School Dist. No. 3 of Charleston County v. Country Club of Charleston

• Citation: 241 S.C. 215,127 S.E.2d 625
• Decision Date: 09 October 1962
• Docket Number: No. 17973,17973
• Parties: SCHOOL DISTRICT NO. 3, OF CHARLESTON COUNTY, The State of South Carolina, Respondent, v. COUNTRY CLUB OF CHARLESTON, The Citizens and Southern National Bank of South Carolina, and McDonald and Parks, and any person or persons or corporations having or claiming any interest in the premises, which are the subject of his action, Respondents; of whom Country Club of Charleston is, Appellant.
• Court: South Carolina Supreme Court

Page 625

127 S.E.2d 625

241 S.C. 215

SCHOOL DISTRICT NO. 3, OF CHARLESTON COUNTY, The State of South Carolina, Respondent, v. COUNTRY CLUB OF CHARLESTON, The Citizens and Southern National Bank of South Carolina, and McDonald and Parks, and any person or persons or corporations having or claiming any interest in the premises, which are the subject of his action, Respondents; of whom Country Club of Charleston is, Appellant.

No. 17973.

Supreme Court of South Carolina.

Oct. 9, 1962.

Waring & Brockinton, Charleston, for appellant.

Sinkler, Gibbs & Simons, Charleston, for respondent.

TAYLOR, Chief Justice.

This appeal arises out of condemnation proceedings brought by School District No. 3 of Charleston County to condemn and acquire a tract of 6.07 acres situate on James Island in Charleston County as a site for a public school.

By appropriate Order the matter was referred to a Special Referee, who, in his Report, found that the market value of the tract taken was $35,000.00, that no severance damage resulted and that the Country Club of Charleston was entitled to $25.00 nominal damage for the taking of such interest as it had in the property. This Report was confirmed in all respects by the Circuit Court, July 18, 1961.

The land in question was part of a 71.4 acre tract which had been sold on August 15, 1957, by the Country Club of Charleston (hereinafter referred to as the Club) to McDonald and Parks, a partnership, who, although a party defendant, does not appeal from the Order of the Circuit Court. The sale, under a purchase money mortgage in favor of the Club, was for the purpose of a residential subdivision. The deed contained certain restrictive covenants which the Club reserved the right to enforce. The purchase price was $180,000.00 of which $45,000.00 was paid and the remaining $135,000.00 evidenced by a purchase money mortgage.

McDonald and Parks without notice to the Club contracted with the School District to sell the land in question for $35,000.00 and attempted to amend the restrictions insofar as they affected the 6.07 acre tract. When the Club refused to agree to the change in restrictions, the School District commenced condemnation proceedings.

The Club had no interest in the land itself other than as mortgagee and the claimed right to enforce the restrictions contained in the deed.

Since the filing of this appeal and prior to hearing had thereon, the debt secured by the purchase money mortgage was paid in full and satisfaction of said mortgage recorded. The Club contends that the $35,000.00 award was not supported by substantive evidence as the fair market value of the property taken, that it was error for the Court to consider the contract between McDonald and Parks and the School District as indicative of the property's value. Inasmuch as the mortgage had been satisfied and the parties had stipulated that any amount awarded by the Court up to the amount of the mortgage indebtedness should be applied on the mortgage, these questions are now moot and no justiciable question remains between the Club and the School District unless as contended by the Club it is entitled to more than nominal damages for the taking of its interest in the property.

Since Appellant's rights under the mortgage have been extinguished by payment and the Club admits that it has no further interest in the mortgage, its only claim for damages is that is retained valuable rights in the property sold by way of enforcing certain restrictions. The Country Club also reserved in the deed a right-of-way over all roadways which right-of-way ceases when the roads are dedicated to the public.

The Club will lose its private rights in the two roadways encompassed within the tract taken and is entitled to compensation for such taking to the extent of its damage established by the evidence, Seaboard Air Line Ry. Co. v. McFadden et al., 156 S.C. 147, 152 S.E. 809. However, the testimony of all witnesses is to the effect that the Club was in no way damaged by the taking.

The question of whether restrictive covenants confer on the dominant estate property rights which are compensable for their taking in condemnation proceedings apparently has not heretofore been presented to this Court. There is an irreconcilable conflict in the decisions from other jurisdictions as to whether a right to enforce such restrictions constitutes property in the constitutional sense for which compensation must be paid if taken. Cases permitting recovery are: Ladd v. City of Boston, 151 Mass. 585, 24 N.E. 858, 21 Am.St.Rep. 481; Riverbank Imp. Co. v. Chadwick, 228 Mass. 242, 117 N.E. 244, L.R.A.1918B, 55; Johnstone v. Detroit, etc. Ry. Co., 245 Mich. 65, 222 N.W. 325, 67 A.L.R. 373; Peters v. Buckner, 288 Mo. 618, 232 S.W. 1024, 17 A.L.R. 543; Flynn v. New York, etc. Ry. Co., 218 N.Y. 140, 112 N.E. 913; ...