IN THE SUPREME COURT OF THE STATE OF MONTANA 

No. 11821 

THE STATE OF MON'IANA, ACTING 

BY AND THROUGH THE STATE HIGHWAY 

COMMISSIOIT OF THE STATE OF MONTANA, 

Plaintiff and Appellant, ltjls*q 

pwZl 'F 

A!, .&: , - j( VS. Cc-pba T *., L re %, :972 1 

p3 

FRED i. METCALF and KENNYBELLE &. 

NETCALF, husband and wife, and +~~oPB,G~ $* ,.<,? 

CARL NELSON and JANE DOE NELSON, CLERK OF SUPEEME COURT 

husband and wife, or as a single STATE OF MONTAI'dU 

Inan , Defendants and Respondents. 

ORDER 

IT IS ORDERkXl that the above Opinion promulgated on 

Augus~ 8, 1972, be amended in the foflowing manner: 

Om page 10, line 16 from the top of the page, strike 

the following: 

18 Too, McLeod was allowed to assume the correctness 

of certain facts testified to by other witnesses, 

but outside his personal knowledge as to whether 

such facts were correct. On retrial such testimony 

should not be permitted, unless the criteria set 

forth here can be met. 11 

The petition for rehearing is denied. 

Dated this 25th day of September, 1972. 
No, 11821 

IN THE SUPREME COURT OF THE STATE OF MONTANA .I 

1972 

THE STATE OF MONTANA, ACTING BY AND THROUGH THE STATE HIGHWAY 

COMMISSION OF THE STATE OF MONTANA, 

Plaintiff and Appellant, 

FRED L. METCALF & KENNYBELLE METCALF, 

husband and wife, 

Defendants and Respondents, 

Appeal from: District Court of the Third Judicial. District, 

Honorable Sid G. Stewart, Judge presiding, 

Counsel of Record: 

For Appellant : 

Daniel J. Sullivan argued, Helena, Montana 59601. 

James R, Beck, Highway Department, Helena, Montana 59601. 

For Respondent: 

Clayton R, Herron argued, Helena, Montana 59601. 

Submitted: June 19, 1972 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

This is an appeal from a judgment for defendants after a 

jury verdict in their favor in the district court of the third 

judicial district, county of Granite. Proceedings in the dis.trict 

court were in eminent domain following an award by commissioners 

appointed to assess damages as compensation by reason of appropriation of defendants' property for highway purposes. Plaintiff, 

State of Montana, acting by and through the State Highway Commission and hereinafter referred to as the Highway Commission, appeals 

and presents three issues for this Court's consideration: 

1. In a condemnation action, when it is demonstrated 

that a valuation witness does not possess a peculiar knowledge 

of the property beyond that which is possessed by men generally, 

but is merely basing his testimony upon unsupported assumptions 

and conjecture, is it error for the district court not to strike 

the testimony of the witness? 

2. In a condemnation action, is it error for the district 

court to refuse the following instruction: 

1 I You are instructed that where testimony is 

submitted in an effort to establish just compensation, and that such testimony is obtained 

from expert witnesses, then, and in that event, 

the opinions as expressed by the experts must 

be founded upon substantiated evidence, and 

must not be based upon unsupported assumption, 

conjecture or speculation. 11 

3. When the opinion expressed by a witness is based on 

speculation and conjecture and is opposed by undisputed facts 

and the dictates of common sense, is it sufficient to support 

the award in this case? 

The property taken by the state for construction of the 

Interstate highway can be broken down into two parcels. The 

total acquisition was some 16.5 acres. Parcel No. 1---consists 
. > 

of hay land; the residence and clinic of Dr. Fred L. Metcalf, 

a veterinarian; and a shelter belt and landscaping around the 

residence. Parcel No. 2 --- consists of a two acre tract with 

a mound of earth containing a gypsum or gypsite deposit of some 

23,000 tons. 

The entire thrust of this appeal is directed to the value 

of parcel No. 2 and no discussion or issue is made as to parcel 

No. 1. As to the value of the property taken, the jury was given 

three possible verdicts: (a) it could set the valuation of the 

deposit, (b) it could have set a separate valuation on each 

parcel, or (c) it could have listed the value of the property 

taken, the damages to the remainder and the total award. The 

jury chose to make only a total award of $125,000, indicating no 

separate valuations, 

The basic facts involved are not contested by either 

party, 

The land involved is part of a twenty acre tract of land 

owned by Fred L. Metcalf and Kennybelle Metcalf, husband and wife, 

hereinafter referred to as defendants. 

The taking was necessary for the purpose of constructing 

a four lane controlled access Interstate highway. The Metcalf 

property is located some 4 or 5 miles west of Drummond, Montana. 

The entire tract owned by defendants is south of, and adjoining 

on its length primary U.S. Highway No. 10. South of the tract 

is the mainlhe of the Northern Pacific Railroad. 

The tract is located on a slope rising upward from east 

to west. The lower and eastern part of the property was used for 

raising grass. Above that area was the residence and animal 

clinic of defendant, the only veterinarian in Granite County. 

The property around the house was landscaped and had an extensive 

shelter belt, almost surrounding the house. West and uphill from 

the improved area was the access road from U.S.Highway No. 10 
which ran southerly from the highway, thence east near or into 

the Northern Pacific right-of-way, then back north to the east 

side of dekndants' house and clinic. This road was also used by 

one Mr, Nelson to gain access from U.S. No. 10 to a siding of 

the Northern Pacific Railroad called Bradham siding, 

Other than this roadway, the land west of the improved 

area was in its natural state and would be considered as grazing 

land. It contained, however, a long, low .mound running approximately from U.S, Highway No. 10 in a southerly direction to, and 

into, the Northern Pacific right-of-way. The mound covered 

approximately two acres of the tract. This mound became important 

in this case when it was discovered that it contained and was composed of the chemical compound "gypsum" or because of the texture 

of the deposit, the correct terminology could be "gypsite", but 

hereinafter will be referred to as "gypsum". 

The nature of the highway acquisition was that some 16.5 

acres of the tract were taken, leaving only a strip of land about 

3.5 acres in size between the constructed Interstate and the 

primary Highway No. 10 which was left in place as a frontage road 

for the Interstate. The taking took the hay land, the residence 

and clinic, the shelter belt and landscaping, and went through 

the mound containing the gypsum. The roadway to the railroad 

siding was preserved by means of a concrete structure under the 

Interstate highway. 

At trial, there was disputed testimony as to the exact 

value of the damage inflicted by the taking of parcel No. 1. 

Defendants introduced testimony that placed their damages for that 

parcel at $70,000; the Highway Commission introduced testimony that 

fixed damages at $40,000. But here, on appeal, the main issue is 

whether or not the gypsum deposit, or parcel No. 2, was correctly 

valued by the jury. 
To find the jury's valuation of parcel No. 2 we can only 

ascertain it took the valuation testimony of defendants' witness 

XcLeod, or $80,000, as its value leaving the balance of the $125,000 

award, or $45,000, as the value of parcel No. 1. On retrial, the 

jury should designate the award for each parcel and then the total, 

The gypsum deposit was discovered by state highway geologists in 1963. The purpose of their exploration was to determine 

the strata of the mound insofar as it would affect highway construction. This type of deposit was not suitable base on which to 

construct a highway; consequently, the mound was removed and 

stockpiled a short distance from the highway. 

The deposit of gypsum occurred naturally from the evaporation and percolation of ground waters. The two acre deposit 

extended downwards from ground surface at an average overall 

depth of 7.8 feet, and varied in depth between 3 and 12 feet. 

An average of about .4 of a foot of overburden existed over the 

deposit. The deposit contained 23,500 tons of gypsum which was 

85% or better pure gypsum. It contained 21,000 tons which was 

90% gypsum or better, a generally accepted commercial grade of 

gypsum. Gypsum, even though the percentage is less than 90%, 

can be used for agricultural purposes. 

Agriculturally gypsum has three main purposes: (1) to treat 

alkali soils, (2) to provide sulphur nutrients to soils (the gypsum 

here involved contained 17% sulphur on the average), and (3) to 

condition soils to allow a greater permeation of water and soil 

nutrients. Gypsum is beneficial to sand-loam soils, silt-loam 

soils, and to loam and sandy soils generally. All of these types 

of soil exist in the lower valley of Granite County and in western 

Montana . 

Defendants introduced testimony that one retail source in 

Hamilton, Montana, has been selling 500 to 600 tons of gypsum for 

agricultural purposes per year, and that in western Montana generally 
the retail buyers of gypsum in bulk have been paying $10 per ton, 

plus shipping costs of $10 per ton. Defendants contended that if 

retail buyers could buy gypsum at a cheaper price, they would buy 

and sell more. Defendants also contended ranchers and farmers 

in the Drummond area must pay $22 to $26 per ton retail for sacked 

gypsum material and that a few weeks after the discovery of this 

gypsum deposit defendants sold approximately 130 tons to farmers 

and ranchers in the area at a price of $10 per ton, with purchasers 

hauling away their gypsum. These sales stopped when legal counsel 

advised defendants that the state of Montana presently owned the 

gypsum. Defendants also introduced testimony that the cost of 

shipping this gypsum to Hamilton would be between $5 to $7.37 per 

ton, depending on whether rail or road transportation was used. 

They further contended that a market exists for the widespread 

use of gypsum in western Montana, and that good public relations 

and good advertising work would open the market for rapidly increased sales. 

Defendants argued, insofar as the gypsum property was 

concerned, they had established proof of its presence, quality, 

and quantity; and that there was a need, demand, and market 

available at the location of the deposit. 

The Highway Commission contended the gypsum deposit contained excessive amounts of water; consequently, it would not meet 

commercial standards. Its expert testified the gypsum deposit 

contained 25% to 30% free water and the presence of free water 

in excess of 25% disqualified the deposit as being commercial. 

Another Commission expert witness testified the deposit was 

definitely too small to be commercially usable and the best that 

defendants would be able to do was to make local sales to local 

people. He further testified he was unaware of any deposit of 

this nature that had been commercially developed. 
The Highway Commission alleges that a material part of the 

verdict was based on speculation and conjecture; therefore, the 

judgment should be reversed and a new trial ordered with directions 

that the value of the property should be established only on substantiated, factual evidence. It argues defendants did not produce 

a witness who, by study or experience, understood the true nature 

of the deposit of gypsum, so as to be qualified to testify as to 

its economic value for commercial purposes. 

Dr. Paul B, Alexander, Ph.D., a professional geographer and 

consulting geologist was the defendants' principal expert witness. 

He is a professor at the University of Montana and at the time he 

testified was president of the Montana Explorations Company, a 

mineral exploration company. Prior to his teaching career, he 

was a geologist for the Anaconda Company for five years, had served 

as a consultant for various oil companies in California and Canada 

and had been self-employed. He was hired by defendants and made 

his study of the deposit while it was still in place. Under his 

direction, samples of the gypsum were taken and sent to various 

laboratories for valuation. He determined the deposit contained 

some 23,140 tons of 85% or better gypsum, and testified it had 

commercial value as an agricultural fertilizer. 

Defendants then produced as a witness one Roy McLeod of 

Philipsburg, Montana. McLeod had been superintendent, assistant 

manager, and manager of the Trout Mining Company of Philipsburg 

for 18 years. Although no longer in the mining business, McLeod 

was still active, from time to time, as a consultant on value of 

mining properties. Over plaintiff's objections, McLeod testified 

the value of the gypsum was $80,000 for the acreage involved. 

The Highway Commission contends McLeod did not have sufficient knowledge to make the estimate he did, and that he should 

not have been allowed to testify as to value of the deposit 

because he: (1) had never seen the deposit in question, (2) knew 
nothing of gypsum, (3) had never studied the economic aspects 

of the gypsum market, (4) had no knowledge of sale of land containing gypsum in place, (5) had no knowledge of the quality 

standards applicable to the chemical compound to make it commercially marketable, and (6) had never investigated any gypsum 

deposits. 

In addition to their two expert witnesses, defendants 

introduced testimony from individuals directly involved in 

agriculture who testified as to the commercial use of gypsum, 

County Extension Agent D. L, Becker testified as to the alfalfa 

acreage in the county; David Dutton, a rancher in the area who 

had purchased a 12 ton load from defendants, told of its use and 

value as a fertilizer; Clifford Nelson, a rancher and purchaser, 

testified as to its agricultural value; as did Ernest Wight, 

another rancher. All were in agreement that the deposit could 

be beneficially used when mixed with the clay type soil of the 

area. 

Also, Martin Ueland of Hamilton, manager of the Bitter 

Root Cannery testified as to the use of gypsum in that area, 

its price and quantity used. Donald Graham, Corvallis, soil 

scientist at the Western Branch Experiment Station, testified 

the soil of most of the western Montana counties, particularly 

those counties where hay and alfalfa are important crops, would 

respond to the application of gypsum. He introduced slides of 

experiments which showed as high as a sevenfold increase in an 

alfalfa crop after the application of gypsum. 

With the foregoing as background, we now look to the issues 

raised by the Highway Commission. First, we will consider the 

alleged error by the court in refusing to strike the testimony 

of witness McLead. Admittedly both Alexander and McLeod were not 

gypsum experts, but both have credentials in the mining field. 
Due to the type of deposit involved here, it would have been 

almost impossible to have found an expert who could testify as 

an expert, as to the type of deposit found. A11 witnesses, for 

both plaintiff and defendants, testified that the type of deposit 

found here is an unusual deposit, not often found. However, Dr. 

Alexander, a teaching geologist, most certainly has the necessary 

professional credentials to help the jury establish the value of 

the deposit here involved. 

On rebuttal, Dr. Alexander testified, in answer to the 

Highway Conmission's expert witness Criswell, that in evaluating 

a deposit such as this one two views must be considered (1) the 

I I large company" evaluation, and (2) the "small guy" valuation. 

He testified that a large company would find such a deposit 

valueless, but that a small operator could commercially develop 

the deposit by using a back-hoe or prime mover to load the gypsum 

on trucks. 

Wilbur Criswell, the expert witness for the Highway Commission, was a graduate of the Montana School of Mines with a B.S. 

in mining engineering. He had pursued this occupation for some 

24 years and had considerable experience in locating, evaluating 

and securing market information on gypsum, but for the most part 

he was interested in rock gypsum deposits as opposed to a small 

I I gypsite" deposit, as here involved. He felt that such a small 

deposit had no commercial use, at least not to the people for whom 

he had worked. 

Reviewing the expert testimony before the jury, we find 

(1) Dr. Alexander testified that in his opinion the deposit had 

commercial value, but set no figure; (2) Mr. Criswell testified 

it had little or no value, but (3) Mr. McLeod testified the 

deposit had a value of $80,000. Mr. McLeod was allowed to testify 

over repeated objections by plaintiff Highway Commission, and we 
find that allowing such testimony was prejudicial error necessitating reversal and a new trial. 

Here, McLeod was allowed to testify and set a figure based 

on a hypothetical question which assumed facts not in evidence 

the 

as to the market values of gypsum and the value of/ gypsum in 

place. Clearly, from the evidence produced and from ~c~eod's 

experience as a mining man, he could not testify as to a gypsum 

deposit what amount a willing buyer would pay and a willing seller 

would accept, neither of whom was acting under duress, which is 

the accepted legal definition of the fair market value of property. 

Certainly, his figure of $80,000 had a material effect on the 

verdict. The Highway Commission moved to strike the answer to 

the hypothetical question, but was overruled. The lengthy 

hypothetical question covered all of the fact material listed 

heretofore, and more, but it lacked the expertise needed to provide 

information on a willing buyer and a willing seller. T-os, M-eod 

was al-1-d to a-ssume Che c-orret-ess of cer-tagit. f-aets test434-d 

t+ -by ocher Wi-t*e.sser;-, bu* out4de hi-s per-sonel- knowledge as towhether sueh Eacas were c+errec%. Qn- retxza-1 such testirneny shmld 

not be per-mi&&ecl, un1.e~-s the cxi---i.-~~ set for* here can be met. 

Both the Highway Commission and defendants rely on two 

cases of this Court regarding witnesses competent to make valuation 

figures. State v. Peterson, 134 Mont. 52, 63, 328 P.2d 617; 

State Highway Comm'n v. Antonioli, 145 Mont. 411, 416, 401 P.2d 

563. 

In Peterson, this Court said that to qualify as a witness 

competent to give opinion testimony as to value, that witness 

must have: 

"* * 9~ some peculiar means of forming an intelligent 

and correct judgment as to the value of the property 

in question beyond what is presumed to be possessed 

by men generally. 11 
In Antonioli, the Court stated: 

"'Where the testimony submitted to the jury and 

relied upon by the landowners in their efforts 

to establish just compensation is testimony from 

exDert witnesses. the opinions as expressed by 

thb experts must'be founded upon substantiated 

evidence and must not be based upon unsupported 

assumption, conjecture or speculation. "' (Emphasis 

added). 

See: United States v. Certain Land, Etc. (~.c.Ala.l963), 214 

F.Supp, 148, 150; Texas Electric Service Co. v. Vest (Tex.Civ. 

App. 1958), 310 S.W.2d 733; Los Angeles County v. Signal Realty 

Co., 86 Cal.App. 704, 261 P. 536; State Highway Comm'n v. Smith 

& Jesson, 141 Mont. 302, 377 P.2d 352. 

Clearly, based on the holdings of the above cited two 

Montana cases, McLeod lacked the peculiar knowledge required to 

set the value estimate of $80,000. 

In view of our holding on the first issue, it is unnecessary 

to consider appellant's second and third issues which to some 

extent have been covered in our discussion herein and they should 

not arise on retrial. 

Judgment is reversed and the cause remanded to the district 

court for a new trial. 

/ 

--------- - -------- 

RocihiW 

We Concur: Ll 

................................ Chief Justice 

Associaa Justices.