State v. Hastings

• Decision Date: 13 May 1965
• Docket Number: No. 30299,30299
• Citation: 246 Ind. 475,206 N.E.2d 874
• Parties: STATE of Indiana, Appellant, v. Gordon HASTINGS and Betty Hastings, (H. & W.), Appellees.
• Court: Indiana Supreme Court

Page 874

206 N.E.2d 874

246 Ind. 475

STATE of Indiana, Appellant, v. Gordon HASTINGS and Betty Hastings, (H. & W.), Appellees.

No. 30299.

Supreme Court of Indiana.

May 13, 1965.

Edwin K. Steers, Atty. Gen., Robert E. Robinson, Deputy Atty. Gen., for appellant.

Scifres & Hollingsworth, Roscoe Hollingsworth, Ben M. Scifres, Lebanon, Ind., for appellee.

JACKSON, Judge.

Appellees commenced this action in the trial court as an inverse condemnation action. Their complaint alleged that an interest in the land, the right of ingress and egress to and from the adjoining highway, had been appropriated by the appellant without just compensation. Appellant's objection to said complaint and action were overruled. The trial court thereupon appointed appraisers to assess the alleged damages sustained by appellees as the result of the alleged taking. Thereafter, the appraisers filed their report and both parties filed exceptions thereto and the State requested that the amount of damages be determined by a jury.

During the jury trial appellees introduced evidence of loss of business to which the appellant objected. The trial court also instructed the jury that they could allow appellees a sum of money for loss of business, to which the appellant objected.

Interrogatories were submitted to the jury among which was the following: 'Did you include in your verdict any damages for the loss of business?' The answer was 'yes'.

The verdict of the jury reads as follows:

'We, the jury, find for the plaintiffs, Gordon Hastings and Betty Hastings, husband and wife, in the sum of $65,000.00 and we further find that the right of access was taken on the 1st day of July, 1959, from which date said amount will draw interest at the rate of six percent per annum.'

Judgment was rendered on the verdict as follows:

'* * * Judgment that plaintiffs have and recover of and from the defendant the sum of $65,000.00 and that said judgment shall bear interest at 6% per annum from July 1, 1959, until paid and costs taxed at $_____; * * *'

After the return of the verdict and prior to the rendition of the judgment thereon, the defendant moved to set aside the general verdict on the basis of the answer to the interrogatories. The court overruled the motion to which ruling the defendant excepted, and thereafter the defendant filed his motion for a new trial. The motion for new trial contains fourteen grounds, most of which were in the form of objections to the introduction of testimony as to the value of the appellees' business. Objections were also made to the giving of plaintiffs' tendered final instructions Nos. 1 and 2, and to the refusal of the court to give defendant's tendered final instruction No. 2. Appellees' instruction No. 1, the objection thereto, and appellees' instruction No. 2 and the objection thereto are set out verbatum.

No. 1. 'The court instructs you that if you find that the State of Indiana, by the construction of a limited access highway in question, destroyed or impaired the access to the real estate on which plaintiffs' property abutted and the plaintiffs were damaged by reason thereof, then, in determining plaintiffs' damages, you should find the difference between the fair market value of the abutting property immediately before and immediately after the destruction and impairment of said access, and this difference so found would be the damages to the real estate sustained by the plaintiffs. This in turn is based upon the highest and best use to which the land involved is best suited before and after the access thereto is molested.

'And if you further find, by reason of such impairment or destruction of access, the plaintiffs could no longer operate their restaurant business at a profit and were compelled to close the same and were damaged, you should find the difference between the fair market value of their business immediately before and immediately after the taking of the access, and such difference, if any, would be the damage to the business as sustained by the plaintiffs. And if you find that the plaintiffs were so damaged, then the addition of these two amounts would constitute the whole damage sustained by the plaintiffs, and your verdict should be for the plaintiffs in such amount.'

The objection thereto reads as follows:

'The defendant, State of Indiana, objects to the giving of Plaintiffs' Tendered Instruction No. 1 for the reason that it states the jury may consider and allow damages for loss of business and business loss is not legally compensable in the State of Indiana, and the giving of this instruction will inform the jury that it is proper to so allow said type of damage.'

Plaintiffs' tendered final instruction No. 2 reads as follows:

'The Court instructs you that in arriving at damages and determining the values, you have a right to consider whether the plaintiffs' restaurant operation was a going concern, whether the location of the restaurant was good or otherwise, the length of time they had been in business, profits realized from the operation of such business and any and all other facts and circumstances, as shown by the evidence and bearing upon and relating to the question of damages.'

The objection to the giving of the foregoing instruction reads as follows:

'The defendant, State of Indiana, objects to the giving of plaintiffs' Tendered Final Instruction No. 2 for the same reasons as recited in the objection to the giving of Plaintiffs' Tendered Final Instruction No. 1.'

Defendant's tendered final instruction No. 2 reads as follows:

'The Court instructs you that, under the laws of the State of Indiana, you should allow no damages for loss of business.'

Ground 13, in the motion for a new trial, is that the verdict of the jury is contrary to law.

Ground 14, is that the court erred in overruling defendant's motion to set aside the general verdict.

On the 31st day of May, 1962, the trial court overruled the appellant's motion for a new trial.

The assignment of errors contains two specifications:

'1. The Trial Court erred in overruling the Appellant's Motion For New Trial.

'2. The Trial Court erred in overruling Appellant's Motion To Set Aside The General Verdict.'

The undisputed evidence is that the State bulldozed the entrances which had been constructed by appellees, dug them up and erected a fence, all of which was done on State property. Thus it appears that there was no land of appellees taken by the State and that appellees were deprived only of direct access to the new limited access highway, as well as the investment in the construction of the access route from the highway to their business establishment.

There was evidence introduced by the appellees as to the value of the property, including the personal property, and also evidence as to the value of the business prior to the elimination of direct access to the new highway. This evidence was introduced over objections of the appellant; exceptions were saved as to the action of the court in admitting such evidence over objections.

The parties are in agreement that we are here concerned with a single question, that being is loss of business compensable as damages under the Indiana Eminent Domain Law? Appellees' rely upon the decision of this court in the case of State v. Stabb (1948), 226 Ind. 319, 79 N.E.2d 392, for support for its proposition that appellees are entitled to compensation in the instant case. In that case at page 323, at page 394 of 79 N.E.2d, the court said, '[i]t is generally held that no damages should be allowed in a case of this kind for the loss of business, good will or profits from the business where only the land and not the business is being taken unless the statute under which the proceedings is had provides for such an element of damage.' Appellees then say the court proceeded in the cited case to apply the exception to the rule mentioned in clause four of Acts 1935, ch. 76, Sec. 3, p. 228, being Sec. 3-1706, Burns' 1946 Replacement, which reads as follows:

'Fourth. Such other damages, if any, as will result to any persons or corporation from the construction of the improvements in the manner proposed by the plaintiff.'

The court further said:

'* * * Clauses one, two and three of this section cover all the damages sustained by the property taken and the residue; therefore, clause four must refer to damages other than damages to the property involved. It includes any direct consequential damages suffered by any person due to the construction of the improvement.' State v. Stabb (1948), 226 Ind. 319, 324, 79 N.E.2d 392, 395.

In the present case no actual real property was appropriated by the State, but only the direct access from the highway into the property was taken and a fence constructed on the line between the right-of-way and the property of the appellees. The right of access was taken by virtue of Acts 1945, ch. 245, Sec. 5, p. 1113, being Sec. 36-3105, Burns' 1949 Replacement, which provides:

'For the purposes of this act, such authorities of the state, counties, cities, or towns, may acquire private or public property and property rights for limited access facilities and service roads, including rights of access, air, view, and light, by gift, devise, purchase or condemnation in the same manner as is now or hereafter may be provided by law to acquire such property or property rights for the laying out, widening or improvement of highways and streets within their respective jurisdictions. In the acquisition of property or property rights for any limited access facility or portion thereof, or service road in connection therewith, the state, county, city or town, may, in its discretion, acquire an entire lot, block, or tract of land, if by so doing the interests of the public will be best served, even though said entire lot, block, or tract is not immediately needed for the right-of-way proper but is otherwise useful or necessary in the carrying out of the purposes of this...