Buena Park School Dist. of Orange County v. Metrim Corp.

• Decision Date: 15 December 1959
• Citation: 176 Cal.App.2d 255,1 Cal.Rptr. 250
• Court: California Court of Appeals Court of Appeals
• Parties: BUENA PARK SCHOOL DISTRICT OF ORANGE COUNTY, California, Plaintiff and Appellant, v. METRIM CORPORTATION, a California corporation, Fullerton Country Club, a California corporation, Title Service Company, a corporation, Long Beach Federal Savings and Loan Association, a corporation, et al., Defendants and Respondents. Civ. 6224.

Page 250

1 Cal.Rptr. 250

176 Cal.App.2d 255

BUENA PARK SCHOOL DISTRICT OF ORANGE COUNTY, California, Plaintiff and Appellant, v. METRIM CORPORTATION, a California corporation, Fullerton Country Club, a California corporation, Title Service Company, a corporation, Long Beach Federal Savings and Loan Association, a corporation, et al., Defendants and Respondents.

Civ. 6224.

District Court of Appeal, Fourth District, California.

Dec. 15, 1959.

Hearing Denied Feb. 10, 1960.

Joel E. Ogle, County Counsel (Orange County), Stephen K. Tamura, and Adrian Kuyper, Assts. County Counsel, Santa Ana, for appellant.

Ball, Hunt & Hart, Long Beach, for respondent Metrim Corp.

John D. Miller, Long Beach, for respondent Title Service Co.

Otto A. Jacobs, Santa Ana, and Charles K. Chapman, Long Beach, for respondent Long Beach Federal Sav. and Loan Assn.

MONROE, Justice pro tem.

This is a proceeding in eminent domain by which the plaintiff seeks to acquire for school purposes a tract of approximately eleven acres in the City of Buena Park. The action was commenced on April 15 1957, which was fixed as the date of valuation. The case was submitted to a jury, which fixed the value of the property taken at $309,000 and awarded an additional sum of $16,300 as severance damages to the property of the defendants not taken. A motion for new trial was presented and overruled, and the plaintiff school district appeals.

The amount of $16,300 as severance damages was the amount named by one of plaintiff's appraisers in his testimony and no issue concerning that matter is raised on the appeal. The valuations placed by the two expert witnesses on behalf of plaintiff were $125,600 and $139,600, including severance damages. Two expert witnesses for the defendants gave valuation of the property taken in the amount of $402,000 and $518,250.

The principal controversy between the parties both at the trial and upon the appeal centers around the status of the subject property at the time of valuation. The plaintiff contended at the trial and contends upon appeal that the property was acreage and should be valued as unimproved acreage and that evidence which treated it as a part of a subdivision was improperly received. On the other hand, the defendants contend that at the time of taking the property was, in fact, for all practical purposes, a subdivision consisting of thirty-seven building sites. The solution of the problem is largely one of fact.

The Metrim Corporation is one of three corporations who acquired an area of approximately nine hundred acres in Orange County in 1956. They undertook the project of a subdivision for high -class residences. A portion of the area was set apart for a golf course, the subdivision to be built around the course. Metrim Corporation had acquired ninety acres of property which adjoined the golf course and the eleven acres which plaintiff seeks to acquire appears to have been the choice area adjacent to and overlooking the course. In September, 1956, a tentative map of the proposed subdivision was approved by the planning commission of the city of Buena Park, and during that month the property was annexed to that city. The area of the subdivision was zoned for single-family residences. The work of improving the subdivision proceeded and at the time of the filing of the action the golf course was well on the way toward completion. The property had been surveyed and the engineering work done and considerable of the grading was completed. The subject property had been marked out into lots and some of the streets in the area had been graded and were ready for paving. The utilities, sewer and water lines, had been brought to the edge of the subject property.

Appellant's contention in this regard arises principally from the fact that at the time of the commencement of this action a subdivision map had not been recorded. It appears that such final subdivision map had been completed and approved and had been delivered in escrow for presentation to the recorder for filing on April 11, 1957. However, the plaintiff school district filed an action of condemnation on the 10th day of April. That action covered seventeen acres. Summons and complaint were not served, but as a result of the filing of the action the recorder declined to record the subdivision map. Later, on April 15, the plaintiff commenced this action and thereafter the original action was dismissed.

The just compensation which the California Constitution, art. 1, § 14, directs must be paid to the owner of land taken for public purposes is defined to be the fair market value. It is 'the highest price estimated in terms of money which the land would bring * * * in the open market, with reasonable time allowed in which to find a purchaser * * *'. Sacramento Southern Railroad Company v. Heilbron, 156 Cal. 408, 104 P. 979, 980. This classic definition of market value contemplates, of course, the price which the property would have brought at the time of valuation had it then been placed upon the market and had it then been available for sale. It is obvious that in determining that value the trier of fact must disregard the fact that at that time because of the filing of condemnation proceedings the property was not actually salable. It is a matter of common knowledge that a purchaser would not buy property in the process of being condemned except at a figure much below its actual value. It follows, therefore, that in arriving at the fair market value it is necessary that the jury should disregard not only the fact of the filing of the case but should also disregard the effect of steps taken by the condemning authority toward that acquisition. To hold otherwise would permit a public body to depress the market value of the property for the purpose of acquiring it at less than market value.

It follows, therefore, that the court could have, within the limitations of sound legal and equitable principles, advised the jury that they should treat the property as having the value that it would have had, had no preliminary action been taken by the board toward the acquisition of the property. The trial court, however, did not give any such instruction but throughout the trial permitted the defendant to treat the property for valuation purposes in the light of the conditions as they actually existed. In other words, evidence was taken concerning the value of the property as a part of the subdivision which was actually in the process of construction but which had not been yet sufficiently completed to place the thirty-seven lots contained within the eleven acres upon the open market. In so approaching the situation the trial court committed no error.

It is first contended by the appellant that it was error to permit expert witnesses testifying on behalf of defendant to refer to 'comparable sales' of building sites in similar subdivisions. Pursuant to the rule laid down in County of Los Angeles v. Faus, 48 Cal.2d 672, 312 P.2d 680, defendants' witnesses on direct examination referred to comparable sales. The plaintiff's main contention in support of objections to such testimony arose from the fact that the final subdivision map had not been recorded. It was contended, thererfore, that the property could not be considered as building sites but must be considered as unimproved acreage. The complete answer to this question is the fact that the property was evaluated as of the condition in which it was at the date of valuation. The jury viewed the property and its surroundings. As has been noted, the actual work of the subdivision had reached the state where the property could no longer be considered vacant, unoccupied acreage, but was properly considered as a partially completed subdivision. The receipt of evidence of sales prices of lots in other subdivisions was within the discretion of the court. Covina Union High School Dist. v. Jobe, 174 Cal.App.2d 340, 345 P.2d 78.

It was next contended that the court improperly received evidence with regard to the prices which the lots would have brought had the subdivision been completed. It is true that in determining the value the jury may not consider plans which the owner may have for future use of the property. Redwood City Elementary School District V. Gregoire, 128 Cal.App.2d 766, 276 P.2d 78. It is therefore held that it is not proper to place a valuation upon property which is suitable for subdivision taking the market value of contemplated lots and subtracting therefrom the cost of subdivision. City of Los Angeles v. Hughes, 202 Cal. 731, 262 P. 737. In the Hughes case, however, there was involved the matter of an unimproved area which was adapted for subdivision purposes but had not been subdivided.

In Napa Union High School District v. Lewis, 158 Cal.App.2d 69, 322 P.2d 39, 41, there was involved a situation somewhat similar to that in the case at bar. The court permitted evidence of the ultimate value of lots in the proposed subdivision together with evidence of the cost to complete such subdivision. It was held, however, that in arriving at the cost of the proposed subdivision it was improper to figure the cost of the subdividing of the property taken as a unit because of the fact that it was but a part of the larger acreage to be subdivided. The court pointed out that the subdivision costs should be taken for the entire acreage and the proportionate share thereof applied to the condemned property. The court said:

'Testimony as to any facts showing the nature of the land in controversy and its adaptability for subdivision for residential purposes was admissible. Sacramento Southern R. R. Co. v. Heilbron, 156 Cal. 408, 411, 104 P. 979. It was competent for appellant to show how much it would cost to put the property to its highest and best use and to demonstrate to the jury the quality of the land for that use, thus supporting his value witness' ultimate valuations of the land taken.'

Applying the rules...