On Rehearing

Strutz, Judge.

The City of Fargo filed a petition for rehearing, contending that the decision of this court in which we held that where private property is damaged for a public use, although no part of the property is taken, the City, which acquires the land, easements, and rights of way for the construction of such publish improvement, will be liable for any consequential damages resulting form such taking and improvement. A rehearing was granted and, on such rehearing, two points were argued by the City:

First, is the City liable for any damages where it acquires such property for public improvement to be constructed by the Federal Government, and where no part of the property claimed to be damaged was taken for such improvement; and

Second, if the City is liable, should the case be remanded to the district court for determination of damages?

We have considered these questions raised by the City, and we believe that the City is liable for any damages where it acquires property for public improvement[141 N.W.2d 734]

even though such improvement is to be constructed by the Federal Government. Our Constitution provides the private property shall not be taken "or damage" for a public use without just compensation. The City contends that, in this case, we have a Federal project and that Federal law authorizes the United States of America, through its Corps of Army Engineers, to construct a project of this kind if the needed lands are provided without cost to the United States. It point out that if the needed lands could not be obtained by the City by purchase, it became the duty of the Attorney General of the United States to acquire such lands by eminent domain proceedings, provided the City paid the cost of such acquisition and, further, paid the awards for lands so acquired.

We believe it is entirely immaterial that the United States has the authority to acquire the lands needed for this project by eminent domain. It must be conceded, we believe, that the project here under consideration was a public improvement and that the property taken was acquired for a public purpose, regardless of the method by which it was acquired. If the taking for a public purpose resulted in consequential damages, as herein defined, to neighboring property which was not taken, we believe such damage comes within the provisions of Section 14 of the North Dakota Constitution. Under the proceedings by which this property was to be acquired for public use, the City of Fargo was required to pay for its acquisition, whether such acquisition was by purchase or by the ercise of eminent domain conducted by the Federal Government.

This project was a public project for a public purpose. If the property of the plaintiffs, although not taken, was damaged thereby, the City, which under the terms of its agreement with the Federal Government was to pay for the acquisition of property for such public use, would be liable under Section 14 of our Constitution.

Thus, where the City acquires property for a public use and, as a consequence of such use, special damages are caused to adjoining property which is not taken, and the damages are such as are not sustained by the public or neighboring property owners generally, an action will lie against the City to recover such consequential damages, 29A C.J.S. Eminent Domain § 111, p. 450. Such property owner, in order to be entitled to recover, must establish that he has sustained special damages differing in kind and not merely in degree from those sustained by the public generally. Where the damage caused is common to all owners of property in the neighborhood, no recovery may be had. 18 Am.Jur., "Eminent Domain," Sec. 139, p. 765.

The City next contends that, since this case is here de novo, this court should assess damages, if any, to the plaintiffs under the record made in the trail of the case in the district court, and that the case should not be remanded to the district court for determination of damages.

The case was tried and evidence of damage submitted on the theory that the contractors who performed the work were liable for any damages suffered by the plaintiffs. Since we hold that contractors who make public improvements authorized by law, and who perform their work with care and skill, are not liable for damages to abutting property owners for consequential damages, and that such contractors are liable only for damages due to their negligence in the performance of their work, the damages which can be proved against the City might not necessarily be the same as those which might be proved for damages which are due to negligence of the contractors. The City would be liable only for consequential damages, and the proof of such consequential damages must be clear, strong, and convincing. The measure of damages for consequential injuries to property in such case would be diminution in market value of the property. 29A C.J.S. Eminent Domain § 141, p. 597.[141 N.W.2d 735]

We therefore hold that this case should be remanded for proof of damages, if any, suffered by the plaintiffs when such damages are proved under the foregoing rule. The trial court must determine what damages, if any, have been done to the property of the plaintiffs, as determined by the diminution of its value for rental and sale purposes.

For reasons stated above, we adhere to our former opinion.

Alvin C. Strutz
Harvey B. Knudson
Ralph J. Erickstad

Teigen, Chief Justice, dissenting.

I dissent for the reasons stated in my dissent to the original opinion.

Obert C. Teigen, C.J.William S. Murray, J., not being a member of the Court at the time of submission of this case, did not participate.