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Supreme Court of Tennessee. September 15, Merritt, Jr. Charles E. Thomas Parsons, City Atty. These two civil actions, consolidated for the purposes of appeal, raise two questions, viz: 1. Does the City of Manchester have the right to acquire, by eminent domain, so much of the electric system of Duck River Electric Membership Corporation as is within the boundaries of the city?

Assuming the existence of the right, what is the proper measure of damages? The first suit was instituted by the City of Manchester, seeking to acquire, by eminent domain, certain property owned by Duck River Electric Membership Corporation, located within the corporate limits of the city and used by Duck River as a part of its electric distribution system.

This appeal challenges this ruling by assignments which insist that 1 a Tennessee municipality may not condemn the property of an electrical cooperative without demonstrating a public purpose or need and absent a judicial finding that the taking serves such a need, and 2 that a Tennessee municipality is not authorized to condemn, under the general law, the property of an electric cooperative devoted to public use.

We treat these assignments as being fairly summarized by the controlling issue as specified at the beginning of this opinion. The City of Manchester, the county seat of Coffee County, Tennessee is a municipal corporation organized and existing under the laws of the State of Tennessee.

The city granted a franchise to Duck River, authorizing the operation of an electric system within the city for a fifteen year period beginning 8 January and expiring 8 January This franchise has not been renewed with the result that, as a practical proposition, Duck River continues to serve the city at its sufferance and the residents of the city are being supplied electricity at the sufferance of Duck River. While the orderly processes of the law would no doubt intervene to prevent the city being thrown into darkness, the fact remains that this arrangement is fragile and lacking in stability.

Under these circumstances the city, on 4 June , after Duck River’s franchise had expired, adopted its Ordinance Number , declaring that “the prosperity of the City of Manchester will be materially retarded and that it would be detrimental to the welfare of the inhabitants and citizens of the City of Manchester for [them] to continue to be served by the Duck River Electric Membership Corporation”; that they would “be better served by a municipally owned electrical distribution system;” and directing that a condemnation suit be filed.

The determination by a condemning authority of the necessity for the taking is not a question for resolution by the judiciary and, absent a clear and palpable abuse of power, or fraudulent, arbitrary or capricious action, it is conclusive upon the courts. Harper v. Trenton Housing Authority, 38 Tenn.

Heth, Tenn. But of course the courts have the right and duty to determine the existence of authority to take, the existence of a legitimate public use and related questions. Section T. It is self-evident that this statute applies only to real estate. Section , T. In the clearest of language this statute empowers the city to acquire by condemnation, any public works, and land or rights in land, in connection therewith.

This is a clear and complete remedy. It is not necessary to rely upon any other statute. Therefore, in this regard, the acts are of identical import. Counsel for Duck River earnestly and ably urge upon the Court the proposition that a corporation may not condemn property already devoted to public use by another corporation, and cites, in support of this general rule of law, numerous cases from this and other jurisdictions. We do not fault this as a correct generalized statement of the law.

Railroad Co. Cemetery Co. The inconsistent public use was a railroad right-of-way vis-a-vis, a cemetery. Electric systems are seldom privately owned and are always devoted to the public use in the practical sense that they exist to serve substantial segments of the public. The Legislature, therefore, knew that it was authorizing the condemnation by Tennessee municipalities of public service type utility operations engaged in supplying electric current to the public. Southern Railway v.

Memphis, Tenn. There the suit involved a taking of switch and terminal yards for public park purposes, a wholly inconsistent use. Railroad v. Mayor and Aldermen of Union City, Tenn. Williamson Co. Turnpike Co. Cases from other jurisdictions and textbook authority follow the same general pattern. We look first to the character of the two entities. In Memphis v. Laski, 56 Tenn. They exist for the purpose of general government.

They are arms or agencies of the state and they exercise, by delegation, a portion of sovereign power for the public good. Thornton v. Carrier, 43 Tenn. Electric membership cooperatives, under Tennessee law, are general welfare corporations.

By appropriate by-laws membership qualification and limitations may be imposed. A distressing feature of these corporations is their power to refuse service to prospective customers. The pre-eminent mission of public power, and of those charged with its distribution, is to provide the blessings of electricity to the maximum possible extent.

The adoption of membership conditions tends to frustrate that purpose. In Chumbley v. Duck River Elec. A city electric department can exact no membership requirement and must serve all inhabitants, without discrimination and without the imposition of restrictions and conditions excepting those relating to payment.

While we cast no aspersions upon these corporations and freely and fully recognize the great public service they have rendered in rural and sparsely populated areas of our state, the fact remains that they are manifestly low-grade, volunteer, public service type corporations, inferior in all respects, to municipalities which exist for the purpose of general government.

Cities enjoy perpetual succession; there is no provision for their dissolution accompanied by a division of assets. They enjoy a higher degree of permanency and a greater degree of stability.

Ample authority supports the position of the city that the property of Duck River is not in “public use. We think a fair appraisal of the services rendered by electric membership corporations demands the conclusion that their facilities are devoted to “public use” in the context of condemnation proceedings. Yet, there can be no legitimate contention but that the city distribution of electric current will be a higher public use.

Franklin v. This case inferentially holds that the city may take the property of an electric cooperative. See S. In short, as between a Tennessee municipality and an electric membership cooperative, the city is sovereign and supreme. Manchester may condemn. The second suit was a declaratory judgment action filed in aid of the condemnation suit and seeking to have the Court declare the proper measure of damages. Tennessee Code Annotated. This appeal ensued.

Section provides, in pertinent part: In estimating the damages, the jury shall give the value of the land or rights taken without deduction, but incidental benefits which may result to the owner by reason of the proposed improvement may be taken into consideration in estimating incidental damages.

The right to just compensation is decreed by Article 1, Section 21 of the Constitution of Tennessee which provides in substance that no man’s property shall be taken without just compensation. This right of compensation existed long before the statutory scheme of condemnation came into being; therefore “such right cannot be said to be created by any such statutes, because the latter are enacted in implementation of the constitutional right already given.

Roane County, Tenn. Reference to the general condemnation statutes will reveal that they contemplate only the condemnation of land. No reference is made to personal property and yet the constitutional prohibitions against taking private property without just compensation applies with full force and validity to personal property. Zirkle v. City of Kingston, Tenn.

This action seeks to condemn land. It may or may not be improved. It also seeks to condemn personal property including poles, conductors, anchors, guy wires, lightning arresters, transformers, street lights, and numerous other items of equipment used in an electrical distribution system. Technically, some of this may be so attached as to become a part of its realty; however, we treat it as personal property, in accordance with the pleadings, for the purposes of this phase of the controversy.

It would be difficult to set apart a guy wire by metes and bounds. The standard measure of just compensation, arrived at in the usual manner, is equally unacceptable. But this brings us back to an unacceptable measure of damages. The courts have fashioned appropriate measures of damages without specified guidance from the Legislature. We agree with the insistence of counsel for the city that “the determination of damages is a judicial and not a legislative question.

Memphis, supra, instructs us that the question of the sufficiency and adequacy of the procedure for ascertaining damages is a judicial question confided to the courts.

We so hold. The public policy of our state, however, is formulated to a substantial extent by the Legislature, Home Beneficial Assn. White, Tenn. The Legislature has arrived at a formula or method for determining the fair market value or just compensation to be paid the owner in these cases involving the acquisition of public entities.

We hold this to be a fair and equitable method of determining just compensation as mandated by our Constitution.

In our view these are not controlling considerations. We are motivated by the fact that the Legislature has found and determined this to be a proper manner for determining “just compensation” or “fair market value. Nor would we. We realize that we have probably approved a liberal measure of damages, but we think Duck River is entitled to liberal consideration.

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