Atlantic Refining Co. v. Director of Public Works

• Citation: 244 A.2d 853,104 R.I. 436
• Decision Date: 06 August 1968
• Docket Number: No. 309-A,309-A
• Parties: The ATLANTIC REFINING COMPANY v. DIRECTOR OF PUBLIC WORKS for the State of Rhode Island. ppeal.
• Court: Rhode Island Supreme Court

Page 853

244 A.2d 853

104 R.I. 436

The ATLANTIC REFINING COMPANY v. DIRECTOR OF PUBLIC WORKS for the State of Rhode Island.

No. 309-Appeal.

Supreme Court of Rhode Island.

Aug. 6, 1968.

Letts & Quinn, Andrew P. Quinn, Daniel J. Murray, Jerome B. Spunt, Providence, for plaintiff

Alexander G. Teitz, Asst. Counsel, Providence, for defendant.

OPINION

KELLEHER, Justice.

The present appeal was taken by the director of public works for the state of Rhode Island, hereinafter referred to as the state, from a judgment entered by a superior court justice in accordance with the mandate issued by this court in the Atlantic Refining Co. v. Director of Public Works, R.I., 233 A.2d 423. ¹ The present case concerns itself with the amount of interest to which the Atlantic Refining Company, hereinafter sometimes referred to as the condemnee, is entitled on the award of money it received as compensation for the taking of its property for highway purposes by the state.

The state concedes that the condemnee is entitled to receive some interest on the money judgment it was awarded in the condemnation suit for the time between the entry of the judgment ² and the payment of the money due therefrom. What is in dispute, however, is the method for computing that interest. The state contends that the condemnee should receive a flat 6 per cent rate of interest based upon the original sum fixed as compensation for the fair market value of the property at the taking date. The condemnee, on the other hand, argues that it is entitled to a 6 per cent interest on the amount of money which it was awarded by the judgment rendered in the superior court from the date of the judgment to the date of its full payment. The state vigorously objects to the condemnee's computation because, it argues, to accept the condemnee's mathematics really results in a compounding of interest. In pressing this objection, the state points out that the principal sum on which the condemnee would have us compute interest is the total-dollar figure contained in the judgment of the trial justice which concededly contains a sum of interest ³ for the period between the date of the taking and the date on which the decision below was entered.

Since neither side would yield in its contentions, the state agreed with the Atlantic Refining Company to pay the sum of $480,763.20, which amount was not in dispute. Thereafter, in order to resolve their impasse, condemnee filed a motion for entry of final judgment and accompanied it by a stipulation which summarized the contentions and views of the respective parties. The motion was argued before a superior court justice who ruled in favor of the condemnee; accordingly, a judgment in the sum of $495,457.87 was subsequently entered by him. The balance of $14,694.67, which represents the numerical difference between the two methods of interest computation advocated by the instant litigants, is the sum with which we are here concerned.

Whenever, the power of eminent domain is exercised, a constitutional right arises in favor of the owner whose land has been taken thereby to be justly compensated for his loss. City of Newport v. Newport Water Corp., 57 R.I. 269, 189 A. 843; Southern New England Ry. for Condemnation, 38 R.I. 216, 94 A. 738; Rhode Island Constitution, art. I, sec. 16. Although there is no legal command to do so, in the ideal order of things payment to the owner of the present market value of his land should be made contemporaneously with its appropriation. Cf. In Re Pawtucket & Central Falls Grade Crossing Comm'n, 36 R.I. 200, 89 A. 695. In reality, because of the time it necessarily takes to ascertain the extent of the damages suffered by those forced to surrender their land to public use, there is invariably an interval of time between the moment when the sovereign acquires the property and the moment when payment is eventually made. In recognition of this fact, it is well settled that in order to be justly compensated for his land, the owner is entitled to an additional sum of money in the form of interest running from the time full payment ought to have been made until the time it actually was made. The interest is, in a sense, not part of the damages for the taking but is awarded the owner for the detention of the monetary payment after it had been justly due him. Whitman v. City of Providence, 44 R.I. 33, 114 A. 183. Virtually all respectable authorities on this subject are in accord with the above-recited principles. See 3 Nichols on The Law of Eminent Domain (rev. 3d ed.), § 8.63, p. 150; 1 Orgel, Valuation Under the Law of Eminent Domain (2d ed.), § 5, p. 19; 2 Lewis, A Treatise on the Law of Eminent Domain in the United States (3d ed.), § 742, p. 1319; Jahr, Law of Eminent Domain Valuation and Procedure, sec. 176, p. 290.

Essentially, what the parties disagree about in the instant appeal is how interest should be computed in condemnation suits for the period of time which extends between the date on which a judgment is entered in the superior court for the condemnee and the date on which that judgment becomes final. This time period will vary depending on whether an appeal is taken by either party to the lawsuit.

The condemnee here asserts that it is entitled to interest at 6 per cent computed on the judgment entered in its favor by the superior court justice who heard the case for the time between the entry of the judgment and the time it became final after our disposition of the state's appeal, notwithstanding the fact such a computation results in a compunding of the interest which formed a part of the...