Valley Paper Co. v. Holyoke Housing Authority

• Decision Date: 10 December 1963
• Citation: Valley Paper Co. v. Holyoke Housing Authority, 346 Mass. 561, 194 N.E.2d 700 (Mass. 1963)
• Parties: VALLEY PAPER COMPANY v. HOLYOKE HOUSING AUTHORITY.
• Court: Supreme Judicial Court of Massachusetts

Page 700

194 N.E.2d 700

346 Mass. 561

VALLEY PAPER COMPANY v.HOLYOKE HOUSING AUTHORITY.

Supreme Judicial Court of Massachusetts, Hampden.

Argued Oct. 30, 1963.

Decided Dec. 10, 1963.

Emerson S. Searle, Socrates Geanacopoulos, Springfield, and Clarke S. Lyon, Holyoke, for petitioner.

Joseph F. Kelly and Myer L. Feldman, Holyoke, for respondent.

Before SPALDING, WHITTEMORE, CUTTER, KIRK and REARDON, JJ.

CUTTER, Justice.

This is a petition under G.L. c. 79 by Valley Paper Company(Valley) to recover damages for the taking by the Holyoke Housing Authority on May 27, 1958, of 46,777 square feet of vacant land (the locus).The locus lies south of the second level canal of the Holyoke Water Power Company and also south of Canal Street (sixty feet wide), which is between the canal (about 140 feet wide) and the locus.Valley (in addition to damages for land actually taken) also seeks to recover for alleged diminution in value of its land (131,767 square feet) and mills on the north side of the canal.The accompanying sketch plan, based upon an exhibit, shows these properties roughly.

The jury awarded Valley $25,000 in damages.The bill of exceptions presents Valley's exceptions to the exclusion of evidence offered by it and to the admission of evidence offered by the Authority.

1.Valley endeavored to show that the locus had been an integral part of Valley's property north and south of the canal for about ninety years.It contended that its land, at the time of the taking, was devoted to a special use and that the taking rendered the remaining land less usable for purposes of a paper mill.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

There was evidence of the following.Valley had acquired title to these properties in 1866 and 1870, together with the right upon the payment of an annual rent 'to use upon the premises * * * certain mill powers of water from the canal * * * [and] the right to take water from the canal for use in the manufacture of paper.'Valley had operated a paper mill on its land (parcel 1) north of the canal from the time that it acquired title.At the time of the taking all available space on parcel 1 'was fully utilized.'The last two buildings on parcel 1 were erected in 1956.The locus, for many years, had been occupied by houses for Valley's employees.These were later torn down and for some years prior to the taking the locus had been vacant.Part of Valley's land south of the canal was sold in 1945.Valley by deed had acquired the right to construct a bridge across the canal from parcel 1 to the locus, but had never built such a bridge.At the time of the taking, Valley claimed to hold the locus 'for future expansion of the paper mill.'

Valley called as a witness one Tucker, who had gained forty years' experience in the paper business and had been vice-president in charge of manufacturing of two paper companies in Holyoke.The trial judge ruled that he'was not qualified to testify as to value based on fair market value,' but that the witness could 'testify as to the probable uses the land had.'The judge later 'ruled that the witness was qualified to give testimony regarding reproduction costs.'The witness then gave extensive testimony about Valley's plant.He stated that the best use of parcel 1 was for a paper mill and that, in his opinion, the reproduction cost of the buildings, less various types of depreciation and obsolescence, was $1,752,240.He was then asked by Valley's counsel whether the taking affected the future use of the mill property, that is, the actual '[u]se that could be made of it on the twenty-eighth day of May after the taking.'The judge sustained an objection to the question.A long and inconclusive discussion of the applicable authorities then took place.The objection was again sustained after the judge had said, '* * * [A]ssuming it is a question for expert opinion * * * still it is by use that could be made of it after the twenty-eighth day of May, that's future use, isn't it?'

Valley's counsel then offered to prove 'that the land taken * * * was of special value to * * * Valley * * * because it was the only land on which this company could expand.The land taken * * * could most valuably be used in conjunction with the operation of the company for a finishing mill, for warehousing facilities, and trucking facilities.By the use of the right to erect a bridge, contained in the original deed * * * the two properties could be connected and operated together.* * * He would further testify that * * * there are a number of plants in this area so connected by bridges * * * [and] the witness is prepared to testify to the cost of such a bridge * * *.'It was also stated that the witness would testify to the value of the property before and after the taking, resulting in damage of $262,000.¹

The exception to the exclusion of Tucker's testimony presents the question whether the locus was so separated from parcel 1 as to permit damages for the taking to be assessed without reference to its effect upon parcel 1, or whether Valley sufficiently held both parcels as a unit so that damages could include compensation for any injury to parcel 1.Whether in such a situation, land in various parcels, contiguous or close together, is to be treated as a unit is essentially 'a practical one.'SeeLincoln v. Commonwealth, 164 Mass. 368, 379-380, 41 N.E. 489.Where there is room for doubt, an issue of fact may be presented.SeeNichols, Eminent Domain(3d ed.) §§ 14.3, 14.31.It is not conclusive that parcels are physically somewhat separated, if used together or if reasonably to be regarded as 'held as a unit for a single purpose.'SeeTrustees of Boston Univ. v. Commonwealth, 286 Mass. 57, 62-64, 190 N.E. 29, 31.See alsoMaynard v. Northampton, 157 Mass. 218, 219, 31 N.E. 1062.Cf.Providence & Worcester R. R. v. Worcester, 155 Mass. 35, 40, 29 N.E. 56;Wellington v. Boston & Maine R. R., 164 Mass. 380, 381-382, 41 N.E. 652.

Doubtless, the usual situation is that noncontiguous parcels are to be treated as separate for eminent domain purposes.Nevertheless, joint use or potentiality of joint use of two or more noncontiguous parcels may so substantially affect the market value of the remaining parcels, when one of them is taken, that it becomes appropriate, in assessing damages, to treat the separate parcels as in effect a unit.

A person whose land is taken is entitled to its market value, which 'may reflect not only the use to which the property is presently devoted but also that use to which it may be readily converted.* * * [t]he value may be determined in light of the special or higher use of the land when combined with other parcels; it need not be measured merely by the use to which the land is or can be put as a separate tract.* * * But in order for that special adaptability to be considered, there must be a reasonable probability of the lands * * * being combined with other tracts for that purpose in the reasonably near future.'SeeUnited States v. Powelson, 319 U.S. 266, 275-276, 63 S.Ct. 1047, 1053, 87 L.Ed. 1390;Baetjer v. United States, 143 F.2d 391, 394-395(1st Cir.), cert. den. sub nom.United States v. Baetjer, 323 U.S. 772, 65 S.Ct. 131, 89 L.Ed. 618(S. C. sub nom. United States v. 7936.6 Acres of Land, 69 F.Supp. 328[D.C.P.R.]).

The Baetjer opinion states that the decision whether to treat tracts as 'single' or 'separate' does not 'wholly depend upon whether holdings are physically contiguous.Contiguous tracts may be 'separate' ones if used separately * * * and tracts physically separated * * * may constitute a 'single' tract if put to an integrated unitary use or even if the possibility of their being so combined in use 'in the reasonably near future' * * * 'is reasonably sufficient to affect market value'' (emphasis supplied).²

One useful attribute of a parcel of land may be that it affords capacity for expansion of a business operation.This is recognized by Producers' Wood Preserving Co. v. Commissioners of Sewerage, 227 Ky. 159, 165-169, 12 S.W.2d 292, and by St. Louis v. Paramount Shoe Mfg. Co., 237 Mo.App. 200, 214-215, 218, 221, 168 S.W.2d 149.In a sense property reasonably held for the expansion of a business is used in that business.Such a view seems consistent with the few relevant intimations in the Massachusetts cases.See the Maynard case, 157 Mass. 218, 219, 31 N.E. 1062; the Trustees of Boston Univ. case, 286 Mass. 57, 64, 190 N.E. 29.

We conclude that, where there is substantial basis for finding that a noncontiguous parcel taken by eminent domain (a) is being held for the expansion of a business operation conducted upon the owner's remaining land, (b) is fairly adaptable to that use, (c) is likely so to be used prior to a time not so remote as to be speculative, and (d) its taking adversely affects the market value of the remaining land, the trier of the facts may treat the parcel, for the assessment of damages, as part of the property where the business is conducted.In the present case, of course, parcel 1 and the locus can perhaps be regarded as contiguous, because of the opportunity to construct a bridge across...