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United States v. Certain Land

September 24, 1963


Author: Biggs

Before BIGGS, Chief Judge, STALEY, Circuit Judge, and STEEL, District Judge.

BIGGS, Chief Judge.

This is an appeal from an order of the court below entered January 14, 1963, denying a motion of the appellant, Three Hundred Straight Street, Inc., (Three Hundred), the former owner and mortgagor of certain real estate in the City of Paterson, New Jersey, taken by the United States by condemnation proceedings. The motion was to alter or amend an order entered by the same court on October 18, 1962, awarding interest on the mortgage debt to the time of payment to Benjamin Eastwood, Jr. and others, assignees trustees (Trustees) of the mortgage.

On December 4, 1961, the United States commenced a condemnation proceeding in the court below to take land owned by Three Hundred. As provided by 40 U.S.C.A. § 258a,*fn1 the United States filed a "Declaration of Taking" on the same day and on December 5, 1961 deposited with the court $450,000. as the estimated just compensation for the condemned property. Three Hundred was made a party to the proceedings as were various other interested parties but, by an oversight, the Trustees were not made parties to the proceeding. Apparently they did, however, have actual notice of it. On January 22, 1962, the court below entered an order for delivery of possession to the United States. On January 26, 1962, possession was duly transferred to the United States.

On March 8, 1962, Three Hundred moved for an order authorizing the withdrawal of $298,768.36 from the registry. This sum represented the difference between the total amount on deposit, $450,000. and the outstanding principal of the mortgage debt, viz., $151,231.64. On March 9, 1962, the Trustees appeared in the action and moved for an order permitting the withdrawal of the amount of the mortgage principal with interest at the contract rate of 5% per annum from January 1, 1962, to the time of payment.*fn2

On March 26, 1962, a hearing was held on the two motions. Counsel for Three Hundred and counsel for the Trustees were present. An attorney representing the United States was also present. Three Hundred objected to the Trustees' claim for interest.*fn3 It was agreed, however, to postpone argument on the interest issue to a later date and to withhold payment of the contested sum until determination of the question. The contesting parties were in agreement respecting the allocation and distribution of the remainder of the fund, but it was not until June 6, 1962 that an order was entered authorizing payment of this amount from the registry.

Three Hundred asserts that the United States was responsible for this delay because it refused to consent to distribution until a security bond had been posted to cover any possible deficiency judgment. The record supports this contention to some extent.*fn4 The court below never made a specific finding on this point. Findings of fact, however, were not necessary for the disposition of this appeal as will hereinafter appear.

On June 22, 1962, the Trustees moved for the withdrawal of the sum of $3,381.65 representing 5% interest on the principal balance of the mortgage debt from January 1, 1962 to June 11, 1962.*fn5 A hearing was held on this motion, resulting in an order filed on October 18, 1962, granting the movants the relief sought, and a brief letter opinion from the district judge. In this letter the judge stated that inasmuch as the Trustees had not been notified of the proceedings they could not have been expected to apply for payment sooner than they actually did. The court expressed the view that ordinarily an application for payment would be sufficient to stop the running of interest but that this rule should not apply where as here the application had been opposed by Three Hundred to the extent of the interest claim, resulting in delay. The court concluded that the Trustees had acted with "due diligence and dispatch" and under the circumstances it was "just and equitable", within the meaning of that phrase as used in 40 U.S.C.A. § 258a, that they be awarded interest to the time of payment. The court bottomed its decision on United States v. Certain Lands in Borough of Brooklyn, 129 F.2d 577 (2 Cir., 1942), to the effect that a mortgagee was entitled to interest on the principal sum to the date of payment as opposed to the day when title vested in the United States, here December 5, 1961.

On October 29, 1962, Three Hundred filed a timely motion under Rule 59(e), Fed.R.Civ.Proc., 28 U.S.C.,*fn6 to alter or amend the order of October 18, 1962. At the hearing on this motion Three Hundred asserted (1) that the United States was responsible for the long delay between the hearing of March 26, 1962, and the entry of the withdrawal order on June 6, 1962, and that therefore the Government should bear an interest burden on the whole fund for this period and (2) that, as between Three Hundred and the Trustees, the court should decree that the running of interest cease as of March 26, 1962. The court dismissed summarily the contention that the United States should be charged with interest for this period and this issue is not raised on this appeal*fn7 and is therefore not before us.*fn8 The court below took under advisement, however, Three Hundred's contention that it should not be liable for interest after March 26, 1962 because of the delay. By a letter opinion, filed on December 4, 1962, the district judge denied Three Hundred's motion stating only that the record indicated that argument on the interest issue was postponed through the joint consent of Three Hundred and the Trustees. An order in accordance with this letter was filed on January 14, 1963. Technically, this is the order appealed from.

A preliminary question concerning our jurisdiction must be determined, though not raised by the parties. This appeal has been taken from the order of January 14, 1963, denying the motion under Rule 59(e), Fed.R.Civ.Proc., 28 U.S.C. to alter or amend the previous order of October 18, 1962 rather than from that order itself. But the order of January 14, 1963 is not appealable, the dispositive action of the court being embodied in the October 18th order. See Bass v. Baltimore & O. Terminal R. Co., 142 F.2d 779 (7 Cir.), cert. denied, 323 U.S. 775, 65 S. Ct. 135, 89 L. Ed. 619 (1944). Cf. Greenwood v. Greenwood, 224 F.2d 318 (3 Cir., 1955).

The fact that Three Hundred appealed from the wrong order, however, does not deprive us of jurisdiction. Where it is clear that a party has simply made an inartificial attempt to obtain review of a prior judgment or order, courts have accepted the appeal under the doctrine of harmless error and treated the appeal as if taken from the original and correct order. See Greenwood v. Greenwood, supra; Milton v. United States, 120 F.2d 794 (5 Cir., 1941); 6 Moore, Federal Practice, 2d ed. 1953, pars. 59.15[1] and [4]. The circumstances at bar present such a situation. An examination of the issues involved clearly reveal an intent on the part of Three Hundred to attack the original order. We therefore treat the present appeal as if arising from the order of October 18, 1962.

The Trustees contend, however, that even if the appeal be so treated, it is not timely. This is an erroneous contention. Rule 73(a) provides a period of sixty days for an appeal by any party in any action in which the United States is a party. Three Hundred's timely motion under Rule 59(e) suspended the finality of the order of October 18, 1962 until January 14, 1963, the date when the order denying the motion was entered. It follows that the appeal filed on February 11, 1963 was within the time limit provided by Rule 73(a).

We turn next to a consideration of the present appeal on the merits. Section 258a, Title 40 U.S.C.A., provides the United States with an optional step for condemnation proceedings as follows. At any time before judgment on the issue of valuation the United States may file a "Declaration of Taking" and deposit in court the estimated just compensation for the premises to be condemned. On compliance with these two steps, title and immediate right to possession vest in the United States. The United States is not chargeable with interest on that part of the property taken which is covered by the deposit.*fn9 The statute further provides: "Upon the application of the parties in interest, the court may order that the money deposited in the court, or any part thereof, be paid forthwith for or on account of the just compensation to be awarded in said proceeding."*fn10 The section concludes with the sentence which is the focal point of the present controversy: "The court shall have power to make such orders in respect of encumbrances, liens, rents, taxes, assessments, insurance, and other charges, if any, as shall be just and equitable."

The statute therefore confers broad discretion on a United States district court in the situation at bar. We need not define the exact bounds of this discretion. It is sufficient to state here that the reviewing power of this court is sharply limited. The order in question must be permitted to stand unless there has been an error of law or the perpetration of injustice. Was the order of October ...

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