Court Opinion

ID: 6899859
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:53:50.712972+00
Date Added: 2024-06-11T16:06:08.093276
License: Public Domain

HEALY, Circuit Judge
(dissenting),
The majority’s reversal of the judgment appears to be built around an instruction given by the court and the refusal to give appellants’ requested instruction No. 40. As I read the opinion other matters are brought in as intensifying the assumed prejudicial effect of the errors first mentioned.
The instruction held to be erroneous doe's not, as seems to be thought, advise the jury to disregard speculative values or speculative considerations which influence market value. This particular portion of the charge is devoted to conditions or considerations peculiar to the immediate parties as distinguished from the ordinary conditions in light of which fair market value is to be determined. I quote the entire passage.
“You are not to consider what the property or interest taken was worth to the defendants or any of them or to the owners of the leasehold or to the owners of the royalty interest for speculation or merely for possible usage, or what the defendants claim the property or leasehold interest or *25royalty interest was worth for such purpose, nor what it would be worth to the Government for military purposes or for other purposes. You are not to consider the price that the property or interest would sell or lease for under special or extraordinary circumstances, hut only the fair market value if offered in the market under ordinary circumstances for cash, a reasonable time being allowed to make the sale.
“The defendants in this case are not entitled to make a profit because the interests which they claim they have were taken from them by the Government. By that I mean that they may not obtain more compensation by reason of the condemnation proceeding than they would obtain as the fair market value of such interest if there had not been a condemnation proceeding. The Government’s wartime necessity for the use of this property, for the particular purpose standing alone, cannot be considered in estimating the value of the property taken. Demand created by wartime necessity cannot be considered in estimating the value of the interest taken. Future income or speculative productive value contemplated is not a measure of condemnation value. Profits which might be derived from devoting the property to a particular purpose depends so much on conditions that cannot be forseen that they have no competency.”
This passage was immediately preceded by a lengthy instruction, which I quote on the margin, clearly defining market value and advising the jury that market value is the measure of damages in condemnation.1 The instruction of which my brothers complain, read in conjunction with the charge quoted in the footnote, I take to be good law. I had supposed it to be settled that the measure of condemnation value, as the trial court said, is market value, not “future income or speculative productive value contemplated” by the owner. Appellants appear to have thought so too. On the appeal they have not assigned the giving of this instruction as error, nor did they interpose any objection to it below; much less was the language singled out in the majority opinion designated by them as objectionable. The matter of speculative value was not mentioned in the objections interposed. Rule 51 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, provides, in part, that “no party may assign as error the giving or failure to give an instruction unless he objects there*26to before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the ground of his objection. * * * ” The court not only tosses this salutary rule out of the window but of its own motion finds reversible error in a charge which the federal courts have given so often that it has come to be regarded as a stock instruction.
I may say that appellants were represented throughout by able and highly vocal counsel who exhibited no difficulty in expressing themselves or in making their points clear. They have not complained that this instruction was wrong; and it has remained for my brothers to discover in their brief a fugitive intimation that somewhere in the instructions language is to be found which negatived counsel’s request No. 40. The objection to the failure to give request No. 40 I quote on the margin.2
I wish to make some further observations with respect to this request, but for the moment it seems enough to say that, assuming its propriety, the giving of it was unnecessary. The court, as will appear from a reading of the instructions quoted-in footnote 1 above, amply and correctly defined market value. These instructions do not exclude speculative considerations, whether probable or merely possible, which in fact “influence the minds of sellers and buyers.”
It should be remembered that opinion evidence of value based on speculative considerations, as well as on what were claimed to be comparable sales in other localities, was freely admitted, none was excluded, and all was left for the consideration of the jury. Under the instructions counsel were entitled to urge and the jury were at liberty to take into account the speculative value of the interests taken insofar as it might be thought persuasive in the market; and appellants were entitled to no more than that. If the ground was fairly covered in the instructions, and I am satisfied it was, reversible error can not be predicated on the mere refusal to respond to this specific request even if it were in all respects proper. As said in Railway Co. v. McCarthy, 96 U.S. 258, 265, 266, 24 L.Ed. 693, “no court is bound to give instructions in the forms and language in which they are asked. If those given sufficiently cover the case, and are correct, the judgment will not be disturbed, whatever those may have been which were refused.” The rule to this effect is universally followed.
The verbiage of request No. 40 was taken from an opinion of the Fifth Circuit in the case Eagle Lake Improvement Co. v. United States, 141 F.2d 562. The language was not there put forward as appropriate material for an instruction. It was employed in discussing an instruction which the court thought should not have been given. The trial judge had in substance charged the jury to find the mineral interests involved “valueless” unless from the evidence it was believed that a reasonable probability existed that oil or gas in paying quantities might be produced. The appellate court cited Olson v. United States, 292 U.S. 246, 54 S.Ct. 704, 78 L.Ed. 1236, as being in substantial accord with this view, that is to say as holding that elements affecting value that depend upon occurrences which, though possible, are not reasonably probable, should be excluded from consideration as too speculative and conjectural to afford the basis for the judicial ascertainment of value. But the court pointed out that Texas law is more liberal where oil interests are involved, and a number of local decisions to that effect were cited. Further, it was observed that the mineral leaseholds in suit “are immediately adjacent to a currently productive oil field.”
No productive field existed in the neighborhood of these leaseholds; they were in territory where, to put it mildly, nothing of commercial significance ’had been encountered. Nor do my associates point to any California law which would validate as an instruction the charge embodied in request No. 40. I may add that in this instance the trial court gave no instruction *27of the character found erroneous in the Eagle Lake Investment Co. case; and there is nothing in the opinion in that case to buttress the present holding that a failure to instruct in the language of request No. 40 constitutes reversible error. I am myself persuaded that a charge phrased as this request is would serve merely to confuse or mislead the jury in their endeavor to arrive ht market value. After all, the question of what — whether much or nothing —a specific interest would bring if exposed for sale on the open market is not one of law, as this request assumes, but one of fact to be determined from the evidence.
I turn to other points stressed by the majority. One of these relates to a comment of the judge in the course of the trial on the incredibility of an item of testimony of the witness Bradford, and to the judge’s remark concerning the state Corporation Department. Counsel for appellants objected to these observations as prejudicial. The court then stated in the presence of the jury “I am sorry to have made this comment. I will tell the jury to disregard it. It is just a comment of the court. * * * I will tell the jury to disregard the court’s statement. The comment of the court was on the weight of the evidence and the jury is not bound by it. The jury can decide the case if and when it comes time for the jury to decide the case, according to their own lights and according to the instructions the court may give them at that time. The court, of course, has a right to make comments as to the weight of the evidence, but the jury is not bound by what the court says in that regard. It may form its own judgment. Does that instruction cover what you have in mind?” To which counsel for appellants replied, “Yes, your Honor. Thank you.”
That would seem to have closed the incident even to the satisfaction of counsel, and I am unable to agree that its occurrence justifies a reversal. Appellants did not suggest that a mistrial be declared. On the contrary they appear to have preferred to take their chances on a favorable verdict.
Another matter found error by the majority is this sentence quoted from the instructions : “The reason why the court has expressed the opinion is that it appears to the court that there is no factual basis presented in the testimony of the expert witnesses for the defense upon which the opinion of value given by them can be said to rest.” My associates construe this as a charge “that no evidence exists of the fact of a gas production giving a saleable value to the leasehold, when the record is replete with such evidence.”
Neither here nor below did appellants interpret the court’s language as a statement that there was no evidence of a discovery of gas in commercial quantities. Obviously the court meant to tell the jury no such thing, for, while confessedly there had been no factual demonstration of a commercial discovery, appellants’ expert Norris had testified that in his opinion gas in commercial quantities was encountered at the time the well blew out. Appellants did object to the instruction of which the quoted sentence is a part, but not on the ground injected by the majority. Their objection was that the remarks exceeded the bounds of proper comment by the court in that it amounted to taking sides. The objection interposed is shown in full in the footnote.3
Here again my associates not only brush aside the requirements of Rule 51 but volunteer an interpretation of the judge’s remark not so much as suggested by astute counsel who participated in the trial and who had doubtless prayerfully scrutinized the appeal record. Had there been reason to believe that the language used might be subject to the construction given it by my associates the duty rested on appellants of calling the matter specifically to the court’s *28attention. In this way opportunity would have been afforded to correct any possible misapprehension and a new trial on that ground could readily have been avoided. Consult among the many authorities on the subject, Palmer v. Hoffman, 318 U.S. 109, 119, 63 S.Ct. 477, 483, 87 L.Ed. 645, 144 A.L.R. 719; Pennsylvania R. R. Co. v. Minds, 250 U.S. 368, 375, 39 S.Ct. 531, 63 L.Ed. 1039.4
Preliminary to a further word on this particular point I append below the whole of the remarks of which the quoted sentence was a part.5 It seems to me clear from a reading of this instruction that the sentence is not open to the interpretation my associates give it. It amounts to no more than an expression of the court’s opinion, expressly designated as such at the time, that the values fixed by appellants’ experts lacked basis in fact. Even this analysis is less than fair to the trial judge. Defense experts had testified to total values of the leasehold and royalty interests in suit at sums as high as $662,000. The thought expressed by the judge was, not that these interests were without saleable value, but that in his opinion the values testified to by the experts were exaggerated to the point of being incredible.
I desire at this point to interpolate a word concerning the phrases “wells of proven profit,” “proven commercial gas leases,” “profitably producing gas well,” and kindred examples of poetic license employed in the court’s references to the leases in suit. There was no factual proof of a commercial discovery, and I am sure my associates would not want to leave the impression that there was. The evidence on the subject rested entirely in unverified and unverifiable opinion. Where a demonstrable commercial discovery of gas has been made the fact is not open to dispute; the volume of flow is susceptible of accurate measurement, and in such case opinion evidence of the fair market value of the property has a truly factual basis. Here the opinion evidence of value, so far as predicated on an assumed commercial discovery of unknown proportions, neither had nor could have anything tangible on which to rest.6 It hardly rose to the dignity of an informed guess. Authorities like Montana Realty Co. v. Warren, 137 U. S. 348, 11 S.Ct. 96, 34 L.Ed. 681, dealing with the admissibility of evidence, are obviously inapposite.
The appropriate basis for the formulation of expert opinion on market value has been *29very recently announced by the Supreme Court in United States v. Miller, 317 U.S. 369, 374, 63 S.Ct. 276, 280, 87 L.Ed. 336, 147 A.L.R. 55, in this language: “It is usually said that market value is what a willing buyer would pay in cash to a willing seller. Where the property taken, and that in its vicinity, has not in fact been sold within recent times, or in significant amounts, the application of this concept involves, at best, a guess by informed persons.” Here appellants’ witnesses failed to inform themselves of or to consider sales of other properties or mineral rights in the vicinity of these leases. Their expert Wents, after disavowing knowledge of various Northern California transactions, stated that they had no bearing on the problem. Bradford denied knowledge of trading in gas rights north of Madera County. These witnesses, when pressed for a basis for their estimates, claimed only that sales for comparable amounts had been made in Southern California oil areas, namely Bakersfield and Los Angeles. The qualifications of an expert witness to give opinion evidence of value is a question of law for the court, cf. United States v. 13,255.53 Acres of Land, 3 Cir., 158 F.2d 874, and I am unable to see how the court can be thought in error in commenting on these witnesses’ lack of qualifying information.
In any event the comment was no more than the judge’s expression of opinion on the evidence. The jury were amply advised that it was their province to decide the facts and to determine where the weight of the testimony lay. The judge was careful to inform them that they were not bound by his comments. In making them he was within his prerogative, and I am of the belief that the majority holding erroneously restricts this right and duty of comment. From the beginning, unlike the rule in many of the states, it has been settled in the federal jurisdiction that “the judge, in submitting a case to the jury, may, at his discretion, whenever he thinks it necessary to assist them in arriving at a just conclusion, comment upon the evidence, call their attention to parts of it which he thinks important, and express his opinion upon the facts; and the expression of such an opinion, when no rule of law is incorrectly stated, and all matters of fact are ultimately submitted to the determination of the jury, cannot be reviewed.” Vicksburg, & M. Railroad Co. v. Putnam, 118 U. S. 545, 553, 7 S.Ct. 1, 2, 30 L.Ed. 257.
This vital prerogative of the judge was again stressed in the decision cited in support of the majority holding, namely Quercia v. United States, 289 U.S. 466, 53 S.Ct. 698, 77 L.Ed. 1321. A reading of that case demonstrates its inapplicability to the situation before us. There the judge, in instructing the jury in a criminal proceeding, charged them as follows: “And now I am going to tell you what I think of the defendant’s testimony. You may have noticed, Mr. Foreman and gentlemen, that he wiped his hands during his testimony. It is rather a curious thing, but that is almost always an indication of lying. Why it should be so we don’t know, but that is the fact. I think that every single word that man said, except when he agreed with the Government’s testimony, was a lie.” Of these remarks the Court said that “the trial judge did not analyze the evidence; he added to it, and he based his instruction upon his own addition. Dealing with a mere mannerism of the accused in giving his testimony, the judge put his own experience, with all the weight that could be attached to it, in the scale against the accused.”
In the present instance the judge did not add to, subtract from or distort the evidence. If his comments are to be held out of bounds it seems to me that little of consequence is left of the federal judge’s right to express his opinion on the evidence where he thinks the arrival by the jury at a just conclusion requires that he pursue that course. Here the judge informed counsel in advance of the argument of his purpose of commenting on the expert opinion of values, stating as his reason that if a verdict were returned in line with defense expert opinion he would feel obliged to set the verdict aside.
I would affirm the judgment.

 “Now, just compensation means the equivalent in money of the interest taken so that the owner may be in the same position pecuniarily he would have occupied had the taking not occurred. Just compensation in condemnation is determined on the basis of the market value of the property or interest taken at the time of the taking by the Government. Thus the market value becomes the measure of damage. The test is not value for special purpose. It is the fair market value in view of all the purposes to which the property or interest is naturally adaptable. It is the highest value in terms of money which the property or interest will bring if exposed to sale for cash in the open market in the community in which it is situated, with a reasonable time to find a purchaser buying with full knowledge of all the uses and purposes to which it is adapted and for which it is capable of being used, the seller not being required to sell or the buyer not being required to buy at the time.
“In arriving at the amount of the market value of the interest taken by the Government in this case, that is, the amount in dollars and cents of the market value, you are not to consider what the interest taken was worth to the Government, for to allow that element to enter into your deliberation would be to make the Government’s necessity the owner’s opportunity. In other words, neither need for selling nor need for purchasing should be considered or should be taken into account. The location or physical characteristics, the advantages and disadvantages of the property or interest which is the subject of the condemnation are proper matters to [be] shown in evidence in determining market value. These are matters which naturally would be taken into calculation in forming a public and general estimate of the value of the property or interest taken and influence the minds of the sellers and buyers with relation thereto. Accordingly, to the extent that such matters are shown by the evidence, the Jury may properly consider the same in arriving at its conclusion as to the amount of the just compensation which should be paid.”

 “We also object to tbe refusal of the court to give our instructions Nos. 40, 41, and 43, those instructions having to do with the market value of the oil and gas leases. We object on the ground that the refusal to give those instructions is prejudicial error.”

 “Our objection to that particular instruction — and it was quite a long one— is that it exceeds the bounds of proper comment by a court in the instructions and amounts to taking sides. We object to the instruction as prejudicial error, on the ground that it denies the defendants in this action due process of law under the Fifth Amendment to the Constitution, on the ground that it is repugnant to the Fifth Amendment to the Constitution, providing that a defendant is entitled to just compensation in condemnation cases. We object to it on the ground that it is repugnant to the Sixth Amendment to the Constitution in that it denies the defendants in this action a fair trial by jury.”

 In Palmer v. Hoffman, supra, it was said of this subject: “In fairness to the trial court and to the parties, objections to a charge must be sufficiently specific to bring into focus (he precise nature of the alleged error. Where a party might have obtained the correct charge by specifically calling the attention of the trial court to the error and where part of the charge was correct, he may not through a general exception obtain a new trial.” This principle, constituting the rationale of Rule 51, has always been followed in the federal jurisdiction.

 “Ordinarily, ladies and gentlemen, the court, as I stated to you before, abstains from expressing opinions as to the weight of the evidence. However, due to the somewhat apparent complexities of this case, and in order to be of assistance to the jury in the proper administration of justice, I believe it is my duty to make the following comment to the jury: In the opinion of the court the values fixed by the expert witnesses produced by the defendants in this case appear to the court to be so exaggerated as to make the testimony of those witnesses incredible. The opinion that I have expressed is just the opinion of the court. A Federal judge is permitted to make such a comment to the jury. The jury is not bound by the opinion of the court. The opinion is expressed as a part of the instructions as to the law for such aid as the jury wishes to make of it in determining the factual question. The jurors individually and collectively are entitled to disagree with the opinion of the court. You may have your own opinion and you can come to it. You are not bound in any manner in making a finding in accordance with the view expressed by the court. The reason why the court has expressed the opinion is that it appears to the court that there is no factual basis presented in the testimony of the expert witnesses for the defense upon which the opinion of value given by them can be said to rest.”

 The earlier flow of gas referred to in the majority opinion, said to amount to 100,000 to 125,000 cubic feet per day, confessedly was without commercial significance.