Case Title: Arkansas State Highway Commission v. Griffin

Citation: 411 S.W.2d 495

Docket Number: 5-4066

State: arkansas

Court: Arkansas Supreme Court

Date: 1967-02-20T00:00:00Z

Document:
411 S.W.2d 495 (1967) ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. Harry GRIFFIN, et ux., Appellee. No. 5-4066. Supreme Court of Arkansas. February 20, 1967. *496 George O. Green and Don Langston, Little Rock, for appellant. Harold C. Rains, Jr., Van Buren, for appellee. HARRIS, Chief Justice. The principal question in this case is whether a condemnor should be required to pay an enhanced price for the land condemned, which its demand alone has created. On May 27, 1965, the Arkansas State Highway Commission filed a condemnation complaint in the Circuit Court of Crawford County, condemning a part of four lots out of a tract of land described as Tract 345, owned by appellees, Harry Griffin and Louise Griffin. The sum of $7,150.00 was deposited in the registry of the court as estimated just compensation for the taking and damaging of appellees' property. The Griffins contended that this amount was insufficient, and they asked for a jury trial to determine the amount of just compensation. On trial, the jury returned a verdict in favor of appellees in the amount of $18,500.00, and from the judgment so entered, appellant brings this appeal. For reversal, it is first asserted that the trial court erred in permitting testimony concerning land sales to oil companies, the value of such land having been greatly increased because of the proposed construction of Interstate Highway No. 40. The evidence reflects that the Griffins had owned the tract involved since approximately 1926, and their home was located thereon. This tract was a part of property platted in 1955 into twenty-two lots fronting on U.S. Highway No. 71, and most of the lots had been sold prior to the date of taking. In 1960, appellees sold two lots to an individual named Mettler for $500.00 each, and in 1963 Mettler purchased another lot from the Griffins for $500.00. Sometime prior to August, 1964, the Highway Department determined that the proposed Interstate 40 Highway would overpass Highway 71, and there would be a major interchange in the vicinity for purposes of traffic getting on and off the new highway. In August of that year, the department sent its appraisers into the area for a market study; stakes were placed in the area, and construction plans and sketch maps became a matter of public record. Various oil companies began to go into the area and take options on particular lots for the purpose of locating service stations. Tony Zeni, business representative of the Humble Oil and Refining Company, testified that his company took an option on four lots owned by one Blaylock, and on March 2, 1965, purchased these lots. This *497 particular property is located right on the interchange, and is considered a "primary location" for a service station.[1] Zeni testified that, in his opinion, the Humble Company would not have bought the property if an interchange had not been located there. He testified that the price paid ($59,000.00 for two acres) was greatly enhanced because of the location, and competition for the property. Evidence reflected that Sun Ray DX Oil Company bought the Mettler property (which was immediately north of the Blaylock property, and had been sold by Griffin to Mettler) for $20,000.00 on April 19, 1965, and the testimony reflects that, south of the interchange, the Texaco Company bought the property on the southeast corner, and Skelly Oil Company purchased that immediately south of Texaco.[2] We think the evidence during the trial clearly establishes that the price of property in this area "sky-rocketed" when the proposed location of Interstate 40 became known, the variance in the price of the several lots, of course, depending upon the exact location of the property desired. In valuing the Griffin property, witnesses for appellees took into consideration these sales to the oil companies (which were based solely on the location of the interchange), and it is this evidence about which appellant complains in the particular point under discussion. The question before us, therefore, is: Should the Arkansas State Highway Department be required to pay an enhanced price (for property) which was brought about solely by its own proposed improvement? This issue is discussed in Nichols on Eminent Domain, Third Edition, 1962, Volume 4, Section 12.3151, Pages 201-204, as follows: *498 While, as pointed out, there is some authority to the contrary, we like the logic of the general rule, and align ourselves with those who have adopted that view. In Bonaparte v. Mayor, etc., of Baltimore, 131 Md. 80, 101, 594, the Maryland Court of Appeals (corresponding to our Supreme Court) said: Actually, as far back as 1891, we recognized this same principle. In Newgass v. Railway Company, 54 Ark. 140, 15 S.W. 188, which involved a condemnation proceeding instituted by the St. Louis, Arkansas and Texas Railway Company for a right-of-way, we said: Also, though not passing on the question, we recognized the general rule in Arkansas State Highway Commission v. Cochran, 230 Ark. 881, 327 S.W.2d 733. In accordance with the authorities cited, we hold that the testimony as to the enhanced value of the Griffin property, occasioned by the contemplated construction of Interstate 40, was inadmissible. The proper valuation date for appellants' property is the date of taking, May 27, 1965; although the oil company purchases of nearby properties were made shortly before this date, these inflated sales cannot be used in arriving at the before value of the property. Only normal inflation, i. e., that inflation which is engendered by the general economy, can be taken into consideration. As pointed out in Newgass, it is our view that reason and justice demand this conclusion. For its second point, appellant complains that the court permitted incompetent evidence, in that appellees introduced testimony of damage to their lands based on commercial values, and also introduced evidence relating to damage (loss of the dwelling located on the lands) which was based on residential value. Appellant says that these are inconsistent uses, that the landowner *499 is entitled only to damages for the highest and best use of his property, but that the court's action in admitting the evidence had the effect of allowing recovery of double damages, i. e., both for commercial and residential purposes. It is also contended that the evidence given concerning the value of the home was inadmissible. It is entirely proper to allow evidence of all potential uses of a landowner's property. In Arkansas State Highway Commission v. Brewer, 240 Ark. 390, 400 S.W.2d 276, we said: Of course, a verdict rendered by a jury which was partially based on testimony relating to the commercial value of the land, and partially based on testimony relating to the land's value for residential purposes, would not be proper, but it is for the jury to determine the best and highest use of a landowner's property. It is also asserted that the valuation placed on the Griffin home was improper, appellant stating that these witnesses considered only the cost of the house (at the time it was built), rather than depreciating it on the basis of its age. In Arkansas State Highway Commission v. Richards, 229 Ark. 783, 318 S.W.2d 605, we commented on the question of "cost as criterion," stating: Because of the errors herein pointed out, the judgment is reversed, and the cause is remanded to the Crawford County Circuit Court with instructions to proceed in a manner not inconsistent with this opinion. [1] According to Mr. Zeni, the difference in a primary location and a secondary location depends on two factors, one being visibility, and the other access to the property. "The closer you can get to the control of access the better location you have." The witness also testified that a secondary location would be immediately adjacent to the primary location. [2] According to the evidence, the Griffin property, here involved, would not be nearly so valuable for service station or other commercial purposes, since it is located some 600 feet from the interchange, north of the property purchased by D.X. Mr. and Mrs. Griffin had previously (April, 1965) sold Sun Ray DX Oil Company two and one-half lots for $10,000.00, which are located just south of the property in this litigation.