The instant appeal arises out of a dispute as to whether a circuit court can award attorney’s fees to a mortgagee of condemned property taken by eminent domain, under Arkansas Code Annotated § 18-15-605 (b) (Repl. 2003). Two years ago, we heard a previous appeal of the same matter in City of Fort Smith v. Carter,
The City of Fort Smith operates a water supply utility that accumulates water in Lake Fort Smith. In 2002, the City chose to acquire certain land in the area around Lake Fort Smith in an effort to expand the lake. One of the parcels to be acquired was a twenty-acre tract that was titled in the name ofJ.D. and Mary Lois Carter. Less than a year earlier, the Carters purchased the land from Lee and Patricia Hackler for the purchase price of $60,000. The Hacklers held a mortgage on the land to secure the Carters’ outstanding debt.
On April 3, 2002, the City filed a petition for order of immediate possession, under Arkansas Code Annotated § 18-15-409, and deposited a sum of $14,000 with the Crawford County Circuit Court. The circuit court entered an ex parte immediate order of possession, and the Hacklers and the Carters responded, arguing that the City’s valuation of the property at $14,000 was deficient. After a trial, a jury found that the reasonable value of the property was $30,000 and awarded compensation in that amount, plus interest. The Carters and the Hacklers then filed a motion for attorney’s fees under Arkansas Code Annotated § 18-15-605(b). The circuit court declined to grant an award pursuant to the statute, but found that the Carters and the Hacklers were entitled to an award under Rule 11 of the Arkansas Rules of Civil Procedure.
The City appealed the circuit court’s order to this court in City of Fort Smith v. Carter, supra. We determined that the City’s actions were not subject to sanctions under Rule 11, and then addressed the Carters and the Hacklers’ argument on cross-appeal. They contended that the circuit court erred in denying them attorney’s fees under section 18-15-605(b) because the term “corporation” in the statute applied to all corporations, including municipal corporations. The City disagreed, arguing that the statute only applied to private corporations. This court held the term “corporation” to be ambiguous, and construed the statute in favor of the landowners, pursuant to our well-settled rules
On remand, the circuit court held a hearing at which the Hacklers claimed they should be considered “land owners” under section 18-15-605 because as mortgage holders they had an interest in the title to the property. The City, however, argued that although the Hacklers had an interest in the property it was not an ownership interest in the context of the statute because the eminent-domain statutes did not contemplate that a mortgagee could be a landowner of property. The circuit court agreed with the Hacklers and entered an order awarding both the Carters and the Hacklers attorney’s fees. The City then filed the instant appeal challenging the circuit court’s order with regard to the Hacklers.
The instant case involves our interpretation of section 18-65-105. We review matters of statutory interpretation de novo. See CJ Building Corp. v. TRAC-10,
Act 1207 of 1995, Ark. Code Ann. §§ 18-15-601 through 18-15-607 (Repl. 2003 & Supp. 2007), was enacted to enable municipal corporations to expand their water supply facilities through eminent domain. A municipality may obtain an order of immediate possession of the property by filing a petition with the circuit court, in the county where the property is located, and depositing with the court a sum, which in its opinion, is the reasonable value of the property to be taken. See Ark. Code Ann. § 18-15-409(a)(2) (Repl. 2003). Ark. Code Ann. § 18-15-605 provides for an award of attorney’s fees in certain cases when a jury decides that the deposit made by the petitioning municipality is less than the reasonable value of the land. See id. Specifically, section 18-15-605 (b) states,
In the case of application for orders of immediate possession by the corporation or water association, if the amount awarded by the jury exceeds the amount deposited by the corporation or water association in an amount which is more than twenty percent (20%) of the sum deposited, the landowner shall be entitled to recover the reasonable attorney’s fees and costs.
Id. (emphasis added). The dispute in the instant case hinges upon the meaning of the term “landowner” in section 18-15-605(b).
The City argues that the term “landowner” describes the traditional view of a real property owner as the person who has title to the land and the possessory right to occupy the land. The Hacklers, on the other hand, contend that a mortgagee has legal title to the mortgaged property and is therefore a landowner for purposes of the statute.
By applying a plain reading to the term “landowner,” it is apparent that the term does not describe the Hacklers as mortgagees of the property. In Black’s Law Dictionary (8th ed. 2004), the term “landowner” is defined as “one who owns land.” Id. at 895. This definition of “landowner” does not contribute much to our analysis; however, the definition of the general term “owner”does lend to our inquiry. The term “owner” is defined as “one who has the right to possess, use, and convey something; a person in whom one or more interests are vested.” Id. at 1137. Moreover, in common parlance “owner” is defined as one who “possesses property.” Oxford American Dictionary 590 (2ded. 2001). Thus, it is clear that the common understanding of the term “landowner” is someone who is entitled to possess and convey land.
Our court has long held that despite the fact that a mortgagee has legal title to the mortgaged land, the mortgagee does not have absolute title thereto and does not have the right to possess the land until the mortgagor defaults on the mortgage. In Moore v. Tillman,
[A] mortgage of lands is not a conveyance thereof carrying the absolute and unrestricted title thereto. On the contrary, while a mortgage at law does carry the legal title, it is not, either at law or in equity, an absolute, unconditional, and indefeasible title. It becomes such only after the mortgagor has breached the condition of the mortgage and his equity of redemption has been foreclosed. In other words, while the legal title under the law does vest in the mortgagee, still this is only for the purpose of enabling him to obtain security for the satisfaction of the debt or obligation due him by the mortgagor; and, when that satisfaction is obtained, the legal title vests and remains in the mortgagor .... Thus, after all is said and done, a mortgage, in common parlance as well as legal acceptation, is an instrument evidencing a security for debt. . . .
The Hacklers cite our opinion in Bank of Oak Grove v. Wilmot State Bank,
Notes
In the instant appeal, the Hacklers make a res judicata argument, asserting that in the previous appeal this court determined that section 18-15-605(b) was applicable to the Hacklers as mortgagees. The Hacklers misread our holding in that opinion. While we determined that section 18-15 — 605 (b) did apply to municipal corporations and did decide that the Carters were “landowners” under the statute, we left the determination of whether the Hacklers, as mortgagees, were “landowners” to the circuit court on remand.