United States v. 599.86 ACRES OF LAND, ETC.

• Decision Date: 23 April 1965
• Docket Number: No. 1658,1687.,1658
• Citation: 240 F. Supp. 563
• Parties: UNITED STATES of America, Plaintiff, v. 599.86 ACRES OF LAND, MORE OR LESS, IN JOHNSON AND LOGAN COUNTIES, ARKANSAS, and John L. Zimpel, et al., and Unknown Owners, Defendants. UNITED STATES of America, Plaintiff, v. 118.57 ACRES OF LAND, MORE OR LESS, IN JOHNSON COUNTY, ARKANSAS, and Ruth Blackburn White, et al., and Unknown Owners, Defendants.
• Court: U.S. District Court — Western District of Arkansas

240 F. Supp. 563

UNITED STATES of America, Plaintiff, v. 599.86 ACRES OF LAND, MORE OR LESS, IN JOHNSON AND LOGAN COUNTIES, ARKANSAS, and John L. Zimpel, et al., and Unknown Owners, Defendants.

UNITED STATES of America, Plaintiff, v. 118.57 ACRES OF LAND, MORE OR LESS, IN JOHNSON COUNTY, ARKANSAS, and Ruth Blackburn White, et al., and Unknown Owners, Defendants.

Nos. 1658, 1687.

United States District Court W. D. Arkansas, Fort Smith Division.

April 23, 1965.

Charles M. Conway, U. S. Atty., Fort Smith, Ark., Max E. Findley, Special Asst. to U. S. Atty., for plaintiff.

Sexton & Robinson, Fort Smith, Ark., for defendants.

JOHN E. MILLER, Chief Judge.

Civil No. 1658

Clarence E. Mills and wife, Minnie Mills, were the owners of 133.33 acres of land located approximately three miles southwest of Clarksville, Arkansas, and being in the Southwest Quarter and the Southwest Quarter of the Northeast Quarter of Section 14, Township 9 North, Range 24 West. By declaration of taking filed June 18, 1962, the Government acquired a fee simple estate with the minerals reserved and subordinated to Tract 1911 consisting of 81.14 acres, and a perpetual flowage easement with minerals reserved and subordinated on Tract 1911E-1 containing 7.5 acres, and Tract 1911E-2 containing 3.5 acres, making a total of 81.14 acres acquired in fee simple and a perpetual flowage easement on 11.0 acres, leaving a remainder of 41.19 acres.

Civil No. 1687

The Ozark Real Estate Company owned, among other lands, a part of the West Half of the Southeast Quarter of Section 16, Township 9 North, Range 23 West, in Johnson County, Arkansas, containing 49 acres. By declaration of taking filed November 9, 1962, the Government acquired the fee simple estate with the minerals reserved and subordinated to Tract 1626 containing 17.69 acres, and a perpetual flowage easement with minerals reserved and subordinated on Tract 1626E containing 3.50 acres, leaving a remainder of 27.81 acres, which includes 4.81 acres, being a 150-foot right of way of the Missouri Pacific Railroad Company across the ownership.

On October 3, 1963, a pretrial conference was held in the County Court House at Clarksville, Arkansas, the landowners being represented by their attorneys and the Government appearing by a Special Assistant to the United States Attorney. The tracts under consideration in each case were consolidated for trial, and the hearing to determine just compensation was held on October 9, 10, and 11, 1963, the parties being represented as above.

The Commission filed its report on October 21, 1963. On November 1 the landowners filed exceptions to the report of the Commission, and on December 2 filed "Further Objections to the Report of Commissioners." On December 6 the Government filed its response to the landowners' objections and to their "Further Objections." The parties obtained a transcript of the testimony and proceedings before the Commission, and all parties have submitted briefs in support of their contentions as evidenced by the exceptions and further exceptions of the landowners and the response thereto of the Government.

The Commission in its report stated that the landowners contended as to each of the tracts, "that although the minerals are reserved to the landowner by the Declaration of Taking they are subordinated to the Government's right to flood the surface, and as a consequence of the flooding the value of the coal as a mineral has been or will be destroyed. The Government takes issue with this position, and subsidiary issues arise in that it has to be determined by the Commission whether the taking by the Government destroys or damages the mineral estate, and secondly, a determination of the damages in that respect. In this instance, the fee simple title is vested in the respective owners, and there is no problem of apportionment."

In the "Further Objections to the Report of Commissioners" the landowners made three specifications of error: (1) the conclusions of the Commissioners are contrary to the clear weight of evidence, (2) the Commission failed to correctly apply controlling law, and (3) the report of the Commissioners is not sufficient to afford a basis for review.

In the response of the Government to the landowners' "Further Objections," and particularly to objections 1 and 2, the Government in paragraph 1-A set forth 18 alleged facts in answer to contentions 1 and 2 of the landowners. (It would unduly extend the opinion to set forth verbatim all of the reasons so alleged by the Government.) Objections 1 and 2 should be considered together and prior to the consideration by the court of objection 3 to the effect that the report of the Commissioners is not sufficient to afford a basis for review.

While all tracts herein were consolidated for the hearing, the Commission discussed and made separate findings of fact and conclusions of law. Thus it seems that the court in reviewing the report of the Commission should consider, as far as practicable, each case and the tracts contained therein separately, but since the hearings were consolidated, some of the evidence is applicable to all the tracts.

Tracts 1911, 1911E-1, 1911E-2

These tracts have approximately 80 acres of open and pasture land. The highest and best surface use is for a small livestock operation of the subsistence type. Government Exhibit 3 is a photograph of the surface improvements, none of which were taken. The exhibit contains five photographs: (1) dwelling, (2) small house and storage, (4) barn with open shed; (5) hen house; (7) old dwelling. The improvements are in exceptionally poor condition.

Mr. Mills, the landowner, valued the entire ownership of 133.33 acres at $80,000 as of the date of the taking, and the remainder at $10,000, or a difference of $70,000.

As to the value of the surface, the witnesses for the Government testified that the value of the entire ownership prior to the taking was $7,500 and after the taking was $2,950, a difference of $4,550. According to O. B. Yaeger, a hydrologist for the Corps of Engineers, the lowest point on the tract would be approximately 335 feet above mean sea level in the bed of a creek that traverses the property; that otherwise, the property would be above the 338 foot level which would be the normal pool power level of the Dardanelle Lake; that the frequency of flooding at the 349 foot level would occur on an average of once in five years; that it would flood to the 354 foot level, the upper line of the easements taken, on an average of once in 50 years.

T. A. Raley, an appraiser, whose qualifications are not questioned, checked sales of coal interests with either the seller or the buyer. The sales were of lands where the entire fee was sold, including the coal, and where coal alone was the subject of the conveyance; that as to the market value determined from the sales so checked and compared, the minerals have a value of $5.00 to $25.00 per acre. Government Exhibit 4 shows the thickness of the coal on two of these sales so investigated to be 20 inches and on other sales it would appear that the land involved was low or close to the river or formerly islands in the river.

The real question involved in these tracts, as well as the two tracts in Civil 1687, is the enhancement, if any, of the market value by reason of the tracts being underlaid with coal.

The landowner, Mr. Mills, is a miner and has been for several years. His land is underlaid with coal approximately 38 inches thick with a middle band, but no mining of any kind has occurred during the last 40 years.

The Commission had before it the landowners' Exhibit No. 1 showing the coal contours in the vicinity of the tracts included in both cases. The exhibit shows a platting of Big Danger Fault running generally east and west, and refers to other faults in the structure of land in the area.

Mr. B. E. Cobb, basing his testimony upon the testimony of another witness, Mr. Edward F. Woodson, adduced by the landowner, fixed the value of the coal in place in his opinion at $65,250, by multiplying the estimated number of tons by a royalty value of 25 cents per ton.

Mr. Edward F. Woodson, a civil engineer, estimated the amount of coal under the tracts now under consideration to be 397,290 tons; that after the construction of the Dardanelle Reservoir it would not be economically practicable to recover the coal. This witness used an unusual rule in figuring the amount of the coal. He designated it as the "old Scotch rule," which he explained at page 65 of the transcript as being a rule which considers 150 tons per acre per inch regardless of the thickness of the overburden.

Mr. Sterling Hurley is President of the Ozark Realty Company which owns Tracts 1626 and 1626E in Civil No. 1687, and 6,000 or 7,000 acres of other land in Johnson County but none of which is adjacent to the tracts involved herein. The lands now owned by Ozark Realty Company were formerly owned by two Ohio corporations. In 1958 Hurley acquired the controlling interest and subsequently organized the Ozark Realty Company. The capital stock cost him $300,000 to $400,000, or $50 to $60 per acre. The assets of the corporation are primarily the 6,000 or 7,000 acres of land. The income of the corporation is derived from coal royalties, etc.

On Tract 1911 there is an abandoned mine once operated by the Eureka Anthracite Coal Company and abandoned sometime before 1920. Mining operations have been conducted in the general area since the Civil War, and there are literally thousands of acres of coal in the general area. One witness testified that there is approximately 96 million tons of unmined coal. The depth of the coal below the surface of the earth vitally affects the market value of the coal lands, whether it is to be a stripping operation or shaft operation. Most of the mining operations have been north of Big Danger Fault, and the tracts in both cases are situated north of said fault.

The Harding...