State ex rel. State Highway Commission v. Mann

• Decision Date: 13 October 1981
• Docket Number: No. 61664,61664
• Citation: 624 S.W.2d 4
• Parties: STATE of Missouri ex rel. STATE HIGHWAY COMMISSION, Appellant, v. William S. MANN, et al., Respondents.
• Court: Missouri Supreme Court

Page 4

624 S.W.2d 4

STATE of Missouri ex rel. STATE HIGHWAY COMMISSION, Appellant, v. William S. MANN, et al., Respondents.

No. 61664.

Supreme Court of Missouri, En Banc.

Oct. 13, 1981 Respondent's Motion for Clarification Overruled Dec. 8, 1981.

Bruce A. Ring, Earl H. Schrader, Jr., Milton Skeens, James B. Jackson, Mo. State Highway Commission, Kansas City, for appellant.

Clifford N. Jarrett, Bruce Heavner, Heavner, Wilkins, Jarrett & Kimball, P. C., Kansas City, for respondents.

PER CURIAM.

This is an action in eminent domain brought by the appellant, State Highway Commission of Missouri, to acquire a right of way for proposed improvement of Missouri State Highway 210 in Jackson County, Missouri. Judgment in Jackson County Circuit Court was for defendant-respondents Mr. and Mrs. William Mann, owners of the proposed right of way, in the amount of $338,550. The State Highway Commission appealed. The Missouri Court of Appeals, Western District, ordered the case transferred here so that this Court might re-examine the existing law on the use of the capitalization of income method of valuation in partial taking cases. Jurisdiction rests in this Court pursuant to Mo.Const., art. V, § 10, and Rule 83.02.

Respondents, William and Dorothy Jane Mann, are the owners of 209.6 acres of land in Jackson County, Missouri, which they purchased in 1951. The property lies between the new Missouri River channel Liberty Bend Cutoff and the old Missouri channel bend and is heavily deposited with sand of a quality which is in demand in construction work. Beginning in 1966, the Manns entered into a contract with Rulo Sand and Gravel Company, Inc., which granted Rulo the right to remove sand and gravel at a rate of 25 cents per ton on the first 25,000 tons and 20 cents on each ton in excess of that figure. In June of 1967 a similar contract was entered into with the Clarkson Construction Company. Clarkson paid at a rate of 15 cents per ton, agreed to maintain certain levees and to rehabilitate the land after the sand mining operation ceased. Of the 209.6 acres in this tract, 172.9 acres are suitable for recovery of commercial sand and gravel.

Complaints were made about the existence of this sand and gravel operation on land zoned for agricultural use and so on March 26, 1968, the Manns, Rulo, and Clarkson applied for special use permits in order to continue removing and storing the sand and gravel. The Jackson County Zoning Board notified the State Highway Commission of the special use permit request. By letter dated April 18, 1968, the Highway Commission advised that relocated Route E-210 would traverse the proposed special use area. In the face of the notification by the Highway Commission, the special use permit request was amended to exclude the proposed right of way. On July 19, 1968, a five-year special use permit was issued excluding a strip 150 feet wide designated as right of way for proposed State Route E-210. In 1973 the permit was renewed for five years, however the restrictions were increased to include a prohibition on mining within 85 feet of any boundary, including 85 feet on either side of the right of way, resulting in a total of a strip 320 feet wide set aside for the right of way. Thereafter, in 1974 the Commission filed a petition asking that the right of way be condemned for highway purposes. This was six years after the Commission's letter of 1968 regarding the location of the highway. On December 16, 1974, court-appointed commissioners assessed the damages to the Manns's property at $338,550. Both the State Highway Commission and the Manns filed exceptions.

In a pretrial stipulation the parties have agreed that the date of the taking was January 16, 1975; that the total area of the tract before the taking was 209.6 acres; that 15.8 acres were taken by the condemnation; and that the owners must provide lateral support for the right of way in a strip 85 feet wide running parallel to the road and at a 2 to 1 slope from that point to bedrock, resulting in an additional 21.79 acres from which excavation of sand and gravel is prohibited.

Trial was to the court without a jury. Respondents William and Dorothy Jane Mann presented expert testimony by a real estate appraiser who estimated the loss involved to be $835,400. The trial court subsequently sustained appellant's objections to respondents' expert testimony, but then reopened the matter to permit additional evidence as to value. Respondents presented the testimony of an insurance company appraiser and an economist, but the trial court rejected this testimony as speculative. The court concluded that it could find evidence in the record by which it could compute the "just compensation" due respondents. The trial court found that the damages to the respondents totalled $338,550. In calculating the damages the court noted that it was exclusively using the capitalization of income method as used in City of St. Louis v. Union Quarry & Constr. Co., 394 S.W.2d 300 (Mo.1965). Appellant State Highway Commission's motion to modify or, in the alternative, for a new trial was overruled. The Highway Commission appealed. The court of appeals, western district, ordered the case transferred to this Court in order that we might re-examine the existing law on the use of the capitalization of income method of valuation in this type of partial taking case.

I

Appellant Highway Commission contends the property was required to be valued for agricultural purposes only because the land was zoned "agricultural" by Jackson County. The trial court permitted evidence as to value to be predicated on the use to which the land on both sides of the proposed right of way was then being put-sand and gravel mining. This use had been permitted under special use permits issued by Jackson County since July 1968. The special use permits did not include the strip of land crossing respondents' property which the appellant advised Jackson County would be needed for the highway right of way sometime in the future-as of April 1968. As previously stated, the original excluded strip was only 150 feet wide, but was subsequently enlarged in the second special use permit to 320 feet. The additional width was because of a prohibition against mining within 85 feet of a boundary or a highway right of way. The trial court found the only reason the noted strip was excluded from the special use permits was because of the appellant's actions in notifying the county board that the land would be needed for a highway easement. Mr. Harold Lambert, Director of Planning & Zoning for Jackson County, so testified.

The finding of the circuit court is supported by substantial evidence. Indeed, it would be difficult to factually conclude otherwise. And so, by the date of taking, January 16, 1975, the land on both sides of the proposed highway easement had been legally used as a sand mine and it is evident that, had it not been for the Highway Department's desires with respect to the proposed easement strip, that too would have been included in the special use permits and been legally mined. The objections of nearby residents to the sand mining had been found unavailing by Jackson County in 1968 when it issued its first sand mining permit.

Appellant argues the court erred in holding that there was a reasonable probability of a zoning change of the entire tract but for the proposed highway use. Whether from a technical standpoint the "zoning" would have been changed may be arguable; this because the county used "special use permits" to allow the mining rather than a "zoning" change. It is not arguable, however, whether the county would permit mining to take place over the objections of other residents because that actually happened. Nor is it even a reasonable probability that sand mining would not have been allowed on the easement strips had it not been for the desires of the Highway Commission. Clearly, the use would have been permitted.

The landowner is entitled to be compensated for the taking on the basis of the highest and best use of the land. See Olson v. United States, 292 U.S. 246, 255, 54 S.Ct. 704, 708, 78 L.Ed. 1236 (1934); City of Chicago v. Equitable Life Assurance Soc'y, 8 Ill.2d 341, 345, 134 N.E.2d 296, 299 (1956); Forest Preserve Dist. v. Lehmann Estate, Inc., 388 Ill. 416, 424, 58 N.E.2d 538, 542 (1944). Surely, the use to which the land on both sides of the strip was legally being put and the use to which the right of way would have been put but for the action of the Highway Commission falls within that category.

The trial court did not err in not restricting the value of the land use to agricultural use.

II

Appellant also contends that the respondents' deletion of the right of way from the special use permit applications made by them gave rise to a contractual obligation between respondents and the Board of Zoning Adjustment. Appellant cites no authority which would support the finding of a contractual relationship in these circumstances. This Court is not persuaded that any such relationship arose.

III

The appellant contends the trial court erred in exclusively using the Capitalization of Income Approach in arriving at the damages in this case. There are three generally accepted approaches to estimating market value. The Cost Approach calculates the replacement value of the property. Use of the second method, the Market Approach, also known as the Comparison Approach, results in the property value being calculated by comparing it with similar properties to determine market price. The third method, the Capitalization of Income Approach, is calculated by using the net return of the property to determine a logical selling price. See generally 4 J. Sackman, Nichols' The Law of Eminent Domain (3d rev. ed. 1980).

In the present case the capitalization method was chosen by the trial court after twice rejecting the expert testimony on valuation offered by the Manns. In its conclusions of...