United States v. 31.07 ACRES OF LAND, ETC.

• Court: U.S. District Court — District of Montana
• Writing for the Court: WILLIAM D. MURRAY
• Citation: United States v. 31.07 ACRES OF LAND, ETC., 189 F.Supp. 845 (D. Mont. 1960)
• Decision Date: 21 November 1960
• Docket Number: No. 804,806.,804
• Parties: UNITED STATES of America, Plaintiff, v. 31.07 ACRES OF LAND, MORE OR LESS, IN the COUNTY OF LEWIS AND CLARK, STATE OF MONTANA; Treasure State Industries, Incorporated, et al., Defendants. UNITED STATES of America, Plaintiff, v. 185.34 ACRES OF LAND, MORE OR LESS, IN the COUNTY OF LEWIS AND CLARK, STATE OF MONTANA; Thomas H. Herrin, et al., Defendants.

189 F. Supp. 845

UNITED STATES of America, Plaintiff, v. 31.07 ACRES OF LAND, MORE OR LESS, IN the COUNTY OF LEWIS AND CLARK, STATE OF MONTANA; Treasure State Industries, Incorporated, et al., Defendants.

UNITED STATES of America, Plaintiff, v. 185.34 ACRES OF LAND, MORE OR LESS, IN the COUNTY OF LEWIS AND CLARK, STATE OF MONTANA; Thomas H. Herrin, et al., Defendants.

Nos. 804, 806.

United States District Court D. Montana, Helena Division.

November 21, 1960.

COPYRIGHT MATERIAL OMITTED

W. D. Rankin, Helena, Mont., for defendants involved in these Findings.

Krest Cyr, U. S. Atty., Butte, Mont., and John Blackwood, Asst. U. S. Atty., Billings, Mont., for plaintiff.

WILLIAM D. MURRAY, Chief Judge.

In the above entitled actions the United States condemned numerous parcels of land belonging to various different owners for use in connection with the Helena Valley Unit, Missouri River Basin Project, Montana. In each of the actions the just compensation due some of the various owners has been or will be arrived at either by agreement or trial. Involved in the present proceedings before the court is the question of just compensation due for the taking of the following parcels:

Cause No. 804:

Parcel E-3, owned by Marguerite Greenfield

Parcel E-7, owned by T. L. Greenfield, et ux.

Parcels E-3 and E-7, leased by Joseph Chovanak

Cause No. 806:

Parcels E-23 and D-16, owned by Myrlin G. Donaldson, et ux.

Parcels E-24 and D-13, owned by Harry Helberg, et ux.

Parcels E-33 and D-1, owned by Albert L. Olson, et ux.

Upon agreement of the above named owners, and the government, the issue of just compensation for the taking of these parcels was tried to the court without a jury, in a consolidated trial, and that is the only issue before the court.

The taking involved in each instance under consideration was an easement to construct, operate and maintain irrigation canals, laterals, ditches and other pertinent facilities, together with all the rights and privileges incident to the use and enjoyment thereof.

Cause No. 804—Parcels E-3 and E-7

Parcel E-3, belonging to Marguerite Greenfield and parcel E-7, belonging to T. N. Greenfield and Doris N. Greenfield, his wife, were both leased to Joseph L. Chovanak at the time of taking, on March 20, 1959, under a lease that would run through the year 1964. Mr. Chovanak filed an appearance herein and testified at the trial. His testimony was the only testimony on behalf of the owners of Parcels E-3 and E-7, as to the damage caused to the owners by reason of the taking. In addition Mr. Chovanak also testified as to the damage of his leasehold by the taking and this testimony was objected to by the government upon the ground that damage to the leasehold was not compensable. The evidence was received under a reserved ruling and now, after an examination of the authorities, the court concludes that the government's objection is without merit, and that damage to the leasehold interest is compensable. In Silberman v. U. S., 1 Cir., 131 F.2d 715, at page 717, it was stated:

"The principle that the owner of an estate or interest in property condemned is entitled to compensation is not open to dispute. Nor is it doubted that a lessee for a term of years has an interest which must be recognized upon the taking of the property covered by his lease. (Citing cases)."

See also Duckett & Co. v. U. S., 266 U.S. 149, 45 S.Ct. 38, 69 L.Ed. 216; Kohl v. U. S., 91 U.S. 367, 23 L.Ed. 449; 29 C.J.S. Eminent Domain § 198, p. 1103; 18 Am.Jur. 865, "Eminent Domain", Sec. 232.

Of course, the combined awards to the owner and the lessee may not exceed the value of the land taken, plus damage to the remaining land caused by the taking; in other words, the difference between the value of the entire tract before the taking and the value of the remainder after the taking.

Therefore, when land or a portion of land subject to a lease is taken by condemnation, the court must first determine the just compensation to be paid for the entire taking and then such compensation must be distributed between the owner of the property and the lessee as their interests may appear. Generally speaking, the market value of the leasehold is the measure of compensation for the taking of the leasehold. 1 Orgel on Valuation under Eminent Domain, 2nd Ed., Sec. 126.

In this case there was no evidence as to the market value of Mr. Chovanak's lease and the evidence is otherwise insufficient to establish the damage done to the leasehold of Mr. Chovanak or to apportion the damage done to that leasehold between the lands owned by the respective owners. Therefore, from the evidence before the court, the court can only decide the just compensation to be paid for the entire taking and either leave it to the Greenfields, as owners, and Chovanak, as lessee, to divide the compensation between them, or to take further evidence to decide that question.

Parcel E-3, Marguerite Greenfield, owner; Joseph L. Chovanak, lessee

This unit consists of approximately 366 acres of dry crop land and 206 acres of pasture land, or a total of 572 acres. The total acreage involved in the easement taken by the government is 9.24 acres upon which is constructed a lateral for the irrigation system. This 9.24 acres consists of dry crop land. As a result of the taking and the construction of the lateral, a tract of about 50 acres, lying east of the lateral, has been separated from the remainder of the unit and the operation of the entire tract as a unit has been somewhat impaired as a result of the severance of this 50 acres, which impairment would be reflected in the market value of the tract as a whole.

The court finds that on the date of taking, March 20, 1959, the fair market value for this type of dry crop land in the vicinity of the Helena Valley was $100 per acre, and the fair market value for this type of pasture land in that area was $25 per acre. The court further finds that the fair market value of parcel E-3 in its entirety, immediately before the taking, was $41,750, and that immediately after the taking the fair market value of the remainder was $40,225, and the difference, or $1,525, represents the amount of just compensation for the taking of the easement across E-3, this amount to be divided between Marguerite Greenfield, as owner, and Joseph L. Chovanak, as lessee, as they may agree, or as the court may determine upon the taking of further evidence, if necessary.

In arriving at this finding as to just compensation, the court has considered the possibility of enhancement of value of the entire unit as a result of the construction of the government irrigation project, but from the evidence of one of the government experts, has concluded that because of the soil characteristics of the land, it would not be economically feasible to convert it to irrigated land and that even after the completion of the project the highest and best use of the unit will be as it was before—dry crop land and pasture.

Parcel E-7, T. L. Greenfield and Doris N. Greenfield, owners; Joseph L. Chovanak, lessee.

This parcel before the taking consisted of approximately 77 acres, 59 acres of which were dry crop land and the remaining 18 acres were pasture land. The tract is rectangular in shape, being roughly twice as long as wide with the 18 acres of pasture lying at the west end and the crop land being in a rectangular block east of the pasture land. The acreage within the easement taken is 6.59 acres, all of which is dry crop land. The lateral constructed on the easement runs diagonally through the dry crop land, leaving a triangular tract on each side of the lateral. Because of the relatively small size of this unit to begin with, and the triangular shape of the smaller tracts remaining after construction of the lateral, the operation of the entire parcel as a unit has been seriously affected and the market value of the unit as a whole has been substantially diminished by the taking. In this instance, too, the evidence shows that because of soil characteristics there will be no enhancement in the value of the unit by virtue of the construction of the irrigation project and the highest and best use of the land continues to be as dry crop land and pasture.

Again, the court finds that the fair market value of the types of land involved here on the date of taking was $100 per acre for the dry crop land and $25 per acre for the pasture land. The court further finds that the fair market value of parcel E-7, on March 20, 1959, immediately before the taking was $6,350, and the fair market value of the remainder immediately after the taking was $4,340. The difference of $2,010 is found to be the amount of just compensation for the taking of the easement across the land, said $2,010 to be divided between T. L. and Doris N. Greenfield, owners, and Joseph L. Chovanak, lessee, as they may agree, or if necessary, as the court may decide after the taking of further evidence.

Cause No. 806—Parcels E-23 and D-16, Myrlin G. Donaldson et ux., owners; Parcels E-24 and D-13, Harry Helberg et ux., owners; Parcels E-33 and D-1, Albert L. Olson et ux., owners.

These cases present a serious question of law as to whether damage done to the landowners' remaining lands by drainage of subsurface waters by drains constructed on the portion of the lands taken is compensable, or whether it is non-compensable "consequential damage".

A substantial portion of the land in each of the above ownerships, prior to the taking, consisted of sub-irrigated land, the highest and best use of which was for hay production and pasture in livestock operations. On the easements taken across the land of each of these owners, the government, as part of the irrigation system, has dug deep drain ditches, as well as laterals and mains. These deep drains have drained all of the subsurface water from the lands, reducing the former sub-irrigated hay land and pasture to dry grazing land. While the lands are within the...