Arkansas State Highway Commission v. Ormond, 5--5021

Decision Date22 December 1969
Docket NumberNo. 5--5021,5--5021
Citation247 Ark. 867,448 S.W.2d 354
PartiesARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. Charles L. ORMOND and Elizabeth Ann Ormond, his wife, Appellees.
CourtArkansas Supreme Court

Thomas B. Keys and Kenneth R. Brock, Little Rock, for appellant.

Felver A. Rowell, Jr., Morrilton, for appellees.

FOGLEMAN, Justice.

Appellant took 11.01 acres from a 262-acre tract owned by appellees for the construction of Interstate Highway 40, a controlled-access highway. It appeals from a judgment awarding appellees $12,000 as just compensation, asserting only two grounds for reversal. The first is the refusal of the trial court to strike that portion of the testimony of Charles L. Ormond, one of the landowners, relating to values based on use of the land for commercial catfish farming. The other is that there was no substantial evidence to support the verdict.

We agree that appellant's motion to strike that portion of Ormond's value testimony of which it complained should have been sustained. He had fixed a value of $102,114 on the whole tract before the taking and a value of $17,240 on the remaining lands, consisting of 92.5 acres north of, and 158 acres south of, the new highway. Thus, his difference between before and after values was $84,874.

Ormond, a realtor and farmer, demonstrated his familiarity with real estate values in Conway County. He testified that the highest and best use for the lands was for catfish farming, and that he had commenced operations to devote the lands to that purpose before the taking. According to him, he had constructed a preliminary pond in 1963 or 1964 and had constructed a dam on the north part of the land which had not been completed when the condemnation suit was filed. Ormond stated that he acquired the land several years before the taking after having studied the entire county to find land suitable for flooding. He felt that this land had these attributes and a terrain such that adjoining lands would not be flooded from dams necessary for his purposes. This taking destroyed accessibility to the north residual, so that there was no way to proceed with catfish farming plans.

On cross-examination, it was revealed that Ormond had made extensive investigation as to markets, prices, demands, methods, yields and costs he might anticipate when his plans were implemented. He admitted that his before taking value was based entirely on income he anticipated upon the basis of his own estimates of market prices, yields and costs. He also admitted that prices would fluctuate and that one could not say as much as a year in advance what the price would be when the crop was yielded. His estimate of costs included 6cents for fingerling minnows, even though he acknowledged a current range of 4 1/2cents to 7cents.

There is nothing whatever in the record to indicate that Ormond had any experience in this business or anything related thereto. Appellant's objection was that the value based upon his anticipated future profits was highly speculative. Thus, appellant met its burden of showing that there was no reasonable basis for Ormond's opinion of the value of the entire tract before the taking. Even if we should consider that evidence of income and production from commercial catfish farming is admissible under the recognized exception in cases of agricultural property, as appellees urge, there is no exception which permits such values to be based on pure speculation, as must be the case when the testimony is given by one without experience or expertise in the undertaking about which he testifies, when there is no history as to the particular land upon which to base anticipated income or production. See Little Rock & Ft. S. Ry. Co. v. Alister, 62 Ark. 1, 34 S.W. 82.

Even though the value testimony of Ormond was improper, this does not require reversal, if other evidence is sufficient to sustain the verdict. Owen v. Jones, 14 Ark. 502; Jones v. Malvern Lumber Co., 58 Ark. 125, 23 S.W. 679. It is only when there is no other evidence to sustain the verdict or when it is manifest that appellant was prejudiced by the incompetent evidence that a reversal is proper under circumstances existing here. See Owen v. Jones, supra; Fordyce v. McCants, 51 Ark. 509, 11 S.W. 694, 4 L.R.A. 296, 14 Am.St.Rep. 69. We have held that error will not require reversal where it is manifestly not prejudicial, or where it is evident that the error did not affect the verdict. Insured Lloyds v. Mayo, 244 Ark. 802, 427 S.W.2d 164; Keathley v. Yates, 232 Ark. 473, 338 S.W.2d 335; Street v. Shull, 187 Ark. 180, 58 S.W.2d 932; Lamden v. St. Louis Southwestern Ry. Co., 115 Ark. 238, 170 S.W. 1001.

We must determine, then, whether, in view of other evidence in the case, this error was prejudicial to appellant or whether it affected the verdict. In doing so we must also determine the other question posed, i.e., whether there was substantial evidence to support the jury verdict. We find that there was and that the error in relation to the Ormond testimony does not require reversal.

It must be remembered that only Ormond's opinion as to the land value before the taking would have been stricken. This would leave for the jury's consideration, not only Ormond's opinion as to the value of the remaining lands, but his testimony as to the characteristics of the land and as to a much disputed point--its highest and best use. This was appropriate. Ormond was entitled to show every advantage that his property possessed, present and prospective, in order that the jury might satisfactorily determine what price it could have been sold for on the market. Arkansas State Highway Commission v. Carder, 228 Ark. 8, 305 S.W.2d 330; Arkansas State Highway Commission v. O. & B., Inc., 227 Ark. 739, 301 S.W.2d 5; City of El Dorado v. Scruggs, 113 Ark. 239, 168 S.W. 846; Little Rock Junction Ry. v. Woodruff, 49 Ark. 381, 5 S.W. 792, 4 Am.St.Rep. 51; Kansas City Southern Ry. Co. v. Boles, 88 Ark. 533; 115 S.W. 375. He could state and have his witnesses state any and every fact concerning the property which he would naturally be supposed to adduce in order to place it in an advantageous light if he were selling it to a private individual. Little Rock Junction Ry. v. Woodruff, supra; Stuttgart & R. B. R. Co. v. Kocourek, 101 Ark. 47, 141 S.W. 511. An owner is entitled to show the availability of his property for any and all purposes to which it is plainly adapted, or for which it is likely to have value and induce purchases. Arkansas State Highway Commission v. Brewer, 240 Ark. 390, 400 S.W.2d 276; Arkansas State Highway Commission v. Griffin, 241 Ark. 1033, 411 S.W.2d 495; Gurdon & Ft. Smith R. Co. v. Vaught, 97 Ark. 234, 133 S.W. 1019. The same considerations are to be regarded as in a sale between private parties. Ft. Smith & Van Buren Bridge District v. Scott, 103 Ark. 405, 147 S.W. 440; Little Rock & Fort Smith Railway v. McGehee, 41 Ark. 202.

Appellees also offered the testimony of Lloyd Pearce, a realtor with 14 years' experience as a real estate appraiser. He described a 10-acre lake on the property and a dam which held water on some 35 to 40 acres thereof. He recognized that these lakes had a potential for fish farming. He considered that the highest and best use of the lands was for agricultural purposes with a potential for rural homesites and commercial fish farming. His opinion was that the fair market value of the whole tract was $52,400 and of the remaining lands, $35,300, leaving a difference of $17,100 or $5,100 more than the jury verdict.

Appellant's argument that Pearce's value testimony is not substantial is difficult to follow. He was the first witness called. Our attention is not directed to any objection to his testimony or the basis therefor made during the trial. Apparently appellant did not consider his testimony to be without any reasonable basis at the time it was given. As we interpret the argument, appellant contends that Pearce based his valuation of the Ormond land before the taking substantially on two sales, one of which was not comparable, and the other based on incorrect information, but ignored a sale which was comparable. It is also argued that there was no basis for his difference in values before and after the taking.

Pearce said that he used market data in making his appraisal. He used a sale of a tract by one Isley to Walls on June 18, 1966. This was a 66-acre tract, and Pearce stated that he confirmed a sale price of $18,000, or $290 per acre, with the real estate man who handled the sale, but not with the seller or purchaser. Federal revenue stamps on the deed also indicated an $18,000 consideration. Appellant argues that Pearce was wrong because one of its witnesses, a highway department staff appraiser, testified that he confirmed this sale with the purchaser Walls and found that the consideration was $12,000 or $182 per acre. It has been recognized that a value expert may rely upon hearsay in determining market values in the vicinity of the lands in question. Arkansas State Highway Commission v. Russell, 240 Ark. 21, 398 S.W.2d 201.

It has never been recognized that one person who has firsthand knowledge of a real estate sale as a party is a source of information superior to another participant. Apparently, no one made any effort to contact the seller. An interesting question would be posed if he had given another witness still a third figure as the true consideration. The jury was not required to accept the version of either of the witnesses. Buyers and sellers of real estate are often reluctant to disclose true prices. A question of credibility and weight was presented for jury determination on this point, at least in the absence of direct and uncontradicted evidence on the subject.

Appellant contends that this sale and another could not be considered as comparable because the lands involved in those transactions fronted upon, or were near, Highway 64, while the property...

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