Independent School Dist. of Boise City v. C. B. Lauch Const. Co., 8414

• Decision Date: 10 January 1957
• Docket Number: No. 8414,8414
• Parties: INDEPENDENT SCHOOL DISTRICT OF BOISE CITY, a specially chartered school district in Ada County, Idaho, Plaintiff-Appellant, v. C. B. LAUCH CONSTRUCTION COMPANY, a corporation, State of Idaho, Eli Larson, Trustee, John W. Eagleson and Effa (sometimes known as Effie) H. Eagleson, husband and wife, John W. Eagleson, Trustee, Mutual Finance Company, a corporation, Max Eiden and Jayne Eiden, husband and wife, N. L. Terteling and Angela B. Terteling, husband and wife, First Security Bank of Idaho, a national banking association, Ruth G. Meyers, a widow, Horace Meyers, William A Koelsch and Frances W. Koelsch, husband and wife, Ted L. Miller and Vivlan B. Miller, husband and wife, Terry's Appliance Company, a corporation, Frederick A. Costello and Mae Costello, husband and wife, Francis M. Pratt and Grace Pratt, husband and wife, The Prudential Insurance Company of America, a corporation, Van L. Smith and Alice W. Smith, husband and wife, and The Idaho First National Bank, a national banking association, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 1077

305 P.2d 1077

78 Idaho 485

INDEPENDENT SCHOOL DISTRICT OF BOISE CITY, a specially chartered school district in Ada County, Idaho, Plaintiff-Appellant, v. C. B. LAUCH CONSTRUCTION COMPANY, a corporation, State of Idaho, Eli Larson, Trustee, John W. Eagleson and Effa (sometimes known as Effie) H. Eagleson, husband and wife, John W. Eagleson, Trustee, Mutual Finance Company, a corporation, Max Eiden and Jayne Eiden, husband and wife, N. L. Terteling and Angela B. Terteling, husband and wife, First Security Bank of Idaho, a national banking association, Ruth G. Meyers, a widow, Horace Meyers, William A Koelsch and Frances W. Koelsch, husband and wife, Ted L. Miller and Vivlan B. Miller, husband and wife, Terry's Appliance Company, a corporation, Frederick A. Costello and Mae Costello, husband and wife, Francis M. Pratt and Grace Pratt, husband and wife, The Prudential Insurance Company of America, a corporation, Van L. Smith and Alice W. Smith, husband and wife, and The Idaho First National Bank, a national banking association, Defendants-Respondents.

No. 8414.

Supreme Court of Idaho.

Jan. 10, 1957.

Maurice H. Greene, Boise, for appellant.

Anderson, Kaufman & Anderson, Boise, for respondents.

TAYLOR, Justice.

Plaintiff (appellant) commenced this action and summons was issued and dated on May 15, 1951. The action was brought against a number of defendants to condemn several parcels of land for school purposes. After the usual proceedings on demurrers, the defendant (respondent) filed answer specifically denying the necessity for the taking. Thus it became a prerequisite condition to condemnation that plaintiff first establish that the taking was necessary. § 7-704, I.C. That issue was tried in October, 1951, and decree was entered establishing the necessity March 10, 1952. The defendant, owner, appealed and this court affirmed that decree. Independent School Dist. v. C. B. Lauch Construction Co., 74 Idaho 502, 264 P.2d 687. Remittitur was filed in the district court January 8, 1954.

April 24, 1954, defendant filed motion to open the judgment on the ground that certain officials of the plaintiff district had publicly disclosed their intention not to use the land for the purpose for which it had been sought, and that the taking of defendant's land was no longer warranted or necessary. This motion was stricken by the court April 30, 1954, and defendant appealed from the order, striking its motion, May 3, 1954. The order was affirmed by this court. Independent School Dist. v. C. B. Lauch Construction Co., 76 Idaho 126, 278 P.2d 792. Remittitur was filed in the district court January 25, 1955.

February 4, 1955, plaintiff filed motion, under § 7-717, I.C., as amended, for permission to take possession of the property, pending jury trial of the issue of compensation and damages. March 29, 1955, the district court entered its order granting possession to the plaintiff, conditioned upon the deposit by it of the sum of $80,000. The deposit was made and approved by the court, and the order for possession declared in full force and effect April 1, 1955. Thereafter, pursuant to stipulation of the parties, appraisers were appointed and appraisal was returned to the court, July 16, 1955, fixing the value of the property in the sum of $74,800. The parties then stipulated for a hearing on the issue of what interest should be added to the award of the appaisers. After hearing thereon, the court entered judgment October 15, 1955, for the defendants for $74,800, with interest thereon at the legal rate of 6% from the date of summons, May 15, 1951, in the sum of $19,822.

This appeal is from the judgment allowing interest from the date of the summons.

Appellant recognizes that this court adhered to the rule allowing interest from the date of summons in Village of Lapwai v. Alligier, 69 Idaho 397, 207 P.2d 1025, and urges that the Lapwai case be distinguished from the instant case on the ground that 'the four and one-half years which elapsed from the date the summons was issued to the date when appellant was able to obtain possession of the property, was in a large measure contributed to by delaying tactics on the part of respondents, and that appellant should not be required to pay interest for periods of time resulting from the delaying tactics of respondents.' Some courts have refused to allow interest for periods of delay in payment of damages occasioned by the fault of the condemnee. Mohler v. Fish Commission, 129 Or. 302, 276 P. 691; Laramie Valley Ry. Co. v. Gradert, 43 Wyo. 268, 3 P.2d 88; Lee v. Missouri Pacific R. Co., 134 Kan. 225, 5 P.2d 1102; Bruna v. State Highway Commission, 146 Kan. 375, 69 P.2d 743; Feltz v. Central Neb. Pub. Power & Irr. Dist., 8 Cir., 124 F.2d 578; Central Neb. Pub. Power & Irr. Dist. v. Berry, 8 Cir., 124 F.2d 586; Central Neb. Pub. Power & Irr. Dist. v. Fairchild, 8 Cir., 126 F.2d 302; E. M. Fleischmann Lbr. Corp. v. Resources Corp. Intern., D.C.Del., 114 F.Supp. 843; Speed v. Transamerica Corp., D.C.Del., 135 F.Supp. 176; 3 Nichols, Eminent Domain, § 8:63(2) p. 113; Annotation 36 A.L.R.2d 337, at 421.

However, such a rule should not be applied in this case. Under our statute, the condemnor must first establish that the taking is necessary to the intended use. § 7-704, I.C.; Portneuf Irrigating Co. v. Budge, 16 Idaho 116, 100 P. 1046. This gives the property owner the right to litigate that issue, and he should not be penalized for so doing.

Appellant further contends that if the Lapwai case is not to be distinguished, it should be overruled. We have concluded to re-examine the issue. Our law of eminent domain in part provides:

'For the purpose of assessing compensation and damages, the right thereto shall be deemed to have accrued at the date of the summons, and its actual value, at that date, shall be the measure of compensation for all property to be actually taken, and the basis of damages to property not actually taken, but injuriously affected, in all cases where such damages are allowed, as provided in the last section. No improvements put upon the property subsequent to the date of the service of summons shall be included in the assessment of compensation or damages.' § 7-712, I.C.

In Weiser Valley Land & Water Co. v. Ryan, 9 Cir., 190 F. 417, at page 424, cited in the Lapwai case, the court construed the above statute as follows:

'The next contention is that the court erred in adding interest to the amount of the assessment from the date of the summons. Under the statute, the right to the compensation shall be deemed to have accrued at the date of the summons. Having such right to compensation at a given time, it would seem that the owner ought to have interest upon the amount ascertained until paid. In the meanwhile he can claim nothing for added improvements, nor is he entitled to any advance that might affect the value of the property.'

This, we think, is not a correct reading of the statute. The statute does not give the owner the right to compensation at the date of the summons. It merely provides that the right shall be deemed to accrue at that date 'for the purpose of assessing compensation and damages.' In other words, it fixes the time as of which the value of the property is to be determined. In effect the statute defines compensation to be the amount payable as 'just compensation' required by the constitution, Art. 1, § 14, for the property actually taken, and damages as the compensation for property not taken, but injuriously affected. Thus interest is not included in either compensation or damages.

The construction given this statute in the Weiser Valley case was accepted and followed in Brown v. United States, 263 U.S. 78, 44 S.Ct. 92, at page 95, 68 L.Ed. 171, at page 182. There the contrary rule previously established by the Supreme Court was referred to, but the court, actuated by the precept of the conformity statute, chose to follow the so-called local state rule. Speaking for the court, Chief Justice Taft said:

'The interest charge under the Idaho statute has the wholesome effect of stimulating the plaintiff in condemnation to prompt action. Moreover, the plaintiff may reduce to a minimum the rents and profits enjoyed by the defendant because under the Idaho statute the plaintiff may have a summary preliminary hearing before commissioners to fix probable damages, and by depositing the amount so fixed with the clerk of the court, if the defendant will not accept it, the plaintiff may obtain immediate possession. Within less than a month after bringing suit, he can thus appropriate to himself the rents and profits of the land, and in enjoyment of them can await the final judgment.'

Generally in condemnation cases the action is not brought until the plaintiff's plan for the use of the property is fully developed and its need for possession is urgent. The owner, on the other hand, in exercising his right to resist, is naturally prone to delay. To allow the owner the benefits of possession as well as interest during the pendency of the proceedings is not only inequitable, but would encourage protracted delay. Neither is the provision for appointment of appraisers, and for payment or deposit of the amount of the appraisement, with the right then to take possession, in all cases an adequate safeguard to the plaintiff. As above noted, our statute gives the owner the right to litigate the issue of necessity for the taking. Where there is a serious challenge of that right, the plaintiff would be foolhardy to enter upon the property and incur consequential damages flowing therefrom, since the court might determine adversely the issue of necessity. 'It would be folly to appoint commissioners to assess damages for the taking of property that is not for a public use, or is not necessary for such use within the purview of the statute. The question of necessity is one that should be determined by the court in limine before appointing commissioners.'...