Donaldson v. Bismarck , 71 N.D. 592 ( 1942 )

Defendant has petitioned for a rehearing "on the ground and for the reason that the court has overlooked material law and facts in the above entitled action, namely:

1st. That this is an action for damages in tort and not an action in condemnation proceedings.

2nd. That interest is not allowed as a matter of law under our statute in cases of this kind.

3rd. That there was neither pleading nor proof, nor claim by the plaintiff for interest.

4th. That even if interest should be allowed, it is excessive under chapter 150, Laws 1937."

The contentions thus advanced will be considered in the order stated.

(1) In support of the first contention it is said in the petition for rehearing:

"The court overlooked the fact that this action is not one in eminent domain, . . . and the damages are not measured the same as in an action in eminent domain. The city is not bringing this action to appropriate land. The city is not a party plaintiff. Nor is the city in any manner seeking the aid of the court to procure for itself any of the plaintiff's land. The action is brought by plaintiff, Donaldson, against the city for damages and is a tort action, . . . and it would follow that the right to interest in this case is the same as it would be if a private party had, for instance, built a slaughterhouse in the neighborhood of plaintiff's land. It is simply resulting damages as distinguished from actual taking of the property. . . .

"The plaintiff, if he relied on his rights under the 5th Amendment of the Federal Constitution, could have enjoined the defendant from operating the dump ground, and if the defendant in that case should wish to proceed, the city could then bring an action in condemnation proceedings, and in that case the plaintiff, Donaldson, as defendant in that case, could have asserted his rights under the doctrine of eminent domain. The plaintiff has not brought himself in a position to rely upon the 5th Amendment of the Federal Constitution in this, that he has brought an action against the city for damages. Under the common law, this would be an action for damages, quare clausum fregit."

The original decision in this case demonstrates, we think, beyond all doubt that this court was under no misapprehension as to the nature of the action. There is not a suggestion in that decision that the action is one by the city for condemnation. The first two sentences in the decision read:

"The plaintiff brought two actions against the defendant for damages alleged to have been sustained by reason of the establishment, maintenance and operation by the defendant of a public dump near the home owned and occupied by the plaintiff. In one action damages are sought for permanent injuries to the real property, and in the other action damages are sought for the annoyance, inconvenience and discomfort caused the plaintiff as a result of the establishment, maintenance and operation of said public dump."

The plaintiff did not claim, and the decision did not purport to grant him, any relief under the Fifth Amendment to the Federal Constitution, and, of course, that amendment could in no circumstances have any application to any question involved in this action. 16 CJS pp. 129 et seq.; 12 CJ p. 744; 1 Cooley, Constitutional Limitations, 8th ed. p. 66, and authorities cited in note 3; Brown v. New Jersey, 175 U.S. 172, 44 L ed 119, 20 S. Ct. 77; Capital City Dairy Co. v. Ohio, 183 U.S. 238, 46 L ed 171, 245, 246, 22 S. Ct. 111; Corrigan v. Buckley, 271 U.S. 323, 70 L ed 969, 46 S. Ct. 521.

"The first ten amendments to the Federal Constitution commonly known as the `bill of rights,' guaranteeing protection to certain rights of the people, do not apply to the states, but constitute limitations on the power of the Federal Government only." 16 CJS p. 129.

The Supreme Court of the United States has said "it is elementary" that the Fifth Amendment to the Constitution of the United States "operates solely on the National Government, and not on the states." Capital City Dairy Co. v. Ohio, 183 U.S. 238, 245, 46 L ed 171, 175, 22 S. Ct. 120. And that "the Fifth Amendment `is a limitation only upon the powers of the general government, . . . and is not directed against the action of individuals.'" Corrigan v. Buckley, 271 U.S. 323, 330, 70 L ed 969, 972, 46 S. Ct. 521; 16 CJS pp. 129, 130.

But the facts pleaded and proven in this case clearly establish that rights guaranteed to the plaintiff by § 14, article 1, of the Constitution of North Dakota, have been violated to plaintiff's damage. That section provides: "Private property shall not be taken or damaged for public use without just compensation having been first made to, or paid into court for the owner." This guaranty is broader than the guaranty of the Fifth Amendment to the Constitution of the United States. King v. Stark County, 67 N.D. 261, 264, 271 N.W. 771. Under § 14, supra, the owner is as much protected against his property being damaged as against his property being taken; and damaging property constitutes as much a ground for recovery as does the taking of property. King v. Stark County, 67 ND at p. 266, 271 NW at p. 774.

The guaranty of § 14 of the Constitution safeguards rights, and its protective power is not dependent upon the employment of any particular remedy. It is embodied in and made a part of the "Declaration of Rights" in the State Constitution, which is a counterpart of the Bill of Rights in the Federal Constitution.

"Section 14 of the Constitution was intended to guarantee to an owner of property the full right of ownership including possession and enjoyment rather than a right to redress for wrong committed in taking his property away from him. The constitutional mandate is not satisfied by the ascertainment of the amount of compensation and making the same a charge upon a state or municipal fund for which the credit of the state or the municipality is pledged. Martin v. Tyler (4 N.D. 278, 60 N.W. 392, 25 LRA 838). The Constitution guarantees to the owner something more than a right to recover judgment for the damages caused by the taking of his property or a recovery of the property itself after it has been taken; it guarantees that his property shall not be taken or damaged even for a necessary public use `without just compensation in money being first made to, or paid into court, for the owner.' Martin v. Tyler, supra. See also 20 CJ pp. 835-839.

"Section 14 of the Constitution was `calculated to protect property owners from injustice and wrong on the part of municipal or other corporations or individuals invested with the privilege of taking private property for public use, and should be given a liberal construction by the courts in order to make it effectual in the protection of the rights of the citizen.' Donovan v. Allert, 11 N.D. 289, 91 N.W. 441, 58 LRA 775, 95 Am St Rep 720; 1 Lewis, Eminent Domain, 2d ed. §§ 366, 389. And `the taking or damaging of private property for public use without the owner's consent is deemed so serious that payment therefor is a prerequisite to attempting to do so.' This is so even though the ultimate right to take the property for the proposed public use is manifest. `This does not mean that it (the property) may first be appropriated, and paid for at the end of a suit for damages, but means that payment must precede the taking or damaging.' Donovan v. Allert, 11 N.D. 289, 298, 91 N.W. 441, 58 LRA 775, 95 Am St Rep 720; 20 CJ pp. 835, 836, 838, 839." Becker County Sand Gravel Co. v. Wosick, 62 N.D. 740, 749, 750,245 N.W. 454.

The evidence in this case shows and the trial court found — (and we have approved these findings) — that plaintiff's property, immediately prior to the establishment of the dump, had a market value of $4,750; and that by reason of, and as a result of, the establishment of such dump and the defendant's use and maintenance thereof, plaintiff's property was damaged so as to depreciate the market value thereof from $4,750 to $1,250. In short, the acts of the defendant resulted in taking away from or depriving plaintiff of more than two thirds of the value of his property.

The provisions of § 14 of the Constitution are not restricted to eminent domain proceedings. They are applicable as well where private property has been taken or damaged without the consent of the owner, and where no condemnation proceeding has been brought. It is well settled that in such case the constitutional guaranty may be invoked, and the owner may maintain an action to recover just compensation for the property taken or the damage inflicted. Notes: — 20 ALR pp. 516 et seq. and 28 LRA(NS) pp. 968 et seq.; 18 Am Jur p. 1028, Eminent Domain; 2 Lewis, Eminent Domain, 3d ed. pp. 1545-1548. That rule has been recognized and applied by this court in many cases. Gram Constr. Co. v. Minneapolis, St. P. S. Ste. M.R. Co. 36 N.D. 164, 161 N.W. 732; Schilling v. Carl Twp.60 N.D. 480, 235 N.W. 216; Mayer v. Studer M. Co. 66 N.D. 190, 262 N.W. 925; King v. Stark County 67 N.D. 260, 271 N.W. 771; Jacobson v. State, 68 N.D. 259, 278 N.W. 652.

In Mayer v. Studer M. Co. this court said: "Where the state or an agency thereof acting in a sovereign capacity takes or damages private property for public use without legal exercise of the power of eminent domain, the aggrieved party may recover compensation for the property thus taken or compensation for the damage to his property thus inflicted."

(2). It is next contended, "that interest is not allowed as a matter of law under our statutes in cases of this kind," and attention is called to our statutory provisions (Comp. Laws 1913, §§ 7142, 7143) relating to interest, and to the decision in Seckerson v. Sinclair, 24 N.D. 625, 140 N.W. 239, wherein it was held that the allowance of interest in an action for tort is discretionary with the jury. The statutory provisions cited by the defendant, and construed in Seckerson v. Sinclair, supra, have no application to a case like this, wherein the right to recover "just compensation" is guaranteed by § 14 of the Constitution. In such cases the owner of property that has been damaged or taken is entitled to "just compensation," and to have such compensation paid to him, or into court, before the damage is inflicted or the property taken. Obviously, the value of property that has been taken or the amount of damage that has been inflicted, would not be less in a case where the property is taken or the damage is inflicted without the consent of the owner, and without the legal exercise of the power of eminent domain, than it would be if the compensation had been determined in a condemnation proceeding at, or immediately prior to, the time the damage was inflicted or the property taken.

Under the mandate of the Constitution, the owner is entitled to be paid "just compensation" before his property is taken or damaged. Where the property is taken or damaged without the owner's consent and without the legal exercise of the power of eminent domain, the owner becomes entitled to just compensation for the value of the property that has been taken or the amount of damage that has been inflicted the instant the property is taken or damaged. In such case, payment at some future time of the value of the property at the time it was taken, or the amount of the damage determined as of the time it was inflicted, does not constitute the just compensation which the Constitution requires to be paid to the owner. Just compensation, in such case, should include in addition to the value of the property at the time of the taking, or the amount of the damage at the time of its infliction, such additional amount as may be required to pay the full equivalent of the value or of the damage, as the case may be, paid contemporaneously with the taking or the damaging. Ordinarily, "interest at a proper rate is a good measure by which to ascertain the amount so to be added." Seaboard Air Line R. Co. v. United States, 261 U.S. 299, 67 L ed 664, 43 S. Ct. 357; Jacobs v. United States, 290 U.S. 13, 78 L ed 142, 54 S. Ct. 26, 96 A.L.R. 1; United States v. Creek Nation, 295 U.S. 103, 79 L ed 1331, 55 S. Ct. 681; Shoshone Tribe v. United States, 299 U.S. 476, 81 L ed 360, 57 S. Ct. 244; United States v. Klamath M. Tribes, 304 U.S. 119, 82 L ed 1219, 58 S. Ct. 799; Metropolitan Water Dist. v. Adams, 16 Cal. 2d p. 676, 107 P.2d p. 618; note, 96 ALR pp. 150 et seq.; 29 CJS pp. 1053 et seq.; 18 Am Jur p. 912; Eminent Domain; Warren v. First Div. St. Paul P.R. Co. 21 Minn. 424, 427; see also Oklahoma City v. Wells, 185 Okla. 369, 91 P.2d 1077, 123 A.L.R. 662; 2 Lewis, Eminent Domain, 3d ed. pp. 1319-1321.

In Jacobs v. United States, 290 U.S. 13, 78 L ed 142, 54 S. Ct. 26, 96 A.L.R. 1, supra, suit was brought by the owners of land to recover for damage caused by intermittent flooding as the consequence of the construction of a dam. The trial court held that the owners "were entitled to the amount of damage caused by the construction of the dam as of the date of its completion (October 1, 1925), `together with interest thereon at 6 per cent from the date of said taking until now as just compensation under the Fifth Amendment to the Constitution of the United States.'" The circuit court of appeals held that the plaintiffs were not entitled to the allowance that had been made by the district court based upon a computation of interest at the rate of 6 per cent from the date of the taking. The Supreme Court of the United States reversed the decision of the circuit court of appeals. In its decision, the Supreme Court of the United States said:

"The circuit court of appeals, distinguishing the present suits from condemnation proceedings instituted by the Government, held that the suits were founded upon an implied contract and hence that interest could not be allowed, citing United States v. North American Transp. Trading Co. 253 U.S. 330, 64 L ed 935, 40 S. Ct. 518.

"This ruling cannot be sustained. The suits were based on the right to recover just compensation for property taken by the United States for public use in the exercise of its power of eminent domain. That right was guaranteed by the Constitution. The fact that condemnation proceedings were not instituted and that the right was asserted in suits by the owners did not change the essential nature of the claim. The form of the remedy did not qualify the right. It rested upon the Fifth Amendment. Statutory recognition was not necessary. A promise to pay was not necessary. Such a promise was implied because of the duty to pay imposed by the Amendment. . . .

"The amount recoverable was just compensation, not inadequate compensation. The concept of just compensation is comprehensive and includes all elements, `and no specific command to include interest is necessary when interest or its equivalent is a part of such compensation.' 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.'"

In United States v. Creek Nation, 295 U.S. 103, 79 L ed 1331, 55 S. Ct. 681, supra, the Supreme Court of the United States held that the just compensation to be awarded for the appropriation of lands by the United States "should not be confined to the value of the lands at the time of the taking but should include such addition thereto as may be required to produce the present full equivalent of that value paid contemporaneously with the taking;" and that "interest at a reasonable rate is a suitable measure by which to ascertain the amount to be added."

The statutes of this state declare: "Interest is the compensation allowed for the use, or forbearance, or detention of money, or its equivalent." Comp. Laws 1913, § 6070.

In this case plaintiff's property was damaged in January, 1939. Judgments were rendered in his favor on July 19, 1940. The defendant appealed, and the action is still pending. Comp. Laws 1913, § 7966. The plaintiff has not been paid one cent of the "just compensation" which the Constitution required the defendant to pay before taking or damaging plaintiff's property. Payment now of the amount defendant was required to pay in January, 1939, will not constitute such "just compensation" as the Constitution prescribes. There must be added thereto an amount sufficient to produce the full equivalent of the amount of the damage inflicted upon plaintiff's property, paid contemporaneously with the infliction of the damage. Shoshone Tribe v. United States, 299 U.S. 476, 496, 497, 81 L ed 360, 368, 369, 57 S. Ct. 244. And interest at the rate prescribed by our laws as the legal rate, in absence of contract (Laws 1935, chapter 157), is, we think, "a proper measure by which to ascertain the amount so to be added." Jacobs v. United States, 290 U.S. 13, 78 L ed 142, 54 S. Ct. 26, 96 A.L.R. 1; United States v. Creek Nation, 295 U.S. 103, 79 L ed 1331, 55 S. Ct. 681; Shoshone Tribe v. United States, 299 U.S. 476, 81 L ed 360, 57 S. Ct. 244, and United States v. Klamath M. Tribes, 304 U.S. 119, 82 L ed 1219, 58 S. Ct. 799, supra.

(3). The next contention is "that there was neither pleading, nor proof, nor claim by the plaintiff for interest," and that hence there is no basis for allowance of interest.

This contention overlooks the foundation of plaintiff's cause of action. Such cause of action rests upon a constitutional guaranty which entitles plaintiff to recover "just compensation" for the damage inflicted upon his property. In his complaint the plaintiff alleged that prior to the establishment of the dump his property was of the value of $10,000, and that the establishment, maintenance and operation of the dump in the manner and with the results set forth in the complaint had rendered plaintiff's property worthless. Judgment was demanded in the sum of $10,000. "The requirement that `just compensation' shall be paid is comprehensive, and includes all elements, and no specific command to include interest is necessary when interest or its equivalent is a part of such compensation." Seaboard Air Line R. Co. v. United States, 261 US at p. 306, 67 L ed at p. 670, 43 S. Ct. 354. As has been pointed out, where property is taken or damaged before ascertainment and payment of compensation for the taking or damaging, the owner is not limited to the value of the property or the amount of the damage at the time of the taking or the damaging; but "he is entitled to such addition as will produce the full equivalent" of that value or damage paid contemporaneously with the taking or the infliction of the injury, and interest at a proper rate may ordinarily be used as a proper measure by which to ascertain the amount so to be added. Seaboard Air Line R. Co. v. United States, 261 U.S. 299, 67 L ed 664, 43 S. Ct. 357, supra. The plaintiff's complaint showed that his property had been damaged without the ascertainment or payment of compensation, and it alleged the amount of such injury and the acts which occasioned it. He was not required to enumerate in his prayer for judgment the elements of the "just compensation" which he was entitled to be awarded for the damage that had been inflicted upon his property or to designate the measure to be adopted in the determination or computation of such compensation. A demand for interest would have been superfluous. Oklahoma City v. Wells, 185 Okla. 369, 91 P.2d 1077, 123 A.L.R. 662, supra. The complaint in this case asked for judgment for the damage to the property — a damage for which the Constitution said the plaintiff was entitled to receive, and the defendant city was under obligation to make, "just compensation." The judgment which the district court is directed to enter under the decision in this case is for such "just compensation" and for no more. Such judgment merely awards to the plaintiff the amount of damage inflicted upon the plaintiff in January, 1939, and such addition thereto "as will produce the full equivalent" of the amount of such damage paid contemporaneously with the infliction of the injury. Seaboard Air Line R. Co. v. United States, 261 U.S. 299, 67 L ed 664, 43 S. Ct. 357; Jacobs v. United States, 290 U.S. 13, 78 L ed 142, 54 S. Ct. 26, 96 A.L.R. 1; United States v. Creek Nation,295 U.S. 103, 79 L ed 1331, 55 S. Ct. 681; Shoshone Tribe v. United States, 299 U.S. 476, 81 L ed 360, 57 S. Ct. 244 and United States v. Klamath M. Tribes, 304 U.S. 119, 82 L ed 1219, 58 S. Ct. 799, supra.

(4). It is next contended "that even if interest should be allowed, it is excessive under chapter 150, Laws of 1937."

The laws of this state provide that, "interest for any legal indebtedness shall be at the rate of four per cent per annum, unless a different rate, not to exceed the maximum rate allowed by law, is contracted for in writing" (Laws 1935, chap. 157); and that, "interest is payable on judgments recovered in the courts of this state at the rate of 2% per annum, and no greater rate, and such interest must not be compounded in any manner or form." (Laws 1937, chap. 150.)

It seems to be the contention of the defendant that inasmuch as judgment was rendered in favor of the plaintiff on July 19, 1940, that interest from that date cannot be allowed at a rate in excess of 2 per cent per annum. The contention is not tenable. Defendant appealed under § 7846, Comp. Laws 1913, as amended, and demanded a trial anew of the entire case in this court. Said § 7846 provides that in such case "the Supreme Court shall try anew the question of fact . . . in the entire case . . . and shall . . . either affirm or modify the judgment or direct a new judgment to be entered in the district court." It therefore became incumbent upon this court to "review the record here presented, and find the facts for itself" (Doyle v. Doyle, 52 N.D. 380, 202 N.W. 860), to "apply what we deem to be the law to the facts as disclosed by the record" (Buckingham v. Flummerfelt, 15 N.D. 112, 106 N.W. 563), and "to enter such judgment as is appropriate upon the whole record." Hoellinger v. Hoellinger, 38 N.D. 636, 166 N.W. 519. After reviewing the whole record, this court reached the conclusion that in order that the plaintiff may have "just compensation" for the damage the defendant had inflicted upon his property in January, 1939, he should be paid $3,500, the amount of the damage inflicted in January, 1939, and in addition thereto interest upon that sum at the rate of 4 per cent per annum from the time the damage was inflicted, and thus receive compensation equivalent to the amount of the damage to his property if the same had been paid contemporaneously with the infliction of such damage. In order to give effect to the conclusion thus reached, this court directed the district court to vacate its former judgment, and to order the entry of a new judgment in an amount which this court, upon the review and trial anew of the entire case as prescribed by the statute, had determined to be a proper judgment, — a judgment which will award to the plaintiff "just compensation" for the damage that had been inflicted upon his property.

We adhere to the former decision. A rehearing is denied.

BURR, Ch. J., and MORRIS, BURKE, and NUESSLE, JJ., concur.