Toledo Edison Co. v. Roller

The plaintiff Toledo Edison Company, the appellee herein, appropriated acreage for an electrical transmission line across the 92 acre farm owned by defendants Michael E. Roller and Margaret J. Roller, the appellants. A judgment was entered on a verdict of $15,000 and it is from this judgment that the appeal was taken. The first assignment of error states:

"The court erred in excluding all evidence as to the sales prices of comparable easements over the same property and over neighboring property, and in refusing to permit appellants' expert to give his opinion of value of the Edison easement based upon such sales."

This assignment of error is not well taken. Testimony was admitted on behalf of the plaintiff as to the value of the property before the take and the value of the property after the take; the difference, according to one expert, was $62,905.50, and according to the landowner, Michael Roller, was $75,000.00. Evidence of sales of comparable property was admitted but the assignment of error relates not to sales of comparable property, but to the sale prices of "comparable easements." No citations were given for the proposition that sale prices of easements were properly admissible to prove before and after value of the lands involved. In the trial of this case, the question was propounded of one of the defendants' appraisers concerning the sale price of an easement previously granted by the plaintiff over the same 92 acre farm for a pipeline easement. The court excluded the easement testimony for the reason that the pipeline easement and the electrical line easement were not comparable. Even if it could be considered comparable, such testimony was not admissible for the reason that it related specifically to the amount paid for anallegedly comparable easement and not to comparable sales ofland. No Ohio authority was given for this rather novel proposition. At least one Ohio court has indicated a contrary view, in the case of Columbus v. Zanes, 120 Ohio App. 229 at page 232 where the court, in charging the jury, said this:

"The criteria for you to follow in determining the market value of this 1500 (sic) foot strip, as I said, would normally be the highest price that a willing buyer-seller would sell and purchase, but since easements have no independent market valuein themselves, you will have to consider, in determining value, the use of the easement in the future that it has relating to use of the whole property remembering the rights given by the property owners to the city and the rights remaining to the property owners to use the property." (Emphasis added.)

Such evidence properly was excluded for the further reason that in Ohio and in many other jurisdictions, it is well established that sales to agencies having the power of eminent domain are not comparable and are not admissible as proof of fair market value. See Ohio Power Co. v. Diller, 18 Ohio App. 2d 167; In re Appropriation by Ohio Turnpike Comm., 164 Ohio St. 377; Masheter v. Yake, 9 Ohio App. 2d 327; Naftzger v.State, 24 Ohio App. 183, and 29A Corpus Juris Secundum 1210, Eminent Domain, Section 273, Note 67.1.^*

The defendants argue that their position is supported byMasheter v. Hoffman, 34 Ohio St. 2d 213, where evidence of comparable sales, on direct examination, was permitted. This case, in no way, changed the rule that sale prices of comparable real property is admissible as substantive proof of the fair market value of the property to be appropriated. The syllabus of that case clearly states that proof of such sales are admissible when "* * * concluded between purchasers who were willing, butnot required, to buy and sellers who were willing, but notrequired to sell." (Emphasis ours.)

Rather than supporting the defendants' position, Masheter v.Hoffman, supra, supports the position of the plaintiff. Actually, the sole question before the court in that case was whether the law of Ohio excludes, on direct examination, the testimony of one's own expert witness as to the sale price of comparable real property as substantive evidence of the value of the land to be appropriated, rather than limiting such testimony to cross examination. At page 220, the court refers to the case of Ohio Turnpike Comm. v. Ellis, 164 Ohio St. 377, wherein the court held that it was not reversible error to admit, on direct examination, as bearing on the question of the value of the land to be appropriated, the price at which a board of county commissioners, not required to sell, sold comparable nearby land, where the bidding procedure did not constitute a forced sale. However, the court, in Ellis, supra, pointed out, by way of dictum, that if the trial court had rejected the evidence, no error would have been committed. The court, in Masheter, disagreed with the dictum of the court in Ellis and stated that the trial court would have erred had it excluded such evidence. OhioTurnpike Commission v. Ellis, supra, however, like Masheter v.Hoffman, and the Ohio cases previously cited, stands for the proposition that it is evidence of comparable sales of land between a seller willing to sell and a buyer willing to buy that is admissible. See also 19 Ohio Jurisprudence 2d, Eminent Domain, Sections 163, 164. For the proposition that evidence of sale prices of other comparable real property is admissible on direct examination of one's own real estate expert as substantive proof of the value of the property under condemnation, where the conditions with respect to the other lands and to the sales thereof, are similar to those involved in the property under condemnation, see also In re Appropriationfor Hwy. Purposes, 15 Ohio App. 2d 55.

As indicated in the defendants' brief herein, a growing number of jurisdictions now admit into evidence sales of comparable property to a condemner under varying circumstances, such as where the sale was actually voluntary where there is a complete absence of any comparable sales, or even where an admittedly forced sale occurred. For this view, compare:Frederickson v. Hjelle (N. D.), 149 N.W.2d 733; HonoluluRedevelopment Agency v. Pun Gun, 49 Haw., 426 P.2d 324;Commonwealth Dept. of Highways v. McGeorge (Ky.),369 S.W.2d 126; State v. Voyich, 142 Mont. 355, 384 P.2d 765; Bruce v.State Dept. of Pub. Works, 93 Rawle I. 466, 176 A.2d 846; TexasGas Trans. Corp. v. Fontenot (La.App.), 133 So. 2d 841;State v. McDonald, 88 Ariz. 1, 352 P.2d 343; Collins v.Pulaski County, 201 Va. 164, 110 S.E.2d 184; County of LosAngeles v. Faus, 48 Cal. 2d 672, 312 P.2d 680; Amory v.Commonwealth, 321 Mass. 240, 72 N.E.2d 549; Eames v.Southern New Hampshire Hydro-Elec. Corp., 85 N. H. 379,159 A. 128; Shaw v. Monongahela Ry. Co., 110 W. Va. 155, 157 S.E. 170;Wateree Power Co. v. Rion, 113 S.C. 303, 102 S.E. 331; Curley v. Mayor and Aldermen of Jersey City, 83 N. J. L. 760,85 A. 197.

In the case of Frederickson v. Hjelle, supra, the court, at 737, cites 5 Nichols, Eminent Domain, Section 21.33, at 465-468 (3d ed. 1962), as follows:

"* * * Evidence showing what the company seeking to condemn has paid for other lands would probably be taken by the jury as indicating the market value when, as a matter of fact, it does not tend to show the market value of the land. A company condemning land might be willing to give more than it is worth, and the owner of land might be willing to take less than it is worth, that is, less than its market value, rather than have a lawsuit. Moreover, when a company seeks to get land or condemn it for public uses, having the power to condemn, the landowner would probably come to some agreement with it rather than have a lawsuit, and this agreement would show a compromise rather than the market value of the land. * * *"

The court further cites Nichols, at page 738, as follows:

"There has been some dissatisfaction with the rule of exclusion set forth above and in some jurisdictions it has been held that such evidence is admissible if the land was in fact similar and it was shown that the transaction was not influenced by any fear of litigation. Thus, it was held in one case that the mere fact that one of the parties to a sale had the power to condemn does not of itself make the sale compulsory, at least where there had been no step taken to exercise such power before the sale was negotiated. * * *"

The divergent views in this area are also well stated in the case of County of Los Angeles v. Faus, 304 P.2d 257, and 48 Cow. 2d 672, 312 P.2d 680. The pros and cons are set forth as to whether evidence of sales of other lands is admissible when the purchaser has the right of eminent domain or is a condemner.

There is considerable logic to the views expressed in other jurisdictions that evidence of sales made to condemners should be admissible and the facts and circumstances surrounding such should go only to the weight of the evidence and not to its admissibility. On the other hand, there are many more jurisdictions in which the view is stated with logic and clearness that sales made to a purchaser with the power of eminent domain or to a condemner are not voluntary and do not reflect the market value of the land to be appropriated. Ohio has adhered to the latter view for many, many years, and if any change is to be made in this area, it should be made by the Supreme Court of Ohio rather than by a Court of Appeals. Even if Ohio accepted the former view, under the facts of this case and for reasons stated above, the first assignment of error is, nevertheless, not well taken.

The second assignment of error is as follows:

"The court erred in excluding all opinion evidence of value based upon development and use of the land for residential purposes."

An examination of the record indicates that the assignment of error stated is too broad in that there was evidence of the potential use of the land for residential purposes. In the record, this question was asked:

"Q. Mr. Guthrie, at the time we recessed, we were talking about the site development of this property. In your opinion, what is the highest and best use of this property?

"A. Residential."

Again, the question was asked:

"Q. I believe you stated that the highest and best use of this property would be for residential purposes.

"A. That is my opinion, sir."

The witness explained that, in the site development theory of the market approach, he would estimate what the entire farm would sell for if it were divided into residential lots. He further stated that he would estimate what it would cost a developer to develop these lots, and the future he ended up with was what this developer could pay Mr. Roller in the open market for this land for residential purposes. An objection was made at this point, and the objection was sustained. A proffer was made that if Mr. Guthrie had been permitted to answer, he would have answered "$276,153," as the value before the Edison easement, and after the take on the Edison easement that the value of the land would be $206,999, and that the difference would, therefore, be $69,164.

The attempt to introduce into evidence the value of the land if actually divided into residential lots was improper, and the court did not err in sustaining the objection to this specific line of questioning, in that the cost of development, plus other factors entering into the value of the land after development would be purely speculative. This was particularly true in that the land under consideration was not zoned residential, nor had any application for a change in zoning been made at the time of trial, as far as the record indicates. Masheter v. Wood, 36 Ohio St. 2d 175; In re Appropriation, 174 Ohio St. 441; Bd. of CountyCommrs. v. Thormyer, 169 Ohio St. 291; Cf. In re Appropriationfor Hwy. Purposes, 15 Ohio App. 2d 131; Masheter v.Mariemont, Inc., 36 Ohio App. 2d 78. This court finds that the second assignment of error is not well taken.

It further appears that the verdict of the jury was well within the low figures of the appraisers who testified on behalf of the defendant and the higher figures given on behalf of the plaintiff, and it further appears that substantial justice has been done the party complaining. On consideration whereof, the judgment of the trial court is affirmed at appellants' costs.

Judgment affirmed.

POTTER, P. J., concurs.

BROWN, J., dissents.

^* The proffer made by the plaintiff of the price paid for the easements to the Dome Pipeline Co. did not indicate that this sale was voluntary or whether it was made to a condemner with the right of eminent domain. In the absence of any positive showing to the contrary, we assume that the Dome Pipeline Co. did have the right to eminent domain. The proffer did include not only the easement on the Roller property, but so-called comparable easements on acreage of other owners, without indicating precisely what the other acreage was.