Court Opinion

ID: 9608096
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:06:13.594946+00
Date Added: 2024-06-11T08:13:51.902778
License: Public Domain

SCHAUER, J.
I dissent. It appears to me that defendant was subjected to unwarranted and prejudicial restriction in the presentation of his evidence and that the majority opinion, affirming the judgment, is unsound in at least two elements:
1. It concedes, as it must, that “the trial court erred in sustaining the objection” of plaintiff to a question asking defendant, who had qualified as an expert witness, to state his reasons for his opinion as to market value. The defendant undoubtedly was better acquainted with the property sought to be condemned, and with the surrounding property, than any other witness. From the record it is apparent that his hope for recovery of what he considered the fair value of his property was based very largely, if not almost exclusively, upon his own testimony, the testimony he expected and was entitled to give. He was permitted to state the value as being $5,000 an acre but was precluded from substantiating his estimate by his reasons. The majority, conceding the error, hold that it was not prejudicial, because, forsooth, “It can only be surmised that appellant was basing his estimate upon his speculation that the zoning ordinance might be modified at some future time” and “as appellant’s estimate of market value was entirely out of harmony with all other evidence in the record . . . and as appellant has not suggested either in the trial court or in this court any rational basis for such estimate, it seems apparent that such estimate was nothing more than wishful guessing . . .” (Italics added.) From the above quotations it appears now to be the law of this state that this court may base its decisions upon its own surmise; furthermore, the novel rule is declared and followed that if the testimony of one witness *776is “out of harmony with all other evidence in the record” the testimony of that witness may be substantially disregarded as a matter of law. (The effect of this holding on section 1844 of the Code of Civil Procedure—“The direct evidence of one witness who is entitled to full credit is sufficient for proof of any fact, except perjury and treason” —appears to be left to further surmise.)
2. The second important defect in the majority opinion lies in the fact that it gives lip service to the rule that “damages must be measured by the market value of the land at the time it is taken, that the test is not the value for a special purpose, but the fair market value of the land in view of all the purposes to which it is naturally adapted” (italics added) but actually applies the rule to sustain the action of the trial court in limiting the test to “the value for a special purpose.” As hereinafter appears more fully the defendant-appellant here was limited in his evidence of the value of his land to estimates based on the special purpose use of single family residential subdivision or farming operation. A statement of the facts elucidates the points above summarized.
In 1905, defendant purchased the tract which in substantial entirety is the subject of this litigation. At that time such tract, a rectangular unit of land located on the southwest corner of Santa Fe Avenue and Columbia Street in Long Beach, had a frontage on Santa Fe of approximately 407 feet and extended westerly some 1,800 feet along Columbia. Prior to this litigation defendant had conveyed to the Union Pacific Railroad for a right of way a strip, 80 feet wide, at the west end of the tract, and to other persons a rectangular plot 75 feet on Santa Fe by 445 feet on Columbia; the remainder of the original tract is the parcel belonging to defendant and involved on this appeal. (Also condemned by plaintiff, but not involved in this appeal, is the rectangular plot described hereinabove.) Defendant’s parcel as it now stands comprises approximately 16 acres of land, together with certain improvements thereon. It has a frontage of approximately 338 feet on Santa Fe and 1,275 feet on Columbia, but, except in that area wherein it is diminished by the previously conveyed rectangular plot above mentioned, is in its dimensions approximately 407 by 1,723 feet.
*777Continuously since 1905, defendant has resided on the parcel in question and used it for livestock and general farming operations. In 1906, he built on it an eight-room frame house, and a barn, storeroom, and shed. Later a garage and shop were added. For some 12 years prior to, and up to the time of, trial (December, 1944) the shop was utilized by defendant’s son as a machine shop for the repair of oil well equipment and machinery. Previous to 1941, the entire tract had been zoned for industrial uses, but in that year it was rezoned by the city of Long Beach as a residential district for single family dwellings. At that time and continuing to the time of trial, it had not been subdivided, no streets had been cut into it, it contained no sidewalks or public rights of way and no sewer or gas or water installations except two water wells. The only actual industrial use of the parcel (the portion of the tract still owned by defendant-appellant) disclosed by the record is that of the operation by defendant’s son of the machine shop. “It is a regular machine shop with all kinds of machinery in it for heavy work, a big lathe and a drill press and things like that.” Immediately west of the property in litigation is a main line of the Union Pacific Railroad and further to the west are railroad classification yards, in which freight is shifted back and forth; also parallel to the westerly border of the property is a high power transmission line of the Southern California Edison Company. Immediately north of Columbia Street is the La Serena Tract, which was subdivided for residential purposes in approximately 1921. Across Santa Fe Avenue, to the east of defendant.’s property, is another residential subdivision, and a third such subdivision bounds the property on the south. Santa Fe Avenue, on which, as previously mentioned, the property has a frontage of approximately 338 feet, is largely used as a truck boulevard carrying heavy traffic; it has no curbs; it does have a paved center roadway 30 feet wide “and 10 feet of shoulders.” Defendant testified that a restaurant, a beer parlor, and “several stores” were established at locations distant 800 feet to one-half mile from his property.
Contrary to the majority opinion, it appears to me that under the circumstances shown, the refusal to allow defendant to state his reasons' or basis for the value stated constitutes prejudicial error. Defendant fixed the value at $80,000; *778the jury awarded him only $20,000. I do not think we can properly “surmise” that the jury would have attached no weight to defendant’s reasons for value which they were not permitted to hear. It was not incumbent upon defendant to make an offer of proof under these circumstances. He was already qualified as an expert and as a matter of law he was entitled to state his reasons for his opinion. The weight to be accorded those reasons was for the jury, not for us.
The prejudice of the error is emphasized by the fact that, as hereinafter appears in more detail, no other witness, either for. defendant or plaintiff, appears, in making his appraisal, to have given consideration to any industrial use value of the property, or to its value for any use other than the specific one of “subdivision for single family residences” and, possibly, the still lower use of farming.
All witnesses, in forming their estimates of the present market value of the property, should have given consideration- to every use, including the highest and best use, for which such property was adaptable. (City of Napa v. Navoni (1942), 56 Cal.App.2d 289, 299 [132 P.2d 566].) In San Diego Land etc. Co. v. Neale (1888), 78 Cal. 63, 69 [20 P. 372, 3 L.R.A. 83], this court referred to Mississippi & Rum River Boom Co. v. Patterson (1879), 98 U.S. 403 [25 L.Ed. 206], opinion by Mr. Justice Field, and summarised the facts as follows: “ [T]hree islands in the Mississippi River were sought to be condemned for the purpose of a boom or storing-place for floating logs. For general purposes the property was of insignificant value, but it was found to have a large value for boom purposes. It had never been used for such purposes, but there was nothing to prevent other persons or companies from engaging in the enterprise if they had seen fit to do so. It was held that the value for boom purposes must govern.” The court then quotes from Justice Field’s opinion in the Boom case (98 U.S. at 407-408) : “In determining the value of land appropriated for public purposes, the same considerations are to be regarded as in a sale of property between private parties. The inquiry in such cases must be, What is the property worth in the market, viewed not merely with reference to the uses to which it is at the time applied, but with reference to the uses to which it is plainly adapted?—that is to say, what it is worth from its availability for valuable uses. Property is not to be deemed worthless because the owner allows it to go to waste, *779or to be regarded as valueless because he is unable to put it to any use. Others may be able to use it and make it sub-serve the necessities or conveniences of life. Its capability of being made thus available gives it a market value which can be readily estimated. So many and so varied are the circumstances to be taken into account in determining the value of property condemned for public purposes, that it is perhaps impossible to formulate a rule to govern its appraisement in all cases. Exceptional circumstances will modify the most carefully guarded rule; but, as a general thing, we should say that the compensation to the owner is to be estimated by reference to the uses for which the property is suitable, having regard to the existing business or wants of the community, or such as may be reasonably expected in the immediate future.”
Concerning defendant’s contention that both the jury and defendant’s witness (other than himself) as to the value of his property were erroneously restricted to a consideration of its value for a specific use (for subdivision for single family residential purposes) and were not allowed to give effect to its present value for its highest and best, i. e., potential industrial use, the record discloses the following; The real estate broker and appraiser who appeared as an expert witness on behalf of defendant testified that defendant’s property was worth $17,500 for the residential use (in itself largely potential because the property was not yet subdivided) permitted by the zoning ordinance. The record proceeds :
“Q. [By defendant’s attorney to the expert witness] Now, I will ask you . . . what is the highest and best use for which it [defendant’s land] is naturally adapted? A. Industrial purposes.
“Q. What do you mean by that? A. Manufacturing plant or operation of any kind of an industry that would be useful adjacent to the Long Beach Harbor area. That particular property is on one of the main vehicular traffic arteries going to the City of Long Beach Harbor area, and it is very accessible and it also is near transportation and track-age can be easily put into the property, because the property abuts the Union Pacific Railway lines, and it is adjacent to the classification yard and adjacent to industries, and it has all of the facilities for an industry. There are plenty of power lines and plenty of water for manufacturing plants.
*780“Q. Taking this same tract you have testified to, involved in this case—these parcels involved in this case— what is your opinion of its value for an industrial purpose being higher than or less than you would for residential single family homes? A. Considerably higher. . . .
“Q. How much higher? A. I don’t know. I haven’t given it sufficient study to determine its fair value for industrial purposes. I confined my opinion to its use as single family residential district, being a single family residential subdivision, on account of the ordinance which is now in force, which is restricted to that use. [Italics added.]
“Q. Yes. A. I would say to be ultra conservative, at least double the amount.
“[By plaintiff’s attorney] Just a minute. I object to any statement of value which is assumed to be upon property if it should be considered from the standpoint of an industrial site. Certainly he cannot make any statement as to the exact value for any such purpose if he has given it no study.
“ [By defendant’s attorney] Keeping in mind this man is an expert and he is qualified as such and he said he viewed the property and that he is conversant with property in the Long Beach industrial districts, I would say that he would be qualified to give an opinion as to its valuation if it were placed on a basis of an industrial site.
“ (Discussion.)
“The Court: I will sustain the objection.”
No other evidence (except possibly the testimony of the defendant, himself, hereinabove mentioned) as to the value of the property for, or upon an appraisal which included consideration of, its assertedly “highest and best” (industrial) use was offered or received. The court thereafter instructed the jury that “You must not consider for any purpose any offer of evidence that was rejected, or any evidence that was stricken out by the court; such matter is to be treated as though you never had known of it,” and, also, in reference to fixing value, that “you should not consider possible future uses under altered circumstances which may or may not arise.” It thus appears that the jury were effectively instructed that they were not to consider defendant’s proffered evidence as to the value of his property for its assertedly highest and best use. Furthermore, from the last-quoted instruction, the jury may well have understood that they *781could not even consider value for residential purposes because the property had not yet been subdivided, it had no streets, sewer or gas installations, and the making of such improvements would be “altered circumstances which may or may not arise.”
Plaintiff produced but one expert witness as to value. That such witness, in making his appraisal, did not consider at all the value of the property for industrial enterprises or for the use for which it was being condemned is evident from his own testimony. The transcript shows:
“Q. [To the witness Hoffman, produced by plaintiff] : I will ask you this, in arriving at the value of the appraisal which you have given us on that tract and the improvements on it, Parcel 1, did you take into consideration the highest and best use for which it was available. . . ? A. I did.
“Q. Did you consider its value as an industrial site? A. I did not.
“Q. You did not? A. No.
“Q. Why? A. Because it is zoned for single family residences.
“Q. And you therefore gave it no thought for any other use? A. I did not, except for farm land or subdivision.”
A fair reading of the transcript supports no other conclusion than that the entire case, insofar as value is concerned, was tried by plaintiff upon a theory which in effect limited considerations of value to use of the property for subdivision for single family residences and, possibly, for farming operations, a still lower use. The defendant’s expert was interrogated at length on direct examination with reference to the value of the property for the specific use of subdivision for single family residences. In their brief, plaintiff’s counsel, summarizing the evidence, recognize the fact by the statement that “Respondent’s [plaintiff’s] appraiser testified that the fair market value of the subject property for subdivision purposes was the sum of $12,500 for the land, and $1,000 for the buildings. . . .” (Italics added.)
The rule is settled that in determining the value of land taken by eminent domain “all uses to which it is adapted and might be put” are to be considered, and compensation is to be awarded “upon the basis of its most advantageous and valuable use, having regard to the existing business *782or wants of the community, or such as may be reasonably expected in the immediate future.” (18 Am.Jur. 879-880, § 244, and cases there cited; see San Diego Land etc. Co. v. Neale (1888), supra, 78 Cal. 63, 69-71; City of Los Angeles v. Hughes (1927), 202 Cal. 731, 735 [262 P. 737].) Thus, in the last-cited case, it was stated with regard to the value of condemned property which had theretofore been planted to nursery stock, that (page 735 of 202 Cal.) “the true basis for computing the market value of land sought to be condemned, in view of the evidence of its suitability for subdivision purposes, is its value as it stood on the date when, under the law, its value was to be determined, plus any increased value which it may have had in the market by reason of its suitability for subdivision into city lots.” As observed in San Diego Land etc. Co. v. Neale, supra, at page 71 of 78 Cal., “This is not sanctioning a remote or speculative value. It is merely taking the present value for prospective purposes.”
Insofar as concerns the effect upon value which results from the fact that the property is subject to zoning ordinances, I am aware of no authority which holds, that consideration shall be given by expert witnesses to only those uses which are permitted by the ordinances at the date as of which the value of the property is to be determined. It has been declared that (City of Beverly Hills v. Anger (1932), 127 Cal.App. 223, 227 [15 P.2d 867]), “The question as to whether a zoning ordinance has the effect of increasing or reducing the value of land included within its provisions is one of fact to be established by evidence. Regardless of whether the value of real property is increased or diminished as a result of the application of a zoning ordinance, the ordinance is competent evidence to be considered in a suit for condemnation of property located within the district which is affected thereby, for the purpose of determining the actual market value thereof.” (Cf. City of Beverly Hills v. Anger (1930), 110 Cal.App. 626, 629-630 [294 P. 476] ; Los Angeles City H. S. Dist. v. Hyatt (1926), 79 Cal.App. 270, 272 [249 P. 221].)
If, in condemnation cases, a city or county or other plaintiff can completely exclude consideration of certain types of uses, perhaps those to which the property is otherwise best suited, for which it is most valuable, and to which it is *783intended to put the property after condemnation, by enacting, or taking advantage under, a zoning ordinance forbidding such uses, but which ordinance can be repealed or amended after the property is acquired, the constitutional guarantee of reasonable compensation upon a taking for public use can be in a large measure circumvented. As previously indicated, all uses to which the land is adaptable may, and they should, be considered. These include the use for which the property is being taken (see Mississippi & Rum River Boom Co. v. Patterson (1879), supra, 98 U.S. 403, 408; San Diego Land etc. Co. v. Neale (1888); supra, 78 Cal. 63, 69; Sacramento etc. R. R. Co. v. Heilbron (1909), 156 Cal. 408, 412 [104 P. 979]; City of Stockton v. Vote (1926), 76 Cal.App. 369, 405-407 [244 P. 609]; City of Stockton v. Ellingwood (1929), 96 Cal.App. 708, 715 [275 P. 228] ; Temescal Water Co. v. Marvin (1932), 121 Cal.App. 512, 519 [9 P. 2d 335] ; Joint Highway Dist. No. 9 v. Ocean Shore Railroad Co. (1933), 128 Cal.App. 743, 749, 755 [18 P.2d 413]), not to show the value in use to the condemnor but as an element affecting the present market value (see 29 C.J.S. 1029, § 160). Obviously, here the use of the land for a school building and campus is other than a single family residence or farm use. Equally obvious is the injustice which, whether the financial loss be great or small, is perpetrated upon the landowner by allowing the plaintiff through an unreal rule or application of law to conclusively deny to him that his land presently possesses value for any other than single family residence or farm purposes in the very proceeding by which the land is being acquired for another and higher use. A further demonstration of the vice in application of such unconscionable rule is apparent in this case: Plaintiff’s expert based his appraisal on single family residence use, and as a reason for making his valuation for that use low, he pointed out that the property was large in its dimensions, that it had not in fact been subdivided, that it was all in one piece, and that it contained no streets. Yet it appears that in truth those very attributes which depreciated its value for residential use appreciated its value for the use for which it was condemned.
While the fact that a zoning ordinance forbidding particular uses had been enacted would be a material fact affecting the value of property in the zoned district generally, it would *784be only one of many facts from which the value of the particular parcel being condemned should be determined, and the fact that such parcel was being taken for a use proscribed by the ordinance would be highly persuasive that the ordinance was entitled to relatively little weight in fixing the market value. I am therefore of the view that in presenting expert testimony as to value defendant was entitled to have the witnesses consider the influence on the present value of his land of uses, including industrial and school, to which the land was particularly adapted by reason of its character, its quantity, its dimensions, its location, its surroundings, its freedom and relative seclusion from public rights of way, the availability of transportation facilities, etc., even though a zoning ordinance presently proscribed or limited such uses.
Such a consideration of potential industrial or other uses by an expert witness does not mean that (as perhaps was sought to be accomplished here) the witness may, independently of his opinion as to the general market value of the property, giving consideration to all of its uses, testify that it has one value for one specified use and another and different value for a different use. (See Sacramento etc. R. R. Co. v. Heilbron (1909), supra, 156 Cal. 408, 410-412; Joint Highway Dist. No. 9 v. Ocean Shore Railroad Co. (1933), supra, 128 Cal.App. 743, 754.) Prior to the adoption in 1937 of section 1872 of the Code of Civil Procedure, supra, which provides that “Whenever an expert witness gives his opinion, he may, upon direct examination, be asked to state the reasons for such opinion . . .,” the rule was, as stated in the Joint Highway Dist. No. 9 case (at page 763), “it is not proper on direct examination to give in terms of money the value in use of property for any purpose whatever.” It seems apparent, however, that section 1872 so modifies the earlier rule that an expert witness who has given his opinion of market value of a tract may now, upon either direct or cross-examination, in response to a request to state the reasons for his opinion, explain the various factors he has considered in reaching his opinion.
Whether, upon the exact status of the entire record here (including the facts that both plaintiff’s and defendant’s experts avowedly based their appraisals of value of the property upon its specific use as a subdivision for single family residences; asserted that they had not considered its possible use for industrial purposes, and, insofar as plain*785tiff’s expert is concerned, denied that it had any value for such industrial usage; that defendant’s expert testified that its value for industrial purposes would be far greater than for single family residences; and that defendant himself stated a value which was “far greater” than that ascribed to the property by the other experts for the very limited use considered by them but which value defendant was not allowed to attempt to substantiate by expression of his reasons) defendant’s witness should have been allowed to testify to the money value of the property for an industrial use, need not now be determined. Upon a new trial, all the qualified value witnesses could be instructed in accordance with the views hereinabove expressed as to the elements which they should properly consider in appraising the market value of the property as of the controlling date (July 21, 1944) and, either upon direct or cross-examination, each could be required to state his reasons for his opinion.
The judgment should be reversed and the cause remanded for a new trial.
Shenk, J., and Carter, J., concurred.