City of Austin v. Cannizzo

• Decision Date: 31 March 1954
• Docket Number: No. A-4360,A-4360
• Parties: CITY OF AUSTIN v. CANNIZZO et al.
• Court: Texas Supreme Court

Page 808

267 S.W.2d 808

153 Tex. 324

CITY OF AUSTIN v. CANNIZZO et al.

No. A-4360.

Supreme Court of Texas.

March 31, 1954.

Rehearing Denied June 2, 1954.

W. T. Williams, Jr., City Atty., Clifton E. Speir, Doren R. Eskew and Robert L. Burns, Asst. City Attys., Austin, for petitioner.

David L. Tisinger, Austin, for respondents.

CALVERT, Justice.

The controversy in this condemnation proceeding brought by our petitioner, the City of Austin, for school purposes, relates only to determination of the damages. The land actually appropriated was a more or less rectangular piece, being 4.57 acres out of a larger tract owned by the respondent-condemnees, John Cannizzo and others, in a southwesterly area of the city, in the angle between the Barton Springs Road on the north and the Fredericksburg Road or South Lamar Boulevard on the east. The 4.57 acres lies immediately south of a 6 acre tract of the City on which is located a relatively new public school of substantial size. The Special Commissioners awarded the respondent $13,000, which the County Court of Travis County, upon a verdict, raised to a total of $25,000, being $21,000 for the value of the 4.57 acres taken and $4,000 by way of devaluation of the rest of respondent's tract. The charge to the jury included as part of the preliminary general instructions the statement 'that the only issue in the case is the value of the land taken, and the depreciation in value, if any, to the defendants' remaining land.' The special issues, accompanying instructions and answers are set out in footnote ¹.

The Court of Civil Appeals affirmed the County Court judgment. There was no assignment directly attacking the verdict as excessive. 260 S.W.2d 54.

We granted the writ of error on two points alleging respectively error committed below: (a) 'in holding that for the 4.57 acre tract of land to have a market value there must have been a sufficient number of recent sales of comparable property in the immediate vicinity of said tract to establish a prevailing price (such as can be quoted on wheat, cotton, and other commodities)'; and (b) in admitting, and permitting the jury to consider, evidence of the adaptability of the 4.57 acre parcel for commercial purposes, despite the undisputed fact that commercial usage would violate valid existing city zoning restrictions on the area.

Proposition (a) above involves consideration of Special Issues Nos. 1 and 2 with their corresponding instructions. The theory of the charge and the view of both courts below was that unless there had been a sufficient number of recent sales of comparable property to establish a prevailing price, respondents' recovery should be measured by the 'intrinsic' rather than the 'market' value of the property. This view finds particular support in Taylor County v. Olds, Tex.Civ.App., 67 S.W.2d 1102, writ dismissed, by the Eastland Court of Civil Appeals, and in a series of cases thereafter decided by the same court. What was said in the Olds case in this respect is also quoted with approval by the Galveston Court of Civil Appeals, in Foley Bros. Dry Goods Co. v. Settegast, 133 S.W.2d 228, writ refused.

On the other hand, although disclaiming any intention to lay down a hard and fast rule to be followed in all fact situations, this Court made clear in State v. Carpenter, 126 Tex. 604, 89 S.W.2d 194, motion for rehearing overruled, 89 S.W.2d 979, not only what it regarded as the controlling issues in the ordinary eminent domain case but the form in which the issues should be submitted so as to avoid confusing the jury as much as possible. Under the form there suggested and the record in this case as we understand it, there were only three issues in this case: (1) The market value of the land taken, considered as severed land, (2) the market value of the remainder of the tract immediately before the taking, and (3) the market value of the remainder of the tract immediately after the taking, 'market value' in all such issues being defined in terms of what the land would bring in a transaction between a willing seller and a willing buyer. 89 S.W.2d 201-202.

Market value is not restricted to prevailing price. It may be that in rare instances a prevailing price is fixed on a front-foot basis in new additions and subdivisions in the growth and development of our cities, and that in such instances the prevailing price would in turn fix the market value of the property, but market value would still measure recovery in eminent domain proceedings and prevailing price would be but evidence of market value. It was clearly error to instruct the jury that the 4.57 acre tract had no market value unless the evidence revealed 'a sufficient number of recent sales of comparable property to establish a prevailing price.'

By Special Issue No. 2 the court asked the jury to find the intrinsic value of the land taken. This was also error. We repeat: the measure of respondents' recovery was the market value of his land. Although there is authority for the proposition that where property has no market value its intrinsic value may be shown, we have no such case before us.

We see no need to ferret out of the decided cases the nice distinctions made by our courts between 'market value' and 'intrinsic value' as those terms are used in eminent domain and kindred proceedings. Most of the cases to which we are referred and which we have investigated use the term 'intrinsic value' in the sense of intrinsic worth based upon such factors as cost, depreciation, present usefulness, past return on investment, etc., and hold that where the evidence establishes the absence of a market for the kind of property involved evidence of intrinsic value is admissible for the purpose of arriving at the final figure to be established whether that figure be for the purpose of awarding damages in an eminent domain proceeding, fixing a basis for tax liability, or establishing the rights of individual suitors. As examples, see Lower Colorado River Authority v. Hughes, Tex.Civ.App., 122 S.W.2d 222, writ dismissed; West Texas Hotel Co. v. City of El Paso, Tex.Civ.App., 83 S.W.2d 772, writ dismissed; Foley Bros. Dry Goods Co. v. Settegast, Tex.Civ.App., 133 S.W.2d 228, writ refused.

Respondents did not plead that the land in suit had no market value. On the contrary, one of their objections to the award of the Special Commissioners was because it failed 'to award the full market value of the land proposed to be taken', and by their prayer they sought recovery of 'their true damages, to wit: the market value of the land proposed to be taken, or in the alternative, the intrinsic value thereof, or in the alternative, the value to these defendants and condemnees.' They offered three witnesses on value, each of whom testified to the market value of the property. One of the witnesses also testified that the property had no market value in the sense that there was not a quotable prevailing price and that the intrinsic value of the property was the same as the value he had theretofore placed on the property as its market value. Petitioner offered two witnesses on the issue of damages both of whom qualified to testify to market value of the property and both of whom did so testify.

Thus it appears as a matter of law that there was no such record before the court as justified the abandonment in the charge to the jury of the standard of market value and the adoption therein of the standard of intrinsic value in measuring damages. City of Trinity v. McPhail, Tex.Civ.App., 131 S.W.2d 803, no writ history; State v. Richardson, Tex.Civ.App., 215 S.W.2d 359, writ refused, N.R.E. The fact that petitioner's counsel sought unsuccessfully and without sound basis to disqualify some of respondents' witnesses by objecting to their testimony on the ground that the witnesses had not shown themselves acquainted with a sufficient number of recent sales of comparable property in the immediate vicinity as to form the basis of opinion testimony of market value could not justify the abandonment.

But respondents contend that even if Special Issue No. 2 was erroneous in using intrinsic value as the standard of recovery, the error was rendered harmless by the instruction given in connection therewith which measured intrinsic value by the same yardstick as is used in measuring market value. Under the provisions of Rules 434 and 503, Texas Rules of Civil Procedure, we must determine the harmlessness of the error by an examination of the entire record and we should not order a reversal unless we are satisfied that the error 'was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case.' Texas Power & Light Co. v. Hering, 148 Tex. 350, 224 S.W.2d 191, 193; Texas Employers Ins. Ass'n v. McKay, 146 Tex. 569, 210 S.W.2d 147. It therefore remains for us to decide whether, in our judgment, the instruction rendered the errors in the charge harmless.

Whereas 'market value' is correctly defined as the price which property would bring in a transaction between a willing seller and a willing buyer, it will be noted that the instruction given in connection with Special Issue No. 2 defined 'intrinsic value' as the price which the property should bring in such a transaction. That the court intended the instruction to call for a measure of damages different from that of market value as laid down in the Carpenter case is heightened and made doubly clear by the court's instruction just preceding Special Issue No. 5, the only place in the charge where 'market value' is defined and in which it is defined as the price which the property will bring rather than the price which the property would bring. If the court had intended the jury to understand that 'market value' and 'intrinsic value' were one and the same thing there was no occasion whatever for the use of the word will in the definition of the former and the word should in the definition of the...