Stewart v. Com. for Use and Benefit of Department of Highways

• Decision Date: 17 June 1960
• Citation: 337 S.W.2d 880
• Parties: Louise B. STEWART et al., Appellants, v. COMMONWEALTH of Kentucky, for the Use and Benefit of the DEPARTMENT OF HIGHWAYS, et al., Appellees.
• Court: Supreme Court of Kentucky

Page 880

337 S.W.2d 880

Louise B. STEWART et al., Appellants, v. COMMONWEALTH of Kentucky, for the Use and Benefit of the DEPARTMENT OF HIGHWAYS, et al., Appellees.

Court of Appeals of Kentucky.

June 17, 1960.

Rehearing Denied Sept. 30, 1960.

Robert E. Hatton, Louisville, for appellants.

Marshall B. Woodson, Jr., Louisville, for appellees.

PALMORE, Judge.

This appeal is by the landowner from a judgment awarding $63,000 as the value of her property condemned by the appellees, the Commonwealth and City of Louisville, in the acquisition of right-of-way for the North-South Expressway in Louisville. She claims that the award was inadequate and resulted from prejudicial errors in the exclusion of certain evidence relating to sales of comparable property. The excluded evidence may be reduced to three categories, as follows:

(1) Prices paid by the condemnor for similar property in the same general location for the same project at approximately the same time. (Excluded on the ground that sales of land subject to condemnation to the proposed condemnor are not admissible evidence.)

(2) Testimony of R. J. Stewart, a qualified real estate expert, as to the prices paid for property some three blocks away, which the witness claimed to be comparable property and had purchased for a syndicate intending to raze the improvements and construct a motel. (Excluded mainly because the witness had not inspected the interior portions of the buildings and therefore, the trial court felt, was not in a position to prove comparability.)

(3) Testimony of John M. Hennessy, a qualified real estate expert, as to the same prices about which the witness R. J. Stewart was not permitted to testify. (Excluded on the ground that Mr. Hennessy's information was based on hearsay.)

Though in some jurisdictions prices paid by the condemnor for other similar properties are admissible in evidence, the weight of authority appears to be otherwise. Nichols on Eminent Domain (3d ed.), Vol. 5, § 21.33. This court has held consistently that such evidence is not competent. Chicago, St. L. & N. O. Ry. Co. v. Ware, 1927, 220 Ky. 778, 295 S.W. 1000; Com., by State Highway Commission v. Combs, 1929, 229 Ky. 627, 17 S.W.2d 748; Louisville & N. R. Co. v. Johnson, 1930, 233 Ky. 628, 26 S.W.2d 535. Likewise, prices paid by other prospective condemnors for comparable property have been held inadmissible. Kentucky-West Virginia Gas Co. v. Hays, 1931, 238 Ky. 189, 37 S.W.2d 17; United Fuel Gas Co. v. Mauk, Ky.1954, 272 S.W.2d 810.

Appellant suggests that each of the Kentucky cases on the point involved the taking of something less than the entire property affected, resulting in damage to the remainder, and that the real rationale of these decisions is that residual damages are by nature so dissimilar from one property to another that they are not susceptible of practical comparison. The fact is, however, that a sale to a prospective condemnor lacks the elements of a free and voluntary transaction. 'The reasoning which forbids consideration of forced sales generally, renders it incompetent for either party to put in evidence the amount paid by the condemnor to the owners of neighboring lands taken at the same time, and as part of the same proceedings, however similar they may be to that in controversy and whether the payment was made as the result of a voluntary settlement, an award, or the verdict of a jury.' Nichols on Eminent Domain (3d ed.), Vol. 5, p. 296 (§ 21.33).

In those states where such evidence is not presumptively incompetent the preliminary question of whether the transaction was so tainted by compulsion as to influence the price, and therefore to destroy its usefulness as a standard of value, must be determined by the trial court in the same manner as the trial court must likewise find sufficient similarity and likeness of conditions between the respective properties before evidence of the comparable sale is admitted. Ibid. We think that such an inquiry into the matter of motivation ventures too far into the realm of speculation and is not a satisfactory substitute for the rule of nonadmissibility. We therefore adhere to the latter rule.

It is urged that the landowner (but not the condemnor) ought to be allowed to show prices paid by the condemnor for other similar property for the special purpose of securing the guaranty of equal protection of the laws under the 14th Amendment of the federal Constitution. However, no authorities are cited, nor do we find any, to sustain this viewpoint.

The property concerned in this case consisted of two large brick residential buildings 60 to 70 years old at the southwest corner of Brook and College Streets, fronting on College. The concer building had been converted to office space with off-street parking facilities and a concrete block warehouse addition. The second building had been converted into four residential apartments.

The witness R. J. Stewart, a nephew of the appellant, is engaged in the real estate business and is a qualified appraiser. In December of 1958, just after the inception of this proceeding, he had acted as agent in the purchase of three residences on the east side of Second Street between College and Jacob Streets, being two blocks west and a fractional block north of the appellant's property, and in April of 1959 had purchased in the same capacity, a fourth piece of residential property on the same block as the three acquired in December of 1958. His principals were not interested in the improvements, which were to be wrecked, and the witness 'didn't even bother to inspect the buildings before purchasing them.' However, in his avowal he testified that the Second Street properties were all residences converted to multi-family usage, of about the same vintage as appellant's property, situated on smaller lots but sufficiently similar in all essential respects to appellant's property to constitute comparable property according to his interpretation of appraisal practice. His testimony as to the prices paid was excluded on the ground that there was not a satisfactory showing of comparability.

Exact comparability between different parcels of improved real estate being virtually nonexistent, the introduction of so-called comparable sales nearly always injects collateral issues as to the degree of similarity or dissimilarity. For this reason some courts have not permitted such evidence. In this jurisdiction, however, actual sales of other reasonably similar property have been firmly established as competent and probative evidence. See City of Paducah v. Allen, 1901, 111 Ky. 361, 63 S.W. 981. 'Except in a few jurisdictions, this class of evidence is received.' Wigmore on Evidence (3d ed.), Vol. II, p. 505 (§ 463). 'If the admission of such evidence is regulated with reasonable judgment by the presiding justice, it throws light upon the issue as nothing else can * * * The disadvantages arising from the use of such evidence are more than compensated for by the benefits which are likely to come to the jury from its reception.' Nichols on Eminent Domain (3d ed.), Vol. 5, p. 277 (§ 21.3).

The preliminary question of whether the respective properties are susceptible of practical comparison is similar to the question of sufficiency of a witness' qualification as an expert, in that each must be determined by the trial court precedent to the introduction of the main testimony to which it pertains. In some courts this determination is treated as factual and may not be disturbed on review unless 'clearly erroneous.' See Aycrigg v. United States, D.C.N.D.Cal.1954, 136 F.Supp. 244, 251, and cases therein cited. Since, however, the initial determination is to be made on the basis of undisputed testimony, and does not represent a choice between conflicting evidence or...