State v. Deal

• Decision Date: 27 June 1951
• Citation: 191 Or. 661,233 P.2d 242
• Parties: STATE et al. v. DEAL et al.
• Court: Oregon Supreme Court

Page 242

233 P.2d 242

191 Or. 661

STATE et al. v. DEAL et al.

Supreme Court of Oregon.

Argued Feb. 7, 1951.

Decided June 27, 1951.

Samuel A. Hall, Asst. Atty. Gen. (George Neuner, Atty. Gen., J. M. Devers, Asst. Atty. Gen. and Chief Counsel for Oregon State Highway Commission, C. W. Enfield, Asst. Atty. Gen. and Robert L. May, Jr., of Salem, on the brief), for appellant.

Allan Hart and Gerald J. Meindl, of Portland (Pendergrass, Spackman & Bullivant, of Portland, on the brief), for respondents.

Before BRAND, Chief Justice, and ROSSMAN, LUSK, LATOURETTE and TOOZE, JJ.

LUSK, Justice.

The plaintiff, State of Oregon, through its State Highway Commission, has appealed from a judgment based on the verdict of a jury in a condemnation action.

The lands involved were taken by the state on March 23, 1946, to form a part of a relocated section of the Oregon Coast Highway in Lincoln County about midway between the cities of Newport and Depoe Bay and a few miles north of Agate Beach. There are three tracts, referred to in the record as Parcel No. 1, Parcel No. 2 and Parcel No. 3. Parcel No. 1, containing 7.66 acres, was owned by the defendants, W. K. Deal and wife and Curtis E. Christy and wife; Parcel No. 2, containing 0.41 acres, and Parcel No. 3, containing 0.64 acres, were owned by the defendants Christy. Lincoln County, also named as a defendant, is not a party to this appeal and need not be again referred to.

In their answer to the complaint the defendants alleged the reasonable market value of their lands on March 23, 1946, to be as follows: Parcel No. 1, $16,500; Parcel No. 2, $1,000; Parcel No. 3, $2,000. The state in its reply denied that Parcel No. 1 had any value in excess of $2,500 and that Parcels Nos. 2 and 3 together had any value in excess of $1,500. The jury by its verdict assessed the market value of Parcel No. 1 at $6,000 and of Parcels Nos. 2 and 3 combined at $1,500.

The state's brief contains 15 assignments of error, a number of them presenting the same point, namely, the propriety of the court's rulings which permitted the defendants to introduce evidence that the properties involved could be subdivided into a certain number of lots of certain dimensions to be used as sites for beach homes, and to show the prices at which such lots could have been sold on the day of the taking. The same legal question arises on exceptions to the court's charge.

The lands taken are parts of a larger tract formerly owned in its entirety by the defendants. Parcel No. 1 fronts on the Pacific Ocean. It is about 2400 feet long and varies in width roughly 30 feet at the north and 160 feet at the south. It includes a sandy beach. Its westerly boundary line is mean high tide, and its easterly boundary line before the taking was an abandoned railroad right of way 100 feet in width, granted by the predecessors in title of the defendants in 1918 and 1919 and which is included in the properties acquired by the state for the new highway. The remainder of the larger tract lies to the east of the railroad right of way; a considerable portion of this was platted in 1937 under the name of Beverly Beach, and most of the lots in this subdivision have been sold. The original plat of Beverly Beach, as prepared by the defendants, included Parcel No. 1 as Block 5 thereof, but when it was tendered for recording by the owners the county officials rejected it because the plat showed the railroad right of way running between the beach front property, Parcel No. 1, and the remainder of the land. The evidence of the defendants indicates that they did not proceed with their purpose to plat Parcel No. 1 because of uncertainty as to whether or not the Highway Commission was going to take it. Mr. Deal testified that as early as 1937 he had received information from the Highway Department that this was the Commission's intention.

Parcels Nos. 2 and 3 are rectangular in shape and lie to the east of the old railroad right of way. Since the jury found that the combined value of these two parcels was in the exact amount conceded by the plaintiff no further consideration need be given them.

The plaintiff in its case in chief, for the purpose of showing that Parcel No. 1 was not adapted for subdivision purposes, introduced evidence that the property was too far from conveniences such as stores and a post office; that the cost of building a road to serve it would be very heavy; that it was not safe for home sites because it sloped sharply towards the beach and the ground was treacherous and likely to move and to wreck houses built upon it; that the northerly portion was too steep and narrow for subdivision purposes; and that, as one witness stated, 'the amount of money that it would take to develop it would be prohibitive as to what you could receive after you platted it and attempt to sell it because you don't sell all of your lots the way you plat them.' On cross-examination some of the state's witnesses were asked to give their opinions as to the probable value of lots into which the property might be subdivided, and, in response to such questions, placed very low, in some instances practically nominal, valuations on such non-existent lots. One of the witnesses for the state conceded that it would be practicable to subdivide the south 1000 feet of Parcel No. 1, as the lots in that portion would be of adequate depth.

In an attempt to meet this testimony the the defendants called as a witness Charles L. Marshall, a civil engineer who had first examined the property in 1936, having been employed to do so by the then owner of the railroad right of way, and who was at that time impressed with the suitability of Parcel No. 1 for subdivision purposes and so reported to his employers. He testified as follows:

'Q [By Mr. Hart] Mr. Marshall, may I ask you, in your study of the property in October of 1946, did you consider what would be a feasible means of dividing Parcel No. 1 into lots? A Yes.

'Q Will you state what you had in mind in that respect? A Well, I thought the property could be divided and should be divided into strips about 50 feet wide running from the right of way down to the beach and that it----

'Mr. Hall: If the Court please, I want the record to show that we object to the question and that answer on the same ground as the previous objection that Counsel is not entitled to show that the tract of land is divided into specific lots. He may show that the highest and best use of the land is for subdivision purposes, but can go no further and cannot show the number of lots which they say that it can be divided into. I recite the citations.

'The Court: Same ruling.

'Mr. Hart: Proceed, Mr. Marshall.

'A Of course, at the upper end where the property is narrow, it comes to a point at the north end, as far as usable the eastern, the 50 foot lot, would be impossible, but I would accept a 125 feet at the upper end into a lot and then 75 feet into another and when it became 70 or 75 feet from there south, cut that into 50 foot strips.

'Q And can you state the number of lots which you forsaw as feasible in Parcel No. 1? A In my opinion we could layout about 45 lots.'

The witness further testified without objection to the probable costs of access roads and bringing water to the property, and gave it as his opinion that subdivision was entirely feasible from a financial standpoint.

Other witnesses called by the defendants likewise testified to the number and size of the lots into which Parcel No. 1 could have been subdivided, and in addition were permitted to express their opinions as to the prices for which such lots, had they existed, could have been sold in March, 1946. All this testimony came in over the objections of the plaintiff, and the court's rulings admitting it, as well as the testimony of Marshall which we have quoted, are the subject of the first four assignments of error.

Plaintiff contends that evidence of the number and value of non-existent lots is speculative and therefore inadmissible. That such is the general rule is established by many court decisions and authoritative text writers. We quote from 2 Lewis, Eminent Domain (3d ed.):

'The market value of property includes its value for any use to which it may be put. If, by reason of its surroundings, or its natural advantages, or its artificial improvements, or its intrinsic character, it is peculiarly adapted to some particular use, all the circumstances which make up this adaptability may be shown, and the fact of such adaptation may be taken into consideration in estimating the compensation. Some of the cases hold that its value for a particular use may be proved, but the proper inquiry is, what is its market value in view of any use to which it may be applied and of all the uses to which it is adapted?' 1233, § 707.

'* * * It is proper to show that the property is suitable for division into village lots and that it is valuable for that purpose, but it is not proper to show the number and value of such lots as separate parcels.' 1236, § 707.

'* * * In a case in Wisconsin it was held proper to show that property was suitable for division into village lots and the probable value of such lots. But this is clearly going one step too far. The probable value of village lots which do not exist is too speculative.' 1241, § 709.

The matter is thus stated in 2 Nichols on Eminent Domain (2d ed.) 1170, § 445: 'Evidence of the value of the property for any use to which it is reasonably adapted, is, as already stated, admissible, but such evidence must be limited to a bare statement why the property is adapted for a particular purpose and to testimony of its value for such purpose. As bearing upon these issues the owner may offer a plan showing a possible scheme of development for the purpose for which it is most available, but he cannot go further and describe in detail to the jury a speculative enterprise for which in his opinion or that of some expert the...