Title: State Highway Com. v. Burk
Citation: 200 Or. 211, 265 P.2d 783
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: January 13, 1954

Modified and remanded January 13, 1954.
*218 George A. Rhoten, of Salem, argued the cause for appellants. With him on the brief were Rhoten, Rhoten &amp; Speerstra, of Salem.
Ralph Wyckoff, Assistant Attorney General for Oregon, of Salem, argued the cause for the State Highway Commission, plaintiff-respondent. With him on the brief were George Neuner, former Attorney General for Oregon, C.W. Enfield, Assistant Attorney General and Chief Counsel for the Oregon State Highway Commission, Fred A. Miller, Assistant Attorney General for Oregon, and Robert L. May, Jr., Assistant Counsel for Oregon, all of Salem.
MODIFIED AND REMANDED.
BRAND, J.
This is a condemnation action brought by the State of Oregon by its Highway Commission against the owners and their lessees of land required for a non-access highway. The principal issues in the case are two. The first concerns the claim of the defendants that there should have been separate awards of damages to the owners of the land, on the one hand, and to the several lessees of portions of the same, on the *219 other. The second main issue is new to our jurisprudence. The question presented is whether the defendants were entitled to compensation for the taking of an alleged right or easement of access. The defendants claim that the court erred in ruling that they were not entitled to damages on account thereof. These and other minor issues were resolved against the contentions of the defendants. The case went to the jury, which returned a single verdict for $33,000 with interest, and a judgment was entered on the verdict condemning the property for a non-access highway. The defendants appeal.
The complaint, which was filed on 8 September 1950, alleges that a certain highway known as the Salem-Dallas Highway, being State Highway No. 30 and State Route No. 22, is a state highway and a part of the state and federal highway systems. The complaint alleges that the section of said highway in question had been previously constructed and maintained, but that traffic conditions had made it necessary to relocate it upon a new line. The complaint alleges that the defendants Burk, Pearl C. Couey and Modella May Rodgers, are the owners of the record title to certain real property which is described therein. We shall refer to this group of defendants as the "owners". It is alleged that the defendants Patzer, Galloway and Winkenwerder claim some title or interest in the property, the exact nature of which is unknown to the plaintiff. The complaint, as modified by the supplemental complaint, describes the tract of land which is required for right-of-way purposes and for proper relocation, construction, improvement, repair, maintenance and operation of said highway by the state. No part of the land condemned for the *220 new highway was within the boundaries of the old. The property described is a part of a larger tract owned by the defendants and amounts to approximately 8 1/2 acres in area. The complaint then alleges that the highway carries a large volume of traffic and that it is the judgment and opinion of the Commission that, in addition to the acquisition of fee simple title to the real property described in the supplemental complaint, "there be also condemned and extinguished such interest, if any there be, by which a right of access, ingress, egress, or regress, or any right in the nature of a right of access, ingress, egress, or regress, may accrue" to the property owned by the defendants but not taken. The prayer is for an assessment to be made by a jury as to the compensation to which the defendants should be entitled for the taking of the fee simple title to the real property described, and for the extinguishing of all rights of access and reservations or interests "if any there be". The answer of the owners, so far as material to this controversy, alleges that, should their property and rights be taken, there would be damage in the sum of $75,000, the alleged value of the said property and rights, plus the damage to the remaining property of the defendants not taken. It was alleged that the sum stated "is, of course, exclusive of sums, if any, to which defendants Patzer, Galloway and Winkenwerder may be entitled." The last-quoted portion of the answer of the owners was stricken upon motion of the plaintiff. Answers were filed by the defendants Patzer and Winkenwerder. The answer of Winkenwerder alleged in part:
He alleged that the value of his rights and property interests was $15,000, and he sought in addition $750 as a reasonable attorney fee. The allegations of the defendant Winkenwerder concerning the separate value of his leasehold interests were stricken by the court upon the motion of the plaintiff. A similar answer was filed by the defendant Patzer, setting up his unexpired 10-year lease, and alleging that pursuant thereto he had constructed a pumice block and concrete one-story building on said property and had increased the value of the premises thereby. He also claimed that his damages in the amount of $15,000 should be separately assessed, and he sought attorney fees in the sum of $750. The allegations concerning his alleged right to separate assessment of damages were stricken.
*222 After the filing on 3 January 1952 of the supplemental complaint, to which reference has been made, the defendant owners filed an answer. In it they eliminated the allegations concerning their alleged right to a separate assessment of their damages, and in lieu thereof alleged that the true value of the property and rights of all defendants, plus damage to the remaining property, was $85,000 with 6 per cent interest from September 8, 1950. They also sought attorney fees. The plaintiff replied, denying the alleged damages and denying that any sum should be allowed as attorney fees.
On 16 January 1952 the defendant Patzer filed an amended answer. The allegations were similar to those of his original answer except that he eliminated the allegations concerning his separate damage which had been stricken by the court. On 16 January 1952 the defendant Winkenwerder filed his amended answer, eliminating the matter which had been stricken by the court, but amplifying his previous allegations concerning the nature of his leasehold. He alleged that:
Defendant also alleged that the lease was in good standing and that the total value of all the property and rights of the defendants, plus damage to the remaining property and rights was the sum of $85,000 He also sought attorney fees. Replies were filed. The cause was dismissed against the defendants Galloway and judgment was entered upon the verdict of the jury which assessed the damages in a single lump sum, without any segregation as between the various defendants. The judgment recited that "on September 8, 1950, plaintiff, pursuant to the provisions of Section 100-116, O.C.L.A., took possession of, and proceeded to construct a public highway thereon, all of the real property sought to be condemned * * *." The court further found that the defendants were entitled to their costs and disbursements and a reasonable attorney fee to be fixed by the court. The judgment further recited that the plaintiff had elected to take the property and had tendered the amount *224 of the verdict plus 6 per cent interest from September 8, 1950, and it was adjudged that the real property and all rights of egress and ingress were condemned and appropriated to the State of Oregon.
On 3 April 1952 the defendant owners filed a motion for a supplemental hearing for the purpose of determining the respective rights of all the parties defendant in the lump-sum award. The defendant Patzer joined in the motion, which was denied by the court. The defendant owners filed a statement of costs and disbursements wherein they represented that $3,500 was the reasonable value of the services rendered by the attorneys for said defendant owners. The defendants Winkenwerder and Patzer also sought separate allowance of attorney fees. All claims for separate allowance of costs and attorney fees were denied by the court, and an order was made allowing to all of the defendants jointly, certain costs and disbursements and a single lump sum of $4,500 as attorney fees. The defendant owners filed notice of appeal from the judgment "and the whole thereof". A separate notice of appeal was filed by the defendant owners from the following orders:
1. The two appeals of the defendant owners have been consolidated. The defendant Patzer filed notice of appeal from the judgment of condemnation but not from the supplemental orders. He has filed no bond, and presented no bill of exceptions or brief. His appeal must be deemed abandoned. Defendant Winkenwerder has not appealed.
We have summarized the pleadings of the nonappealing defendants because it appears necessary for an understanding of the appeal of the owners.
The defendants assign as error the giving of the following instructions, to which exception was duly taken:
The instruction given was in accord with the theory of the state. It contended, in substance, that there was no highway in existence across any portion of the defendants' property until the bringing of the instant suit. The state therefore argues that, although, as an abstract statement of law, it is true that owners are entitled to damages for the taking of easements of access, that rule is not applicable to the case at bar "because it assumes that the defendants have an existing right of access." The state argues that since there was no highway in existence there could have been no right in the nature of an easement of access.
*227 The Constitution of Oregon provides that
The statute under which the plaintiff is proceeding provides, in part, that the State Highway Commission may, under certain conditions, which are specified, commence an action in the circuit court
2-7. From the generality of the language employed in the statute, it appears that the state is authorized, in a single action, to do what it has attempted in the pending case, namely, to condemn a non-access highway and thereby to acquire the fee of privately-owned property, to the exclusion of any right of entry appurtenant to the land not taken. The provisions whereby action may be brought for determining the compensation to be paid for a right of access, and the damages, if any there be, for the taking thereof, indicate by implication, the view of the legislative body that the right of access may be a right for which compensation is to be paid, and that the damages, if any there be from the taking, are to be assessed and paid. However, the statute does not apply exclusively to cases in which the state seeks to acquire new land in fee for a non-access *228 highway. The act is equally applicable to cases in which the state seeks to convert a conventional highway into a non-access highway by condemning only an easement of access. When a conventional highway is established, there is attached to the abutting land an easement of access in, and to, the highway. Such easement is a property right which cannot be extinguished without compensation. This is clear, and it is conceded by the state. Even where the fee of a conventional highway is in the state, it is subject to an easement of access appurtenant to the abutting land. Willamette Iron Works v. O.R. &amp; N. Co., 26 Or 224, 37 P 1016; Sandstrom v. Oregon-Washington Ry. &amp; Nav. Co., 75 Or 159, 146 P 803; Tooze v. Willamette Valley Southern Ry. Co., 77 Or 157, 150 P 252; Bostwick v. Hosier, 97 Or 125, 190 P 299; Ail et ux. v. City of Portland, 136 Or 634, 299 P 306; Morris v. City of Salem et al., 179 Or 666, 673, 174 P2d 192. The rule is definitely settled in the recent case of Sweet v. Irrigation Canal Co., 198 Or 166, 254 P2d 700, 256 P2d 252. See also Bohm v. Metropolitan El. Ry. Co., 129 NY 576, 29 NE 802; People v. Al G. Smith Co., Limited, 86 Cal App2d 308, 194 P2d 750; Rose v. State, 19 Cal2d 713, 123 P2d 505; Anzalone v. Metropolitan District Commission, 257 Mass 32, 153 NE 325; Petition of Burnquist, 220 Minn 48, 19 NW2d 394. But the fact that the establishment of a conventional highway creates in the abutting land the attributes of a dominant, and in the highway the attributes of a servient tenement, does not require the conclusion that such attributes are created when land for a new non-access highway is condemned. This action was brought to extinguish and compensate for all rights of the defendants in the property taken. It extinguishes the right of the defendant to enter, from *229 his abutting land, the land which once belonged to him, but which now belongs to the state. The same right would be lost to the owner if he had sold the tract to a private individual instead of losing it by condemnation to the state. He would have no right to enter the land sold from the land retained. But this does not mean that he would have had, and then lost, an easement appurtenant to a part of his land for access to another part. It means merely that the statute authorizes the acquisition by condemnation of a fee which is essentially unlike the taking for a conventional highway, and is essentially like the fee which a private individual would acquire by purchase, which of course, would imply no right of access over the vendees' land by the vendor. To be sure, the analogy is not perfect. The state, in acquiring a non-access highway, is taking only for public use, but by authority of the statute, it is taking rights similar in extent to those acquired by private purchasers, and it is devoting such enlarged rights to public use.
8. Since the statute may be employed, either to extinguish conceded and existing easements in a conventional highway, or to take new land for a non-access highway, the statutory provision authorizing compensation for rights of access carries with it no implication that an easement of access, which never existed before, is created by filing an action to condemn a non-access highway, and then, eo instanti, extinguished by the bringing of the same action. The constitution requires compensation for the taking of an easement only if there is an easement to take. If there was none, then the statute which authorizes compensation for such easements does not apply. Whether there is any such property right in the nature of an *230 easement, when new land is condemned for a non-access highway, is the question for determination.
9, 10. Reduced to its simplest terms, our problem is to determine at what point we should hold that the police power ends and the power of eminent domain begins. 11 McQuillin 263, Municipal Corporations (3d ed, Smith, 1950); Philadelphia v. Scott, 81 Pa 80, 22 Am Rep 738; 3 Stanford Law Rev 298, 302. Private rights relative to highways may be regulated in many ways under the police power, and that without compensation. If the action of the state amounts to a "taking", then the principles based upon the constitution control and the state must proceed by condemnation. Unfortunately, the statement of the formula does not answer the questions involved. In general, the regulation of highway traffic is within the police power. This includes the establishment of one-way streets, the establishment of traffic lanes, regulations as to speeding and parking, regulations of abutting owners, along with the general traveling public involving circuity of travel, as where one living on a southbound divided street desires to go north, regulations limiting permissible "U" turns, and changes in the highway system resulting in the reduction or increase of the volume of traffic on the highway fronting the property of an owner. See Clarke, The Limited Access Highway, 27 Wash Law Rev 111; Cunnyngham, The Limited Access Highway, 13 Mo Law Rev 29; State ex rel. Suksdorf v. Superior Court in and for Klickitat County, 169 Wash 195, 13 P2d 460; 25 Am Jur, Highways, § 253; 40 CJS, Highways, § 232; Jones Beach Blvd. Estate v. Moses, 268 NY 362, 197 NE 313; City of Chicago v. Spoor, 190 Ill 340, 60 NE 540; Rose v. California, 19 Cal2d 713, 123 P2d 505; City of Stockton v. Marengo, 137 Cal App 760.
*231 11. One of the traditional and prime functions of the conventional street and highway is, and will remain, that of a "land-service road" providing rights of ingress and egress to and from the property of abutting owners for the benefit of such owners, their invitees and the public. We have seen that where such rights have once become vested, it is almost universally held that they can be divested only by condemnation of the easement appurtenant to the abutting property. In direct contrast with the land-service function of the conventional highway is the purpose and function of the non-access freeway or throughway. The congestion of population in the cities, the amazing increase of rapid automobile transportation, the delays and perils incident to the use of the conventional two way unrestricted-access highways have rendered imperative the establishment of non-access or limited-access highways or freeways in the interest of the public convenience and necessity. 3 Stanford Law Rev 298; 27 Wash Bar Journal 111.
It is reliably reported that travel upon our inadequate highways results in 40 thousand deaths, a million-and-a-half injuries, and property damage of 2 billion dollars a year, and that these staggering losses have been materially reduced wherever modern non-access highways have been established.
In Schnider v. State, 38 Cal2d 439, 241 P2d 1, the plaintiffs brought an inverse condemnation proceeding against the state, seeking compensation on account of the alleged deprivation of a right of direct access. They owned lots which were separated from a conventional highway by an intervening strip of land which was owned by others. Thereafter, the highway *232 commission authorized the reconstruction of the highway as a limited-access freeway. The intervening strip of land was acquired by the state, thereby widening the highway so that it thereafter abutted upon the plaintiffs' land. The facts created a clear test as to whether land abutting on a non-access highway, but which had never abutted on the conventional highway, acquired any property right of direct access. The trial court held that the plaintiffs were not entitled to compensation for the taking of such alleged right of access. The case went to the Court of Appeals and thence to the Supreme Court. The latter court, by Gibson, C.J. said:
As said in City of Los Angeles v. Geiger, 94 Cal App2d 180, 210 P2d 717, 724, "There can be no detriment to a right which never existed and no compensation for a loss not sustained. * * *"
In People v. Thomas, 108 Cal App 832, 239 P2d 914, proceedings were instituted for the acquisition of a limited-access freeway where no highway had previously existed. On appeal the defendants claimed that error was committed in excluding any damage for severance of access rights. The court said:
In this connection we quote from an article in the Stanford Law Review which merits consideration by reason of the excellence of its reasoning:
*235 12, 13. We conclude that there is no "taking" of an easement of access when a new non-access highway is established by condemnation. An easement implies the existence of a dominant and servient tenement. To assume the existence of an easement appurtenant to land there must be presupposed two tracts of land in separate ownerships. Petition of Burnquist, supra, 220 Minn 48, 19 NW2d 394; Restatement, Property, Servitudes, §§ 450, 453, 455, 456, 497. Our conclusion that there was no easement of access and that none was condemned is not decisive of the further question as to whether the non-access character of the highway was relevant on the issue of consequential or severance damages to the remaining property. The effect which the unique and total character of the condemnation may have upon the market value of the property not taken, presents an issue which is not dependent upon the existence of an easement. We again quote from the article in Stanford Law Review, cited supra:
14-16. In this case, the so-called non-access road deprives the defendants of all direct access thereto, although they will still have the possibility of access to the new highway by a long and circuitous route. Land *236 of the defendants which was taken by condemnation extended southerly to the navigable water of the Willamette River. By reason of the non-direct access character of the land taken, the remaining land which lay to the north of the new highway was deprived of its former direct access to the river. In any event, whether the market value of the land not taken was affected by the "more complete severance" resulting from the character of the highway appropriated, was a question to be determined by the jury upon the evidence. This action is brought pursuant to the provisions of OCLA, § 100-116 as amended by Oregon Laws 1947, chapter 283. Both parties rely upon its provisions, and no reference, either in brief or argument, has been made to Oregon Laws 1947, chapter 226, p 286, relating to the powers of the State Highway Commission. In our opinion, section 16 of the last-mentioned act fortifies our conclusion that the jury was entitled to consider specifically the non-access character of the highway being established when determining the severance or consequential damages to the land not taken. Section 16 reads as follows:
*237 The language employed recognizes the two types of compensation established by our decisions interpreting the constitutional requirement of just compensation. They are (1) the value of the land taken, and (2) damages to the remainder. Section 16, supra, provides that evidence as to the plan of the improvement is relevant to the determination of both types of compensation, and it specifically authorizes the jury to consider the deprivation of any right of access in determining the damages to the remaining property. Item (2) of section 16 is applicable only to the situation described in item (3), i.e., where the property sought to be condemned constitutes a part of a larger tract. If the state should take the entire property, no question as to deprivation of right of access could arise. However, item (2) was appropriately inserted in the statute to cover cases in which an old conventional highway is "established" as a throughway and in which case, as we have held, there would be a "taking" of the preexisting easement appurtenant to the land not taken. The statute does not provide or imply that damages by reason of deprivation of right of access shall be fixed separately from other damages to the property not taken, but only that such evidence is relevant in the assessment of such damages. Any other construction would imply an intention on the part of the legislature to confer a gratuity on the owner over and above the limits of just compensation, and would impliedly authorize a duplication of the same element of damages under items (2) and (3) of section 16. In any event, we think it was a question of fact whether the market value of the land not taken was affected by the "more complete severance" resulting from the non-access character of the highway appropriated. The legal *238 situation is analogous to that presented in Cooley v. Boston &amp; Maine Railroad, 303 Mass 371, 21 NE2d 953, 122 ALR 1166. A railroad right-of-way which had been acquired by eminent domain bisected the owner's land. The Supreme Court, by Justice Qua, said:
The cases on this point are not entirely in harmony, but the reasoning of the Massachusetts case seems to us conclusive when applied to the taking by eminent domain of a non-access highway, for no right of access can be implied contrary to the express provisions of the statute. See 122 ALR 1171, note; 44 Am Jur, Railroads, § 117, p 329. It follows that the damages awarded to a land owner may include an element of loss by reason of a depreciation in the market value of the remaining land by reason of the peculiar nature of the appropriation.
17. In Portland-Oregon City Ry. Co. v. Penney, the railroad corporation brought an action to condemn a right-of-way through plaintiff's land. The condemnation for such a purpose involved a limitation of access to the strip condemned, somewhat analogous to the limitation involved in the establishment of a non-access highway. The court said:
This general rule was invoked in People v. Al G. Smith Co., Limited, supra, 86 Cal App2d 308, 194 P2d 750, where the state condemned the access rights of the defendants in a conventional highway, thereby converting it into a freeway. The only issue related to the effect upon the land outside of the limits of the highway. The court held that the facts brought the case within the rule that "`Where private property is taken for a public use and damage results to the remaining property of the landowner, compensation for such damage must be awarded which is measured by the diminution in value of that property which remains.'" Since, in that case, the only right taken was the right of access, the case is authority for the proposition that the extinguishment of such right is relevant on the issue of damage, if any, to the remaining property. The same rule is followed when condemnation is brought to acquire a conventional highway. Pape et al. v. Linn County, 135 Or 430, 296 P 65. We hold that the peculiar character of the appropriation is relevant to the issue of damages to the portion of the land not taken.
18. Returning to the instruction given in the case at bar, we see that the instruction was limited to the proposition that there was no separate property right in the nature of an easement. It was the nonexistence of an easement which was not to be considered in determining the fair cash market value of the defendant's property. It is true that the instruction *240 might better have clearly distinguished between the existence of an easement on the one hand, and the question of a possible depreciation of the market value of the remaining land, on the other. The court did not say that there could be no depreciation in the market value by reason of the nature of the condemnation. The exception taken by the defendants did not call to the attention of the court the distinction between the taking of an easement and the depreciation of market value, nor did the defendants request any instruction to the effect that the jury might consider the non-access character of the land taken, in determining the depreciation, if any, of the market value of the remaining land. However, the court did instruct, in general terms, that the defendants were entitled to compensation measured by the fair cash market value of the land actually taken "plus the amount, if you find there is any, by which the fair cash market value of the remainder * * * has been depreciated solely as the result of the appropriation * * *." Again, the court instructed the jury to determine the damages, if any, to the property not taken, on account of the rights asserted by the Highway Commission. Under the instructions, we think the jury were entitled to consider the effect of the non-access quality of the condemnation in determining the depreciation, if any, in the remaining property, and we find no evidence that they may not have done so. See State ex rel. Sullivan v. Carrow, 57 Ariz 434, 114 P2d 896; Boxberger v. Highway Commission, 126 Colo 526, 251 P2d 920; Case v. State Highway Commission, 156 Kan 163, 131 P2d 696. The giving of the instruction to which exception was taken did not constitute reversible error.
The proposition most earnestly urged by the defendants is that the court erred in refusing to permit the three sets of defendants; one, the owners; two, Patzer; and three, Winkenwerder, separately, to plead and prove their separate damages and to receive a separate award by the jury. Thus they challenge the instruction that the award should be made by the jury in a single lump sum. Since the owners are the only appellants, we limit the inquiry to a consideration of their rights. The situation of the owners is clear. They held the fee, subject to whatever rights there were in the two leases, Patzer and Winkenwerder. The lease from the owners to Winkenwerder was for a period of three years, ending on 14 November 1952. It was drawn along conventional lines, with the possible exception of a provision to the effect that the lessee expected to secure a license to sell alcoholic beverages and that if he failed to secure the license, he should have an option to cancel the lease. The lease to Patzer was somewhat more complicated. The term was for 10 years, ending on 31 August 1958. The lease recited that it was contemplated that the lessee would erect a building of a size 30 feet by 60 feet to cost approximately $10,000. At the expiration of the lease the lessee agreed to sell, and the lessors to buy, the building, at a price of $5,000. The other provisions of the lease were of standard character. Both leases were introduced in evidence. Evidence was received as to the effect of the leases upon the market value of the whole. Much of it was relevant as to the highest and best use to which the land was adapted. An expert witness for the state testified that ground leases were the best use to which *242 portions of the land could be put. Evidence was offered as to the present value of the building constructed by Patzer, as of the date of the appropriation. The court instructed the jury that they might consider his leasehold interest and also "as a part of the whole, the fair cash value of the improvements * * *." The court also instructed that if any part of the land included in the Winkenwerder lease was taken, they should consider his leasehold interest. Thus, it is apparent that the jury were permitted to consider the elements which would affect the market value of the tract as a whole. The complaint of the owners on this phase of the case is not that such evidence was excluded but that the various defendants were improperly deprived of a separate proof of the value of the separate interests and a separate assessment of damage as to each interest.
19-22. In State ex rel. McCaskill v. Hall, 325 Mo 165, 28 SW2d 80, 69 ALR 1256, proceedings were brought to condemn a single tract of land in which the fee was held by one group of persons; leases were held by others (one lease to run to the year 2001), and subleases were owned by others with option of renewal. Some interests were held by trustees and some of the leaseholds were subject to mortgages. A sublessee brought mandamus to compel a separate assessment of the value of his leasehold. He asserted that a failure to separately assess his damage would be violative of his rights under state and federal constitutions. He asserted that in securing his proper portion of a lump sum award, he would be subjected to the expense of litigating with others who also claimed interests in the land, for which expense he would receive no compensation, and he argued that by reason *243 of such litigation he might be dispossessed long before he received compensation. The Missouri court cited as the general rule the following which is taken from Lewis on Eminent Domain:
The same rule is laid down in Nichols, The Law of Eminent Domain, 3d ed, § 12.36, as follows:
To the same effect see Orgel on Valuation Under Eminent Domain, § 107, p 362; 29 CJS, Eminent Domain, § 197, pp 1102-3; Morgan v. Willman, 318 Mo 151, 1 SW2d 193, 58 ALR 1518, 1526; Barnes v. City of Springfield, 268 Mass 497, 168 NE 78; Eagle Lake Improvement Co. v. United States, 160 F2d 182 (CCA 5th); Grand River Dam Authority v. Gray, 192 Okla 547, 138 P2d 100; Herr v. Board of Education, 82 NJL 610, 83 A 173; In re Allen Street and First Avenue, 256 NY 236, 176 NE 377; Phillips v. United States, 151 F2d 645 (CCA 7th); United States v. 25.936 Acres of Land, 153 F2d 277, (CCA 3d); Ross v. The Elizabethtown and Somerville Rail Road Co., 20 NJL 230; State by Youngquist v. Anderson, 176 Minn 525, 223 NW 923; State ex rel. Long v. Superior Court, 80 Wash 417, 141 P 906; St. Louis v. Rossi, 333 Mo 1092, 64 SW2d 600.
23, 24. The defendant owners, confronted by this impressive weight of authority, nevertheless argue that a lump-sum award amounted to a taking of their property without just compensation under Oregon Constitution, Article I, § 18. They call attention to the wording of the statute under which the action was brought. OCLA, § 100-116, as amended by Oregon Laws 1947, ch 283, p 391, outlines the procedure to be followed "to acquire real property". It refers to the compensation to be paid "therefor" and to the damages for the taking of "such real property". It then authorizes "appropriate suit or action" for the condemnation "of such interests as such owner or owners may have in said real property". The defendants assert that the constitution deals with persons, *245 not tracts of land, and quote from Boston Chamber of Commerce v. Boston, 217 US 189, 54 L ed 725 (1910), wherein such language was used. In that case it is said that the constitution does not require a disregard of the mode of ownership, or require a parcel of land to be valued as an unencumbered whole when it is not held as such. The court also said that the question is what the owner lost, not what the taker gained. However, it is unnecessary for us to decide whether the constitution requires the valuation to be in a lump sum. The very great weight of authority establishes that the constitution permits valuation in that manner. It is true, as the defendants say, that the constitution deals with persons, but the condemnation statutes deal with land. The action may be commenced, as in many tax statutes, against the person or persons in whose name the record title appears. The statute adds that lessees or other persons having or claiming an interest may be included. Such proceedings have repeatedly been held to be in rem, although, of course, the pleadings, as a rule, though not always, carry the names of the owners as defendants. 2 Lewis on Eminent Domain, § 512, p 928. Citing many cases, State ex rel. Long v. Superior Court, supra, 80 Wash 417, 141 P 906; Grand River Dam Authority v. Gray, supra, 192 Okla 547, 138 P2d 100. In Eagle Lake Improvement Co. v. United States, supra, 160 F2d 182, 184, (CCA 5th) the court said:
Duckett &amp; Co. v. United States, 266 US 149, 69 L ed 216.
*246 25. The statutory provision that the defendant may answer and allege the true value of the real property and the damage resulting, is not inconsistent with the holdings that it is property which is taken, and that the taking of property is the object of the proceeding. Of course, land cannot answer the complaint.
In some states there are statutes expressly providing for the separate valuation of separate interests in the same tract. See State v. Platte Valley Public Power &amp; Irrigation Dist., 147 Neb 289, 23 NW2d 300; Town of Perry v. Thomas, 82 Utah 159, 22 P2d 343; State ex rel. La Prade v. Carrow, 57 Ariz 429, 114 P2d 891. There is no statute authorizing or requiring such procedure in this state.
The defendants rely especially upon Boston Chamber of Commerce v. Boston, supra. The Chamber of Commerce owned land in the heart of Boston which it had acquired by deed, and which deed reserved to the grantor rights-of-way; light and air, over approximately one-fifth of the tract. Thereafter the city of Boston laid out a public street over most of the land which was covered by the private easements. The Chamber of Commerce and the holder of the easement, which was appurtenant to the land of the third party, filed a petition for assessment of damages, and astutely stipulated that the damages might be awarded in a lump sum to all parties interested, without apportionment. The building of the Chamber of Commerce fronted upon the private easement, and the keeping of the space open for travel was of great benefit to it. On the other hand, the private easement was of great benefit to the dominant tenement, but obviously the public street over the same area was of equal value. It was stipulated that if the separate interests *247 of the parties were valued separately, the damages would be $5,000, but it was contended that if the property condemned was treated as if it were the property of one owner in fee simple, the value of the land taken would be $60,000. Under these peculiar circumstances, the Supreme Court of Massachusetts held that the separate interests should be valued separately. The result was a drastic reduction in the sum total of the awards, which was far below the market value of the tract treated as a fee under single ownership. It seems apparent that the defendants in the case at bar can gain no comfort from that case.
It has been suggested that Mayor and City Council of Baltimore v. Latrobe, 101 Md 621, 61 A 203, is contrary to the general rule which requires a lump-sum award. This is by no means clear. In any event, that case involved tenures which were peculiar to ancient land holdings in the state of Maryland which were later abolished. The fee was subject to an "unredeemable ground rent for 99 years, renewable forever." The court recognized the validity of the general rule as we have stated it, and the real issue considered in the case related to the proper apportionment of compensation between the owner and the holder. The contention of the condemnor was that the owner was not entitled to any compensation under the circumstances. The court rejected this contention and considered at length the relative interests of the parties, and concluded "that in this case the rent can and should be apportioned" in view of the fact that a part only of the land had been taken. The case is distinguishable. In a few instances it has been held that when the owner of land grants an easement *248 with the provision for reversion in the event that the grantee ceases to use the property for the purpose for which the easement was granted, and especially where the land taken is shown to be mineral-bearing and of value separately from the use of the surface, the owner of the reversion should have a separate valuation. These cases also frequently fail to distinguish between a separate valuation on the one hand, and the apportionment of a lump-sum award on the other. There are, of course, cases in which juries or commissioners are authorized by statute, not only to determine lump-sum valuation, but also to apportion the award. But this does not imply any rule that the separate amounts apportioned to the owners of different interests may exceed the market value of the whole.
In United States v. 250 Acres of Land, 43 F Supp 937 (DC Tex), one person owned the mineral rights, and the other, rights in the surface. The district court held that the commissioners should report, not only the value of the entire title, but also the value of each separate interest. But it is apparent that the court was considering the matter of apportionment rather than the valuation of the separate interests, for it said:
26. The decisions of this court as to the measure and amount of compensation clearly imply that all interests in the land are to be valued in a lump sum. The measure of damages is the actual cash market value of the land, condemned, plus the depreciation, if any, *249 of the value of the land not taken. Portland-Oregon City Ry. Co. v. Penney, supra, 81 Or 81, 158 P 404; State ex rel. v. Hawk et al., 105 Or 319, 208 P 709; Keane et al. v. City of Portland et al., 115 Or 1, 235 P 677; State v. Mohler et al., 115 Or 562, 237 P 690 239 P. 193; La Grande v. Rumelhart et al., 118 Or 166, 246 P 707. The matter of setting off direct benefits against damages to the land not taken is not involved in this appeal and is not discussed.
We have reserved until now the consideration of Portland v. Postill, 123 Or 579, 263 P 896. In that case the city instituted condemnation proceedings under the provisions of its charter. The property was owned by a corporation and Postill was the lessee of a building thereon. Based on a report by the city engineer, and after notice and hearing, the council fixed the amount of compensation for the taking. Pursuant to authority of Oregon Laws 1925, ch 294, the lessee Postill appealed to the circuit court and alleged that the city had awarded the damages to the owner and none to him. He set up his 10-year lease and described substantial improvements made by him on the leased premises and concluded with a prayer for a separate assessment of his damages. The case was tried by a jury which fixed the total amount of compensation for the taking and in addition separately determined the amount of damage suffered by the lessee, which was included in the total. The owner was not a party to the proceedings in the circuit court and could not be bound by the apportionment. Consequently the judgment recited that the apportionment made by the jury to the lessee was advisory only. A lump-sum judgment was entered "to be paid * * * to whomsoever may be hereafter ascertained to be entitled thereto * * * and it is further intended that the division of *250 said gross amount shall be hereafter made when all of the parties shall have an opportunity to be heard thereon." Postill was awarded his costs.
From this judgment Postill alone appealed to this court. The argument on appeal was not based on any claim that separate awards must be made or could be made in amounts exceeding the total value of the property if held in a single ownership. The argument was that the charter required separate apportionment of the share of the lessee, to which the lessee asserted a constitutional right. This court held that the charter contemplated the award of damages in a lump sum and that the segregation be made after the gross sum had been ascertained and deposited with the city treasurer.
We quote:
The court further intimated that if controversy should arise between the owner and the lessee as to their respective shares, it should be settled as provided in the charter. The charter provided that such controversy should be determined by the council after hearing, and subject to appeal, and added, "`or the council may direct that a suit of interpleader or other proceeding be instituted.'"
We are not concerned with the interpretation of the city charter in the Postill case, but that decision did directly hold that the making of a lump-sum award *251 subject to later apportionment was "not in violation of any prescription of the Constitution." That case is decisive on the constitutional issue which is here presented. On the issues of statutory construction and procedure, we rely upon authorities cited from other jurisdictions.
27. We conclude that, except perhaps under extraordinary circumstances, when actions are brought for condemnation of land, which are triable before a jury, that body should return a verdict in a single lump sum, representing the fair market value of the land taken, and the net depreciation, if any, of the part not taken. In this case we find no circumstances requiring any departure from the general rule.
28, 29. There remains the important question raised by the fourth assignment of error as to how, when, and by whom, the apportionment of the damages should be made, as between the lessors and the several lessees. The Oregon statute under which the action was brought, and the judicial opinions from other states, demonstrate that the condemnation proceedings, as such, ended when the jury made its award and the damages assessed were paid into court by the state. At that point judgment is entered appropriating the property to the state.
The statute provides:
Excerpts from Nichols on Eminent Domain support our conclusion:
The learned author then points out that both lessor and lessee are entitled to share in the award according to their respective interests. He then says:
Again, on the authority of cases cited, it is said:
30. While recognizing that a court in the proceeding to assess damages has no equitable powers, 18 Am Jur, Eminent Domain, p. 1007, § 364, the authors of that text continue"
The same rule is recognized in the federal courts:
Since the condemnation was complete when the money was paid into the court, it follows that the function of the jury was, by that time, fully performed.
31. Issues remain for determination, but they are not issues in a condemnation action, for in such actions, the state is a vitally interested party, and in the subsequent apportionment of the fund between parties who have appeared in the case, the state is not interested. The vital question is not concerning the duty of the state;  it concerns the duty of the court. As applied to the pending case, the question is limited to the situation in which all of the persons having property rights in the land are before the court as parties. It *254 may be that the state would be interested in apportionment proceedings if claimants who had not been parties in the condemnation action were permitted or required to intervene in proceedings for apportionment and to litigate questions of title in the land, prior to condemnation; but that problem is not now before us.
Various procedures have been approved for the apportionment of the fund. If the fund has been paid to one of the owners, another, who had a property right in the land, has been permitted to sue for money had and received, an action based upon equitable principles. Harris v. Howes, 75 Me 436. We think that a rule which would require this type of procedure would be unjust to all parties having interests in the property. The one to whom the money was paid may have spent or concealed it and the other should not be put to the expense of an independent suit to secure his share in the fund which represents his former interest in the land. Furthermore, the one to whom the money was paid should not be subjected to two suits by reason of the condemnation, when one would suffice.
In a number of cases it has been held that the money should be paid to the court and the parties permitted or required to interplead. From the note in LRA, 1917 A, we quote the following:
In Harris v. Howes, supra, the court authorized an action for money had and received, but it stated that a bill in equity would also lie for recovery for the proportionate share by lessee.
In Mayor and City Council of Baltimore v. Latrobe, supra, 101 Md 621, 61 A 203, the court said:
In Turner v. Woodard, 259 Fed 737 (CCA 1st), the United States instituted condemnation proceedings against land in which mortgagees and lien creditors held interests. In that case the parties had stipulated that the only issue to be submitted to the jury should be the value of the property, and that the court should apportion the fund. The United States was not a party to the stipulation. The court distributed the fund. We quote:
In Department of Public Works and Building v. Porter, 327 Ill 28, 158 NE 366, 369, the court said:
*257 Finally, in Pacific National Bank of Seattle v. Bremerton Bridge Co., 2 Wash 2d 52, 97 P2d 162, 165, the court said:
From State ex rel. Long v. Superior Court, 80 Wash 417, 141 P 906, we quote:
In North Coast Ry. Co. v. Hess, 56 Wash 335, 105 P 853, it was held that the power of the equity court to determine the distribution of the fund was inherent, and existed apart from statute, and, since the fund stands in place of the full value of the land, it is the duty of the court to dispose of the fund in the same manner as it would have disposed of the land for which the fund is substituted.
32. From the authorities cited, and as a matter of sound reasoning, we find that after the state has paid into court the sum awarded by the jury, the condemnation proceedings, as such, are at an end, and judgment vesting title in the state follows. But this leaves in the court a fund in which the former lessor and lessees have interests which are the equivalent in money of the interests formerly held in the land. But while the interests in the land were easily defined by reference to the leases, the determination of the relative interests in the fund may involve the most intricate and difficult problems, for the determination of which, juries are unsuited. The interposition of equity is required. If, as indicated by the authorities, one claimant may implead others who were not parties to the condemnation action and may invoke the aid of equity, we think it follows a fortiorari that similar equitable procedure should be available to those who were parties to the condemnation. In cases of this kind the state is not interested in the apportionment proceedings, nor is it responsible for the expense involved therein. But we think that the making of the apportionment is ancillary to the condemnation proceedings and should be determined without the necessity of bringing a new suit *259 or action. The action of the state has worked a substitution of unknown rights in a fund for known rights in the land, and the law should not throw the parties out of court and require them to institute a separate and independent suit in equity, or to bring an action for money had and received, which would be neither plain, speedy nor adequate, when all the parties are before the court and when timely request is made, as was done in this case, for further proceedings apportioning the award.
33. In addition to the above illustrations, it should be pointed out that the distribution of a condemnation award is analogous to a bill in interpleader, for the condemnor who pays the amount of the judgment into court is discharged from further liability and the land is appropriated to the use of the condemnor. Thereafter, the conflicting claims, if any, can be dealt with as in proceedings following the discharge of the plaintiff from liability by deposit into court of the contested fund in a bill of interpleader. The litigation then proceeds among the claimants to the fund. Since a bill of interpleader is an equitable proceeding, the apportionment of a condemnation award would be similarly an equitable proceeding.
34. The money in the hands of the court was in every true sense a trust fund. Our statute provides that:
The adjustment of the rights of the claimants in the manner proposed, if not technically within the letter of the statute, is at least within its spirit.
35. Another statute provides:
We hold that the trial court was authorized to retain jurisdiction and that it should have conducted a supplemental hearing in this case for the purpose of apportioning the lump-sum award among the owners and lessees as their interests may appear, exercising the powers of equity to that end. Similar action was taken by this court in Spencer v. City of Portland, 114 Or 381, 235 P 279, where we said:
36. The third assignment of error criticizes the instruction which was given concerning a view of the premises. As we read it, the court did not tell the jury that the view of the premises was evidence. In effect, they were instructed that the view might be *261 considered as an aid in understanding the evidence. The assignment is without merit.
37. The fourth assignment raises issue already considered and determined herein. The value of the property is not that which is placed thereon by the testimony of the owners, although their testimony is competent. The measure of damages is as previously set forth herein.
38. The fifth assignment asserts that the court erred in denying to the Burk interests a separate allowance of attorney fees. In the judgment of condemnation, jurisdiction was retained for the determination by the court of the amount of the attorney fees at a supplemental hearing to be held upon that issue. Thereafter an order was made as follows:
We do not know what matters were considered relevant by the trial court in fixing the lump-sum fee. Although it was proper to fix the compensation for the taking of the property as if it were held in a single ownership, the fixing of attorney fees was a different matter. The statute contemplates that the court shall fix "a reasonable attorney's fee". OCLA, § 100-116, as amended by Laws 1947, ch 283. But in this case it is apparent that the interest of the several lessees was in some respects adverse to that of the owners. The owners and the lessees were entitled to separate representation by counsel, and the work of counsel was therefore more involved than it would have been had there been no separate interests in the property. If the trial court considered this aspect of the case in *262 fixing the lump-sum fee, then the total award should stand as made, and the sum fixed should be apportioned to the owners, on the one hand, and to the separate lessees on the other, at the time when the apportionment of compensation is made. If, however, the award of an attorney's fee was made without regard to the additional legal services required by reason of the presence of adverse parties, then the total award should be modified to conform to this opinion. This is a matter peculiarly within the control of the trial court.
We have already disposed of the sixth assignment of error.
There is no merit in the seventh assignment which complains of the exclusion from evidence of a letter written by an attorney, by the Highway Commission.
The cause is remanded to the circuit court with directions to apportion the award of compensation between the owners and the defendant Patzer and between the owners and the defendant Winkenwerder, as their several interests may appear, and to apportion a reasonable attorneys' fee between the parties as may be equitable.