United States v. Land in Dry Bed of Rosamond Lake, Cal., 16661-C

Citation143 F. Supp. 314
Decision Date23 July 1956
Docket Number16877-C,17371-C,No. 16661-C,17598-C.,16661-C
CourtUnited States District Courts. 9th Circuit. United States District Court (Southern District of California)
PartiesUNITED STATES of America, Plaintiff, v. LAND IN DRY BED OF ROSAMOND LAKE, CAL., et al., Defendants.

Laughlin Waters, U. S. Atty., A. R. Early, Jr., Asst. U. S. Atty., Los Angeles, Cal., for plaintiff.

Irl D. Brett, Los Angeles, Cal., Frank Wickhem, Los Angeles, Cal., Earl E. Howard, Hollywood, Cal., Brott & Feldan, Los Angeles, Cal., Roger M. Sullivan, Los Angeles, Cal., for various defendants.

JAMES M. CARTER, District Judge.

This action concerns parcels of land lying in the dry bed of Rosamond Lake, California, taken by the government through eminent domain. The ultimate issue is the fair market value of the land as of the date of taking.

In pretrial proceedings, the court required the government and the defendant landowners to state what they would contend at the trial, would be the highest and best use or uses to which the land was reasonably suited or adapted; and required there be submitted en camera to the court for inspection, the value which the respective experts would place on the land. The pretrial stipulation shows that the government's witnesses will testify that the highest and best use of the tracts are for desert homesites; that defendant landowners' witnesses will testify that the highest and best use is for mining sites for the production of rotary clay used in oil drilling.

The en camera valuations submitted privately to the court show a vast discrepancy in the values to be placed on the land by the government's experts, and by the defendants' experts.

Thus, as shown in the pretrial stipulation, the issue arises as to whether these lands have a fair market value based on the existence of rotary drilling clay. The government experts propose to testify that although there is clay present, it is entirely unsuitable for use in oil drilling because of an excess of sand and salts, and that there is no market for such clay. Conversely, the defendant landowners' experts propose to show that there is in place a vast amount of clay, that although it contains an excess of sand and salt, this sand and salt can be removed by a modern engineering process, and that there would be a market for the resulting beneficiated clay.

The question now arises on trial, as to what testimony the experts for the landowners may give.

(a) Quantity and Quality of rock, mineral or timber in place and the per ton or unit value thereof cannot be multiplied out to give market value; nor may it be valued separate from the land.

"* * * The separate valuation of timber or rock attached to land, or valuations arrived at by a process of multiplying the number of cubic feet or yards by a given price per unit, are not approved bases for evaluation. United States ex rel. Tennessee Valley Authority v. Indian Creek Marble Co. D.C., 40 F.Supp. 811. * * *" United States v. 13.40 Acres, D.C.Cal.1944, 56 F.Supp. 535, at page 538. From the facts of that case, the experts for the landowner did exactly the thing shown in the quote, namely multiplied the yards by a given price and arrived at a valuation. The court properly granted a motion for a new trial.

In Cementerio Buxeda, Inc., v. People of Puerto Rico, 1 Cir., 1952, 196 F.2d 177, 180, certiorari denied 344 U.S. 876, 73 S.Ct. 170, 97 L.Ed. 678, the judgment of the Supreme Court of Puerto Rico was vacated and the case remanded with directions to the court of Eminent Domain of Puerto Rico. The case involved the taking of a portion of a cemetery which had not yet been used for burials.

"* * * By its various rulings the Court of Eminent Domain excluded evidence of sales of separate burial sites, not only in other cemeteries but also in this particular cemetery. By these rulings the defendant was prevented from showing two very important factors which should have been considered in arriving at a valuation. We have no doubt that the court would have been correct had it rejected the evidence as to the value of the individual burial sites if it had been introduced solely to indicate loss of business profits. For that purpose the evidence is irrelevant, Mitchell v. United States, 1925, 267 U.S. 341, 45 S.Ct. 293, 69 L.Ed. 644. * * * It is quite another thing to exclude such evidence where it seeks to establish `what a willing buyer would pay in cash to a willing seller.' See United States v. Miller, 317 U.S. 369, 374, 63 S.Ct. 276, 87 L.Ed. 336; Baetjer v. United States, supra 1 Cir., 143 F.2d 391. In the latter situation the inquiry would properly encompass an investigation of the facts as to the capacity of the parcel for burials, its location, past sales in this and other similar cemeteries, the reasonableness of the prices charged for individual burial sites, and in general its future prospects as they would appear to `a willing buyer'. The rejection of this evidence was, therefore, error. * * *" Emphasis supplied.

The court added:

"* * * This is not to say that valuing the parcel is merely a problem in multiplication. Rather, such figures as sales and cost of interment, among others, are factors which would be considered by a prospective buyer and would help to form a basis for valuing the tract before and after the condemnation. As to lot sales being used as an indicia of value, see United States v. Iriarte, 1 Cir., 166 F.2d 800, 804, certiorari denied Iriarte v. United States, 335 U.S. 816, 69 S.Ct. 36, 93 L.Ed. 371, and the caution contained therein. * * *"

In National Brick Co. v. United States, 1942, 76 U.S.App.D.C. 329, 131 F.2d 30, the land in question contained a sand bank containing 300,000 cubic yards of pure sand. The court prevented the landowners' expert from giving testimony concerning the value per ton of the sand from the bank, as to whether he had bought sand of the same quality and what he had paid for it, and as to the value of the land with the sand. The court limited the testimony to the fair market value of the property for land as real estate. The judgment was reversed and remanded for a new trial. The circuit court said, 131 F.2d at page 31:

"* * * And we know of no other evidence by which the jury could be properly guided in determining the value of the property than to be told the per ton value of the sand as it lay, or, without this knowledge, how the jury could ever have reached a judgment based on anything more than guess or speculation. * * *"

The court in its concluding paragraph, said, 131 F.2d at page 32:

"* * * We think the inquiry should have been whether the property was valuable in the open market for the sale of sand or for the use of sand in the making of bricks; and that in order to reach a fair conclusion in this respect the jury should have been informed by competent witnesses as to the quantity of the sand, the quality of the sand, the uses to which it might be put, whether there was a market for it, and the value of the land with the sand in that market in its then condition. * * *"

This final statement we think to be a correct statement of law and the resulting decision correct. We cannot agree with the earlier portion of the opinion if it purports to say that the fair market value of the sand in place could be presented to the jury, separate and apart from the valuation of the land itself.

It is something totally different to permit an expert to inform a jury, that one factor considered was the amount of sand in place and its price per ton. This is the presentation of a factor which might well have been considered in the market place, and is not independent evidence of the fair market value of the sand.

In Clark v. United States, 8 Cir., 1946, 155 F.2d 157, 160, a parcel of property which had been improved as a recreational area for the employees of the owner, was taken. It contained a lake, peninsula for parking cars, beaches, a dam, wooded areas and a tract of white oaks. Much of its value lay in the improvements. The court quoted United States v. Miller, supra, to the effect that "`where, for any reason, property has no market value, resort must be had to other data to ascertain its value.'" The trial court had refused to permit the jury to be informed as to the separate value of buildings and structures upon the land. It was held, at page 161, that this was an abuse of discretion. The court quoted with approval from National Brick Co. v. United States, supra.

In Cade v. United States, 4 Cir., 1954, 213 F.2d 138, 141, the court found error in the exclusion of testimony of experts who testified there was a deposit of granite rock on the ground which was reasonably worth $25,000. The court said: "* * * There was no reason why their testimony as to the value of the deposit of rock should not have been admitted for consideration by the jury in estimating the value of the land taken. * * *" The court also cited with approval National Brick Co. v. United States, supra.

The fourth circuit had earlier permitted the separate value of timber to be stated, apart from the value of the land, including the timber thereon, United States v. 5139.5 Acres, etc., 4 Cir., 1952, 200 F.2d 659, 661.

We think the better rule is stated by the fifth, sixth and seventh circuits. Georgia Kaolin Co. v. United States, 5 Cir., 1954, 214 F.2d 284, at page 286, states:

"In eminent domain proceedings, the existence of valuable mineral deposits in the condemned land constitutes an element which may be taken into consideration if and in so far as it influences the market value of the land. The reason for this rule is said to be that the measure of compensation in such cases is the market value of the land to be condemned, taken as a whole and with due consideration of all the components that tend to make its market value. This rule has been applied to limestone deposits, gold ore, fire clay, coal, stone, and sand and gravel, 156 A.L.R. 1416-1417; but there can be no recovery for both the value of the land and its

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