Court Opinion

ID: 6485994
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:09:59.435184+00
Date Added: 2024-06-11T15:54:20.679624
License: Public Domain

DISSENTING OPINION OE
STAINBACK, J.
I cannot agree with the opinion of the majority as expressed herein.
This is a suit in eminent domain brought pursuant to the resolution of the Hawaii Aeronautics Commission as follows:
*440“RESOLVED (1) that the public necessity requires the condemnation for public use, namely, for Honolulu International Airport expansion, of the lands of the Damon Tract adjacent to the airport, delineated on the map on this table; (2) that the Territory proceed immediately with condemnation proceedings of the said land so needed; (3) that the Attorney General be requested to institute suit for such purpose.” (Emphasis added.)
The facts relative to the various pleadings, motions, amendments and other proceedings that have taken place in the court below are set forth in the majority opinion.
That “the lands of the Damon Tract” include the improvements thereon — erected before the expiration of long-term leases — and that the Territory in taking such is liable to the owners thereof is elementary law. The rights to compensation “accrued at the date of summons.” (R. L. H. 1955, c. 8, § 22.)
“A condemnation proceeding is an action in rem. It is not the taking of rights of designated persons, but the taking of the property itself. Duckett & Co. v. United States, 266 U. S. 149, 151, 45 S. Ct. 38, 69 L. ed. 216.” (Eagle Lake Improvement Co. v. United States, 160 F. [2d] 182, 184.)
The proceeding takes the land including all improvements thereon and the question of the division of the compensation as between landlord and tenant depends upon the terms of the conti’act between the landlord and tenant, to which contract the Territory is not a party and with which it is not concerned. This will be discussed hereinafter.
The main difficulty presented is whether mandamus will lie to compel the trial of the interests of the lessor and the lessees in one proceeding and prevent the withdrawal of the sum of $3,585,999.
This court has frequently held that mandamus is not a *441substitute for appeal; that where there is a discretion in the trial judge, in the absence of a clear abuse of such discretion it will not be interfered with by mandamus. The latest decision of this court so holding was Petition Tactacan, Writ of Mandamus, 42 Haw. 141.
The object of mandamus is set forth in section 236-2, Revised Laws of Hawaii 1955, as follows:
“The object of this order is to prevent a denial of justice, and it therefore issues in all cases where the law has assigned no specific relief by the ordinary means, or even where a party has other means of relief, if the slowness of ordinary legal forms is likely to produce such a delay, that the public good and the administration of justice will suffer from it, and where justice and reason require that some mode should exist of redressing a wrong, or an abuse of any nature whatever.”
In the case of Virginia v Rives, 100 U. S. 313, 323, the statement is made:
“In what case such a writ [of mandamus] is warranted by the principles and usages of law it is not always easy to determine. Its use has been very much extended in modern times, and now it may be said to be an established remedy to oblige inferior courts and magistrates to do that justice which they are in duty, and by virtue of their office, bound to do. It does not lie to control judicial discretion, except when that discretion has been abused.”
The quotation thereafter states:
“One of its peculiar and more common uses is to restrain inferior courts and to keep them within their lawful bounds.”
La Buy v. Howes Leather Co., 352 U. S. 249, decided January 14, 1957, sustained the Court of Appeals in issuing writs of mandamus requiring the Federal District *442Judge to vacate his orders referring two civil antitrust actions to a master for a hearing. Paragraph I of the syllabus states:
“Since the Court of Appeals could at some stage of the antitrust proceedings entertain appeals in these cases, it had discretionary power under the All Writs Act, 28 U. S. C. § 1651(a), in proper circumstances to issue writs of mandamus reaching them.”
In its discussion of the Court of Appeals issuing the writ, the court pointed out that the cases had been burdensome to the petitioner and showed the long records that had already taken place in the District Court proceeding, the many amendments and preliminary pleas, etc., as in the case before us.
See Fong, Auditor v. Sapienza, Judge, 39 Haw. 79, where a writ of mandamus was issued because of an abuse of discretion by the trial judge with reference to a continuance.
Under the liberal provisions of the territorial statute mandamus will lie in this case if, as stated in Carlock v. United States, 53 F. (2d) 926:
“It is a fundamental principle, governing condemnation proceedings, where several interests are involved, such as estates for life, or in remainder, or leaseholds, or in reversion, in the property to be condemned, all should be combined in determining the value of the fee, after which the total value of the fee can be subdivided in satisfaction of the values fixed upon the various interests involved.”
A condemnation proceeding is in the nature of an action inrem. (Burkhart v. United States, 227 F. [2d] 659 [CCA 9, 1955]; United States v. Honolulu Plantation Co., 182 F. [2d] 172 [CCA 9, 1950]; Eagle Lake Improvement Co. v. United States, 160 F. [2d] 182; Meadows v. United States, *443144 F. [2d] 751 [1944]; Carlock v. United States, 53 F. [2d] 926.)
“It is not the taking of rights of designated persons, hut the taking of the property itself. Duckett & Co. v. United States, 266 U. S. 149, 151, 45 S. Ct. 38, 69 L. ed. 216. * * * The sum determined to be due for the taking is apportioned between the claimants, hut, ‘as between the condemnor and the condemnee, the property is valued as a whole ’ ” (Eagle Lake Improvement Co. v. United States, 160 F. [2d] 182.) (Emphasis added.)
See also Meadows v. United States, 144 F. (2d) 751, 752. There are many other authorities to a like effect.
It is elementary that “land” or “real estate,” as used in statutes relative to eminent domain, include the improvements attached to the realty. The authorities are unanimous to that effect.
“Not only is soil affected, but everything annexed to the soil is included. It matters not that such conditions are by act of nature or by artificial affixation.” (Nichols, Eminent Domain, 3d ed., vol. 2, § 5, p. 10.)
“Fixtures upon the property taken must be valued and paid for as part of the real estate * * *.” (Lewis, Eminent Domain, 3d ed., vol. 2, p. 1276.)
Our statute relative to condemnation proceedings provides as follows:
“Damages assessed, how. In fixing the compensation or damages to be paid for the condemnation of any property, the value of the property sought to he condemned with all improvements thereon shall he assessed, and if any of the improvements are separately owned, the value thereof shall be separately assessed. * * *” (R. L. H. 1955, § 8-21.) (Emphasis added.)
“Assessed as at day of summons. For the purpose of assessing compensation and damages, the right thereto shall be deemed to have accrued at the date of sum• *444mons, and its actual value at that date shall be the measure of valuation of all property to be condemned ^ if #
“No improvement put on the property subsequent to the date of the service of the summons shall be included in the assessment of compensation or damages.” (R. L. H. 1955, § 8-22.) (Emphasis added.)
It will be noted that the rights of the occupants “accrued” on September 13, 1957 when the tenants still held tenancies under the provisions of their various leases; prior to that time there could be no claim that the Territory had any right to the property either of the lessor or of the lessees.
The dictionary gives the following definition for the word “accrue”:
“To come into existence as an enforceable claim; to vest as a right; as, a cause of action has accrued when the right to sue has become vested. * * *”
See also the numerous cases cited in Words and Phrases (pages 582-602, particularly pages 592 to 597) where the word “accrue” or “accrued” means to become absolute or vested.
As pointed out in the majority opinion, before the amendment to the complaint it included within the taking the land and all improvements thereon. The amendment attempted to strike from the complaint the interests, if any, of the petitioners in the land and the right of the petitioners to remove their improvements.
In justifying this the majority opinion attempts to distinguish United States v. Sunset Cemetery Co., 132 F. (2d) 163, where the court refused to permit an amendment to the declaration of taking so as to exclude anything already seized; it held that by the original declaration of taking the rights of both parties were fixed and could not thereafter be altered. The claim is made that under our *445statute title to the property or interest taken vests in the condemning authority not by the filing of the complaint, nor by the entry of an order of possession, but only upon the entry of the final order of condemnation. But see the decision in Honolulu v. Lord, et al., 36 Haw. 348, wherein it was said:
“Section 64, Revised Laws of Hawaii, 1935 [now R. L. H. 1955, § 8-22], provides that for the purpose of assessing compensation and damages the right thereto shall he deemed to have accrued at the date of the summons, which is equivalent to saying the property shall he deemed to have heen taken at that time.” (Emphasis added.)
As further pointed out in this decision, equitable principles are applied in the payment of just compensation for the taking of property.
Numerous cases, including cases in the Supreme Court of the United States, hold that the “blight of condemnation” exists from the date of the institution of proceedings as the owner cannot thereafter fully utilize his property and just compensation requires that he be made whole.
If we are to apply equitable principles to “just compensation” (Fifth Amendment to the Constitution of the United States) we must take the substance rather than the form. The majority opinion states that the only recourse the petitioners would have would be for abandonment and not for compensation for the taking of their interests. This would be true if there were a bona fide abandonment. Obviously there was none. By first abandoning its original taking including all the lands and its subsequent retaking, the Territory attempts to deprive the tenants of an accrued right by a flimsy technicality. One cannot do indirectly what would be illegal if done directly. (Dress Mfg. Co. v. Cadinha, 36 Haw. 732, 742.)
If we start with the indisputable proposition that im*446provements placed upon land become a part thereof, and the Territory instituted a proceeding to condemn “the lands of the Damon Tract adjacent to the airport,” it became obligated to pay the full value thereof as of the date of summons; this would include the improvements thereon.
Por example, if we assume that lot X owned by A has a value of $1,000 and improvements thereon of the value of $1,500, the Territory would be obligated to pay $2,500 as the value of the land even though it might not desire or use the improvements upon the land.
If we have the same lot X owned by A and B or more owners and the government condemns it, it would have to pay the same amount, to be divided among the various owners in accordance with their respective interests.
If we assume that the fee of lot X was owned by A, and that A had leased it to B with the provision that in case of condemnation B should have the value of the improvements he might erect thereon, the government would still be obligated to pay $2,500 compensation for the property and A and B would divide according to their contract.
It is no concern of the government how the owner of the fee and the owner of the leasehold divide the proceeds. This is only justice and common sense. There are numerous authorities to this effect, a few of which are as follows:
In United States v. Seagren, 50 F. (2d) 333, it is stated:
“The question thus becomes whether or not this private stipulation for removal between the landlord and the tenant inures to the benefit of the government when condemning the estate of both? Gan the United States, exercising its right of eminent domain, change the essential character of structures from realty, which it must pay for, to personalty, which it may order removed without payment, because a landlord and tenant, dealing upon private considerations of reciprocal interest and expenditure, have years before agreed as *447between themselves that upon their termination of their lease the tenant might remove his structures?
* *
“If the structures here in question had been built by the landlord, they would have been taken and paid for by the government without question, as the government concedes they are now part of the realty. Is the tenant’s reserved power of removal as against the landlord’s termination of the lease to work a forfeiture in favor of the government? We think not.
“The inherent character of these structures is real estate; no agreement can change that character, though the landlord may waive the right which might otherwise accrue to him from the character of the structures placed upon his land. At the most, that is all that this agreement did.
“We find the controlling rule well stated in Nichols on Eminent Domain: ‘It frequently happens that, in the case of a lease for a long term of years, the tenant erects buildings upon the leased land or puts fixtures into the building for his own use. It is well settled that, even if the buildings or fixtures are attached to the real estate and would pass with a conveyance of the land, as between landlord and tenant they remain personal property, and, in the absence of special agreement to the contrary, may be removed by the tenant at any time during the continuation of the lease provided such removal may be made without injury to the freehold. This rule is however entirely for the protection of the tenant and cannot be invoked by the condemning party. If the buildings or fixtures are attached to the real estate, they must be treated as real estate in determining the total award, but in apportioning the award they are treated as personal property and credited to the tenant.’ Nichols on Eminent Domain (2d Ed.) vol. 1, § 234.”
*448State v. Miller, 92 S. W. (2d) 1073, 1074, where the State sought to condemn certain land for highway purposes and took the position that a building on the desired strip should be removed by the owner to another portion of his land and the State should be required to pay for no more than the bare land taken plus the cost of removing the improvements, the court said “Such a rule would be intolerable. * * * The building here under consideration was a permanent improvement and constituted an appurtenance to the land which would pass with the title in an ordinary conveyance, and in our opinion the state should be required, as held by the trial court, to accept and pay for it along Avith the land so condemned.”
In Brazos River Conservation and Reclamation District v. Adkisson, 173 S.W. (2d) 294, the court held that where fixtures were of such a character that if put in by the owner they would constitute a part of the real estate, they must be paid for as real estate by the condemner, and that it is immaterial that as between the lessor and the lessee the lessee had the privilege of removing such fixtures at the termination of the lease.
In Jackson v. State of New York, 213 N. Y. 34, 35-36, Justice Cardozo, one of the great judges of modern times, went even further and held in eminent domain the value of fixtures in a building taken by the State must be considered in estimating total value of property appropriated. The board of claims had refused to award any compensation to the claimant for the machinery, shafting, elevators and conveyors contained in the building. This equipment was annexed to the building in such form as between the vendor and vendee they would have constituted fixtures. Justice Cardozo stated:
“We think that the power of the State is not so great, nor the plight of the citizen so helpless. Condemnation is an enforced sale, and the State stands toward the *449owner as buyer toward seller. On that basis the rights and duties of each must be determined. It is intolerable that the State, after condemning a factory or warehouse, should surrender to the owner a stock of secondhand machinery and in so doing discharge the full measure of its duty. Severed from the building, such machinery commands only the prices of second-hand articles; attached to a going plant, it may produce an enhancement of value as great as it did when new. The law gives no sanction to so obvious an injustice as would result if the owner were held to forfeit all these elements of value.”
Again, in a New York case, In re Block Bounded by Avenue A, etc., 66 Misc. Rep. 488, 122 N. Y. S. 321, 339, the court said:
“The city took the entire buildings as they stood, including the trade fixtures therein, and for the purposes of this proceeding they must all be regarded as real property; that is, as between the tenant and the city, the trade fixtures were real property and must be paid for by the city the same as a building, and the tenant was under no more obligation to remove them than he would be to remove a building if he were the owner. As between the tenant and the owner, however, the trade fixtures were personalty, and could be removed, and therefore any award made for them would go to the tenant.”
The majority opinion attempts to distinguish the cases cited heretofore on the ground that the government in those cases was taking the whole fee and not something less than fee simple. Certainly the government may under proper circumstances if its needs require condemn less than a fee simple interest, but in this case the attorney general was authorized and directed to take the adjacent “lands” and there was no intent or authorization to take *450less than the fee simple. It is true the attorney general did attempt to take two bites instead of one in the proceeding to obtain title to all of the interests without paying the full value therefor, that is, the value of the improvements upon the land. But all the cases hold that the contract between landlord and tenant does not inure to the benefit of the government and it may not avail itself of any agreement between landlord and tenant so as to deprive the tenant of “just compensation.”
We think this court may take judicial notice that a large part of the land in the Territory is held by a very few large estates which will only lease and not sell their properties. For example, on the Island of Oahu more than one-third of its area is owned by three estates, properties of which include urban as well as rural lands; that many residences, business establishments, banks and elaborate hotels are built upon such leased property; that both the territorial and federal governments have taken under eminent domain, and are continuing to take, large and valuable areas throughout the Territory where the improvements are of much greater value than the bare land.
Years ago most of the leases made by these large estates contained a provision that in case of condemnation the lessee should not be entitled to any claim for compensation but that “all compensation payable or to be paid for or on account of the said premises by reason of the condemnation as aforesaid, shall be payable to and be the sole property of the lessors, and the lessee shall have no interest in or claim to such compensation or any part or parts thereof whatsoever.” (Bishop v. Pittman, 33 Haw. 647, 650.)
When the site for Hickam Field was taken by the government of the United States for an airfield, the Bishop Estate received many thousands of dollars for improvements which had been put upon its land by various tenants, *451the government having to pay full value of the lands and improvements. The writer of this opinion represented the United States in this proceeding which took over Water-town and other adjoining areas with all the improvements thereon represented mostly by numerous small residences and business establishments, many such representing the life savings of industrious but humble citizens. It was heartbreaking to see these tenants deprived of their property with no compensation. Under the contract the Bishop Estate received the full compensation or total value of the property for which the United States had to pay. This court held that the Bishop Estate could not donate to the tenants the value of improvements erected by them, even though it was reaping where it had not sown. (Bishop v. Pittman, supra.)
To cure this harsh provision in the leases, many landlords thereafter revised such covenants (some upon demands of tenants) so as to provide that in case of condemnation the lessee should receive the value of the improvements placed upon the land by him. Now the Territory by a subterfuge attempts to deprive the tenants of all value of his covenants by saying you can remove your improvements under another covenant (which was for an additional protection of the tenant) and therefore it is unnecessary to pay you the value thereof. The government was not a party to the contract nor was the contract for the benefit of the government, but for the tenants, and certainly because of this contract the government should not be permitted to take property at less than its fair value. If this is permissible the tenant is truly between Scylla and Charybdis or, in popular parlance, between the devil and the deep blue sea when he has erected improvements upon leasehold property.
In United States v. General Motors, 323 U. S. 373, 381, where the United States Government took over for a tern*452porary period the unexpired term of a lease and wished to pay only the rental value of an empty building for such taking from the tenant, the court refused to permit such proceeding, saying:
“If the Government need only pay the long-term rental of an empty building for a temporary taking from the long-term tenant a way will have been found to defeat the Fifth Amendment’s mandate for just compensation in all condemnations except those on which the contemplated public use requires the taking of the fee simple title. * * * If such a result be sustained we can see no limit to utilization of such a device; and, if there is none, the Amendment’s guaranty becomes, not one of just compensation for what is taken, but an instrument of confiscation fictionalizing ‘just compensation’ * *
Again, on page 382, the court points out that when the government does not take the entire interest but by the form of its proceeding chops it into bits of which it takes only what it wants, refusing to pay more than the market rental value for the chips so cut off, it states that this is neither the taking nor just compensation the Fifth Amendment contemplates. On page 383 the court stated:
“For fixtures and permanent equipment destroyed or depreciated in value by the taking, the respondent is entitled to compensation. An owner’s rights in these are no less property within the meaning of the Fifth Amendment than his rights in land and the structures thereon erected. And it matters not whether they were taken over by the Government or destroyed, since, as has been said, destruction is tantamount to taking. This is true whether the fixtures and equipment would be considered such as between vendor and vendee, or as a tenant’s trade fixtures.”
Conceding that the government may, upon payment of *453just compensation, take less than the fee simple, in the present case it did not do so; in fact, very obviously it had no intention to take less than the fee simple. Under the resolution of the Hawaii Aeronautics Commission the attorney general was authorized to and did bring a suit to condemn “the lands of the Damon Tract adjacent to the airport, delineated on the map.” It may not use a “device” to escape payment of just compensation, namely, the value of the land taken which included all improvements thereon.
The right to compensation of the land which the Territory took — and that included all improvements thereon — “accrued” on September 13, 1957, in the defendants to the condemnation proceedings. As to how this “just compensation” for what the government was taking, namely, lands which included improvements, was to be apportioned between tenant and landlord was not a matter of concern to the Territory; it was a question between the landlord and the tenants.
As pointed out in case after case, the obligation of the government to pay “just compensation” is not affected by how the “just compensation” may be divided between landlord and tenant. (See cases supra.) Any other construction would result in depriving tenants of the property without due process of law and would be a complete disregard of the equitable principles governing compensation in eminent domain. It is well settled that you cannot violate equitable principles by doing indirectly that which you cannot do directly. (Dress Mfg. Co. v. Cadinha, supra.) Certainly, this “device” is much more flagrant than the one in the cases heretofore cited such as in United States v. General Motors, supra.
Apparently the movants for a separate trial do not trust a jury finding as between landlord and tenant — and the Territory has joined with them by depositing with the court one dollar as the value of the lessees’ interests. The *454only ground set forth in the motion for a separate trial is that there are certain leases existing between the movant and the tenants. Clearly, the only trial that can be fair both to the Territory and to the various defendants is to proceed to the condemnation as a single proceeding with the jury under proper instructions valuing both the interest of the landlord and the several tenants.
The authorities cited in the court below by movants for a separate trial do not stand for their contention. Practically all these cases have been discussed heretofore. For example, the motion for separate trials cites Burkhart v. United States, supra, which was before the Ninth Circuit Court of Appeals on two occasions. This case was remanded after the second appeal with the following statement :
“The cause is reversed as to the lessees and remanded with directions to proceed to trial between the government and the parcel and that any question as to allocation of the just compensation between the claimants be dealt with after the award for the whole has been settled.”
There was a similar holding in Eagle Lake Improvement Co. v. United States previously cited. It stated as between the condemner and the condemnee the property is valued as a whole.
Incidentally, it may be noted that the Territory in assessing taxes included the improvements of the tenants as realty. (Personal property is not taxed in the Territory.) Yet it now claims that such improvements are personalty.
The contract provisions between the landlord and the tenants are intended to serve as a shield to the tenants and cannot be used by the Territory as a sword to destroy them.
I believe this court has ample authority under our territorial statute, section 236-2 heretofore quoted, to issue the writ of mandamus requested and it should direct the lower *455court to proceed with the trial of the case as to all parties and all interests, with the jury under proper instructions fixing the fair value of the interest of each of the parties as of September 13,1957.