Gradison v. State

• Citation: 260 Ind. 688,300 N.E.2d 67
• Decision Date: 14 August 1973
• Docket Number: No. 770S158,770S158
• Parties: Jules T. GRADISON, Appellant, v. STATE of Indiana and Rita J. Gradison, Appellee.
• Court: Supreme Court of Indiana

Page 67

300 N.E.2d 67

260 Ind. 688

Jules T. GRADISON, Appellant, v. STATE of Indiana and Rita J. Gradison, Appellee.

No. 770S158.

Supreme Court of Indiana.

Aug. 14, 1973.

David S. Richey, of Parr, Richey, Obremskey, Pedersen & Morton, Lebanon, Arch N. Bobbitt, of Ruckelshaus, Bobbitt & O'Connor, Indianapolis, for appellant.

Theo. L. Sendak, Atty. Gen., John T. Carmody, Deputy Atty. Gen., Indianapolis, for appellee.

PRENTICE, Justice.

This is an appeal by the landowner (Appellant from a judgment for $140,000.00 and interest, being the amount determined by jury following the appropriation of land by the state (Appellee) for Highway I--465. Nineteen errors are assigned by the landowner and will be hereinafter designated and considered as they appeared in his brief. We reverse the judgment of the trial court upon issue No. 2 but give an opinion upon each issue presented, except Nos. 11, 12 [260 Ind. 691] and 14, inasmuch as they and similar questions appear likely to arise upon the retrial.

(1) The first issue argued by the landowner is presented both by testimony offered by the landowner, objected to by the state and excluded by the court and by the state's instruction No. 2, given over the landowner's objection. This issue relates to the method of evaluating land which the evidence has disclosed may be utilized as a sand and gravel mine.

Witness Park, testifying as an expert for the landowner, was asked upon direct examination if he had an opinion as to the price of gravel and sand in the area at the time of the appropriation, and he responded that he did. He was then asked to state such opinion, to which the state objected. The objection was sustained and an offer to prove was made. Another expert witness for the landowner had previously testified that the land appropriated contained 10,177,000 net mineable tons of sand and gravel, and Mr. Park had given his expert opinion that the land in question contained 10,260,000 tons.

Instruction No. 2 aforesaid and the objection thereto were as follows:

'INSTRUCTION NO. 2

You are instructed that sand and gravel in place, are part of the land and may not be evaluated separately from the land; but must be considered as part of the land itself. Thus, you may take into consideration evidence that the land does contain sand and gravel as a factor to be used in establishing the fair market value of that land, but it would be improper for you to base your evaluation on the amount of sand and gravel which might be removed from the land multiplied by a fixed price per unit.'

'Defendant objects to Plaintiff's Instruction Number 2, for the reason that the same is no longer the law in the State of Indiana, and it should not be the law in the State of Indiana. That the law, upon which this was originally based, has been changed, and the law in other jurisdictions indicates that it is permissible to consider volume of mineral available for mining, and the rate or value per ton of such minerals, or fixed price per unit.'

In determining the amount of damages in a condemnation case, the jury must find the fair market value of the property at the time of the taking. As pointed out by the landowner in his brief, quoting Chief Justice Arterburn from Southern Indiana Gas & Electric Company v. Gerhardt (1961), 241 Ind. 389 at p. 393, 172 N.E.2d 204 at p. 205:

'* * * The 'fair market value' is a determination of what the land may be sold for on the date of the taking if the owner were willing to sell. Anything affecting the sale value at that time is a proper matter for the jury's consideration in attempting to arrive at a 'fair market value'.'

Stated differently and also called to our attention by the landowner and quoting from Clark v. United States (1946), 8th Cir., 155 F.2d 157, is the following:

'* * * In eminent domain proceedings the rule is that all facts which an ordinarily prudent man would take into account before forming a judgment as to the market value of property he contemplates purchasing is relevant and material. * * *.'

Unquestionably, the sand and gravel content of the land taken and its value, as it lay or in place was relevant; as it was a factor properly to be considered in arriving at the fair market value. We have not been cited to Indiana authority upon the issue, but the rule generally accepted in other jurisdictions is that '* * * the value of such mineral deposits cannot be determined independently of the land of which it is a part. It cannot be considered as so much potential merchandise to be evaluated as such. The land taken must be valued as land, with the factor of mineral deposits given due consideration. * * * Thus, the value as stone land suitable for quarrying--but not the value of the stone separate from the land--is a proper subject for consideration, both by the witnesses and the jury in fixing the amount of just compensation to be awarded. * * * All legitimate evidence tending to establish value of the land with the minerals in it is permissible. This is not to say that such minerals are to be seperately evaluated, but that consideration may be given to the quantity of the mineral that can be extracted and to the value thereof, purely as evidence for arriving at the value of the land. * * *.' Nichols on Eminent Domain, Third Edition, § 13.22 and cases there cited.

The landowner insists that the excluded testimony was tendered only as evidence of the highest and best use of the land taken and to show that the presence of the sand and gravel enhanced its value. We do not agree that the testimony was offered in such context or that it was likely to be so regarded. Rather, we agree with the state that, if allowed, such testimony would have indicated that the land had a fair market value equal to the local market price per ton for sand and gravel multiplied by the number of tons estimated to be contained within the land. The excluded question and the answer offered did not relate to the land or the gravel therein, i.e. to the value of the sand and gravel in place. It concerned the market value of sand and gravel from any source whatever--the price a purchaser would be willing to pay at that location. It did not shed any light upon the issue of whether or not the landowner's sand and gravel could be removed from beneath the overburden and sold at a profit. Obviously, if it could not, its presence contributed nothing to the value of the land. The landowner has cited us to numerous cases wherein the courts have held that evidence of the value of minerals contained in the land was admissible. In the cases cited, however, the evidence was as to the value of such minerals in their natural state, i.e. as they lay. The primary case relied upon by the landowner upon this point is National Brick Co. v. United States (1942), 76 U.S.App.D.C. 329, 131 F.2d 30. In that case, the court stated that no rule was better established than that the special value of land due to its adaptability for use in a particular business is an element which the owner of land is entitled to have considered in determining the amount to be paid as just compensation. The trial court had excluded evidence of the value per ton of the sand within the appellant's land, 'in the bank just as it is now.' In reversing, the court said:

'We think the inquiry should have been whether the property was valuable in the open market for the sale of sand or for the use of sand in the making of bricks; and that in order to reach a fair conclusion in this respect the jury should have been informed by competent witnesses as to the quantity of the sand, the quality of the sand, the uses to which it might be put, whether there was a market for it, and the value of the land with the sand in that market in its then condition.' (Emphasis ours).

United States v. 180.37 Acres of Land, etc. (1966), U.S.Dist.Ct., Western Dist.Va., 254 F.Supp. 678, also cited by the landowner, is an exception among the cases holding that the 'unit method' of valuation is not permissible. It must be noted in that case, however, that there was no evidence of comparable sales and that it was thus assumed that none was available. The court said: '* * * It was the feeling of the commissioners that the method employed in ascertaining the market value * * * was the most logical one to use 'in order to do substantial justice' under the facts and circumstances of this case, and this Court cannot say that this conclusion is clearly erroneous.' And thus the court accepted the commissioner's method of valuation as a matter of necessity, or at least of expedience in the particular case and in no manner endorsed it as being generally acceptable. Although the landowner in the case before us objected to the evidence of comparable sales introduced by the state, it was accepted by the trial court, and we think correctly so. It is also to be noted in United States v. 180 Acres of Land (supra) that the valuation was a 'royalty' valuation, which we take to mean an estimate of the value of the mineral in place, which was twenty-five cents per ton, and that the estimated quantity, for valuation purposes, was predicated upon a seventy percent rate of recovery. We, therefore, think the circumstances of such case are not analogous to the case at bar.

(2) A standard instruction was given, over landowner's objection, concerning the setting-off of special benefits to the landowner's residue against damages thereto. The landowner maintains that there was no evidence of such benefits and hence the instruction was improper as not conforming to the evidence. He concedes that there was evidence that as a result of the highway construction a portion of the residue would no longer flood, as it did before; but he contends that this does not constitute a 'special benefit' inasmuch as the improvements also benefited, in a like manner, all lands in the vicinity that had been subject to prior floods. The law is clear in Indiana that where benefits to the...