State By and Through State Highway Commission v. Parker

• Decision Date: 07 December 1960
• Citation: 225 Or. 143,357 P.2d 548
• Parties: STATE of Oregon, by and through its STATE HIGHWAY COMMISSION, composed of Charles H. Reynolds, M. K. McIver and Robert B. Chessman, Appellant, v. Charles PARKER, Ernie Parker and Eddie Parker, a copartnership doing business as Parker & Sons, Respondents.
• Court: Oregon Supreme Court

Page 548

357 P.2d 548

225 Or. 143

STATE of Oregon, by and through its STATE HIGHWAY COMMISSION, composed of Charles H. Reynolds, M. K McIver and Robert B. Chessman, Appellant, v. Charles PARKER, Ernie Parker and Eddie Parker, a copartnership doing business as Parker & Sons, Respondents.

Supreme Court of Oregon, Department 1.

Argued and Submitted July 6, 1960.

Decided Dec. 7, 1960.

Leslie B. Hampton, Asst. Atty. Gen., for appellant. On the brief were Robert Y. Thornton, Atty. Gen., Leonard I. Lindas, Charles Peterson and William A. Mansfield, Asst. Attys. Gen.

Orval Thompson, Albany, for respondent. With him on the brief was Mark Weatherford, Albany.

Before McALLISTER, C. J., and ROSSMAN, PERRY, SLOAN and HOLMAN, JJ.

ROSSMAN, Justice.

This is an appeal by the State of Oregon through its Highway Commission from a judgment which the circuit court entered condemning and appropriating to the state's use a tract of real property, described in the complaint and owned by the three defendants, upon the payment by the state of the sum of $3,740. The state as plaintiff-appellant deems the sum excessive.

In appealing, the state submits two assignments of error. The issue which they present is sufficiently revealed by the first of them which reads as follows:

'The court on direct examination of witness H. W. Snell erred in sustaining defendants' objection to questions directed to said witness to inform the jury of his market value investigation of sales of other properties in the vicinity of the subject property and particularly the physical factual similarity between such land sold and the land of defendants sought for a public use.

"Witness H. W. Snell upon direct examination testified:

"By Mr. William Mansfield:

"Q. In making your appraisal, did you consider the sales of other nearby and similar properties? A. Yes, sir.

"Q. Would you describe, don't tell me the amount paid yet, but will you describe the sales? A. As to location?

"Q. Location, general appearance. A. One sale was across the highway.

"Mr. Weatherford: I object to this, as not proper direct examination.'

* * *

* * *

"Court: Show on the record, the objection is being sustained, and they are making an offer of proof."

The defendants own a tract of 160 acres of land of which the state sought to acquire 8.4 acres for the purpose of improving the Corvallis-Newport highway. Upon the trial in the circuit court the issue was the amount of just compensation which the state should pay for the 8.4 acre parcel. The state contended that $684 was the appropriate sum, and the defendant insisted upon $5,250.

In order to support its position the state inquired of an expert-value witness, the aforementioned H. W. Snell, concerning the recent sale of three properties which it said were comparable to the defendants'. The latter's objection, 'The law in Oregon has always been, as I understand it, in the practice that there can't be any direct detail examination of other sales, except on cross examination' was sustained and thereby the witness was prevented from giving the information which the state sought. The offer of proof discloses that if Mr. Snell had been permitted to testify he would have reported upon three sales including such details concerning each as the price which the property brought, the date of the sale, a description of the property and the location of the latter.

The sole issue presented by this appeal is whether or not an expert-value witness may testify on direct examination as to the price recently paid for a property similar to the defendants' by a willing purchaser to a willing seller. In considering the issue we will confine ourselves to voluntary sales and disregard those of a forced nature. We will assume that (1) the property which the condemning party says is similar is located sufficiently near the land in suit; (2) the property which is purportedly similar has features such as size, improvements and lay of the ground substantially resembling those of the land in question so that its sale price will tend to indicate the value of the property under consideration if such sales have a tendency of that nature; and (3) the witness is sufficiently informed and well versed in real estate matters so that the trial judge will be warranted in accepting his testimony as that of an expert. In resolving the issue we will give attention to these two questions: Does evidence of the price paid for a similar property throw light upon the value of the property under condemnation? Will reception of evidence showing the sum paid for other property or properties consume an undue amount of time or confuse the issue?

Before an investor purchases securities, whether listed upon a stock exchange or not, he acquaints himself with the prices recently paid by others for the security which he plans to buy. He acts upon the belief that money talks and that its most cogent utterance reveals market value. Money is the common denominator by which properties that are bought and sold from time to time are generally judged. Prices paid, unlike the abstract opinion of an expert, represent the money ventured by those who enter the market. They are akin to the verdict of a jury. No purchaser wishes to pay more than the going price, and no seller in the absence of special circumstances wishes to accept less. We take the following from Wigmore on Evidence, 3rd ed., § 463, page 503:

'When the conduct of others indicating the nature of a salable article consists in offering this or that sum of money, it creates the phenomena of value, so-called. For evidential purposes, Sale-Value is nothing more than the nature or quality of the article as measured by the money which others show themselves willing to lay out in purchasing it. Their offers of money not merely indicate the value; they are the value; i. e. since value is merely a standard or measure in figures, those sums taken in net potential result are that standard.'

We recognize a difference in the manner in which the price paid for a share of stock is taken as the security's market value and the price paid for a parcel of real property, similar to the defendants', is treated as indicative of the latter's value. No two parcels of land are identical, and sales of realty, similar to that under condemnation, do not occur with the frequently of sales of listed securities. Nevertheless, recent sales of real property, even if few in number, may produce the by-product of market value.

If the parcel under eminent domain has not been upon the market for a score of years or more it is necessary to take into consideration the prices paid recently for similar properties which are located in the same vicinity and which have corresponding characteristics. If the subject of inquiry is the market value of a share of stock for which there is a daily active market, receipt of evidence showing prices paid recently for other shares of the same company does not offer significant prospects of creating delay in the trial of the case, confronting the adversary with surprise or diverting the jury's attention from the real issue. But it is claimed that the offer of evidence showing the prices paid for tracts of real property supposedly similar to the defendant's may involve the trial in collateral difficulties of the kind just mentioned.

It is apparent from the foregoing that in fashioning a rule to govern the admissibility of evidence of the kind aforementioned, one must take note not alone of the fact that the evidence is relevant, but also of the prospect that its receipt will involve the trial in matters of collateral difficulty. An auxiliary policy which helps at times to shape the rules of evidence, and which is discussed in Wigmore on Evidence, 3rd ed., § 1865, excludes some proof of its value is not sufficient to warrant the delay or confusion of issues which its receipt may occasion.

If the price paid for similar property is inadmissible, then the only alternative is to receive the opinions as to the value of the property under condemnation which are offered by those qualified to express them. Accordingly, if the price paid for a property in an actual sale is inadmissible, and the state claims that its market value is, say $500, it will not be in a position to show that a similar parcel was recently sold for that amount, but will be confined to the opinions of experts. And if the owner claims that the property's value is $1,000 he will not be permitted to show that an identical tract recently sold for that amount, but will be forced to depend upon an opinion as to value. Thus, in order to hasten the trial and simplify its issues the court will dispense with known facts and accept the species of evidence which has brought to the administration of justice its most severe criticism--opinion evidence. Further, this will be done in the name of expediency; that fact renders it appropriate to quote the following:

'In no case that we know of is it ever said that a defense shall be admitted if it is easily proved and rejected if it would give the Court great trouble to investigate it.' Godard v. Gray L.R. 6 Q.B. 139.

If it is said that upon cross examination questions may be put to the expert as to sales of similar tracts, then the question at once arises, why cannot that evidence be received on direct examination. It seems reasonable to infer that evidence received on cross examination showing the prices paid for similar tracts of land and the characteristics of the tracts will create as much delay and other consequences as if the evidence were received on direct examination.

This court has seven times spoken in eminent domain proceedings concerning the admissibility of evidence of the kind with which we are now concerned. It has ruled at least three times that such evidence is admissible. In making its rulings it has never intimated that evidence of the kind with which we are now concerned creates delay, confronts the other...