H. E. Fletcher Co. v. Com.

• Decision Date: 03 March 1966
• Citation: 350 Mass. 316,214 N.E.2d 721
• Parties: H. E. FLETCHER COMPANY v. COMMONWEALTH.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 721

214 N.E.2d 721

350 Mass. 316

H. E. FLETCHER COMPANY v. COMMONWEALTH.

Supreme Judicial Court of Massachusetts, Middlesex.

Argued Nov. 4, 1965.

Decided March 3, 1966.

Robert W. Meserve, Boston (Leon F. Sargent, Boston, with him) for petitioner.

F. Dale Vincent, Asst. Atty. Gen., for the Commonwealth.

Before SPALDING, KIRK, SPIEGEL and REARDON, JJ.

KIRK, Justice.

The petitioner owns a large tract of land located mainly in the town of Westford. A very small part is in Chelmsford. On December 10, 1958, the Commonwealth took a strip of the tract for the extension of a public highway known as Route 3. The strip taken ran through both towns. The petitioner brought a separate petition for damages resulting from the taking of its land in each town. Since there was one taking by the Commonwealth of the strip of land belonging to the same owner for the same purpose, the two petitions were properly consolidated for trial as a single case leading to a single verdict. Lumiansky v. Tessier, 213 Mass. 182, 188-189, 99 N.E. 1051; Lee Lime Corp. v. Massachusetts Turnpike Authy., 337 Mass. 433, 434, 149 N.E.2d 905.

The jury's verdict was $50,000. The petitioner, contending that the award was inadequate, brings this bill of exceptions directed to the judge's rulings on evidence and to the denial of the petitioner's motion for a new trial.

We summarize the evidence as shown by the bill of exceptions (eighty-one pages) which incorporates many exhibits by reference. The entire tract of the petitioner, consisting of 1,050 acres, is located in an area known geologically as the 'Chelmsford granite belt' which runs northeasterly for several miles from the vicinity of Ayer through the Chelmsford-Westford area into New Hampshire. Chelmsford granite in general has the characteristic of being a dark gray stone of fine grain. The quality of granite is not uniform throughout the belt. According to the petitioner, the granite taken from its quarry, known as the Fletcher quarry, was considered superior to that taken from other quarries in the Chelmsford belt. The Fletcher quarry has been in operation for many years. It is located in that part of the petitioner's tract which is in Westford where the removal and processing of granite is permitted by the zoning by-law. The removal and processing of granite is not permitted in Chelmsford. The petitioner has never operated a quarry in Chelmsford.

The taking by the Commonwealth consisted of 17.4 acres of the 1,050 acre tract. The land taken was a strip 300 feet wide and 2,500 feet long. It was wild land, traversed only by hunters. Less than one-half acre of the land taken was in Westford. The remainder of the land taken was in Chelmsford. The strip taken separated the petitioner's land into two parts, a part to the east of the strip of about 67.8 acres, and the rest, to the west of the strip, of over 900 acres. The distance between the active Fletcher quarry and the nearest point of the land taken was 2,500 feet.

In 1957 the petitioner had considered extracting granite from a part of its land other than the active Fletcher quarry. On October 17, 1958, approximately seven weeks before the taking, and knowing of the probability of highway construction, the petitioner purchased eighteen acres of land for $1,475. The land purchased was contiguous to that already owned by the petitioner and extended across the path of the proposed highway. More than one fourth of the strip taken by the Commonwealth on December 10, 1958, was part of this lately purchased land.

Sometime in 1960 the petitioner caused a study to be made to determine the nature of the stone in its inactive land. Included in the study was the land already taken by the Commonwealth. Core samples produced by test borings made at different points and observation of the granite exposed during the progress of the road construction on the land taken showed a continuous deposit of good granite between the northeast face of the Fletcher quarry to somewhere beyond the land taken. A new quarry could have been opened on the land taken and quarrying could successfully have been conducted by extracting granite in a southwest direction, where, because of the topography, the face of the new quarry could conveniently be exposed. The opening of a new quarry at this site would be preferable to continuing operations on the northeast face of the Fletcher quarry now in operation. The study led the petitioner to the conclusion that the land taken would have been the logical and best site for a new quarry. The data which the study yielded and upon which the petitioner's conclusion was based were not known to the petitioner at the time of the taking. For reasons of safety, quarrying could not be conducted within 200 feet of both sides of the new roadway.

We consider first the petitioner's exceptions to the exclusion of certain testimony from two expert witnesses. John Alexander of Minnesota, who was familiar with all phases of quarry operations and with the Fletcher quarry among others in the country, testified that the entire Fletcher property was worth $12,000.000 before the taking and $8,000.000 after the taking. Factors entering into his opinion were the ease of extraction, the quality and multiplicity of uses of the stone, its marketability in different sizes, the availability of labor, and the favorable tax situation both for local real estate and the Federal depletion allowance. A zoning regulation which did not permit quarrying in Chelmsford would not in Alexander's opinion be a factor affecting the value of the land.

The petitioner then offered to show through Alexander that it would be able to produce and sell 2,000,000 cubic feet of stone a year for forty years at an annual profit of $1,500,000 of which about $300,000 a year would be used for capital and capital replacement leaving $1,200,000 available as profit subject to taxes with the result that, applying 'a rule of thumb' in evaluating quarry property, the petitioner's entire property was worth ten times the gross profits, or $12,000,000. Upon objection by the Commonwealth the judge excluded the proposed line of questions which would elicit the indicated answers. The petitioner excepted. Alexander concluded his testimony by saying that the difference in the value before and after the taking was because 'the taking was of close to 50% of the reserves * * * [which] were in the good stone belt.'

Ralph A. Fletcher, for many years the petitioner's treasurer, director and active manager, testified to the unusual and desirable characteristics of stone in the Fletcher quarry above others in the Chelmsford granite belt. The only comparable stone was that in the area taken by the Commonwealth. His opinion was that the whole tract was worth $12,250,000 before and $7,750,000 after the taking. That the land in Chelmsford was zoned for residential purposes would have no effect al all, in Fletcher's opinion, on the market value. Factors considered by Fletcher in fixing the figure of $12,250,000 were: an estimated thirty-nine and one-half or forty years of production, an estimated 80,000,000 cubic feet of dimension stone available for extraction at the time of the taking, and an average rate of extraction of 2,000,000 cubic feet a year over forty years. By applying 'the average gross price per cubic foot of stone to the average rate of extraction for this 40-year period,' he 'came up with the average dollar amount of sales per annum * * * and valuded the land at 10 times the gross earnings so computed' or 'approximately $12,250,000.' The petitioner then sought to elicit from Fletcher the 'method of computation * * * [t]o check the valuation * * * [he] arrived at as to this property before the taking.' Subject to exception following the Commonwealth's objection, the judge excluded the question.

At the close of an extended bench conference the judge stated that he would exclude the question on Fletcher's computations as being too speculative. Upon inquiry by the petitioner's counsel whether his ruling was an exercise of discretion or as matter of law that the evidence was inadmissible, the judge stated in substance, 'My present ruling * * * [on] the question * * * you are presently going to * * * [make] an offer of proof on is made as a matter of law.' The petitioner then offered to show through Fletcher that $5 a cubic foot for its stone was the average fair price; that 2,000,000 cubic feet would be the average sales a year, producing $10,000,000 in gross sales a year; that after making allowances for return of capital, for labor and other costs of removal and sale of stone and management expenses, there would be a profit figure before taxes of twelve per cent or $1,200,000; that capitalizing this figure and applying to that figure a reasonable factor of ten times the net profit the result would be $12,000,000.

Continuing his testimony, Fletcher said that, immediately before the taking, the 'reserves of dimension stone available on the Fletcher property' were 80,000,000 cubic feet, and 'that by virtue of the taking the Fletcher Company had lost more than half of its reserves, which of course resulted in a great reduction in the life of the quarry.'

The respondent's objections to Alexander's and Fletcher's proffered testimony were general. We need not dwell on the merit of the exception to the ruling as to Alexander. Not only was the exclusion within the judge's discretion and made as matter of discretion, Providence & Worcester R. R. v. Worcester, 155 Mass. 35, 41, 29 N.E. 56, Manning v. Lowell, 173 Mass. 100, 102, 103, 53 N.E. 160, but the figures incorporated in the offer do not appear to have been of Alexander's own knowledge or to have been otherwise in evidence as a basis for the answer sought. It is of more practical importance, however, that the excluded matter was later in full substance introduced without objection through Fletcher, who had personal knowledge of the...