Court Opinion

ID: 7816206
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:37:02.220843+00
Date Added: 2024-06-11T16:30:36.631118
License: Public Domain

Jim Johnson, Associate Justice, dissenting. Article 2, § 22 of the Constitution of the State of Arkansas is as follows: ‘ ‘ The right of property is before and higher than any constitutional sanction; and private property shall not be taken, appropriated or damaged for public use, without just compensation therefor.” Based on this provision of the Constitution, this court has held that advance payment is required as a condition precedent for taking land under an eminent domain proceeding. Arkansas State Highway Commission v. Partain, 192 Ark. 127, 90 S. W. 2d 968. Following the opinion in the Partain case, supra, the legislature in 1953 enacted Act 115 which provided, inter alia, as follows: “§ 76-536. Title vests upon making deposit. Immediately upon the making of the deposit provided for in section 5 (§ 76-538), title to the said lands in fee simple (or a conditional fee if mineral rights are sought to be preserved to the property owner) or such lesser estate or interest therein as is specified in said declaration, shall vest in the persons entitled thereto; and said compensation shall be ascertained and awarded in said proceeding and established by judgment therein and said judgment shall include as a part of the just compensation awarded, interest at the rate of six per cent (6%) per annum of the amount finally awarded as the value of the property, from the date of the surrender of possession to the date of payment, but interest shall not be allowed on so much thereof as may have been paid into court. No sum so paid into court shall be charged with commission or poundage.” 1  This act contained no emergency clause and before the effective date thereof this court on April 20, 1953, delivered its opinion in the case of Arkansas State Highway Commission v. Stupenti, 222 Ark. 9, 257 S. W. 2d 37, wherein it was held that: ‘ ‘ Just compensation means full compensation. While the real loss to appellee might well be described as the denial of the use of his land for the time stated, yet the universally recognized rule for measuring this loss is by calculation of interest on the value of the land. ’ ’ The conflict between Act 115, supra, and the Stupenti case, supra, seems to be irreconcilable. The act provided “interest shall not be allowed on so much thereof [amount of judgment] as may have been paid into court”, and the opinion in Stupenti provides, “Just compensation means full compensation” and in that opinion this court in determining that interest was due the landowner quoted from Jacobs et al. v. U. S., 290 U. S. 13, 54 S. Ct. 26, 78 L. Ed. 142, as follows: ‘ ‘ The owner is not limited to the value of the property at the time of the taking; ‘he is entitled to such addition as will produce the full equivalent of that value paid contemporaneously with the taking’. Interest at a proper rate ‘is a good measure by which to ascertain the amount so to be added’.” and further in the Stupenti case this court, in rejecting the argument that interest, if any, should run only from the date of entry (May 5, 1950) to the date when appellant made its deposit into the registry of the court, said, “This, of course, would result in no interest at all since the deposit was made March 27, 1950.. In all events the proper date from which interest should be computed is the date of entry. ” It is apparent therefore that this court has determined that a property owner is entitled to interest from the date of entry as a part of his just compensation regardless of whether the proper amount has been placed in the registry of the court, and that such deposit does not relieve the condemnor from payment of such interest since the interest payment is not considered interest as such but a part of the land owner’s just compensation. In the case at bar we have a landowner who felt that the $69,500 deposit made by the condemnor was grossly inadequate and in proper manner petitioned that the state be required to increase its deposit. After a hearing on the petition, the trial court in its sound discretion found that the deposit should be increased to $544,000. After this increase was ordered the Highway Commission changed its plans for the construction of the proposed highway, providing for additional access to the balance of appellees’ property, thereby diminishing materially the prospective damage to the balance of appellees’ property. The trial court, avoiding a multiplicity of suits, again in its sound discretion, refused to allow the Highway Commission to reopen the case for the purpose of showing the changes in plans which would have diminished the prospective damage and no doubt would have justified a smaller deposit. Certainly it cannot be said that the trial court abused its discretion in refusing to reopen the case. If this were not so, then there would be no end to the litigation which would result from every change the Highway Commission might decide to make following a judicial determination of the amount of a deposit. Upon trial of the case, based on the changed plans, a jury found appellees’ damages to be $325,000, which amount, even after the plans were changed, is a far cry from the $69,500 the Highway Commission originally placed in the registry of the court which was supposed to be its estimate of the damages which would have been sustained by the landowners. In fact, it is not denied that under the terms of Act 115, the action of the landowner in petitioning for an increased deposit saved the State $38,131.75 in interest alone, not counting the windfall of $32,000 additional this court is allowing the State by the majority opinion. If the amount of interest due the landowner could be calculated under the plain language of the Stupenti case, supra, then the saving to the State caused by this landowner’s petition would be almost twice the $38,131.75 saved under Act 115. Yet the majority opinion says, “If the appellees’ view of the law should prevail it would inevitably result in encouraging landowners to present exhorbitant claims against the State in condemnation cases.” To the contrary, it appears to me that the healthy result would be to cause the State to make a deposit which more nearly represents the true value of the damage which might be sustained by the landowner who is being compelled to sell his land to the State against his will2 Particularly is this true if it can be said that the portion of Act 115 which prohibits payment of interest on amounts deposited in court is constitutional. The majority does not cite one single condemnation case to support its conclusion, but instead dismisses the excellent cases cited by appellees with the remark that they are distinguishable, “for in none of them did the landowner obtain the excessive deposit through his own efforts ”. In my view this is a distinction without a difference, since the principle in all of these cases remain the same. Uniquely under our law the trial court is permitted to order an increase in the amount of a deposit if it can be shown that the amount deposited is inadequate. This is not an ex parte proceeding whereby the landowner is the only party heard, but instead the State has the right to be heard and offer evidence of the correctness of the amount of the deposit. After a full hearing the trial court, in the case at bar, correctly determined from the evidence that the deposit was grossly inadequate and should be increased. Now this court by the majority view is saying that the landowner should be penalized because the trial court failed to determine exactly the amount of damages a jury would assess, and as above set out, the final trial was held on a set of facts which did hot obtain at the hearing on the motion to increase, dne to the change in plans made by the Highway Commission. Suppose the trial court had granted the condemnor’s motion to reopen the case and offer evidence of its change of plans and after a full hearing determined that the amount of the deposit should have been reduced. Would not the majority view require that the landowner pay interest on the excess for the period of time such excess had been deposited? To ask the question is to answer it. Under our system the landowner had no more control over whether the Highway Department would change its plans than he had over the amount the trial court found to be an adequate deposit. Nor does the landowner have any control over the amount the condemnor chooses to voluntarily deposit. Would not the majority view also apply to a situation whereby the condemnor on its own volition deposited an amount in excess of the ultimate judgment? The majority in rejecting the logic of the Georgia Court of Appeals in City of Atlanta v. Lunsford, 105 Ga. App. 247, 124 S. E. 2d 493, chose to discuss only the involuntary loan aspect of the court’s reasoning. This is not the strongest case cited by appellees. See New York Elevated Railroad Co. v. Story, 8 N. Y. State Reports 431, 44 Hun. 177; St. Louis K. & NWR Company v. Knapp, Stout & Co., (Mo.), 61 S. W. 300; Kelly et al. v. Okla. Turnpike Auth., 269 P. 2d 359; Maddox v. Gulf, Colo. S S. F. Ry. Co., (Tex.), 293 S. W. 2d 499. In fact it is the only case cited in which the proposition of an involuntary loan is discussed and to say the least, I agree with the court’s logic in its entirety. The Georgia statute is not identical with ours but in my view it cannot be distinguished in meaning and effect. I quote at length from the Lunsford case, supra, as follows : “No mention of interest is made in Code Section 36-603, which is the section applicable here. It simply provides that, in the event the final judgment fixing the amount to be paid for the land taken is less than the amount of the award of the assessors, the condemnee shall be bound to refund any excess paid to or received by him. “The law allows interest only because of a contract, express or implied, for its payment, or as damages for the detention of money, or for breach of some contract, or the violation of some duty. It is very generally stated that interest, being of purely statutory origin and not the creature of the common law, shall not be awarded except in such cases as fall within the terms of the statute, unless it has been contracted for either expressly or impliedly. In other words, there is no absolute right, independent of contract, express or implied, or of statute, to interest. Best v. Maddox, 185 Ga. 78, 194 S. E. 578; Accord, Irons v. Harrison, 185 Ga. 244 (8), 194 S. E. 749; Gormley v. Eison, 189 Ga. 259, 5 S. E. 2d 643. This principle has been applied specifically to a condemnation proceeding such as we here deal with. St. Louis K. & N.W.R. Co. v. Knapp, Stout & Co., 160 Mo. 396, 61 S. W. 300. ‘ ‘ Certainly there is no express contract on the part of the condemnee to pay interest on any amount, nor do we find any basis for holding that there is any implied contract on his part to do so. The amount of the assessors’ award is required to be paid by the condemnor, and it is made available to the condemnee from the time of such payment under the provisions of Art. I, Sec. Ill, Para. I of the Constitution of 1945 (Code Anno. Sec. 11-301) which provides that just compensation must be ‘first paid.’ State Highway Department v. Hendrix, 215 Ga. 821, 113 S. E. 2d 761. The condemnation proceeding is, as to the condemnee, involuntary. If the amount of the award was not made available to the condemnee before the taking of his land, it would result in his being deprived of the use of his land and the money which the assessors have determined to represent just compensation therefor until a final judgment could be obtained. Often there is considerable delay between the time of the assessors’ award and the trial before a jury. At any time the condemnee takes his money down, it is only natural that he has hope that the amount of the jury verdict will be equal to or in excess of the amount of the assessors’ award. Neither the condemnor, the condemnee, nor the court can know what the result may be, thus none can know until final judgment the amount that must finally be paid and accepted as just compensation. Condemnee is not and cannot be bound to refund any amount until final judgment. Thus it would strain credulity to say that there is any contractual obligation on his part to pay any amount until that time. Interest does not begin to run on an obligation until it is due and payable, in the absence of some contractual or statutory provision to the contrary. Approval of the contention of the city that interest should run on the excess from the time of payment of the award into the registry of the court, or even from the time of the withdrawal thereof, by the condemnee, would amount to holding that the city was authorized to require the condemnee to accept an involuntary loan, amount of which was indefinite and not determinable until some future date when a final judgment might be obtained, and at ‘lawful interest’ or 7 percent per annum, a rate over which the condemnee could have no control. “Interest eo nomine can only be recovered from the date when the amount of the claim has been liquidated and determined. Insurance Company of North America v. Folds, 42 Ga. App. 306, 155 S. E. 782, and see 29 C. J. S. Eminent Domain, Sec. 333, page 1386. “It is urged that, since the General Assembly has provided for. the payment of interest by the condemnee on such excess amount in a special master proceedings (Ga. L. 1957, page 387, 396, Code Anno, Section 36-615a), a public policy has been adopted which we should apply uniformly both here and in the ‘Three Assessor’ type of proceedings. We do not agree. Each type of proceeding is statutory, and each must be had, governed, and determined by the terms of its respective, statute. Further, provision for payment of interest by the condemnee on the excess or the difference between the amount of a special master’s award and the amount of the final judgment has not yet been tested as to its constitutionality. There is room, we think, for grave doubt that the provision will stand a constitutional test. “Counsel for the city urged that, since it has been held, in State Highway Board of Georgia v. Warthen, 54 Ga. App. 759, 189 S. E. 76; Gate City Terminal Company v. Thrower, 136 Ga. 456, 71 S. E. 903; Central Georgia Power Company v. Stone, 142 Ga. 662, 83 S. E. 524, that when the amount of the award has been increased by the final judgment the condemnee is entitled to interest on the amount of the increase from the time of the taking of the property, it would be unfair .to hold that the city is not likewise entitled to interest on the excess when the amount of the award has been decreased. Again, we do not agree. The interest to which the condemnee is entitled flows from the constitutional guaranty of his just compensation to the condemnee for his property. Seaboard Airline R. R. Co. v. United States, 261 U. S. 299, 43 S. Ct. 354, 67 L. Ed. 664; Brooks-Scanlon Corp. v. United States, 265 U. S. 106, 44 S. Ct. 471, 68 L. Ed. 934; Reed v. Chicago-Milw. & St. Paul R. R. Co., 25 F. 886. ‘ ‘ Of course, when the final judgment is obtained and the amount that condemnor is required to pay as just compensation is thus finally determined, if there is excess between the amount of the judgment and the assessors’ award, both the amount thereof and the obligation to refund by the condemnee has become fixed. Thus it is proper for the court to provide, in this judgment as in other judgments, for the payment of interest thereon from the date of the judgment, and at the lawful rate of 7% per annum. Code Section 110-304 and 57-108. Judgment affirmed.” From what has been said and from 29 C. J. S., Eminent Domain, §333 (b), page 1386, wherein it is said, “"Where the award has been paid into court, and the amount finally awarded is less than that deposited, the condemnor is not entitled to interest on the balance; and this is so, it has been held, even though the money deposited was turned over to the landowner,” I respectfully dissent to the majority opinion.   It must be noted that the Act clearly states the liability of the Highway Commission for interest on an excess of recovery over deposit, but pointedly omits any provision for interest from the landowner.    A fair offer would tend to minimize the necessity of litigation, a policy of law which is universally applied.