Penna v. State Highway Bd.

• Decision Date: 23 March 1961
• Docket Number: No. 189,189
• Citation: 122 Vt. 290,170 A.2d 630
• Parties: Nicholas PENNA and Mildred Penna v. STATE HIGHWAY BOARD.
• Court: Vermont Supreme Court

Page 630

170 A.2d 630

122 Vt. 290

Nicholas PENNA and Mildred Penna v. STATE HIGHWAY BOARD.

No. 189.

Supreme Court of Vermont.

March 23, 1961.

Bloomer & Bloomer, Rutland, for plaintiffs.

John D. Paterson, Montpelier, Keith E. King, Springfield, for defendant.

Before HULBURD, C. J., and HOLDEN, SHANGRAW, BARNEY and SMITH, JJ.

HULBURD, Chief Justice.

This appeal is concerned with the amount of compensation a landowner is entitled to receive for land taken in condemnation proceedings. The plaintiffs were owners of a strip of land in Dorset, Vermont which bordered on Route 7. It contained about two and a half acres. On it were located a cottage and five tourist cabins. Three of the cabins were on the land at the time the plaintiffs purchased it in 1952 for the sum of $9,500. Two others had been added later by the plaintiffs at a cost of $4,300. The taking by the State Highway Board consisted of about one-half of the Pennas' land, and it was the half upon which all the cabins were located. As a result the Pennas were left with the cottage, suitable for use as a residence, together with the land upon which it was situated of a combined value of $2,500, but shorn of their tourist business. In these circumstances the Highway Board awarded the plaintiffs the sum of $9,050. With this sum the plaintiffs were dissatisfied, and, in the litigation which followed, the jury awarded them the sum of $12,500. The Highway Board, in turn, is dissatisfied with that figure and comes to us claiming that the verdict resulted from error in the court's instructions to the jury and its rulings on admission of evidence.

Before considering the individual assignments of error, we think it desirable to make some observations concerning the statute which defines the elements of damage upon which compensation is to be made to the owner of land taken in condemnation proceedings. We are prompted to do this because the defendant Highway Board takes the position that 'Our statute is not so explicit and is in fact, as above stated, a restatement of the general law existing prior to 1957, and the court below erred in instructing the jury to add the business loss to the market value of the property.' We are bound to say that such a statement is fraught with error. The statute passed in 1957, which the defendant refers to as a restatement of the general law prior thereto, is 19 V.S.A. § 221(2). It reads as follows: 'Damages resulting from the taking or use of property under the provisions of this chapter shall be the value for the most reasonable use of the property or right therein, and of the business thereon, and the direct and proximate lessening in the value of the remaining property or right therein and the business thereon.'

This Court recognized in Record v. Vermont State Highway Board, 121 Vt. 230, 237, 154 A.2d 475, that the legislature by the passage of this act was bent on correction of what it considered inequitable and unjust treatment of landowners in highway condemnation cases. Prior to the enactment of our present statute, it was generally held that 'In the absence of statutory authorization for payment * * * injury to or destruction of a business conducted upon lands taken by eminent domain do not constitute elements of just compensation under the terms of the usual constitutional provisions.' Nichols on Eminent Domain, Vol. 4, p. 259. Such was the attitude of this Court as reflected generally in Nelson v. State Highway Board, 110 Vt. 44, 53, 1 A.2d 689, 118 A.L.R. 915. It cannot be denied that this rule at times was harsh in its application. It was generally justified by saying 'that business and the fruits thereof are too uncertain, remote and speculative to be used as the criterion of the market value of the land upon which such business is conducted.' Nichols on Eminent Domain, Vol. 4, p. 259. Actually this justification may be a better one than first appears, but we deem that it is perfectly clear that the Legislature intended to change all this. We have no difficulty in discovering its intent that where land is condemned for highway purposes the owners shall be compensated: (1) for the value of the land taken, (2) for the value of the loss of business thereon, and (3) for damage resulting to the balance of the land remaining to the owners where an entire parcel is not taken. As was said concerning a Massachusetts condemnation statute, 'The purpose of the Legislature to deal liberally with those affected by the construction of the reservoir is thus shown, and the provisions now before us should be construed in accordance with the intention thus manifested.' Allen v. Commonwealth, 188 Mass. 59, 61, 74 N.E. 287, 288, 69 L.R.A. 599. Our problem, however, has become not one of construction of the statute but of its practical application. It is by no means easy as we shall soon discover.

We turn now to the particular problems which arise under the statute in this case. The first ground on which the defendant excepted to the courts instructions was that the court had separated the question of business loss from the question of compensation for the taking of the land itself contrary to the statute. Apparently the defendant was prompted to take this position because in deciding Record v. Vermont State Highway Board, supra, [121 Vt. 230, 154 A.2d 482] this Court said, 'It is apparent that the Court considered in this case, that business profits were not the subject of independent compensation from the land itself. In this we find no error.' By so holding, this Court is not to be understood as saying that in no case may business loss be the subject of independent compensation in addition to that allowed for the land itself. What we were trying to make clear in the Record case was that every case presents its own factual problem. In each instance, the question arises to what extent, if any, does the evidence show that the plaintiff has suffered a loss to his business which has not necessarily been compensated for in the allowance made for his land. The nature of the business and the manner in which the plaintiff marshals his proof will be determinative...