Superior Construction Co. v. Elmo

Sobeloff, C. J., delivered the opinion of the Court. This suit was filed in the Circuit Court of Baltimore City by the appellees, owners of 1121 Overbrook Road, who occupied it as their home. It is situated on the Baltimore County side of the boundary line between Baltimore County and Baltimore City. The bill prayed an injunction against the appellant corporations and claimed damages for injury to the appellees’ property caused by the debris, mud, and silt continually deposited on the appellees’ property as a result of the appellants’ large building operations on contiguous land in Baltimore City.

The Chancellor found that the appellees were entitled to injunctive relief and, in addition, granted both compensatory and punitive damages. From the award of damages, the appellants appeal. They contest the jurisdiction of the Circuit Court of Baltimore City to award damages with respect to land in Baltimore County and they dispute the measure of damages adopted by the Chancellor. The appellees’ property consists of a rather large lot improved by a dwelling.

A small stream ran through the rear of the property. The appellants’ land sloped downward toward the stream which flowed through the low valley formed by the slope of the appellants’ property on one side and the appellees’ property on the other. Prior to the events complained of the appellants’ property was covered with natural soil, sod and underbrush, and had trees on it. There was a gentle natural flow of water that came down the incline.

In the course of the appellants’ building operations, begun early in 1952 as a part of their plans for the erection of dwellings on a tract of some twenty-four acres, they cleared the protective growth and sod from their property and excavated and filled so as to materially increase the slope of the hill leading down to the stream. The Chancellor found, ⁶ “The flow of the water in its natural state has also been changed to the extent that the flow is quite different from what it formerly was. Formerly it was rain water that trickled down on the site through the underbrush, but now it has been converted into water that comes down from raw earth that has been piled on the defendant’s land adjacent to the plaintiff’s property very much higher than the elevation that previously existed, and as a result, in a hard rainfall this dirt is washed down and stones could be washed down if there were any stones there, and it forms mud and silt on the plaintiff’s property.” The Chancellor also found that appellants “intentionally and negligently dumped the entire load of excess drainage from its building operations” on appellees’ property, and that the appellants “took no measures to alleviate in any degree the damage.” The appellees were forced to move from the property in July, 1952, and it was thereafter vacant at least until the hearing. I. Appellants concede that an equity court of Baltimore City had the power to grant injunctive relief; but on the question of damages they contend that it was without jurisdiction because the property is situated in Baltimore County.

They maintain that this is a local, as distinguished from a transitory, action and that it may properly be brought only in the County, court. Appellees’ answer is that appellants’ contention challenges only the venue and that by their failure to make timely objection in the trial court to the bringing of a local action in a forum other than that of the situs of the subject matter they have waived the point. The distinction between local and transitory actions still exists in Maryland, and equally well settled is the rule that an injury to real estate is local and not transitory, as the cause of action could not have originated in any other place. Patterson v. Wilson, 6 G. & J. 499 ; Ireton v. Mayor and City Council of Baltimore, 61 Md. 432, 434 ; Crook Pitcher, 61 Md. 510 ; Gunther v. ⁷ Dranbauer, 86 Md. 1; Guest v. Commissioners of Church Hill, 90 Md. 689, 696 ; Gusdorff v. Duncan, 94 Md. 160 ; Mayor and City Council of Baltimore City v. Meredith’s Ford and Jarrettsville Turnpike Co., 104 Md. 351 ; Phillips v. Mayor and City Council of Baltimore, 110 Md. 431, 433 .

The fact that the legislature deemed it necessary to enact Article 75, Section 160, 1951 Code (enacted in its present form by Acts of 1916, Chapter 617) to give jurisdiction under certain circumstances to a court sitting in a county (or Baltimore City) other than where the damaged real property is located strongly suggests recognition and continuing approval of the general rule that damages to real estate can be redressed only where the land lies. Poe thus outlines the laying of venue in local actions in Maryland: “In the case of trespass to real property, where the party committing it shall remove from the county where the property lies, or can not be found in such county, suit may be brought against him in any county where he may be found [Art. 75, Sec. 160, 1951 Code] ; but in all other cases the test of the jurisdiction is the situs of the property; and the venue must be averred and averred truly. If the declaration fails to allege the jurisdictional fact of the locality of the land, the defect may be availed of on demurrer.” 1 Poe, Pleading and Practice at Law, Sec. 728. The proper mode of taking advantage of a defect in the averment that the real estate is located within the jurisdiction of the court in which the suit is brought would seem to be, in Maryland, by appropriate action in the trial court.

Otherwise, the defect will be cured after verdict. On this very point, Crook v. Pitcher, supra, stated, in holding that the trial court had improperly overruled defendant’s demurrer: “Where the action is local, and the suit is brought in another place, the proper mode of taking advantage of the defect is by demurrer, and unless the defendant demurs, the defect will be cured by the Statute of Jeofails, 16 & 17 ⁸ Car. II;” See also 2 Alexander’s British Statutes (Coe’s Ed.) .659 fn. The rationale of the language quoted is that the distinction between local and transitory actions does not touch the jurisdiction of a court but only determines the particular manner in which the jurisdiction should be exercised.

British South Africa Company v. Companhia de Mocambique, (1893) A. C. 602, 619. While there is a minority view to the contrary, the rule in most jurisdictions is as above stated. 22 Encyclopaedia of Pleading and Practice 815, and cases there collected. Our holding is that the Maryland rule is correctly stated in Crook v. Pitcher, supra, and that the decree cured any defects of venue. See Art. 5, Sec. 41, 1951 Code.

We expressly avoid any intimation of our views had appellants made a timely objection to the authority of the trial court to adjudicate the issue of damages.

II

The Chancellor’s decree awarded the appellees the total amount of $4,397.50. The Chancellor broke down his award into three distinct elements of damage: (1) the cost of restoration, $2,760.00; (2) the loss of use of the property, $637.50, which figure was arrived at by multiplying the minimum rental value of the property in its undamaged condition ($75.00 per month) by the 8-1/2 month period from July, 1952, when the appellees moved out, to the date of the last hearing, March 16, 1953; and (3) punitive or exemplary damages in the amount of $1,000.00 in addition to the compensatory damages. The appellants claim error in the assessment of each of these elements of damage. With respect to the award of compensatory damages, appellants urge that a court of equity may not assess a greater measure of compensatory damages than the difference between the “before” and “after” value of ⁹ the property when the cost of repairs to real property is greater than that difference; that in the case at bar the only testimony before the Chancellor indicated that the cost of restoration exceeded the diminution in value; and that, in any event, no award based on a loss of rent should have been allowed.

The Restatement of Torts, Sec. 929, gives as the measure of damages for harm to land from past invasions : “Where a person is entitled to a judgment for harm to land resulting from a past invasion and not amounting to a total destruction in value, the damages include compensation for (a) at the plaintiff’s election i. the difference between the value of the land before the harm and the value after the harm or the cost of restoration which has been or may be reasonably incurred, or ii. if a separable portion of the land has been damaged, the loss in its value, and (b) the loss of use of the land and (c) discomfort and annoyance, in an action brought by the occupant.” Comment (b) further explains: “. . . If, however, the cost of replacing the land in its original condition is disproportionate to the diminution in the value of the land caused by the trespass, unless there is a reason personal to the owner for restoring the original condition, damages are measured only by the difference between the value of the land before and after the harm. This would be true, for example, if in trying the effect of explosives, a person were to create large pits upon the comparatively worthless land of another. “On the other hand, where a building such as a homestead is used for a purpose personal ¹⁰ to the owner, the damages ordinarily include an amount for repairs, even though this might be greater than the entire value of the building. So, where a garden has been maintained in a city in connection with a dwelling house, the owner is entitled to recover the expense of putting the garden in its original condition even though the market value of the premises has not been decreased by the defendant’s invasion.” We do not think the Maryland law differs materially from the rule set forth in the Restatement.

In Fine v. Beck, 140 Md. 817 , which involved a house damaged by fire between the date of the trustee’s sale and ratification, this court said, “In actions of tort for injuries to real property the rule in Maryland is: Where the damaged property can be restored to the condition it was .in before the injury, without cost disproportionate to the real injury, the cost of such restoration is the measure of damages. But where that is impracticable, then the difference between the value of the property before and after the injury is the correct measure. Brown v. Werner, 40 Md. 15 ; Consolidated Gas Co. v. Getty, 96 Md. 683 ; Piedmont Coal Co. v. Kearney, 114 Md. 496 ; Mullan v. Belbin, 130 Md. 313 .” The rule takes a slightly different emphasis when the injury to a building renders it only of salvage value. Mullan v. Hacker, 187 Md. 261 , dealt with a concrete block garage that sustained, due to the defendants’ acts, a moving of the north wall three or four inches out of plumb, a cracking of the wall and a falling in of the roof.

Judge Delaplaine said for this court: “There is no question that the measure of damages for property is the cost of restoring it, if it can be restored to the condition it was in before the injury without cost disproportionate to the injury; but where the cost of restoring is greater than diminution in the market value, the correct measure is the difference between the value of the property before the injury and after.” ¹¹ In the most recent case, Levi v. Schwartz, 201 Md. 575 , the cost of restoration of a lawn by building a retaining wall was allowed. Thus, we will not set aside the Chancellor’s award of the cost of restoration unless it was disproportionate to the diminution in value. The Chancellor’s finding was, “The damage to the plaintiff’s property is of a temporary nature, and the cost of restoration is not disproportionate to the difference in value before and after.” This finding is supported by the estimates of Messrs. Cox and Bradshaw, two experienced real estate appraisers who submitted reports at the request of the Chancellor, that the diminution of value was $2,916.30 and $3,253.00,- respectively.

The trial court accepted Bradshaw’s estimated cost of restoration of $2,760.00. Appellants point to testimony of Mr. Bradshaw, on cross-examination, that they interpret as stating that the actual depreciation of the property in terms of market value was practically the same as his estimate of the cost of restoration or “probably less.” This testimony, in the light of the whole record, or even standing alone, would not justify us in setting aside this element in the Chancellor’s award of damages, for even if restoration cost slightly more than the diminution in value it does not appear disproportionate under the circumstances.

III

We think that the Chancellor did not exceed his power in awarding in addition $637.50 damages to the appellees for the loss of use of their property. This is one aspect of the compensatory damages set forth in Sec. 929 of the Restatement of Torts, quoted above. Comment (f) adds, “In addition to damages for the diminution of the value or other similiar elements of damage, the plaintiff is entitled to recover for the past or prospective loss of use caused by the defendant’s wrong as far as this has not been included in the other elements of damage awarded to the plaintiff as stated in Sec. 931.” The cited section indicates that the land ¹² owner is entitled to the rental value of the land even though he has suffered no harm through the deprivation as where he was not using the land at the time of the injury. See also 25 C. J. S. Damages, Sec. 84.

It has been held by this Court that when personal property has been damaged, recovery is not limited to the cost of repair but may include the value of the use of the property during the time that it would take to repair it. Fisher v. City Dairy Co., 187 Md. 601, 603 . We perceive no reason for a different rule when the injury is to real property. Commissioners of Aberdeen v. Bradford, 94 Md. 670 .

Cf. Lurssen v. Lloyd, 76 Md. 360 . While the landowner is entitled to but one satisfaction, he is entitled to have that satisfaction complete. When the landowner is deprived of occupancy and suffers the loss of rental value, complete satisfaction must take account of the loss of personal enjoyment and use, independently of and beyond the difference in market value or cost oí restoration.

Mayor and City Council of Havre de Grace v. Maxa, 177 Md. 168, 182 . The case relied on by appellants, B. & O. Railroad Co. v. Kahl, 124 Md. 299 , may be distinguished in the very words of the case: “. . . when that depreciation (in the value of real property) has been ascertained by using the rental value as a basis it represents the whole damages to which the plaintiff is entitled, and it would be manifestly unjust to super-add the loss of rent as an independent, and additional element of damages, as was done by the plaintiff’s third prayer.” Appellees in this case are entitled to compensation for the loss of use of their property.

IV

The final element in the award was $1,000 as punitive or exemplary damages. Appellants contend that the Chancellor had no power to make this award. , The appellees counter, first, with Rule 9 of the Rules of the Court of Appeals, urging that appellants, not having made this objection below, cannot press it here. ¹³ Rule 9 incorporates verbatim the language of Art 5, Sec. 10, 1951 Code, which states, “In no case shall the Court of Appeals decide any point or question which does not plainly appear by the record to have been tried and decided by the Court below.” The appellees say that the Chancellor’s written memorandum on damages was submitted to counsel several days before the decree was signed and that appellants’ failure then to raise objection to the allowance of punitive damages on the ground of lack of equity’s power to award them is a bar to the objection in this Court. We are of the opinion, however, the appellees’ contention seeks to overextend the requirements of Rule 9 and Art. 5, Sec. 10, and that appellants were not under obligation when they received the Court’s memorandum to make special objection to the item for punitive damages. The memorandum states the well considered opinion of the Chancellor on the question of damages, after he had the benefit of an extensive hearing on that point.

Moreover, as the hearing had concluded and the distribution of the written memorandum was an informal courtesy, it is not apparent how the appellants came under an obligation at that point to except specifically to the award of damages or any item in it. Finally, Art. 5, Secs. 40, 41, 1951 Code, provide that on an appeal from a court of equity, no objection to the jurisdiction of the court, the competency of a witness, the admissibility of evidence, the sufficiency of the averments of the bill or petition, or to any account stated and reported in said cause shall be made in the Court of Appeals, unless it shall appear by the record that such objection was made by exceptions filed in the court from which such appeal shall have been taken. This leads to the conclusion that Rule 9 and Art. 5, Sec. 10, governing appeals from both law and equity, are not intended to bar review in the absence of an objection to a memorandum giving the reasons for a decree but rather are meant to deal with situations that may be objected to at the hearing. ¹⁴ In respect to the merits of the allowance, the question of the power of a court of equity to award punitive or exemplary damages has never been squarely decided in Maryland, although there have been expressions in various cases more or less pertinent to this issue. The Court desires further briefs and arguments on this point.

Decree affirmed except as to allowance of punitive damages; reargument ordered on the question of punitive, damages only; costs to be paid by appellants. On Reargument The cause was reargued before Bruñe, C. J., and Delaplaine, Collins, Henderson and Hammond, JJ. Hammond, J., delivered the opinion of the Court. In this case, the complainants sought and secured an injunction against further trespass to real property, as well as an award by the Chancellor of full compensatory damages, and of $1,000.00 as punitive damages.

In an opinion heretofore filed, we affirmed the decree except as to the allowance of punitive damages, ordering reargument on that point. It is conceded that the facts are such as would justify an award of punitive damages by a jury, if the case had been tried at law. The only question now to be determined is whether equity has inherent power to grant punitive damages, as incidental relief, as admittedly it has in case of compensatory awards. The Restatement, Torts, delineates the two.

Compensatory damages are: “. . . the damages awarded to a person as compensation, indemnity or restitution for harm sustained by him.” (Section 903). Punitive damages are those: “. . . other than compensatory or nominal damages, awarded against a person to punish him for his outrageous conduct.” (Section 908). Compensatory damages are ¹⁵ recoverable not only where they can be measured precisely but where the trier of the facts must, to the best of ability, estimate the harm which the one wronged has suffered; for example, for pain and suffering. The amount of compensatory damages may reflect the motive of the wrong-doer, and where the motive is bad in law, be increased without changing its character and becoming punitive.

If one is entitled to judgment for conversion of a chattel, he may recover compensatory damages greater than the value of the thing taken; for example, its market value as a product manufactured or improved by the taker. Restatement, Torts, Section 927. The liability of an innocent taker of minerals from the land of another ordinarily is measured by the value of the thing taken “in place”; that is to say, in the ground. The wilful pilferer must pay the value of the mineral when ready for market, or even the amount of the proceeds received by the wrong-doer, without recompense for the cost of labor and expenses.

Mt. Savage George’s Creek Coal Co. v. Monahan, 182 Md. 654 , and cases cited; and Article 75, Section 98, Code (1951). These enhanced damages are generally held to be compensatory, not punitive. In addition, where the trespass is wilful, punitive damages may be recovered also.

Often, by statute, double or treble damages are made payable to a wronged one and such damages are held to be punitive. Cross v. McClenahan, 54 Md. 21 ; Porter v. Warner Holding Co., 328 U. S. 395 , 90 L. Ed. 1332 . Failure to distinguish between compensatory damages, although they take into account elements not susceptible of accurate measurement and may be enlarged because of motive or intentional violation of a legal duty, and true punitive damages, has caused some confusion as to what the cases have held, in that enlarged compensatory damages are either actually treated as, or later are thought to have been treated as, punitive. In the case at bar, there is no difficulty.

Full compensatory damages were awarded. The extra $1,000.00 which the ¹⁶ Chancellor awarded was intended as, labelled as, and admittedly is entirely punitive in character. The appellees say that since, admittedly, equity may award compensatory damages as incidental relief, it is entirely reasonable, and consistent with established principles, that it grant full relief in a proper case by awarding punitive as well as compensatory damages. They admit that the weight of authority is against their position, but say that the cases upon analysis show sucn a lack of reason and logic as make their holdings without real weight, and not to be followed.

The reply of the appellants is that, historically and consistently, equity has refused to enforce penalties or forfeitures, that punitive damages are concededly penal in nature and inconsistent with equitable principles, which are ex