Citizens Utilities Co. v. Prouty

176 A.2d 751, 122 Vt. 443, 1961 Vt. LEXIS 99
CourtSupreme Court of Vermont
DecidedNovember 21, 1961
Docket1910
StatusPublished
Cited by11 cases

This text of 176 A.2d 751 (Citizens Utilities Co. v. Prouty) is published on Counsel Stack Legal Research, covering Supreme Court of Vermont primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Citizens Utilities Co. v. Prouty, 176 A.2d 751, 122 Vt. 443, 1961 Vt. LEXIS 99 (Vt. 1961).

Opinions

Smith, J.

This is a joint appeal by petitioners and petitionees from an order of the Public Service Commission granting to the petitioner, in accordance with its petition for eminent domain, title to [445]*445certain real estate, owned by the petitionees, located on both sides of the Clyde River, in the city of Newport, Vt., and awarding compensation to the petitionees for such taking.

The petitioner is a Delaware corporation, licensed to do business in the state of Vermont, and is a public service company operating and carrying on the business of supplying electric power and energy to consumers of various kinds in Essex, Orleans, Franklin and Grand Isle counties in the state of Vermont.

The petitionees are the owners of lands situated on the banks of the Clyde river and are the successors in title to Abbie D. Prouty, now deceased.

The petitionees in their appeal to this Court have denied jurisdiction of the Vermont Public Service Commission to condemn lands owned by them under the eminent domain proceedings brought by the petitioner before the Commission. The petitioner, on its part, brings its appeal here because of claimed error on the part of the Vermont Public Service Commission in its determination of the fair market price of the land which the petitioner has been ordered to pay to the petitionees under the order of the Commission.

The jurisdictional question presented by the petitionees is the paramount one for our consideration, for if jurisdiction is lacking in the Public Service Commission then the entire order is of no force and effect.

The Clyde River rises in the northeastern part of Vermont and empties into Lake Memphremagog at Newport. Upon this river the petitioner has built hydroelectric dams at several places including the outlet of Seymour Lake and Echo Pond, and also across the river at West Charleston and at Clyde Pond. The water from the Clyde Pond storage reservoir is conveyed by steel penstocks to the powerhouse of the petitioner at Newport. These penstocks are located upon the land of the petitionees, and it is this land that the petitioner seeks to acquire by the proceedings in eminent domain before the Public Service Commission. The total area of the land is about 5.4 acres, and it lies for about 700 ft. on both sides of the Clyde River between the Clyde Pond dam and the Newport powerhouse.

The owner of these lands in 1930 was one Abbie D. Prouty. A lease was entered into in that year between Abbie D. Prouty and the Newport Electric Company, the petitioner’s predecessor, for a [446]*446twenty-five year period, at a yearly rental of $7,500, plus taxes. An option to purchase the land for $150,000, expiring Oct. 1, 1935, and contained in the lease, was not exercised by the petitioner.

Under the terms of the lease, the option not having been exercised, there was an agreement that at the expiration of the lease the lessor would sell, and the lessee would buy the land at a mutually agreeable price. In the event they could not agree upon a price, then the lessee was to bring condemnation proceedings “before the tribunal then having jurisdiction,” within six months from the expiration date. If the lessee failed to bring such proceedings, then it was to pay to the lessor $300,000 for the land described in the lease.

The parties did not agree upon a price for the land and the lessee brought this condemnation proceeding before the Public Service Commission within the six month period, on March 21, 1956.

The contention of the petitionees before the Public Service Commission, and now here, is that the Public Service Commission has no jurisdiction because of the fact that the Clyde River is navigable and is subject to the jurisdiction of the Federal Power Commission.

The petitionees, on May 11, 1956, sought an injunction to prohibit further proceedings before the Public Service Commission, in the United States District Court in Vermont. The United States District Court refused the injunction, but found the Clyde River to be a navigable stream and granted judgment for $300,000 to the petitionees here. Upon appeal from the District Court, the United States Court of Appeals for the Second Circuit reversed the District Court and indicated that the question of jurisdiction was properly an issue for the Public Service Commission, itself, to determine. Prouty v. Citizens Utilities Co., 257 F.2d 692, cert. den. 358 U. S. 867, 79 S.Ct. 98, 3 L.Ed.2d 99.

The Federal Power Commission started an investigation into the matter of the navigability of the Clyde River on June 24, 1957. An order was issued from the Federal Power Commission on Feb. 16, 1959 directing the petitioner to apply for a license under the Federal Power Act for the continued operation and maintenance of its projects consisting of a Unit No. 11, Newport and Charleston hydro-electric developments and the Seymour Lake and Echo Pond dams. In the opinion upon which its order was based the Federal Power Commission found the Clyde River to be navigable from its sources to Lake Memphremagog.

[447]*447An appeal from the opinion and order was taken by the petitioner to the United States Court of Appeals, 2nd District. On May 24, 1960, in an opinion written by Judge Learned Hand, the United States Court of Appeals for the Second Circuit affirmed the order of the Commission. The opinion stated that the last mile of the Clyde River was navigable, left the question of how much of the Clyde River above the one mile was navigable “open,” but did find that all of the petitioner’s dams on the Clyde river “affected” the navigability of the last mile. Citizens Utilities Co. v. Federal Power Commission, 279 F.2d 1, cert. den. 364 U.S. 893, 81 S.Ct. 224, 5 L.Ed.2d 188.

The order of the Public Service Commission was filed on Nov. 10, 1960. The report of the Commission indicates its knowledge of the order of the Federal Power Commission and of the decision of the United States Court of Appeals, 2nd District, affirming that order. The report also states that the petitioner does not have the license under the Federal Power Act which it was ordered to obtain by the Federal authorities.

The Public Service Commission decided that the petition before it, which asks for the condemnation of land between a power plant and a dam, and over which land penstocks carry water from dam to powerhouse, was governed by the provisions of 30 V.S.A. §111 (1). This section provides:

“When the Commission finds, in the case of dams, that a certificate of public good authorizing the project as herein required, or a license from the Federal Power Commission has been granted

that the Commission then has authority to proceed with the petition for condemnation of land by eminent domain.

The jurisdiction of the Public Service Commission is limited to “dams and projects that relate to or are incident to the generation of electric energy for public use.” 10 V.S.A. §701 (a).

Referring again to 30 V.S.A. §111 (1), in Sec.

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Citizens Utilities Co. v. Prouty
176 A.2d 751 (Supreme Court of Vermont, 1961)

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Bluebook (online)
176 A.2d 751, 122 Vt. 443, 1961 Vt. LEXIS 99, Counsel Stack Legal Research, https://law.counselstack.com/opinion/citizens-utilities-co-v-prouty-vt-1961.