BEETSCHEN et al.
v.
SHELL PIPE LINE CORP.
St. Louis Court of Appeals. Missouri.
*68 Charles M. Spence, Harold I. Elbert, St. Louis, Thompson, Mitchell, Thompson & Douglas, St. Louis, of counsel, for appellant.
Henry C. Stoll, St. Louis, Joseph Nessenfeld, St. Louis, of counsel, for respondents.
HOUSER, Commissioner.
This is an action against Shell Pipe Line Corporation for damages claimed to have been sustained by the owners of a lot in the *69 City of St. Ann, St. Louis County, occasioned by the building and maintenance of a fence. A circuit court jury awarded plaintiffs $157.50 actual and $2,750 punitive damages. The pipe line corporation has appealed to this court, contending that plaintiffs and the court below misconceived the nature of this action as well as the proper amount of damages.
Plaintiffs' petition originally sought damages for the permanent appropriation of the right to fence. Approximately one month before going to trial plaintiffs amended their petition, alleging the erection of the fence "in violation of plaintiffs' property rights, depriving plaintiffs of the use of the rear ten feet portion of the lot", depreciation of and damage to plaintiffs' property and the use and enjoyment thereof by reason of the trespass, disturbance of the peaceable and quiet use and enjoyment of the property and that the actions of the defendant were "wilful, malicious, unlawful and in reckless disregard of plaintiffs' rights", praying for actual and punitive damages. By its answer the pipe line corporation admitted the erection and the continued maintenance of the fence and conceded that in a condemnation proceedings in federal court in 1928 it had given up the right to fence said easement, but claimed that the fence was permanent and that the plaintiffs must recover all of their damages in one action.
These are the salient facts: In a condemnation suit filed in federal court in 1928 defendant acquired a right of way 20 feet wide for a crude oil pipe line over what was then open farm land in St. Louis County but which recently has been sold off in lots and developed into a populous area. In the federal court proceeding the original petition was drawn in such manner that the company would have acquired not only subsurface rights but surface rights as well, including the right to fence. By way of amended petition, however, the condemnor reserved to the property owners the right to use and cultivate the surface of the strip, and expressly waived any right to fence the right of way, thereby obtaining only the subsurface right to install and maintain an underground pipe line and the right to re-enter the land solely for the purpose of maintenance and repair.
In 1948 the company determined that it was necessary to fence a portion of its right of way in the City of St. Ann for several hundred feet, including that part which constitutes the rear 10 feet of plaintiffs' lot. Counsel for the pipe line corporation investigated, saw the original (but not the amended) petition in the 1928 condemnation proceedings, and rendered an opinion that the company had the right to fence its easement. In the first part of December, 1949 without any prior notice to the property owners the fence was constructed at the boundary line of the easement, across the plaintiffs' lot, upon a line 10 feet north of the south boundary line of plaintiffs' property. The fence is of heavy steel wire 6 feet in height with a 12 inch angle arm designed for three strands of barbed wire. The posts are set in concrete. It is conceded by the pipe line corporation that no condemnation proceedings were instituted in 1948 to procure any further surface rights or the right to fence, and that plaintiffs have not granted the defendant any such rights.
On this appeal the pipe line corporation says that plaintiffs have only one action for the appropriation of the right; that plaintiffs must recover all their damages in the one action; that they cannot split their cause of action and recover in successive actions on the theory of a continuing injury; that respondents originally sued for a permanent appropriation of the right to fence, acquiesced in the taking, waived their right to have compensation assessed in advance, and at the last minute amended their petition to count on a theory of temporary trespass; that the measure of damages is the difference between the reasonable market value of the property before and after the appropriation of the right to fence (i. e. actual and not punitive damages); that this is a "reverse condemnation suit", i. e. a taking or appropriation of the right to fence by a corporation possessing the power of eminent domain; that in acquiring the right by trespass it damaged plaintiffs no more than if it had condemned the right in proper proceedings in *70 circuit court; that plaintiffs have been deprived of nothing except the right to have compensation paid before the seizure of the right; that the same measure of damages applies here that applies in condemnation proceedings; that R.S.Mo.1949, § 523.090, limits the damages to actual damages and excludes any element of punitive damages; and that there is no showing of any intentional doing of a wrongful act without just cause or excuse.
Contra, plaintiffs claim that they have pleaded and proved a temporary, abatable, continuing trespass in which they may recover both actual and punitive damages, and that they may maintain successive actions so long as the fence remains on the property; that diminution in the rental value of the premises represents the actual damages recoverable and that punitive damages may be awarded because there is legal malice coupled with wilful, admittedly wrongful trespass.
Granting that appellant could have obtained the surface rights, including the right to fence, in the original condemnation proceedings in 1928, or by the institution of condemnation proceedings in 1949, the fact remains that it did not do so, but on the contrary committed an act which it now acknowledges to have been a trespass. While conceding that it is a "technical" trespasser, appellant claims that it cannot be held to the same rule that governs trespassers generally. We rule, however, under the facts disclosed here, that a private corporation, invested by law with a portion of the sovereignty of the state in its grant of the power to exercise the right of eminent domain, is not thereby clothed with an immunity not possessed by others who trespass upon the property or rights of private citizens, and must answer for its trespasses in the same manner as any other trespasser. The statute, R.S.Mo. 1949, Chapter 523, § 523.010 et seq., gives the corporation the right to acquire rights in the property of private citizens by instituting condemnation proceedings according to a prescribed formula. Under the Constitution of 1945, Art. I, Section 26, private property cannot be disturbed nor can the proprietary rights of the owner therein be divested until the damages are ascertained and paid to the owner or paid into court for the owner. A corporation which ignores the statute and the Constitution and makes an entry upon the land of a private citizen without agreement with the owner or without having the damages appraised by commissioners is guilty of a wilful trespass. Cox v. St. Louis, M. & S. E. R. Co.,
In such case the aggrieved property owner has an election of remedies. He may proceed by way of injunction to restrain the installation, MacMurray-Judge Architectural Iron Co. v. City of St. Louis,
If he sues for damages, he may in a proper case proceed upon the theory of trespass and sue for actual damages, 30 C.J.S., Eminent Domain, § 400, page 118, and when the facts warrant it recover punitive damages, or he may waive the tort and sue for the compensatory damages to which he would have been entitled if condemnation proceedings had been instituted prior to the entry. Doyle v. Kansas City & S. R. Co.,
If he sues for the just compensation preserved to him by the Constitution for the taking of private property for public use, his theory is that of acquiescence in the taking, consent to the appropriation, and in that event he has but one action, in which he must recover all damages, past, present and prospective. Upon the payment of the judgment in such case the same right in the land is conferred upon the corporation as if it had condemned the land formally. Doyle v. Kansas City & S. R. Co., supra.
*71 In support of its contention that this is a "reverse condemnation" suit and that plaintiffs have waived the tort and sue only to enforce their constitutional right to just compensation, appellant cites the following cases: McReynolds v. Kansas City, C. & S. R. Co.,
The fact that plaintiffs originally framed their petition on the theory of permanent appropriation, in which status the petition remained for nearly a year, did not commit them irrevocably to that theory. They had the right to amend, and did amend, abandoning that theory, and proceeded to trial as for a temporary trespass. These facts constitute no acquiescence or waiver, as appellant claims.
Where the character of the trespass is such that it need not be permanent the landowner may maintain successive actions for the continuation of the trespass, each day giving rise to a fresh cause of action. Doyle v. Kansas City & S. R. Co., supra, 113 Mo. loc. cit. 286,
Appellant has consistently maintained that the erection of the fence was a permanent appropriation of the right to fence. The cases which appellant cites in support of the proposition that plaintiffs may not split their cause of action but must sue and recover all damages in one action, Tooker v. Missouri Power & Light Co., supra; McReynolds v. Kansas City, C. & S. R. Co., supra; Smith v. City of Sedalia,
See also Porter v. Kansas City & N. Connecting R. Co.,
Another factor which distinguishes the Tooker, McReynolds, Smith, etc. cases, supra, from the case at bar is the fact that in each of those cases the public convenience and welfare was involved; the right appropriated was indispensable for the original installation of a public utility providing the general public with new, beneficial facilities such as electric power transmission lines, railroads, water mains, etc., whereas the case at bar does not involve the appropriation of land for the purpose of installing and operating a public utility. That right was acquired long ago. The right sought to be seized here is merely an additional servitude, wholly incidental to the operation of the pipe line, which has been transporting oil and thus serving its public purpose for more than 20 years. In short, the element of public necessity, convenience and benefit is not present here.
Concerning R.S.Mo.1949 § 523.090, supra, it has long been held that the remedy provided by this section is not exclusive, Pratt v. Saline Valley R. Co.,
It is further urged by appellant that the trial court erred in permitting plaintiffs to testify to the depreciation of the rental value of their property from the date of the erection of the fence to the date suit was filed. The proper measure of actual damages in this case is the damage, if any, to the sod, vegetation and soil resulting from the physical trespass and the resulting depreciation in the fair and reasonable rental value of the property. DeSalme v. Union Electric Light & Power Co.,
Appellant's contention that the judgment should be reversed for error in permitting plaintiffs' neighbors to give in evidence their opinions that the fence had depreciated the rental values of their respective properties is resolved against appellant. Although it was error to receive opinion evidence that rental values of similarly situated and similarly constructed properties were depreciated by the building of the fence, the error was harmless because the evidence pertained only to the amount of actual damages. Appellant does not complain that the amount of actual damages awarded (the sum of $157.50) was excessive, if the measure of damages employed was proper. Furthermore, the amount awarded is consistent with the evidence given by the plaintiffs, to which exception has not been taken; the amounts testified to by the other witnesses did not vary from the amounts testified to by plaintiffs; and, as respondents point out, the damage instruction upon which the case was submitted to the jury clearly confined the jury to the depreciation in *73 the reasonable rental value in the use of plaintiffs' property.
Appellant claims that there is no basis for an award of punitive damages; that the officers and agents which committed the trespass in September, 1948, had no knowledge of the amendment to the petition in the condemnation proceedings in 1928 in which the right to fence was specifically excluded from the rights the appellant acquired; that before building the fence they made a reasonably diligent search to ascertain their rights and installed the fence in good faith, in the honest belief that the fence was lawful only after legal clearance by a competent lawyer; that the inference of knowledge on the part of the corporation cannot be drawn; that there was no showing that the officers who authorized the erection of the fence knew about the amended petition in the 1928 condemnation suit; and that immediately upon learning that an amended petition had been filed therein the corporation stopped work on the fence.
On the other hand, respondents point out that the knowledge of the express reservation of surface rights to the landowner and the specific exclusion of the right to fence the right of way, possessed by the agents of the corporation in 1928, was the knowledge of the corporation; that the knowledge of one set of agents and officers in 1928 is the knowledge of a different set of agents and officers in 1948 on the theory that when a corporation acts it does so in the possession of the composite knowledge which comes to it through its various agents and officers through the years. Respondents conclude that the corporation, knowing it had no right to fence, nevertheless intentionally built the fence unlawfully and without any just cause or excuse, and that the corporation therefore should pay punitive damages because it is guilty of "legal malice".
There is no doubt that punitive damages may not be awarded unless there is a showing of malicious, wilful, intentional or reckless injury, State ex rel. Kurn v. Hughes,
We have concluded that plaintiffs made a case for an award of punitive damages based on legal malice.
A corporation, being an artificial entity, a mere creature of the law, cannot think, speak or act otherwise than by and through the thoughts, speech and action of human beings. Hannibal Inv. Co. v. Schmidt, Mo.App.,
Appellant, however, claims that because of the change in the personnel of its officers and agents in the course of the years the corporation should be excused from the legal effects of its previous knowledge. We hold that appellant having once been charged with the legal effects of actual knowledge of its limited right to enter the land of respondents, continued to be possessed of such knowledge regardless of the changes which may have occurred during the years in the personnel of its officers in charge of the land department or in the identity of its right of way officials.
The Supreme Court of the United States stated the rule in this language in Mechanics Bank of Alexandria v. Seton,
The Supreme Court of North Carolina, in Baker v. Atlantic Coast Line R. Co.,
In United States Nat. Bank of Holdrege v. Forstedt,
See also Baird v. New York Cent. & H. R. R Co.,
It is argued, however, that before a corporation may be held liable for punitive damages the act complained of must have been such as to render the servant or agent himself personally liablethat the agent or officer who committed the wrongful act must have been chargeable with legal or actual malice; that the officers in 1948 who directed the erection of the fence had no knowledge of the previous limitation on the corporation's rights of entry, could not be held personally liable, and that, therefore, the corporation may not be held liable. In the cases cited: State ex rel. United Factories v. Hostetter,
In the argument of the case reference was made to State ex rel. John Hancock Mut. Life Ins. Co. v. Hughes, Mo.Sup.,
In the case at bar there is no question that a trespass was committed. It is acknowledged that the building of the fence was wrongful. Where a corporation is actually aware of its limited right to enter land, and with such knowledge it directs the commission of acts which constitutes a trespass in violation of that right, there is a basis for an award of punitive damages. There was sufficient competent evidence in this record to justify the submission to the jury of the question whether appellant "knew it had no right to build and maintain said fence and gate at the time it caused same to be built, and did so without just cause or excuse and with a reckless disregard of plaintiffs' property rights."
Finally, it is urged that the award of punitive damages in the sum of $2,750 is grossly excessive. Bearing in mind that this is not a case of actual malice but of "legal" malice only, the character of the injury, the mitigating and extenuating circumstances of the case, the shortness of the period for which this recovery imposes punishment (3½ months) and the other elements necessary to be considered in reviewing an award of exemplary damages, we have concluded that the award is out of proportion to the degree of wrong involved, and that the maximum amount of punitive damages which the substantial evidence will support is the sum of $500.
The Commissioner accordingly recommends that if plaintiffs will, within 15 days, remit the sum of $2,250 the judgment of the circuit court will be reversed and the cause remanded with directions to the circuit court to enter a new judgment in favor of plaintiffs and against defendant in the sum of $657.50 with interest at six per cent from the date of the original judgment; otherwise the judgment will *76 be reversed and the cause remanded for a new trial upon the limited issue of whether plaintiffs shall recover punitive damages and if so in what amount.
PER CURIAM.
The foregoing opinion of HOUSER, C., is adopted as the opinion of the court.
The judgment of the circuit court is accordingly, reversed and the cause remanded in accordance with the recommendation of the Commissioner.
BENNICK, P. J., and ANDERSON and HOLMAN, JJ., concur.
Order to Transfer.
PER CURIAM.
In accordance with the provisions of Article V, Section 10, Constitution of 1945, and of Rule 2.06 of the Supreme Court, the Court of its own initiative, after opinion and during the pendency of motions of respondents and appellant for a rehearing, or, in the alternative, for a transfer of the cause to the Supreme Court, doth order that this cause be and the same is hereby transferred to the Supreme Court because of the general interest and importance of the question involved in the cause.