Williams v. State Highway Commission, 101

• Decision Date: 16 March 1960
• Docket Number: No. 101,101
• Citation: 252 N.C. 141,113 S.E.2d 263
• Parties: George G. WILLIAMS, Petitioner, v. STATE HIGHWAY COMMISSION, Respondent.
• Court: North Carolina Supreme Court

Page 263

113 S.E.2d 263

252 N.C. 141

George G. WILLIAMS, Petitioner, v. STATE HIGHWAY COMMISSION, Respondent.

No. 101

Supreme Court of North Carolina.

March 16, 1960

Williams, Williams & Morris, Asheville, for plaintiff, appellant.

T. W. Bruton, Atty. Gen., Kenneth Wooten, Jr., Asst. Atty. Gen., Andrew H. McDaniel, Raleigh, Trial Atty., and Harkins, Van Winkle, Walton & Buck, Asheville, Associate Counsel, for defendant, appellee.

PARKER, Justice.

Petitioner instituted a special proceeding before the Clerk of the Superior Court of Buncombe County under G.S. § 40-11 et seq., to recover compensation for the entire taking by respondent under G.S. § 136-19 of a whole leasehold estate owned by petitioner in a store building and premises on Montford Avenue in the city of Asheville. The lease was for five years, commencing on 1 September 1956.

While petitioner was in possession of the store building and premises by virtue of his lease, respondent took the whole store building and premises for the purpose of the relocation, reconstruction, widening and improving of the Asheville, Expressway, on 30 January 1959 obtained a court order removing petitioner from the store building and premises, and has appropriated all of the same to use as a highway right-of-way for the Asheville Expressway.

In the petition in this special proceeding, petitioner sets forth what he terms a 'Second and Further Cause of Action.' In this 'Second and Further Cause of Action' petitioner alleges that he was caused by respondent appropriating his leasehold estate for highway purposes and removing him therefrom by court order to incur large expenses in moving his stock of merchandise, furniture and fixtures to another location, that in moving his stock of merchandise was damaged, that his moving his grocery business to another location lost him business, customers and good will. Wherefore, petitioner prays that he recover from respondent $750 for expenses incurred in his moving to another location, and that he recover from respondent $7,500 for loss and interruption of business and loss of customers and good will.

Respondent made a motion before the Clerk of the Superior Court of Buncombe County to strike from the petition in the special proceeding, and from the 'Second and Further Cause of Action,' identical allegations that 'on or about the 30th day of January, 1959, obtained a court order removing this petitioner from said premises and.' The motion was allowed.

Respondent demurred to petitioner's pleading on the ground that there was a misjoinder of causes. The Clerk of the Superior Court of Buncombe County sustained the demurrer for misjoinder of causes, and ordered a severance, retaining before him for further proceedings the special proceeding under G.S. § 40-11 et seq. to recover compensation for the entire taking by respondent of petitioner's whole leasehold estate under G.S. § 136-19, and transferring petitioner's 'Second and Further Cause of Action' to the civil issue docket of the Superior Court of Buncombe County. To this order there is no exception. The petition in the special proceeding retained by the Clerk is not in the record before us.

Respondent filed a written demurrer to petitioner's 'Second and Further Cause of Action' on the ground that the court has no jurisdiction of the subject matter for the reason that the 'Second and Further Cause of Action' alleges a tort action, and the State has not consented to or authorized the maintenance of a tort action against the State Highway Commission. Judge Thompson rendered an order sustaining the demurrer, and dismissing petitioner's 'Second and Further Cause of Action.'

In this Court respondent filed a demurrer ore tenus on the following grounds: One, the 'Second and Further Cause of Action' does not state facts sufficient to constitute a cause of action, in that it seeks a recovery of damages which are noncompensable, resulting from the taking of private property for public use by respondent. Two, the Court has no jurisdiction over the subject matter, since the 'Second and Further Cause of Action' alleges a taking by respondent, and in matters of taking by respondent the statutes require a special proceeding to be brought before the Clerk of the Superior Court.

The State Highway Commission states in its brief: 'No one questions the right of plaintiff to just compensation for the taking of the leasehold interest.'

Here the respondent entirely took the whole leasehold estate. Should petitioner's removal expenses, and damages to his stock of merchandise caused by such removal, be included in the measure of just compensation, and awarded to him?

The Fifth Amendment to the United States Constitution, which is a limitation upon the federal government, and not upon the states, Brown v. New Jersey, 175 U.S. 172, 20 S.Ct. 77, 44 L.Ed. 119, provides that private property shall not be taken for public use without just compensation. Art. I, Section 17, of the North Carolina Constitution uses language of similar import. DeBruhl v. State Highway Commission, 247 N.C. 671, 102 S.E.2d 229. Respondent is an agency of the State government. It entirely took petitioner's whole leasehold estate under the right of eminent domain, which is the power of the sovereign to take or damage private property for a public use on payment of just compensation. Hedrick v. Graham, 245 N.C. 249, 96 S.E.2d 129. Under the Fourteenth Amendment to the federal constitution, no state can deprive an individual of his property for public use without the payment of just compensation. Delaware, L. & W. R. Co. v. Morristown, 276 U.S. 182, 48 S.Ct. 276, 72 L.Ed. 523, 56 A.L.R. 756; Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322, 28 A.L.R. 1321.

Under the settled rule against allowance for consequential losses in federal condemnation proceedings, expenses of removal or of relocation of personal property are not to be included in valuing property taken, where there is an entire taking of a condemnee's property, whether that property represents the interest in a leasehold or a fee. United States v. General Motors Corp., 323 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311; United States v. Petty Motor Co., 327 U.S. 372, 66 S.Ct. 596, 90 L.Ed. 729; United States v. Westinghouse E. & Mfg. Co., 339 U.S. 261, 70 S.Ct. 644, 94 L.Ed. 816. However, it is apparent from these three cases that if the government takes merely temporary occupancy of premises under lease, then the cost of removal may be considered in determination of just compensation. Intertype Corp. v. Clark-Congress Corp., 7 Cir., 1957, 240 F.2d 375.

A majority of the State Courts hold that, in the absence of a statute or agreement to the contrary, the removal costs of a stock of merchandise, or other personal property, and the breakages or other injury to such property caused by such removal, from a leasehold or fee in land, where there is an entire taking of the whole of the condemnee's estate under the sovereign power of eminent domain, cannot be considered as an element of damage, since such loss is not a taking of property. Housing Authority of City of E. St. Louis v. Kosydor, 1959, 17 I11.2d 602, 162 N.E.2d 357; Edgcomb Steel of New England v. State, 1957, 100 N.H. 480, 131 A.2d 70; Emery v. Boston Terminal Co., 178 Mass. 172, 59 N.E. 763 (opinion C. J. Holmes); Nichols on Eminent Domain, 3rd Ed., Vol. 4, pp. 401-414; Orgel on Valuation under Eminent Domain, 2nd Ed., Vol. I, Sec. 69; Jahr, Eminent Domain, Sec. 112; 18 Am.Jur., Eminent Domain, pp. 895-6; Annotation: 4 L.R.A.,N.S., 890; L.R.A.1915D, 496; L.R.A.1916D, 719; 85 Am.St.Rep. 298; 8 Ann.Cas. 696; 16 Ann. Cas. 787; Ann.Cas.1918B, 886; 34 A.L.R.1523; 90 A.L.R. 165, 166; 3 A.L.R.2d 312; Note, Eminent Domain Valuations in an Age of Redevelopment: Incidental Losses, 67 Yale L. Journal, pp. 62, 76 and 79. In these texts a multitude of cases are cited.

In Housing Authority of City of E. St. Louis v. Kosydor, supra, the Court said: 'For the reasons stated we cannot agree with the suggestion that a denial of damages for defendants' moving expenses amounts to a confiscation of their stock in trade. Conceivably an expected return on their investment has been frustrated by the exercise of the power of eminent domain by an agency of the State. Similar frustrations have been involved in the denial of other incidental losses, due to continuing payrolls during the time spent in moving, loss of goodwill, and the like. At times they may be substantial for the individual. (Citing authorities.) But in the absence of legislation, (Citing authorities), they have been regarded as a part of the burdens of common citizenship.'

The rationale of the decisions for not allowing the damages are: one, the tenant eventually would have to move anyhow, and this is one of the circumstances attached to placing property on leased premises; second, it is not a taking of property within the language of the constitution, in that the expense of moving and injury to the property in moving is neither a taking or damaging of the property; three, a verdict would be based on conjecture; four, such expenses constitute no gain to the taker; and five, a taking of real estate or a leasehold does not affect the ownership of personal property kept on the premises taken, but not permanently affixed thereto, and the owner is entitled to remove such property.

Petitioner alleges that he incurred large expenses in removing his fixtures to another location, and that he is entitled to recover the cost of removing such fixtures. The petition does not allege what sort of fixtures they were, or how they were placed in the store. Ordinarily a tenant is not allowed the cost of removing his fixtures and appliances, when his leasehold is taken for public use under the sovereign power of eminent domain, in the absence of a statute or an agreement to the contrary. United States v. Meyers, D.C. Conn.1911, 190 F. 688; Metropolitan, West...