State ex rel. State Highway Commission v. Gray

• Decision Date: 06 April 1970
• Docket Number: No. 8826,8826
• Citation: 81 N.M. 399,1970 NMSC 59,467 P.2d 725
• Parties: STATE of New Mexico, ex rel. STATE HIGHWAY COMMISSION, Petitioner- Appellant, v. John L. GRAY, Ethel M. Gray, Mimbres Valley Bank and Warren McCan, Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 725

467 P.2d 725

81 N.M. 399

STATE of New Mexico, ex rel. STATE HIGHWAY COMMISSION Petitioner- Appellant, v. John L. GRAY, Ethel M. Gray, Mimbres Valley Bank and Warren McCan, Defendants-Appellees.

No. 8826.

Supreme Court of New Mexico.

April 6, 1970.

James A. Maloney, Atty. Gen., Joseph L. Droege, George D. Sheldon, Sp. Asst. Attys. Gen., Santa Fe, for appellant.

Sherman & Sherman, Deming, for appellees.

OPINION

SISK, Justice.

The State Highway Commission has appealed from the judgment in a condemnation action in which a jury awarded $30,000 to defendants.

Defendant, John Gray, was the owner in fee of one tract of land on the south side of Railroad Boulevard in Deming, New Mexico. Gray was also the lessee, from the Southern Pacific Railroad, of a tract of land nearly opposite the fee land and on the north side of Railroad Boulevard. The two tracts, separated by the street, were used by Gray in the conduct of his business. Improvements on the fee land included an office building and sales, engineering and maintenance facilities; and on the leased land were situated a block plant, concrete batching plant, and warehouse and storage facilities. The State condemned and took all of the fee land but there was no condemnation or taking of any of the leased land.

Gray contended that the fee and the leased property should properly be considered as one tract, and that the taking of the fee property was a partial taking of the larger tract which entitled him to recover for severance damages to his leasehold interest in the remaining property. The State contended that there was only a total taking of one of two separate tracts.

At the first trial the court instructed the jury to determine whether the action by the State constituted a total taking of fee property only, or a partial taking of fee property combined with leased property. The jury decided that there was a total taking of the fee property only and awarded $16,000 for such taking. The trial court subsequently granted Gray's motion for new trial on the ground that as a matter of law the case should have been tried as a partial taking of the combined fee and leased land. Despite the granting of the new trial, the State appealed from the first judgment, and the transcript in the first trial was docketed in this court. On motion of Gray, the appeal was dismissed.

At the second trial, the jury was instructed that the condemnation action was a partial taking, and a verdict of $30,000 was returned.

The State argues five points, all of which relate to the single-tract concept or to the damages awarded. We must first consider, however, Gray's contention that the transcript of the first trial is not before this court because the praecipe did not call for and the transcript did not include the record of the first trial. The praecipe stated that 'The record proper (pleadings) should commence with the next pleading filed after last pleading included in first transcript.' The authorities cited by both parties are distinguishable from the situation existing on this appeal. We cannot consider any exhibit or other evidence which was not before the court and jury at the second trial, and, accordingly, will not consider the two plats attached to the State's brief. But the pleadings which constitute the record proper in the first transcript, which was properly docketed in this court, are before the court in this second appeal. Supreme Court Rule 14(10) provides:

'On a second or subsequent appeal or writ of error, the former transcript shall be deemed before the court, and the new transcript need contain only such of the record and proceedings as do not appear from such former transcript, and as required by the praecipe.'

It was unnecessary, and would have been a useless act, to have included in the second transcript all of the pleadings already contained in the first transcript.

We now consider the State's first contention that as a matter of law the fee land and the leased land should not have been considered as one tract and severance damages allowed for the part not taken. In order to consider two tracts of land as one larger tract, in condemnation proceedings, the three factors of contiguity, unity of use, and unity of ownership must be considered. Although there are exceptions, and although various authorities emphasize the relative importance of one or another of these factors, all three must generally be present in order to consider two tracts of land to be one combined tract. Montana State Highway Comm'n v. Robertson & Blossom, Inc., 151 Mont. 205, 441 P.2d 181 (1968); County of Santa Clara v. Curtner, 245 Cal.App.2d 730, 54 Cal.Rptr. 257 (1966); Barnes v. North Carolina State Highway Comm'n, 250 N.C. 378, 109 S.E.2d 219 (1959); 4 Nichols, Eminent Domain, §§ 14.31, 14.31(1), 14.31(2) (3d Ed.Rev.1962).

Here, although the two tracts were separated by a street, the test of contiguity is satisfied. Ives v. Kansas Turnpike Authority, 184 Kan. 134, 334 P.2d 399 (1959). Also, the test of unity of use is satisfied by abundant testimony that Mr. Gray used the two tracts together in the operation of his various business interests.

Unity of ownership, under the unusual facts of this case, however, is more difficult to determine. There is a split of authority in the few cases which consider whether fee ownership of one tract and some leasehold interest in an adjacent tract is sufficient to satisfy the unity-of-ownership requirement. In United States v. Honolulu Plantation Co., 182 F.2d 172 (9th Cir. 1950), the plaintiff owned a small amount of land in fee, which was not taken, and held leases on adjacent lands which were taken. Although the requirement of contiguity and unity of use were established, the court said that if a fee owner holds some lesser interest in adjacent property which is taken, he is not entitled to compensation, and that a lease on one parcel of land cannot be part of the fee simple estate of another parcel. In People ex rel. Department of Public Works v. Dickinson, 230 Cal.App.2d 932, 41 Cal.Rptr. 427 (1964), unity of ownership of two tracts was found to be lacking even though both tracts had been leased to a partnership by the individual partners who owned the tracts. Other cases have held that if a fee owner of one tract has a lease, for term of years, on an adjacent tract, there is sufficient unity of ownership to entitle him to severance damages to his interest in the property not taken. People ex rel. Department of Public Works v. Nyrin, 256 Cal.App.2d 288, 63 Cal.Rptr. 905 (1967); State ex rel. LaPrade v. Carrow, 57 Ariz. 429, 114 P.2d 891 (1941); Chicago & Evanston R.R. v. Dresel, 110 Ill. 89 (1884); see also Annot., 95 A.L.R.2d 887, at 898.

We find no authority which considers whether fee ownership of one tract which was totally taken can be combined with the right to use another tract which was not taken, in order to satisfy the unity-of-ownership requirement. In order to resolve this question, it is necessary to examine the exact nature of the right and interest which Gray had in the property owned by the railroad.

The lease was for a period of one year and expired by its terms on April 1, 1963, more than three years before the date of taking on April 18, 1966. The lease provided that either party might terminate it on thirty days' notice and that in the event of termination the proportionate part of the $500 advance annual rental would be refunded. With regard to possible holding over, it provided:

'16. In case Lessee holds over the term of this lease, with the consent of Railroad, such holding over shall be deemed a tenancy from month to month, and upon the same terms and conditions as herein stated.'

Gray acknowledged that he became a month-to-month holdover tenant after expiration of the lease but argues that by accepting annual rental thereafter the railroad waived that provision of the lease. There was no testimony concerning any such waiver by the railroad, and no instruction was requested or given concerning waiver. This issue cannot be raised for the first time on appeal. Maryland Cas. Co. v. Foster, 76 N.M. 310, 414 P.2d 672 (1966); Bd. of...