Case Name: GEORGE F. KEANE et al. v. CITY OF PORTLAND et al.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1925-04-28
Citations: 115 Or. 1
Docket Number: 
Parties: GEORGE F. KEANE et al. v. CITY OF PORTLAND et al.
Judges: 
Reporter: Oregon Reports
Volume: 115
Pages: 1–13

Head Matter:
Argued March 17,
reversed April 28,
rehearing denied June 16, 1925.
GEORGE F. KEANE et al. v. CITY OF PORTLAND et al.
(235 Pac. 677.)
For appellants there was a brief and oral argument by Mr. W. H. Powell.
For respondents there was a brief and oral argument by Mr. Frank S. Grant, City Attorney, and Mr. L. E. Latourette, Deputy City Attorney.

Opinion:
BELT, J.
It is fundamental that a municipality, in the exercise of the sovereign power of eminent domain, is a tribunal of limited and special jurisdiction, and must comply strictly with the terms of its charter in respect thereto.
When its proceedings are challenged by direct attack as in the instant case (Acton v. Lamberson et al., 102 Or. 472 (202 Pac. 421, 202 Pac. 732); Christensen v. Lane Co., 90 Or. 401 (175 Pac. 845); Lieblin v. Breyman Leather Co., 82 Or. 22 (160 Pac. 1167); Morrill v. Morrill, 20 Or. 96 (25 Pac. 362, 23 Am. St. Rep. 95, 11 L. R. A. 155), it should affirmatively appear from the record that jurisdiction was acquired by giving the notice in the manner and method prescribed by statute: Chapman v. Hood River, 100 Or. 43 (196 Pac. 467); Jones v. City of Salem, 63 Or. 126 (123 Pac. 1096); Bank of Columbia v. Portland, 41 Or. 1 (67 Pac. 1112); Northern Pac. Terminal Co. v. Portland, 14 Or. 24 (13 Pac. 705).
It is immaterial whether this proceeding be considered a collateral attack, as contended by counsel for defendants, if it affirmatively appears that juris diction was not obtained: Northern Pac. Terminal Co. v. Portland, supra. Defendants claim the benefit of presumption that its proceedings were regular, and that notice was published and mailed as by charter provided, but it is elementary that jurisdiction cannot be acquired by indulging' in presumptions.
It is urged that the following allegations in reference .to notice are insufficient:
"That previous to the passage of the aforesaid ordinance, these plaintiffs were not notified by the auditor or any other officer, employee, or agent of the said defendant City of Portland of the date that said council would hear said engineer's report, nor that such report had been made or filed, nor of the amount of damages proposed to be awarded for plaintiffs' said property, nor of the time when or place where written objections might be filed against such proposed appropriation; and these plaintiffs had no knowledge that such report had been filed, or that a hearing would be had thereon, or of the passage of said ordinance."
Any doubt as to the sufficiency of the complaint relative to the matter of notice is removed by the answer of defendants concerning that phase of the case. In fact, it affirmatively appears therefrom that the auditor "failed to mail any notice to the plaintiffs," as required by the following section of the charter:
"Section 323. Within thirty days after the filing of such report the auditor shall cause a notice to be published for a period of ten successive publications in the city official newspaper, stating that such report is on file in his office subject to examination, giving the date when the same was filed, the probable cost of such proposed street or streets or change, a statement of the district embracing the property proposed to be assessed therefor and notifying all persons interested to present in writing their objections to said report, if any they have, and that said objections, if any there- be, together with said report, will be heard by the council on a date specified in such notice, not less than ten days after the date of the first publication of said notice. It shall also be the duty of the auditor forthwith to send by mail postpaid to each of those designated in the engineer's report a notice stating the probable total cost of such street or streets, or change, a brief description of the property in which such person is interested, a statement of the amount proposed to be assessed against such property, the time within which written objections may be filed against such proposed appropriation and assessment, and the date when the council will hear such report and objections, and, if such person be named as owner or party interested in land to be taken, the amount of damages proposed to be awarded for such property. If the address of any such person be unknown to the auditor, and if such person have an agent whose name and address is known to the auditor, he shall mail such notice to such agent; otherwise, he shall mail it to the owner addressed at Portland, Oregon."
It will not suffice to say that plaintiffs had actual knowledge of said proceedings. Knowledge is not equivalent to statutory notice: Wright v. City of McMinnville, 59 Or. 397 (117 Pac. 298); Bitting v. Douglas Co., 24 Or. 406 (33 Pac. 981); Minard v. Douglas Co., 9 Or. 206; Rice v. Wellman, 5 Ohio C. C. 334.
It is true at the time the city engineer filed his report Ladd Estate Company appeared as record owners of the property under consideration, but ever since condemnation proceedings were instituted by the city, and for some time prior thereto, plaintiffs or their tenant has been and is now in actual possession of the lot sought to be appropriated. On January 5, 1923, when written application was made to the city for a building permit, it disclosed that Gr. P. Keane, plaintiff herein, was the "owner of record," and his address was given as "500 E. 38 No." Furthermore, when notice is alleged to have been mailed, as required by charter,' plaintiffs were the record owners, as their deed from Ladd Estate Company had been recorded on April 19, 1923. Mr. Keane testified unequivocally that he did not receive any notice from the city of the taking of his property, and there is no evidence to the contrary. It follows that the city did not obtain jurisdiction, and the proceedings had, so far as they pertain to the plaintiffs herein, are null and void.
We agree with the city in its contention that the necessity, expediency and extent of the appropriation are legislative and not judicial questions: Smith et al. v. Cameron et al., 106 Or. 1 (210 Pac. 716, 27 A. L. R. 510), and numerous cases of this court therein cited. As stated by Mr. Justice Bean in State ex rel. v. Hawk et al., 105 Or. 319 (208 Pac. 709, 23 A. L. R. 1217):
"When the power to take private property for public use has been conferred by the legislature, it rests with the grantee to determine whether it shall be exercised, and when and to what extent it shall be exercised, provided, of course, that the power is not exceeded or abused. Courts cannot inquire into the motive which actuated the authorities, or enter into the propriety of constructing the particular improvement" — citing 1 Lewis, Eminent Domain (3 ed.), § 370.
As above stated, we are not permitted to inquire into the motives that actuated the council in legislating to widen the streets in question. This is not a case where private interests are directly benefited under the guise of the exercise of the power of eminent domain. There can be no doubt that the property taken is for a public use. Courts are extremely re luctant to interfere with the discretion exercised by grantees of such sovereign power as to the extent and expediency of the appropriation, and will not do so unless convinced- there has been an abuse of the power delegated, which is not so in this ease.
We are of the opinion, as claimed by counsel for respondents, that the question of damages is not a proper matter of inquiry in this suit for injunction. We are here concerned with the legality of the proceedings to appropriate plaintiffs' property, and not with the amount of the award. If plaintiffs were not satisfied with the damages awarded, they should have appealed to the Circuit Court for a determination of that question.
However, since further litigation is possible, we deem it advisable to decide whether damages should have been assessed at the time the city determined that matter or when, as contended by plaintiffs, the ordinance was passed. Defendants assert that no compensation should be allowed for improvements made after notice of the passage of the resolution whereby the city declared its intention to take the property for street purposes. The question is presented as to whether owners of property, acting in good faith, are to be denied the beneficial use and enjoyment of the same before the city finally ordains to take it. We think not: City of Portland v. Lee Sam, 7 Or. 397; and cases listed in note, 36 L. R. A. (N. S.) 273. In contemplation of law the property involved herein was not appropriated until the ordinance was passed, on June 20, 1923, and until that time plaintiffs had the right to all of the attributes of ownership. It would be a travesty on justice to hold that as owners of property they were obliged to suspend all work on the building for a period of about five months and await the uncertain action of the council in determining whether it would adopt the report of the city engineer. Cases cited involving bad faith, as where buildings are moved on to property pending' condemnation proceedings, are not in point. We give no sanction or approval to what has been called in the books "house planting." Courts do not countenance fraud. Plaintiffs acted in good faith, and the building erected was not for the purpose of enhancing damages. Before the city had' commenced proceedings it had granted a building permit to plaintiffs, and they had contracted to lease for a period of five years the building to be erected. The record viewed in its entirety refutes any inference of bad faith on the part of the plaintiffs. Respondents claim that City of Portland v. Lee Sam, supra, is overruled by State ex rel. v. Hawk et al., supra; but in this we do not agree, as the case last cited is under an entirely different statutory proceeding.
This court has never departed from the rule in condemnation proceedings that the measure of damages is the actual cash market value of the land at the time of the taking. In the Hawk case the land was, in contemplation of law, taken at the time of the commencement of the action. In the case at bar it is deemed to have been taken when the city passed its ordinance appropriating the land.
Relative to the question of award of damages it is asserted the plaintiffs have violated certain building line restrictions, and by reason thereof no compensation need be made for the value of the building. There is no merit in this contention. Assuming, but not deciding, that the defendant city has a legal right to complain of such alleged violation, it is clearly estopped from doing so in view of the fact that the building plans and specifications were approved by its "Department of Public Works," and there was issued a building permit by it to the plaintiffs to erect the building where it now stands. There are no restrictions whatever in the deed from Ladd Estate Company to the plaintiffs, and it would seem as a matter of law that they are entitled to build on their property where they see fit: 1 Lewis, Eminent Domain (3 ed.), §227. Cases cited in respondents' brief are not in point on this question, for the facts therein stated disclose an encroachment on street and not building lines.
The decree of the lower court dismissing the suit for injunction is reversed, and it is here decreed that the ordinance in question and all proceedings based thereon are null and void, that the defendants be enjoined from appropriating plaintiffs' land under the proceedings had, and that plaintiffs recover their costs and disbursements herein.
Reversed and Decree Entered. Rehearing Denied.