Guaranty Savings & Loan Ass'n v. City of Springfield

• Citation: 139 S.W.2d 955,346 Mo. 79
• Decision Date: 07 May 1940
• Docket Number: 35933
• Parties: Guaranty Savings & Loan Association, a Corporation, and Lewis Luster, Trustee, v. City of Springfield, a Municipal Corporation, Appellant
• Court: United States State Supreme Court of Missouri

139 S.W.2d 955

346 Mo. 79

Guaranty Savings & Loan Association, a Corporation, and Lewis Luster, Trustee, v. City of Springfield, a Municipal Corporation, Appellant

No. 35933

Supreme Court of Missouri

May 7, 1940

Rehearing Denied May 7, 1940.

Appeal from Jasper Circuit Court; Hon. Ray Watson, Judge. Opinion filed at September Term, 1939, April 2, 1940; motion for rehearing filed; motion overruled at May Term, 1940, May 7, 1940.

Affirmed.

Kirby W. Patterson and W. D. Tatlow for appellant.

(1) The petition is based upon the common-law theory that the trustee in the deed of trust was the record owner of the freehold estate in the real estate described in the deeds of trust from "the 9th day of February, 1927, until the sale of said real estate at trustee's sale and the conveyance thereof by trustee's deed on the 20th day of June 1933." 41 C. J., sec. 1, p. 274. The Missouri rule is now, and has been for many years, that a mortgage or deed of trust only constitutes a lien on the property. Kennett v. Plummer, 28 Mo. 142; Wood v. Hildebrand, 46 Mo. 284; Masterson v. Ry. Co., 72 Mo. 347; Springfield ex rel. v. Ransdel, 305 Mo. 51; Reynolds v. Stepanek, 339 Mo. 809, 99 S.W.2d 65; Eurengy v. Equitable, etc., Corp., 107 S.W.2d 71. (2) The damages for the construction of the viaduct wholly in the street were purely consequential so that the city was not required to have them assessed and paid before constructing the same. This question has been recently considered by this court en banc where the numerous authorities will be found cited. Hill-Behan Lbr. Co. v. Skrainka Const. Co., 106 S.W.2d 483. The constitutional provision cited and relied upon in the petition (Sec. 21, Art. II, Const. Mo.) has no application to this case except that it created a cause of action for "damaging" property, where none before existed. Where the property is only damaged and no part of it taken, the constitutional provision "is silent as to the remedy, the party entitled to the right may resort to any common-law action which will afford him adequate and appropriate means for redress." Householder v. Kansas City, 83 Mo. 488. This construction has been followed by the court in many decisions, down to and including the Hill, etc., case, cited supra. Am., etc., Co. v. O'Malley, 113 S.W.2d 801. (3) A mortgagor, before condition broken and while in the possession of the property, can maintain a suit for injury or trespass to the property, or for consequential damages thereto, without joining the mortgagee, and recovery will be for the full amount of damages sustained. This has been repeatedly decided by the courts of this State. Logan v. Wabash Western Ry. Co., 43 Mo.App. 71; King v. Sligo Furnace Co., 190 S.W. 368; Pence v. Gabbert's Administrator, 70 Mo.App. 201; State ex rel. Kibble v. First Natl. Bank, 22 S.W.2d 185; Matthews v. Mo. Pac. Ry. Co., 142 Mo. 645, 44 S.W. 802; Craig v. K. C. Term. Ry. Co., 271 Mo. 516, 197 S.W. 141; Blankenship v. Kansas Explorations; 325 Mo. 998, 30 S.W.2d 471; Jones on Mortgages (7 Ed.), sec. 664. The judgment in favor of the mortgagor and the satisfaction thereof is a bar to a subsequent recovery by the mortgagee after condition broken. This, too, is directly decided in the cases, supra. (4) The courts of this State, until the instant case, have never been called upon to deal with the question as to whether a settlement in good faith with the fee owner as mortgagor before condition broken, and the payment to him of the damages, constitutes a bar against the mortgagee. It necessarily follows, as an inevitable conclusion, that a bona fide settlement and the payment of damages thereunder is the exact equivalent to the recovery of a judgment and satisfaction thereof. This has been directly decided by the courts of other states, and the dissenting opinion in the instant case, and there is no decision to the contrary, except the majority opinion in the instant case. Knoll v. N. Y. C. & St. L. Ry. Co., 15 A. 571, 1 L. R. A. 366; Shields v. Pittsburgh, 97 A. 124; Dexter v. Pa. Power Co., 193 A. 96; Fidelity, etc., Trust Co., v. Kraus, 190 A. 874; Appeal of Harris, 186 A. 92; Masterson v. Ry. Co., 55 S.W. 577; Chicago, etc., Ry. Co. v. Earl, 181 S.W. 925, 121 Ark. 514; Wilkes v. Southern Ry., 85 S.C. 347, 67 S.E. 292; First Natl. Bank v. Union Ry. Co., 284 S.W. 363; Harris v. Seaboard Ry. Co., 130 S.E. 322; Capital. etc., Co. v. B. & O. Ry. Co., 184 N.E. 862; Lawrey v. L. & N. Ry. Co., 153 So. 468; Ashville, etc. v. Baird, 116 N.C. 253, 80 S.E. 406; State ex rel. Kibble v. First Natl. Bk., 22 S.W.2d 193.

Frank B. Williams for respondent.

(1) It is well settled law that Section 21, Article II of the Constitution of Missouri, which provides that private property cannot be damaged for public use without just compensation: (a) Gives an absolute right and is self-enforcing, and that self-enforcing constitutional provisions may be supplemented by statutory laws and city charters, which do not contravene the constitutional provision, but which provide means for carrying out such provision. Hickman v. Kansas City, 120 Mo. 117; Tremayne v. St. Louis, 6 S.W.2d 935, 940, 320 Mo. 131; Householder v. Kansas City, 83 Mo. 495; Sheehy v. Railroad Co., 94 Mo. 574, 7 S.W. 579; Keith v. Bingham, 100 Mo. 300, 13 S.W. 683. (b) Refers to and regulates the right of eminent domain and applies to cases where private property is damaged for public use. Marshfield v. Brown, 88 S.W.2d 340. (c) Under said provision consequential damages are recoverable, and such recovery does not depend upon any question of negligence or nuisance. 20 C. J., 671, sec. 140; Chapman v. Railroad Co., 240 Mo. 592, 144 S.W. 469; St. Louis v. Brown, 155 Mo. 545, 56 S.W. 298; Hannibal Bridge Co. v. Schaubacker, 57 Mo. 582. (d) Under said provision damages to a landowner are either direct or consequential. Direct damages represent compensation for that portion of the property actually taken and the diminished value of the remainder; any other damages are consequential. Blackwell v. Lees Summit, 32 S.W.2d 66. (e) Within the meaning of this section, the term "owner" includes any person who has an interest in the property that will be affected by the condemnation or appropriation, or who is capable of being damnified. A mortagee is an owner and his interest cannot be damaged for public use without paying just compensation. Houston North Shore Ry. Co. v. Tyrrel, 98 S.W.2d 786, 108 A. L. R. 1508; Morgan v. Willman, 318 Mo. 151, 1 S.W.2d 199, 59 A. L. R. 1518; Railroad v. Baker, 102 Mo. 553. (2) The city charter of the city of Springfield, a city of the second class, authorizes the city to institute condemnation proceedings to condemn a less estate than a freehold interest, and to pay just compensation therefor, and makes it the duty of the court to so adapt its procedure as to give all parties in interest due process of law and just compensation for all property damaged, notwithstanding any provision in the charter or any other statute to the contrary. This being a case of damages to private property for public use, and the property owner's right to compensation being absolute, the city could not ignore the statutory method designed for acquiring and compensating all interests, and, by private settlement with the mortgagor, acquit itself of liability for damages done to the mortgage security. R. S. 1929, Ch. 38, Art. III, Secs. 6628, 6630, 6642; Morgan v. Willman, 1 S.W.2d 199; Municipal Sec. Co. v. Kansas City, 196 Mo.App. 466, 183 S.W. 880. (3) Consequential damages to abutting property caused by changing the grade of a street are properly assessable in a condemnation proceeding for the improvement of the street and the assessment and payment of such damages may be, but need not be, made before the street is graded or the property damaged. Tremayne v. St. Louis, 320 Mo. 120, 6 S.W.2d 935. (4) The action of respondent-mortgagee is for damages resulting consequentially from the construction of a viaduct upon the roadway of a city street abutting the mortgaged premises and within the lines of the street. The damage claimed is for impairment of the mortgage security. Heorath v. Halpin, 60 S.W.2d 744, 227 Mo.App. 984; Guaranty Savs. Loan Assn. v. Springfield, 113 S.W.2d 147; Hill-Behan Lbr. Co. v. Skrainka Const. Co., 106 S.W.2d 483.

OPINION

Tipton, J.

This case comes to the writer on reassignment. It was certified to this Court by the Springfield Court of Appeals because of a dissent of one of its judges. [See 113 S.W.2d 147.] That court affirmed the judgment of the trial court in awarding damages in the sum of $ 3665.90 to a mortgagee for consequential damages caused by a viaduct constructed by appellant in a street abutting property upon which respondent had a mortgage for which appellant had made a settlement with the mortgagor who was in possession.

We will adopt the facts as stated by the Court of Appeals:

"J S. Hively was the owner of the four pieces of improved realty abutting on the west side of Benton Avenue in the City of Springfield, Mo. These properties face east. Hively acquired this property on the 9th day of February 1927, by warranty deed, which was recorded on the same day in the office of the recorder of deeds for Greene County. On the same day J. S. Hively and his wife, Emma Hively, executed to respondent Guaranty Savings & Loan Association separate deeds of trust on each of the four pieces of property. These deeds of trust were recorded in the office of the recorder of deeds for Greene County on the 10th day of February, 1927. On October 4, 1927, the appellant city of Springfield, by ordinance duly passed, authorized the construction of a viaduct, known as the 'Benton Avenue Viaduct.' This viaduct is several blocks long and extends in a northerly and southerly direction as does...