Reorganized School Dist. No. 2 v. Missouri Pac. R. Co.

• Decision Date: 23 October 1973
• Docket Number: No. 34770,34770
• Citation: 503 S.W.2d 153
• Parties: REORGANIZED SCHOOL DISTRICT NO. 2, Plaintiff-Respondent, v. MISSOURI PACIFIC RAILROAD COMPANY, Defendant-Appellant. . Louis District, Division Two
• Court: Missouri Court of Appeals

Page 153

503 S.W.2d 153

REORGANIZED SCHOOL DISTRICT NO. 2, Plaintiff-Respondent, v. MISSOURI PACIFIC RAILROAD COMPANY, Defendant-Appellant.

No. 34770.

Missouri Court of Appeals, St. Louis District, Division Two.

Oct. 23, 1973.

Motion for Rehearing or Transfer Denied Nov. 13, 1973.

Application to Transfer Denied Jan. 14, 1974.

Walter S. Drusch, Jr., Spradling, Bradshaw & Dillard, A. M. Spradling, Jr., Cape Girardeau, for defendant-appellant.

Roberts & Roberts, Farmington, Dearing, Richeson, Roberts & Wegmann, Hillsboro, for plaintiff-respondent.

GUNN, Judge.

Action for inverse condemnation brought by plaintiff-respondent school district against defendant-appellant railroad for the taking of a portion of respondent's school campus in Ironton, Missouri, and subsequent damage to the remainder of the campus. Verdit and judgment of $140,000.00 were for respondent and appellant appeals. We affirm the judgment.

In 1966, respondent school district operated a high school campus in Ironton for approximately 350 students. The campus was a two-block parcel bounded on the north by Dent Street, on the south by Reynolds Street and on the east by appellant's right-of-way. Main Street, or Mo. Highway 21, was to the west. The campus was bisected by an incomplete street known as Madison Street which could be entered from Main Street and was used only as a car and school bus turnaround to discharge students and others at the high school building. It was not a through street. The campus as of November, 1966 consisted of two classroom buildings, a gymnasium and athletic field and playground area. Students would cross Madison Street on a daily basis going between classes and in making use of the athletic and school facilities.

Commencing in November, 1966, appellant widened its right-of-way fourteen feet onto the school property parallel to appellant's property between Dent and Reynolds Streets. Appellant also anchored an overpass on Madison Street which it constructed over its right-of-way leading to the industrial and residential areas east of the right-of-way and school property. Madison Street was graded through the school campus at appellant's direction and later paved. Dent and Reynolds Streets were then closed off at appellant's right-of-way. Madison Street, through the school campus and overpass over appellant's right-of-way, became the access road from points west into the industrial and residential area of East Ironton.

Respondent filed suit for damages by reason of inverse condemnation and on motion was granted a summary judgment against appellant to the extent that appellant did take a fourteen-foot strip for the length of respondent's property and did anchor the overpass on nineteen feet of Madison Street. No appeal was taken from the summary judgment.

Respondent's testimony at the trial was that prior to appellant's taking, plans had been made to move the high school to a new facility at another part of Ironton and to retain the existing site for a junior high school campus. These plans had to be abandoned with the taking, particularly because of Madison Street, as the facility was rendered useless for school purposes, due to the whittling away of the school grounds which were described as meeting only minimal area requirement initially and by reason of a major traffic artery bisecting the school and creating a safety hazard to students crosing the street against traffic to attend classes. The junior high school was then incorporated into the new high school at the new location which to respondents was undersirable but necessary. There was also testimony that an effort was made to have the facility utilized as a technical school, but the plan was rejected by the State of Missouri because of the division of the property by the opening of Madison Street and lack of space due to the taking.

During the taking of the property, and because of the grading of Madison Street, the school had to cancel its athletic programs, as Madison Street was made to extend through the baseball diamond and track.

Respondent's evidence was that the property was rendered useless for school purposes by reason of the taking, but of necessity was continued in use until the new facilities could be constructed; that there were no other school facilities available until after construction of the new school. Valuation of the properties by respondent for the purpose of determining damages was based on the replacement value of the buildings, less depreciation as of 1966, and based on a fifty-year useful life of each building. Respondent's witnesses testified that the replacement value of the buildings, less depreciation, ranged from $276,000 to $201,612. The theory of respondent's case--and their witnesses testified accordingly--was that since the buildings were useless for school purposes after the taking and could not be sold as such, particularly after the opening of Madison Street, respondent's damages should be measured by the replacement cost of the buildings less depreciation; that there was no fair market value of used school buildings as there was no other use therefor, and the replacement cost less depreciation method was the accepted means of evaluating the value of the school buildings for purposes of determining respondent's damages.

Witnesses called by the appellant for expert opinion as to consequential damages from the taking of the fourteen-foot strip of respondent's property and the change of traffic conditions on Madison Street likewise testified that the means of assessing such damages would be through replacement costs of the buildings, less depreciation. As James L. Tuller, a real estate appraisal witness for appellant, testified: 'School buildings usually don't sell on the open market, therefore, there is no market data on comparable sales in making an analysis and adjusting for differences.' Each of the appellant's expert witnesses testifying as to damages acknowledged that the change in traffic patterns on Madison Street added a functional obsolescence to the value of the school buildings and accounted for the major portion of respondent's damages. Another of appellant's expert witnesses testified that the traffic flow on Madison Street interfered with the use of the property for a junior high school campus; that as a former school board member for another district, he would not have tolerated a similar situation in his district. Appellant's estimates of damages to respondent for the taking of the fourteen-foot strip and the opening of Madison Street ranged from $27,800.00 to $33,840.00. The date upon which the estimates were based was November, 1966. The jury returned a verdict for respondent in the amount of $140,000.00.

Appellant's first points of error are concerned with the giving of Instruction No. 3, which was MAI No. 9.02 Modified, and provided:

'You must award Plaintiffs such sum as you believe was the difference between the value of the property as used for a school campus as a whole at the time immediately before the taking and the value of Defendant's remaining property after such taking, which difference in value is the direct result of the taking and the uses which Defendant has the right to make of the property taken.'

Appellant bottoms its challenge to Instruction No. 3 on the ground that it was an unlawful deviation from MAI No. 9.02, ¹ in that, a) it failed to specify the date of taking; b) it omitted the word 'immediately' between the words 'property' and 'after' as a time-limit factor for consideration of value (the value of the property immediately before and immediately after the taking); c) it erroneously deviated from the measure of damages in a condemnation proceeding which, according to MAI 9.02, is the fair market value of the property immediately before and immediately after the taking as opposed to the instruction in this case which was the difference in value of the property used as a school campus as a whole immediately before the taking and value of the remaining property after the taking; d) the word 'defendant' was erroneously used instead of 'plaintiff' in describing the ownership of the property taken, thus causing the jury to be misled.

We find that in this case the measure of damages based on a fair market value, as urged by appellant, would not be appropriate. There was no evidence presented to the jury by either respondent or appellant suggesting that fair market value be the test for measuring damages. Rather, the evidence of both parties in computing respondent's damages was the replacement value of the school buildings less depreciation. At least one of the appellant's witnesses acknowledged that since schools had a very limited use, there was no market data available. Consequently, fair market value would not be an accurate measure in this case. Instead, we believe State ex rel. State Highway Commission v. Mount Moriah Cemetery Assn., 434 S.W.2d 470 (Mo.1968), controls, and it would be improper to instruct a jury applying a fair market value test where there is no evidence of such value. Our Supreme Court in Mount Moriah quoted with approval from Graceland Park Cemetery Co. v. City of Omaha, 173 Neb. 608, 114 N.W.2d 29, 31--32 (1962), where it was said:

'When the property is such that evidence of fair market value is not obtainable, necessarily some other formula for fixing the fair value of the property must be devised. This is true, as we view it of such properties as school yards, church yards, college campuses, buildings under construction, and cemeteries.' (Emphasis added.)

Also, in Mount Moriah the court accepted the instruction recited in Cementerio Buxeda v. People of Puerto Rico, 196 F.2d 177, 180 (1st Cir. 1952), where the court said: 'The defendant should have been allowed to show the value of the property as used for a cemetery as a whole at the time of the condemnation and its value after the condemnation. The difference would be the measure of the...