Opinion
No. 27929.
December 19, 1950. Rehearing Denied January 19, 1951.
APPEAL FROM THE CIRCUIT COURT, KNOX COUNTY, TOM B. BROWN, J.
L. F. Cottey, of Lancaster, and J. B. Smott, of Memphis, for appellants.
Craig Hiller, of Kahoka, and W. E. Stewart, of Edina, for respondent.
This is a condemnation suit which was instituted by the State Highway Commission in the Circuit Court of Scotland County on September 12, 1939, and was thereafter taken on change of venue to the Circuit Court of Knox County.
It seems to be undisputed that the purpose of the Commission was to relocate Highway No. 4 so as to skirt the edge of the city of Memphis.
A part of the project involved the condemnation of a strip of right of way through the land of one James A. Mitchell, who was named as one of the defendants to the suit.
Upon the institution of the suit the court appointed commissioners, who viewed the property and on October 3, 1939, filed their report assessing Mitchell's damages at the sum of $2,500.
Within due time both the Commission and Mitchell filed exceptions to the report.
On October 17, 1939, the Commission paid to the clerk of the court the sum of $2,500 for the benefit of Mitchell, the party in whose favor the damages had been assessed. However the Commission, notwithstanding such deposit, made no attempt at that time to take over the actual physical possession of the land.
For some unexplained reason Mitchell did not claim the deposit, and on November 9, 1939, twenty-three days after it had made the deposit, the Commission itself withdrew the same in its entirety. The record does not disclose any order of court authorizing such action by the Commission, nor does it afford any explanation of why the withdrawal was made.
Nineteen days later, or on November 28, 1939, Mitchell conveyed the land by warranty deed to Vance Vaught and Ruby Vaught, his wife, "subject to highway right of way".
On December 9, 1939, Mitchell died intestate, leaving surviving him, as his sole heir at law, his daughter, Edythe Rugh. However there was no suggestion of his death until August 27, 1947, when the Commission appeared in court and made formal suggestion to that effect.
Following the Commission's withdrawal of its deposit on November 9, 1939, there had been nothing done in the case other than to continue it from time to time by agreement of the parties until May 24, 1941, when the court ordered it stricken from the printed docket, subject to be redocketed at the order of the court.
Meanwhile, on August 9, 1943, Vance Vaught and Ruby Vaught, who had acquired the land from Mitchell, conveyed the same by warranty deed to Ivan Ludwick and Eula Ludwick, his wife, "subject to highway right of way".
After the case had been stricken from the printed docket, there was no further action until May 9, 1947, when the Commission once again paid over to the clerk the sum of $2,500 as the amount of the award which had been made by the commissioners almost eight years previously.
The money, incidentally, is still in the hands of the clerk pending the determination of the present controversy which involves the single ultimate question (as will subsequently appear) of whether the money belongs to Edythe Rugh as the sole heir of Mitchell, who was the owner of the land at the time of the institution of the suit and at the time of the original deposit of the award, or whether, on the contrary, it belongs to Ivan Ludwick and Eula Ludwick, who had meanwhile acquired the land and were the owners of it at the time the deposit was again paid into court after the Commission had apparently decided to proceed with the actual construction of the highway.
On May 29, 1947, the Commission filed a motion asking that the case be restored to the active docket, which motion was sustained on June 6, 1947.
On August 25, 1947, the Commission entered upon and took over the actual physical possession of the land for the first time.
We have already pointed out that Mitchell's death was suggested to the court on August 27, 1947.
On September 5, 1947, Ivan Ludwick and Eula Ludwick filed their motion asking to be made parties defendant to the cause upon the theory that they were the only persons to be injured by the appropriation of the land, and consequently were the only persons entitled to the compensation therefor. They claimed the right to be made parties defendant for the purpose of attacking the jurisdiction of the court, and then, in the event such attack was unsuccessful, of asserting such right and defenses as might be available to them as the then owners of the land and as alleged successors in title and interest to Mitchell, the original defendant.
On October 10, 1947, the court sustained the motion and ordered that Ivan Ludwick and Eula Ludwick be made parties defendant with leave to adopt as their own any pleadings theretofore filed by or on behalf of Mitchell, as well as to file any other or further pleadings which might be proper in the case.
On December 11, 1947, Edythe Rugh appeared in court and filed a motion asking that she be made a party defendant, and that as Mitchell's sole heir, and as the alleged successor to his interest, she be allowed to adopt and proceed with the exceptions theretofore filed on his behalf. On the same day the motion was taken up and likewise sustained.
Since it appeared from the situation thus before the court that any and all compensation to be awarded would belong solely and exclusively either to Ivan Ludwick and Eula Ludwick on the one hand, or to Edythe Rugh on the other, the Ludwicks, on April 13, 1948, filed a motion asking that the several defendants be required to interplead and try out the issue as to which of them was entitled to the compensation as a preliminary to any further proceedings in the case.
On October 6, 1948, it was stipulated that such motion should be sustained, and that the issue of which of the contending parties was entitled to the compensation should be submitted to the court for determination on an agreed statement of facts. It was specifically recognized in the stipulation that the Ludwicks and Edythe Rugh were the only parties claiming any right to the compensation, and that the party or parties against whom the court's decision should go would have no further interest in the proceeding.
On December 7, 1949, the court rendered its judgment, holding that title to the land condemned was taken from Mitchell and vested in the Commission on October 17, 1939, when the Commission made its initial deposit in court; that Mitchell then and there became entitled to the award, and remained so entitled until his death intestate on December 9, 1939, after which his right to receive the award passed to Edythe Rugh as his sole surviving heir at law; that Edythe Rugh had thereafter been solely and exclusively entitled to receive the award or any other award that might thereafter be made in the final determination of the condemnation proceeding; and that Ivan Ludwick and Eula Ludwick had no right or interest therein.
Following the entry of such judgment, Ivan Ludwick and Eula Ludwick filed their motion for a new trial; and this being overruled, they gave notice of appeal, and by subsequent steps have caused the case to be transferred to this court for our review.
For their first point the Ludwicks argue that Edythe Rugh was not entitled to assert her claim for the reason that there had been no order made substituting her in Mitchell's stead within one year after the latter's death as required by Section 22 of the new code, Laws Mo. 1943, p. 364, § 22, Mo.R.S.A. § 847.22; Supreme Court Rule 3.08.
It is true that although Mitchell had died on December 9, 1939, there was no suggestion of his death until August 27, 1947, and nothing in the way of a substitution of Edythe Rugh in his stead until December 11, 1947. The record is clear, however, that the Ludwicks waived any objection they might conceivably have had to the fact that the substitution was made long after the special limitation period had run. Not only was there no objection interposed when the court sustained Edythe Rugh's motion that she be made a party defendant and be allowed to adopt and proceed with the exceptions theretofore filed on Mitchell's behalf, but in fact the Ludwicks afterwards affirmatively recognized her status as a defendant, and specifically moved and stipulated that she be required to interplead with them as to which of them was entitled to the damages awarded. In this situation the Ludwicks are now in no position to complain of the fact that substitution was not made within the year. 1 C.J.S., Abatement and Revival, § 184, page 236.
For their next point the Ludwicks argue that the court erred in holding that title to the land condemned had been divested out of Mitchell and vested in the Commission upon the latter's initial deposit of the award on October 17, 1939. They insist, on the contrary, that such deposit was at most only conditional; that its withdrawal by the Commission on November 9, 1939, nullified whatever effect its initial posting might have had; and that title did not pass to the Commission until August 25, 1947, when the Commission took over actual physical possession of the land after having again paid the award into court on May 9, 1947.
At such time the Ludwicks were of course the owners of the land through which the strip of right of way had been condemned, so that if they should be right in their contention, they would be entitled to any damages assessed, and not Edythe Rugh, whose claim is based upon the theory that the taking occurred when the initial deposit was made into court, which was at a time when her ancestor, Mitchell, was the owner of the land. If she is correct in her position, then the right to the damages assessed would, so far as the present controversy is concerned, have been personal to Mitchell (Turner v. Missouri Pac. Ry. Co., 130 Mo.App. 535, 541, 109 S.W. 101), and at his death would have passed to her as his sole heir at law.
It is the well settled rule that in condemnation suits brought under the general statutes governing this case, the easement in or title to the property condemned is fully acquired by the condemnor when it pays to the owner, or into court for him, the amount of the damages awarded by the commissioners. State ex rel. City of St. Louis v. Oakley, 354 Mo. 124, 188 S.W.2d 820; Caruthersville School Dist. No. 18 v. Latshaw, Mo.Sup., 233 S.W.2d 6; Kansas City Southern Ry. Co. v. Second Street Improvement Co., 256 Mo. 386, 166 S.W. 296.
The Ludwicks argue that the initial deposit made by the Commission was unexplained, and therefore could not have constituted payment into court for the owner. The fact is, however, that the payment was in no sense unexplained. Not only does the statute provide that when the commissioners' report is filed, the condemnor shall pay to the clerk the amount assessed "for the party in whose favor such damages have been assessed", Sec. 1506, R.S.Mo. 1939, Mo.R.S.A. § 1506, but the parties' own stipulation recites that the payment was "the amount of damages assessed and awarded by said commissioners' report to the said James A. Mitchell". It took no order of court directing the payment to be made, nor authorizing the clerk to receive it. All those things followed from the plain language of the statute; and once the payment was made, it became a fund in court, or in the hands of the clerk as trustee, for the purpose contemplated by the statute. Furthermore there was no requirement that tender should have first been made to the owner, and by him have been refused, before the money might have been paid to the clerk.
So far as regards the effect of the Commission's subsequent withdrawal of the deposit, there is no contention that the Commission was thereby undertaking to abandon the project. Once payment was made, there was a taking of the property in a constitutional sense, irrespective of whether the Commission immediately entered into the actual physical possession of the property; and from that very moment, so far as the present controversy is concerned, Mitchell was entitled to the money which had been deposited with the clerk for him. It may be, as is suggested in the briefs, that the Commission, in withdrawing the deposit, was attempting to prevent the possible dissipation of the fund pending a final appraisement by a jury, which might have been for a less sum than the amount of the commissioners' award. But be this as it may, we know of no authority for such a withdrawal; and there would undoubtedly have been a remedy available to Mitchell or his successor in interest to compel the repayment of the fund. The money could not have been lawfully paid to the clerk conditionally because the statute authorizes no such procedure. Holmes v. Kansas City, 209 Mo. 513, 108 S.W. 9, 1134. Title was divested out of Mitchell and vested in the Commission upon the initial payment of the award into court, and did not await and depend upon the actual beginning of the improvement.
For their third and final point the Ludwicks argue that in any event they would be entitled, on the theory of subrogation, to any award of damages up to the limit of a mortgage debt which they had satisfied after acquiring title to the property.
At the time of the institution of the action, as well as at the time when the Commission made the initial deposit, the land was subject to the lien of a deed of trust which had theretofore been executed by Mitchell to secure the payment to the Federal Land Bank of St. Louis of a purchase money note for $6,800.
By reason of such outstanding deed of trust the Federal Land Bank of St. Louis was named as one of the defendants to the action.
Mitchell's conveyance of the land to the Vaughts, and the Vaughts' subsequent conveyance of the land to the Ludwicks, was of course made subject in each instance to the deed of trust, which, by the time of the conveyance to the Ludwicks, had been reduced to the sum of $5,400.
At some time prior to the trial of the issue as between the Ludwicks and Edythe Rugh, the Ludwicks fully paid the debt of $5,400, and thereby satisfied and extinguished the lien of the deed of trust.
The Ludwicks now take the position that in the apportionment of any and all damages awarded, the Federal Land Bank of St. Louis was entitled to priority up to the extent of the unpaid balance of the mortgage debt, which would mean, under their theory, that the Commission was primarily liable, and they themselves only secondarily liable, for whatever money was owed the bank. Consequently they insist that when they paid and discharged the mortgage debt, they were actually paying the Commission's debt so as to have become subrogated to whatever rights the bank might otherwise have asserted against the Commission.
If it were true that when the Ludwicks paid the mortgage debt they were discharging the Commission's obligation, there might be merit to what they have to say. The fact is, however, that they were not paying the Commission's debt, but their own debt, which, as their deed recites, they had assumed and agreed to pay as a part of the purchase price. Payment by a grantee who has assumed the payment of a mortgage debt extinguishes the debt, and does not permit the grantee to be subrogated to the rights of the mortgagee and keep the debt alive for any purpose. Nelson v. Brown, 140 Mo. 580, 41 S.W. 960. By assuming the mortgage debt the Ludwicks had thereby and to that extent reduced the consideration actually paid to the Vaughts, and in paying the debt there was no loss sustained on their part which could have afforded a basis for any right of subrogation.
It consequently follows, as the lower court held, that the deposit now in court, as well as any additional award that may hereafter be made upon a new appraisement by a jury, shall be paid to Edythe Rugh and not the Ludwicks. It would appear that what the ultimate damages shall be is a question yet to be determined. However the decision rendered in this separate trial upon the voluntary interplea of the conflicting claims of the respective parties is none the less final and appealable. Supreme Court Rule 3.29.
The judgment rendered by the circuit court should be affirmed, and it is so ordered.
ANDERSON, P. J., and McCULLEN, J., concur.