author: George Rose Smith, J. Ed. F. McFaddin, Associate Justice

text:
    Ark. State Highway Comm. v. McNeill.
    5-3274
    381 S. W. 2d 425
    Opinion delivered June 1, 1964.
    [Rehearing- denied September 14, 1964.]

      Mark E. Woolsey and Don Langston, for appellant.

      Hardin, Barton <3 Jesson, for appellee.
   George Rose Smith, J.

This is a suit by the appellees, Troy McNeill and his wife, to enjoin the State Highway Commission from constructing a cloverleaf interchange upon a highway near the McNeills’ home, unless the Commission first files a bond to secure any damages that the McNeills may suffer as a result of the construction.” The Commission contends that the presence of the completed interchange will not cause any legally compensable damage to the plaintiffs. The chancellor, rejecting this defense, granted the injunction but withheld any determination of the McNeills’ damages until the principal question has been decided by this court.

The McNeills own a residence in Crestview Estates, .an addition to Fort Smith. The Crestview bill of assurances provides that property in the addition shall be used only for residential purposes. The highway department does not propose to take any of the appellees ’ land. It is, however, acquiring a tract that is comprised of eleven lots within the addition and that abuts the appellees ’ north boundary line. When the interchange is completed the area behind the McNeills’ home will be a busy highway instead of a quiet residential district. Expert witnesses testified that this transition will diminish the value of the plaintiffs’ property by $10,000 or more.

In their complaint the McNeills bottomed their right to damages upon two separate grounds: First, the value of their property would be reduced by the presence of the highway, with its attendant noise, dust, fumes, glaring-lights, and vibration. Secondly, the value of their property would be reduced by the highway department’s violation of the residential restriction contained in the bill of assurances. The chancellor rejected the first count in the complaint but upheld the second count.

There is no appeal from the trial court’s denial of compensation upon the first count. In fact, in the oral argument counsel for the landowners candidly conceded that this count does not state a cause of action. Despite the fact that the merits of the first count are not now in issue we think it best to begin our discussion by considering this count, for our decision upon the main question is really based upon the lack of merit in the first count.

It is well settled in Arkansas that a landowner whose land is not being- taken is not entitled to compensation for damage of the same kind as that suffered by the public in general, even though the inconvenience and injury to the particular landowner may be greater in degree than that to others. Hot Springs R. R. v. Williamson, 45 Ark. 429, aff’d 136 U. S. 121, 34 L. Ed. 335, 10 S. Ct. 955; Little Rock & H. S. W. R. R. v. Newman, 73 Ark. 1, 83 S. W. 653. On the other hand, a compensable injury occurs when there is a special damage to the plaintiff, as by a change in the grade of the street abutting his property or by a destruction of his access to a public street. Campbell v. Ark. State Highway Comm., 183 Ark. 780, 38 S. W. 2d 753.

It cannot be doubted that the first count in the McNeills’ complaint does not state a cause of action. They merely assert that after the project has been completed their back property line will border a public highway rather than a privately owned residential lot. Such an inconvenience is of the same nature as that suffered by the public in general whenever a highway is built in a residential district. There is no cause of action in the landowner for the resulting diminution in the value of his property.

We turn to the principal issue: Does the fact that the proposed interchange will violate the restrictive covenant render the appellant liable for the decrease in the market value of the McNeills’ property? This problem has arisen in some twenty jurisdictions, with the decisions about equally divided between the allowance of compensation and its denial. The cases are discussed in Nichols, Eminent Domain (3d Ed.), § 5.73, and in a Comment, 53 Mich. L. Rev. 451. When compensation is allowed it is ordinarily measured by the diminution in market value. U. S. v. Certain Land in the City of Augusta, D. C. Maine, 220 F. Supp. 696; U. S. v. 11.06 Acres, D. C. Mo., 89 F. Supp. 852; Town of Stamford v. Vuono, 108 Conn. 359, 143 Atl. 245; Johnstone v. Detroit, G. E. & M. R. R., 245 Mich. 65, 222 N. W. 325. The American Law Institute indicates that compensation may be proper in some instances, but it refuses to express any opinion about the correct measure of damages. Restatement, Property, § 566.

Many of the decisions denying compensation are discussed in Anderson v. Lynch, 188 Ga. 154, 3 S. E. 2d 85. The courts seem to have had some difficulty in finding a sound basis for refusing an award, some saying that the plaintiff has no property interest in the land being taken, others that the restrictive covenant does not confer a property right, and still others that the public power of eminent domain should not be impaired by private contract.

We have no quarrel with an award of compensation if, as in Missouri, the same award would have been made if there had been no restrictive covenant. Peters v. Buckner, 288 Mo. 618, 232 S. W. 1024, 17 A.L.R. 543. But, as we have seen in considering the first count in the appellees ’ complaint, that is not the law in Arkansas. Any cause of action asserted by the McNeills must rest solely upon the breach of the restriction.

In those jurisdictions where, as here, compensation would be denied in the absence of a restriction, the decisions approving an award on the basis of the restriction alone are, in our opinion, demonstrably wrong. We need not, however, adopt the somewhat dubious reasons that have been given for the denial of compensation. We think the problem is essentially a simple one in causation.

It seems almost too plain for argument that the reduction in the value of the McNeills’ property is attributable not to the breach of the restriction but rather to the fact that a highway is about to pass through a residential district. Suppose, for example, that this addition, Crestview Estates, had been developed in exactly the same way that it was actually developed, as a residential district, but without any such restriction in the bill of assurances. If the interchange had then been constructed the McNeills’ damage, as far as the pleadings and proof indicate, would have been the same to the penny as if the restriction had existed. Yet it would not have been compensáble. Thus it is illogical to permit a recovery upon the theory that the breach of covenant is the proximate cause of the injury.

Another illustration to demonstrate the fallacy in the decisions allowing compensation: Assume the existence of a purely residential area that is in part restricted and in part unrestricted. If a highway should be constructed just within the restricted section the landowners on that side of the highway would receive compensation while those on the other side, although suffering identical damage, would be without a remedy. Under such a rule it is evident that whenever the owners of property in an unrestricted neighborhood learn that a throughway is coming in their direction it is to their advantage to enter into an agreement imposing restrictions. In that way, by merely signing a piece of paper which they may destroy at will, they are able to pluck valuable causes of action from the thin air.

We do not deny the existence of a property right in the appellees. It may be that the restrictive covenant gave added value to their land when they bought it. But it is not the breach of the covenant alone that is causing their damage. This same tract, instead of being taken for a highway, might have been condemned by the city as a site for a public park. That too would have involved a breach of covenant, but the value of the appellees’ property might actually have been enhanced. Thus there is no logical basis for attributing the appellees’ present damage to the naked breach of covenant. Even without the restriction their injury would still have occurred. We cannot permit an irrelevant clause in the bill of assurances to create a fictitious cause of action.

Reversed and dismissed.

McFaddin, J., dissents.

Ed. F. McFaddin, Associate Justice

(dissenting). I respectfully but vigorously dissent because, as I see it, a valuable property right is being taken from the appellees by the State Highway Commission and this Court is refusing to allow the appellees any compensation for such valuable property right, and all this in spite of Art. 2,, § 22 of our Constitution, which says: ‘ ‘ The right of property is before and higher than any constitutional sanction; and private property shall not be taken, appropriated or damaged for public use, without just compensation therefor.”

In 1955 an exclusive residential addition was developed in Fort Smith called “Crestview Estates Addition,” and the bill of assurances under which each lot in the district was sold contained these provisions, inter alia:

“1. No lot shall be used except for residential purposes. No building shall be erected, altered, placed or permitted to remain on any lot other than one detached single-family dwelling not to exceed two and one half stories in height; and a private garage; and one other detached accessory building of not over one story in height and architecturally harmonious to the dwelling-structure.
“7. No noxious or offensive activity shall be carried on upon any lot, nor shall anything be done thereon which may be or may become an annoyance or nuisance to the neighborhood.
“11. These covenants are to run with the land and shall be binding on all parties and all persons claiming under them for a period of twenty-five years from the date these covenants are recorded, after which time said covenants shall be automatically extended for successive periods of 10 years unless an instrument signed by a majority of the then owners of the lots has been recorded, agreeing to change said covenants in whole or in part. Enforcement shall be by proceedings at law or in equity against any person or persons violating or attempting to violate any covenant either to restrain violation or to recover damages.
“12. These covenants and restrictions shall be deemed to be incorporated in every deed of the owners to any and all lots located in said addition. ’ ’

Every lot in Crestview was bound by the restrictive covenants above recited, one of which was that no lot would be used for any purpose except for a residence. Naturally, this restrictive covenant rendered the lots most valuable for residential purposes. In 1957 the appellees, Mr. and Mrs. McNeill, purchased a lot and a half in Crestview and erected thereon their home in which they now live. In 1962 the Arkansas State Highway Commission purchased, by warranty deed, eleven lots in said Crestview Addition, and each lot was bound by the restrictive covenant that no lot would be used except for a residence.

The Arkansas State Highway Commission purchased these lots for the deliberate use of a highway and not for residential purposes, thus deliberately intending to violate the said restrictive covenant on each lot. Is the State and its agencies above the law and superior to the rights of private persons ! The Constitution answers this question in the negative in the quotation I have above given. I think the Sovereign should deal fairly with its subjects, and I decry any attempt to allow the Sovereign to buy property like a private person and then claim rights superior to private persons.

The Majority Opinion says this is the issue: “Does the fact that the proposed interchange will violate the restrictive covenant render the appellant liable for the decrease in the market value of the McNeill property!” I unhesitatingly answer this question in the affirmative. A restrictive covenant such as we have here is a property right. Such was impliedly recognized in Linder Corp. v. Pyeatt, 222 Ark. 949, 264 S. W. 2d 619. See also 14 Am. Jur. 609, “Covenants” § 194. So the appellees have a property right that has been damaged. That the appellees are suffering damages different from the general public seems to me to be crystal clear. Any person owning a lot in Crestview had a property right against every other lot in Crestview. The general public had no such right: the restriction was owned only by lot owners in Crestview; and that, to my way of thinking, distinguishes lot owners in Crestview from the general public.

So I disagree entirely with the Majority Opinion which says that the lot owners in Crestview suffered only damages the same as the general public. Every lot owner in Crestview had bought a lot, knowing he had a restrictive covenant against every other lot. Suppose somebody had bought eleven lots in Crestview for a supermarket. Would this Court hold that the McNeills had no right for damages! Why should the State Highway Commission, acquiring property by deed, have a greater right than a citizen would have who acquired by deed! I respectfully dissent.

I might close this dissent at this point; but the learned Chancellor wrote a 30-page opinion in this case, and it shows such tremendous research that I now copy extensively from it so that anyone studying this question in the future will have the benefit of the Chancellor’s opinion:

COPIED FROM THE CHANCELLOR’S OPINION

As to the claim of plaintiffs that defendants are violating the restrictive covenants in the Bill of Assurance to the compensable damage of their property, the defendants cite Gremillion v. Rapides Parish School Board, 134 So. 2d 700, in which court reviewed the split of authority. The result of this review reflected that the States of New Jersey, New York, Connecticut, North Carolina, Massachusetts, Michigan, Missouri, Tennessee, Virginia, and Wisconsin, through their respective Supreme Courts, were in accord that a restrictive covenant, such as the one in this case, ivas a property right and interest which when destroyed resulting in damage was compensable. The Courts of the States of California, Colorado, District of Columbia, Georgia, Florida, Ohio, Texas, West Virginia, and Louisiana hold otherwise.

The majority of courts have held that a person in whose favor a restrictive covenant exists has a compensable interest in a condemnation proceeding which prevents compliance with the restrictions. In 2 Nichols on Eminent Domain, Sec. 5.J4 it is stated:

“The majority view holds that such a restriction often characterized as an equitable servitude, constitutes property in the constitutional sense and must be compensated for if taken. Such restrictions constitute equitable easements in the land restricted, and when such land is taken for a public use that will violate the restrictions, there is a taking of the property of the owners of the land for the benefit of which the restrictions were imposed. The owners of such property cannot maintain proceedings for damages against the original owner or enforce the restrictions against the condemnor, but they are entitled to an award of compensation for the destruction of their easements.
“If the existence of the easement diminished the value of the land subject thereto, as is ordinarily the case when the easement is of such a character as a right of way, the compensation of the holder of the easement might well be deducted from the sum awarded to the owner of the servient tenement. In the case of mutual building restrictions, however, the existence of the restrictions often enhances rather than decreases the value of the land, and the owner of the land taken might consequently well object to receiving in any event less than fair market value of his property as a place of real estate.”

The majority cases stand on a much stronger footing, both from a logical as well as a legal viewpoint.

One of the early leading cases in this field is that of Johnstone v. Detroit C. H. & M. Ry. Co., 222 N. W. 325 (1928). There the Supreme Court of Michigan held that owners of property within a restricted subdivision whose property was not actually taken were nevertheless entitled to compensation upon a taking of a portion of the subdivision for railroad purposes. The Court held that compensation for destruction of building restrictions in acquiring the land through the subdivision for the railroad was measured by diminution in value of the land not taken. In Johnstone the court discussed the various cases on this point prior to that time including those cases which held that where the condemnation was for public use that the public body was not subject to the building restrictions. In rejecting this view the Michigan court stated:'

“We cannot approve the application made in these cases of doctrine of public policy. The usual conveyance or contract affecting real estate contemplates its use by persons to the exclusion of all other persons and the public. In the right of use lies its value. The reasoning pursued, by reading the exclusive purpose out of the instrument as illegal, would read into it an exception of public use. In direct point, it would enable the state to destroy a common-law negative easement of light, air, and prospect without compensation. By analogy, it would deny payment for the destruction of an easement of way, an unexpired rental term, increased values due to attractive leases or uses, and, if pursued to its conclusion, injury to the residue of a freehold when part is taken. All the authorities agree that these interests are compensable.
“Especially as applied to residence restrictions is the syllogism unacceptable. Restrictions for residence purposes, if clearly established by proper instruments, are favored by definite public policy. The Courts have long and vigorously enforced them by specific mandate. * * *
“Nor is there anything in our laws, system of government, or the spirit of our institutions which curtails the genius of a citizen in creating or enhancing values in his property in any lawful way, by physical improvement, psychological inducement, contract, or otherwise. His obligation to recognize the power of eminent domain and the possibility of its exercise in no wise restricts his right to legitimate profit. He may view the power in its constitutional entirety, with comitant requisite of just compensation, and order his affairs within the law with assurance that, if the state takes his property it will pay him the value of what it takes, of whatever that value may consist, so it is measured by the market. Anything less is confiscation.
“It is therefore held that owners of property in a subdivision in which, under a general plan, the property is restricted to specified uses, and in which the restrictions are valid, subsisting, and enforceable against the lands in the hands of private owners, are entitled to compensation upon the taking of any part of such subdivision for public use in violation of such restrictions; that, aside from nominal damages for destruction of the easement, the compensation is measured by the actual diminution in value of the premises of such owner as a result of the use to which the property taken is put, and that, in determining such diminution, the effect by way of benefit as well as by way of injury, of such use is to be taken into account.”

In Peters v. Buckner, Judge, 232 S. W. 1024 (Mo. 1921) the court held that a grantee of a lot in a subdivision, the deeds to all the lots which contain a covenant against the erection of buildings for other than residential purposes, has an easement in and to every lot in the subdivision which is also covered by the covenant and that this easement is appurtenant to his lot for the enforcement of such covenant. The court further held that the easement of the owner of a lot in a subdivision in each lot is property which cannot be taken for public use without compensation. In the Peters case the Supreme Court of Missouri stated:

“There can be no doubt but what the erection of the schoolhouse on the lots mentioned in this case is, in spirit, a violation of the covenants of restrictions mentioned in the deeds of the Meadow Park Addition to Kansas City to the various purchasers of lots therein. While these restrictions are not binding upon the state or the school board, acting under the state’s authority in such condemnation proceedings, yet, if such restrictions add actual value to all the lots of the addition, it should be protected by the courts of the state; then, when the school board undertakes to deprive the owners of those lots of those values, by condemnation proceedings, it should be required to pay for the same, as for all other values it takes from the property owners of the addition by such proceedings, and that, too, before their property can be taken or damaged, as before indicated.”
City of Raleigh v. Edwards, 71 S. E. 2d 396 (N. C. 1952), involved a proceeding by the City against the defendant and others to condemn certain lots within the City as the site for the erection of an elevated water storage tank. An adjoining landowner intervened alleging that the erection of the proposed water tank, would impair the value of his property by depriving him of the benefits of existing covenants restricting the use of the property sought to be condemned to private dwelling purposes only. The North Carolina Supreme Court held that the restrictive covenants contained in the deeds to the lots in the subdivision wherein the water tank was to be erected vested in the interveners a property right in the land sought to be condemned which must be paid for. This was the first time this question had been presented to a North Carolina court and the court discussed the underlying principles and basic decisions in this field in the following language:
“The question whether the restrictive covenants contained in the deeds to the lots in the subdivision vested in the interveners a property right in the land sought to be condemned which must be paid for. This precise question does not seem to have been presented heretofore to this Court for determination, and the decisions from other jurisdictions reflect a contrariety of opinion.
“However, the decided weight of authority in other jurisdictions supports the proposition that such a restriction, being in the nature of an equitable servitude, is an interest in land and must be paid for when taken. The theory is that these restrictions impose negative easements on the land restricted in favor of and appendant to the rest of the land in the restricted area, and when a particular parcel thereof is appropriated for a public use that will violate the restrictions, such appropriation amounts in a constitutional sense to a taking or damaging of property of other landowners for whose benefit the restrictions are imposed. 18 Am. Jur., Eminent Domain, Sec. 157, p. 788. Annotations: 17 A.L.R. 554; 67 A.L.R. 385; 122 A.L.R. 1464.
“It is true that such other landowners may not enforce the restrictions against the condemnor, but they are nonetheless entitled to an award of compensation where, through the exercise of the power of eminent domain, there is a taking or damaging of such property rights * * *. 18 A. Jur., Eminent Domain, Sec. 157, p. 788. See Peters v. Buckner, 288 Mo. 618, 232 S. W. 1024, 17 A.L.R. 543; Flynn v. New York etc. R. Co., 218 N. Y. 140, 112 N. E. 913; Allen v. City of Detroit, 167 Mich. 464, 133 N. W. 317, 36 L.R.A. N.S. 890; Town of Stam ford v. Buono, 108 Conn. 359, 143 A. 245. (Citing other cases.)
"In Flynn v. New York, etc. R. Co., supra, it was held by the New York Court that where a railroad company bought lots in a tract of land which was subject to restrictions, including a prohibition against the erection of any structure for business purposes, and built and maintained thereon an electric railroad, there was a deprivation of property rights entitling the other lot owners in the tract to compensation.
"In Allen v. Detroit, supra (167 Mich. 464, 133 N. W. 320), the Michigan Court held that the erection by a city of a fire engine house on property purchased by it, but restricted to residential purposes, was a taking of private property for public use and the owners of the lots for the benefit of which the restriction was imposed were entitled to compensation. The Court said: Building restrictions are private property, an interest in real estate in the nature of an easement go with the land, and a property right of value, which cannot be taken for the public use without due process of htw and compensation therefor; * * *’
"The decisions representing the minority view rest for the most part on the theory that since all property is held subject to the power of eminent domain, the rights of the Sovereign or condemnor are impliedly excepted from the operation of these restrictive covenants; and that if not so excepted, the condemnor, not being party or privy to the contract creating the covenants, no action for damages will be against the condemnor. See 18 Am. Jur., Eminent Domain, Sec. 157, p. 677, footnote 20. Thus, in the final analysis the minority view is grounded on the theory that these restrictions, being contractual rights enforceable in equity only between parties in privy, do not constitute an interest in property at all. See Nichols on Eminent Domain, 3d Edition, Vol. 2, Sec. 5, 73, pp. 72 and 83.
‘ ‘ On the other hand, the majority view rests squarely upon the theory that a negative easement created by a building restriction is a vested interest in land (18 Am. Jur., Eminent Domain, Sec. 157, p. 788), and this Court has adhered unvaryingly to the principle that a negative easement of this kind is a vested interest in land. McKinney v. Deneen, 231 N. C. 540, 58 S. E. 2d 107; Hildebrand v. Southern Bell Telephone & Telegraph Co., 219 N. C. 402, 14 S. E. 2d 252; City of Charlotte v. Heath, 226 N. C. 750, 40 S. E. 2d 600 (here it was conceded by all parties concerned that the negative easements involved were property rights to be condemned and paid for); Turner v. Glenn, 220 N. C. 620, 18 S. E. 2d 197; Davis v. Robinson, 189 N. C. 589, 127 S. E. 2d 697; East Side Builders v. Brown, 234 N. C. 517, 67 S. E. 2d 489. See also Glenn v. Board of Education, 210 N. C. 525, 187 S. E. 781; Hiatt v. Greesboro, supra; Mordecai’s Law Lectures, 2d Edition, p. 557; Thompson on Real Estate, Permanent Edition, Vol. 7, Sec. 3620 through Sec. 3631; Clark, Covenants and Interests Running with Land, p. 174 et seq.
“In Davis v. Robinson, supra, 189 N. C. at page 598, 600, 127 S. E. at page 702, opinion by Yarser, J. it. is said: ‘Easements are classified as affirmative or negative. “Negative easements are those where the owner of a servient estate is prohibited from doing something otherwise lawful upon his estate.” * * * “An easement always implies an interest in the land. * * * It is real property, and it is created by grant.” A building restriction is a negative easement.’
“In Turner v. Glenn, supra, 220 N. C. at page 625, 18 S. E. 2d at page 201, with Barnhill, J., speaking for the Court, it is said: ‘The servitude imposed by restrictive covenants is a species of incorporeal right. It restrains the owner of the servient estate from making certain use of his property. It is an interest in land, conveyance of which is within the statute of frauds.’
“Thus, holding as we do that these negative easements are vested property rights, it follows by force of natural logic and simple justice that for the taking of such property just compensation must be paid as in the case of the taking of' any other type of property, and the lack of contractual privity between the owners and the condemnor is in no sense a determinative factor.
“Treating the allegations of the further defense as true, as is the rule on demurrer, Hall v. Coble Dairies, 234 N. C. 206, 67 S. E. 2d 63, we conclude that the interveners have a vested property right of value in the restrictions imposed on the lots sought to be condemned and that the proposed use of the property amounts in a constituional sense to a taking or damaging of this property right, for which the interveners are entitled to compensation commensurate with any loss they may sustain. Art. 1, Sec. 17 of the Constitution of North Carolina; Fifth Amendment of the Constitution of the United States.”

In Meagher v. Appalachian Electric Power Co., 77 S. E. 2d 461 (1953), the Virginia Supreme Court of Appeals faced this question for the first time. This was a suit involving the erection of high voltage transmission tower lines in violation of restrictive covenants binding upon the lands of the plaintiff and the defendant. There the court held that the restrictive covenant applicable to all of the lots in the subdivision was a property right in favor of those for whose benefit it was imposed, and that a public service corporation invading such property right because of public necessity must compensate those for whose benefit the covenant was imposed. In Meagher the court decided this question by using the following language:

“The next question is whether the restrictive covenants applicable to all of the lots in the subdivisions are a property right in favor of those for whose benefit they were imposed. The precise question has not heretofore been presented to this court and the decisions from other jurisdictions are in conflict. In the recent case of City of Raleigh v. Edwards, 235 N. C. 671, 71 S. E. 2d 396, 397, there is a clear and concise discussion of the subject. There the City of Raleigh instituted condemnation proceedings to acquire property in a subdivision for the erection of a water tower. Several property owners in the subdivision intervened and asserted the claim that the proposed public improvement was in violation of the covenants restricting the use of the property in the subdivision to ‘private dwelling purposes only,’ and would deprive them of vested property rights of substantial value created by such covenants, and entitle them to compensation therefor. After a careful review of the authorities the court thus expressed its agreement with that view:
‘ * * * the decided weight of authority in other jurisdictions supports the proposition that such a restriction, being in the nature of an equitable servitude, is an interest in land and must be paid for when taken. The theory is that these restrictions impose negative easements on the land restricted in favor of and appendant to the rest of the land in the restricted area, and when a particular parcel thereof is appropriated for a public use that will violate the restrictions, such appropriation amounts in a constitutional sense to a taking or damaging of property of the other landowners for whose benefit the restrictions are imposed. 18 Am. Jur., Eminent Domain, Sec. 157, p. 788; Annotations: 17 A. L. R. 554; 67 A. L. R. 385; 122 A. L. R. 1464.
“The North Carolina court declined to follow the minority view which, it said, ‘is grounded on the theory that these restrictions, being contractual rights enforceable in equity only between parties in privy, do not con-, stitute an interest in property at all.’ 71 S. E. 2d at page 401.
“Among other authorities taking the majority view are, Ladd v. City of Boston, 151 Mass. 585, 24 N. E. 858, 21 Am. St. Rep. 481 (opinion by Holmes, J.); Riverbank Improvement Co. v. Chadwick, 228 Mass. 242, 117 N. E. 244, L. R. A. 1918B, 55; Johnstone v. Detroit Elec. R. 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. R. Co., 218 N. Y. 140, 112 N. E. 913, Ann. Cas. 1918B, 588. See also, Nichols’ The Law of Eminent Domain, 3d Ed., Vol. 12, Sec. 5.73, pp. 81-84.
“A leading ease presenting the minority view is Anderson v. Lynch, 188 Ga. 154, 3 S. E. 2d 85, 122 A. L. R. 1456, where the principal authorities relied upon by the defendant here are collected.
“Our previous decisions have clearly indicated that restrictive covenants create a valuable right in property. In Spilling v. Hutcheson, 111 Va. 179, 183, 68 S. E. 250, we approved the statement in 2 Pomeroy’s Equity Jur., 3d Ed. Sec. 1342, that ‘restrictive covenants in deeds * * * limiting the use of land in a specific manner, or prescribing a peculiar use, * * * create equitable servitudes on the land.’
“In Cheatham v. Taylor, 148 Va. 26, 39, 138 S. E. 545, we said ‘that the right of a third person to the protection of the (restrictive) covenant is an equitable right by whatever named called. ’
“In Springer v. Gaddy, 172 Va. 533, 541, 2 S. E. 2d 355, 358, we approved the holding that the right under such a restrictive covenant is ‘ a negative equitable easement. ’ But whatever may be its correct designation, we are of opinion that such restrictive covenants created an ‘interest or estate’ in land, which a public utility may acquire by eminent domain, Code, Sec. 25-8, but subject to the protection of Section 58 of the Constitution that it may not ‘be taken or damaged for public uses, without just compensation. ’
“It is argued that such restrictions cannot be invoked against a public service corporation clothed under the laws of the State with the power of eminent domain, because public necessity may require the taking of property in such an area despite such restrictions. The answer is, that ‘Public necessity may justify the taking, but cannot justify the taking without compensation.’ City of Raleigh v. Edwards, supra, 71 S. E. 2d at page 399.
“We are of opinion, then, that the acts of the defendant are a breach of the covenants and restrictions binding on its lands in these subdivisions, and constitute a taking or damaging of property rights for which compensation must be paid.
“Injunction is the proper remedy to prevent the taking or damaging of private property for a public use without just compensation by one who is invested with the power of eminent domain. Virginia Hot Springs Co. v. Lowman, 126 Va. 424, 427, 101 S. E. 326; Nichols v. Central Virginia Power Co., 143 Ca. 405, 413-415, 130 S. E. 764, 44 A. L. R. 727; 30 C. J. S., Eminent Domain, Sec. 405, p. 125.”

One of the most recent cases involving this question is that of City of Shelbyville v. Kilpatrick, 322 S. W. 2d 203 (Tena. 1959). There, the City brought a suit for declaratory judgment that it could erect a city water tower in a residential subdivision without paying compensation to other lot owners in the subdivision. The court held that where the recorded plat of a subdivision provided that all lots' in the addition were restricted to residential purposes only, and the City acquired one of the lots for the purpose of erecting a water tower thereon, that the proposed violation of the restriction by the City would be the taking by the City of the ‘ property ’ of the owners of the other lots, so that the City would be required by the Constitution to pay just compensation. The Tennessee Supreme Court used the following language in the Kilpatrick case:

‘ ‘ The exact question seems never to have been decided in this jurisdiction. As observed by the Chancellor, the decisions of other jurisdictions ‘are in irreconcilable conflict. ’
“In view of the diametrically opposite views by eminent authorities on each side, it’ will not be amiss, at least in justification of the position taken by this Court, to state briefly the reasons attributed by each for the respective conclusions reached.
“A variance appears in the numerous decisions as to just what technical name should be given this restrictive covenant. All the decisions and textwriters, however, appear to agree in the conclusion that the reciprocal servitude owed by each lot to all the others in the subdivision is an equitable easement; that this easement continues, with tbe exception'(so some say) of tbe sovereign, into whosoever the respective dominant and servient estates may successively pass.
“The authorities likewise seem to agree upon the proposition that, as between individuals, the violation of the right created by this easement may be enjoined in equity by the owner of the dominant estate, or such owner may be entitled to compensation for its violation, all because it would be unconscionable to allow the owner of the servient estate to violate with impunity his contract creating this equitable easement.
“But when it comes to the question of whether the violation of this restriction by the sovereign in the taking of the servient lot by eminent domain (or by voluntary conveyance to it) for a public purpose those who say that it is not the taking of property within the meaning of the constitutional requirement mentioned place this conclusion upon the ground that the easement is not one which ‘would permit the physical use or occupation thereof’ by the other lot owners in the tract, 122 A. L. R. 1465, nor is it a ‘true easement, as right of passage or rights to light’ and air, which are land and subject to condemnation as other interests in land.’ 63 App. D. C. 104, 69 F. 2d 842, 844, 98 A. L. R. 389. Hence for each reason, no interest in land, they say, is taken.
“When it comes to the fact that those from whom the sovereign acquires the servient lot have ágreed with the owner of every other lot in that subdivision to the easement in question, the above jurisdictions, or some of them, say that an individual cannot impose upon the sovereign ‘the burden of compensating him for damage resulting from that public use which does not directly invade his land.’ 17 A. L. R. 555, and that the parties may not ‘in private contract create for themselves an estate in land not known to our law and thus entitle them to compensation where no such right existed before.’ 122 A. L. R. 1465.
“Others upon that side go so far as to say that since the sovereign cannot be restricted in its use of the land for a public use, short of a nuisance, at least, it follows that an intention between the contracting parties not to include the sovereign will be implied. 188 Ga. 154, 3 S. E. 2d 85, 122 A. L. R. 1462.
“The contrary view is that when all the lots in a subdivision are subject to this restrictive easement, and one is taken for a public use, the owners of the other lots for whose benefit the restriction is imposed are entitled to compensation, if damaged, because such an easement constitutes an interest in the land upon which it is imposed.
“The Michigan case of Johnstone v. Detroit, Grand Have, etc., 245 Mich. 65, 222 N. W. 325, 327, 67 A. L. R. 373, in taking this last stated view of the matter, discusses the question in quite some detail. In response to the argument that it is against public policy to apply such restrictive easements to the sovereign in the taking of land for a public use the Court pointed out that the police power is restrictive, only limiting the owner’s use of property to public safety, etc. ‘but never extends to depriving him of it for public benefit. ’
“The Court recognized the fact that building restrictions ‘did not constitute easement known to the common law.’ But then called attention to the fact that the ‘easements of light, air and access in property abutting on a public street is not a common law easement, but its impairment by public use in the street' is a taking of property. ’
Johnstone v. Detroit, etc., supra, asserts that its holding ‘is supported by the weight of authority.’ The first annotation following the report of the case, after calling attention to the annotation in 17 A. L. R., supra, makes this statement: ‘The few cases decided since the earlier annotation uphold the rule that compensation must be made where the taking of property under eminent domain violates building restrictions on the land adjacent thereto. ’
“The reasoning of the cases holding that compensation must be made where the taking of property under eminent domain violates building restrictions placed thereon for the benefit of every other lot in the subdivision is, in the opinion of this Court, more consistent with the realities of the situation. Each of the respective owners of the respective lots entered into this restrictive agreement because each regarded it as something which added to the value of his or her own lot. Our case of Ridley v. Haiman, 164 Tenn. 239, 258, 47 S. W. 2d 750, 756, recognizes it to be a fact that such a restriction is ‘ an interest or right created by the deed itself, ’ meaning an interest or right in the servient lot.
“Certainly it is not within the spirit of our eminent domain law that such interest created by the deed may be taken away from its owner without compensation, if that owner is damaged. Not being within the spirit of the law, it ought not to be so held, unless required by the letter of the law. This Court finds nothing in the letter of our eminent domain law forbidding compensation to the owner under such circumstances. Nor is there anything in Article 1, Section 21, exhibiting an intention that this right in the servient lot may be taken by the sovereign without paying just compensation.
“It does not seem accurate to hold that the owner of the right to restrict the use of the servient lot to a certain use for the benefit of the dominant lot is not a property right in that servient lot.' The only right, broadly speaking, that any owner of any real estate has in land is the right to use it. So, it would seem to follow that the ownership of the right to restrict the use of a given parcel of land to a certain use is, to that extent, a property right in that lot, for which, when deprived thereof, he should be compensated. Or, as better stated in Johnstone v. Detroit, etc. supra, — ‘as the right to restrict the use of real estate is an invasion of ownership, it would seem logical that it is done by virtue of a right or interest in such real estate. ’ ’ ’

In Adaman Mutual Water Company v. United States, 278 F. 2d 842 (ninth Circuit, 1960), the Federal Court discussed this problem by using the following language:

“Presently, a restrictive covenant is generally deemed a property right under federal law. Chapman v. Sheridan-Wyoming Coal Co., 1950, 338 U. S. 621, 70 S. Ct. 392, 94 L. Ed. 393. We think it should be treated similarly in an eminent domain contest where the purpose of the distinction between property interests and other rights is to differentiate losses directly connected with the land taken from losses comparatively more remote. It follows from this that any right or duty, benefit or burden, which moves or is transferred as one with either the land or an estate in it must be deemed an interest in that land and compensable upon condemnation of the fee. Because the transfer of these rights and duties are subject to legal principles different from those which govern the passing of other interests, a unique, direct connection with the land is established. This connection justifies the distinction mentioned above. Accordingly, we think that under the Fifth Amendment a restrictive covenant imposing a duty which runs with the land taken constitutes a compensable interest.
‘ ‘ The argument that an impermissible burden is put upon the power of eminent domain by a restrictive covenant is untenable. Why should a party receive compensation for an easement right which enhances the value of his property and yet be denied compensation for a right obtained by a restrictive covenant which similarly adds to the value of his holding? Both interests are directly connected to the land and we are unable to find a distinction between them which will justify dissimilar treatment at the hands of a condemning authority.”

In the quotations from the above cited cases it is noted that one of the principal factors involved is a determination of whether or not the restrictive covenants actually run with the land or are contractual in nature between the parties. In the instant case there would seem to be little room for argument but that the restrictive covenants run with the land. Indeed, the Bill of Assurance creating the restrictive covenants specifically provides that they are to run with the land and are deemed to be incorporated in every deed of the owners of any and all lots located in the addition. Also, it should be noted that in Arkansas the rule is that a covenant which is beneficial or essential to the use of the land conveyed and which is expressly made binding upon the heirs, assigns or successors of the grantor, runs with the land. Nordin v. May, 188 F. 2d 411 (Eighth Circuit, 1951).

The Court has extended this opinion because of the primary importance of this litigation, not only to the plaintiff, but to all litigants similarly situated.

It is, therefore, the opinion aiid judgment of this Court that the restrictive covenants in the Bill of Assurance and extended into the deeds are property rights; that the acquisition of the eleven lots and the construction of the project thereon amounts in a constitutional sense to a taking or damaging of this property right, and the Court specifically finds and holds that as a direct result of the construction of this project in the Crest-view Estates Subdivision by the defendants has materially and substantially damaged and diminished the market value of plaintiffs’ property; and that the property so taken and damaged are compensable under the law of Eminent Domain and the Constitution of the State of Arkansas.


source: Caselaw Access Project

author: George Rose Smith, J.

license: Public Domain

text:
    Seward v. Mid-State Homes, Inc.
    5-3298
    379 S. W. 2d 271
    Opinion delivered June 1, 1964.

      George P. Eldridge, for appellant.

      Spencer & Spencer, for appellee.
   George Rose Smith, J.

This is a foreclosure suit brought by the appellee upon a promissory note secured by a real estate mortgage. The defendants, Lavern Seward and his mother, interposed a plea of usury. The chancellor rejected this plea, finding that there had been a mutual mistake in the preparation of an allied construction contract and that the transaction was in fact free from usury.

On August 1, 1961, the appellee’s assignor, Jim Walter Corporation, agreed to construct a shell home for the appellants, for which they agreed to pay 84 monthly installments of $64.40 each. The note sued upon evidences that debt. The áppellants’ copy of the construction contract recites that the price of the house was $3,695. If that recitation was correct the note embodies an interest charge of more than 10 per cent and is usurious. The appellee insists, however, that the true price was $3,895, in which case the interest charge is lawful.

We think the chancellor’s decision was clearly right. The Jim Walter salesman who prepared the contract testified that he inserted the lower figure by mistake. He explained that $3,695 was the basic price for the partieular home selected by the appellants.- These purchasers chose to have masonite siding instead of wooden siding on the house, for which a standard charge of $200 was added to the base price. This salesman said that he discovered his error later in the day and promptly informed the appellants, requesting* them to make the necessary chang*e upon their copy of the contract.

There is much corroboration of the salesman’s testimony. It is undisputed that masonite was actually used upon the appellants’ house. It is undisputed that it costs more than twice as much as wood siding. According to the Jim Walter Corporation’s printed schedule of installment payments a principal debt of $3,895 calls for 84 monthly payments of $64.40 each — the exact figures recited in the contract. Lavern Seward later sold two homes for Jim Walter Corporation. Both purchasers selected masonite siding and agreed to the extra charge; so Seward must have been aware of it. In their discovery depositions neither Seward nor his mother would deny that they were told about the $200 charge for the better grade of siding, though at the trial both changed their testimony. The record as a whole shows clearly and convincingly that a mutual mistake occurred.

In affirming the case upon its merits we do not imply that we approve the appellants’ abstract of the record, the sufficiency of which the appellee has challenged. The abstract lacks the impartiality required by our Rule 9, in that it omits much of the evidence that supports the chancellor’s decree. In view of the deficient abstract the appellants could not in any event have prevailed, but we have thought it best to reach the merits rather than to rest our decision upon a technical point.

Affirmed.


author: George Eose Smith, J. Sam Robinson, Associate Justice

text:
    Housley v. Housley.
    5-3302
    379 S. W. 2d 272
    Opinion delivered June 1, 1964.
    [Rehearing denied October 5, 1964.]

      Pope, Pratt & Shamburger, for appellant.

      J ohn Harris J ones, for appellee.
   George Eose Smith, J.

Y. W. Housley died on June 6, 1963, leaving a will that be bad executed on July 22, 1960. Tbis application for a construction of tbe will was submitted to tbe probate court by agreement of tbe parties. Tbe court beld tbe will to be inoperative, so that tbe estate passed by intestacy to tbe appellee, tbe decedent’s son and only beir. Tbe appellant, tbe decedent’s brother, insists that tbe will effectively devised and bequeathed tbe entire estate to him.

Y. W. Housley and bis son, tbe appellee, bad been estranged for some time. In the second paragraph of bis will V. W. directed that bis son should not share in any property that be might leave. Then follows tbe third paragraph, which gives rise to this controversy and reads essentially as follows:

“III. Eeposing tbe utmost confidence in tbe integrity and judgment of my brother, "W. M. Housley [the appellant], of Little Rock, Arkansas, who knows my and our relatives and kindred, their worthiness and needs and my feelings and affections concerning each of them, I hereby give, devise and bequeath to my said brother, W. M. Housley, all of the property of every nature, kind and classification; real, personal or otherwise designated, of which I die seized and possessed . . . in fee simple, unconditioned and unrestricted, to possess, to hold, to use, to own, to barter, to sell or to give away at his will and pleasure and to pass title thereto absolutely and in fee simple and to receive the consideration therefor, if any, and receipt therefor, without any accounting therefor to anyone, in accordance with instructions I have given my brother concerning my burial and the adjustment of any amounts I may owe, including taxes, if any and, also, with respect to any' property Avhich passes to him under this will and said property AAdll pass to him by title absolute and in fee simple unconditionally and without restriction.”

The will Avas prepared by an attorney, and a copy of it AYas sent to the appellant, the sole beneficiary. Almost three years elapsed between the execution of the aat.11 and the testator’s death. The appellant denies that his brother gave him any instructions about the disposition of the estate, but there is much testimony that casts doubt upon the credibility of the appellant’s statement. We need not consider AAdiether the execution of the Avill A\ras induced by fraud, as the appellee charges, for Ave think the probate court Avas right in holding the aat.11 to be inoperative.

There is no real question about the controlling rules of hw. The difficulty lies in their application to this Avill. “Oral instructions cannot be incorporated into a Avritten will by any words of reference, hoAvever clear, since by statute the will must be in writing. Accordingly, a gift to A to be used in accordance Avith testator’s former instructions, or a gift ‘ Avith the hope and expectation and perfect faith that she Avill expend so much of the income and principal thereof, if it should become necessary in the carrying on of a certain charity in which she knows I am deeply interested,’ or a gift ‘in accordance with my instructions to her,’ or a gift ‘to carry out instructions that I may leave in writing or verbally which I have not yet fully completed, ’ cannot operate as an incorporation of such oral instructions into the will as a part thereof.” Page on Wills (Bowe-Parker Rev.), % 19.33. When the testator makes such an attempt to bequeath property to one who is to dispose of it in accordance with the testator’s oral instructions, this provision in the will is void. The gift fails. Fitzsimmons v. Harmon, 108 Maine 456, 81 Atl. 667; Moore v. O’Leary, 180 Mich. 261, 146 N. W. 661; Gross v. Moore, 22 N. Y. S. 1019.

The appellant insists that the testator’s dominant intention was to vest the fee simple title in his brother. It is argued that, as in Wooldridge v. Gilman, 170 Ark. 163, 279 S. W. 20, the additional language in the will should be treated merely as an explanation of the testator’s reasons for disposing of his property as he did.

We do not find this argument to be persuasive. No doubt Y. W. Housley did intend to vest the fee simple title in his brother, but that fact alone does not solve our problem. If he intended for W. M. Housley to receive the fee so that he would be in a position to carry out Y. W.’s oral instructions, then the third paragraph in the will is invalid. By analogy a trustee often takes the fee simple, as when he is given a power of sale and must be in a position to convey the fee, but he nevertheless holds the property in trust. Restatement, Trusts, Second, § 88.

The pivotal question is whether Y. W. intended for his brother to have the beneficial interest in the property. We think it plain that he did not. It would have been a simple matter for this testator, especially with the assistance of an attorney, to make an absolute devise of his property to his brother in fee simple. Yet clause after clause in the will indicates that Y. W. was not making an outright gift. If that had been his intention why did he think it necessary to express his confidence in W. M.’s integrity and judgment? Why did he think it necessary to observe that W. M. “knows my and our relatives and kindred, their worthiness and needs and my feeling and affections concerning each of them”? Why did he think it necessary to declare that W. M. could dispose of the property and receive the consideration therefor, without accounting to anyone? Why, especially, did he say that the property was left to W. M. with the power to dispose of it “in accordance with instructions I have given my brother . . . with respect to any property which passes to him under this will”? Every one of these declarations is wholly inappropriate — indeed, completely irrelevant — if W. M. was to receive the beneficial interest in the estate. Yet each clause is of genuine significance if Y. W. meant for his brother to carry out his oral instructions with respect to the gift. To sustain the appellant’s position we should have to disregard every meaningful phrase in the controlling paragraph of this will except the declarations that W. M. was to take the property in fee simple. Yet, as we have seen, those declarations alone cannot govern our decision, because if Y. W. intended for the appellant to distribute the property among the two brothers’ relatives it was still necessary first to vest the fee in W. M.

The testator’s attempt to disinherit the appellee fails, for the property was not effectively left to anyone else. Williams v. Norton, 126 Ark. 503, 191 S. W. 34. It is unfortunate that the decedent’s intention must be thwarted; but even a reversal would not help matters, since the appellant declines to (and could not lawfully) carry out whatever his brother’s wishes may have been.

Affirmed.

McFaddin, Robinson, and Holt, JJ., dissent.

Sam Robinson, Associate Justice

(dissenting). I fully agree that the intention of the testator has been thwarted. In fact, it has been blocked, obstructed and defeated, all on the theory that doubtful language in the will creates a trust, and yet in the same breath the majority says no valid trust was created. There was a devise absolutely to a brother; therefore, I say the doubtful language should not he construed as creating a trust, valid or invalid.

In this case the intention of the testator is clear. If there is any doubt about how the will should be construed, it should be construed so as to give effect to the intention of the testator. Yet, the doubtful language in the will is construed by the majority in a manner that absolutely defeats the expressed and known intention of the testator. In so doing, the majority does not follow established principles of will construction.

Actually, no trust was set up, valid or invalid. No trustee is named, no beneficiary is named, no duties of a trustee are specified, and no purposes of a trust are mentioned. The will was prepared by an able lawyer. It is not likely that an experienced lawyer would draw a will to create a trust and never mention the word trust. Not one time does the will in question use the word trust.

It is said in 49 A. L. R. 34: “ There is a simple, sure, and familiar form of bequest to raise a trust, which consists of a devise to the legatee in trust to the beneficiary, and the failure to use it has been held to indicate an intention to avoid the creation of a trust. As remarked in one case: ‘It certainly seems singular that a testator, having a full and settled intention to create a trust (for that is what must be read on the face of the will or no-trust can exist), should adopt a mode which at best appears to be a mere suggestion, or inference, instead of employing the familiar method and creating the trust by an express declaration.’ ”

In Woolridge v. Gilman, 170 Ark. 163, 279 S. W. 20, the language was more indicative of creating a trust than is the language in the case at bar. There, the will provided : “To Elizabeth Gilman I bequeath my entire stock in Simmons National Bank, and request that she never dispose of it, but keep it to educate her children, Charles and William Gilman.” In holding that no trust was created, this court said: “. . . the word ‘request’ is employed as a mere expression of hope or confidence on the part of the testatrix that the legatee will use the bank stock in the education of her children, hut the extent and character of their education is left wholly to the judgment of the legatee. Therefore, we do not think the language used justified the conclusion that the testatrix intended to create a trust in favor of Charles and William Grilman.”

An intent to create must be clearly expressed by the language of the will. Bloom v. Strauss, 73 Ark. 56, 84 S. W. 511; Wallace v. Wallace, 179 Ark. 30, 13 S. W. 2d 810.

“On the principle that words which cut an estate down must be as clear as those which create it, an absolute and beneficial interest which is clearly given will not be cut down to the legal title of a trustee by precatory words, unless they show testator intention to create a trust as clearly as though he had created it by express words.” Page on Wills, Vol. 5, $ 40.5, p. 116, 117.

In the case at bar, the will is clear and explicit that the property be left in fee to the testator’s brother, the appellant herein. The will provides: “I hereby give, devise and bequeath to my said brother, William Housley, all the property of every nature, kind and classification, real, personal or otherwise designated . . '. and title absolute and in fee simple, unconditional and unrestricted . . . and said property will pass to him by title absolute and in fee simple, unconditional and without restrictions.” It is hard to see how language could be more explicit in giving the property to the brother in fee.

We have repeatedly held that words of art must be given their technical meaning. Pletner v. Southern Lumber Co., 173 Ark. 277, 292 S. W. 370; Fine v. McGowan, 186 Ark. 1035, 57 S. W. 2d 565.

This rule is so firmly established that it is a rule of property. Shields v. Shields, 179 Ark. 167, 14 S. W. 2d 545. In Moody v. Walker, 3 Ark. 147, the court said: “When technical phrases or terms of art are used, it is fair to presume that the testator understood their meaning, and that they expressed the intention of his will, according to their import and signification. When certain terms or words have by repeated adjudication received a precise, definite and legal construction, if the testator in making his will use such terms or similar expressions, they shall be construed accordingly to their legal effect. . . and ... if this was not the case, titles to estates would be daily unsettled, to the ruin of thousands. It is all-important to the interest of society, that the rules of property should be definitely settled, and that they should possess uniformity and consistency.”

“In fee simplé” are words of art; they have only one meaning. Ballentine Law Dictionary, p. 494; 19 Am. Jur. 471-473.

It is presumed that the testator knew and understood the meaning of the words used in the will. Crittenden v. Lytle, 221 Ark. 302, 253 S. W. 2d 361; Galloway v. Darby, 105 Ark. 558, 151 S. W. 1014. In the Galloway case, the court quotes from Doebler’s Appeal, 64 Pa. St. 9, as follows: “It becomes no man and no court to be wise above that which is written. Security of titles requires that no mere arbitrary discretion should be exercised in conjecturing what words the testator would have used, or what form of disposition he would have adopted, had he been truly advised as to the legal effect of the words actually employed. That would be to make a will for him, instead of construing that which he had made.”

The devise to appellant is as clear as a bell — -“title absolute and in fee simple, unconditional and unrestricted.” Doubtful language thereafter used should not be construed as cutting down the fee. “. . . an absolute gift in a will cannot be cut down by subsequent inconsistent language of doubtful or ambiguous significance, it being necessary before such a result will be permitted that the language indicating an intention to cut down the gift be as clear, plain, and unequivocal as that used in the gift itself; that the presumption is that the first taker receives a fee in spite of subsequent words casting doubt on the question; that in case of doubt as to the quantity of an estate devised, the general rule is that an absolute rather than a qualified estate was intended; and that where a devise of an absolute interest is made, subsequent limitations attempting to deprive the estate of any of the incidents appertaining to it are repugnant and void.” 57 Am. Jur., Wills § 1320.

These rules are supported by many Arkansas cases, including Moody v. Walker, 3 Ark. 147; Byrne v. Weller, 61 Ark. 366, 33 S. W. 421; Bernstein v. Bramble, 81 Ark. 480, 99 S. W. 682; Letzkus v. Nothwang, 170 Ark. 403, 279 S. W. 1006; Union Trust Co. v. Madigan, 183 Ark. 158, 35 S. W. 2d 349; Collie v. Tucker, 229 Ark. 606, 317 S. W. 2d 137.

Appellee relies on Lytle, Ex’r. v. Zebold, 235 Ark. 17, 357 S. W. 2d 20, but in that case there was no doubt whatever that a trust was created prior to the use of the language that could be construed as limiting a fee. Here, it will be remembered that the language devising a fee in the property is clear, unequivocal, and unambiguous. No one can say that the language depended on here to establish a trust is not doubtful. In Ross v. Ross, 135 Ind. 367, 35 N. E. 9, the court said: “Where an estate in fee is devised in one clause of a will in clear and decisive terms, it cannot be taken away or cut down by raising .a doubt upon a subsequent clause, not by inference therefrom, nor by any subsequent words that are not as clear and decisive as the words of the clause giving the estate in fee.”

In Burnes v. Burnes, 137 Fed. 781, Mr. Justice San-born said: “The crucial question in the interpretation of this will is, did the testator intend to impose an imperative obligation upon his brothers to apply his estate, or their property, to the equal benefit of all the children of each of them, or to express a desire that they should do so, and to intrust to their discretion the exercise of the option to comply or refuse to comply with his wish? In Knight v. Knight, 3 Beav. 148, 172-174, Lord Langdale declared the law upon this subject in language which has rarely, if ever, been excelled in strength and clearness. He said:

‘As a general rule, it has been laid down that when property is given absolutely [our italics] to any person, and the same person is by the giver, who has power to command, recommend or entreated or wished to dispose of that property in favor of another, the recommendation, entreaty, or wish shall be held to create a trust: First, if the words are so used that, upon the whole, they ought to be construed as imperative; secondly, if the subject of the recommendation or wish to be certain; and, thirdly, if the objects or persons intended to have the benefit of the recommendations or wish be also certain. . . . On the other hand, if the giver accompanies his expression of wishoor request by other words, from which it is to be collected that he did not intend thé wish to be imperative, or if it appears from the context that the first taker was intended to have a discretionary power to withdraw any part of the subject from the object of the wish or request, or if the objects are not such as may be ascertained with sufficient certainty, it has been held that no trust is created.’ ”

In the case at bar, the testator devised the property absolutely to his brother. If the rule discussed by Judge Sanborn in the Burnes case was followed here, and there is no sound reason why it should not be followed, the appellee could not prevail because the language in the will said to create a trust is not imperative; and the persons claimed to have the benefit of the alleged trust are not certain. Furthermore, if a trust was created, certainly as trustee the brother would have “a discretionary power to withdraw any part of the subject from the object of the wish or request.”

In my opinion, the law is clear that here it should not be said that the will creates a trust. I, therefore, respectfully dissent.

McFaddin, J., joins in this dissent.


author: Paul Ward, Associate Justice.

text:
    Ark. State Highway Comm. v. Taylor.
    5-3281
    381 S. W. 2d 438
    Opinion delivered June 1, 1964.
    [Rehearing denied September 14, 1964.]

      Mark E. Woolse-y, Don Gillaspie, Don Langston, for appellant.

      Bethell da Pearce, for appellee.
   Paul Ward, Associate Justice.

In 1955 James F. Taylor and T. J. Van Zant (appellees herein), real estate developers, purchased approximately 60 acres of land on the eastern limits of Fort Smith. They promptly began to develop the parcel of land as a redistricted residential subdivision called “Eastern Hills Addition.” A plat showing 115 separate building lots was filed. Streets (with minor exceptions) were laid out and improved, and most utilities (such as curbs, gutters, water pipes, gas pipes, electric light and power poles, and sanitary sewers) were installed.

Prior to June 15, 1962 appellees had sold 37% lots upon most of which individual residences had been erected. On the date above mentioned the Arkansas Highway Commission (appellant herein) condemned and took possession of a strip of land off the east side of the development area for the purpose of constructing a segment of the Interstate Highway System. The development area (60 acres) is in the shape of a rectangle. the north and south measurement being approximately % longer than the east and west measurement. Within the area is what appears to be a swag or gulch (not suitable for building lots) consisting of 9.1 acres, called tract A. It runs in a northeasterly direction (in the north portion of the area) from near the west line to the east line.

The portion taken by appellant embraces 41 building-lots in whole or in part (29 in whole and 12 in part) and a portion near the middle of tract A. Appellant deposited $117,500 to reimburse appellees for the land taken. Appellees, by proper pleadings, asked the court to award them the sum of $350,000 as just compensation for the property taken and damaged. A lengthy trial resulted in two verdicts in favor of appellees: $180,000 for the property taken in whole or in part, and $5,683 for damage to certain of the remaining- lots.

On appeal appellant seeks a reversal on three separate points or assignments of error. Since we have reached the conclusion that the judgments must be reversed and the cause remanded for a new trial, we deem it sufficient to set forth such testimony only as relates to the errors hereafter pointed out.

One. At the beginning of the trial appellant contended it was liable to appellees only for the lots or land actually taken. This contention was based on the theory that each individual lot in the subdivision constituted a “unit” of value. On the other hand appellees took the position that the entire tract of land (60 acres) should be considered the “unit” of value. The distinction is of course vital. If the whole tract is considered as a unit, then appellees would be entitled (under the familiar rule of this court) not only to the value of the land actually taken, but to any depreciation in value (caused by the taking) to the balance of the tract of land. In a pre-trial conference the trial court upheld appellees ’ theory, holding all the lots, or the entire 60 acres, constituted a unit of value. This holding, we think, was contrary to the weight of authority pertaining to this kind of situation.

Nichols, On Eminent Domain (3d Ed., Vol. 4, § 14.3, p. 707) states:

“It is well settled that when the whole or a part of a particular tract of land is taken for the public use, the owner of such land is not entitled to compensation for injury to other separate and independent parcels belonging to him which results from the taking ...”

In Wellington v. Boston & M. R. R. Co., 164 Mass. 380, 41 N. E. 652, there was a recorded plat and streets were in, and many of the lots platted were in separate ownerships. This case is very similar to the facts at bar in this respect. There the Court said:

“Upon the evidence, all the other lands' of the petitioners had been made separate and distinct parcels by transforming the locality into a village with wrought and travelled streets, and making all the land not included in the streets into exactly defined house lots, some of which had been sold to other persons, and each of which then owned by the petitioners was held for the distinct purpose of independent sale. Whether a particular lot of land constitutes and independent parcel is a question which cannot be determined in the affirmative by the mere fact that it is separated from other land by a highway or street, or by paper lines, or by fences; nor can it be determined in the negative by the mere fact that it is all in one ownership, and is not divided by streets or by paper lines. But when, as in the present case, the evidence shows that there is an actual division by streets, wrought and in use for travel, and by recorded paper lines, and there is no evidence that any two of the lots are used together, or are held for sale as one parcel, and the only use shown is a separate and distinct use and holding of each lot by itself, we think each lot is a separate and distinct parcel.”

A portion of the above case pertinent here was quoted with approval by this Court in Kansas City Southern Railway Co. v. Boles, 88 Ark. 533, 539, 115 S. W. 375. In that case we also find this statement:

“This testimony was competent to show the connected use of the lots. Although the lots are separated by an alley, they may be said to be contiguous and may be treated as parts of a single tract for the purpose of determining damages in condemnation proceedings, if the testimony shows that they are used as a unit.”

There is no testimony in the record here to show that any one of the lots (which appellees still own) is used or is to be used in connection with any other lot.

In opposition to the above, appellees rely heavily on the case of St. Louis, Iron Mountain & Southern Railway Co. v. Theodore Maxfield Co., 94 Ark. 135, 126 S. W. 83. There, Maxfield, who owned a tract of land adjacent to the town of Batesville, had it platted into lots and blocks intending to have it annexed, but had not done so. Later appellant condemned a right-of-way approximately 100 feet wide across the entire tract of land. The only question was the amount of damages to be recovered. In resolving that question this Court said Maxfield could recover for the land taken “and the depreciation of the market value of the remaining portion.” For several reasons we do not feel bound here by the decision. In the cited case only four lots had been sold, streets had not been opened up, the land (surrounded by a fence) was being “cultivated as a farm” up to the time suit was filed. A careful reading of the case reveals that the principal issue was whether the best use of the land was for farming or building sites. Our research reveals that although the Maxfield case has been cited with approval by this Court several times it has never been cited to sustain the point relied on here by appellees.

Although the judgment for $5,683 must be reversed because of the error above indicated, this does not mean that appellees cannot, under any facts or circumstances, recover anything for damages to property or lots not taken. First, we point out that tract A was severed by the right-of-way. Appellees, we think, would be entitled to recover for any damage done (by -the severance) to the two portions of tract A not taken. Also, appellees have the right to show any special damage (to any lot not taken) not suffered by the public in general, and as more fully defined in the case of Arkansas State Highway Commission v. Troy McNeill et al, 238 Ark. 244, 381 S. W. 2d 425, being handed down this day.

Two. Over appellant’s objection the court gave the following instruction:

“In considering the question of whether the remaining lands of the owner have been damaged or depreciated in market value, you may consider the elements of compensable damage as are established by a preponderance of the evidence, including the effect of the. taking or subdividing the land which remains, the cost of restoring the land that remains to a useful purpose, the effect which may result from altering the grade of surrounding property, impairment, if any, of view, air, and accessibility of remaining property, and any other damage which you find from a preponderance of the evidence reasonably flows from the taking of the property.”

In view of what we have already said under the first point we see no necessity of discussing this point exhaustively. This instruction of course relates to lands not.actually taken, and it is based on the erroneous assumption that the entire tract constitutes a unit of value. Again, we point out, as we did under the first point, appellees are entitled to be recompensed only for such damages as are special — not suffered by the general public. See: Arkansas State Highway Commission v. Bingham, 231 Ark. 934, 333 S. W. 2d 728. Also there is another error in the instruction. After recounting several elements of damages which the jury might consider, the court said,£ £ and any other damage which you find from a preponderance of the evidence reasonably flows from the taking of the property.” That language, we think, left too much to the discretion of the jury, especially under the unit value we have previously approved.

Three. It is also our conclusion that the court erred in permitting the introduction of certain testimony bearing on the market value of the lots which were taken by appellant. Appellee, Taylor, properly testified in detail as to the improvements placed on the land, the expenses incurred, and what each individual lot was worth at the time of taking. In doing so he exhibited a price list, and explained how he arrived at the value of each lot on the basis of so much a front foot. On cross examination, in an effort to justify the prices he had named, Taylor explained that the price list did not reflect the correct value of the lots because of “exclusive listings” he held. To explain: appellees would sell a lot to a builder for $4,000 and require the builder to give him (Taylor) the exclusive right for 90 days to sell the house and lot for a 5% commission; if the house and lot sold for $20,000 he would receive a commission of $1,000 — thus making the lot worth $5,000 instead of $4,000. Repeatedly, hut without success, appellant requested the court to instruct the jury not to consider this testimony in arriving at the market value of the lots taken by appellant. For several reasons we think this type of testimony "was not competent. The record reflects that in many instances Taylor alone got the commission; there was no way to be certain that a house would be sold during the term of the exclusive listing; the size of the commission would depend on the sales price which normally would vary; and, finally it would seem reasonable that considerable time, effort and expense would he involved in making such real estate transactions, but none of these items was taken into consideration.

Appellees have cross-appealed on the ground that the court erred in refusing to give three instructions requested by them. We believe it would serve no useful purpose to discuss these instructions. We have carefully examined each of them and find no reversible error in the court’s action.

We find no merit in appellees’ contention that they should he given all or part of their costs expended in supplying portions of the abstract which should have been supplied by appellant. Rule 9 (d) of this Court requires the appellant to furnish an abstract which will give ‘ ‘ an understanding of all questions presented to this Court for decision” and Buie 9(e) gives us power to adjust costs when it is necessary for appellee to supply a deficiency in appellant’s abstract. Since the issues raised by appellant pertain almost entirely to questions of law, we find that appellant’s abstract complies substantially with the requirements of Buie 9(d).

It is our conclusion therefore that the judgments must be reversed, and the cause is remanded for a new trial.

Beversed and remanded.


text:
    Ark. La. Gas Co. v. Strickland.
    5-3297
    379 S. W. 2d 280
    Opinion delivered June 1, 1964.

      Mahony & Yocum, for appellant.

      Brown, Compton & Prewett, for appellee.
   Paul Ward, Associate Justice.

This is a- personal injury case where appellant’s only complaint on appeal is that the judgments are excessive.

Appellee, Jack L. Strickland, had been an employee of Calhoun County for several years prior to July 25, 1962, engaged in operating heavy road equipment — principally a road grader. On the date mentioned, while he was attempting to remove an obstruction from the road with the grader blade, he struck a six inch gas line belonging to appellant (Arkansas Louisiana Gas Company). The gas line was broken and the gas was instantly ignited. As a result the appellee was burned, particularly about the face and on the left arm and hand. Also, when he jumped from the grader he allegedly injured his left knee. He was in the hospital 13 days for which his bill was $262, and he has paid out $60 for doctor bills and $75 for medicine. As a direct result of the injury he lost 35 days of work during which time he drew his regular salary. He has been working ever since — -a period of some 15 months.

Mr. Strickland filed suit against appellant for his injuries, and his wife sued for the loss of consortium. A jury trial resulted in a verdict and judgment in favor of Mr. Strickland in the sum of $7,500 and in favor of Mrs. Strickland in the sum of $2,500.

Appellant presents a forceful argument to the effect that the evidence does not justify a judgment in the amount of $7,500 in favor of Mr. Strickland, particularly in view of what we have held in other cases to which our attention is called wherein the extent of injuries was somewhat comparable to the injury in this case. In Missouri Pacific Transportation Co. v. Kinney, 199 Ark. 512, 135 S. W. 2d 56 (1939), a judgment for $8,000 was reduced to $4,000; in Sloan v. Hathcoat, 199 Ark. 530, 134 S. W. 2d 873 (1939), a judgment of $3,750 was reduced to $2,000; and in Duty v. Gunter, 234 Ark. 176, 350 S. W. 2d 908 (1961), a judgment of $7,500 (including damage to a truck) was reduced to $4,700. However, in the case of Turchi v. Shepperd, 230 Ark. 899, 904, 327 S. W. 2d 533 (1959), we said:

“A comparison of awards made in other cases is a most unsatisfactory method of determining a proper award in a particular case, not only because the degree of injury is rarely the same, but also because the dollar no longer has its prior value.”

That statement is- applicable to this case we think. Not only were the first two cited eases decided 25 years ago, but there are other recognizable differences between those cases and this case. In the Kiimey decision we said:

“While we think the testimony did not warrant the giving of the instruction on permanent injury and future pain and suffering, in the form it went to the jury, any prejudice resulting to appellants may be removed by reducing the judgment ...”

Although the Gunter case is a recent one, the injuries appeared to be slight. “Gunter was not in the hospital more than thirty or forty minutes ... His medical expense was nominal...”

The evidence in the case under consideration in substance shows: Mr. Strickland’s clothes caught on fire while he was on the grader; when he jumped off, his knee was injured and still gives him trouble at times; he was taken by a friend to the hospital in Fordyce where he remained 13 days; while there he suffered pain and was given sedatives; he was burned on the leg, on the face, on his left hand and on his left arm. The burn on his face caused a change in the texture and complexion of the skin. The doctors described the injury to his arm as follows:

“A. The forearm had an over growth of scar tissue, which is an elevated area, which had healed, this is an irregular shaped scar and it is 7 inches in length from the top to bottom and is a loop about the size of a silver dollar or slightly more about in the center of this keloid, or scar.
“Q. That keloid scar will be there the rest of his life?
“A. Yes, he can have it treated, but the chances are it will still be there.

Mr. Strickland testified (corroborated by his wife) that he is still nervous and has trouble sleeping. It appears that he will have to be careful about working in the hot sun.

Viewing the testimony in the light most favorable to sustain the verdict of the jury, and in view of what we h,ave heretofore said, we are unwilling to say, as a matter of law, the verdict is not supported by substantial evidence.

We have reached the conclusion, however, that the judgment of $2,500 in favor of Mrs. Strickland is excessive. In support of her claim for $2,500 for loss “of the consortium of her husband,” Mrs. Strickland, in substance, testified: I attended my husband at the hospital every day, and he seemed to be in pain.

“Q. Did he ever have trouble sleeping at night?
“A. Yes, sir.
“Q. What did you do for that?
“A. I gave him tablets.
‘ ‘ Q. Give us some examples, please, of the duties you had to perform around the house?
“A. I had to feed the chickens, the hogs, dogs and horse, get the water and wood.
“Q. How many cows do you have?
“A. I don’t have a cow.
“Q. How many horses?
“A. One.
“Q. You fed the horses and hogs and chickens?
“A. Yes, sir.
“Q. How. many hogs do you have?
“A. Around 45.
“ Q. I imderstand that your son and daughter were living there?
“A. Yes, sir, they work ...”

The record shows that Mr. Strickland performed the above mentioned chores before he was injured. These being services which he is no longer able to perform, the logical presumption seems to be that the jury took that element into consideration in fixing the amount of his damages. Moreover, we fail to comprehend how the above mentioned chores . comport with the word consortium as it is ordinarily used. It is defined by Black’s Law Dictionary as follows:

“Conjugal fellowship of husband and wife, and the right of each to the company, co-operation, affection, and aid of the other in every conjugal relation.”

Since the record does not disclose to what extent Mr. Strickland is unable to sleep or how often his wife must give him a tablet, we are driven to the conclusion that the evidence does not support a judgment in excess of $1,000 in favor of Mrs. Strickland.

If, within seventeen calendar days, a remittitur be entered in keeping with this opinion, the judgments are affirmed as reduced. Otherwise, the case will be reversed and the entire cause will be remanded for a new trial.

Modified and affirmed on Entry of Remittitur.

Johnson, J., dissents as to remittitur.