Opinion
No. 51524.
November 14, 1979. Rehearing Denied February 27, 1980.
Appeal from Special Court of Eminent Domain, Adams County, Robert A. Bonds, County Judge
A.F. Summer, Atty. Gen., Jackson, R.L. Netterville, Natchez, for appellant.
Zuccaro, Riley, Pintard Brown, J. Walter Brown, Jr., Natchez, for appellee.
Before ROBERTSON, P.J., and BROOM and COFER, JJ.
Appellant, State Highway Commission of Mississippi, applied for the organization of a special court of eminent domain, with St. Catherine Gravel Company, appellee, as defendant. Such court was organized in Adams County, in which county the subject land lay. In due course, the appellant's petition was heard resulting in a jury verdict and judgment in such sum as caused appellant (Commission) to take this appeal. The condemnation was for title to 3.08 acres more or less, and a drainage easement of 1.23 acres, more or less.
Appellant assigned as error:
(1) The court's allowing recovery for certain gravel, to be explained hereinafter.
(2) The court's admission of evidence of proof of loss of future profits.
(3) The verdict and judgment were contrary to the overwhelming weight of the evidence; and
(4) A substantial part of the verdict resulted from proof speculatory and uncertain.
Defendant was and had for most of a half-century been, engaged in sand and gravel business, which entailed purchasing, or otherwise obtaining, gravel in place, transporting it to its place of business on property, part of which is being taken in this proceeding, washing it, and separating sand and gravel of various sizes and for various uses, all for the market. Its property extended a distance (not here important) into St. Catherine Creek. In the creek, there was a crook or bend where gravel, washed by nature from others' land, settled into a sand and gravel bar, whence these materials were harvested, processed at a low cost (paying nothing for the materials) and sold on the market. For a number of years defendant had harvested the sand and gravel one or two times a year and had sold it for an average profit of slightly under $3,500 per year.
Two appraisers for the commission testified that due compensation for the land being taken was $28,060 and $30,360. (Their testimony was in accordance with the "before and after" rule, usually the measurement yardstick). Appellee adduced from two witnesses $76,500 and $78,635 (the latter being the exact figure as fixed by the jury), as being the due compensation. In the defendant's witnesses' testimony there was included a "before and after" figure, and also $35,000 and $32,000 for loss of the gravel bonanza which appellee had enjoyed through the years.
On the "before and after" figure, there is really no debate. Appellee put the case on appeal in rather clear perspective, saying,
The only question on appeal is the admissibility of evidence by appraisers for the landowner, as well as by one of the appraisers for the State. Mr. Milton, which evidence established a value for the loss of future profits from deposits of gravel on the gravel bar which was a part of landowner's property and which was now being taken by the State Highway Commission and no longer available to the landowner for such.
Appellant asks remittitur of $35,000 or remand for a new trial on the damages. It contends that the proof as to the gravel loss is too speculative and uncertain to form a basis for that part of the verdict which necessarily had to be attributed to the loss of the gravel that periodically settled into a bar in the creek bend.
A part of the purpose of the condemnation was to straighten and revet the bank of the creek for the purpose of building a bridge or bridges to serve the expanded traffic area of U.S. Highway No. 61 at that point. Thus, the bend where the sand and gravel were more prone to settle would be taken away, and would not be a hindrance to the flow of the water which hindrance enlarged the deposit of these materials at that point. There was proof, however, that, at the lower end of the channel to be caused by the dredging process, where the channel came back to the creek bed, the sand and gravel would settle, and this bar would be on defendant's land. This testimony was not without contradiction, however.
The defendant capitalized the income from this gravel and its witnesses, as shown above, arrived at $32,000 and $35,000 therefor, and defendant contends the award was just and should be affirmed.
There are, we conclude, at least these considerations in resolving the case:
(1) At the taking or the trial, there was no proof that any gravel or sand was in the creek on appellee's land.
(2) The gravel had to be washed from others' land upstream (to whom, for anything contrary thereto appearing in the record, it belonged), and was not defendant's property unless it so became when it came to rest in the creek bed belonging to defendant.
(3) Although the washing of the sand and gravel into the bed on defendant's land had been at least annually for a number of years, there was no proof (but a hard pressed presumption) that it would continue to do so for any number of years in the future.
(4) There was not eliminated the prospect that the upstream owners might decide to save the gravel for themselves, devising a means of preventing its washing down the creek.
(5) It was pointed out, too, that the Natchez Trace Highway is to be completed upstream from the defendant's land (when is not shown), and its effect on the creek and the water flow could not be anticipated.
It is contended that this gravel and sand are not part of the land and its taking is separate and is properly considered as a separate item of damage, and, for this case, it was proper to be compensated according to the before and after rule plus payment for the deposits of sand and gravel.
Citing Mississippi State Highway Commission v. Rogers, 236 Miss. 800, 112 So.2d 250 (1959), and Mississippi State Highway Commission v. Ellzey, 237 Miss. 345, 114 So.2d 769 (1959), this Court said in Mississippi State Highway Commission v. Valentine, 239 Miss. 890, 894, 124 So.2d 690, 692 (1960):
However, the test is the fair market value of the land before and after the taking, and does not include the highly speculative and uncertain profits which may be derived from a business. . . . (Emphasis added).
Loss of profits was recently held not to be a proper element of damages in Mississippi State Highway Commission v. Central Land Rental Corp., 239 So.2d 335, 338 (Miss. 1970), citing Mississippi State Highway Commission v. Ladner, 243 Miss. 139, 137 So.2d 791 (1962).
In Seago Enterprises, Inc. v. Mississippi State Highway Comm., 330 So.2d 588 (Miss. 1976), it was again announced by this Court that:
Loss of profits by itself, as a separate item of special damages, is not compensable in Mississippi. Mississippi State Highway Comm. v. Valentine, 239 Miss. 890, 124 So.2d 690 (1960). (330 So.2d at 590).
In Ligon v. Indian Creek Drainage District, etc., 247 Miss. 279, 284, 156 So.2d 810, 811 (1963), the lower court was affirmed on its finding that the presence of amounts of clay in land being taken and its quality were "based on too much speculation and upon too little actual quest for facts, for it to be of great weight."
In obedience to these announcements, it is our opinion that the separate and special claim for damages on account of the sand and gravel is based upon too weak, uncertain, and speculative testimony and an award therefor must not be allowed to stand. We accordingly, reverse the allowance of these damages as alleged due compensation in the amount of $32,000 and affirm the remainder of the award.
AFFIRMED IN PART, REVERSED IN PART AND RENDERED.
PATTERSON, C.J., SMITH and ROBERTSON, P. JJ., and SUGG, WALKER, BROOM, LEE and BOWLING, JJ., concur.
ON PETITION FOR REHEARING
Being of the opinion that the Petition for Rehearing should be granted and the original opinion, reducing the jury verdict from $78,635 to $46,635, withdrawn, I respectfully dissent to the denial of the Petition for Rehearing.
In its Petition for Rehearing, St. Catherine Gravel Company cited to the Court for the first time Archer v. Board of Mississippi Levee Com'rs, 158 Miss. 57, 130 So. 55 (1930). In Archer, this Court said:
"It appears that the chief value of the property involved is the riparian rights of land in the river for procuring sand and gravel, and there was considerable evidence bearing upon the value of the said property, and there was proof of revenue derived from this source by the owner prior to the condemnation proceedings. The court, however, instructed the jury: `The court instructs the jury that in fixing the value of the land and property condemned you must not take into consideration any value of the gravel in the Mississippi River.' Mrs. Archer's title to the center or thread of the stream of the Mississippi river had been established by her in a suit for that purpose at a cost of $5,000 or more, and her riparian rights extended to the center of the stream. As the petition sought to condemn the riparian rights as well as the land lying outside of the river banks, and as the proof shows that gravel was a valuable part of the property within the river channel, it is clear that the court was in error in so instructing the jury. The plaintiff was not only entitled, under the proceeding, to recover the value of the land outside of the river bed, but was entitled to recover for her riparian rights, which, as stated, included the right to take gravel and sand from the Mississippi river for commercial purposes. The proof shows that this was of considerable value. It is therefore necessary to reverse the judgment of the court below and remand the cause for a new trial." 158 Miss. at 62, 130 So. at 56. (Emphasis added).
Besides taking 3.08 acres of land fronting on St. Catherine Creek and a permanent drainage easement over 1.23 acres of land, the Commission is taking away the landowner's riparian rights to the middle of the Creek, just as the Board of Levee Commissioners was doing in Archer and just as in Archer the Commission is taking away the landowner's right to take gravel to the middle of the Creek.
It bears repeating that in Archer this Court said:
"The plaintiff was not only entitled, under the proceeding, to recover the value of the land outside of the river bed, but was entitled to recover for her riparian rights, which, as stated, included the right to take gravel and sand from the Mississippi river for commercial purposes. The proof shows that this was of considerable value." 158 Miss. at 62, 130 So. at 56. (Emphasis added).
The Commission, in its application for a special court of eminent domain, requested the court to appoint a disinterested, knowledgeable person qualified to make an appraisal of the property under the quick-take statute [Mississippi Code Annotated section 11-27-83 (1979 Supp.)]. David Blough, an appraiser of Natchez, Mississippi, was appointed, and in his detailed appraisal he used the income or capitalization approach to appraise the loss of the gravel bar and the riparian rights to mine gravel. The value of the gravel bar and the permanent drainage easement over 1.23 acres was set at $40,687. His total appraisal was $60,500. The court thereupon entered its order that the Commission could take immediate possession of the lands being condemned upon payment of not less than 85% of the compensation and damages, as determined by the court-appointed appraiser. The Commission thus was required to pay into court at least $51,425.
The undisputed proof was that for 50 years the Gravel Company had harvested gravel from St. Catherine Creek. The last three years before the take (1976, 1977 and 1978) the proof was that the annual net income from the annual harvesting of gravel was $3,458.
The Commission's witnesses, Herbert Miller, project engineer, and William B. Milton, appraiser, admitted that the annual mining of gravel from St. Catherine Creek had been going on for almost 50 years, that it was a valuable property right, that the depositing of gravel on the inside bend of the Creek on the Company's land had been a certainty for 50 years, but that, when the Commission condemned and took the land and the riparian rights and straightened the channel of the Creek, the gravel would no longer be deposited on the company's land adjacent to the Company's main plant (including the gravel washing and processing facilities).
At the trial it was just a question of the value to be placed on these riparian rights, not that the right to mine gravel had no value at all, as this Court in its majority opinion has decided.
The Commissioner's appraiser, Milton, valued the taking away of the landowner's right to mine gravel at $5,495. Laurence O'Ferrall, one of the property owner's appraisers, testified that using the capitalization method, the approved appraisal method usually used where there is an annual income (in this case $3,500), the damages to the property owner for the taking away of its riparian rights to mine gravel would be $35,000. His appraisal for the total take and damages was $75,500.
Robert Haltom, the landowner's other appraiser, also used the capitalization method to determine damages for the loss of the right to mine gravel. He was of the opinion that the loss of this right would be $32,000, and that the total take and damages would be $78,635.
The jury heard all of the evidence and personally viewed the property. Without objection from the Commission, the court instructed the jury:
The Court instructs the jury for the Defendant that if you believe by a preponderance of the creditable evidence that the Defendant, St. Catherine Gravel Company, has mined sand and gravel in the past and if you further believe by the preponderance of the creditable evidence that St. Catherine Gravel Company, Defendant, could mine sand and gravel in the future based on past activity and if you further believe by the preponderance of the creditable evidence that the Defendant will not be able to mine said gravel in the future because of the taking of the property and easement by the Petitioner, State Highway Commission of Mississippi, then you may include in your verdict of damages the value of said source of gravel as of the date of the filing of the Petition.
After weighing the evidence and considering the court's instructions, the jury returned this verdict:
"We the Jury vote unanimously (sic) to award the Defendants $78,635.00."
In spite of the undisputed testimony that the riparian rights and the consequent right to mine gravel to the center of St. Catherine Creek were valuable property rights variously valued from a low of $5,495 (Commission's appraiser Milton) to a high of $35,000 (Company's appraiser O'Ferrall), this Court, in the majority opinion, says:
"[I]t is our opinion that the separate and special claim for damages on account of the sand and gravel is based upon too weak, uncertain, and speculative testimony and an award therefor must not be allowed to stand. We, accordingly, reverse the allowance of these damages as alleged due compensation in the amount of $32,000 and affirm the remainder of the award."
My thought is that this ground of reversal is not even before the Court. The Commission made no objection to the defendant's instruction that the jury could take into consideration the value of the "source of gravel". Also, in the Commission's motion for a new trial, although assigning five grounds, the Commission no where complained of the instruction given that the jury could take into consideration loss of the gravel bar and loss of the right to mine gravel to the center of St. Catherine Creek. No where did the Commission complain that the property owner was not entitled to some damages for the loss of riparian rights to mine gravel. This Court thus, in taking away every penny that the jury awarded for the loss of riparian rights, the actual loss of the gravel bar itself, and the loss of income from the annual harvest of gravel, goes further than the Commission itself asked for. This Court is taking away even what the Commission's appraiser said would be due for the loss of gravel. The Commission's appraiser, William B. Milton, valued the gravel bar and right to mine gravel at $5,495.
This Court reduced the jury verdict from $78,635 to $46,635, the exact amount testified to as the value of the land alone. So now the landowner must refund to the Commission $4,790 (the difference between $51,425 paid under the quick-take statute and $46,635, the amount found due by this Court). The refusal to give any value to the loss of riparian rights to me flies in the teeth of Archer and also Section 17 of the Constitution of the State of Mississippi, which solemnly provides:
"Private property shall not be taken or damaged for public use, except on due compensation being first made to the owner or owners thereof, in a manner to be prescribed by law; . . ."
I am of the opinion that the jury was correctly instructed, that the verdict of the jury is supported by substantial evidence, that this Court should not substitute its judgment for that of the jury as to the value of the land and riparian rights taken, and that this Court should affirm the jury's verdict for $78,635.
I, therefore, respectfully dissent.
PATTERSON, C.J., and BOWLING, J., join in this dissent.
My views do not precisely conform to either those expressed by Cofer, J., in the majority opinion or with those expressed by Robertson, P.J., in his separate dissenting opinion. Archer v. Board of Mississippi Levee Comrs., 158 Miss. 57, 130 So. 55 (1930) is relied upon in the dissent. I do not believe Archer is authority or precedent under which, in the instant case, the landowner should have been allowed to recover for future speculative profits which might possibly accrue on account of taking gravel from the waters of St. Catherine Creek. St. Catherine Creek waters make only a small stream and any possible future taking of gravel from such a stream is impermissively speculative to form the proper basis of recovery for such future profits in this case. My view is that, at the most, the jury in seeking to determine present value under the before and after rule, was correctly allowed to hear the testimony that the landowner had in recent years been taking gravel from the stream and selling it. Accordingly the jury could rightfully consider such evidence but not so as to include in its verdict loss of future speculative profits as happened at trial of this cause.
In the present case without objection from the Commission, the jury was instructed that "if you further believe by preponderance of the creditable [sic] evidence that St. Catherine Gravel Company, Defendant, could mine sand and gravel in the future based on past activity . . ." (emphasis supplied) the jurors may consider in arriving at damages the value of "said source of gravel" as of the date of the filing of the petition. By the adroit instruction the jurors were allowed to consider any profits that "could" derive from possible future taking of gravel from the stream. This no doubt was calculated to obscure present value (the chief issue) of the property at the time of the taking. In my opinion such highly speculative damages are not properly allowable, but in the instant case the instruction was given to the jurors without objection from the Commission. No objection having been made to the instruction, I would affirm because the jurors did no more and no less than what the instruction, though faulty and unobjected to, advised them. However, had proper objection been made to the instruction, in my opinion it should not have been given and in such event I would vote differently here. We should not leave any doubt that the instruction referred to is improper, and for failure of Mr. Justice Robertson to so state I dissent separately.
Upon the record as made, I would affirm.
BOWLING, J., joins in this dissent.