State By and Through State Highway Commission v. Arnold
| Decision Date | 16 September 1959 |
| Citation | 341 P.2d 1089,218 Or. 43 |
| Parties | STATE of Oregon, by and through its STATE HIGHWAY COMMISSION, composed of Ben R. Chandler, Charles H. Reynolds and M. K. McIver, Appellant, v. A. W. ARNOLD and Jessie Arnold, husband and wife; Maude E. Liskey, a widow, individually and as executrix of the estate of Dave Liskey, deceased; Maxine Maude Liskey; and Tootsie Wyma Jean Liskey, a minor; and J. B. Pfouts, intervenor, Respondents. |
| Court | Oregon Supreme Court |
John C. McLean, Asst. Atty. Gen., argued the cause for appellant. With him on the brief were Robert Y. Thornton, Atty. Gen., C. W. Enfield, and Leonard I. Lindas, Asst. Atty. Gen.
Francis F. Yunker, Portland, argued the cause and filed a brief for respondents.
Before McALLISTER, C. J., and PERRY, SLOAN and O'CONNELL, JJ.
The plaintiff brought an action to acquire by condemnation the defendants' interest in 21.52 acres of land located in Klamath County. From a verdict and judgment for $13,250 the plaintiff appeals.
The defendants' interest in the property involved consisted of a leasehold interest in the surface and the mineral rights. The plaintiff had previously acquired the fee subject to the foregoing interests.
The property taken includes one-third of a cinder cone, described as 'Buckeye Butte,' which is a geological formation of volcanic origin made up of a mineral aggregate useful for certain construction purposes including the surfacing of roads. The plaintiff acquired the property to obtain cinders for use on the highways in the immediate surrounding area.
There are a considerable number of similar cones in the area. Most of these are unopened as was Buckeye Butte at the time of the taking. Some of the cones are operated commercially although the closest of these are near Bend to the north and Klamath Falls to the south, each of these cities being approximately sixty miles from Buckeye Butte.
There is no large population center near the property taken which would serve as a market for cinders. The town of Chemult with a population of approximately 150 is a few miles to the north.
The Southern Pacific Company and several logging companies have opened cones in the vicinity for the purpose of obtaining cinders for use as ballast and the surfacing of roads. The tracks of the Southern Pacific Company pass near the cone paralleling Highway 97.
At the trial the plaintiff took the position that there was no market for cinders in the vicinity and that the property taken had value only for grazing purposes which value was nominal. The defendants put a value of $130,000 on their interest.
The plaintiff admitted that the cinders in the Buckeye Butte deposit were of good quality for road surfacing purposes and that because of its location near the junction of two highways the cone was particularly desirable and valuable to it for such purposes. The plaintiff's principal contention is that there was no market value for the condemned property; that the special value of the property to the taker cannot be considered and that the jury was permitted to base its verdict upon this special value.
We shall first address our attention to the evidence upon the basis of which the jury could properly conclude that there was a market for cinder cones at the time of the taking, or in the absence of such a market whether the property had compensable value.
It is uniformly recognized that the special value of the property to the taker is not the proper measure of compensation. 3 Nichols on Eminent Domain (3d ed.) § 8.61; 1 Orgel on Valuation Under Eminent Domain (2d ed.) § 81; Oregon R. & Nav. Co. v. Taffe, 1913, 67 Or. 102, 134 P. 1024, 135 P. 332, 135 P. 515. The state contends that the value to the taker cannot properly be considered even though the property has value based upon considerations other than the taker's need.
One of the defendants' witnesses testified that in estimating the value of the cone he took into consideration the fact that the state was preparing to relocate and repair the highway in the vicinity. When the witness was asked 'How much of your market is attributable to the fact the State needed the cinders for a project begun in 1951, and the balance', he replied that he did not 'know exactly' and that he did not make a segregation of these values. The plaintiff assigns as error the trial court's refusal to grant plaintiff's motion to strike the witness' testimony because it improperly contained a noncompensable item which could not be segregated from the total. We think that the motion was properly overruled. We do not agree with the assumption underlying the state's objection. It is stated broadly enough to assert that the value to the taker is not a valid factor in any circumstance, and that the market which is looked to in measuring market value is the market exclusive of the state. But this is not an accurate statement of the law. In estimating the value of the property it is entirely proper to consider the state's need for it if that need is not a special factor influencing the value which is placed upon it in the market. If the state's need for the property is in competition with other similar demands for it the state's participation in the market may be considered in arriving at the value of the condemned property. This idea is expressed in United States v. Boston, Cape Cod & N. Y. Canal Co., 1 Cir., 1921, 271 F. 877, 893, as follows:
In Oregon R. & Nav. Co. v. Taffe, supra, essentially the same principle is announced:
'* * * The fact that the plaintiff desired the property for a railroad right of way would not preclude defendants' recovery measured by its adaptability for that use, if such adaptability added to its market value generally. The particular value of the tract to plaintiff by reason of the location of the tract to its road, and considered with reference to plaintiff's connecting tracks, its established business, and its urgent need, should not be considered by the jury, nor shown by the evidence; but we understand no such evidence was admitted. The paragraph of 15 Cyc. 757 quoted by plaintiff in its brief further says: This, we understand, is the correct rule, and is well supported by the cases, * * *.' 67 Or. 102, 114, 134 P. 1024, 1028.
If, in the present case, it is solely the state's need which creates the market then, of course, this special need must be excluded in the evaluation of the property. United States v. Cors, 1949, 337 U.S. 325, 69 S.Ct. 1086, 93 L.Ed. 1392; see 4 Nichols on Eminent Domain, § 12.315. However, only the special value which the property has to the taker cannot be considered by the trier of fact. Where the basis for value to the taker is the same as it is with respect to others, the jury is entitled to consider the fact that the state is a part of the market. Olson v. United States, 1934, 292 U.S. 246, 54 S.Ct. 704, 78 L.Ed. 1236; Mississippi & Rum River Boom Co. v. Patterson, 1878, 98 U.S. 403, 25 L.Ed. 206; see Hale, Value to the Taker in Condemnation Cases, 31 Colum.L.Rev. 1, 16-24 (1931).
The defendants presented some evidence tending to show that there was a market for cinders in the area (from which it could be concluded that there was a market for the cinder cone in question) and, therefore, that the cone had value which was created by demands in addition to that of the state.
The plaintiff requested an instruction to the effect that in determining market value the jury should not consider 'the value of the rights being taken by virtue of or with reference to the proximity of the cinder cone to the highway * * *.' The requested instruction was not given, for which the plaintiff assigns error.
The requested instruction was properly rejected. Assuming that there was a market for cinders exclusive of the state, the proximity of the cone to the highway would be a relevant factor in assessing the cone's value because the cost of transportation to the purchaser would be an ingredient in fixing the price of the cinders removed from the cone. If the plaintiff intended the requested instruction to inform the jury that it would be improper to consider the special value of the property to the taker (because of the proximity of the cone to the highway) then plaintiff should have cast the instruction in language clearly expressing that idea.
The plaintiff contends that the court erred in giving the following instruction:
'In arriving at the amount of damages to be awarded the defendants herein you should consider the availability of road building...
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