Jelco, Inc. v. Third Judicial Dist. Court, 13023

• Decision Date: 29 June 1973
• Docket Number: No. 13023,13023
• Citation: 511 P.2d 739,29 Utah 2d 472
• Parties: d 472 JELCO, INCORPORATED, a Utah corporation, Plaintiff, v. THIRD JUDICIAL DISTRICT COURT et al., Defendants.
• Court: Utah Supreme Court

Page 739

511 P.2d 739

29 Utah 2d 472

JELCO, INCORPORATED, a Utah corporation, Plaintiff, v. THIRD JUDICIAL DISTRICT COURT et al., Defendants.

No. 13023.

Supreme Court of Utah.

June 29, 1973.

Robert S. Campbell, Jr., and David K. Watkiss, Salt Lake City, for plaintiff.

Raymond T. Senior, Sanford S. Smith, Allen H. Tibbals, Salt Lake City, for defendants.

CROCKETT, Justice:

This controversy arises out of a proceeding by Salt Lake City to condemn about 385 acres of land for expansion on the west of its municipal airport, which land was the subject of a contract of sale from Thomas E. Jeremy, his wife, and Grace Jeremy Cassaday to Jelco, Inc., the vendee's assignee. The City moved for an order of immediate occupancy, and in connection therewith deposited in court 1.4 million dollars which was the City's appraisal of the land. ¹

The vendors (herein referred to as Jeremy) applied to the district court for a determination of the 'just compensation' for their interest in the lands, and for an order allowing them to withdraw the same. Jelco objected to that proposal and particularly urged that evidence should be presented as to the propriety of making such an order. Nevertheless, on the basis of the arguments and representations made by respective counsel the trial court determined Jeremy's interest to be $239,500, the aggregate of four remaining annual payments Jeremy would receive under the contract of sale, plus interest of $6,552.99, and ordered the total of those sums, $246,052.99 released to Jeremy.

Jelco sought relief from that order in this court, contending that it was in error; and particularly so because the court acted peremptorily, without allowing the presentation of evidence; and that the order had the inequitable effect of allowing Jeremy the immediate delivery of the just less than a quarter of a million dollars which was in fact more valuable than that sum collectable over the four year period; and further, that it allowed them full compensation for one tract, number 11, the major part of which was not included in the condemnation.

The 385 acres here in question is part of a larger tract of 700 acres which the Jeremys had contracted on Dec. 1, 1965, to sell to Jelco's predecessor. The purchase price was $631,500, plus interest, which was to be paid $32,000 down, and thereafter in 10 annual installments. The land was designated in 11 separate parcels. The deeds were placed in escrow under instructions that as each annual payment was made, the deed to a particular parcel was to be delivered, and upon the receipt of the final (tenth) payment, the deeds to parcels 10 and 11 were to be delivered. The contract had been performed according to its terms up to the time the city commenced the condemnation action; but there remained four annual installments yet to be paid, and the deeds to parcels 7 through 11 had not yet been delivered.

It is desirable to have in mind certain general principles applicable to the problem here confronted: i.e., whether, under the facts as above stated, the trial court was justified in ordering the withdrawal by the vendor Jeremy of the total $246,052.99, that it was to receive under the contract in the ensuing four years. In such an executory contract the vendee (Jelco) acquires all of the incidents of ownership except legal title. He is therefore in equity properly regarded as the owner of the property. ² Thus, in the absence of an agreement to the contrary, where a condemnor takes land subject to an executory contract, it is the vendee who is normally entitled to any condemnation award for the land so taken. ³ It is he who is entitled to the benefit of any increase and who must bear the detriment of any decrease, in the value of the property; whereas, the vendor (Jeremy) has only legal title. In regard to the purchase price, what he is entitled to is to have it paid in accordance with the terms of the contract. He is of course also entitled to retain the legal title as security for its performance, and in case of default, to seek the remedies provided therein.

It is to safeguard the owners of the respective interests in condemned property that our statute, Sec. 78--34--9, U.C.A.1953, provides that after the condemnor deposits money in court, it shall upon proper application, order it to be paid to the 'parties in interest.' Notwithstanding what has been said above recognizing that the equitable ownership of the condemned property is in the vendee (Jelco), as the one normally entitled to the condemnation award, the security interest of the vendor (Jeremy) must also be safeguarded. For these reasons the statute also provides that '. . . the court shall make such orders in respect to encumbrances, liens . . . as shall be just and equitable.' The court is thus clothed with authority to make appropriate orders with respect to the withdrawal of funds that to him seem practical and just and in conformity with the desired objective of safeguarding the interests of those who have a stake in the outcome of the condemnation proceedings. ⁴

It should be carefully noted that if the court orders that money paid in by the condemnor be paid over to any condemnee, it should be done in such manner as to make it clear that payment by a condemnor and acceptance by one condemnee does not adversely affect the right of any other condemnee to assert any rights or defenses he may have. That this is the way this statute should be understood and applied is indicated by the further provision of Sec. 78--34--9 that:

A payment to a defendant as aforesaid shall be held to be an abandonment by such defendant of all defenses excepting his claim for greater compensation.

We note our agreement with the trial court that it should exercise the authority granted in Sec. 78--34--9 referred to above to pay the funds deposited to the parties...