Title: HIGHWAY COMM N v BENNETT
Citation: N/A
Docket Number: 12187
State: Montana
Issuer: Montana Supreme Court
Date: July 16, 1973

No. 12187 I N THE S U P R E M E C O U R T O F THE STATE O F MONTANA 1973 T H E STATE O F M O N T A N A , ACTING BY AND T H R O U G H T H E STATE HIGHWAY COMMISSION OF THE STATE O F M O N T A N A , P l a i n t i f f and Appellant, ROGER W. B E N N E T T and SANTINA BENNETT, Defendants and Respondents. Appeal from: D i s t r i c t Court of the Third J u d i c i a l D i s t r i c t , Honorable Sid G. Stewart, Judge presiding. Counsel of Record: For Appellant : Daniel J. Sullivan and Leo J. Kottas, Jr. argued, Highway Legal Department, Helena, Montana, For Respondents: Knight, Dahood, Mackay and McLean, Anaconda, Montana. Malcolm MacCalman argued, Deer Lodge, Montana. Filed : rn 7 . ; - * * 3 ? ? Submitted: June 18, 1973 Decided : M r . J u s t i c e Frank I. Haswell delivered the Opinion of the Court, This i s a condemnation action by the S t a t e Highway Commission involving a 2.68 acre t r a c t of land with improvements, located four miles west of Garrison, Powell County, Montanz, Foll0b~ing jury t r i a l i n the t h i r d j u d i c i a l d i s t r i c t court before the Hon, Sid G, Stewart, d i s t r i c t judge, judgment was entered awarding the owners $60,000 f o r t h e i r property. From t h i s judgment and denial of a motion f o r a new t r i a l , t h e S t a t e appeals. The S t a t e of Montana, acting through the State Highway Com- mission, seeks t o acquire the land i n question f o r highway pur- poses. The property owners a r e Roger W. Bennett and h i s wife, Santina Bennett, Their property abuts U,S. Highway No. 10 along the north ri.ght-of-way boundary line. The property i s known i n the area a s The Golden Spike. Located upon the property were r e n t a l cabins, storage sheds and a service s t a t i o n , with home and shop combined, Bennett t e s t i - f i e d h i s business consisted of running the service s t a t i o n and s e l l i n g and repairing used cars, trucks and t r a c t o r s , A t t r i a l , the s t a t e ' s appraiser t e s t i f i e d t h a t the "highest and b e s t use1' of the land was f o r r u r a l homesites and fixed i t s market value a t $25,650, based on the cost approach f o r the buildings and the market data approach f o r the land. Witnesses f o r the property owners t e s t i f i e d t h a t the "highest and best use" of the property was business o r commercial. The property owner valued h i s property a t $100,000 and an independent f e e appraiser f o r the owners, using the c a p i t a l i z a t i o n of income approach, valued the property a t $81,367.44. The jury returned a verdict f o r the property owners i n the amount of $60,000. Judgment was entered and the S t a t e appeals from t h a t judgment. O n appeal the S t a t e presents seven issues f o r review, The f i r s t three concern the admissibility of t h e owner's testimony a s t o the value of the property. Issues four through s i x r e l a t e t o t h e propriety of the c a p i t a l i z a t i o n of income approach used by the property owners' appraiser. Issue seven alleges e r r o r i n the d i s t r i c t c o u r t ' s limiting cross-examination by counsel f o r the State, I n issues one through three the t h r u s t of the s t a t e ' s argument i s t h a t owner en nett's valuation of hi.s property was not admissible because no proper foundation was l a i d , The owner t e s t i f i e d , over objection, t o a figure of $100,000, a s the value of h i s property. The State, relying on Alexander v. State Highway Comm'n, 142 Mont. 93, 110, 381 P.2d 780, contends the owner's testimony was not admissible. I n Alexander t h i s Court held: ft* $ - * t h a t an owner, upon prima f a c i e proof of ownership, s h a l l be qualified t o estimate i n a reasonable way the value of h i s property f o r the use t o which he has been putting i t , Such owner i s not qualified by v i r t u e of ownership alone t o t e s t i f y a s t o value f o r other purposes unless he possess, a s any other witness a s t o value, I some peculiar means of f orming an i n t e l l i g e n t and correct judgment a s t o the value of the property i n question beyond what i s presumed t o be possessed by men generally."' Here, the owner t e s t i f i e d only a s t o the value of the property f o r purposes t o which he had been using it, The S t a t e contends, i n e f f e c t , t h a t the owner cannot s t a t e the value of h i s property f o r the purpose f o r which he was putting it when t h a t use is not, i n the s t a t e ' s opinion, the highest and best use, The property owner presented a figure of $100,000 a f t e r foundation was l a i d a s t o h i s f a m i l i a r i t y with the general area, h i s purchase of t h e property and construction of the buildings, and h i s use of the property i n s e l l i n g gasoline, o i l , used c a r s and other vehicles over a period of twenty years, With t h i s background, it cannot be said t h a t h i s valuation was e i t h e r speculative o r conjectural. The competence of a witness t o give an opinion on value of property is generally i n the discretion of t h e t r i a l judge. One who knows the r e a l property i n question and i s familiar with the uses t o which it may be put, may t e s t i f y a s t o i t s market value. Such witnesses need not know of any s a l e s o r be technical experts. S t a t e Highway Comrn. v, Wilcox, 155 Mont. 176, 468 P.2d 749; S t a t e Highway Comm'n v. Barnes, 151 Mont. 300, 443 P,2d 16; S t a t e v. Peterson, 134 Mont. 52, 328 P,2d 617. The property owner, whether generally familiar with such values o r not, ought t o be allowed t o estimate i t s worth. The weight of h i s testimony is f o r the jury. Alexander v. S t a t e Highway Comm'n, supra; 3 Wigmore, Evidence $ 716 (Chadbourn rev. 1970). The only r e s t r i c t i o n on t h e owner's testimony i s when the nature of the answer i s so un- reasonable a s t o be speculative, conjectural, and contradictory t h a t h i s answer should be stricken. Alexander v. S t a t e Highway Comm'n, supra, Here, the owner's estimate was not so unreasonable o r lacking i n foundation t h a t t h i s Court may hold the d i s t r i c t court abused i t s discretion, s t a t e ' s issues four through s i x a r e directed a t the valuation fixed by the property owners' appraiser under the c a p i t a l i z a t i o n of income approach, The S t a t e contends t h a t such an approach t o valuation should not have been admitted because of i n s u f f i c i e n t evidence of the n e t income t o c a p i t a l i z e , It has been generally held t h a t the b e s t method of a r r i v i n g a t market value i s recent s a l e s of comparable property, S t a t e Highway ~omm'n v, Bare, 141 Mont. 288, 377 P.2d 357. But where there a r e no comparable s a l e s , evidence based upon revenue and valuation based i n p a r t thereon i s competent and admissible. S t a t e Highway Comm'n v, Biastoch Meats, Inc, , 145 Mont. 261, 400 P.2d 274, I n the i n s t a n t case the purpose f o r which the property was used i s indeed unique i n the area, Here, we have a service s t a t i o n and r e p a i r shop i n an area more typically used f o r r u r a l homesites o r farm land, The property owners' appraiser used the c a p i t a l i z a t i o n method of valuation i n determining t h a t t h e property i n question should be valued a t $81,367.44. H e arrived a t t h i s figure by averaging the C owners' income t a x returns f o r the past two years on income from t h e property. He then deducted from n e t p r o f i t the sum of $120 f o r maintenance and $4,800 a s a f a i r amount a t t r i b u t a b l e a s wages f o r the owners, The balance of $4,884 was a t t r i b u t e d t o the value produced by the property i n l i e u of r e n t which when capitalized a t s i x percent gave a value of $81,367.44. Weaknesses i n formulating t h i s value go t o the weight of the expert's t e s t i - mony t o be evaluated by t h e jury, S t a t e Highway Comm'n v. Wilcox, 155 Mont. 176, 468 P,2d 749; State Highway Comfn v, Vaughan, 155 Mont. 277, 470 P.2d 967, Once proper foundation has been l a i d a s t o the witness' expertise he ghouldbe permitted t o give h i s opinion using any of the accpted means of calculating value, It is thus incumbent upon the S t a t e t o bring out any weaknesses of h i s valuation upon cross-examination. The apprsiser's figures were based on more than conjecture and uncertainty and therefore can be distinguished from State Highway Comm'n v, Bare, 141 Mont. 288, 377 P,2d 357, r e l i e d upon by the State, Issue seven concerns the s t a t e ' s contention t h a t it was unduly limited in its cross-examination. It i s a general r u l e i n t h i s s t a t e t h a t section 93-1901-7, R,C.M. 1947, permits a wide range f o r cross-examination. The r i g h t of cross-examination may not be unduly r e s t r i c t e d and may extend not only t o f a c t s s t a t e d by the witness i n h i s d i r e c t examination, but t o a l l other f a c t s connected with them which tend t o enlighten the jury upon the question i n controversy, The r u l e necessarily includes questions t o bring out f a c t s i l l u s t r a t i v e of the motives, b i a s and i n t e r e s t s f the witness o r a s a r e f l e c t i o n upon h i s capacity and memory, Kipp v. Silverman, 25 Mont, 296, 64 P. 884; Cobban v, Hecklen, 27 Mont, 245, 70 P. 805; Cuerth v, Arbogast, 48 Mont. 209, 136 P, 383; Herzig v. Sandberg, 54 Mont. 538, 172 P, 132. W e have thoroughly reviewed the record and find it simply does n o t bear out the S t a t e ' s contention t h a t cross-examination by the s t a t e of the property owners' appraiser was unduly r e s t r i c t e d . Jury findings w i l l not be disturbed unless they a r e so obviously and palpably out of proportion t o the value of the property taken a s t o be i n excess of j u s t compensation, S t a t e Higl-c~sy ~omrn'n v. Jacobs, 150 Mont. 322, 435 P,2d 274. Having reviewed the record and examined the issues raised by t h e State, we find there was no substantial e r r o r i n the dis- t r i c t court proceedings. The judgment i s affirmed, Associate J u s t i c e / Associate ~ u s t i c < s ,