Burger v. City of Beatrice

Carter, J.

Plaintiff landowners brought this action to enjoin the City of Beatrice from proceeding in eminent domain to take restrictive easements over their lands for the installation of water wells and the withdrawal of ground water from beneath the surface of their lands. The trial court denied an injunction and the plaintiff landowners have appealed.

The evidence shows that in the fall of 1964, the City of Beatrice maintained a water distribution system for the inhabitants of the city. It operated 4 water wells in a well field 6 or 7 miles northwest of the city in an area near the Big Blue River. These wells, referred to in the record as wells Nos. 1, 2, 3, and 4, are located on the right-of-way of the Chicago, Burlington & Quincy Railroad, running in a northwest-southeast direction. The railroad right-of-way crossed the lands of plaintiffs. The wells were spaced 1,100 feet apart and were manned with pumps and two 14-inch pipelines which transported the water to the city of Beatrice. The wells and water mains had the capacity to produce and deliver 6,000,000 gallons of water per day to the city. It was determined by the city prior to the events instigating this litigation that the maximum water needs of the city were inadequate even though the city was able to provide the water needs of the city and its inhabitants in 1964.

In 1964 and following, the Phillips Petroleum Company and the Comineo Products Company established fertilizer plants approximately 6 miles northwest of Beatrice near the unincorporated village of Hoag and near the water mains located between the city of Beatrice and its existing well field. Hoag is less than 1 mile southeast of the well field. On February 3, 1965, Phillips entered into- a contract for the purchase of water from the city for the use of the new plant. This contract provided for the delivery of an estimated average of 50,000,-000 gallons of water per month with a maximum of 90,000,000 gallons per month. At the time of trial, a similar contract with Comineo was near completion. The negotiations indicated that Comineo- required an average usage of 35,000,000 gallons of water per month with a maximum of 90,000,000 gallons per month.

With the foregoing situation existing, the city determined that a need existed for the extension of its well field by 4 wells. On March 19, 1965, the city entered into a contract with the Chicago-, Burlington & Quincy Railroad by which it obtained an easement to install new wells on the railroad right-of-way. The final plan of the city was to extend its existing line of wells to the northwest with 1,100-foot spacing from well 4, the farthest northwest well of the existing wells. The plan required the easements here sought to permit the withdrawal of water by the pumps installed from the ground waters underlying plaintiffs’ lands. To obtain these easements, the city negotiated with the plaintiffs and, failing this, the city instituted the condemnation proceeding here involved on April 8, 1965. On April 22, 1965, this action was commenced to enjoin the condemnation proceedings for the reasons hereinafter discussed.

The evidence shows that Phillips and Comineo are private corporations engaged in the production of commercial fertilizers for profit. It also shows that the water requirements of these two companies will equal or exceed the previous requirements of the city of Beatrice. On the foregoing facts it is urged that the condemnation proceeding is for a private purpose and not a public purpose as required by the law of eminent domain.

It is first urged by the city that injunction is not a proper remedy for the reason that plaintiffs have an adequate remedy at law. The rule is: This court is committed to the rule that injunction is a proper action in which to present the question of unlawful or improper exercise of the power of eminent domain. Consumers Public Power Dist. v. Eldred, 146 Neb. 926, 22 N. W. 2d 188; Heppe v. State, 162 Neb. 403, 76 N. W. 2d 255.

The power of eminent domain is a sovereign power which exists independent of the Constitution of Nebraska. The Constitution of Nebraska and legislative enactments pursuant thereto are in no sense a grant of power, but are and should be treated as a limitation of the power of eminent domain. Consumers Public Power Dist. v. Eldred, supra. The Legislature may limit the sovereign power of eminent domain but it lacks the power to extend it. The absolute power of the sovereign authority to take private property for a public use has been limited by the Constitution of Nebraska by subjecting the taking to the payment of compensation for the land taken and the damages to property not taken. Art. I, § 21, Constitution of Nebraska. But it is essential that a use under the power of eminent domain must be a public use, and whether or not the use is public or private is a judicial question and not a legislative one.

A city in engaging in the production and distribution of water for the benefit of its inhabitants is engaged in a proprietary capacity rather than a governmental one. The distinction between its governmental status and its proprietary capacity have been made in the past by this court. In Henry v. City of Lincoln, 93 Neb. 331, 140 N. W. 664, 50 L. R. A. N. S. 174, this court in dealing with the nature of the city’s proprietary capacity said: “It is no part of its duty, as a municipal corporation, to engage in a purely business or commercial enterprise. When it seeks and obtains from the legislature permission to engage in such an enterprise, its act in so doing is purely voluntary on its part, and it thereby assumes a third relation, separate and distinct from the dual relations above considered. While occupying this third relation no governmental functions or corporate duties, as a municipality, devolve upon it. It is then engaged in an ordinary business enterprise, and is bound by all the rules of law and procedure applicable to any other private corporation or person engaged in a like enterprise. It has no greater or higher privileges or immunities than are possessed by any other private corporation.” See, also, Incorporated Town of Sibley v. Ocheyedan Electric Co., 194 Iowa 950, 187 N. W. 560.

When it assumes the status of a private utility company in the production and distribution of water for the benefit of the inhabitants of the city, it subjects itself to the same rights and liabilities of a private water company. When it engages, therefore, in a public utility business, it must provide water service to all inhabitants alike who desire it at the same rate for the same service.

It cannot properly be said, and it is not here contended, that the production and distribution of water as above stated is not for a public purpose. Nor can it be said, and it is not here contended otherwise, that the city does not enjoy the right of eminent domain, both within and without the limits of the city, for the purpose of providing an adequate water supply to provide the needs of the city and its inhabitants. The question here raised is whether or not the taking of easements for water to supply users outside the corporate limits of a city is for a public or private purpose. The question is one of first impression in this state.

The Legislature has power over the very life of a city. It may limit or expand existing powers, or it may destroy the corporate powers of the municipality completely. In the instant case, the city has, been invested with the power to contract for the sale of water outside of the city’s corporate limits. Section 19-2701, R. R. S. 1943, provides in part: “A city of the first or second-class may enter into- a contract or contracts to sell * * * water * * * to persons beyond the corporate limits of such a city when, in the judgment of the mayor and council of such a city * * * it is beneficial to any such city to do so.” This statute grants the power to the city of Beatrice, a city of the first class, to contract for the sale of water outside of the corporate limits of the city, but the power is permissive and creates no duty on demand to furnish water to users outside the city’s limits. Section 16-681, R. R. S. 1943, provides in part that: “Such city owning, operating or maintaining its own gas, water, power, light or heat system, shall furnish any person applying therefor, along the line of its pipes, mains, wires or other conduits, subject to reasonable rules, and regulations, with gas, water, power, light or heat.” When construed with other sections in Chapter 16, this statute means that it is applicable to persons who are inhabitants of the city. There is nothing to indicate that a person outside the limits of the city could demand as a right the use of the water service of a city. The language quoted from section 16-681, R. R. S. 1943, was first enacted in Laws 1901, chapter 18, section 57, page 275. No different construction has been placed upon it so far as we have been able to find. We conclude therefore that water service to persons outside the corporate limits of the city are contractual and permissive, and in no sense mandatory or the result of a duty imposed by legislative action.

Every citizen has the constitutional right to acquire, own, possess, and enjoy property. Art. I, § 25, Constitution of Nebraska. A citizen not only may acquire property, but he may sell it at such price as he can obtain in fair barter. State ex rel. English v. Ruback, 135 Neb. 335, 281 N. W. 607. His property may not be taken from him against his will except by the sovereign powers of eminent domain and taxation, both of which must be for a public purpose. The improper exercise of the power of eminent domain is an infringement upon a citizen’s constitutional right to own and possess property. It is essential therefore that the exercise of the power of eminent domain be in strict accordance with its essential elements in order to protect the constitutional right of the citizen to own and possess property against an unlawful perversion of such right. The authorities are in agreement that a taking of property under the power of eminent domain must be for a public purpose and that it may not be taken for a private one. The problem sometimes arises, as it has in the instant case, as to whether or not a particular taking is for a public purpose.

It has been stated in many cases that “public use,” as applied to the exercise of the power of eminent domain, is not capable of precise definition. The term is elastic and keeps pace with changing conditions. One line of decisions holds that the public use means use by the public—that is, public employment-—and consequently that to make a use public, a duty must devolve on the person or corporation holding property appropriated by right of eminent domain to- furnish the public with the use intended, and that there must be a right on the part of the public, or some portion of it, or some public or quasi-public agency on behalf of the public, to- use the property -after it is condemned. The opposing doctrine is that public use means public advantage, consequence, or benefit, and that anything which tends to- enlarge the resources, increase the industrial energies, and promote the productive power of any considerable number of the inhabitants of a section of the state, or which leads to the growth of towns and the creation of new sources for capital and labor, contributes to the general welfare and the prosperity of the whole community constitutes a public use. In any event, the character of the use, and not its extent, determines the question of public use. Where there is simply a public interest, as distinguished from a public use, the power of eminent domain cannot be exercised. 26 Am. Jur. 2d, Eminent Domain, § 27, p. 671.

The first line of decisions referred to in the preceding paragraph is based strictly on the use to which the condemned property is put, and, to make a use a public one, a duty must devolve on the person holding property appropriated by right of eminent domain to furnish the public with the public use intended in pursuance of an existing enforcible public right. In the instant case, the water sold to Phillips and Comineo is not delivered to a public service corporation, nor to a private corporation obligated to serve the public, nor subject to any right of the public to compel a public use. The usual case of a taking by eminent domain is the simple taking of private property for streets, parks, cemeteries, and for water, light, heat, and power as a public service, and other situations falling into similar classifications.

The applicable definitions of public purpose as used in connection with eminent domain proceedings necessarily mean something different in condemnations for drainage ditches, irrigation works, reservoirs, dams, and the like. The broader definition of public purpose supported by the second line of decisions does not contemplate situations such as we have in the instant case.

It cannot logically be argued that “public use,” as applied to the exercise of the power of eminent domain, has a fixed definition. Increases in the population and other changing conditions require new and different applications of the power of eminent domain, but such new applications of the power must be for a public and not a private purpose. In most cases where the power to condemn private property for public use is questioned, the facts of the particular case must be subjected to close examination.

The evidence in this case shows that the withdrawal of underground water from plaintiffs’ lands was largely for the use of the Phillips and Comineo companies. The two 14-inch pipelines conveying water to Beatrice continue intact. A new 18-inch pipeline was constructed from the new well field to the point near the Phillips and Comineo plants where they were connected to the 14-inch lines with a valve control installation. A service line has been installed to service the Phillips plant and a second has been installed or will be installed to service the Comineo plant. The new 18-inch pipeline has not been extended into Beatrice although there is evidence that such an extension is contemplated some time in the future. We necessarily draw the conclusion that the water from the 4 new wells is primarily for the purpose of serving the Phillips and Comineo plants.

In our opinion, therefore, the construction of the 4 wells, the withdrawal of the ground water from plaintiffs’ lands, and the construction of the 18-inch pipeline was largely for the private use of Phillips and Comineo. We do not doubt that the public interest of Beatrice is subserved by the taking, but public interest does not constitute public purpose within the meaning of the power of eminent domain. The use made of the water by Phillips and Comineo is not such as will be used by the public to such an extent as to make it a public use. Minnesota Canal & Power Co. v. Koochiching Co., 97 Minn. 429, 107 N. W. 405, 5 L. R. A. N. S. 638; Nichols v. Central Virginia Power Co., 143 Va. 405, 130 S. E. 764, 44 A. L. R. 727.

In State ex rel. Dominick v. Superior Court, 52 Wash. 196, 100 P. 317, 21 L. R. A. N. S. 448, it is said: “Does the fact that the respondent will sell and deliver a portion of its electrical power to third persons and corporations to be by them used for public and municipal lighting and in the operation of railroads and railways afford a sufficient reason for denying to it the right of eminent domain? We think not. Courts look to the substance rather than the form, to the end rather than to the means. If in the end the property is devoted to a public use, the mere agency or instrumentality through which that result is accomplished is a matter of no concern.”

In the case before us, the end is the furnishing of water for the private purposes of Phillips and Comineo for their private use in the production of commercial fertilizers for profit. It is not even contended that its use is for any other purpose. It is undoubtedly true that the locations of the Phillips and Comineo plants at the places previously described is an asset to Beatrice. It will furnish some employment and increase business in the area, but such a public interest does not constitute a public purpose under the power of eminent domain. If it did, there would be no limit to the exercise of the power for the benefit of private enterprises and the constitutional right of the citizen to own, possess, and enjoy property would be seriously infringed by its subjection to the growing demands of industry for its needs for water for industrial use. The use put to the water by Phillips and Comineo is private and wholly within their control. It does not support a finding that its use is for such a public purpose that it warrants the encroachment of plaintiffs’ constitutional rights to the ownership, possession, use, and enjoyment of their property.

We again point out that the furnishing of water for drinking and domestic uses to its inhabitants is for a public purpose under the power of eminent domain in that a city in so doing acts in its proprietary capacity as a public service corporation. In selling water outside of the limits, it is a matter of contract authorized by the Legislature, but as to which it is under no duty to provide by virtue of its status as a municipal corporation or the powers granted to it in its proprietary capacity.

There is evidence in this record that there was and is a need on the part of Beatrice for additional water for use in emergencies, anticipated growth, and increased use by the city and its inhabitants in the future. We do not here hold that condemnation may not be proper in the fulfillment of these needs. But where a condemnation proceeding under the power of eminent domain purports to take property both for a public use and for a substantial private use as distinguished from a mere incidental private use, the right to proceed by condemnation must be denied. Minnesota Canal & Power Co. v. Koochiching Co., supra; Kessler v. City of Indianapolis, 199 Ind. 420, 157 N. E. 547, 53 A. L. R. 1; Shizas v. City of Detroit, 333 Mich. 44, 52 N. W. 2d 589. When the public use is separable from the private use, the court may proceed as to such public use and deny the taking and compensation for the private use. Shizas v. City of Detroit, supra; Kessler v. City of Indianapolis, supra.

It appears to us that the attempt of Beatrice to take the easements on plaintiffs’ lands by eminent domain, insofar as the use by Phillips and Comineo is concerned, is an attempt to obtain private property against the will of the owners for a private purpose, even though for compensation, under the guise of an exercise of its power of eminent domain. This it cannot do. Kessler v. City of Indianapolis, supra; Hogue v. Port of Seattle, 54 Wash. 2d 799, 341 P. 2d 171; D. N. Kelley & Son, Inc. v. Selectmen of Fairhaven, 294 Mass. 570, 3 N. E. 2d 241.

We conclude that the taking of the easements in the instant case by the power of eminent domain as against the plaintiffs is void to the extent that it is for the private benefit of the Phillips and Comineo companies. To the extent that a need is shown for the taking for the benefit of Beatrice and its inhabitants, if such need is separable, the proceeding may be sustained. In any event, the city of Beatrice should not be permanently enjoined. The injunction, if granted, should run against the present proceeding to the extent that it is unlawful. The judgment is reversed and the cause remanded for further proceedings consistent with this opinion.

Reversed and remanded with directions.