Arkansas State Highway Commission v. Southern Development Corp.

• Decision Date: 21 June 1971
• Docket Number: No. 5--5508,5--5508
• Citation: 250 Ark. 1016,469 S.W.2d 102
• Parties: ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. SOUTHERN DEVELOPMENT CORPORATION, Appellee.
• Court: Arkansas Supreme Court

Page 102

469 S.W.2d 102

250 Ark. 1016

ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. SOUTHERN DEVELOPMENT CORPORATION, Appellee.

No. 5--5508.

Supreme Court of Arkansas.

June 21, 1971.

Rehearing Denied Aug. 9, 1971.

Thomas B. Keys, George Green, and James N. Dowell, Little Rock, and Coleman, Gantt, Ramsay & Cox by John G. Lile, Pine Bluff, for appellant.

John Harris Jones, Pine Bluff, for appellee.

BEN CORE, Special Justice.

Appellee, Southern Development Corporation, hereinafter called Southern, prior to this suit, was the owner of an 8.3 acres tract of land lying north and east of the Arkansas River upstream from the City of Pine Bluff. The tract fronts 940 feet on the River. The Arkansas State Highway Commission, hereinafter called Commission, filed this condemnation suit for the purpose of taking 1.60 acres of the tract in fee and a temporary easement on a smaller piece measuring 110 feet by 151.5 feet for a total of 2.01 acres. After the taking two tracts remained, one lying northwest of the bridge containing 3.31 acres and the other lying south of the bridge containing 2.98 acres. Preliminary to the order of possession the Commission deposited $2,500.00 with the Court as estimated just compensation. In its answer Southern contended that the land was adapted as a bridge site, commercial site or industrial site for motel, marina and recreational facilities or for other use considering its river frontage, elevation and accessibility to the urban area of Pine Bluff. Southern's answer as finally amended claimed $634,000.00. The jury awarded $35,000.00. The Commission has appealed and Southern has cross-appealed.

Points relied upon by the Commission, with some slight renumbering from the brief, are:

1. The Court erred in permitting the jury to consider the question of whether or not the highest and best use of the land was that of a bridge site.

2. The Court erred in permitting the jury to consider the testimony of Jim Hood as to the value of the land as a bridge site.

3. The verdict is excessive in that there is not substantial evidence to support it.

On its cross-appeal Southern contends that the trial court erred in the following particulars:

1. In excluding the testimony of L. P. Carlson and Leo Tyra as to the amount of savings on cost of construction of the bridge at this particular site over that of the next most feasible site;

2. The exclusion of the testimony of Jim Hood as to the basis of his opinion on the value of the land as a bridge site;

3. In the giving of the plaintiff's instruction number 12 which told the jury that it should consider the value of the land the landowner placed on the property for tax purposes as evidence of its true value.

Southern contends that this court has the authority to and should increase the jury verdict to the sum of $207,500.00 upon Southern's consenting that the temporary construction easement be made permanent for highway and bridge purposes. The Commission contends that this court has the authority to and should reduce the verdict to $3,500.00, which is the market value figure established by the Commission's appraiser. Arkansas State Highway Commission v. Bingham, 231 Ark. 934, 333 S.W.2d 728 (1960).

The Commission's points 1 and 2 can be rephrased into one contention which is that there was no testimony as to the special adaptability of this property as a bridge site and for that reason the jury should have been directed to disregard any valuation opinion based upon such adaptability. We think that just the reverse is true, which is that there was no competent testimony as to the value of the property as a bridge site and therefore its adaptability as such should not have been submitted to the jury. We, therefore, reverse on direct appeal.

Before demonstrating this result from the record, it will be helpful to set out the governing rules from prior decisions of this court. It is interesting to note that both parties cite substantially the same decisions of this court, with a few exceptions, to sustain their respective positions. There is apparent agreement as to the establishment of the following rules concerning the taking of private property for public use.

Private property shall not be taken, appropriated or damaged for public use without just compensation therefor. Arkansas Constitution, Article 2, Section 22. The title to land is always held upon the implied condition that it will be surrendered to the government when the public necessities demand and when full compensation has been tendered. Little Rock Junction Ry. v. Woodruff, 49 Ark. 381, 5 S.W. 792 (1887). The true measure of just compensation is the 'market value of the property'. Little Rock Junction Ry. v. Woodruff, ibid.

'The owner, in parting with his property to the state is entitled to receive just such an amount as he could obtain if he were to go upon the market and offer the property for sale. To give him more than this would be to give him more than the market value, and to give him less would not be full compensation.'

In arriving at this market value the approach is to consider what has been taken from the owner, in other words, what the owner has lost, disregarding its value to the condemnor. The objective is to arrive at the market value, or the value in the market, of the property taken. It is thus opposed to the subjective consideration of what the condemnor has gained or what is the value of the property to the person or entity taking the same. Nichols on Eminent Domain, Volume 3, Section 8.61, page 49.

'As a general guide to the range which the testimony should be allowed to assume, * * * the landowner should be allowed to state, and have his witnesses to state, every fact concerning the property which he would naturally be disposed to adduce in order to place it in an advantageous light if he were attempting to negotiate a sale of it to a private individual. * * * In offering testimony on this issue, the owner was not limited to any pre-existing use of the land. If it was of little value as a farm, or for common uses, and was of great value as mineral land or as a townsite, that fact might be shown, though it had never been so used.' St. L., I.M. & S.R. Co. v. Theo. Maxfield Co., 94 Ark. 135, 126 S.W.2d 83 (1939).

'* * * the owner had the right to obtain the market value of the land, based upon its availability for the most valuable purposes for which it can be used, whether so used or not.' Yonts v. Public Service Company of Arkansas, 179 Ark. 695, 17 S.W.2d 886 (1929).

Market value is a factual issue peculiarly within the province of the jury and to be proved by the owner as a fact.

'* * * we are asked to review the verdict upon the testimony. This is a delicate duty in any case, and especially so in a case where the sole issue is one as to value. This is so peculiarly within the province of the jury, * * * nothing but an extreme case would justify our interference.' Little Rock Junction Ry. v. Woodruff, ibid.

In addition to the principal issue of fact, which is the market value, sub-issues of fact can develop on the question of adaptability of the parcel to the various uses urged by the owner. The ultimate issue is the market value but other dependent factual issues can develop in the process of proving the ultimate issue.

In this case Southern pleaded the issue of the peculiar adaptability of this property as a bridge site. We think this is one of those possible characteristics which could be urged by a landowner as a contributing factor to the market value of his parcel. Further, we think that in this case there was proof introduced as to the existence of that characteristic of such substantial nature that reasonable minds could draw different conclusions therefrom as to such adaptability and, therefore, that a jury question was made on the issue of adaptability. However, more is required before the issue can be submitted to the jury. Proof of a market value for the parcel for that use must be made. Mere proof of adaptability, without more, does not establish such market value. There must be such demand for the property for that use as will give it a value in the market for that use.

The only proof offered here as to such value as a bridge site was the testimony of Jim Hood establishing a difference in before and after value of $640,000.00. Jim Hood is president of Southern. He testified to training and experience sufficient to qualify himself as an expert in real estate management, development and appraisement. He testified on direct examination that, in his opinion, the highest and best use of the property was as a bridge site. He further testified that, in his opinion, for that use, the difference in the fair market value of the 8.3 acres before and after the taking was $640,000.00. If that were all that was in the record we think that no reversible error would be present because an expert is entitled to state is opinion as to market value on direct examination without further explanation and the same constitutes substantial evidence sufficient to support a jury verdict unless additional information is brought out demonstrating that such expert has no fair and reasonable basis for his opinion. In other words, the opinion of an expert is given the weight of evidence prima facie and, unless thereafter exposed as having no fair and reasonable basis, constitutes substantial evidence upon which a jury verdict can be based. Arkansas State Highway Commission v. Johns, 236 Ark. 585, 367 S.W.2d 436; Arkansas State Highway Commission v. Ptak, 236 Ark. 105, 364 S.W.2d 794 (1963).

However, in the direct examination Southern's attorney attempted to bring out the basis for his opinion. Counsel for the Commission anticipated the basis and objected to the same being brought out. The trial court sustained the objection. Even at that point we think that no reversible error had been committed. However Southern's counsel then made an offer of proof on the basis...