Opinion
April 30, 1909.
William N. Dykman, for the appellant.
Louis Marshall, for the respondent The Westchester County Water Works Company.
Charles Haldane [ David McClure with him on the brief], for the respondent The Farmers' Loan and Trust Company.
This appeal is taken by the plaintiff and petitioner from an order of the Special Term to raise the questions of interest upon an award in proceedings by the village of White Plains to condemn the real property of a water works company, and of the additional allowance. The first award of the commissioners, made in 1898 and confirmed by the Special Term on September 1, 1898, was $103,298. The order of confirmation provided that the plaintiff and petitioner pay such award to the said owner and certain lienors thereof, or deposit with the county treasurer of Westchester county the said sum to the credit of the said owner and its lienors, subject to the further order of the court, and upon such payment or deposit the plaintiff and petitioner was authorized to enter and to take possession of the property. The petitioner, on or prior to September 1, 1898, offered to pay the award to the said owner, which was refused, and thereupon and on said day deposited the said award and also $5,164.90, the additional allowance, with the said county treasurer to the credit of the proceedings and in accord with the said order of the Special Term, with whom said sums have remained on deposit. As the final result of two appeals taken by the owner and a holder of a trust mortgage upon the property, a second award was made by a new commission and has been confirmed by the Special Term. The second commission reported that the compensation should be $229,725, explicitly stated by it to be constituted of $150,000 for the property and of $79,725 interest thereon from September 1, 1898, the date when plaintiff and petitioner took possession of the property, to the date of the report. The plaintiff and petitioner moved to set aside the report in so far as it awarded interest and an additional allowance of five per cent upon this award. The lienor trust company moved for confirmation, but the owner objected thereto that the award was unjust, inadequate and illegal. The Special Term overruled all objections and made the order of absolute confirmation now appealed from by the plaintiff and petitioner, excepting as it confirms the report as to the value of the property and the allowance of interest on the difference between the first and the second awards from September 1, 1898.
As such interest was not provided for by contract, express or implied, or by statute, the defendants' right thereto must arise from a default on the part of the plaintiff. ( Matter of Trustees, etc., 137 N.Y. 95.) The statute (Code Civ. Proc. § 3371) provides that "if the report is confirmed, the court shall enter a final order in the proceeding, directing that compensation shall be made to the owners," and that upon payment thereof "the plaintiff shall be entitled to enter into the possession of the property condemned, and take and hold it for the public use specified in the judgment." And the same section provides that "deposit of the money to the credit of, or payable to the order of the owner, pursuant to the direction of the court, shall be deemed a payment within the provisions of this title." Aside from the tender or offer of payment, this deposit made satisfied the constitutional provision as to just compensation. ( Matter of N.Y.C. H.R.R.R. Co., 60 N.Y. 116.) In that case the court, per RAPALLO, J., say: "It is further objected that the order of confirmation is in violation of the constitutional provision against taking private property for public use without just compensation, inasmuch as it does not direct the compensation to be paid to the party claiming to own the land, but to be deposited in bank subject to the order of the court. We do not think this objection tenable. The money when deposited becomes, in law, the property of the parties entitled to the compensation. Their land is converted into money, but there may be conflicting claimants of the fund, and the intervention of the court may be necessary for its distribution, or for the adjustment of liens, etc. The fund is subject to the same claims to which the land was before being taken. The Railroad Act declares (§ 19) that if there are adverse and conflicting claimants to the money or any part of it, the court may direct it to be paid into court by the company, and may determine who is entitled to the same, and direct to whom the same shall be paid. This statute has been in active operation for nearly a quarter of a century, and we have never before heard of the constitutionality of this provision being questioned; nor is any authority now cited in support of the objection. In the present case it appears that there were liens upon the land, and the direction that the money be deposited was appropriate. Whether the order directed that it be drawn out on an ex parte application, or on notice, we do not think affected its validity." (See, too, United States v. Dunnington, 146 U.S. 350.) Lewis on Eminent Domain (2d ed. § 581) says: "When the constitution expressly requires prepayment or is so interpreted as to require it, the owner is entitled to the award deposited, if possession has been taken, and may enforce such right by appropriate proceedings." And further (§ 580): "Statutes permitting the party condemning to take possession pending an appeal by either party, upon making a deposit of the damages awarded, are uniformly upheld by the courts."
How, then, can the plaintiff be said to be in default, that it should pay interest as damages therefor?
But it is contended that as the defendants appealed they might have jeopardized their appeal or affected it by taking compensation before the appeal was disposed of. The right of appeal in such proceedings is not inherent; the Legislature could subject such right when conferred by it to conditions. Accordingly the statute (Code Civ. Proc. § 3375) provides: "The proceedings of the plaintiff shall not be stayed upon such an appeal, except by order of the court, upon notice to him, and the appeal shall not affect his possession of the property taken, and the appeal of a defendant shall not be heard except on his stipulation not to disturb such possession." (See, too, Mercer Somerset R. Co. v. Delaware Bound Brook R.R. Co., 26 N.J. Eq. 464; Packard v. Bergen Neck R. Co., 48 id. 281.) Thus as the appeal does not disturb the possession gained by the plaintiff, it would follow that the compensation which represents the property taken remains as the property of the defendant. That this is so is apparent from section 3377 of the said Code, which provides that in case of a new appraisal if the amount of the compensation is increased, the difference shall be a lien upon the land appraised, and shall be paid to the owner or deposited, and if the amount is decreased it shall be refunded by the owner. Thus it seems to me that the statute, notwithstanding it affords the right of appeal, contemplates that the owner shall accept the compensation as originally determined, and that, even if he does not accept it, it is regarded as paid to him in law if not in fact when deposited, in accord with the directions of the court. I think that the owner's right of appeal would have been neither jeopardized nor affected by the taking of the compensation determined by the first award. ( Matter of N.Y. H.R.R. Co., 98 N.Y. 12.) The sections of the Railroad Law discussed in that opinion are essentially the same as the provisions of the present Condemnation Law. (See, too, St. Louis K.C.R. Co. v. Donovan, 149 Mo. 93.)
Each party in the case at bar may find in other States decisions which support his contention. Lewis on Eminent Domain (2d ed. § 499) cites some of them. Examination of the opinions in such cases as make for the respondents shows that the results reached rest upon the general principle that the owner is entitled to payment of his compensation at the time petitioner and plaintiff gains possession of the land, and hence if the owner be kept out of his compensation he is entitled to interest thereon as damages for a default. ( Hayes v. Chicago, Milwaukee St. Paul R. Co., 64 Iowa 753; Atlantic Great Western R. Co. v. Koblentz, 21 Ohio St. 334; Sioux City, etc., R.R. Co. v. Brown, 13 Neb. 317; Chicago, Rock Island P.R. Co. v. Buel, 56 id. 205; Selma, Rome Dalton R.R. Co. v. Gammage, 63 Ga. 604.) The cases which make for the appellant rest upon the proposition that when the owner is tendered or may obtain forthwith his compensation, and yet does not take it, he cannot upon gaining an increase thereof demand interest save upon that excess. The case of Shattuck v. Wilton R.R. ( 23 N.H. 269) is instructive. It was held that when the railroad company paid the original compensation into the State treasury and it was then tendered to the owner, inasmuch as the money was in the hands of the treasurer for the use of the owner, there was no principle which should charge thereafter interest against the railroad save on the excess determined by the result of the appeal, but when the railroad, as it could do under the statute, simply filed security upon the appeal of the owner, the owner, because he could not take his compensation until the determination of the appeal, was entitled to interest upon the award as finally determined. The propriety of this distinction is admitted even in Sioux City, etc., R.R. Co. v. Brown ( supra). In St. Louis, Oak Hill C.R. Co. v. Fowler ( 113 Mo. 458) the courts held that inasmuch as the owner could withdraw the money paid to the clerk, it followed that the company should not be required to pay interest on the amount thus paid in, but only on the excess, and likewise in Chicago, Santa Fe Cal. R. Co. v. Eubanks ( 130 Mo. 270). (See, too, Hollingsworth v. Des Moines St. Louis R. Co., 63 Iowa 443; In re Navan Kingscourt R. Co., 10 Ir. Rep. Eq. 113.) The case of Neilson v. Chicago Northwestern R. Co. ( 91 Wis. 557), cited by Mr. Lewis as holding the contrary, rests expressly upon West v. M., L.S. W.R. Co. (56 id. 318) and Uniacke v. Chicago, M. St. P.R. Co. (67 id. 108). The former case does not discuss the point under review, but the latter case expressly states that there may be equitable considerations which will take a given case out of the rule, e.g.: "If the sum awarded be paid or tendered to the owner of the land condemned, instead of being paid into court, * * * no interest thereupon should be allowed after such payment or tender." Mills on Eminent Domain (2d ed. § 175) says: "If the amount is deposited in the State treasury for the use of the owner, and might be taken without prejudice to his right of appeal and claim for increase of damages, interest will not be allowed on the tender during the time of appeal, but only on the excess given on appeal," stating that the English rule is substantially the same and citing In re Crystal Palace R. Co. (19 Jur. 995), which should have been cited as 1 Jur. (N.S.) 995. The learned counsel for the respondent insists that the compensation is neither just nor adequate if the owner, after the expiration of ten years, merely receives the value of his property without interest thereon. But this conclusion rests upon the premise that the owner could not take his compensation, at least untrammeled, until the expiry of the ten years; which is contrary to the law as I view it. For it (save the excess) was tendered to the owner and in law it was paid to the owner by the deposit on September 1, 1898, thereof under the provisions of the statute. By affording a second appraisal, the statute does not wholly wipe out the first award, for it stands as the compensation for the loss of the property, subject to increase or decrease as expressly provided by the statute (§ 3377). For these reasons I think the owner is not entitled to any interest as against the petitioner or plaintiff, save on the excess, to be computed from the time that the plaintiff entered into the possession of the premises. I think that any earnings of the money while in the hands of the county treasurer belong to the owner. (Lewis Em. Dom. [2d ed.] § 616, citing Snyder v. Cowan, 50 Mo. App. 430.) There must be fault before there can be default. The practical result of the contention of the respondents is that the plaintiff, who has not only offered to pay the compensation (save of course the excess) but has paid it in the eye of the law, is charged with interest as if for a default. Thus the defendants by their neglect or refusal to take their money succeed in investing it with the plaintiff, maugre all the plaintiff can do, at the rate of six per cent per annum. Such a proposition might readily work a mischievous result. Assume that an owner, dissatisfied with an award of $100,000, succeeds upon an appeal in increasing it by $1,000 or even $10. He could then charge the plaintiff, who had done all that he could to pay the $100,000 forthwith, with interest upon $100,000 during the period intervening the deposit and the determination of the appeal.
I think that the defendants are entitled to an additional allowance of costs upon the amount as awarded by the result of the report of the second commission. It appears that of this sum the plaintiff "paid by deposit" $5,164.90. Therefore, the defendants are entitled to such further sum as against the plaintiff as shall represent five per cent of the award as finally determined.
The order must be modified in accord with this opinion, and as modified affirmed, without costs of this appeal to either party.
HIRSCHBERG, P.J., WOODWARD, RICH and MILLER, JJ., concurred.
Order in so far as appealed from modified in accordance with the opinion, and as so modified affirmed, without costs of this appeal to either party. Settle order before Mr. Justice JENKS.