Bales v. The Wichita Midland Valley Railroad Company

• Decision Date: 07 July 1914
• Docket Number: 18,750
• Citation: 92 Kan. 771,141 P. 1009
• Parties: W. D. BALES, Appellant, v. THE WICHITA MIDLAND VALLEY RAILROAD COMPANY, Appellee
• Court: Kansas Supreme Court

141 P. 1009

92 Kan. 771

W. D. BALES, Appellant, v. THE WICHITA MIDLAND VALLEY RAILROAD COMPANY, Appellee

No. 18,750

Supreme Court of Kansas

July 7, 1914

Decided July, 1914.

Appeal from Sedgwick district court, division No. 2; THORNTON W SARGENT, judge.

Cause remanded.

SYLLABUS

SYLLABUS BY THE COURT.

1. EMINENT DOMAIN--Unexpired Term of Leasehold--Elements of Damages. When a leasehold consisting of a room used by the lessee for business purposes is appropriated for railway uses, the increased rental value of the premises caused by the addition by the tenant of decking, floor space, light plant and fixtures, and hook and rug racks, is an element that may be considered by the jury in determining the value of the unexpired term.

2. SAME. Anticipated profits of a furniture business carried on by the lessee upon the premises should not be allowed as an element of damages in the situation shown by the evidence in this case.

3. SAME. In awarding compensation to a lessee for a leasehold appropriated for railway uses, the market value of the unexpired term should be allowed, taking into consideration as elements of value the situation, condition and use made, or that may be made, of the premises, and the nature and prosperity of the business carried on there if it affects the value of the lease.

E. L. Foulke, C. A. Matson, and J. D. Wall, all of Wichita, for the appellant.

J. D. Houston, and C. H. Brooks, both of Wichita, for the appellee.

OPINION

BENSON, J.

An appeal was taken to the district court from an award of damages by commissioners for taking a leasehold of the plaintiff upon a business house for depot grounds. The only question presented here is whether the district court applied the correct measure of damages.

The property held under the lease was occupied by the plaintiff for the sale of new and second-hand furniture. After acquiring the lease he put in extra decking, light plant and fixtures, extra shelving, hooks and rug racks, at an expense of about $ 200. The lease had eleven months to run at a rental of $ 45 per month. The court instructed the jury that the measure of damages was the difference between the market value of the lease for the unexpired term and the rent the plaintiff was required to pay, and said:

"In estimating the market value of the lease in question you may take into consideration the desirableness of the location of the premises for this or any other legitimate business, whether the leasehold property was improved for a special purpose for which it was specially suited, whether the business which the plaintiff established thereon and conducted has enhanced the market value of the leasehold property as a site for carrying on such business; but you can not take into consideration any specific or independent damages apart from the lease itself on account of injury to his personal property while being removed, nor that he has been compelled to surrender the rooms for the right of way of the railroad, nor for any damages because of loss of profits or damage to his business or good-will, nor for expense in storing his goods. . . . In estimating the value of the lease you may take into consideration the expense to Bales of moving his stock of goods and fixtures to a new location or damage to the same resulting from the removal, and the increased value of the premises for rent in consequence of putting in such fixtures and improvements as showing the value of the unexpired portion of the lease, but not as showing a specific claim for damages for the expense of moving his stock of goods and fixtures to a new location or damage to the same resulting from their removal or for putting in such fixtures and improvements. . . . In arriving at the value of the plaintiff's lease, you may take into consideration the fact, if you find it to be a fact, that the building included in this lease had been used for a second-hand and new furniture store for a number of years; and if you find that the buildings had been so used added to the value of the plaintiff's lease, you will take that fact into consideration in arriving at your verdict."

The jury found in answer to a special question that the market value of the lease was made up of the following items:

"Extra decking, floor space, light plant and

fixtures, extra shelving, hook & rug rack,

$ 120.00

Extra rent, $ 5.00 per month

55.00

Ten per cent on net profits

300.00

$ 475.00"

and that the rental value of the property was $ 50 per month.

The rent being $ 45 per month and the rental value being $ 50 per month, the difference for eleven months makes up the $ 55 item.

After hearing testimony which took a wide range, the abstract shows that on motion of the defendant the court said to the jury:

"You will disregard all testimony of the witness showing that his opinion as to the value of this lease was based on the fact that the business was a going concern and that there was a loss of time in moving and that there was a depreciation of the stock in moving and that there was a loss of profits by reason of moving, and you will not consider that testimony at all."

On motion of the defendant the court struck out the items of $ 120 and $ 300, allowed by the jury, and rendered judgment for the plaintiff for $ 55.

When the plaintiff put in the decking, shelves and other conveniences, the value of his unexpired term was that of the property as he received it, plus the added value caused by these additions; that is, the rental value of the property in the condition it was when taken for public use.

The jury were asked to state the elements making up the aggregate value of the lease, and gave as one of these elements the extra decking and other things mentioned. The amount of $ 120 for these fixtures or additions should, in harmony with the instructions and the question, be interpreted to mean the increase in the value of the unexpired term by attaching them to the property. So understood, no good reason is perceived why the amount should be stricken out. In Pause v. City of Atlanta, 98 Ga. 92, 26 S.E. 489, 58 Am. St. Rep. 290, it was held that the cost of improvements and fixtures placed in the building by the lessee which could be removed by him could not be recovered, but that the increased rental value of the premises in consequence of putting them in could be considered in computing damages.

The item of ten per cent on net profits, also contained in the answer to the special question, appears to be based on the testimony of a witness who said that the value of this lease was $ 45 per month, plus ten per cent of the net profits of the business, for the value of the location for an established business. The plaintiff having testified that his net profits for the preceding year were $ 3000, the basis of the finding appears. The question is therefore presented, whether, conceding the evidence sufficient upon which to estimate profits, they should be allowed as an element in arriving at the value of the lease.

It was said in Cobb v. Boston, 112 Mass. 181:

"The only question was as to the value of his unexpired lease, and not as to the profits of his business or the inconvenience of removing it to some other place."

It was observed in Becker, Appellant, v. Phila. & Reading R. R., 177 Pa. 252, 35 A. 617:

"We have so often said that the profits of business could not be recovered in condemnation proceedings that it seems like a waste of time to cite the decisions. As far back as Thoburn's Case, 7 S. & R. 411, it was held that, in estimating the damages done to the landowner, the jury are to value the injury to the property at the time the injury was suffered, without reference to the person of the owner or the state of his business." (p. 258.)

In St. L., K. & W. Ry. Co. v. Knapp-Stout & Company, 160 Mo. 396, 61 S.W. 300, a condemnation case, the court said:

"Injury to business, loss of profits, inconvenience to the owner, damage to personal property or the expense of removing it, are not to be estimated as distinct elements of damages." (p. 412.)

The rule in New Hampshire, as stated in ...