McArdle's Estate v. City of Jackson

• Decision Date: 08 December 1952
• Docket Number: No. 38545,38545
• Citation: 61 So.2d 400,215 Miss. 571
• Parties: McARDLE'S ESTATE v. CITY OF JACKSON.
• Court: Mississippi Supreme Court

Page 400

61 So.2d 400

215 Miss. 571

McARDLE'S ESTATE v. CITY OF JACKSON.

No. 38545.

Supreme Court of Mississippi.

Dec. 8, 1952.

Henley, Jones & Woodliff, Jackson, for appellant.

Satterfield, Ewing, Williams & Shell, Jackson, for appellee.

ETHRIDGE, Justice.

This is an appeal by the Estate of Susie McArdle, deceased, from a judgment of the Circuit Court of the First Judicial District of Hinds County, Mississippi, based upon the verdict of a jury sustaining the assessment made by appellee, City of Jackson, of appellant's property for ad valorem real estate taxes for the year 1950.

The appellant estate, which is administered by Harold Cox, testamentary trustee, owns commercial property in the downtown area of the City of Jackson which fronts 160.2 feet on the north side of Capitol Street, which runs east and west, and extends northward between approximately parallel lines through an entire city block for a distance of 440 feet to the south side of Amite Street, upon which it has a frontage of 160.5 feet. The property is partially improved with five retail store buildings fronting upon Capitol Street. Between two of these store buildings is a space or driveway 29 feet in width, which serves as an entrance from Capitol Street to a parking lot operated by a lessee upon most of the remaining area of the property, which is paved except for the frontage on the north side of the lot upon Amite Street, which is traversed by Town Creek. Over this creek on the west side is a steel and concrete bridge, which leads to Amite Street.

Appellant first assigns as error that the verdict of the jury was contrary to the overwhelming weight of the evidence. The City of Jackson had assessed the property for 1950 for $193,500. Appellant's protest asserts that the assessed value of the property should be $139,000. It was stipulated that the City of Jackson assesses property at two-thirds of its true or reasonable market value. The record of the trial below is lengthy. Appellant taxpayer offered as witnesses a lessee of one of the buildings on its property, and the trustee of the estate, who testified in considerable detail concerning the income from the property its physical condition and other relevant facts. The city used several witnesses, including the city tax assessor and two experienced real estate appraisers. There was ample evidence to support the verdict of the jury approving the assessment made by the city. Appellant's main argument on this point is that the valuation of the property should be based primarily upon its capitalized earnings, and that by following this method of valuing the property, the assessment was excessive. However, Code of 1942, Sec. 9769, in referring to some of the elements of ascertaining 'true value', expressly provides that 'any other circumstances that tend to enhance' the property's value shall be considered. All of the facts as to the condition of the property, its surroundings, its improvements, and capabilities may be considered. Miss. State Highway Commission v. Hillman, 1940, 189 Miss. 850, 198 So. 565; Knox, Attorney General, v. Southern Paper Co., 1926, 143 Miss. 870, 108 So. 288. Moreover, appellant's instruction Number 7 correctly told the jury 'that you may consider the then use of said property and the net income received from said property after payment of taxes and expenses as some evidence of its true value or market value * * *'

While income or rental value of real property is one proper element for consideration in determining its value, this factor is not the sole criterion, and all other relevant facts should be considered in determining valuation. 51 Am.Jur., Taxation, Sec. 705; Anno., 95 A.L.R. 434. Hence whether the property is devoted to the uses for which it is best adapted, and is in a condition to produce its maximum income, is a legitimate inquiry. Actual income may not be so important in determining true value as is earning capacity. The jury could consider appellee's evidence that the property was not put to its best economic use. Hence although the following instruction granted the city should have been more precisely phrased with reference to the significance of actual income, it is not erroneous:

'The court instructs the jury for the City of Jackson that income or rental value of unimproved or vacant lots is not the basis of their value and that in considering the income or rental value of improved property the jury may consider whether or not such property has been improved so as to bring a reasonable return upon its most profitable use and further instructs the jury that the actual income now received is not necessarily controlling.'

Appellant argues that the trial court erred in overruling its motion to exclude the testimony of the witness J. H. Wells, an appraiser of real estate and a witness for the city, with respect to the best use to which the property could be put. Appellant says that Wells conceded that he had made no study of the situation to determine whether the property could be more feasibly used by constructing a warehouse on the parts not covered by buildings, and that such speculative matters and possibilities should not be submitted to the jury. However, both Wells and Magruder, real estate appraisers, testified that the property was not being placed to its most profitable and efficient use. They considered various details as to a better economic use of the property: constructing a building on part of the 29 foot driveway on Capitol Street, and developing the undeveloped Amite Street frontage by erecting a storage warehouse or other buildings on this and the interior area of the lot, and by repairs to and modernization of the existing buildings. Tax assessors may consider the most profitable form of improvements upon the land as one of several elements in fixing its proper valuation, as well as its availability for other purposes. 51 Am.Jur., Taxation, Sec. 706; Town of Union v. J. R. Buchwalter Lumber Company, 1924, 136 Miss. 414, 101 So. 561; Miss. State Highway Commission v. Hillman, 1946, 189 Miss. 850, 198 So. 565; State ex rel. Smith v. Tallahala Lumber Co., Miss., 1942, 8 So.2d 230. Hence the testimony of both Wells and Magruder on this issue was relevant. Also, the trial court correctly overruled appellant's motion to exclude their evidence on the alleged ground that neither of them took into consideration the actual income from the property. These witnesses stated that they considered the rents along with numerous other factors in making their appraisals.

The circuit court gave the following instruction: 'The court instructs the jury on behalf of the City of Jackson that in a case of this nature the testimony of expert witnesses is proper to establish the value of the property, and that the jury should consider such testimony along with all other testimony in the case, the weight and sufficiency of which you are the sole judges.'

Appellant says that there is no such thing as an expert on real estate values; that the question of valuation is a matter of common knowledge and experience to any person familiar with the facts; that this instruction is on the weight of the evidence, and has the effect of advising the jury that they should give more weight to testimony of the city's experts; and that the statement that the jury are the sole judges of the weight of the evidence does not cure this prejudicial attempt to bolster the testimony of the witnesses for the city, who purported to be the only appraisal experts testifying. The intricate details of proper valuation of property and specialized knowledge as to geographic, economic and social facts and their significance to value has warranted the courts in recognizing the use of expert testimony for valuation of real property, for consideration by the jury along with all of the evidence in the case. Redmond v. City of Jackson, 1926, 143 Miss. 114, 108 So. 444; Robertson Bros. v. Mobile & O. R. Co., 1929, 155 Miss. 198, 124 So. 334; J. H. Leavenworth & Son v. Hunter, 1928, 150 Miss. 245, 116 So. 593; Geohegan v. Union Elevated Railroad Co., 1916, 266 Ill. 482, 107 N.E. 786, 790; Redman v. U. S., 4 Cir., 1943, 136 F.2d 203, 205. We do not think that this instruction could have misled the jury. It was told that it should consider such testimony along with all of the other testimony in the case, and that it was the sole judge of its weight and sufficiency.

Appellant also complains of two lengthy instructions given the city in which the jury was advised in part that 'the assessment complained about must be compared with and equalized on a basis considering like properties within the city as a whole'; that the jury must take the 'assessment of like property throughout the city'; that the taxing authorities must assess the property according to its true value 'on a basis of equality to other like property within the City'. Appellant says that these...