State by Lord v. Red Wing Laundry and Dry Cleaning Co.
| Decision Date | 28 November 1958 |
| Docket Number | No. 37475,37475 |
| Citation | 253 Minn. 570,93 N.W.2d 206 |
| Parties | STATE of Minnesota, by Miles LORD, its Attorney General, Respondent, v. RED WING LAUNDRY AND DRY CLEANING COMPANY, Appellant. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
In condemnation proceedings evidence of reproduction cost, less depreciation, is admissible. However, in computing depreciation, consideration must be given to physical 'wear and tear' and economic and functional obsolescence. Economic obsolescence would include factors which might cause a reduction in the value of property as a result of external or environmental influences; such as, a change in the nature of the surrounding neighborhood or legislative changes such as zoning. Functional obsolescence would include internal factors involving inadequacies of a structure which have developed due to technological improvements.
Robins, Davis & Lyons, & Robins, Willard L. Converse, St. Paul, for appellant.
Miles Lord, Atty. Gen., Robert W. Mattson, Deputy Atty. Gen., Hartley, Nordin, Sp. Asst. Atty. Gen., for respondent.
Appeal from an order of the district court denying appellant's motion for a new trial.
A condemnation proceeding was instituted in Goodhue County. Pursuant to a petition to the district court by the state, the commissioners appointed by the court awarded appellant, Red Wing Laundry & Dry Cleaning Company, referred to herein as the laundry, the sum of $122,218. Both parties appealed to the district court from this award. Upon trial of the issues, the jury assessed damages to the laundry in the sum of $57,500.
The evidence introduced at the trial relative to market value is essentially as follows: The president of the laundry testified as to the nature of the business and that in his opinion the market value of the property was $187,457.60. Two other witnesses for the laundry, who were engaged in the laundry and dry cleaning business in Minneapolis, testified that the fair market value of the property was $150,000 and $147,000, respectively. The laundry then attempted to introduce the records of an appraisal firm as evidence of value. Examination of certain employees of the appraisal firm indicated that their appraisal value was arrived at by computing the cost of reproducing the buildings, less depreciation. In computing the present cost of reproducing the existing buildings, the present cost of all the materials necessary to reconstruct the buildings was determined. In computing the amount of depreciation allowed, physical or apparent 'wear and tear' and functional and economic obsolescence were considered in arriving at the percentage of reproduction cost which represented depreciation.
The court sustained the objection of the state to the effect that the evidence was inadmissible as being 'incompetent, that it violates the rule of viewing property as a whole unit.' Two state witnesses who qualified as realtors and appraisers testified that the market value of the property was 'Forty thousand' and 'from forty to forty-five thousand.'
So far as is pertinent to this decision the sole issue presented on appeal is whether, in eminent domain proceedings, evidence of the reproduction cost of commercial buildings, less depreciation, is admissible as an aid to the jury in arriving at the market value of the land and improvements as a whole.
This specific issue has never been presented to this court for decision. However, general principles with respect to the admission of evidence in eminent domain proceedings have been established. In King v. Minneapolis Union Ry. Co., 32 Minn. 224, 225, 20 N.W. 135, involving the condemnation of a 99- year leasehold interest, including buildings and machinery, this court was confronted with the question 'whether it was proper, in determining the value of this property, to take into account the fact that there was a manufacturing business established and in operation upon the premises.' The court stated that it is elementary that a person is entitled to the fair value of his property for any use to which it is adapted and for which it is available and for which it may be sold. The opinion also stated that such a person is entitled to the value of his property for any use to which it may be applied and for which it would ordinarily sell in the market, whether that use is the one to which his property is presently applied or for some other use to which it is adapted. The court went on to say (32 Minn. 226, 20 N.W. 136):
'* * * It is, we think, equally true that any evidence is competent and any fact is proper to be considered which legitimately bears upon the question of the marketable value of the property.'
In that case evidence was introduced tending to prove that the fact of a business having been established and carried on on the premises for so long a time materially increased the market value of the property. The court reasoned that if that was a fact it was competent to prove it, and, if proved, it was proper to take it into consideration in estimating the value.
In discussing the further point raised, that the verdict was not justified by the evidence, the court referred to evidence of the separate values of the machinery, buildings, and leasehold which had been introduced at the trial. The total verdict was $33,000. Appellant railway there contended that testimony as to the value of the building was $8,000 and the machinery $12,000, and that this would indicate, in view of the total verdict, that the jury placed a value of $13,000 on the leasehold, which appellant contended was really worth nothing because of onerous conditions upon the lessee. The court did not agree with that reasoning and said that inasmuch as some witnesses had put quite a high value on the lease it could not say as a matter of law that the lease was worthless; further that it did not follow that the...
To continue reading
Request your trial
-
State by Mondale v. Gannons Inc.
...1, 120 N.W.2d 36; Regents of the University of Minnesota v. Irwin, 239 Minn. 42, 57 N.W.2d 625; State, by Lord v. Red Wing Laundry & Dry Cleaning Co., 253 Minn. 570, 93 N.W.2d 206. 1 The landowner cannot claim inconsistent uses for land which was taken by condemnation nor can be show his pa......
-
Washington Beef, Inc. v. County of Yakima
...at this plant. Delta Air Lines, Inc. v. Dep't of Revenue, 328 Or. 596, 605 n. 5, 984 P.2d 836 (1999); State v. Red Wing Laundry & Dry Cleaning Co., 253 Minn. 570, 574, 93 N.W.2d 206 (1958). See also CP at 33. External or economic obsolescence refers to factors outside of the plant like a sh......
-
Housing and Redevelopment Authority for City of Minneapolis v. First Ave. Realty Co.
...covered on direct examination of Liebenberg. We approved the admission of similar testimony in State, by Lord, v. Red Wing Laundry & Dry Cleaning Co., 253 Minn. 570, 93 N.W.2d 206, holding that it may be of aid to the jury in arriving at the market value of the property. At the conclusion o......
-
State v. Wilson
...analysis of the use of the cost of reproduction method of ascertaining fair market value in State by Lord v. Red Wing Laundry & Dry Cleaning Co., 253 Minn. 570, 93 N.W.2d 206 (1958). In that jurisdiction, as in ours, the proper measure of just compensation is the value of the land with the ......