Fulcher v. U.S.

• Decision Date: 17 September 1980
• Docket Number: No. 78-1552,78-1552
• Parties: Arthur J. FULCHER, Jr., Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 278

632 F.2d 278

Arthur J. FULCHER, Jr., Appellant, v. UNITED STATES of America, Appellee.

No. 78-1552.

United States Court of Appeals, Fourth Circuit.

Argued Jan. 7, 1980.

Decided Sept. 17, 1980.

Daniel D. Khoury, Manteo, N.C. (Christopher L. Seawell, Aldridge & Seawell, Manteo, N.C., on brief), for appellant.

Robert L. Klarquist, Dept. of Justice, Washington, D.C. (James W. Moorman, Asst. Atty. Gen., Washington, D.C., George M. Anderson, U. S. Atty., Bruce H. Johnson, Asst. U. S. Atty., Raleigh, N.C., Charles E. Biblowit, Dept. of Justice, Washington, D.C., on brief), for appellee.

Before HAYNSWORTH, Chief Judge, and WINTER, BUTZNER, RUSSELL, WIDENER, HALL, PHILLIPS, MURNAGHAN and SPROUSE, Circuit Judges.

PER CURIAM:

For the reasons set forth in the accompanying four opinions, the issues in this case are decided as follows:

1. Seven members of the court reverse the judgment of the district court. They hold that the district court has jurisdiction and that the complaint states a claim for relief under 28 U.S.C. § 2409a. Two members of the court dissent.

2. Seven members of the court hold that the 12-year statute of limitations provided by 28 U.S.C. § 2409a(f) applies. Two members of the court dissent.

3. Six members of the court hold that the government is vested with indefeasible title. Three judges dissent.

On remand the district court should first determine whether Fulcher's claim is barred by the 12-year statute of limitations. If it is not, the court should decide the merits of Fulcher's claim. In this connection, the court must ascertain whether Fulcher was properly made a defendant to the condemnation proceedings. If he was not properly impleaded, the court should determine whether Fulcher or Wahab was the owner of the condemned land.

If Fulcher prevails on the merits, the court should award him just compensation. Because a majority of the court hold that the government acquired fee simple title pursuant to 40 U.S.C. § 258a, compensation should be determined by ascertaining the value of the property on the date the declaration of taking was filed. Fulcher should also be awarded interest from that date.

BUTZNER, Circuit Judge, with whom HAYNSWORTH, Chief Judge, and WINTER, and SPROUSE, Circuit Judges, join:

Arthur J. Fulcher appeals from an order of the district court dismissing his action against the United States in which he sought to quiet title to property which had been condemned and made part of the Cape Hatteras National Park. The sole issue is whether Fulcher can maintain his action under 28 U.S.C. § 2409a which authorizes quiet title suits against the government in district courts. The district court held that Fulcher could not divest the government of its title. It intimated that his only remedy was an action for compensation presumably in the Court of Claims. Accordingly, it dismissed the action under Rule 12(b)(6) for failure to state a claim. We agree with the district court that Fulcher cannot obtain title to the property or its possession. We conclude, however, that he can maintain this action. If he is not barred by the statute of limitations and if he prevails on the merits of his claim, he will be entitled to compensation. We therefore vacate the order of dismissal and remand the case for further proceedings. ¹

I

For the purpose of this appeal, the following facts are accepted as true. On March 29, 1937, O. C. Fulcher conveyed the property in question to A. J. Fulcher, the claimant's father, who promptly recorded his deed. In July, 1947, O. C. Fulcher again conveyed the property, this time to R. S. Wahab, who also recorded his deed.

The government acquired the property for the Cape Hatteras National Park by filing a declaration of taking and depositing the estimated compensation in court pursuant to 40 U.S.C. § 258a on March 17, 1959. A. J. Fulcher and his heirs were not named defendants in these proceedings. Although notice impleading all unknown owners was published in a local paper, Arthur J. Fulcher, living in California, did not receive actual notice of the proceedings and entered no appearance. Wahab, a named defendant in the condemnation proceedings, was adjudged to be the owner of the Fulcher tract and awarded $18,825.40 compensation.

At some unspecified later date, Fulcher discovered that the property had been condemned. Claiming title superior to Wahab and therefore superior to the government, he brought this action in 1977. Relying on United States v. Chatham, 323 F.2d 95 (4th Cir. 1963), ² he contends that the condemnation proceeding did not vest title in the government because notice of the proceeding was inadequate. The government answered and moved to dismiss the complaint on the ground that it could not be divested of title to the property which it had acquired in the condemnation proceedings. ³ The district court, distinguishing Chatham, granted the government's motion.

II

We agree with the district court that Chatham does not control this case. In Chatham the government named as defendants persons who were complete strangers to the land. Here, in contrast, when the government commenced the condemnation proceeding, it named as a defendant the person who ostensibly held title to the land as shown by the last deed of record. In this respect the government satisfied the requirements of Rule 71A(c)(2), which provides in part: "Upon the commencement of the action, the plaintiff need join as defendants only the persons having or claiming an interest in the property whose names are then known . . . ."

We therefore agree with the district court that the condemnation of the property pursuant to § 258a and Rule 71A(c)(2) vested an indefeasible title in the government. This is manifest from the statute. It provides that on filing the declaration of taking and the deposit of the estimated compensation, "title to the said lands in fee simple absolute . . . shall vest in the United States." The condemnation is a proceeding in rem brought against the land itself. It extinguishes all previous rights and gives "title to the United States good against the world." Norman Lumber Co. v. United States, 223 F.2d 868, 870 (4th Cir. 1955). ⁴

III

Recognition of the government's title does not deprive the former owner of the land of his right to just compensation. ⁵ Schroeder v. City of New York, 371 U.S. 208, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962); Walker v. Hutchinson City, 352 U.S. 112, 117, 122, 77 S.Ct. 200, 203, 205, 1 L.Ed.2d 178 (1956). The owner's right is founded on the due process and just compensation clauses of the fifth amendment. Section 258a and Rule 71A(c)(2) implement these constitutional guarantees. Section 258a provides that upon the filing of the declaration of taking and the deposit of the estimated compensation "the right to just compensation for the (property) shall vest in the persons entitled thereto; and said compensation shall be ascertained and awarded in said proceeding and established by judgment therein . . .." The Rule provides that prior to any hearing involving compensation the government must add as defendants all persons "whose names can be ascertained by a reasonably diligent search of the records . . . ." The Rule next directs that "(a)ll others," that is those persons whose names could not be ascertained, "may be made defendants under the designation of 'Unknown Owners.' "

Payment to the wrong claimant does not divest the government of the property it acquired in the in rem condemnation proceeding; nor does it divest the true owner of his right to compensation which by the terms of the statute similarly vested. For the purpose of this appeal, the government acknowledges these principles, but it contends that Fulcher's right to compensation, if any, can be vindicated only by an action for damages in the Court of Claims under the Tucker Act. Although the government's contention is supported by precedent, ⁶ we believe that the enactment of 28 U.S.C. § 2409a in 1972 makes it no longer viable.

IV

Enactment of the Tucker Act (28 U.S.C. §§ 1346 and 1491) in 1887 waived sovereign immunity with respect to a landowner's claim based on the fifth amendment for the government's taking of his property without payment of just compensation. The landowner's remedy was limited to monetary damages and title was confirmed in the government even though formal condemnation proceedings had not been instituted. See United States v. Dow, 357 U.S. 17, 21, 78 S.Ct. 1039, 1044, 2 L.Ed.2d 1109 (1958). However, if condemnation proceedings were instituted and the government fully complied with the statute under which it proceeded, it was absolved from liability to the rightful owner when the condemnation court mistakenly paid another claimant. United States v. Dunnington, 146 U.S. 338, 13 S.Ct. 79, 36 L.Ed. 996 (1892). The landowner's remedy, if he were named as a defendant, was by appeal.

The injustice of denying compensation to an unnamed landowner who had no knowledge of the condemnation proceedings was addressed in 1952 by Rule 71A(c) (2). In addition to the obligation to comply with the condemnation statute, the government is required by the Rule to take reasonable steps to ascertain the true owner; only those persons not identified in this manner can be impleaded as unknown. The Rule preserves the landowner's right to compensation, but not to possession of the property, if the government has failed to comply with it. ⁷ Condemnation Procedure A New Federal Rule, 4 Stanford L.Rev. 266, 269 (1952). See generally 6A Nichols, Eminent Domain, § 29.1 (3d ed. 1979); 12 Wright & Miller, Federal Practice and Procedure: Civil § 3045 (1973). The Rule alleviates the admitted hardship of Dunnington. ⁸

V

In 1972 the Congress, again waiving sovereign immunity, enacted 28 U.S.C. § 2409a ⁹ to allow the United States to be made a party in actions in district courts to quiet title to lands in which the government claims an interest. At the same time it amended the...