STATE OF LOUISIANA, SABINE RIVER AUTHORITY v. Carter, Civ. A. No. 11792

• Decision Date: 23 December 1968
• Docket Number: Civ. A. No. 11792,11798.
• Citation: 293 F. Supp. 1171
• Parties: STATE OF LOUISIANA, Through the SABINE RIVER AUTHORITY, State of Louisiana v. Fred Foster CARTER et al. STATE OF LOUISIANA, Through the SABINE RIVER AUTHORITY, State of Louisiana v. Beulah Eloise CLANTON et al.
• Court: U.S. District Court — Western District of Louisiana

293 F. Supp. 1171

STATE OF LOUISIANA, Through the SABINE RIVER AUTHORITY, State of Louisiana v. Fred Foster CARTER et al.

STATE OF LOUISIANA, Through the SABINE RIVER AUTHORITY, State of Louisiana v. Beulah Eloise CLANTON et al.

Civ. A. Nos. 11792, 11798.

United States District Court W. D. Louisiana, Shreveport Division.

December 23, 1968.

W. R. Jackson, Jr., Leesville, La., for plaintiff.

William H. Baker, Holloway & Baker, Jonesboro, La., Anthony Claude Leach, Jr., Leesville, La., J. Peyton Moore, Curator ad hoc, Shreveport, La., for Fred Foster Carter and others.

William H. Baker, Holloway & Baker, Jonesboro, La., Elias R. Kaufman, and Everett R. Scott, Jr., Kaufman, Anderson, Leithead, Scott & Boudreau, Lake Charles, La., J. Peyton Moore, Curator ad hoc, Shreveport, La., for Beulah Eloise Clanton and others.

OPINION ON REVIEW OF OBJECTIONS BY PLAINTIFF AND DEFENDANTS, LANDOWNERS, TO THE FINDINGS OF THE SABINE RIVER AUTHORITY LAND COMMISSION

BENJAMIN C. DAWKINS, JR., Chief Judge:

March 2, 1966, the State of Louisiana, through the Sabine River Authority, brought suit here seeking to expropriate full ownership of the land in question. Jurisdiction was asserted and accepted under 16 U.S.C. § 814 et seq., and the expropriation proceedings were based on La.Const. art. XIV, § 45 and La.R.S. 38:2321 et seq.

Each tract of land involved in these proceedings was subject to a ninety-nine year timber lease, with an unexpired term of seventy-six years as of filing of the suit. Thus, two sets of rights were expropriated, those of the respective landowners and that of lessee, Continental Can Company, Inc. (Continental).

By order of this Court dated and issued March 2, 1966, the above entitled proceedings were referred to the Sabine River Authority Land Commission, a three-member Commission appointed by this Court under Rule 71A(h), F.R. Civ.P., for the purpose of determining just compensation due to persons whose interests were being expropriated.

At hearings held on March 30 and 31, 1966, for the Fred Foster Carter case, No. 11,792, evidence was introduced in behalf of the expropriating authority and Continental. Counsel for landowners introduced no evidence, and relied merely upon cross-examination of the witnesses for plaintiff and the timber lessee. At an evidentiary hearing held June 27, 1966, evidence was received in the Clanton case, No. 11,798, wherein the parties offered as a joint exhibit the entire record of Carter. Subsequently, August 29, 1966, both parties introduced the testimony from Clanton into the record of Carter. In its original opinion of November 28, 1966, and supplemental opinion of January 3, 1967, the Commission considered these two cases to have been consolidated and we shall do the same.

In its November 28, 1966, opinion, the Commission, as to which we have nothing but praise in execution of its duties, concluded that the value of the land in question was $70.00 per acre. It further concluded that the market value of the leases held by Continental was approximately 75/85ths of the value of the land in each case as a unit. Thus $61.76 per acre, i. e., 75/85ths of $70.00 was awarded to Continental; and $8.24 per acre, i. e., 10/85ths of $70.00 was awarded to the Landowners. This produced total awards of $12,456.99 to Continental and $1,662.01 to Landowners in Carter; and $37,157.29 to Continental and $4,957.51 to Landowners in Clanton.

By order of this Court dated December 7, 1966, these cases were reopened for additional argument before the Commission. After reargument, on January 3, 1967, the Commission rendered a supplemental decision affirming in all respects its earlier decision. Before us now is judicial review of the findings of the Commission (Rules 71A(h); 53(e) (2), F.R.Civ.P.).

The specific issues presented are: (1) whether rentals for the timber leases in question were prepaid; (2) whether the Commission erred in setting the basic land value at $70.00 per acre; (3) whether the Commission improperly allocated the amount of the award between Landowners and lessee; and (4) whether legal interest of 5%, as provided by Louisiana law, should have been awarded from the date of the filing of the suit or the date of the judgment.

On the first issue, it really is uncontroverted, and we hold that full rentals for the timber leases were prepaid.

As to this point, Landowners quite tenuously urge that the $10.00 per acre initially paid by Continental to lessors was simply consideration for the then standing timber on the acreage, and that its obligation to make annual payments of all property taxes, constituted consideration for each of the remaining ninety-eight years of the lease. Thus, argue Landowners, the contract was a timber sale with ninety-eight options resting with lessee to extend the lease by paying annual taxes.

The plain language of the contract in question makes it manifestly clear that $10.00 per acre was "The PRICE and CONSIDERATION for which this sale of the timber, wood and other forest products now growing on said property is made and for which the lease and future operations and cutting privileges herein set out are granted." (Emphasis added.) The obligation to pay annual rentals was one of several "conditions and stipulations." More specifically we conclude that it was a resolutory condition in each of the lease contracts; that is, one in which the occurrence or nonoccurrence, as the case may be, of the condition "operates the revocation of the obligation, placing matters in the same state as though the obligation had not existed."¹ LSA-Civ. Code Art. 2045.

On the second issue, we hold that the Commission was acting fairly and impartially, and was supported therein by substantial evidence, in setting the basic value of the land in question at $70.00 per acre, including timber rights. There was ample evidence adduced before the Commission upon which to base that conclusion. We are of opinion that it is not our function, exquisitely and by way of "nit-picking," to rehash and reweigh that evidence. All that must appear is that there was substantial evidence to support the Commission's evidentiary findings, and that its awards were not "clearly erroneous." Rousseaux et al. v. United States of America, 394 F.2d 123 (5 Cir. 1968); Evans v. United States, 326 F.2d 827 (8 Cir. 1964); Buena Vista Homes, Inc. v. United States, 281 F.2d 476 (10 Cir. 1960); United States v. Glanat Realty Corp., 276 F.2d 264 (2 Cir. 1960).

The most seriously contested issue here is the third, which concerns proper distribution of the proceeds between the Landowners and lessee. We hold that, inasmuch as the highest and best use was as timberlands, the Commission quite correctly awarded $8.24 per acre to Landowners and $61.76 per acre to lessee.

Landowners argue that in addition to paying lessees the market value of its interest, the expropriator should have paid the Landowners the full amount of the value of the land in question, i. e., what it would have brought, unencumbered by the ninety-nine year leases, subject only to a deduction of $10.00 per acre, the amount of the prepaid rentals.

In their arguments, both to the Commission and to this Court, Landowners rely on State v. Ferris, 227 La. 13, 78 So.2d 493 (1955); In Re Morgan R. R. and S. S. Company, 32 La.Ann. 371 (1880); State Through Dept. of Highways v. Holmes, 209 So.2d 780 (La.App. 2d Cir. 1968); State Through Dept. of Highways v. Cockerham, 182 So.2d 786 (La.App. 1st Cir. 1965), writ refused 249 La. 110, 185 So.2d 219. Landowners especially rely on Morgan and Cockerham.

Morgan is the first and still the leading Louisiana decision dealing with the problem of determining the amount of recovery due to landowners and lessees following expropriation proceedings. There plaintiff expropriated a certain lot of ground in New Orleans. The owner had granted a three-year lease of the property at a stipulated rental of $60.00 per month, with the privilege granted to lessee to renew for an additional three years. The question before the court was how much, if anything, the expropriator owed the lessee for such expropriation.

Discussing the nature of the rights of the lessee, the Louisiana Supreme Court said:

"The rights of use, enjoyment, and disposal are said to be the three elements of property in things. They constitute the jura in re. The right of a lessee is not a real right, i. e., a jus in re. In other words, the lessee does not hold one of the elements of property in the thing. His right is a jus ad rem, a right upon the thing. While therefore, technically, the lease of real estate does not operate a divestiture of any elements of property, it does by the express terms of article 492 C.C. prevent or encumber the exercise of the right of perfect ownership. That article says that not only real rights but `other rights,' vested in third persons, limit the exercise of full ownership. The right of a lessee is substantive, and is independent of changes in the ownership of the thing. C.C.

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