Title: State v. Noble

State: utah

Issuer: Utah Supreme Court

Document:

6 Utah 2d 40 (1957) 305 P.2d 495 STATE OF UTAH, BY AND THROUGH ITS ROAD COMMISSION; H.J. CORLEISSEN, CHAIRMAN, LAYTON MAXFIELD AND LORENZO J. BOTT, MEMBERS OF THE STATE ROAD COMMISSION, PLAINTIFF AND APPELLANT, v. BRACK HOWARD NOBLE AND ANN C. NOBLE, HIS WIFE; ELMO ENGLAND; E.J. HUBER, AND PACIFIC NATIONAL LIFE ASSURANCE COMPANY, A CORPORATION, DEFENDANTS AND RESPONDENTS. No. 8544. Supreme Court of Utah. January 10, 1957. E.R. Callister, Atty. Gen., Walter L. Budge, K. Roger Bean, Robert B. Porter, Asst. Attys. Gen., for appellant. Herbert B. Maw, Salt Lake City, George K. Fadel, Bountiful, for respondents. WORTHEN, Justice. Appeal from a judgment upon a verdict of a jury awarding defendants $150,000. Interest in the sum of $7,321.05, being interest on said $150,000 from date of occupancy by plaintiff at 8% per annum, was added. The State of Utah through its State Road Commission brought this action to condemn approximately 8.1 acres of land belonging to defendants in Salt Lake and Davis Counties for highway purposes. The only question for determination is this: Does the evidence support the jury's verdict? The evidence reveals that the property in question located between U.S. Highway 91 and the Wasatch Mountains was being used by defendants for several purposes. Defendant Brack Howard Noble testified that he purchased the land about 8 1/2 years before the condemnation action was commenced and that he occupied it continuously until the state took possession on July 22, 1955. He testified that on the property was his residence, an antique business, a trailer court business and a sand and gravel business. He testified that none of these uses was incompatible with any other. Mr. Richards, a civil engineer, a witness for defendants, testified that he was requested by defendants to determine the quantity and quality of the materials found on the property; that he employed a driller and supervised the drilling operations; that he concluded there were 1,299,868 tons of material in the tract, of which 355,222 tons was "muck" sand and 944,646 tons was mixed sand and gravel. Mr. Richards did not testify as to the value of the sand and gravel, nor of the land or any business or improvements thereon. Defendant's witnesses placed the fair market value of the property at $270,000, $270,768 and between $250,000 and $275,000, while the defendant placed a total value on the property of $300,000. Defendant testified that he placed a value of $200,000 on the sand and gravel on the property. It is apparent from reading the testimony of defendant and his three witnesses who testified as to the value of the property that they and each of them based their valuation on the aggregate total of values placed on the premises in part by other experts who each appraised a segment of the property and/or its operations. All witnesses included as a factor in computing the value of the property the quantity of sand and gravel testified to by Mr. Richards. No single witness testified as to the value of the property based upon his own knowledge and experience. All used Richards' estimate of the quantity of sand and gravel; some used the testimony of other witnesses as to the value of sand and gravel per ton. A reading of the testimony of defendant's experts shows with abundant clearness that they arrived at their determination of the value of the lands in question by multiplying the estimate of another expert (Engineer Richards) as to the tons of sand and gravel in place by the estimated value per ton. Fixing the value of land in condemnation cases by finding the product of the number of tons of muck sand and sand and gravel in place multiplied by the price per ton is almost universally condemned. Our Constitution[1] forbids the taking of private property for public use without just compensation. To just compensation and to that only are the defendants entitled. Just compensation means that the owners must be put in as good a position money wise as they would have occupied had their property not been taken. In United States v. Miller,[2] the court said: The problems in this type of case are pointed up by observing part of the testimony of defendant Brack Howard Noble. He testified that the value of the muck sand and the sand and gravel on the premises was $200,000. When asked how long it would take to sell the muck sand defendant answered: When asked how he arrived at the figure of $200,000 for the value of the sand and gravel on the property defendant answered: This court in State v. Tedesco[3] observed: As heretofore observed all of the expert witnesses who testified for defendants fixed the value of the land by finding the product of the total tons of sand and gravel times the price per ton. Such is not the proper method of fixing the fair market value of the property. Courts have with great unanimity rejected the proposition that just compensation is the equivalent of the total profits which would be realized from the future operations of the property. The measure of damages is (said to be) the market value of the property and not the output thereof. The accepted formula for determining fair market value is not how much would the property produce over a period of fifteen years, but what would a purchaser willing to buy but not required to do so, pay and what would a seller willing to sell but not required to do so, ask. As will be observed from the cases hereafter considered, the defendants are not entitled to the value of the sand and gravel independently of the land of which it is part, nor considered as merchandise. The land must be valued as land with the sand and gravel given due consideration as a component part of the land, and evidence of the amount, quality and value of the sand and gravel may be considered. In Nichols on Eminent Domain, Volume 4, p. 245, title Mineral Deposits, the author says: The same author under the same Section and on page 248 observes: Orgel on Valuation under Eminent Domain (4th Ed.) pp. 541-547, Section 164, under title "The Quarry and Mining Cases" says: In the early case of Orleans County Quarry Co. v. State[4] the state appropriated three quarry properties belonging to the company. The Board of Claims valued the 7.301 acres of land appropriated at $76,327.54. The valuation was arrived at by figuring the probable amount of stone in the ground and giving that value to claimant. The New York Court set aside the award and ordered a new trial. The court remarked: In the Iowa case of Nedrow v. Michigan-Wisconsin Pipe Line Co.[5] the pipeline company brought condemnation proceedings to acquire a right of way. The District Court gave judgment in favor of plaintiff for $101,440. The property taken over for the pipeline was under lease by plaintiff which provided for payment of a royalty of 5¢ per ton of limestone quarried from the land. The court found that by reason of the pipeline it would be impossible to remove the limestone from approximately 6.9 acres of ground. The court further found that there was no evidence of market value because there was no proof of sales of like property producing similar rentals or royalties. The court then computed the amount of limestone which would necessarily be left unquarried by reason of the pipeline at 3,248,700 tons and found that the royalty due plaintiffs was $162,435. The trial court then made the following finding: The trial court then fixed plaintiff's damages as the present worth of $162,435, payable $4,000 a year for 41 years beginning five years from date, fixing the value of the Use of the money at 2 1/2 per cent per annum and arrived at a figure of $100,000 and then held. On appeal the Supreme Court of Iowa reversed the case and held that it was error to award the value of the mineral deposits in the land as the measure of damages for the property taken, since evidence of mineral deposits is only a permissible consideration not a yardstick with which to measure damages. The Iowa court quoted approvingly from an annotation in 156 A.L.R. 1416 as follows: The court quoted further from 156 A.L.R. p. 1423: The Iowa court further observed: In Reiter v. State Highway Commission[6] eminent domain proceedings were instituted by the Commission. The Commission appealed contending that the trial court erred in permitting witnesses for the landowners to testify as to the value of the condemned land predicated solely on the bases of the value of sand deposits lying beneath the land. The Kansas Court observed: In United States ex rel. Tennessee Valley Authority v. Indian Creek Marble Co.,[7] the court used this language: In State v. Tedesco, supra, this court quoted approvingly the following language of the Pennsylvania Court:[8] It is abundantly clear from a reading of the testimony of the witness for both the respondent and the State that all arrived at their valuation of the real estate by fixing the value of the sand and gravel through the formula of tons in place times price per ton. It is true that the witnesses for respondent and the State were far apart on their estimate of removable sand and gravel but it is apparent that both parties relied upon an erroneous conception and an improper formula in determining the value of the land. As a result of using the appraised value of the sand and gravel in arriving at the value of the land there was no competent evidence to support the verdict. The test of market value is not an expert's estimate of what a buyer would pay per ton for sand and gravel multiplied by the total tons of each over a period of many years after the same has been removed from the land. It is inconceivable that a willing buyer who was not required to purchase would pay for the land in question a price in cash that would require many years in disposing of the sand and gravel to recover back the full estimated purchase price if it were recoverable at all. Such a purchaser would take into consideration the possibility of higher taxes higher labor costs possibility of curtailed market as well as the possibility that like the livery stable, the bicycle shop, the buggy and surrey manufacturing plant and the steam locomotive manufacturing plant, there might well be a complete cessation of any demand for the products under consideration. It is manifest that all estimates of value were arrived at by using as part of the value of the real estate the product of the total tons of sand and gravel times the price per ton of each which is improper for which reason there is absent evidence to sustain the verdict. Judgment reversed and the case remanded for a new trial. No costs awarded. CROCKETT, WADE and HENRIOD, JJ., concur. McDONOUGH, C.J., concurs in the result. [1] Article I, Section 22. [2] 1943, 317 U.S. 369, 63 S. Ct. 276, 280, 87 L. Ed. 336, 147 A.L.R. 55. [3] 4 Utah 2d 248, 291 P.2d 1028, 1029. [4] 1916, 172 App.Div. 863, 173 App.Div. 990, 159 N.Y.S. 30, 31. [5] 245 Iowa 763, 61 N.W.2d 687, 691. [6] 177 Kan. 683, 281 P.2d 1080, 1083. [7] D.C., 40 F. Supp. 811, 822. [8] Pennsylvania S.V.R. Co. v. Cleary, 125 Pa. 442, 17 A. 468.