Case Title: State Highway Com. v. Bailey

Citation: 212 Or. 261, 319 P.2d 906

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1957-12-31T00:00:00Z

Document:
Reversed and remanded December 31, 1957.
*264 Frederick A. Morgan, Jr., Assistant Attorney General for Oregon, argued the cause for appellant. With him on the brief were Robert Y. Thornton, Attorney General for Oregon, C.W. Enfield, Assistant Attorney General and Chief Counsel for Oregon State Highway Commission, and Leonard I. Lindas, Assistant Attorney General for Oregon.
J.B. Bedingfield, of Coos Bay, argued the cause for respondents. With him on the brief were J.B. Bedingfield, Jr., and Bedingfield, Grant & Bedingfield, of Coos Bay.
Before PERRY, Chief Justice, and ROSSMAN, BRAND and McALLISTER, Justices.
REVERSED AND REMANDED.
*265 BRAND, J.
This is an action brought by the State of Oregon by its Highway Commission against Kate L. Bailey, Leslie Zumwalt and Mary Eleanor Zumwalt, husband and wife, and Bernard I. Mather and Alice A. Mather, husband and wife, to condemn land required for a limited access highway. Judgment was entered on a verdict for defendants for $22,000.00 plus interest, and plaintiff appeals. The plaintiff Highway Commission assigns as error the order of the trial court in allowing defendants' motion to strike plaintiff's further and separate reply which alleges purported special benefits to be set off against the damages arising from the condemnation and which order also excluded any evidence in support of those allegations. The contention of defendant is that that reply alleges only general and not special benefits to defendants and that general benefits cannot be set off against damages. The bill of exceptions is sufficient to raise this issue, but it does not bring up the evidence. Our question is whether evidence which would support the reply would have been admissible.
The sufficiency of the complaint is not challenged. It describes the boundaries of the defendants' lands and of the proposed throughway which bisects said lands, and it defines the location and extent of rights of access and passage accorded to the defendants. The answer sets up the claims of damage by reason of the limited access character of the taking, the loss of use of certain portions of an old county road, the resulting necessity to build fences and barns, and the inconvenience caused by the taking. The value of the land taken is alleged to be $17,000 and the reduction in value of the remaining lands not taken is set at $10,000.
*266 The separate reply which was stricken by the court reads, in part, as follows:
The prayer of the reply is that the special benefits to the remaining lands be determined by the jury.
It will be recalled that paragraph "V" of the reply incorporated paragraph "V" of the amended complaint with regard to the rights of access. The allegations of paragraph "V" of the amended complaint are substantially as follows:
The amended complaint also provides:
Perhaps we should amplify our statement as to the defendants' motion to strike the separate reply.
The bill of exceptions certifies that the motion was made in chambers after the jury had been selected and sworn and before the opening statements. Counsel said:
*273 Counsel then said:
The court said, "The motions will be allowed." It was agreed that the court's rulings should be considered as though they were made at the proper time during the trial.
We are of opinion that the issue as to the admissibility of evidence which would support the allegations of the reply is before us for decision. Attention is called to the allowance by the court of the second motion to exclude all testimony in proof of facts alleged concerning special benefits.
1. In their brief defendants assert and we agree that
Our agreement, however, is limited to the statement that special benefits need not be pleaded and are admissible on the issue of damages to the land not taken. In support defendants cite Oregon Central R.R. Co. v. Wait, 3 Or 91, and Willamet Falls C. & L. Co. v. Kelly, 3 Or 99, both of which were circuit court cases, and Oregon Central R.R. Co. v. Wait, 3 Or 428, decided in the Supreme Court. In all three cases the damages to the land not taken were alleged in the answer, and issue was joined by general denial only, yet the court considered the question of special benefits to be deducted *274 from damages. So too in Beekman v. Jackson County, 18 Or 283, cited by defendants, it was implied that special benefits, if proven, should be considered, and no reference was made to any duty of the part of the condemnor to plead them. See also, Horn v. Davis, 70 Or 498, 142 P 544. Defendants also cite Schmid v. City of Portland, 83 Or 583, 591, 163 P 1159, for the proposition stated in their brief supra. We agree that the Schmid decision is consistent with the asserted rule. The court said:
2. The court did not say that the burden of proof of special benefits was on the condemnor or that any duty to plead them was imposed upon it. The proper construction of the words quoted is that a defendant in a condemnation action must allege the value of the land taken and the damage (reduction in market value) to the remainder of the tract, and if the Highway Commission would show special benefits to reduce the amount of such damage it must go forward with the evidence, but the burden of proof of the amount of damage to the remainder of the tract is upon the defendants. Highway Commission v. Superbilt Mfg. Co., 204 Or 393, 405, 281 P2d 707; 2 Lewis, Eminent Domain, 3d ed, § 645, p 1114; 4 Nichols on Eminent Domain, *275 § 14.21[2], p 316. We also take note of the provision that
No reference is made in this section to any reply setting forth special benefits. We hold that it is unnecessary to plead them.
The rule as stated by the defendants to the effect that it was unnecessary for the plaintiff to allege special benefits in its reply, and the implication drawn therefrom that the reply was properly stricken does not, however, dispose of this case, for the court also held that evidence supporting the allegations of the reply, if offered, would be rejected. Under this ruling it is apparent that such evidence of special benefits as would have been admissible in support of the reply would have been excluded at the trial regardless of the presence or absence of any pleading alleging such special benefits.
3. We think it clear that the stipulation of the parties amounted to a waiver of any requirement that the plaintiff should make offers of proof of special benefits. The reply sufficiently indicates the desire of the plaintiff to present evidence of special benefits, and the order of the court, considered with the stipulation, sufficiently indicated that any offers of such evidence would be rejected. Both parties have presented the case on the theory that the issue for determination here is whether evidence of the benefits described in the reply was admissible as special benefits or whether they were only general in nature.
*276 The basis of defendants' claim for compensation is the constitutional provision that "Private property shall not be taken for public use, nor the particular services of any man be demanded, without just compensation; nor except in the case of the state, without such compensation first assessed and tendered; * * *." Constitution of Oregon, Article I, § 18; Harland v. Chandler, 208 Or 167, 175, 300 P2d 412. The statutory authority for taking and establishing state highways is found in ORS, chapters 366 and 374. Special reference is made to the following sections of ORS 366: 205, 220, 320(2), 340, 375(1), 380, and the provisions concerning the establishment of throughways or limited access highways to be found in ORS, chapter 374, §§ 005, 010, 030, 035, 055, 085 and 090. In the case at bar the proceeding is for the acquisition of a "throughway", which is defined as follows:
Under the express provisions of ORS 374.035(2) the resolution adopted in the case at bar constitutes conclusive evidence that the highway when constructed shall be a throughway "with all of the characteristics and incidents prescribed by and provided for in ORS 374.005 to 374.095." The provisions of ORS 374.055 are of special importance in the consideration of this case. We quote:
4. The Highway Commission takes a fee simple title to the land condemned. ORS 366.360; State Highway Com. v. Burk, 200 Or 211, 227, 295 P2d 783; State Highway Commission v. Efem Warehouse Co., 207 Or 237, 265 P2d 1101.
5, 6. Postponing the attempt to define special benefits and to distinguish them from general benefits, the question first arises as to the legal effect to be given to special benefits in the trial of a condemnation action. It is now firmly established by our decisions that such benefits may be set off or employed to reduce the damages to the remainder of the tract not taken, but cannot be used to adversely affect the right of the owner to receive the fair cash market value of the land actually taken. The defendants were entitled to receive the fair cash market value of the land actually taken for highway use. Such value includes the land itself and any improvements which are a part of the realty. Oregon & Cal. R.R. Co. v. Barlow, 3 Or 311, 315 (circuit court); Oregon Central R.R. Co. v. Wait, 3 Or 428, 433; Harrison v. Pacific Ry. & Nav. Co., 72 Or 553, 559, 144 P 91; Portland-Oregon City Ry. Co. v. Penney, 81 Or 85, 158 P 404; Portland & O.C. Ry. Co. v. Sanders, 86 Or 62, 73, 74, 167 P 564; Keane v. City of Portland, 115 Or 1, 12, 235 P 677; State ex rel. Kendall v. Mohler, 115 Or 562, 578, 237 P 690, 239 P 193; Pape v. Linn *278 County, 135 Or 430, 437, 296 P 65; State of Oregon v. Cerruti, 188 Or 103, 113, 214 P2d 346; State Highway Commission v. Burk, 200 Or 211, 248, 265 P2d 783; Highway Commission v. Superbilt Mfg. Co., 204 Or 393, 412, 281 P2d 107; Highway Commission v. Holt, 209 Or 697, 308 P2d 181.
7. This court in Re Petition of Reeder, 110 Or 484, 493, 222 P 724, stands in opposition to the cases cited supra. In that case the court quoted from 1 Elliott, Roads and Streets, 4th ed., § 275, as follows:
The court then said: "Oregon is properly classed with the third division." That statement is contrary to the rule laid down in the cases cited, and is not the law. The Oregon rule now falls within the class numbered "2" as defined by Elliott. Willamet Falls C. & L. Co. v. Kelly, 3 Or 99 (Circuit Court); Oregon Central R.R. Co. v. Wait, 3 Or 428, 432, 433; Harrison v. Pacific Ry. & Nav. Co., 72 Or 553, 559, 144 P 91; Pape v. Linn County, 135 Or 430, 437, 296 P 65; State Highway Commission v. Burk, all supra.
In dealing with the landowners' right of compensation with reference to the residue or portion of the *279 tract not actually taken, we must deal with the problem of "damages" and benefits, and the meaning of "benefits" must be considered in connection with the meaning of "damages." What then is meant by "damages" resulting from the appropriation, as that word is used in the decisions and statutes?
In his great modern work on Eminent Domain, 3d ed, vol 4, Nichols classifies the rules from the various jurisdictions into three groups, and illustrates the rule in each group by an equation. These equations are:
The embarrassing fact is that the author cites an Oregon case in support of each of the three rules. Under Group "1" he cites La Grande v. Rumelhart, 118 Or 166, 246 P 707; under Group "2", Putnam v. Douglas County, 6 Or 328, and Portland-Oregon City Ry. Co. v. Penney, supra, 81 Or 81, 158 P 404; and under Group "3", Beekman v. Jackson County, supra, 18 Or 283. If this court has in fact announced three different rules governing compensation, it is time for a clarification. However, we think the discrepancies are more apparent than real.
*280 The implication of the cases in Group "2" is that if the land not taken is increased in value in an amount equal to the value of the land taken, the owner would be entitled to no compensation whatever. Putnam v. Douglas County, supra, classified as falling within Group "2", was decided in 1877. The court in substance instructed the jury that if they found that the premises would not be rendered less valuable "by the opening of the road" the landowner should not receive any compensation even for the part actually taken. The jury were also told to take into consideration "all special advantages the opening of the road will give to the premises, which appear, if any; as, for instance the giving of an outlet to market to said premises and the enhancement of the value of the land taken." Pursuant to the instructions the jury found for the county and awarded the landowner nothing. The Supreme Court affirmed the judgment. In other words, the benefits were set off against the value of the land taken, as well as against the damages to the remainder. One judge dissented on this point. The case is contrary to the earlier ruling in Oregon Central R.R. v. Wait, supra, 3 Or 91 (circuit court) and the clear ruling in Willamet Falls Canal & Lock Co. v. Kelly, supra, 3 Or 99 (circuit court). It is also contrary to the more recent decisions cited supra which hold that the landowner is in any event entitled to receive the fair market value of the land taken. In so far as the Putnam case is contrary to these cases, it is overruled. Portland-Oregon City Railway Co. v. Penney (1916) was improperly classified under Group "2". We have already cited it as supporting the rule that the landowner must in any case receive the value of the land taken without deduction.
Beekman v. Jackson County, supra, classed by Nichols in Group "3" was tried below on the theory *281 announced in the Putnam case, and the jury awarded no compensation for land taken or damages to the remainder. On appeal judgment on the verdict was reversed for the reason, among others, that the instructions did not explicitly define special benefits. The opinion is not altogether clear, but it intimates that the owner is entitled to receive the value of the land taken plus damages to the remainder, subject to any reduction of such damages by reason of special benefits if any. If this was the meaning of the court, it was perhaps properly classified in Group "3". But in the light of our decisions and in this jurisdiction we hold that the formula for compensation in the cases like Beekman v. Jackson County and others in Group "3", when properly applied, is the same as the formula in Group "1". "Damages to remainder area minus benefits to remainder" means damages and benefits as reflected in market value, and therefore the final test is the value of remainder before taking, less value thereof after taking, that is to say, depreciation in market value of the remainder. When statutes refer to damages (ORS 366.380(3), 374.055) we have construed the law as above indicated. State Highway Commission v. Burk; Portland-Oregon City Ry. v. Penney, both supra; Pape v. Linn County, supra, 135 Or 430, 296 P 65; People v. Al G. Smith Co., Limited, 86 Colo App2d 308, 194 P2d 750.
An excellent instruction covering the rule as to the value of land taken, and the rule concerning the remainder, was given by the trial court and approved by this court in Portland & O.C. Ry. Co. v. Sanders, 86 Or 62, 167 P 564, as follows:
*283 La Grande v. Rumelhart, 118 Or 166, 176, 246 P 707, is cited by defendants. In that case we held that the following instruction given by the trial court "correctly states the law":
8. We have held that it is unnecessary for the jury to make special findings as to the amounts of damages and benefits. Beekman v. Jackson County, supra. To require such separate findings would unduly complicate the task of a lay jury whose only duty is to determine (1) the value of the land taken, and (2) the depreciation in value of the residue. When the property owner introduces evidence of damage (depreciation in value to the residue) the plaintiff Commission may controvert such evidence and in addition may present evidence of special benefits. The duty imposed upon the trier of the facts is then simply to consider all of the relevant evidence and determine the amount if any of the depreciation of the market value of the residue not taken. The question as to special benefits is one of relevancy, not of pleading, and we now turn to a consideration of the scope and meaning of "special *284 benefits." In the ensuing discussion we are considering only damages and benefits to the residue not taken.
We will first consider the problem as it relates to the condemnation of a throughway or limited access highway. Under ORS 374.055(3) quoted supra, evidence was admissible to determine the damages which will accrue to the part not sought to be condemned by reason of its severance from the portion sought to be condemned and by reason of the construction of the improvement in the manner proposed. In State Highway Commission v. Burk, supra, we held that
Obviously, the completeness of the severance might affect the amount of the damage or depreciation in the land value. It is equally obvious that if the severance is not complete  if the owner is given access to the highway at specified points, or the right to go from his land on one side of the highway to the rest of his tract lying on the other side of the highway, then the depreciation, if any, resulting from the nonaccess aspect of the taking would be reduced. It is of little importance whether we say that the rights of access granted to the owner constitute special benefits or merely circumstances tending to minimize the depreciation in value which might otherwise result from the taking in the manner proposed.
In State Highway Commission v. Burk, supra, this court gave full consideration to the condemnation of limited access highways in relation to consequent depreciation in the land not taken, but had no occasion *285 to consider the question of special benefits. It is, however, significant that we said:
Since the decision of the Burk case similar questions have been considered by the Supreme Courts of Missouri and Washington, and in both the question of special benefits has been discussed. In both cases the Burk case was cited with approval and quoted at length.
In State v. Clevenger, 365 Mo 970, 291 SW2d 57, a limited access case, the Supreme Court of Missouri said:
The foregoing recent analysis of special benefits is of great significance, not only concerning the modes of access granted to the owner, but also concerning the other often disputed elements going to make up special benefits.
*286 In State v. Calkins, Wash, 314 P2d 449 (1957), the court considered the right of compensation arising from the taking for a limited access highway. The highway bisected defendants' farm. The court followed the ruling in the Burk case. It then said:
The court continued:
Concerning the offsetting of special benefits against "severance damages * * * based upon the added inconvenience of moving from one part of the land to the other, the separation of the land into different *287 tracts, and other management problems", the Washington court said:
The Missouri and Washington cases express the modern view concerning the nature of special benefits and their effect upon the depreciation of the value of the land not taken, with especial reference to limited access condemnations.
The complaint describes the nature, number and location of the rights of access granted to the defendants. The points of access and the property allegedly benefited are located along the proposed highway with reference to the Highway Engineer's Center Line Stations.
9. Four parcels of defendants' land described as parcels "A", "B", "C", and "D" are alleged to be specially benefited. Aided by the drawing, a map, the Engineer's survey stations and the pleadings, we have made a painstaking study of the location of the rights of access and of crossing with reference to the location of the parcels said to be specially benefited. Suffice it to say that some of the rights of access or crossing directly connect with one or more of the parcels "A", "B", "C", and "D", while others are near but not connected with any such parcel. It is apparent that the terrain along the coast is rugged. The evidence taken at the trial on the merits is not before us. Without a view of the premises and evidence concerning the lay of the land, it would be impossible to know to what extent if any the reserved rights do or could benefit *288 any of the parcels. We merely hold that the plaintiff Commission was entitled to present evidence of circumstances tending to show what if any special benefits accrue to the four parcels by reason of the access and crossing rights reserved to the defendants and what if any effect said reservations had upon the market value of the land not taken.
We now consider the other allegations of special benefits as to which the plaintiff claims the right to introduce evidence. They appear in the reply.
We first point out that evidence on certain issues must of necessity go to the jury regardless of the knotty problem as to the nature of special benefits.
In Chapman v. Hood River, 100 Or 43, 51, 196 P 467, the court quoted with approval from Beekman v. Jackson County, supra, in part, as follows:
10, 11. Surely, if the manner of the location of the road may be shown by the defendants as bearing on damages, the plaintiff may rebut such evidence regardless of rules defining special benefits. To hold otherwise would be to split judicial hairs. Incidentally we do not approve of the implication in the statement quoted supra that damages are to be fixed separately as to each item and then added together. All of the items of damage and of special benefit are to be considered together *289 in arriving at the amount if any of the depreciation of market value of the land not taken.
12. By way of summary we see that evidence will be admissible in behalf of the defendants to show "the manner, nature and extent" of the taking for a limited access highway, the separation of defendants' land into different tracts and the added inconvenience, if any, in going about and managing the property, and similar circumstances so far as they cause a depreciation in the fair market value of the land not taken, and defendants may show the extent of such depreciation. In like manner evidence will be admissible in behalf of the plaintiff Commission to show the beneficial effects, if any, of the rights of access and crossing which tend to minimize the damage, if any, which would accrue if the severance by a nonaccess highway were absolute and complete. State v. Clevenger, and State v. Calkins, both supra. The ultimate duty of the finder of the facts will be to consider all of this evidence in arriving at the net depreciation in value of the land not taken. The two cases last cited treat these rights of access as special benefits and we accept their authority upon that matter, but there is no mysterious virtue in the words "special benefits" when used in this context.
Coming to an attempted classification of benefits which are deemed special, we quote from 3 Nichols, Eminent Domain, 3d ed, § 8.62, p 39:
We agree, and unfortunately the diversity may be observed in our own decisions which we will now review.
*290 In Oregon Central R.R. v. Wait, supra, 3 Or 91 (Circuit Court) defendant moved for a new trial. The court denied the motion and approved the following instruction:
The court said:
To the same effect see Willamet Falls C. & L. Co. v. Kelly, supra, 3 Or 99 (Circuit Court). Oregon Central R.R. Co. v. Wait, 3 Or 428 was one of the earliest Supreme Court cases in this state. We quote from page 433:
In these early cases there is much to commend the common-sense appraisal of the problem without technical distinctions concerning the nature of special benefits.
In Putnam v. Douglas County, 6 Or 328, the court for the first time hinted at the nature of special damages which may be set off. The jury was instructed as follows:
The court, however, went beyond the rule of the earlier cases and held that the advantages which the proposed road will confer may be set off not only against damages to the land not taken, but also against the value of the land taken. There was a forceful dissent, and on this point, the majority holding is no longer the law.
In Beekman v. Jackson County, supra, 18 Or 283, this court stated that it was the duty of the jury to take into consideration any special benefits which the lands would receive but held that it did not appear whether the jury had in view a peculiar benefit or some general benefit which the owner would receive in common with others. All of the evidence was before the court and the court said it was unable to discover that there would be special benefits. The court also observed *292 that the lands were already accessible to a public road and the benefit from the new road was remote and speculative. It held that the court should have given the following requested instruction, a part of which reads as follows:
The court said that the evidence showed that the jury did not limit its findings to special benefits. It must be remembered that in this case the jury had set off benefits against the value of the land taken, as well as against the remainder and had awarded the owner nothing. The judgment was reversed and remanded for a new trial. We make no criticism of the instruction approved by the court if applied to the damage or benefit to the land not taken. In considering the early cases it must be remembered that the taking for highway purposes was not then a taking in fee as it now is. McQuaid v. Portland & V. Ry. Co., 18 Or 237.
Defendants rely upon Coos Bay R.R. v. Nosler, 30 Or 547, 48 P 361. This was not a condemnation action but was an action to collect on a contract whereby defendant and others agreed to contribute on conditions specified to the cost of construction of a railroad. The defendant asserted as a defense or set-off against the money owing by him to the plaintiff, that he had been damaged by reason of the fact that he owned considerable real property "in and about Coquille City" which he claimed would be enhanced in value if the road had *293 been fully constructed to Roseburg within the time required, and that he would have been able to have sold his holdings at a large profit. The court indicated that there was no clear standard by which such profits could be measured and that it could not reasonably be supposed that the railroad company would have in contemplation damages of that kind. It then cited by way of analogy the rule offsetting benefits against damages in eminent domain, and said:
This case is distinguishable. The alleged special benefits claimed were those accruing to the "considerable real property in and about Coquille City" owned by defendant, and were not such as would be allowed in a highway condemnation case where the only special benefits are those accruing to the remainder of a single tract through or across which the highway is to run. The benefits claimed were such as flow from the building of a depot, or as result in benefit to an entire townsite, and were general in nature. Benefits from construction of a railroad across the property of an owner are in the nature of the case more remote and difficult to establish than benefits from highway construction.
In Portland & O.C. Ry. Co. v. Ladd Estate, 79 Or *294 517, 155 P 1192, the plaintiff brought suit to condemn a strip of land for a railroad through the Eastmoreland and Westmoreland additions owned by the defendant. In its reply the plaintiff alleged special benefits. No evidence of benefits was offered other than those arising from increased transportation facilities. The verdict fixed the value of the land taken and found that the damages to the residue did not exceed the special benefits. The defendant appealed from the judgment on the verdict. In reversing the case the court held that the only benefits that may be set off against damages are those which are special and peculiar to the tract. We have no criticism of the decision on the facts. The court did, however, by way of dictum, express approval of a statement by the Wisconsin court which would unduly restrict the scope of special benefits if applied in condemnation proceedings by the Highway Commission.
Portland-Oregon City Ry. Co. v. Penney, supra, was another case involving condemnation for a railroad. The trial court excluded evidence tending to sustain four so-called counterclaims on account of alleged special benefits and on appeal judgment was affirmed. This court first quoted a portion of LOL, § 6839, now ORS 772.055, which reads as follows:
The court said the statute means that in computing the damages to a tract of land by reason of the construction of the road across it, the corporation cannot be heard *295 to say that any increased value which may accrue to the land by reason of the facilities offered shall be "subtracted from the sum which would be compensation if the land were purchased for any other purpose than a railroad." The court by Justice McBRIDE expressed disapproval of the statutory rule, but followed it. We quote:
The court obviously considered itself bound by the statute ORS 772.055 quoted supra, but that statute applies only to actions brought under ORS, Chapter 772 by public service corporations. It has no application to condemnation proceedings brought by the Highway Commission. It is therefore unnecessary to decide whether the provisions of ORS 772.055 mean that compensation for the land taken must be made irrespective of increased value thereof or that the depreciation in market value of the residue must be made irrespective of the increased value of that land. But see, Oregon Central R.R. Co. v. Wait, supra, 3 Or 91 at 98. The Penney case is not decisive of the case at bar.
In Re Petition of Reeder, 110 Or 484, 222 P 724, the question involved condemnation of a county road. The verdict found (1) the fair market value of the land taken, (2) the amount of damages sustained by the remainder, and (3) the amount of special benefits. The amount of the judgment was fixed by adding the value of the land taken to the amount of damages suffered by the remainder and deducting the amount found as benefits. In the case of each landowner the benefits found were less than the amount found as damages to the remainder, so that it was unnecessary for this court to determine whether benefits could be set off against the value of the land taken. We have discussed *297 that matter supra. Our present interest relates to the nature of special benefits. The landowners appealed and asserted that there was no evidence of special benefits and that general benefits could not be set off against damages. The court held that there was evidence "from which the jury might find that the lands of each would be specially benefited" and refused to weigh the evidence on that issue, it being for the determination of the jury. The court also held that the instructions given on special benefits were free from error. Examination of the original records in the files of this court discloses that the trial court instructed the jury to the effect that general benefits may not be set off against damages. We quote:
Again speaking of special benefits, the court instructed the jury, as follows:
We have carefully examined all of the Oregon decisions bearing upon the nature of special benefits. Assuming that an accurate and detailed definition of special benefits is desirable and possible, those decisions leave much to be desired. We therefore turn to the decisions in other jurisdictions for clarification. In the following cases it is held that benefits resulting from the fact that the land fronts on the proposed road do not become general merely because other property abutting on the road may participate in similar benefits. Abbott v. Cottage City, 143 Mass 521, 10 NE 325; Department of Highways v. Templeton, 5 Tenn App 485; Newberry v. Hamblin, 157 Tenn 491, 9 SW2d 700; Chase v. City of Portland, 86 Me 367, 29 A 1104; State v. Anderson, 176 Minn 525, 223 NW 923; Aswell v. City of Scranton, 175 Pa St 173, 34 A 656; Allen v. City of Charleston, 109 Mass 243 (1872); Wilson v. Greenville County, 110 SC 321, 96 SE 301; Aaronson v. United States, 79 F2d 139; Lewis v. Seattle, 5 Wash 741 (1893).
Typical of the cases cited is the following which we *299 quote with approval from Hall v. Commonwealth, 235 Mass 1, 126 NE 49:
In Wilson v. Greenville County, 110 SC 321, 96 SE 301, supra, the court said:
Again, it is well said that
With reference to the allegation contained in the reply to the effect that construction of the highway would render three parcels of the defendants' remaining land adaptable, suitable and available for higher and better use, to-wit, for residential and subdivision purposes, and a fourth parcel for commercial uses, an opinion of the North Carolina court is of interest. The court said:
This case should be considered in connection with our own decision in State Highway Commission v. Deal, 191 Or 661, 233 P2d 242. In the latter case the issue related to the value of the land actually taken for highway purposes, and we held that:
In that case it was the landowner who was seeking to show adaptability for higher use in order to increase his compensation for the land taken. In the pending case the state seeks to show a similar adaptability for higher use of the land not taken resulting from the proposed improvement, as a special benefit to be set off against damages. The statement quoted is equally applicable in both situations. It is equally true, however, in both situations, that speculative evidence would be inadmissible, and though the circumstances showing adaptability may be shown, evidence that the property could be subdivided into a certain number of lots of certain dimensions and separately valued as to sales prices would as a matter of law be speculative and inadmissible. As to proof of availability for higher and better use, see also, Lowe v. City of Omaha, 33 Neb 587, 50 NW 760; Louisiana Highway Commission v. Grey, 197 La 942, 2 So2d 654; State ex rel. State Highway v. Clevenger, supra; State v. Calkins, supra.
*302 In Department of Public Works and Buildings v. Keck, 330 Ill 39, 161 NE 55, the court took note of evidence to the effect that the lands not taken were substantially increased in value by the location of a hard surface road through them and that the jury therefore properly denied damages.
Finally we cite with approval the following:
In a later case the Missouri court said:
13,14. We conclude that presumptively the proposed construction will result in some special benefits and that the existence and extent of such benefits are normally questions for the consideration of the jury upon all of the evidence and under proper instructions. It is only when the court can say as a matter of law that evidence offered to prove special benefits is so remote and speculative as to show no substantial basis for such a finding that the court can reject the evidence offered.
*303 15,16. Since this case must be remanded for a new trial, it has been necessary to come to grips with the problem as to the nature of special benefits, but we should recognize the specific issue now before us. Plaintiff by its reply in effect offered to prove that special benefits will accrue to four parcels of defendants' land. The decision of the trial court was to the effect that no testimony would be received to show the alleged special benefits. We do not know what evidence would have been offered to support the allegations of the reply and therefore cannot declare that it would have been speculative. The broad ruling made at the opening of the trial could be upheld only if we could hold that no evidence of any kind could be offered which would show reasonable probability of special benefit. This we cannot do. We pause to consider the origin and nature of the confusion which has crept into this area of the law in our own and other jurisdictions. We start out with statutory provisions requiring the court in condemnation cases to ascertain the "damages" suffered by the owner. ORS 35.070, 366.375, 374.055. Upon the statutory provisions from the very beginning the courts have ingrafted the idea of special benefits to be set off against damages. So long as the courts were considering compensation from the standpoint of damages and benefits, there appeared to be no objection to the adoption of rules as to what kinds of damages and benefits may be considered, and the rule became established that "general benefits" cannot be considered even though they have enhanced the value of the property in question. But, contemporaneously with these developments there also became established the rule which this and many other courts have adopted, namely, that the compensation to which the landowner is entitled is measured by the depreciation *304 if any in the fair market value of the remainder of the land by reason of the taking. Once this rule is adopted the question for the jury becomes, what was the fair cash market value before the taking, and what was or will be that value after the taking? In each instance the rule universally applied on questions of land value is "the amount which the land would bring if it were offered for sale by one who desired but was not obliged to sell and was brought by one who was willing but not obliged to buy." Highway Commission v. Holt, 209 Or 697, 308 P2d 181, and Pape v. Linn County, 135 Or 430, 296 P 65, both supra. Any competent evidence of matters not merely speculative which would be considered by a prospective vendor or purchaser or which tend to enhance or depreciate the value of the property is admissible. 31 CJS 883, Evidence, § 182; 30 CJS 163, Eminent Domain, § 430. Thus, when the courts are speaking in terms of damage and benefit they exclude evidence of general benefits although such benefits enhance the value of the property. Petition of Reeder, supra. But when they are speaking of market value they recognize the relevancy of any evidence not speculative which would affect market value. We find no logical reason for requiring an expert witness on real estate values to exclude from consideration any substantial element, be it plus or minus, which directly affects market value of the land whether or not it also affects the value of other lands.
Another consideration suggests that there are strange contradictions in our law. In Schmid v. City of Portland, supra, 83 Or 583, 163 P 1159, Justice HARRIS called attention to the resemblance between special benefits in condemnation cases and special benefits in street assessment cases. The analogy is *305 interesting. In street assessment cases the entire cost of an improvement may be assessed against the abutting property. The right to make such assessment rests on the theory that the property is benefited to the extent of the assessment. No fine distinctions are drawn between special and general benefits as every property owner knows to his sorrow.
In Fisher v. City of Astoria, 126 Or 268, 269 P 853, a street assessment case, this court held that the fact that the improvement may benefit the entire city does not prevent the city from assessing the cost against the adjacent property which enjoys a more intense benefit.
17. Notwithstanding these apparent inconsistencies we are constrained to yield to precedent. Justice Holmes had admonished us that "the life of the law has not been logic, it has been experience", and it appears that the earlier practice which set off both general and special benefits against damages has lost ground and is now retained in only one state, Indiana. 3 Nichols on Eminent Domain, § 8.6205, p 57. We therefore yield to the weight of authority, difficult as the rule may be in its application. We reluctantly hold that special benefits only may be set off against damages in fixing the amount of depreciation in market value of the lands not taken. The court should not, however, adopt a narrow or unreasonable definition of special benefits.
The Supreme Court of Massachusetts has succinctly said:
18. The rule to which we adhere is broadly stated in Hempstead v. Salt Lake City, 32 Utah 261, 90 P 397, as follows:
We may roughly summarize the benefits which the plaintiff alleges in its reply, as follows: A new modern road will be built on defendants' land. Access to it and across it will be given as alleged. Specified parcels now used for agriculture will be adaptable, suitable and available for higher and better uses, to-wit, for residential and subdivision purposes. Another parcel will be adaptable, suitable and available for the establishment of commercial ventures that cater to the traveling public. The amount of the alleged benefits is specified as to each of the four parcels.
19, 20. Out of respect for the authorities certain limitations must be imposed upon the kind of evidence which may be received to show so-called special benefits which may be set off against so-called damages, in order to arrive at the amount of the depreciation, if any, in the fair market value of the land not taken. Evidence of general benefits may not be considered. Benefits which are common to the public or which the land of defendant shares in common with lands of others in the community which do not abut upon the highway may not be considered. "Speculative benefits" may not be considered nor can speculative damages, but *307 in reality it is not benefits or damages which are speculative. It is the evidence of benefit or damage. This is not a rule defining special benefits. It is merely an application of the universal rule that evidence offered to prove value of land must not be merely speculative.
21-24. Only such benefits as are or will be the proximate result of the improvement may be considered and only such benefits as may be shown to be reasonably probable. The issue of benefits is limited to the particular tract of land of which a portion is taken. Subject to these limitations the jury is entitled to consider the entire plan of improvement and the probable effect of the improvement upon the use and value of the land, and it may consider all of the evidence pro and con on that issue. They may consider evidence of improved outlet to market to said premises, of higher and better use, as for subdivision, residential or commercial purposes, frontage on a better road, modes of access, and in general any substantial evidence that the improvement will add to the convenience, accessibility, use and value of the land if such benefit is not shared by *308 nonabutting lands. The fact that other lands abutting on the improvement are also specially benefited is immaterial.
From the very nature of the nonaccess road which is proposed, the jury may consider what if any special benefits accrue to defendants' land with its rights of access, in view of the rarity of such rights as may appear from the evidence. With full appreciation of the difficulties involved in the submission of cases of this kind to the jury under the established rules, we have indicated, so far as possible, what those rules are. Since there is before us no specific offer of evidence but only a general statement as to the kind of evidence proposed to be offered, we can do no more.
The judgment is reversed and the cause remanded for a new trial conformable to this opinion.