United States v. Smith, 22320.

• Decision Date: 11 April 1966
• Docket Number: No. 22320.,22320.
• Parties: UNITED STATES of America, Appellant, v. Percy SMITH and Ella Smith et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

355 F.2d 807 (1966)

UNITED STATES of America, Appellant, v. Percy SMITH and Ella Smith et al., Appellees.

No. 22320.

United States Court of Appeals Fifth Circuit.

February 1, 1966.

Rehearing Denied April 11, 1966.

Vernol R. Jansen, Jr., U. S. Atty., Mobile, Ala., J. Edward Williams, Acting Asst. Atty. Gen., Roger P. Marquis, Elizabeth Dudley, Attys., Dept. of Justice, Washington, D. C., Edwin L. Weisl, Jr., Asst. Atty. Gen., Washington, D. C., for appellant.

W. DeWitt Reams, B. H. Roberts, Mobile, Ala., John L. Godbold, Camden, Ala., Pillans, Reams, Tappan, Wood & Roberts, Mobile, Ala., of counsel, for Fred Henderson and Sarah E. Henderson, appellees.

Before MARIS,^* RIVES and BELL, Circuit Judges.

MARIS, Circuit Judge.

This is an appeal by the United States from a judgment entered by the District Court for the Southern District of Alabama in a suit brought by the Government to condemn certain lands in Wilcox County, Alabama, in connection with the establishment of the Millers Ferry Lock and Dam on the Alabama River and for the ascertainment of just compensation for the taking. We are here concerned only with a tract of 92.60 acres, designated as tract 104, for which the sum of $12,500 was deposited in court as estimated compensation. The issue of just compensation was tried to a jury which returned a verdict in the amount of $25,000 upon which judgment was entered. The Government filed motions for a new trial, or, in the alternative, for the remittitur of $9,500, which would have reduced the award to $15,500. Both motions were denied. This appeal followed.

Tract 104, containing 92.60 acres, was taken in March 1963 from a tract of 265 acres owned by Fred and Sarah E. Henderson. The Hendersons' property is well located along a paved state highway leading into Camden and is about one and one-half miles from the Millers Ferry community. The testimony indicates that its topography and soil are good and that its best use is for agricultural purposes, consisting of pasturing cattle and growing cotton and corn, and as timberland. Structures valued at $950 are located on the Hendersons' remaining land. Tract 104 is bottom land, which has been used only for pasture, and it borders on the left bank of the Alabama River. It grew several varieties of grass, was kept mowed, was stone-free, and contained about 17 acres of woodland.

As compensation for the taking of this tract of land the Hendersons are entitled to receive by way of damages from the Government the fair market value of the land taken, as of the time of taking. United States v. Miller, 1943, 317 U.S. 369, 374, 63 S.Ct. 276, 87 L.Ed. 336; Bowie Lumber Co. v. United States, 5 Cir. 1946, 155 F.2d 225, 229. In addition, they are entitled to be compensated for any damage to their remaining land which has resulted from the severance from it of the land taken. United States v. Miller, 1943, 317 U.S. 369, 376, 63 S.Ct. 276, 87 L.Ed. 336; International Paper Company v. United States, 5 Cir. 1955, 227 F.2d 201, 205; Stephenson Brick Co. v. United States, 5 Cir. 1940, 110 F.2d 360. The burden of proving both elements of damage was upon the Hendersons as owners of the land taken. United States ex rel. T. V. A. v. Powelson, 1943, 319 U.S. 266, 273, 63 S.Ct. 1047, 87 L.Ed. 1390; United States v. Certain Parcels of Land, etc., 5 Cir. 1945, 149 F.2d 81, 82.

The fair market value of property taken to which its owners are entitled is what a willing buyer of the property would pay in cash to a willing seller of it. United States v. Miller, 1943, 317 U.S. 369, 374, 63 S.Ct. 276. In determining such market value consideration is to be given to all the facts and circumstances that would reasonably go into the making of a bargain of purchase and sale between a willing buyer under no obligation to buy and a willing seller under no obligation to sell. United States v. Leavell & Ponder, Inc., 5 Cir. 1961, 286 F.2d 398, 401, cert. den. 366 U.S. 944, 81 S.Ct. 1674, 6 L.Ed.2d 855. Market value is not, of course, a quality which inheres in the property itself, but is rather a reflection of the state of mind of the public with respect to the property. That state of mind may be established by the testimony of expert witnesses who are qualified by their special knowledge, investigations and study to give an opinion as to what they believe it to be, or by evidence of transactions reasonably close in time involving other comparable property from which the market value of the property in question may be directly deduced by the fact finder himself. 5 Nichols, Eminent Domain, 3d ed., § 21.1. Evidence of such comparable transactions may also be received from expert witnesses in support of their opinions as to the value of the property involved in the litigation. Orgel, Valuation Under Eminent Domain, Vol. 1, 2d ed., § 137. In United States v. Johnson, 1960, 285 F.2d 35, 40, the Court of Appeals for the Ninth Circuit said:

"In the determination of the fair market value of property taken in a condemnation case, evidence of the price for which similar property has been sold in the vicinity may be admissible upon two separate theories and for two distinct purposes. First, such evidence may be admissible as substantive proof of the value of the condemned property, or secondly it may be admissible, not as direct evidence of the value of the property under consideration, but in support of, and as background for, the opinion testified to by an expert as to the value of the property taken.

`The rule is well settled in most jurisdictions that ordinarily "the value of lands, or interests in realty, at a particular time, may be proved by evidence of voluntary sales of similar property in the vicinity made at or about the same time." * * * And although there is some conflict in the decisions, we think the better rule is that where the opinion of an expert witness is based in part on such sales, he should be permitted to give the details of the sales upon which he bases the opinion, although the facts so stated do not become independent evidence. * * *' United States v. 5139.5 Acres of Land, etc., 4 Cir., 200 F.2d 659, 662."

See, also, United States v. Featherston, 10 Cir. 1963, 325 F.2d 539, 542-543.

In the present case the testimony as to market value of three expert real estate appraisers was presented at the trial, which was held in July 1964, about 16 months after the taking. Two of them, Phillips and Breen, were offered by the Government and the third, Williamson, by the Hendersons. In addition, the Hendersons offered the testimony as to market value of Strother, a cattle rancher who had purchased land in Wilcox County, and of Fred Henderson himself.

The testimony of Phillips and Breen, the two Government expert appraiser witnesses, fixed the market value of tract 104 and the timber thereon at $11,500 and $13,466, respectively, and the total damage to the Hendersons resulting from the taking, including severance damage, at $12,500 and $15,500, respectively. Williamson, the expert appraiser witness called by the Hendersons, testified that the market value of tract 104 and the timber thereon was $22,000 and that their total damage, including severance damage, was $26,150. Strother, the cattle rancher, testified that the market value of tract 104 was $250 per acre. This would aggregate $23,150 for the whole tract. He was not permitted by the district court to testify as to severance damage. Henderson himself testified that he would not put any price on tract 104 and that if he had to sell it he would not do so for less than $300 per acre. This would be $27,780 for the whole tract. It will thus be seen that the verdict of $25,000 finds it sole support in the testimony of Williamson, Strother and Henderson. In fact its support must be found in Williamson's testimony alone since, as will be shown later, Strother's testimony was not competent on this issue, while Henderson's testimony was equally lacking in probative value since it was limited to what his own asking price for the tract would be as an unwilling seller. United States v. Miller, 1943, 317 U.S. 369, 374, 63 S.Ct. 276. We must, therefore, consider Williamson's testimony, which the Government argues was equally lacking in probative value.

Williamson testified that the market value of tract 104 was $225 per acre. This would amount to $20,835 for the whole tract. He also testified that the timber on the tract was worth about $1,175 and that the Hendersons' severance damage was an additional $4,150 making a total of $26,150¹ damages suffered by them from the taking. Williamson testified that his valuation of tract 104 was based on ten transactions relating to land in Wilcox County which he regarded as comparable, three sales prior to the taking, four sales subsequent to the taking, and three options to purchase land which were given after the taking. The three prior sales included one in February 1958 at $65 per acre, one in June 1961 at $100 per acre and one in November 1961 at $130 per acre. However, Williamson stated that he placed no reliance on the February 1958 sale because the seller retained so many reserved rights. The four subsequent sales included one in June 1963 at $178.57 per acre, one in July 1963 at $100 per acre, one in August 1963 to Auburn University which the district court excluded since the land might have been acquired by the University by eminent domain, and one in December 1963 at $87 per acre. The three options were given to Pine Hill Associates for contiguous tracts, one on September 30, 1963 and two on October 1, 1963 at $250 per acre each. A consideration was paid for each option.

The Government objected at the trial to the testimony with respect to the three options and urges on this appeal that it was error to admit evidence as to them. Its contention is that as options they represent only what a willing seller would take for his land but not, unless and until exercised by the holder of the option,...