Haig v. Wateree Power Co.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] April 11, 1922. The opinion of the Court was delivered by The facts in this case are embodied in the decree of his Honor, the Circuit Judge, which is as follows:

"This action, which is brought for the recovery of money alleged to be due by the defendant to the plaintiffs as interest, arises out of a proceeding commenced by the defendant as petitioner against the plaintiffs herein as respondents for the condemnation of certain real estate owned by the respondents in that proceeding, for the purposes of acquiring certain easements upon and over the said real estate, including the right to flood the said lands with water. Pursuant to an order made by his Honor, Judge Moore, of the Sixth Circuit, a jury was empanelled by the Clerk of Court for Fairfield County to assess the compensation to be paid by the petitioner in said proceeding to the respondents therein for the easement sought. The jury rendered a verdict on the 6th day of November, 1917, fixing the compensation to be paid at the sum of $30,000. On this verdict judgment was entered and enrolled by the Clerk of Court on the 7th day of November, 1917. From this both petitioner and respondents appealed to the Court of Common Pleas. The appeal was thereupon heard as provided by statute in the Court of Common Pleas. A jury was empaneled to try the issues submitted to them, and rendered a verdict assessing the compensation to be paid to the respondents by the petitioner at the sum of $23,500.00. On this verdict judgment was also entered and enrolled by the Clerk of Court on the 7th day of March, 1918. Notice of appeal to the Supreme Court was served by both sides, but thereafter, on the 3rd day of February, 1919, a provisional settlement was reached by the parties, whereby the principal of the judgment was paid by the petitioner, and by mutual agreement the right of the respondents to demand and receive interest was reserved for decision of the Court. The contention of the plaintiffs in this action, respondents in the condemnation proceedings, is that they are entitled to interest on the amount of the verdict rendered by the condemnation jury, or on the judgment entered on said verdict by the Clerk of Court as reduced by the verdict on appeal, from the date of the condemnation verdict and judgment, November 7, 1917, to the date of payment by defendant of the principal of the judgment on the 3rd day of February, 1919; or, at all events, if not entitled to interest on the ultimate amount found, from the date of the condemnation verdict, that they are entitled to interest on the amount of the verdict, and judgment rendered on the appeal from that date, to-wit: from March 7, 1918, to the date of the provisional settlement made on the 3rd of February, 1919. The contention of defendant is that the plaintiffs are not entitled to interest on the verdict as a sum ascertained and due, nor on the judgment entered on the verdict, the entry of which, it contends, was not authorized or required by law. In the view which I take of the case the plaintiffs cannot recover interest on the amount ultimately found by the jury on appeal from the date of the condemnation verdict rendered by the Clerk's jury, for the reason that the verdict rendered on appeal in the Court of Common Pleas must be presumed, under the rule of past, present, and future damages, to include all sums due to the plaintiffs up to the date of that trial on any account. But as to the verdict and judgment rendered on the appeal, I hold that the plaintiffs are entitled to interest thereon at the legal rate from that date to the time of the payment by the defendant of the principal of the judgment, to-wit: from March 7, 1918, to February 3, 1919, which amounts to the sum of $1,485. I hold that the judgment was properly entered and bore interest as such from the date of entry. But if I should be in error as to that, in the view which I take of the question, the verdict rendered by the jury on appeal to the Court of Common Pleas was a sum ascertained and due and would carry interest as such. It is therefore ordered and adjudged that the plaintiffs recover of the defendant the sum of $1,485.00 and the costs of this action."

The exceptions raise the following issues on appeal:

"(1) That his Honor erred in holding that a judgment had been entered and enrolled upon the verdict in the Circuit Court, the contention of the appellant being that there was no order of the Court allowing such entry of judgment, and that same was without warrant or authority of law, and was wholly null and void.

"(2) For error in not holding that there could be no entry of judgment that would bear interest in said proceeding, because said verdict was not rendered in any action in the Court of Common Pleas, and because there is no statute of the State authorizing or allowing entry of judgment upon such verdict, and because no valid order could be granted permitting the entry of judgment thereon, and that the same was wholly null and void.

"(3) Because his Honor erred in holding that plaintiffs were entitled to interest upon the verdict in the Circuit Court as `a sum ascertained and due.' Because under the Constitution and statute of the State the compensation so found was only payable before the taking and appropriation of said easement, and the same had been paid by appellant before taking possession of said easement.

"(4) That his Honor erred in not holding that the condemnation statute of the State was exclusive, and that under such statute no judgment upon a verdict could be entered nor interest recovered on a verdict in condemnation proceedings instituted under said statute."

The action herein was brought under certain sections of our statute which directs the occasion, the manner and the agencies by which the sovereign right of eminent domain may become operative in South Carolina. That right is based upon the theory that when the State originally granted lands to individuals the grant was made under the implied condition that the State might resume dominion over the property whenever the interest of the public or welfare of the State made it necessary. Its origin antedates constitutional provisions and legislative enactments. It is one of the unwritten laws of all civilized nations. It is justified by the fact that the right of individuals must yield to the public good, and the welfare of the State is paramount to that of the individual citizen. It is a previously existing universal law that lay dormant in the State until proper legal authorities directed the occasion and the mode through which it may become operative. Under Article 10, Sections 3292 to 3305, inclusive, the General Assembly has directed the occasion and manner of taking the property of a citizen and converting it into public use for the benefit of all the people and the welfare of the State. The right of the citizen, however, is hedged about with such provisions and enactments as guarantee and protect him from financial loss. While there is nothing in the nature of a contract between the landowner and the State, or the corporation to which the power is delegated, it is, in effect, a compulsory sale with the compensation fixed in a fair and impartial manner. As this action is a special statutory proceeding, all acts and doings thereunder are limited to the specific power granted therein. Declarations, words, and phrases must be taken and construed in their legal and commonly accepted meaning.

The grounds of appeal from the decree of the Circuit Judge resolve themselves into two questions for the Court to decide. First, is it legal to enter a judgment from a verdict of a jury in the statutory proceeding, known as the Condemnation Act? Second, does the amount of the award fixed by the jury bear interest at the legal rate from the date of the verdict until the payment of the award?

This proceeding was brought under authority of Sections 3292-3305, inclusive, Vol. 1, Code of Laws 1912. It is a special statutory proceeding with the right of appeal to the Circuit Court. Railway v. Ellen, 95 S.C. 68;78 S.E., 963, Ann. Cas., 1915B, 1042. The rights and remedies granted thereunder are exclusive and must be confined within the limits of the purposes and privileges therein expressed. Section 3295 provides that —

The jury "shall ascertain the amount of compensation which shall be made to the owner thereof, and shall render their verdict in writing for the same."

Section 3296 provides for an appeal to the Circuit Court from the verdict so rendered. Section 3302 provides that —

All proceedings "shall be filed in the office of the Clerk of the Court of Common Pleas for the county in which such proceedings were had, and shall be there of record."

Section 3303 makes provision for the payment of certain costs. There is no provision that the verdict should be entered as a judgment. It is evident that the General Assembly recognized the distinction between a verdict in a proceedings of this nature and a verdict on a money demand. In Section 3953, Vol. I, Code of 1912, in providing for arbitration and award provision was made for an appeal to the Circuit Court, with the further provision that —

The award of the arbitrators "shall be filed with the Clerk (of the Court) of Common Pleas within five days after such finding and when so filed shall become a judgment of the Court of Common Pleas."

In the condemnation act it provides that the proceedings shall be filed in the office of the Clerk of the Court, and "shall be there of record." If the General Assembly had intended that a verdict in a condemnation proceeding should ripen into a judgment, it would have said so, as it did in the statute providing for arbitration and award. It is scarcely probable that the General Assembly, in which were lawyers of marked ability and wide experience, should have unintentionally permitted such an important and far-reaching omission. There is no statutory provision in this State fixing a time within which the award of a jury in a condemnation proceeding must be paid. Section 324 of the Code of 1912 is only applicable to verdicts rendered in civil actions in the Court of Common Pleas, and does not apply to a verdict rendered by a jury under the condemnation statute. Section 3299 provides that, "upon payment of the compensation thus ascertained," the use of the land for the purpose for which it was acquired shall vest in the condemnor so long as it is used for the required purpose and no longer.

As the statute does not fix a time within which the award must be paid, the amount thereof cannot be required until the time of the actual taking or entry on the land. We know of no statute or decision in this State, and none has been cited, that sustains the position that upon an award the condemnor is obliged to take the property and pay the award. An examination of the holding of the Courts in other jurisdictions reveals the fact that the weight of authority is that, in the absence of statutory provisions on that question, the effect of proceedings for condemnation is simply to fix the price at which the party condemning can take the property sought, and that even after confirmation the purpose of taking the property may be abandoned without incurring any liability to pay the amount of the award. The reason for the rule appears to be that —

"Whenever land is sought to be taken for a public purpose, the public authorities, in the absence of any statutory provision to the contrary, have a reasonable time, after the ascertainment of the expenses of the scheme, to decide whether to accept or refuse the land at the price fixed."

The procedure calls for "a reasonable valuation of the land; and if the public rejects it at the valuation fixed, the landowner suffers, in general, no detriment, and if, in an exceptional case, an injury is done, he is entitled to reparation." Many of the Courts hold that the rule is a necessity in view of the rational conduct of public affairs. "The question whether a projected improvement is wise or unwise, expedient or inexpedient, cannot be answered by any one who is ignorant of the expense that it involves." The legal effect of such procedure is held to be that —

"It compels the landowner to offer the public the required land at an ascertained price, and that, when such price has been finally ascertained, the public has a reasonable time within which to make an election either to accept or reject the offer."

This general principle of law is more fully discussed by Chief Justice Beasley of the Court of Errors and Appeals of New Jersey in the case of O'Neill v. Freeholders ofHudson, 41 N.J. Law, 161; Lewis on Eminent Domain (3rd Ed.) Vol. 2, § 955; Alabama M.R.R. Co. v. Newton,94 Ala., 443; 10 South., 89; Bensley v. Mountain LakeWater Co., 13 Cal. 306; 73 Am. Dec., 575; Florida Central,Etc., R.R. Co. v. Bear, 43 Fla., 319; 31 South., 287;Denver New Orleans R.R. Co. v. Lamborn,8 Colo., 380; 8 Pac., 582; Carson v. Hartford, 48 Conn., 68; UnitedStates v. Cooper, 21 D.C. (10 Mackey) 605; Chicago v.Hayward, 176 Ill., 130; 52 N.E., 26; Manion v. Louisville,Etc., R.R. Co., 90 Ky., 491; 14 S.W. 532; Wilkinson v.Bixler, 88 Ind., 574; Merrick v. Baltimore, 43 Md., 219;Gear v. Dubuque Sioux City R.R. Co., 20 Iowa, 523; 89 Am. Dec., 550; Williams v. New Orleans, Mobile Texas R.R. Co., 60 Miss., 689; Commissioners v. Henry,38 Minn., 266; 36 N.W., 874; Sylvester v. St. Louis,164 Mo., 601; 65 S.W. 278; Lidgerwood v. Michalek, 12 N.D., 348; 97 N.W., 541; Stacey v. Vermont R.R. Co.,27 Vt., 39; County Commissioners v. McGhee, 20 Ohio Cir. Ct. R., 201; Hampton v. Commonwealth, 19 Pa., St. 329;Seavy v. Seattle, 17 Wn., 361; 49 Pac., 517; Chesapeake Ohio R.R. Co., v. Bradford, 6 W. VA., 220. "The effect of the condemnation proceeding is simply to fix the price at which, upon payment, the condemnor may take the land." Corpus Juris, Vol. 20, p. 1082.

The holdings of this Court in the case of Mauldin v.Greenville, 64 S.C. 444, 42 S.E. 202, are not applicable to the case at bar. The cases were each brought under a special statutory proceeding. While they are kindred statutes, and each can trace its legal genealogy to the sovereign power of eminent domain, the manner of procedure, the cause of action, the pleadings, and facts are different in each case. The Mauldin case was brought under Section 30 of the charter of the City of Greenville; the cause of action, for damages caused by the altering or lowering of the street, or sidewalk, in front of a building, which compelled plaintiff to lower the floor of his building to conform to the grade of the sidewalk. The case was practically a suit for damages already sustained. The verdict fixed the amount of damages, and furnished the basis of a final judgment. Nothing was left optional with either party. The judgment was a final determination of the rights of the parties in the action.

The case at bar was brought under the condemnation statute. The verdict of the jury fixed the value of the future right to flood certain lands of the condemnee. No damage had been done, and no right of the landowner had been invaded. It was optional with the condemnor whether it would take the land at its assessed value or decline to do so. Until the land was actually taken, no obligation rested upon the condemnor to pay the award fixed by the jury. No title vested until payment of the award. There could be no final determination of the rights of the parties in the action so long as the taking of the property, payment of the award, and vesting of the right was optional with either party. "The act of condemnation is not complete until the damages assessed have been paid or tendered." Corpus Juris, Vol. 20, p. 1082. If the condemnor had elected not to take the property, the judgment could not have been enforced, as the landowners' right to compensation had not vested. "The general rule is, the condemnation proceedings may be dismissed, or abandoned, at any time before, but not after, the landowner's right to compensation has become vested." Corpus Juris, Vol. 20, p. 1079.

In the case at bar, the verdict was rendered on the 7th day of March, 1918, and the landowners' right to compensation did not vest until the condemnor elected to take the property on the 3rd day of February, 1919. Until that time there was no final determination of the rights of the parties. Section 304 of the Code of Laws of South Carolina defines a judgment to be "the final determination of the rights of the parties in the action."

The rule that the landowner is obliged to sell, and the condemnor is not required to take, is an apparent inequality of justice; yet such is the law in this and other States where the statutes have not otherwise provided.

The Circuit Judge erred in holding that the judgment herein was properly entered. Does the amount of the award fixed by the jury bear interest at the legal rate from the date of the verdict in the Court of Common Pleas until the date of payment? As there was no statutory authority to enter and enroll the judgment herein, it has no legal force or effect, and interest cannot be claimed thereunder. Nor can interest attach under authority of Section 2516, Vol. 1, Code of Laws, 1912, which is, in part, as follows:

"In all cases wherein any sum or sums of money shall be ascertained, and, being due, shall draw interest according to law, the legal interest shall be at the rate of seven per centum per annum."

In order to come within the requirements and intention of this section the sum must not only be "ascertained," but it must be "due." While the sum was ascertained by the jury, it was not due until the condemnor elected to take the property and pay the compensation. So long as the assumption of an obligation is optional with either party to a transaction, it cannot be held that the sum ascertained is due. Therefore the law and the facts of this case do not come within the purview of Section 2516. There is no statute in this State that provides for the payment of interest on an award in a condemnation proceeding. Article 1, § 17, of our State Constitution directs that —

"Private property shall not be taken for private use without the consent of the owner, nor for public use without just compensation being first made therefor."

Article 9, § 20, of the Constitution provides that —

"No right of way shall be appropriated to the use of any corporation until full compensation therefor shall be first made to the owner or secured by a deposit of money."

In the absence of any statute on the subject, the rules governing interest in eminent domain cases are controlled by the constitutional principle requiring just compensation for property taken. 21 Ann. Cas. p. 710; Geoheganv. U.E. Ry., 266 Ill. 482, 107 N.E. 786, Ann. Cas. 1916B, 762. "In the absence of any statutory provisions controlling the subject, the rule in respect to interest must be derived from the constitutional provision requiring just compensation to be made for property taken." Lewis on Eminent Domain (3rd Ed.) Vol. 2, § 742. Upon the rendition of the verdict and fixing the award in a condemnation proceeding the landowner is deprived of valuable rights and privileges that, in the nature of the proceeding, could not have been anticipated or ascertained by the jury. The "taking" of the property being optional with the condemnor, the landowner occupied an uncertain and precarious position. He is practically deprived of all of the rights in his land except naked possession thereof, and that possession may be terminated at any time at the will of the condemnor. Possession is not the only element of value in land. The right to sell, the right to rent, the right to improve, the right to sow and to reap, are all valuable rights which are affected by a verdict in a condemnation proceeding. Mr. Lewis, in his writings on Eminent Domain (3rd Ed.) Vol. 1, § 65, says:

"If property, then, consist, not in tangible things themselves, but in certain rights in and appurtenant to those things, it follows that when a person is deprived of any of those rights he is to that extent deprived of his property, and hence that his property may be taken, in the constitutional sense, though his title and possession remain undisturbed; and it may be laid down as a general proposition based upon the nature of the property itself, that whenever the lawful rights of an individual to the possession, use, and enjoyment of his land are in any degree abridged or destroyed by reason of the exercise of the power of eminent domain, his property is pro tanto taken, and he is entitled to compensation."

If the amount of the award had been paid on the date of the rendition of the verdict, when the right to take vested in the condemnor, it would have been "just compensation." As the payment was postponed by the condemnor until a future time, the landowners did not receive "full compensation," as contemplated under the Constitution. The difference is the same as between a sale for cash and a sale on time. The plaintiffs herein are entitled to interest under the constitutional provisions requiring just and full compensation for private property taken for public purposes.

The decree of the Circuit Judge is sustained in so far as it holds that the plaintiffs recover from the defendant the sum of $1,485 and the costs of this action.

MR. CHIEF JUSTICE GARY and MR. JUSTICE WATTS concur.