These cases arise in a condemnation proceeding instituted by the United States in the federal District Court for Minnesota to acquire easements of flowage upon lands bordering upon the Lake of the Woods in that state. The only substantial question is whether, on the facts disclosed by the record and others of which judicial notice may be taken, the actual use and special adaptability of petitioners' shorelands for the flowage and storage of water, that inter alia will be available for the generation of power, may be taken into consideration in ascertaining the just compensation to which petitioners are entitled.
The superficial area of the Lake of the Woods is between fourteen and fifteen hundred square miles; it lies in Minnesota, Ontario, and Manitoba. Many streams flow into it. The Rainy river and Warroad river are the largest of those touching Minnesota. The former, coming from the east along the international boundary, drains a very large territory lying on both sides of the line. The latter, not so large, coming from the south, drains a considerable area within Minnesota and empties into the southwesterly part of the lake. The outlets of the lake are in Canada; they combine to make the Winnipeg, a great river, flowing northwesterly to Lake Winnipeg. In 1898 a Canadian corporation, by agreement with the Crown, put in operation the Norman dam for the control of outflow down the Winnipeg. Since the construction of this dam, and in consequence of it and other dams in the outlets, shorelands, in disregard of the rights of owners, have been intermittently flooded for the impounding of water used in Canada for the generation of power and other purposes.
In 1909 the United States and Great Britain made a treaty which (art. 8) created an international joint commission and conferred upon it jurisdiction in terms broad enough to include cases involving the elevation of the Lake of the Woods as the result of these dams. 36 Stat. 2451. In 1912 questions arising out of the raising of the lake were referred to the commission, and, after hearings and extensive studies, it made its final report in 1917. The United States and Great Britain then consummated the treaty of 1925 (44 Stat. 2110) which provides (article 8): 'A flowage easement shall be permitted up to elevation 1064 sea level datum upon all lands bordering on Lake of the Woods in the United States, and the United States assumes all liability to the owners of such lands for the costs of such easement.'
By an act to carry into effect the provisions of the last-mentioned treaty (Act of May 22, 1926, 44 Stat. 617, as amended April 18, 1928, 45 Stat. 431), Congress directed the Secretary of War to acquire by purchase or condemnation flowage easements up to the specified elevation upon all lands in Minnesota bordering upon the Lake of the Woods, the Warroad river, and the Rainy river, and that compensation should be made in accordance with the Constitution of Minnesota which declares (article 1, § 13): 'Private property shall not be taken, destroyed or damaged for public use, without just compensation therefor first paid or secured.' Commissioners appointed to ascertain the damages sustained by the several owners by reason of such taking made their awards. The United States and these petitioners appealed. The cases were tried together, the jury returned verdicts for the amounts to which petitioners were found severally entitled and judgments were entered accordingly. Petitioners appealed. The Circuit Court of Appeals affirmed. 67 F.(2d) 24.
At the trial petitioners sought to have just compensation ascertained on the theory that the flooding of their lands (for brevity called 'use for reservoir purposes'), the circumstances which make them specially adaptable for that use and the fact that prior to condemnation such adaptability had increased their market value should be considered by the jury in determining just compensation. And, in order to establish a basis on which to rest that submission, petitioners offered to prove the followign facts: