NIXON v. MARR, 190 F. 913

WM. H. MUNGER, District Judge.

The parties in this case, on the 20th day of September, 1909, entered into an agreement, by the terms oí which Marr agreed to convey to Nixon in fee simple, clear of all incumbrances whatsoever, by a good and sufficient warranty deed, lots 1, 2, 3, 4, 5, and 6, in block 4, Hodges’ addition to the city of Tulsa, Okl.; Marr to pay the taxes on lot 4 for the year 1909, and Nixon to pay the taxes for said year on the remaining property, and Marr to have the privilege of keeping a hay barn on the lot until the hay was removed, and to thereafter remove the barn from the premises, not later than July 1, 1910.

Nixon agreed to pay for said property the sum of $4,975 — $100 on signing the contract, as earnest money, $2,387.50 on delivery of a good warranty deed and abstract, and $2,487.50 in 60 days from the said 20th day of September; said warranty deed and abstract to be deposited in escrow in the Bank of Commerce during said (50 days. Two days thereafter, on the 22d day of September, Marr and wife executed a deed to said premises with full covenants of warranty and deposited the same, with abstract of title, in escrow in the Bank of Commerce.

Nixon paid the $100 and the $2,387.50 as agreed, and went into possession of the premises. Failing to pay the $2,487.50, Marr, on the 12th day 'of March, 1910, brought this action to recover the balance of such purchase money, and to have the same declared, a lien upon said premises, and the same sold in payment therefor.

Nixon, in his answer, admits the execution of the contract and the deed, payment of a portion of the purchase price, and that the last payment of $2,487.50 was unpaid, but claims that the city of Tulsa had, prior to the executing of said contract and deed, taken steps to condemn a street 65 feet wide across said lots, by filing the proper petition in the district court for Tulsa county for the appointment of commissioners to appraise the damages. By reason thereof Nixon claimed damages.

From the record it appears that on May 28, 1909, the board of commissioners of the city of Tulsa filed a petition in the proper district court, alleging that, on the • — ■- day of May, 1909, said board of commissioners passed a resolution declaring the necessity of opening and extending East Second street over, through, and across certain lots, among them being lots 1, 2, 3, 4, and 5, in block 4, in Hodges’ addition. The petition prayed for the appointment of three commissioners to assess the damages.

No action seems to have been taken on this petition until the 7th day of October, when Marr was served with a notice by the sheriff of Tulsa county that an application for the appointment of such commissioners to assess damages would be made on the 18th day of October, 1909, at 9 o’clock a. m., or as soon thereafter as counsel could be heard, to the judge of the district court in said county, at his chambers, etc., which notice Marr gave Nixon, on what date is not disclosed.

On the 14th day of October, 1909, the board of commissioners of said city filed in said district court an amended petition for the same purpose, describing the property to be taken more minutely. No notice seems to have been served of this petition. -On the 18th day of October the application of the board was heard by the judge of the district court, and commissioners appointed, who appraised the damages and reported the same to the court. No further proceedings appear to have been taken.

The real question presented is whether in this action Nixon is entitled to have set off against the balance of the purchase price damages sustained by reason of the diminution in value ol the property by reason of an appropriation of a portion thereof by the city for a street. This, we think, depends upon whether, at the date of the contract of sale, the city had appropriated or acquired a vested right to the property in question for street purposes.

Section 24 of the Rill of Rights of the Oklahoma Constitution provides as follows: “Private property shall not he taken or damaged for the public use without just compensation. Snell compensation, irrespective of any benefit from any improvements proposed, shall be ascertained by a board of commissioners of not less than three freeholders, in such manner as may be prescribed by law.

The commissioners shall not be appointed by any judge or court without reasonable notice having been served upon all the parties in interest. * * * Until the compensation shall be paid to the owner or into court for the owner, rhe property shall not be disturbed or the proprietary rights of the owner divested.” The statute of the state of Oklahoma, relative to eminent domain procedure, is in harmony with this constitutional provision; provides for an application or petition to the judge of the district court, upon 10 days’ notice to the opposite party, for the appointment of commissioners to assess the damages; and provides that upon payment by the corporation to the clerk of the court, for the use of the owner, of the sum assessed as damages by the commissioners, the party may enter upon the premises and construct the improvement.

The statute also provides for an appeal by either party from the award of damages. Under the foregoing constitutional provision, it seems clear that the owner of the property cannot be disturbed in his possession, or in any of his proprietary rights, until the compensation due him has been first ascertained by the commissioners appointed for that purpose, and the amount thereof paid to the party or into court. The commissioners, on the 3d day of November, 1909, made a report, assessing the damages.

The clerk of the district court testified as a witness that: “The report was tlie last tiling ever done; no order made after that.” It seems clear, under the constitutional provision before mentioned, that the city did not, by such proceedings, acquire a vested right to the premises for street purposes. This it could not do, under the constitutional provision, without first paying to the owner, or into court, the amount of*the damages assessed, which it has not done.

It is unnecessary to review the numerous and conflicting decisions in the several states, relative to at what stage of condemnation proceedings property may be said to be appropriated.

Most of the decisions brought to our attention are based upon statutory provisions respecting the matter, and not upon a constitutional provision, expressly providing, as does the Oklahoma Constitution, that "until the compensation has been paid to the owner, or into court for the ozvner, the property shall not be disturbed or the proprietary rights of the owner divested.” (Italics our own.) Up to such time the owner has a clear and perfect right to sell and convey the premises, •either by executory contract or by deed passing the fee-simple title. In Lewis on Em.

Dom., vol. 2 (3d Ed.) § 895, it is said: “The passage of an ordinance to widen or extend a street, or the filing •of a map of a proposed street, or the doing of other similar acts of a preliminary nature, does not affect the property proposed to be taken; and a transfer of the property after such acts will have the same effect as though made before, and will vest in the grantee the title to the property and right to the compensation when the taking is consummated.

Where the title vests in the condemnor by virtue of certain ex parte acts, such as the making and filing of a location, as is permitted in some of the states, the right to compensation vests in the person who is owner at the time the title vests in the condemnor. * * » After the right to compensation has once vested, it becomes a personal claim, and does not pass with the land. * 15 * A conveyance pending proceedings to condemn transfers to the vendee the right to the award when made.

Where the confirmation of the award vests the right to compensation and obligates the condemnor to take and pay for the property, a transfer of the property after the confirmation does not transfer the right to the award. But where the award or judgment merely fixes the price at which the condemnor may take the property, and the condemnor has the option to take or not, a conveyance vests the right to the compensation in the vendee.” The author cites numerous authorities, which fully support the text, and they need not be referred to here. See, also, note to Fort Wayne & S. W. Traction Co. v. Fort Wayne & W. R.

Co., 16 L. R. A. (N. S.) 537. It may be stated, as a general rule of law, in the absence of statutory provisions, that a condemning party may dismiss or abandon condemnation proceedings at any time before the easement title passes and the rights of the parties become vested. District of Columbia v. Hess, 35 App. D. C. 38, 28 L. R. A. (N. S.) 91, and note; 7 Enc. Pl. & Pr. 674.

So, here, the city had a perfect right to abandon the proceeding, and if the city should take no steps to pay the damages awarded, and conclude the proceedings within a reasonable time, it might well be presumed that they had been abandoned.

In this case, the contract of conveyance was made and one-half of the purchase price paid before the city took any steps towards condemnation proceedings other than filing the petition in May preceding, and, at the time of the filing of the amended petition, giving notice of the application for the appointment of appraisers, Nixon was the equitable owner of the premises and entitled to the compensation. ' 0 In Lewis on Em.

Dom. § 518, supra, the law is stated as follows: “In case of an executory contract of sale, it is generally held that the ven-dee is entitled to the compensation, on the ground that he is the equitable owner of the property and that what is taken- is subtracted from what -he is to receive from his contract, while the vendor remains entitled to the whole amount of the purchase money agreed to be paid.” Counsel for appellant cite and place much reliance upon the cases of Cavenaugh v. McLaughlin, 38 Minn. 83, 35 N. W. 576, and Kares v. Covell, 180 Mass. 206, 62 N. E. 244, 91 Am. St. Rep. 271.

In the former case, the Supreme Court of Minnesota held that a resolution by the citj^ council, declaring the necessity for an appropriation of the property for a highway, prior to the conveyance, constituted such an appropriation that the vendee was entitled to rescind. In the latter case, the Supreme Judicial Court of Massachusetts held that where a party had given a bond for a conveyance free from in-cumbrance. and subsequent to the giving of such bond, but prior to the giving of a deed, a portion of the land was appropriated for highway purposes, the vendee was entitled to rescind.

In this case, appellant is not claiming a rescission, but damages. To entitle him to rescind, he should offer to surrender back to Marr the possession of the premises. Cases more nearly identical to the one at bar, which have been called to our attention, are Stevenson v. Lochr, 57 Ill. 509, 11 Am.

Rep. 36, in which it was held that, where the owner of a tract of land sold it, giving a contract for a deed of general warranty to be made on final payment, and between the sale and the making of the deed a portion of the premises was condemned under the right of eminent domain for a railway track, the incumbrance thus created was not one for which damages could be recovered in an action on the covenants in the deed, and that in an action on a promissory note by the payee against the maker the damages to the defendant arising by reason of the incumbrance thus created on the land could not be set off against the note.

Kulin v. Freeman, 15 Kan. 423, was a case in which the vendor of a piece of land gave to the vendee a title bond, and received in return one half of the purchase money in cash down, the other half in two promissory notes. Afterwards the vendee died, and subsequently, by certain condemnation proceedings, a railroad company obtained a right of way for its road across said land, and paid the damages asr sessed to the county treasurer.

In a suit upon the notes against the administrator, it was held that the party could recover the amount of the notes and interest, as the amount awarded in the condemnation proceedings belonged to the vendee.

We are clearly of the opinion that no proprietary right of Marr to the premises in question had been appropriated by the condemnation proceedings, and that he had good right to make a perfect sale; that Nixon, as purchaser, took subject to the power of the state to exercise the right of eminent domain; that he was entitled to receive the damages assessed, and, if dissatisfied with the same, could have intervened and appealed from such award; that the damages resulting from the condemnation proceedings are no defense to the action for the recovery of the balance of the purchase price.

It is further claimed upon the part of appellant that the court had no jurisdiction of the ease as one in equity; that Marr’s remedy was simply to recover the purchase price at law. We think, however, that the equitable title was in Nixon, that the retention of the legal title by Marr was merely as security, and that he was entitled to treat the contract as a mortgage and foreclose the same in a court of equity. This view is fully sustained in Smith v. Kirchner, 7 Okl. 166, 54 Pac. 439; Lewis v. Hawkins, 23 Wall. 119, 23 L. Ed. 113.

The judgment' of the court below, in favor of Marr, as prayed, was right, and is affirmed.