Rapides Parish School Bd. v. Nassif

• Decision Date: 25 February 1957
• Docket Number: No. 42315,42315
• Citation: 232 La. 218,94 So.2d 40
• Parties: The RAPIDES PARISH SCHOOL BOARD v. Mrs. Mary M. NASSIF et al.
• Court: Louisiana Supreme Court

Page 40

94 So.2d 40

232 La. 218

The RAPIDES PARISH SCHOOL BOARD v. Mrs. Mary M. NASSIF et al.

No. 42315.

Supreme Court of Louisiana.

Feb. 25, 1957.

Gravel, Humphries, Sheffield & Mansour, Gus Voltz, Jr., Alexandria, for defendants-appellants.

Ben F. Thompson, Jr., Dist. Atty., Edwin O. Ware, Asst. Dist. Atty., Dewitt T. Methvin Jr., Alexandria, for plaintiff-appellee.

FOURNET, Chief Justice.

The defendant, Mrs. Mary M. Nassif,¹ is appealing from a judgment of the District Court awarding to her the sum of $7,500 as the value of certain property² in Alexandria, Louisiana, the result of an expropriation suit by the Rapides Parish School Board--the said property being necessary to complete acquisition by the Board of a site for a proposed new colored elementary school to be constructed on Square 26 of the Welch Addition to the city. The defendant complains that the plaintiff's expert witnesses, in arriving at an evaluation of $8,000, made their appraisals on the basis of replacement costs less depreciation on the building, and the raw value of the land, but that the true value of her property can be arrived at only by taking into consideration the value of the business conducted thereon, and that the assessment, as demonstrated by the various methods of computation employed by her expert witnesses, should have been fixed at from $12,000 to $15,000; also, that she should have been allowed the cost of moving, an amount shown as $753.25.

The land expropriated has a frontage of 42 feet on Reed Street and a depth of 71 feet between parallel lines; the improvements, which covered practically the whole area, consisted of a one-story frame building partitioned into two sections, half being rented to third parties for use as a cafe at a rental of $55 per month and the remainder being used by the defendant and her husband in operating a grocery store, meat market and liquor store. The business was patronized in the main by the negro employees of nearby industrial enterprises, many of whom also lived in the vicinity. In February, 1946, Mrs. Nassif, who had been a tenant, acquired the property for $3,600. The area was later classified as 'Zone B residential,' in which by local ordinance the sale of alcoholic beverages is prohibited, but since Mrs. Nassif had sold liquor on the premises prior to the adoption of the ordinance she retained the privilege to continue such sales. The building's encroachment on adjoining property had been the subject, on October 28, 1948, of a written agreement between the Nassifs and the adjoining owners by which the building was to remain as placed, but the Nassifs would acquire no rights by that fact and acknowledged title to the land in other named persons.

The five experts who testified in this case,³ real estate appraisers of reputation and many years' experience in the locality, were not in great disagreement when the basis used in arriving at their estimates was the value of the land plus replacement costs of the improvements less depreciation, keeping in mind the best use to which the property could be put, i.e., commercial--their appraisals being in the neighborhood of $8,000. Certain variations in the estimates are attributable to the fact that some appraisers calculated a greater need for repairs on the building, while others, in an effort to meet the test of a voluntary sale between a willing seller and a willing buyer, took into consideration the encroachment on adjoining land and the cost of moving the rear portion and a side wall of the building to bring it within the bounds of defendant's title. Through the defendant's witnesses, two other methods of appraisal were developed from the viewpoint of the property's revenue producing capacity; estimates were made of the market value for investment purposes between a willing buyer and a willing seller (a) on the basis of rental income or return, and (b) by reason of location, rental income, business income, and exclusive right to sell liquor in the immediate vicinity. In calculating by the former method, defendant's witnesses estimated that a fair rental value for both portions of the building would be $110 per month, and based upon that rental revenue they computed a fair value of the property for investment purposes of $9,000 (in the opinion of two) to $11,000 or $12,000 (in the opinion of the third).⁴ In calculating by the other, or latter, method it was assumed by the appraisers that the business produced a net revenue of $5,200 before salaries for Mr. and Mrs. Nassif and before overhead deductions; after such deductions, a business investment value was computed⁵ and that figure, when added to the physical value of the land and building, resulted, according to the calculations of defendant's three experts, in a 'fair market price' of $15,000.

The trial judge found no authority in the jurisprudence for allowing recovery on the basis of the value of the business as a going concern computed in the (last above outlined) manner used by defendant's experts,⁶ stating that 'The courts of Louisiana have uniformly considered the value of the business only in so far as it helps to determine the fair market value of the land and buildings.' In arriving at a valuation the judge noted that the experts for both plaintiff and defendant 'almost uniformly agree' on the figure of $8,000 as the value of the land and of the building on a cost of replacement less depreciation basis, and observed that with respect to valuation of the property on the basis of fair rental return, the experts varied their estimates from $7,000 to $9,000, so that, all things considered, he thought the sum of $8,000 to be a fair price.⁷ Reimbursement for moving costs was not allowed; the deduction of $500 was made in an effort to settle equitably the problem of encroachment on adjoining land and the extent to which the price would be thereby affected in a sale of the property to a willing buyer.

The rule is well settled that the best guide in determining the market value to which the owner is entitled under the law in expropriation suits is evidence of sales of similar or comparable properties in the vicinity, Texas Pacific-Missouri Pacific Terminal R.R. v....