Fiske v. State Highway Bd., 393
| Decision Date | 04 February 1964 |
| Docket Number | No. 393,393 |
| Citation | 197 A.2d 790,124 Vt. 87 |
| Parties | Fred C. FISKE and Edith N. Fiske v. STATE HIGHWAY BOARD. |
| Court | Vermont Supreme Court |
A. Pearley Feen, Burlington, for plaintiffs.
Joseph E. Frank, Burlington, for defendant.
Before HOLDEN, C. J., and SHANGRAW, BARNEY, SMITH and SYLVESTER, JJ.
On March 27, 1961 the Vermont State Highway Board condemned a portion of the land and buildings owned by the plaintiffs. The property was situated on both sides of the highway known as Williston Road in South Burlington. All of the premises on the north side of the highway, consisting of eight tenths of an acre, with a ranch type dwelling were taken. On the south side of the highway, one and one tenth acres with two dwelling houses and three tourist cabins were condemned. The property remaining in the plaintiffs consisted of three and one half acres, a dwelling house occupied by the plaintiffs as their residence, and five tourist cabins. As originally constituted the south parcel had a frontage on Williston Road of approximately four hundred feet. After the taking, access to the remaining land from Williston Road was by way of a frontage of fifty three feet at the western end of the land retained. The purpose of the appropriation was to establish a clover leaf interchange.
The highway board awarded the plaintiffs $78,000 as compensation for the land and buildings taken. The plaintiffs appealed to the Chittenden County Court pursuant to the provisions of 19 V.S.A. § 231. After trial by jury a general verdict of $70,500 was returned. The composition of this amount was specified by two special verdicts. One was in the amount of $60,265, representing the value of the lands and buildings taken by the state. The second was for $10,235, being the amount fixed as damage to the land and buildings retained.
The plaintiffs appeal from the judgment that followed. Error is assigned to the court's exclusion of evidence offered by the plaintiffs as to the amount of business loss sustained in the condemnation, and to its refusal to submit the issue of business loss to the jury.
The record indicates that the plaintiff Fred Fiske had operated a tourist business at this location from May 30 to November 1 each year since 1930. Starting with a single cabin, the facilities were expanded from time to time until the highway project was commenced. Then the operation consisted of six single units and two double cabins. In 1958 the business produced gross receipts of $2416.00 and net profit of $745.00. In 1959, gross income was $4069.50 with net income of $1498.61. 1960 yielded $3216.46 gross and $1315.61 net income.
In this enterprise the plaintiffs attended to the registration and placement of guests and collected the rentals. Outside help was employed to do the other work involved. In computing the net profits, no deduction was made for the services performed by the plaintiffs.
In addition to the cabin business, Fred Fiske had engaged in appraising real estate. He had extensive experience in appraisal of farm properties and limited activity in commercial properties.
The plaintiffs contended that the severe restriction in the frontage of the south parcel on Williston Road and the circuitous access to the cabin development occasioned by the highway condemnation destroyed the utility of the property as a cabin operation. They maintained that this curtailment required them to abandon the business and to sell and remove the remaining cabins from the premises, at considerable loss.
On this state of the evidence, the plaintiff was asked the following:
Here the defendant objected to the question. Counsel for the plaintiffs then stated an offer to the effect that the factual situation in this case entitled the landowners to compensation for loss of business under 19 V.S.A. § 221(2), and that in the opinion of the plaintiff, the business had a value of $20,000. The defendant interposed further objection that the plaintiffs' claim of business loss was predicated on capitalization of income. From the tenor of the remarks of the presiding judge in excluding this offer, it is clear that he considered the plaintiffs' estimate was based on capitalization of income as suggested in the objection. The court further added--'I think, under the present state of the evidence, to allow the witness to express his opinion at this time would be to go into the realm of conjecture on the part of the witness and such an opinion wouldn't have any foundation * * *.'
In response to inquiry by the court, counsel for the plaintiffs stated that their claim of business loss was not based exclusively on capitalization of income, although the income produced by the enterprise was a factor in arriving at his estimate of the value. Further inquiry on loss of business was excluded except for cross-examination of the witness by counsel for the highway board. From this it appeared that the vacancy rate experienced by the plaintiffs' business in 1958 was in excess of seventy five per cent, fifty per cent in 1959, and sixty per cent in 1960. The defendant also sought to develop the point that the cabin business might increase in value as a result of its favorable location in relation to the new interchange.
By the enactment of 19 V.S.A. § 221(2) in 1957, the legislature has decreed that a landowner, whose property contains a going business, shall be compensated, not only for the land taken, but he shall be entitled to a further award to the extent of 'the direct and proximate lessening in the value of the remaining property or right therein and the business thereon.' Perhaps, as Justice Holmes pointed out in Earle v. Commonwealth, 180 Mass. 579, 583, 63 N.E. 10, 57 L.R.A. 292, there is no constitutional necessity for monetary recognition of such an indirect loss.
In enlarging the scope of compensation to this extent, undoubtedly the law makers were mindful of the lack of certainty in measuring business loss and the difficulty in calculating the true effect of the taking on a going business. Nevertheless the statute requires the highway board, in the first instance, and the county court, on appeal, to search out to what extent, if any, the business yield has been proximately lessened by the condemnation. To be sure, the economic effect of the highway project is not necessarily adverse. The problem in each case is essentially factual. Record v. State Highway Board, 121 Vt. 230, 237, 154 A.2d 475; Penna v. State Highway Board, 122 Vt. 290, 293, 170 A.2d 630.
In the language of Chief Justice Hulburd in the Penna case, the plaintiffs here marshalled their proof by showing a modest profit in the three years preceding the taking. The extent of the landowners' services in gathering the net income was presented so that the jury might properly reduce the computation of profit according to its estimate of the value of proprietor's labor. The profits, thus adjusted, were admissible to help determine the amount of damage inflicted on the cabin business. Penna v. State Highway Board, supra, 122 Vt. at 292, 170 A.2d at 632.
In searching for the true extent of business loss, the jury was entitled to entertain the opinion of the owner on this issue. A proprietor who is conversant with his business and its management is competent to testify to the value of the property and the business which was operated there. O'Brien v. State Highway Board, 123 Vt. 414, 417, 190 A.2d 699. And even if the trial court was correct in its assumption that the estimate would be based in part on capitalization of income, that of itself would not render the offered testimony inadmissible. No exact formula for measuring the business loss is available and the legislature prescribed none. The business operation had been terminated so that actual experience after the taking was not available. There was nothing in the plaintiffs' offer to indicate they attempted to gear the profits to the life expectancy of the owners, against what was said in the Penna case, supra, 122 Vt. at 294, 170 A.2d at 633. In these circumstances, recent profits...
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...permitted to testify as to the value of corporate property with which he was thoroughly familiar. See also Fiske v. State Highway Board, 124 Vt. 87, 94-95, 197 A.2d 790, 794 (1964), for an analogous case involving testimony on the value of an unincorporated business by an owner who was prov......
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...which is merely conducted on real estate is admissible only where it is claimed the business itself is taken. See Fiske v. State Highway Board, 123 Vt. 87, 92, 197 A.2d 790. Defendant cites textbooks and manuals wherein it is stated that the income approach relates to income produced direct......
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Ehrhart v. Agency of Transp., 05-243.
...for only those losses directly and proximately caused by the physical loss of property. For this reason, in Fiske v. State Highway Board, 124 Vt. 87, 92, 197 A.2d 790, 793 (1964), we allowed the owner of a tourist cabin business to recover business losses that resulted when the State took p......
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...a legal one. This view is reaffirmed in Penna v. State Highway Board, 122 Vt. 290 at 293, 170 A.2d 630, and in Fiske v. State Highway Board, 124 Vt. 87 at 91, 197 A.2d 790. The language of 19 V.S.A. Sec. 221(2) specifically speaks in terms of the 'lessening in the value' of the business on ......