Opinion
Rehearing Denied July 7, 1970.
Opinion on pages 527 to 541 omitted
HEARING GRANTED
For Opinion an Hearing see 93 Cal.Rptr. 859, 483 P.2d 27.
Robert N. Tait, Dist. Atty., Norman Sherr, Deputy Dist. Atty., and Thomas M. Dankert, Special Counsel, Los Angeles, for plaintiff and appellant.
Charles E. Ogle, Morro Bay, for defendants and respondents.
WOOD, Presiding Justice.
In this eminent domain proceeding, plaintiff County of San Luis Obispo seeks [87 Cal.Rptr. 803] to acquire, for uses in connection with the Lopez Dam project, 160.475 acres of unimproved property owned by defendants at the southern boundary of the dam project. The jury found that the fair market value of the property on February 27, 1967, was $48,142.50. Plaintiff County appeals from the judgment.
Plaintiff's motion to dismiss defendants' cross-appeal (on ground the appeal was not timely) was granted heretofore in another division of the court.
Appellant contends that the court erred in receiving evidence of sales of property which was from thirty to fifty miles from the condemned property, and erred in receiving evidence of sales of property which had been enhanced in value by the dam project. Appellant also contends that the court erred prejudicially in delaying a ruling with reference to the existence of an easement to the condemned property.
The condemned property is near Arroyo Grande Creek in the coastal mountain range, northeast of the city of Arroyo Grande, in San Luis Obispo County. The property is 'L shaped,' and the long or upper part of the 'L' extends northerly and southerly. A portion of the property extends across the Arroyo Grande Valley to the creek; and there is access to the property from the Arroyo Grande Creek Road, which intersects the northern portion of the property. The southern portion of the property (base of 'L' shape) includes a little valley where there is a good spring which has water the 'year around.' The Arroyo Grande Creek also runs the 'year around.' The north-central portion of the property and the southern portion of the property (base of 'l') are 'quite mountainous.'
A preliminary appraisal of land for the dam project was made in 1962, and in August 1964 application for funds was filed with the state (Wat.Code, § 12880 et seq.). In connection with the grant of such funds, the county committed itself to install recreational facilities and to utilize the reservoir as a lake for boating, camping, and other recreational purposes. At an election on September 28, 1965, bonds for the project were approved. During several months preceding the bond election, there was publicity concerning the project.
The reporter's transcript incorrectly states that the bond election was on September 28, 1966.
Property known as the Wood Ranch, which adjoined the condemned property, was partly within the proposed dam project. In 1965, prior to the condemnation action, approximately 400 acres of that ranch were sold to Robert Otis, who subdivided the property. A sale of a 40-acre parcel of the subdivided ranch, which was known as the Cossa sale, was referred to in defendants' evidence as a sale of property which was comparable to the condemned property. Appellant County asserts that evidence as to that sale should not have been received because the sale was 'project enhanced.' With respect to the sale of the Wood Ranch, the County refers to the listing of the ranch for sale with a broker, Mr. Lovett, who obtained a map showing the location of the dam project in relation to the Wood Ranch and who showed the map to prospective purchasers. After the sale of the ranch to Otis and after the subdividing thereof, Otis asked Lovett (broker) whether he would be interested in reselling parcels of the ranch as shown on the subdivision map. Lovett declined to accept the agency offer by reason of his having received legal advice that such resales would violate subdivision law.
Lovett testified that, as broker, he sold the Wood Ranch to Otis as a principal. The conveyance was to three persons who apparently were associated with Otis. There was evidence that the real estate commissioner ordered Otis and the other persons to cease and desist from further activity with respect to the subdivision; and there was evidence that they were prosecuted criminally.
A real estate appraiser (Dr. Vrooman), called as a witness by defendants, testified in part as follows: The Bailey (condemned) property is L-shaped, is traversed [87 Cal.Rptr. 804] by the Arroyo Grande Creek Road, and extends to the creek. It has access to the water of the creek, which 'runs year around.' The property also includes a very good spring which has water 'year around.' There are very few 'year round running' creeks in the county. There is reasonable access to the mountainous portions of the property. Most of the property is 'wooded.' The highest and best use of the property (before dam project) was for recreational purposes. There were limited amounts of such property available on the market in the area because most of such property is held in government forest preserves or in 'large holdings' by cattle ranches. In his opinion, the Bailey property was worth $450 an acre on February 27, 1967 (valuation date). A main factor, upon which he based his opinion, was the scarcity of such recreational land in the area by reason of the large holdings by the government and the cattle ranchers. Another factor was the highly desirable climate and scenic beauty of the mountain range in which the property is located--it is in a narrow mountain range, and the ranges to the east and west have less desirable climate and topography for recreational purposes.
He also testified that he had made a study of the trend of sales of recreational property in the county (he described sales of various properties in 1964 and 1965), and he concluded from the trend that there was limited recreational land available for sale, and that there was a rapidly rising market for recreation lands in the county.
He further testified relative to sales of seven properties which in his opinion were comparable to the condemned (Bailey) property. Four of those properties, which were in Old Creek, were from thirty to fifty miles from the Bailey property. He testified that he looked for sales in the same mountain range in which the Bailey property was located, and for property which had topography, access to creeks, road access, and other features similar to the Bailey property; and the property in the Old Creek area was very similar to the Bailey property in those respects. There had been four sales of property in the Old Creek area in 1964 and 1965. The acreage sold varied from 40 acres to 158 acres, and the sale prices varied from $200 an acre to $300 an acre. The three other comparable properties were in the area of the Lopez Dam project. With reference to two of those sales, the district attorney stated that he had no objection inasmuch as plaintiff intended to (and did) present evidence of those sales. Each of those two properties consisted of 40 acres, and the sale prices were $200 an acre and $287 an acre. The other such sale was the Cossa sale. It was a sale of 40 acres for $700 an acre on September 8, 1965 (escrow was opened on September 9, 1965).
He testified that the sale price of one of the properties (to Quest) in Old Creek was $300 an acre. In another part of the testimony he said that the price was $380 an acre.
The escrow closed in November 1965. It appears that closing of the escrow was delayed by reason of difficulties in surveying the property.
Vrooman also testified in substance that the 40 acres in the Cossa sale were part of the Wood Ranch which had been purchased by the Otis group; the Otis group had split the Wood Ranch property into smaller parcels and sold the parcels; he (witness) talked with members of the Cossa family, and they said that when they purchased the 40 acres they were not relying on passage or nonpassage of the bond act (bond election was on September 28, 1965, about twenty days after the Cossa purchase), and that they were not relying on completion or noncompletion of the dam project, and that they could not have cared less about the dam project when they purchased the 40 acres. He (witness) also examined the depositions given by members of the Cossa group in condemnation proceedings concerning the Cossa property, and the depositions included statements that they 'made their purchase on the basis of acquiring recreational land [87 Cal.Rptr. 805] and couldn't care one way or the other whether a bond issue passed or whether or not a dam was to be built.'
A witness called by plaintiff testified that in settlement negotiations of condemnation of the Cossa property, Tony Cossa told him that the Cossa property had been purchased 'for lake frontage.' No member of the Cossa group of purchasers was called as a witness in the present case.
Plaintiff (County) presented evidence of seven sales of comparable properties ranging from 40 acres to 280 acres at the following prices an acre: $483, $287, $200, $200, $135, $65, $31. As previously stated, two of those sales were among the sales included in defendant's evidence.
The verdict was $48,142.50 for the taking of 160.475 acres (which is $300 an acre).
Appellant contends that the court erred in receiving evidence of the Cossa sale ($700 an acre) in that the value of the property sold was enhanced by the project. It argues (citing People ex rel. Dept. of Water Resources v. Brown, 255 Cal.App.2d 597, 63 Cal.Rptr. 363; and People ex rel. Dept of Pub. Wks. v. Arthofer, 245 Cal.App.2d 454, 54 Cal.Rptr. 878) that 'The rule in California is that enhancement arising from the project can not be considered in determining fair market value' of condemned property. Appellant asserts that although there is no California case which 'deals with the subject of the admission of project enhanced sales,' the abovementioned rule should apply to preclude evidence of sales of other property which was enhanced in value by the project. (In support thereof, it cites cases from other states.) The Cossa sale occurred about two months prior to the election on September 28, 1965, wherein bonds for the proposed project were approved. This action was commenced on February 27, 1967. There was evidence on behalf of the defendants (statements of Cossa purchasers to Vrooman and in depositions) to the effect that the proposed project did not influence the purchase of the Cossa property. The fact that there was such testimony was not determinative that the Cossa sale was not a project enhanced sale. There was evidence on behalf of plaintiff to the effect that the proposed project did influence the sale of the Cossa property--a witness called by plaintiff testified that one of the Cossa purchasers said that the Cossa property was purchased for lake frontage. The weight and credibility of the testimony were matters for determination of the trial court. The court did not err in receiving evidence as to the Cossa sale.
Appellant also contends that the court erred in receiving evidence of the sales of properties near Old Creek because those properties were from thirty to fifty miles from the condemned property, and therefore were not comparable within the meaning of section 816 of the Evidence Code. That section provides in part: 'In order to be considered comparable * * * the property sold must be located sufficiently near the property being valued, and must be sufficiently alike in respect to character, size, situation, useability, and improvements, to make it clear that the property sold and the property being valued are comparable in value and that the price realized for the property sold may fairly be considered as shedding light on the value of the property being valued.'
In the present case, an appraiser testified that the highest and best use of the condemned property was for recreational use; there was a very limited amount of such property available for sale in the county by reason of government and ranch holdings; he searched for sales of comparable property in the same mountain range in which the condemned property was located; that mountain range, by reason of topography, climate, and scenic beauty, was more desirable for recreational property than the mountain ranges to the east and west of it; he searched for sales of properties which were similar to the condemned property in size, character, topography, suitability for recreational use, [87 Cal.Rptr. 806] access to creeks, and access to roads; and that the properties sold in Old Creek were very similar to the condemned property in those respects. Under the circumstances, the Old Creek properties were sufficiently near, and were sufficiently alike in character, to the condemned property as to be comparable in value to the condemned property. The court did not err in receiving evidence of sales of the Old Creek properties.
Appellant further contends that the court erred prejudicially in delaying a ruling with reference to the existence of an easement of access to the southerly portion of the condemned property.
There was an issue as to whether a prescriptive easement existed for access to the southern portion of the condemned property. Plaintiff contended that the existence or nonexistence of such easement was a question of law. In preliminary proceedings, before the jury was impaneled, plaintiff asked the judge to rule on said issue of law before evidence was presented to the jury as to the value of the purported easement. The judge declined to rule thereon at that time. After the jury was impaneled, plaintiff requested that the judge hear evidence relating to the easement outside the presence of the jury. The request was denied and the judge said that he would rule on the question of law 'some place along the line.' Thereafter, defendant presented evidence with reference to the purported easement, and plaintiff called two expert witnesses, each of whom stated his opinion of the value of the condemned property with access to the southerly portion thereof, and the value without such access; and those witnesses were cross-examined regarding their testimony relating to such access. After all evidence had been presented to the jury, and before instructions were given to the jury, the judge heard argument, considered the evidence relating to the easement, and found that there was no easement at the time of the condemnation. The judge instructed the jury as follows: 'It has been contended by the defendant property owners in this case that they have a prescriptive easement to the southerly portion of their property across that property immediately next to, and easterly of, their property. This property has been from time to time in this case referred to as the Wood Ranch. The Bailey property has no such legal right of access over the Wood Ranch. The only legal access to the southerly part of the Bailey property is from the northerly part of the property from the same property at the north end.'
Appellant argues that the judge had a duty 'to rule in a timely manner' on the question of law whether the easement existed; that by reason of his delay in ruling on that question the jury heard substantial evidence relating to the easement; and that the net effect of the delay in ruling was to confuse the jury on the existence and extent of access to the southern portion of the property.
As above stated, the jury was instructed that no easement existed. It was not improper for the judge to permit all evidence relating to the purported easement (evidence as to the existence of the easement, and evidence as to its value) to be presented before determining whether an easement existed; and, after making such determination, to give appropriate instructions with reference thereto. It cannot be concluded properly that the delay in ruling on the issue as to the existence of the easement prejudicially affected the jury's deliberations.
Appellant states, in the conclusion of its opening brief, that 'The sole basis for the support of the opinion of the respondent's appraisal witness was the Cossa sale. His appraisal was at $450 per acre. Without the Cossa sale, which was immediately adjacent to the subject property, respondent's appraiser stood defrocked in front of the jury.' As above shown, said appraiser (Vrooman) testified that the condemned property was traversed by the Arroyo Grande Creek Road, and that the property extended to the creek, [87 Cal.Rptr. 807] which runs the 'year around'; there was a good spring on the property; there were very few 'year round running' creeks in the county; the mountain range in which the property was located had highly desirable climate and scenic beauty; the highest and best use of the property was for recreational purposes; there were very limited amounts of recreational property available for sale in the area by reason of government and ranch holdings; his study of the trend of sales of recreational property in the county showed that there was a rapidly rising market for recreation lands; and in his opinion the property was worth $450 an acre on February 27, 1967. After that testimony, Vrooman testified with reference to sales of comparable properties in the Old Creek area and in the vicinity of the condemned property. The sales price of those properties ranged from $200 an acre to $300 an acre, with the exception of the Cossa sale wherein the price was $700 an acre. Those prices (except Cossa sale) were similar to the prices of comparable properties referred to in evidence presented by plaintiff. The prices per acre in five of the seven comparable properties referred to in plaintiff's evidence were: $135, $200, $200, $287, and $483. The verdict, as previously stated, was $48,142.50 for 160.475 acres, which is $300 an acre. The evidence was sufficient to support the verdict.
The judgment is affirmed.
THOMPSON, J., concurs.
GUSTAFSON, Associate Justice.
I concur. I believe however, that I should state in detail my position with respect to the Cossa sale.
Eminent domain cases comprise about eight percent of the civil jury trials in superior courts in California. (1970 Annual Report of the Administrative Office of the California Courts, p. 98.) Despite the frequency and importance of this type of litigation, there are altogether too many unsettled questions of law. One of these is the extent to which, if at all, the amount awarded to a condemnee as the fair market value of his property should reflect knowledge of the proposed public project.
The problem arises from the fact that public projects do not materialize full-blown out of thin air. This is particularly true of large projects such as airports, dams, freeways and boat harbors. Large projects are planned years in advance of acquisition of the land and construction of the improvements. Even 'prior to the determination of a definite site for the proposed public work, property values will rise in a broad area, reflecting the anticipation of continued private ownership adjacent, or at least proximate, to the improvement'. 20 Hastings L.J. 622 (1969).) If it were certain from the moment that a proposed public project is first discussed that a given parcel of land will be acquired for it, the value of that parcel of land could not possibly increase or decrease solely by reason of knowledge of the proposed public project because, being land which will be acquired for the public project, the parcel will neither benefit nor suffer from the public project. Only land which is not to be acquired can increase or decrease in value by reason of knowledge of the public project.
The difficulty is that never does anyone know from the moment of the initial proposal of the public project that a given parcel of land will be acquired for it.
In the first place, a proposed public project when first conceived will often be designated only for a general area and not for a particular site. A county, for example, may propose to establish a large airport, but will defer selection of a particular site until many studies have been made. Meanwhile, all land in the county may increase in value in anticipation that an airport will be located within the county. Another example is a proposed freeway between two cities. Before the particular route is even tentatively selected, land values in the area may rise in anticipation of the construction of the freeway. Other examples are countless. Suppose that a given parcel of land rises in value from $20,000 to $25,000 because [87 Cal.Rptr. 808] of knowledge for plans of a college, freeway, airport or auditorium in the general area, but without knowledge of precisely where the public project will be located. X buys the parcel of land for $25,000. The parcel is then acquired for the public project. Should X be awarded only $20,000 for his parcel? I think not.
It has been recognized that there often is 'an actual increase in the market price, consequent upon a knowledge by the public of the proposed improvement'. (San Diego Land & Town Co. v. Neale (1888) 78 Cal. 63, 20 P. 372; see also Kerr v. South Park Com'rs. (1886) 117 U.S. 379, 6 S.Ct. 801, 29 L.Ed. 924.)
In the second place, even if a given parcel of land is tentatively selected for a public project, the public project may ultimately be completed without the acquisition of the parcel. Often plans for a public project are changed from time to time to include or exclude land and to expand or reduce the planned improvements. Should the owner of a parcel of land ultimately acquired for a public project be deprived of an increase in value of his parcel attributable to knowledge of the proposed public improvement prior to the date when it became reasonably probable that if the public project is undertaken, his land will be included therein? I think not.
Suppose the rare case where from the very moment a public project is conceived it is known that if the public project is completed a given parcel of property will be acquired for it. Often it is years between conception of a public project and acquisition of the land for it. Since a condemnor may abandon a condemnation proceeding even after final judgment in condemnation (Code Civ. Proc., § 1255a), it is never certain even at the time that the fair market value of the parcel is determined by the jury that the parcel will be acquired. It is therefore important that the landowner not be deprived of any increase in value of his parcel due to factors (such as inflation, growth in the area, changes in the zoning ordinance affecting his property, etc.) other than knowledge of plans for the acquisition of his parcel for the public project.
The jury fixes the fair market value of the property being acquired solely on opinion evidence of the value of the property. (Evidence Code, § 813.) Ordinarily, as was the case here, the opinion of an appraiser will be predicated on the prices at which comparable properties were sold. (Evidence Code, § 816.) An appraiser may not predicate his opinion on the price of a property sold unless it is 'clear that the property sold and the property being valued are comparable in value and that the price realized for the property sold may fairly be considered as shedding light on the value of the property being valued'. (Evidence Code, § 816.) Since no two parcels of property are identical, the appraiser must adjust the price of property sold for the date when it was sold as compared to the date of valuation of the property being acquired and for differences in location, character, size situation, usability and improvements of the property sold from the property being acquired.
An appraiser's opinion of the value of property being acquired is only as good as the reasons he gives for it. Since the appraiser is subject to cross-examination and since the opposing party's expert witness may expose any errors in the testimony of the appraiser, I think that the trial judge should not preclude an appraiser from basing his opinion upon a sale of other property unless the sale of the other property clearly sheds absolutely no light on the value of the property being acquired. In the case at bench, for example, the witnesses for the condemnor (appellant) expressed the opinion that the Bailey property was worth $150 per acre. That opinion was based upon sales of properties for prices of from $31 per acre to $483 per acre. No sale was for $150 per acre. If the provisions of section 816 of the Evidence Code that it must be 'clear that the property sold and the property being valued are comparable in value' (italics added) were [87 Cal.Rptr. 809] literally applied, most if not all of the testimony of the condemnor's experts concerning sales of comparable properties would have been excluded. I think that the phrase should not be read literally and that the trial court properly admitted the evidence just as it properly admitted evidence of sales of properties of from $200 per acre to $700 per acre which formed the basis of the opinion of the condemnee's appraiser that the Bailey property was worth $450 per acre.
An enormous amount of subjective opinion is involved in adjusting the prices at which other properties were sold in order to arrive at the value of the property being acquired. In this case the condemnor's appraisers adjusted one sale at $483 per acre down to $150 per acre and one sale at $31 per acre up to $150 per acre. The condemnee's appraiser adjusted the Cossa property sale at $700 per acre down to $450 per acre and two sales at $200 per acre up to $450 per acre. The final adjustment, of course, is for the jury (within the limits of the expert testimony) and the jury in this case found that the value of the Bailey property was $300 per acre.
With respect to usability of a property being acquired, an appraiser may consider that the highest and best use of the property is one which is currently prohibited by a zoning ordinance if there was 'a reasonable probability' on the date of valuation that the ordinance would have been changed to permit the use on which the appraiser predicates his opinion of value. (People ex rel. Department of Public Works v. Dunn (1956) 46 Cal.2d 639, 297 P.2d 964.) If the price for which other property was sold reflects knowledge of the parties that if the public project is completed that property will be worth more than it otherwise would be worth, I think it is appropriate for the appraiser to adjust the price (and no more difficult than other adjustments he must make) to eliminate any change in value attributable to knowledge of the public project from the date when in his (not the judge's) opinion it became 'reasonably probable' that the property sold would benefit from the public project. With respect to the Cossa sale, I think it would have been proper to permit an appraiser to testify regarding it even if the price admittedly reflected belief of the buyer and seller that the public project would be completed as planned, but only if the appraiser discounted the price to the extent that it was more than it would have been without knowledge that the land probably would be benefited by the public project.
The condemnor asks us to take the position that as a matter of law testimony concerning the sale of comparable property must be excluded if the property will benefit from a public project the plans for which have become 'a matter of common knowledge'. I think that such a position would be unduly harsh on a condemnee as compared to the position I advocate. In the case at bench, feasibility studies for the Lopez Dam were begun at least as early as 1958. Condemnation proceedings were instituted nine years later. I think that the date on which it became reasonably probable that the Bailey property would be acquired and the date on which it became reasonably probable that the Cossa property would benefit from the public project are factual questions inextricably associated with other factors affecting the value of property and thus to be determined by the jury based upon expert testimony. (Contra: United States v. Reynolds (1970) 397 U.S. 14, 90 S.Ct. 803, 25 L.Ed.2d 12 .) The condemnor does not contend that but for the proposed dam the Cossa property would have been worthless. Neither does it contend that the Cossa property was not comparable to the Bailey property. Under these circumstances it seems to me that rather than ignore completely the sale of the Cossa property, it is preferable to consider the sale, but to isolate and disregard that portion of the sale price which was attributable to knowledge of the plans for Lopez Dam after the date when it was reasonably probable that the Cossa property would benefit from Lopez Dam.
[87 Cal.Rptr. 810] The condemnor says that 'apparently no case in California deals with the subject of the admission of project enhanced sales'. I think City of San Diego v. Boggeln (1958) 164 Cal.App.2d 1, 330 P.2d 74 deals with this subject and is contrary to the condemnor's position. There the property being acquired was designated for inclusion in Mission Bay Park in 1945, but the condemnation action was not brought until 1954. First, the condemnor sought to limit 'evidence of comparable sales [to the] 1940-1945 era'. The trial court, however, refused even to receive evidence of sales made in that period because they were too remote in time from the date of valuation. The ruling was upheld on appeal. Second, the condemnor, obviously relying on Shoemaker v. United States (1893) 147 U.S. 282, 13 S.Ct. 361, 37 L.Ed. 170, unsuccessfully sought an instruction that sales of comparable properties adjoining or within the immediate vicinity of the park made after the boundaries of the park were first fixed should be disregarded. This ruling was also upheld on appeal because the instruction was 'objectionable in that it * * * excludes the consideration of other sales which took place since the city of San Diego first fixed the boundaries of the park for public improvement'.
Unfortunately, the jury instructions given in Boggeln, in other cases and in the case at bench, fail to recognize what I think are proper elements of valuation. I therefore deem it necessary to discuss them.
The jury in the case at bench was instructed: 'The property being taken may not be valued with reference to enhancement or depreciation in value, if any, to said property arising solely and directly from the public improvement proposed by the plaintiff. Increase or decrease in value, if any, caused by the construction or knowledge of the Lopez Dam project is excluded in the determination of fair market value.' This is almost word for word the jury instruction recommended in BAJI (5th ed.) No. 11.77.
The word 'solely' in the first sentence is appropriate because the owner should not be deprived of an increase in value prior to the date of valuation but after announcement of the project if that increase is attributable to factors other than knowledge of the improvement plans of the condemnor. The word 'directly', however, does not convey to the jury what is meant. Cited by the editors of BAJI for the instruction is San Diego Land & Town Co. v. Neale (1888) 78 Cal. 63, 20 P. 372 where the court said that the owner 'might get some benefit from [the dam] indirectly; that is to say, the public knowledge of a proposed improvement might cause an actual demand in the market, and the subsequent advance in the current rate of price'. I read that case, as does the author of the comment in 20 Hastings Law Journal 622 (1969), as drawing a distinction between 'indirect' benefits (knowledge of a proposed public project which increases all land values in the area and to which increase the owner is entitled) and 'direct' benefits (increases in the value of comparable properties after it becomes reasonably probable that the comparable properties will not be taken for the public project and will benefit from the improvement to be made on the property being taken, an increase to which the owner of the property being taken is not entitled because his land will not be benefited by being adjacent to the public project because it is within the boundaries of the public project). If the Bailey property increased in value because of knowledge of the proposed Lopez Dam from 1958 to the date when it became reasonably probable that the Bailey property would be acquired, the jury should have been instructed that this was enhancement arising 'indirectly' from the public project to which enhancement the condemnee was entitled.
The second sentence of the instruction which denies to the owner any increase in value caused by 'knowledge of the Lopez Dam project' conflicts with the first sentence which denies the condemnee only an [87 Cal.Rptr. 811] increase arising 'directly', but not one arising 'indirectly', from knowledge of the proposed improvement.
The court further instructed the jury: 'If the sales price of property used as a comparable sale in this case is in your judgment higher because it has been affected by the knowledge of the buyer and seller of the Lopez Dam Project, such sale should be disregarded by you.' There was conflicting evidence on whether the price for which the Cossa property was sold was predicated upon knowledge of the parties to the sale that the property would be benefited by Lopez Dam. We must assume that the jury followed the instruction and that it disregarded evidence of sale of the Cossa property if it found that the price was affected by knowledge of Lopez Dam. Any error in admission in evidence of the sale of the Cossa property was therefore harmless.
I think, however, that the instruction should not have been given. First, it deprived the owners of the Bailey property of any increase in the value of their property as reflected by the sales of comparable properties from the time that the project was first conceived to the date when it became reasonably probable that the Bailey property would be acquired. Second, for reasons which I have heretofore set forth, I think that a jury should not be instructed to completely disregard the price at which comparable property was sold if the price was affected by knowledge of the public project, but should instead be told to consider what the price would have been if at the date of the sale it was not reasonably probable that the property involved in the sale would be benefited by the public project.
On the subject of enhancement of value caused by knowledge of a public project, it has been said that 'the bulk of the American decisions seems buried in a morass of irreconcilable conflict' and that the California law is 'rather murky and unsettled'. (20 Hastings L.J. 622 (1969).) I set forth my views in the hope that the California Supreme Court will someday bring order out of chaos.
ORDER DENYING PETITION FOR REHEARING.
PER CURIAM.
Petition for rehearing is denied.
GUSTAFSON, Associate Justice.
I concur in the denial of the petition for rehearing. The condemnor, in its petition for rehearing, asserts that the method of handling 'project enhanced sales' suggested in my concurring opinion 'presents a practicable problem of substantial proportions.' That the method suggested will work is shown by Merced Irr. Dist. v. Woolstenhulme (1970) 7 Cal.App.3d 536, 86 Cal.Rptr. 575, an opinion which had not been published at the time I wrote my concurring opinion.