Hughes v. North Carolina State Highway Commission

162 S.E.2d 661 (1968) 2 N.C. App. 1

William L. HUGHES, Jr.
v.
NORTH CAROLINA STATE HIGHWAY COMMISSION.
COLVARD OIL COMPANY, Inc.
v.
NORTH CAROLINA STATE HIGHWAY COMMISSION.
FARMERS EQUIPMENT, INC.
v.
NORTH CAROLINA STATE HIGHWAY COMMISSION.

No. 68SC92.

Court of Appeals of North Carolina.

August 14, 1968. Certiorari Allowed October 9, 1968.

McElwee & Hall, by John E. Hall and Moore & Rousseau, by Julius A. Rousseau, Jr., North Wilkesboro, for plaintiffs appellees.

T. Wade Bruton, Atty. Gen., by Harrison Lewis, Deputy Atty. Gen., and Charles M. Hensey, Raleigh, Trial Atty., for defendant appellant.

BRITT, Judge.

The question presented by this appeal can be stated as follows: Did Commission, by virtue of the 1951 judgment in the special proceeding instituted by Blair in 1940, acquire an easement approximately 100 feet wide in the land in question as against plaintiffs who were not parties to the special proceeding and acquired their title indirectly from Blair between 1945 and 1951? The answer is yes.

The proceeding instituted by Blair in 1940 was initiated pursuant to the provisions of G.S. § 40-12 et seq. (Vol. 2A, G.S. N.C., 1950 Recompilation). This procedure was directed by G.S. § 136-19, which—prior to the 1959 amendment—provided in relevant part as follows:

"The State Highway Commission [and Public Works Commission] is vested with the power to acquire such rights of way and title to such land * * * as it may deem necessary and suitable for road construction * * * either by purchase, donation, or condemnation, in the manner hereinafter set out.

"Whenever the Commission and the owner or owners of the lands * * * required by the Commission * * * are unable to agree as to the price thereof, the Commission is hereby vested with the power to condemn the lands * * * and in so doing the ways, means, methods, and procedure of Chapter 40, entitled ``Eminent Domain,' shall be used by it as near as the same is suitable for the purposes of this section * * *.

"In case condemnation shall become necessary the Commission is authorized to enter the lands and take possession of the same * * * prior to bringing the proceedings for condemnation, and prior to the payment of the money for said property.

"In the event the owner or owners shall appeal from the report of the commissioners, it shall not be necessary for the Commission to deposit the money assessed with the clerk, but it may proceed and use the property to be condemned until the final determination."

North Carolina statutes and court decisions set forth the following methods by which the Highway Commission can acquire right-of-way easements: (1) purchase or agreement; (2) donation; (3) dedication; (4) prescription; or (5) condemnation.

Obviously, the Commission acquired a right-of-way easement over a portion of the Blair property; a consideration of the various methods leads us to conclude that the easement the Commission acquired was by condemnation.

The statutory and case law of our State provide without question that the Highway Commission can acquire highway rights-of-way by condemnation. G.S. § 136-19; Browning v. North Carolina State Highway Commission, 263 N.C. 130, 139 S.E.2d 227. As written prior to 1959, G.S. § 136-19 provided that the Commission could acquire land for highway rights-of-way by condemnation and that the Commission could enter lands and take possession prior to bringing the condemnation proceeding. In discussing G.S. § 136-19 in Moore v. Clark, 235 N.C. 364, 70 S.E.2d 182, Ervin, J., said:

"The State Highway * * * Commission possesses the sovereign power of eminent domain, and by reason thereof can take private property for public use for highway purposes. G.S. § 136-19 * * * The Commission may do this either by bringing a special proceeding against the owner for the condemnation of the property under G.S. § 136-19, or by actually seizing the property and appropriating it to public use. * * * The owner is at liberty to bring such proceeding against the Commission in case the latter takes his property merely by seizing it and appropriating it to public use for highway purposes. * * *" (Emphasis added.)

For the purposes of this appeal, it can be assumed that the Commission entered and seized a portion of Blair's land in 1938 or 1939. When this occurred, the proper remedy was to institute proceedings under G.S. § 136-19. Moore v. Clark, supra; McKinney v. North Carolina State Highway Commission, 192 N.C. 670, 135 S.E. 772; Jennings v. State Highway Commission, 183 N.C. 68, 110 S.E. 583. At that time, G.S. § 136-19 provided that—as nearly as possible—the procedures and methods provided in G.S. § 40-11 et seq. should be used. Williams v. North Carolina State Highway Commission, 252 N.C. 772, 114 S.E.2d 782; Gallimore v. State Highway & Public Works Commission, 241 N.C. 350, 85 S.E.2d 392. Pursuant to the provisions of G.S. § 40-12 et seq., Blair on 27 January 1940 filed his proceeding alleging a taking and seeking compensation. Judgment was not entered in this proceeding until 23 November 1951. In the stipulated facts for the instant action, it is agreed that Commission "did not file a lis pendens nor did the defendant cross-index the pending suit."

The phrase "condemnation" or "exercise of the power of eminent domain" by its very definition admits the condemnor did not own or have title to the land, but rather that it took or appropriated the property of another for public use. Westcott v. State Highway Commission, 262 N.C. 522, 138 S.E.2d 133. Thus, Blair's proceeding under G.S. § 136-19 and G.S. § 40-12 et seq., was a condemnation proceeding rather than one to try title.

The 1959 amendment to the condemnation statutes provides that title passes to the Highway Commission upon the filing of a petition and declaration of taking and payment of certain funds into the Clerk of Court's Office. In North Carolina State Highway Commission v. York Industrial Center, 263 N.C. 230, 139 S.E.2d 253, the Supreme Court pointed out that prior to 1959, the Highway Commission, when it had to acquire title by condemnation, was to act under the provisions of G.S. § 40-12 et seq. The court pointed out: "In proceedings instituted pursuant to the provisions of c. 40, ``[t]he title of the landowner is not divested unless and until the condemnor obtains a final judgment in his favor and pays to the landowner the amount of the damages fixed by such final judgment.'"

G.S. § 40-26 provides as follows:

"§ 40-26. Change of ownership pending proceeding.—When any proceedings of appraisal shall have been commenced, no change of ownership by voluntary conveyance or transfer of the real estate or other subject matter of the appraisal, or any interest therein, shall in any manner affect such proceedings, but the same may be carried on and perfected as if no such conveyance or transfer had been made or attempted to be made. (1871-2, c. 138, s. 22; Code, s. 1950; Rev., s. 2594; C.S., s. 1730.)"

Chapter 40 of the General Statutes, entitled "Eminent Domain," provides for procedure in condemnation cases, not only by the Highway Commission but by other corporations or agencies entitled to exercise the right of eminent domain. The agencies or corporations are set out in G.S. § 40-2; this statute, with certain modifications, has been a part of our law since 1871. Railroad companies are included in the list, and decisions of our Supreme Court relating to condemnation by railroad companies are helpful in determining the law in the case at bar.

In Abernathy v. South & W. R.R., 159 N.C. 340, 74 S.E. 890, the defendant railroad entered upon the land of plaintiff and constructed a roadbed. Plaintiff, the sole owner of the property at the time of the taking, instituted an action for compensation under the statute. While the action was pending, but before the judgment was rendered, he conveyed a one-third interest in the land to one Berry. Defendant railroad contended it had to pay only two thirds of the compensation to plaintiff, relying on the cases of Livermon v. Roanoke & T. R.R., 109 N.C. 52, 13 S.E. 734; Phillips v. Postal Telegraph Cable Co., 130 N.C. 513, 41 S.E. 1022, and Beal v. Durham & C. R.R., 136 N.C. 298, 48 S.E. 674. The court distinguished those cases on the grounds that the transfer of title occurred before the proceeding of an appraisal or condemnation had commenced. It cited G. S. § 40-26 and held that the case was governed by that section since conveyance of title to Berry was not made until after the proceeding was commenced. "We are not required to consider what claim Berry may have upon the plaintiff, as that matter is not before us. L. A. Berry is not a party to this suit."

In Caveness v. Charlotte, R. & S. R.R., 172 N.C. 305, 90 S.E. 244, plaintiff brought an action to recover permanent damages by reason of the construction and operation of defendant railroad. The railroad was not constructed through plaintiff's lot but along the street adjacent to plaintiff's lot. It does not appear that any of his land was taken but that he was injured by impairment of value, noise, smoke, cinders, dust, etc. While his suit was pending, plaintiff sold to one Sanders, who in turn conveyed to others. The railroad contended a judgment for plaintiff could not be sustained because it appeared that plaintiff had conveyed the title to another and the right of recovery followed as an incident to the title. The court—through Hoke, J.—held this position untenable.

After quoting Revisal, sec. 2594 (now G. S. § 40-26), the court declared:

"The proceedings by this section are constituted a lis pendens, and although the grantee, as stated, prior to payment of the amount, may be entitled to this compensation, if proceedings have been instituted, he must assert his right by action or appropriate proceedings in the cause. Abernathy v. [South & W.] Railroad (supra). And so, under our decisions, in case of suit, the railroad company acquires the right to remain and construct its road when the owner enters suit for permanent damages for trespass. He thereby assents to the company's right to occupy and build its road upon the land upon the payment of the amount due and the entire compensation for the easement should inure to the owner who recognizes the railroad's right by entering this character of suit. Livermon v. [Roanoke & T.] Railroad (supra); White v. [Northwestern North Carolina] Railroad, 113 N. C. [610, at p.] 622, 18 S.E. 330, 22 L.R.A. 627, 37 Am. St. Rep. 639; Staton v. [Atlantic Coast Line] Railroad, 147 N.C. [428, at p.] 443, 61 S.E. 455, 17 L.R.A. (N.S.) 949.

"Under any view of the matter, therefore, the present recovery must be sustained, it appearing from the record that plaintiff owned the land when the railroad entered and constructed its road and, pending his ownership and before conveyance he entered suit and filed his complaint for permanent damages."

This case is controlled by the provisions of G.S. § 40-26. Therefore, in the light of that statute and the decisions of our Supreme Court applying it, we hold that in this case the special proceeding instituted by Blair in 1940 constituted a lis pendens and that plaintiffs took title to their lands and interests therein subject to the special proceeding and judgment entered therein in 1951. Lis pendens notice under G.S. § 1-116 is not exclusive. Whitehurst v. Abbott, 225 N.C. 1, 33 S.E.2d 129, 159 A.L.R. 380.

Furthermore, plaintiffs were provided with additional notice of existence of Commission's right-of-way easement. In the deed executed by Blair to Frazier, plaintiffs' predecessor in title, Blair reserved his rights in the highway rights-of-way. In the deeds from Frazier to plaintiffs or their predecessors in title, the highway rights-of-way were expressly excepted.

Plaintiffs strenuously argue that the reservation of title to the rights-of-way set forth in the deed from Blair was ineffective because of ambiguity in the description of the land in which he purported to reserve his rights. Our Supreme Court has not applied a rule of strict construction on conveyances or reservations of easements. In Borders v. Yarbrough, 237 N.C. 540, 75 S.E.2d 541, in an opinion by Parker, J. (now C. J.), the court upheld an easement set forth in a deed as follows: "This lot is sold subject to an easement across the same (lot No. 6 of a subdivision) for a sewerage line running from lot No. 5 to the disposal in the street. This shall be a perpetual easement under this lot." Also in Bender v. American Telephone & Tel. Co., 201 N.C. 355, 160 S.E. 352, the court upheld an easement for telephone and telegraph lines across a sizeable tract of land, described only by adjoining land owners and there being no description or designation of the particular part of the land that the lines could be constructed on.

Blair instituted his proceeding under G. S. § 40-12 et seq. in 1940, alleging that Commission and Town had taken rights-of-way 100 feet wide. Title passed to Commission and Town when judgment was entered in the proceeding in 1951 and the money ordered paid by the judgment was paid. North Carolina State Highway Commission v. York Industrial Center, Supra. Plaintiffs were and are bound by said judgment. G.S. § 40-26; Abernathy v. South & W. R.R., Supra; Caveness v. Charlotte, R. & S. R.R., Supra. Furthermore, Blair, in his deed to plaintiffs' predecessor in title, expressly reserved his right to collect for the rights-of-way.

Defendant's assignments of error to Judge Gwyn's judgment are sustained. The judgment is vacated and this action is remanded for proper judgment consistent with this opinion.

Error and Remanded.

CAMPBELL and MORRIS, JJ., concur.