Court Opinion

ID: 9442908
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:03:45.703467+00
Date Added: 2024-06-11T17:29:16.908317
License: Public Domain

MURRAH, Circuit Judge.
These consolidated appeals involve the common question of the correct measure of just compensation for the taking of private lands by the Government for public purposes.
All of the lands involved are cattle ranches of the respective appellees in Dona Ana and Otero Counties, New Mexico, appropriated by the United States for war purposes under the Second War Powers Act, § 201, 56 Stat. 177, 50 U.S.C.A. § 171a. The ranches consist of land owned in fee by the ranchers, land leased from the State of New Mexico, and the public domain on which the ranchers hold permits under the Taylor Grazing Act of June 28, 1934, 48 Stat. 1269, as amended, 43 U.S.C.A. §§ 315-315r. The permits grant an exclusive or preferential right to graze a stipulated number of cattle on the public domain, and are usually for a term of ten years with preference for renewal. They are to be recognized and safeguarded, but they create no “right, title, interest, or estate in or to the lands.” Section 315b. They have been judicially termed a privilege “withdrawable at any time for any use by the sovereign without the payment of compensation.” Osborne v. United States, 9 Cir., 145 F.2d 892, 896; see also Oman v. United States, 10 Cir., 179 F.2d 738.
At the request of the War Department, a proceedings was first instituted on April 3, 1945, to take for military purposes, 556,-032 acres in this vicinity for a term of years ending June 3, 1945, extendible for yearly periods during the national emergency. Later, however, it was determined to take the land in fee, and on October 16, 1946, a petition was filed to condemn 427,120.98 acres, including the lands involved here.
The petition to condemn called attention to the fact that a large portion of the lands taken were federally owned, and that the Government did not by this proceedings admit the existence of any fights in such lands in favor of any of the named defendants, or any other persons. Title and possession of the lands were taken on October 21, 1946, and the Government appealed from the Commissioners’ appraisement. The four separate proceedings in Number 4148 were consolidated for trial and four separate judgments rendered on jury verdicts. Number 4201 involves one ranch, but the common question of law in all the cases is presented on facts which are not *295significantly different, and they will be treated together.
On a pre-trial of the cases, the controversy arose over the correct measure of compensation for the taking of the ranches, the Government contending that since the landowners owned no compensable interest in the permit lands, they could not be taken into consideration in the determination of just compensation for the fee land taken. The ranchers took the position that the ranches necessarily included the fee, leased and permit lands, as an economic unit, and that they should be valued on the basis of the carrying capacity of the ranch as a unit in the determination of just compensation. Pursuant to argument, the trial court ruled that “the jury will be instructed that it will take into consideration the carrying capacity of each respective ranch, irrespective of the type and character of the ownership or the title under which or the right to use which, each such ranch is held, and any other factor which may and is usually used and considered between private individuals in leasing or renting such ranches *
Consistently with this ruling, witnesses for the ranchers were permitted to base their evaluation of the ranches upon the carrying capacity times the unit value of the calf crop, plus the value of the improvements. Thus, one of the ranches, with a carrying capacity of 67 head of cattle, was valued at $20,670.00 by multiplying the carrying capacity by a per animal unit value of $152.00, plus the estimated value of the improvements. When one of the witnesses so testifying was asked if he could evaluate the fee land by allocating to it the proportional part of its carrying capacity, plus the improvements, he answered that it could be done, but that ranchers just didn’t “trade that way.”
In overruling the objections to this method of arriving at fair value of the land taken, the court repeatedly stated in effect that it would instruct the jury that although the landowners could not be compensated for their grazing permits, they could take into consideration the availability and accessibility of these lands in arriving at just compensation for the taking of the fee lands. And, the jury was finally instructed to the effect that the Government was taking only the fee land and that it should determine only the value of such land, but in doing so, it could take into consideration as an element of value, the accessibility and availability of the lands covered by the grazing permits. No exception was taken to these instructions. As a matter of fact, the Government’s requested instructions were not at material variance.
 Since no exceptions were taken, and since the requested instructions are not inconsistent with those given by the court, no reversible error can be predicted upon them. But even so, the cases were tried and the verdict of the jury in each case is based upon the legal theory that just compensation is to be determined by the value of the ranches as units, based upon their carrying capacity, without regard to the underlying ownership of the land. Such was the established law of the case, and if it is incorrect, the judgments must be reversed, for if the evidence is legally inadmissible to support the verdict of the jury, it cannot stand, although the court’s instructions may have been literally correct. The instructions of the court could not change the legal nature and effect of the proof.
Unquestionably, the grazing permits were of value to the ranchers. They were an integral part of the ranching unit— indeed, the fee lands are practically worthless without them. But, “the existence of value alone does not generate interests protected by the Constitution against diminution by the government, however unreasonable its action may be.” Reichelderfer v. Quinn, 287 U.S. 315, 319, 53 S.Ct. 177, 178, 77 L.Ed. 331. The Constitution requires only that the sovereign pay just compensation for that which it takes, “not for opportunities which the owners may lose.” U. S. ex rel. T. V. A. v. Powelson, 319 U.S. 266, 282, 63 S.Ct. 1047, 1056, 87 L.Ed. 1390. Just compensation for that which is taken does not include consequential losses to the owner. Mitchell v. United States, 267 U.S. 341, 45 S.Ct. 293, 69 L.Ed. 644; United States v. Petty Motor Co., 327 U.S. 372, 66 S.Ct. 596, 90 L.Ed. 729; United *296States v. Willow River Power Co., 324 U.S. 499, 510, 65 S.Ct. 761, 89 L.Ed. 1101; United States v. Miller, 317 U.S. 369, 376, 63 S.Ct. 276, 87 L.Ed. 336. “Such losses may be compensated by legislative authority, not by force of the Constitution alone.” United States v. Willow River Power Co., supra, 324 U.S. at page 510, 65 S.Ct. at page 767, 89 L.Ed. 1101.
Thus, in Osborne v. United States, 9 Cir., 145 F.2d 892, the Government took ranches consisting of fee land, leased land, and land held under permit from the Forest Service. 36 C.F.R. Sec. 331.1 et seq. The ranchers sought compensation for the taking of their grazing privileges, as well as severance damages, and appealed from the refusal of the trial court to so instruct the jury. After sketching the history of grazing rights and privileges in the West, Judge Stephens, for the Ninth Circuit, held that the limited right of grazing granted by the permits gave the ranchers no property interest as against the sovereign; that their only recourse for the cancellation of the permits was under Section 315q, Title 43 U.S.C.A., 56 Stat. 654, providing that whenever use for any war purposes of public domain prevents its use for grazing, persons holding grazing permits or licenses which have been or will be canceled because of such use, shall be paid out of funds appropriated or allocated for such project, such amount as the head of such department or agency so using the lands shall determine to be fair and reasonable for the loss suffered by such persons as the result of the use of such lands for war purposes. And, “such payments shall be deemed payment in full for such losses.” And see also United States v. Honolulu Plantation Co., 9 Cir., 182 F.2d 172.
The ranchers here seek to distinguish this case from the Osborne case on the grounds that the permits were appropriated or withdrawn before the institution of the condemnation proceedings, so that the United States did not actually take the land covered by the permits, as here. But, in our view, there can be no legally significant difference in the withdrawal of the permits for war purposes by the Secretary of the Interior, as in the Osborne case, and the cancellation of the permits by a declaration of taking in condemnation proceedings. In either case, the Government, by appropriate action, has exercised its unquestionable power to take only that which it owns, and in which the condemnee has no compensable interest. It was noncom-pensable hardships of this kind which prompted the Congress to amend the Taylor Grazing Act to provide for the administrative determination and payment for losses suffered from the cancellation of the grazing permits for war purposes, i. e. Section 315q, Title 43 U.S.C.A.
The formula used by the ranchers’ witnesses was undoubtedly one of the accepted methods for arriving .at the fair market value of the ranch as an economic unit, and it unquestionably would be a proper criterion between private individuals or between the ranchers and the Government if the ranchers owned or had a compensable interest in that which the Government takes. Although the permits are valuable to the ranchers, they are not an interest protected by the Fifth Amendment against the taking by the Government who granted them with the understanding that they could be withdrawn at any time without the payment of compensation.
In the determination of just compensation for the lands taken, it is competent to consider the' value of the land for the purposes for which it is actually used or reasonably adaptable. Boom Co. v. Patterson, 8 Otto 403, 98 U.S. 403, 408, 25 L.Ed. 206; Olson v. United States, 292 U.S. 246, 255, 54 S.Ct. 704, 78 L.Ed. 1236; Mitchell v. United States, 267 U.S. 341, 344, 45 S.Ct. 293, 69 L.Ed. 644; McCandless v. United States, 298 U.S. 342, 56 S.Ct. 764, 80 L.Ed. 1205; United States ex rel. T. V. A. v. Powelson, 319 U.S, 266, 275, 63 S.Ct. 1047, 87 L.Ed. 1390; Chicago, Burlington & Quincy R. R. Co. v. City of Chicago, 166 U.S. 226, 250, 17 S.Ct. 581, 41 L.Ed. 979; 2 Lewis Eminent Domain, 3rd Ed., Sec. 707, p. 1233. Undoubtedly, the condemned land was most suitably and profitably adapted for use to which it was devoted, that is, base land for a cattle ranch in connection with grazing permit land, and the fair value of the land for *297that purpose would he competent evidence of just compensation. But, it is not competent unless the permit lands are available and accessible for that purpose, and they cannot be said to be available and accessible here, since the permits were withdrawn or canceled coincidental with the taking.
The permit holders here are not unlike riparian owners on navigable streams who enjoy the preferential privileges incident to the use thereof, but have no compensable property right therein when the use is diminished or destroyed by the Government in the exercise of its powers over navigation. United States v. Chandler-Dunbar Co., 229 U.S. 53, 33 S.Ct. 667, 57 L.Ed. 1063; United States v. Willow River Power Co., supra. Or, they may be likened to the owner of property by the side of a road or street which greatly enhances his business, but who suffers no compensable loss when the change of the course or grade level of the road or street operates to destroy the advantage, resulting in a business loss. See United States v. Willow River Power Co., supra, 324 U.S. at page 511, 65 S.Ct. 761, 89 L.Ed. 1101; 1 Lewis Eminent Domain, 3rd Ed., Sections 129-134 and 721. Cf. Kimball Laundry Co. v. United States, 338 U.S. 1, 69 S.Ct. 1434, 93 L.Ed. 1765; Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S.Ct. 622, 37 L.Ed. 463; United States v. Petty Motor Co., supra.
The judgments are accordingly reversed with directions to proceed in accordance with the views herein expressed.