Title: STATE HIGHWAY COM. v. Morehouse Holding Co.

State: oregon

Issuer: Oregon Supreme Court

Document:

Reversed and remanded November 30, 1960.
*63 J. Robert Patterson, Assistant Attorney General, Milwaukie, argued the cause for appellant. With him on the brief were Robert Y. Thornton, Attorney General, Leonard I. Lindas and Charles Peterson, Assistant Attorneys General, Salem.
Roscoe C. Nelson, Portland, argued the cause for respondent. With him on the brief was C. Laird McKenna, Portland.
Before McALLISTER, Chief Justice, and ROSSMAN, PERRY, GOODWIN and KING, Justices.
REVERSED AND REMANDED.
ROSSMAN, J.
This is an appeal by the plaintiff, State of Oregon, through its Highway Commission, from a judgment of the circuit court which decreed that upon the payment by the state to the defendant of $25,100 together with interest, costs and attorney fees the real property which is the subject matter of this proceeding would be appropriated to the state. The latter sought the property for the improvement of a highway in Portland. The judgment was preceded by the return of a verdict in the defendant's favor.
The state (plaintiff) in appealing submits four assignments of error. Their essence is thus stated in the state's brief:
The defendant owns a parcel of real property in Portland which consists of three-fourths of a block and which was improved in part with a warehouse and the defendant's retail store. Before the condemnation proceeding was instituted a disastrous fire destroyed the warehouse and a part of the retail establishment.
We will now consider the first assignment of error which presents the question as to whether the circuit court erred when it permitted one of plaintiff's witnesses, over plaintiff's objection, to state on cross examination that comparable property had been offered for sale at the price of $80,000.
1. Oregon and other jurisdictions have held that offers to buy or sell comparable property are not admissible in evidence to establish the value of the land *65 under condemnation. We take the following from State of Oregon v. Cerruti, 188 Or 103, 214 P2d 346:
Other cases have excluded offers to buy similar property. Davis v. Charles River Branch Railroad Company, 65 Mass 506, and Annotation, 7 ALR2d 781, 785. Assuming arguendo that an offer to buy is distinguishable from an offer to sell there is ample precedent to exclude an offer to sell similar property as evidence of the value of the property in suit. Atlantic Coast Line R. Co. v. United States, 132 F2d 959; Metropolitan St. Ry. Co. v. Walsh, 197 Mo. 392, 94 SW 860; In re Housing Authority of City of Newark, 126 NJL 60, 17 A2d 812; Helena Power Transmission Co. v. McLean, 38 Mont 388, 99 P 1061, and Annotation 7 ALR2d 781, 795.
*66 The textbook writers favor the exclusion of evidence of the kind just described. Its inadmissibility is attributed partly to the fact that offers to buy or sell represent at the best the opinion of one party only, and partly to the difficulty of establishing their bona fide character. See Orgel, Valuation Under Eminent Domain, 2d ed, § 148. Nichols, Eminent Domain, 3rd ed, § 21.4 (3). Lewis, Eminent Domain, 3rd ed, § 666, states:
McCormick on Evidence, § 166, p 349, says:
We are satisfied that the first assignment of error possesses merit. We sustain it.
2. The second assignment of error is based, as we have seen, upon the trial judge's refusal to permit one of the state's expert witnesses to explain the manner in which he estimated the value of the part of defendant's property which it would retain after the state had taken the fraction under condemnation. The state's brief from which we will now copy gives the substance of the testimony excluded by this challenged ruling:
According to Nichols, Eminent Domain, 3rd ed, § 18.42(1):
Wigmore on Evidence, 3rd ed, § 562, states:
*68 This court has recognized and employed the rule stated in those two authorities; see L.B. Menefee Lumber Co. v. MacDonald et al, 122 Or 579, 260 P 444 (paragraph 19). The defendant expresses fears that the question propounded to the expert would have drawn from him a basis for his opinion of a speculative character. It quotes the following from State Highway Commission v. Deal, 191 Or 661, 233 P2d 242:
See to like effect State Highway Commission v. Bailey, 212 Or 261, 319 P2d 906.
The property involved in this proceeding is situated in a business industrial part of the city of Portland. The expert, whose testimony is under analysis, did not propose to subdivide it in the manner envisioned by the owner in the Deal case. The owner proposed no change whatever for the property, but the witness desired to state that it could be sold as a whole or in parts. His testimony would not have imported into the case speculation or conjecture. He should have been permitted to give the basis of his opinion.
3. The third assignment of error complains because the trial judge did not instruct the jury:
*69 We do not believe that that requested instruction is in harmony with State Highway Commission v. Arnold et al, 218 Or 43, 341 P2d 1089, 343 P2d 1113. The instructions upon the subject matter of value were well calculated to guide the jury. The third assignment of error discloses no occasion for reversal.
4. The fourth, being the last assignment of error, is based upon an instruction requested by the plaintiff but refused. Had it been given it would have told the jury in part:
In seeking to sustain the requested instruction the plaintiff's brief quotes from a part of the answer which alleges that the state, in rerouting the traffic, has caused such a large volume to move in front of the defendant's premises that:
Thus, an instruction that would have been pertinent was not one that dealt with a lessening of traffic but one that would have dealt with an increased flow of traffic. The state's reply brief says:
*70 In view of the discussion of the applicable principles of law that is set forth in the two sets of briefs, we do not believe that any trouble will occur in the framing of the instructions upon the retrail. This assignment of error affords no occasion for reversal.
We sustain assignments of error 1 and 2. The judgment of the circuit court is reversed and the cause remanded.