East Bay Municipal Utility District v. City of Lodi

While a rehearing was granted in this cause for the purpose of re-examining the question of damages, owing to the fact that some corrections should be made in the opinion heretofore filed herein, we think it is more convenient to discard our first opinion entirely and restate our views in full, following the general statement heretofore made in this cause.

The plaintiff had judgment in an eminent domain proceeding condemning the riparian rights of the defendants in and to the waters of the Mokelumne River, in so far as said rights pertain to the lands and premises described in the plaintiff’s complaint. From this judgment the defendants appeal.

The lands and premises involved comprise about 207 acres situate along the Mokelumne River in Amador and Calaveras Counties, are unsuitable for agricultural purposes, are mostly rocky and barren and are susceptible of being used for grazing purposes only to a limited extent. The lands and premises belonging to the defendants are divided by certain lands and premises belonging to the United States, reserved from entry except for power purposes, and also a certain tract of land belonging to a private owner.

The court found that the lands and premises of the defendants could be used for power purposes by building a dam thereon, which would raise the waters of the river, giving a head of not exceeding 43 feet, without inundating the lands belonging to the general government, but if the intervening tracts between the lands owned by the defendants were submerged, the waters of the river might be so raised as to give a head of 57 feet.

While not so found, the testimony shows that a head of water to the extent herein mentioned, would operate a power plant of some capacity, the extent of which does not satisfactorily appear.

The Mokelumne River has its source in the Sierra Nevada mountains, approximately 100 miles easterly of the City of Lodi, and flows in a general westerly course to its con

For the purpose of utilizing the waters of the Mokelumne Biver, so far as possible to supply the domestic demands of the cities of Oakland, Berkeley, Alameda, Emeryville, Piedmont, Albany, Bichmond and El Cerrito, an election was held on May 22, 1923, for the purpose of organizing the East Bay Municipal Utility District, with exterior boundaries including the cities above mentioned. This election resulted in the organization of the plaintiff as a Utility District. Investigations were had as to the availability of the waters of the Mokelumne Biver for the purposes mentioned, and also to ascertain for what power uses said waters might be applied, and thereafter, on November 4, 1924, an election was had authorizing a bond issue in the sum of $39,000,000 for the construction of what was thereafter called the Mokelumne Biver project. Some litigation followed relative to the validity of the bonds offered for sale by the district, which resulted favorably, and on September 25, 1925, contracts were entered into for the construction of the major units of the project, and actual work was begun. Thereafter, eminent domain proceedings were had, whereby the district secured the use of approximately 8,000 acres of land for use as a reservoir site. These proceedings were had in 1927. For the purposes of impounding the waters of the river and rendering them available for use, the district began the building of a certain dam called the “Pardee D.am”, and continued work thereon, and at the time of the execution and delivery of a deed by the Colorado Power Company to the City of Lodi, hereinafter mentioned, had expended upon the Pardee Dam, conduits, etc., upwards of $34,000,000, a sum slightly, in excess of $15,000,000 thereof having been expended upon the construction of the dam. In addition to this, the Utility District has expended on tunnels, aqueducts, and

Prior to the institution of this suit no action had been taken with reference to the riparian rights of any owners of land on the Mokelumne River below the site of the Pardee Dam, apparently the contention of the district being that the impounding of the flood waters of the Mokelumne River during the flood season of each year, would enable the district to release from its reservoir a quantity of water sufficient in volume that the riparian rights of lower land owners would not be impaired.

Beginning with September, 1926, and ending with July, 1927, one Lloyd Thayer acquired title to the various parcels of land involved in this action, and thereafter organized the Colorado Power Company, and conveyed the premises to the company so organized.

During the period of time elapsing between the commencement of construction work by the Utility District, and some time in the year 1928, Thayer had some negotiations with the Utility District relative to the district advancing a sum in the neighborhood of $100,000 to build a dam for impounding waters upon the lands to which he had acquired title. These negotiations did not result in the district advancing any money, and some time later the Colorado Power Company sent a letter to the Utility District in which it was stated that the Power Company proposed to develop power as a riparian owner, and notified the Utility District not to proceed with any construction work that would interfere with the natural flow of the Mokelumne River above the Colorado Power Company’s project. This was about three years after work had been begun upon the Mokelumne River project by the Utility District, and after the district had expended thereon a sum in excess of $15,500,000.

On the ninth day of January, 1929, so far as the record shows, without any previous negotiations, the Colorado Power Company delivered to the City of Lodi a deed of conveyance signed by Lloyd W. Thayer, as president, and Albert P. Slichter, as secretary, whereby the Power Company transferred to the City of Lodi, all and singular, the premises described in the plaintiff’s complaint. This deed contains, among other things, the following terms and conditions: “Whereas the grantor and the grantee consider the

At the same meeting of the council, when the deed just referred to was tendered by the representatives of the Colorado Power Company to the City of Lodi, the council adopted resolution No. 567, which contained, among other things, the following: After reciting that in the judgment of the representatives of the company and of the council, the project referred to was economically adapted as a site for the development of a municipality owned electric power plant, the resolution reads: “Whereas, the conditions attached to the tender of the said deed are that the City of Lodi accept the deed, conveying the property of the Colorado Power Company, as hereinafter described, and such title to the said property as the Colorado Power Company now has, subject to certain conditions subsequent expressed in said deed, and that the settlement or dismissal or any litigation now pending, or which may follow the acquisition of title to the said property by the City of Lodi, affecting the riparian rights to the flow, of the Mokelumne River through the said property,

The record shows that the instruments just referred to were presented to the city council of the City of Lodi on the evening of the 9th of January, 1929, by representatives of the Power Company, and the proceedings then had included the delivery of the deed in the passage of the resolution referred to and the authorization of the institution of injunction proceedings against the Utility District. The mayor of the City of Lodi testified that no consideration was paid by the City of Lodi, no bond election had been called up to the time of the trial of this action, and practically no further proceedings had been taken and had, other than a very limited exploration made of the premises by the city engineer, or an engineer employed for that purpose.

It appears also from the record that the council was advised that their position in the pending litigation, which litigation involved the water-level in the wells from which Lodi derived its water supply, would be strengthened by going into the Colorado deal. No investigation was made as to the purchase price of the premises involved, paid by Thayer, which the record shows aggregated the sum of $9,475. The representatives of the Power Company, in explaining the project to the council, did not state how much the project would cost, nor was the purchase price of the premises mentioned. Mr. Thayer never informed the council as to the amount of money he had paid for the lands included in the deed, nor was anything said as to what the Colorado Power Company had paid therefor. The record shows that no application was ever made to the federal power commission to use the lands owned by the federal government. It was further shown that it was the intent of the council to meet the expense of the project by a bond issue. The record further shows that an election was held to organize a water district which included the City of Lodi, and the project was voted down. The record further

With this summary in view, one vital question is tendered for consideration, to wit: Were the circumstances and transactions connected with the property involved such as to render the same immune as against eminent domain proceedings under the last sentence of paragraph 4 of section 1240 of the Code of Civil Procedure, which reads: “But property appropriated to the use of any county, city and county, incorporated city or town or municipal water district, must not be taken by any other county, city and county, incorporated city or town or municipal water district, while such property is so appropriated and used for the public purposes for which it has been so appropriated”? This language implies that the property to be rendered immune must not only be appropriated, but also used for a public purpose. As construed by the authorities which we shall hereafter cite, the word “used” does not mean actual physical use at the date of the institution of the condemnation suit, but means property reasonably necessary for use, and which the circumstances reasonably show will be actually used within a reasonable length of time. If the use is contingent, uncertain or problematical or not reasonably definite as to time, eminent domain proceedings are not barred. If the circumstances disclosed upon the trial of the cause are such as to justify the trial court in concluding that the projected use is contingent, uncertain, problematical or not reasonably definite as to time, then and in that case an appellate court has no power to interfere, unless error otherwise appears in the trial, necessitating a reversal.

In the consideration of the questions presented and determined by the trial court, it must be remembered that the water supply of the City of Lodi is not involved, and that

The court further found that the waters of the Mokelumne River could be utilized by the plaintiff to the extent and for the purposes proposed by the plaintiff without destroying the adaptability or feasibility of the lands of the defendants for power purposes.

The court further found that if the lands and premises of the defendants were depreciated in value to any extent, such depreciation did not exceed the sum of $10,000, which sum was allowed as compensation for damages on account of the subjection of the riparian rights appurtenant to the lands involved being subjected to the uses of the plaintiff in this action.

The trial court also found that the amount of the bonded indebtedness which would be required to construct the power project and transmission line, in addition to the amount of the present outstanding bonded indebtedness of the City of Lodi, would exceed fifteen per cent of the total assessed valuation of the property within the limits of the city.

In support of their appeal the appellants cite a number of cases to the effect that property appropriated to public use by one municipality cannot be taken by condemnation proceedings for the uses and purposes of another municipality. This, of course, is in accordance with the statutory law of this state. The cases cited, however, are distinguishable from the circumstances here presented.

In the case of Mono Power Co. v. City of Los Angeles, (C. C. A.) 284 Fed. 784 , cited as controlling here, the facts show that the Southern Sierras Power Company, to which the property had been conveyed, was engaged in the transmission of power to a number of different cities; that while the Southern Sierras Power Company had. only recently acquired the property in dispute preceding the institution of eminent domain proceedings by the city of Los Angeles, it was proceeding to utilize the property, and there were not any contingencies relative to either the immediate or prospective uses of the property by the Power Company. The means, the ability, the immediate and actual use, were all present to support the rights of the Power Company, and to render the property being used immune as against any condemnation

In State ex rel. Union Trust & Sav. Bank et al. v. Superior Court, Spokane County, et al., 84 Wash. 20 [ 145 Pac. 999 , 149 Pac. 324 ], as appears from the opinion, the findings of the trial court and the record shows that the property acquired was held for future use, and the court said, quoting from the syllabus: “A corporation constructing a hydro-electric power plant for a public purpose cannot condemn a power-site owned by another public utility corporation which intends to construct thereon a similar power plant, since property owned by a corporation and devoted to a public use cannot be condemned by another corporation for use in the same manner and for the same purpose.” Here, again, are no circumstances showing the future use to be problematical.

The case of Marsh Min. Co. v. Inland Empire Min. & Mill. Co., 30 Idaho, 1 [ 165 Pac. 1128 ], is simply to the effect that eminent domain proceedings will not enable one claimant to condemn property where the condemnor is merely seeking to subject the property to similar uses to which it is already being applied.

In State ex rel. South Fork Log Driving Co. v. Superior Court, etc., 94 Wash. 691 [ 163 Pac. 15 ], the Supreme Court of Washington held that property not presently actually devoted to a public use, but purchased and held by a public service corporation in reasonable anticipation of future needs, is deemed devoted to a public use. Here, again, enters a question of fact to be determined by the trial court as to whether the property has been acquired, and is being held in reasonable anticipation of future use, upon which determination of fact, if supported by the testimony, the finding of the trial court cannot be disturbed.

The case of Nicomen Boom Co. v. North Shore Boom & Driving Co., 40 Wash. 315 [ 82 Pac. 412 ], involved the question of abandonment of property after having been acquired, which differentiates everything said in the opinion in that case from the circumstances here presented.

In 20 C. J. 601, the law is thus stated: “Land owned by a corporation whose business constitutes a public use, not in actual use nor essential to the exercise of its franchise,

We do not find anything in the case of Los Angeles v. Los Angeles Pacific Co., 31 Cal. App. 100 [ 159 Pac. 992 ], applicable here.

In Vermont Hydro-Electric Corp. v. Dunn, 95 Vt. 144 [ 12 A. L. R. 1495 , 112 Atl. 223 ], a ease cited by appellants and also by respondent, we find a very full statement of the law and citation of authorities which we think amply sustains the judgment of the trial court in this action. It is there shown that there must be a reasonable probability of use of the property, within a reasonable time; that the exemption does not apply if the use is indefinite and uncertain; and that it must be used without any unreasonable delay. The opinion in this case is so full and complete that we quote therefrom extensively, as follows: “It is the settled law of this State that property already legally appropriated to a public use cannot be taken for another public use without legislative authority expressly given or necessarily implied. (Rutland-Canadian R. Co. v. Central Vermont R. Co., 72 Vt. 128 , 133 [ 47 Atl. 399 ]; Rutland R. Light & P. Co. v. Clarendon Power Co., 86 Vt. 45 , 50 [ 44 L. R. A. (N. S.) 1204 , 83 Atl. 332 ].) To bring property within the immunity from condemnation under general legislative authority, it is not necessary that it be acquired by eminent domain. If its owner has devoted it to a public use which he is under' a legal obligation to maintain, it comes within the protection of the rule. (2 Nichols Em. Dom. 364; 2

“It follows that to sustain the plaintiff’s claim that the property in question is held devoted to a public use, it should appear that it is reasonably necessary to a proper discharge of the plaintiff’s legal obligation to the public, and that in good faith it intends to use the property for such purpose without unreasonable delay. These are largely questions of fact to be inferred from the circumstances under which the property is held.”

Again, as shown by the case of State v. Chehalis Boom Co., 82 Wash. 509 [ 144 Pac. 719 ], mere ownership of property by a public service corporation does not render it immune from condemnation. We quote therefrom the following: “The mere fact of ownership of this property by respondent, even though it is a public service corporation, is no impediment to the acquisition of such property through eminent domain proceedings by relator. It is not the mere ownership of property by a public service corporation that

To the same effect is the case of Borough of Florham Park v. Borough of Maddison, 77 N. J. L. 260 [ 72 Atl. 4 ], where it is said: “Immunity from condemnation accorded to lands held by any municipality for purposes of a water supply ... is not created by the mere execution and delivery of a deed of lands to a municipality for such purpose, and the acceptance of the same by the common council of such municipality.” The same ruling was had in the same case upon a subsequent hearing. ( 78 N. J. L. 446 , 78 Atl. 753 .) To the same effect is the case of East Hartford Fire Dist. v. Glastonbury Power Co., 92 Conn. 217 [ 102 Atl. 592 ], where the Supreme Court of Connecticut held that the mere ownership of property did not exempt it from condemnation proceedings. (See, also, Indiana Power Co. v. St. Josephs etc. Power Co., 159 Ind. 42 [ 63 N. E. 304 , 64 N. E. 468 ].)

The respondent urges the fact that the appellants stood by for a number of years, to wit, from some time in 1923, until shortly before the institution of these proceedings, made no objection to the work being done by the Utility District, and negotiated to the extent which we have mentioned on the part of Thayer and the Power Company, and also that the City of Lodi had made inquiries as to obtaining electric power from the power plant of the Utility District, and that they are equitably estopped, citing in support thereof a number of cases, two of which we will mention: Collier v. Merced Irr. Dist., 213 Cal. 554 [ 2 Pac. (2d) 790 ], decided by the Supreme Court August 31, 1931, and the case of Gravelly Ford Canal Co. v. Pope & Talbot Land Co., 192 Cal. 4 [ 218 Pac. 405 ]. However, these cases and others cited by the respondent in support of estoppel, we think are not wholly applicable, the holding in these cases

We do not find anything in the case of City of San Diego v. Cuyamaca Water Co., 209 Cal. 105 [ 287 Pac. 475 ], affecting any rule of law hereinbefore stated.

The only specification of error relative to the ruling of the trial court as to the admission and rejection of testimony is that the testimony as to the financial condition of the City of Lodi, its bonded indebtedness, and whether it could or could not legally float an additional bonded indebtedness to construct the projected works, was erroneously admitted. With this contention we cannot agree, as such testimony bore directly upon whether the City of Lodi either would or could make any immediate use for power purposes of the property involved in this action, or whether such use was only remote and problematical. Likewise, the ruling of the court excluding protests against the building of the Pardee Dam by others than the appellants herein was unquestionably correct. Some of the findings of the trial court appear to us to be immaterial, as contended by the appellants, but whether correct or incorrect, they do not affect the vital questions involved herein.

As called to our attention upon petition for rehearing, it appears that .the appellants’ contention that the trial court erred in adopting an uncertain measure of damages, is well taken. Finding No. 32 of the trial court is as follows: “Finds it is not a fact that without the certainty or assurance of the continued natural flow of said waters of the Mokelumne River in their normal amount or quantity, said lands of defendants would have little or no value, or would be suitable or adapted only for grazing purposes, and in this connection the court finds that the waters of said stream can

Again, the whole theory of the respondents storing water for power purposes rests upon there being water available for storage and use for power purposes. If there is no water available for storage for power purposes, then and in that event the domestic uses for which the waters are primarily impounded by the respondent would completely destroy respondent’s property as a reservoir and power site. From which the deduction necessarily follows that there should either be a definite ascertainment and fixing of the quantity of water to be discharged, or an allowance of damages based upon the privilege of the respondent to absolutely discharge no water, as the domestic uses of the respondent would be, and are superior to uses for merely power purposes.

In this particular we may call attention to the record which discloses that neither the appellants nor the respondent introduced testimony which would enable the court to make correct findings and properly assess the damages. The testimony of the appellants’ witnesses as to damages, estimated the cost of appellants’ project, and then the sale of energy developed by the project. A quotation from the

On the part of the respondent and the theory adopted by the court as we have stated, all the witnesses on the subject of damages assumed first that the respondent would so use its power plant as to furnish a more adequate supply and a better flow of water by reason of its regulation for the uses and purposes of the appellants, than would be the case if the waters of the stream were allowed to flow as in a state of nature. Some of the witnesses based their estimate of damages by taking into consideration a five-year contract which existed between the district and the Great Western Power Company. The testimony of these witnesses is too long to set forth herein, but two questions and answers illustrate the whole theory upon which the court fixed its damages. (Question propounded to Mr. Cone, witness for the respondent): "Q. So that any water that flowed down, and was a benefit to that property, as a means of power development, would depend entirely upon the will of the East Bay District in releasing it, except in eases where the reservoirs were full and it flowed over them? A. Yes. Q. Is it fair to say then that your design of this project was based upon the assumption that you need not give any consideration to the riparian rights of owners of this tract, of which you have spoken, except as you happen to release it through your own power plant? A. No, that is not a fair statement. Q. What is a correct statement? A. A correct statement is that we would have to make such releases as were determined as their right to have made. We did not expect to override the law, or their rights, or anything of that kind.”

In considering the question of damages it must also be borne in mind that the trial court found that the premises involved in this action were and are suitable for reservoir and power purposes. This finding is based upon conflicting evidence, and therefore must be accepted by us as true. The law .seems to be quite uniform that in eminent domain proceedings the damages must be assessed once and for all, and must include all the damages that might be inflicted by the condemning party.

In the case of Crane v. Harrison, 40 Idaho, 229 [ 38 A. L. R. 15 , 232 Pac. 578 , 580], we find the law thus stated: “Damages must be assessed once and for all time, and should be based upon the most injurious use to which the condemnor may lawfully put the property.” This is the holding of the court in the case of Idaho Western R. R. Co. v. Columbia Conference, 20 Idaho, 568 [ 38 L. R. A. (N. S.) 497 , 119 Pac. 60 ], The opinion in the Crane ease continues: “If this is a correct statement of the rule at the time the municipality required the right of way for street purposes, appellant or his predecessor was given damages once and for all time, based upon the most injurious use of the land reasonably possible to which the City might lawfully put it.”

To the same effect is the case of Farmers Reservoir & Irr. Co. v. Cooper, 54 Colo. 402 [ 130 Pac. 1004 ], where it is said in substance that all damages, present and prospective, which are the necessary or reasonable incident of taking

In the case of Cleveland C. C. & St. Louis Ry. Co. v. Hadley, 179 Ind. 429 [ 45 L. R. A. (N. S.) 796 , 101 N. E. 473 ], we find the following statement supported by a long list of cases: “The general rule in condemnation proceedings is that all damages, present or prospective, that are the natural or reasonable incident of the improvement to be made or work to be constructed, not including such as may arise from negligence or unskillfulness or wrongful act of those engaged in the work, must be assessed. Damages are assessed once and for all, and the future necessities as well as the present needs of the condemnor are to be taken into consideration.”

To the same effect is the case of Brack v. Mayor and City of Baltimore, 125 Md. 378 [Ann. Cas. 1916E, 880, 93 Atl. 994 ], where it is further in the opinion set forth that mere promises on the part of the condemnor cannot be considered.

In the case of Louisville etc. Ry. Co. v. Western. Union Tel. Co., 184 Ind. 531 [Ann. Cas. 1917C, 628, 111 N. E. 802 ], where it was sought to make a limited appropriation and to have the damages assessed upon a limited appropriation, the court held that mere stipulations contained in the complaint were promissory in their character, and did not constitute any binding obligation upon the condemnor, and therefore did not furnish a true basis for estimating damages. In the note to this case, as reported in Ann. Cas., supra, appears the following: “Mere unaccepted promissory stipulations of a condemnor of property are distinguished from unappropriated rights reserved to the owner of a fee. The holding is that whatever rights are sought to be appropriated by eminent domain must be taken absolutely and unconditionally, and that unaccepted promissory stipulations cannot affect either the character or extent of the appropriation or the amount of damages to be awarded.” (Citing a number of cases.) A distinction is drawn between an appropriation subject to certain rights of the land owner, excepted from the appropriation, and an attempt to impose unaccepted promissory stipulations or proposed agreements by the condemning party or undertakings to be performed after the appropriation, and which are not binding upon the condemning party. These cases hold in effect that if the

The rules which we have just stated are set forth in 20 C. J., beginning on page 765, where unaccepted promises are held insufficient as a diminution of damages (citing a number of eases), and then it is further said: “The probability that the appropriator will not exercise, or the fact that there is no present intention of exercising to the full extent the rights acquired, should not be considered in reduction of damages where there is nothing to prevent a full exercise of such rights, since the presumption is that the appropria-r tor will exercise his rights and use and enjoy the property taken to the full extent.” (See, also, the ease of Sternes v. Sutter-Butte Canal Co., 61 Cal. App. 747 [ 216 Pac. 66 ], where it was held that damages must be assessed once and for all.)

The following cases cited by appellants support the rules of law which we have just set forth: Hamor v. Bar-Harbor Water Co., 92 Me. 364 [ 42 Atl. 790 ]. (In the opinion in this case a number of other cases are cited to the same effect.) (Ingraham v. Camden Water Co., 82 Me. 335 [ 19 Atl. 861 ]; Howe v. Inhabitants of Weymouth, 148 Mass. 605 [ 20 N. E. 316 ]; Denver v. Denver Union Water Co., 246 U. S. 178 [ 62 L. Ed. 649 , 38 Sup. Ct. Rep. 278 ]; Mills v. Inhabitants of Randolph, 157 Mass. 345 [ 32 N. E. 153 ]; Flagg v. Town of Concord, 222 Mass. 569 [ 111 N. E. 369 ]. In this case a large number of authorities are cited.)

That the trial court erred in the fixing of damages and that the true measure of ascertaining the same was not adopted, appears to us clearly established from the foregoing. The respondent makes the point that under the cases of Chester v. Carmichael, 187 Cal. 287 [ 201 Pac. 925 ], and Mahoney v. City and County of San Francisco, 201 Cal. 248 [ 257 Pac. 49 ], and authorities there cited, that the deed of the Colorado Power Company to the City of Lodi is void, but from what we have said it does not appear necessary to determine this question. Nor is it necessary to express any opinion as to the validity or invalidity of section XI of the

Other questions have been tendered and considered, but not being such as to affect the decision herein, are not mentioned in detail. We may add, however, that we find nothing in the case which would warrant the application of the apportionment provisions contained in subdivision 4 of section 1240 of the Code of Civil Procedure.

As a conclusion from what we have said, the judgment of the trial court awarding to the respondent, condemnation of the riparian rights of the appellants, is affirmed, and the judgment of the trial court fixing and assessing damages is reversed, and the cause remanded to the trial court to proceed and assess damages awarding the maximum damages that can or may result to the appellants’ property, unless the respondent consents to the amending of the findings and the entry of a decree definitely fixing, as near as may be, the quantity of water to be released from the Pardee Dam, irrespective of whether the respondent may, or may not be operating its power plant, and in that event, damages to the appellants may be fixed in such nominal sum as the trial court may determine to be just. And it is so ordered.

Appellants are awarded their costs.

Preston, P. J., and Thompson (R. L.), J., concurred.

A petition for a rehearing of this cause was denied by the District Court of Appeal on March 16, 1932, and applications by appellants and respondent to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on April 15, 1932.