Mills v. United States

• Decision Date: 13 July 1966
• Docket Number: No. 18156,18157.,18156
• Citation: 363 F.2d 78
• Parties: Clarence E. MILLS et al., Appellants, v. UNITED STATES of America, Appellee. OZARK REAL ESTATE COMPANY, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

363 F.2d 78 (1966)

Clarence E. MILLS et al., Appellants, v. UNITED STATES of America, Appellee.

OZARK REAL ESTATE COMPANY, Appellant, v. UNITED STATES of America, Appellee.

Nos. 18156, 18157.

United States Court of Appeals Eighth Circuit.

July 13, 1966.

H. Clay Robinson, of Sexton & Robinson, Fort Smith, Ark., for appellants. Sexton & Robinson, Forth Smith, Ark., were on the brief.

Roger P. Marquis, Atty., Dept. of Justice, Washington, D. C., for appellee. Edwin L. Weisl, Jr., Asst. Atty. Gen., Washington, D. C., Charles M. Conway, U. S. Atty., Fort Smith, Ark., Max E. Findley, Sp. Asst. to the U. S. Atty., Fort Smith, Ark., were with him on the brief.

Before VAN OOSTERHOUT, BLACKMUN and GIBSON, Circuit Judges.

BLACKMUN, Circuit Judge.

A condemnation commission, appointed under Rule 71A(h), Fed.R.Civ.P., has fixed the compensation for the government's taking in 1962 of certain interests in Arkansas land for the Dardanelle project on the Arkansas River. The district court (Judge Miller) approved the commission's report in the two cases here under review and entered judgment accordingly. United States v. 599.86 Acres of Land, 240 F.Supp. 563 (W.D. Ark.1965). The owners appeal.

We recently passed upon this same commission's determinations concerning other lands and we upheld the district court's judgment confirming the report. Morgan v. United States, 356 F.2d 17 (8 Cir. 1966). That review was one made particularly in the light of United States v. Merz, 376 U.S. 192, 84 S.Ct. 639, 11 L.Ed.2d 629 (1964).

These appeals are less complex than Morgan v. United States, for no question is raised here as to the court's instructions to the commission even though those instructions were delivered prior to the decision in Merz. The present appellants' complaint is directed to the evidence and to what they regard as the illogic of the commission's findings. Their joint brief defines the narrow controversy:

"The questions at issue between the landowners and the Government were the contribution to the fair market value of the properties of the coal deposits, and the amount of damage to the deposits caused by the construction of the Dardanelle Dam Project."

Judge Miller in his opinion has set forth the general facts accurately and in detail and they need no lengthy repetition here.

Clarence E. Mills and his wife (No. 18,156) owned 133.33 acres which they had acquired in 1944. The government took 81.14 acres of this, exclusive of the mineral rights, and imposed a perpetual flowage easement on 11 additional acres. The Mills thus retain 41.19 acres. According to evidence which the owners introduced, the property is underlaid with a strata of semi-anthracite coal 38 inches thick at a depth ranging from 130 to 230 feet; some of this, however, has been removed by mining in past years.

Ozark Real Estate Company (No. 18,157) owned 49 acres. The government took the fee in 17.69 acres, exclusive of the mineral rights, and imposed a perpetual flowage easement on 3.5 additional acres. This left 23 acres plus 4.81 acres devoted to a railroad right-of-way. According to evidence introduced by Ozark, its tract is underlaid with a coal strata 42 inches thick at a depth of approximately 80 feet; the Ozark tract has not been mined.

All agree that there is coal on the condemned lands. Mining operations have been conducted in the area since the Civil War. The mine on the Mills property was abandoned before 1920. One witness estimated that reserves in the vicinity were as extensive as 96 million tons. At the time of the taking only five mining operations were still being conducted in the area. The coal has a high fixed carbon content and is sold primarily to zinc smelters and not as fuel. Demand for coal from the field has decreased to about 100,000 tons a year. The mines in the area are interconnected underground; pumping is necessary. A portion of the coal on the Ozark tract could be strip mined. Mining has not been feasible since the taking.

The parties vigorously differ as to the coal's significance and its consequent value. The owners assert that the highest and best use of their properties was for coal mining. The government claims that the coal deposits had little or no value and that surface use was the important factor. The parties' opposing approaches produce substantial value differences.

The commission in its report stated that "not all of the coal shown by the reserves is presently marketable at any price" and concluded that coal on the Mills and Ozark properties had little recognizable value. It fixed the Mills' compensation, with severance damages, at $5,550 and Ozark's at $1,850. These are the figures which were sustained by the district court and which the appellants say disclose that the commission's report is clearly erroneous within the meaning of Rules 71A(h) and 53(e) (2), Fed.R.Civ.P.

The usual standard of compensation in federal condemnations is expressed in United States v. Miller, 317 U.S. 369, 373, 63 S.Ct. 276, 279, 87 L.Ed. 336 (1943), as "the full and perfect equivalent in money of the property taken". This court recently has recognized and applied this standard. United States v. South Dakota Game, Fish & Parks Dep't, 329 F.2d 665, 667-668 (8 Cir. 1964), cert. denied 379 U.S. 900, 85 S.Ct. 187, 13 L.Ed.2d 175; United States v. Crance, 341 F.2d 161, 165-166 (8 Cir. 1965), cert. denied 382 U.S. 815, 86 S.Ct. 36, 15 L.Ed.2d 63; Hembree v. United States, 347 F.2d 109, 110 (8 Cir. 1965); United States v. Fort Smith River Dev. Corp., 349 F.2d 522, 526 (8 Cir. 1965). The appellants in their brief concede that the commission "employed the correct measure of just compensation" and that it understood the issue before it. But, the argument goes, the government has presented no competent evidence as to the value of coal comparably in place; instead, the owners' evidence, presented primarily through witness B. E. Cobb, is the only competent evidence in the record and thus is to be accepted.

We do not agree that the government's case is so easily surmounted. Only the government introduced evidence as to before and after values of the surface. This, of course, was in line with its theory. It is...