Toledo Edison Co. v. Roller

The first assignment of error concerns the exclusion of evidence as to sales prices of comparable easements to two separate pipeline companies over the defendants' property and neighboring property, and in refusing to permit the condemners' expert to give his opinion of the value of the Edison easement based upon such easement sales.

Determination of the rules for the admission of evidence that should be fashioned for appropriation proceedings should always keep in focus the purpose and objective of eminent domain proceedings. The purpose is succinctly expressed in the5th Amendment of the United States Constitution, and Section 19, Article I, and Section 5, Article XIII of the Ohio Constitution, that it is the judicial proceeding by which an owner of private property receives "just compensation" "assessed by a jury" when his property is taken for a public use.

Rules of exclusion of evidence are more likely to thwart this worthy constitutionally protected jury proceeding, and make it a game of hide and seek. By contrast, rules promoting the introduction of evidence are more likely to accomplish the objective of having a jury determine "just compensation." Broad latitude for the admission of evidence in civil proceedings is the trend of the times. Cf. Fed. Rules Evid. 402, 403, 702, 703,705.

The sale price of land and interests in real estate, including easements, sold to a condemner is admissible in evidence where there is no affirmative evidence that the sellers of comparable properties were compelled to sell. Masheter v.Hoffman, 34 Ohio St. 2d 213; Curley v. Mayor and Aldermen ofJersey City, 83 N. J. L. 760, 85 A. 197; Township of Moorestown v. Slack, 85 N. J. Super. 109, 204 A.2d 23; Eames v.Southern New Hampshire Hydro-Elec. Corp., 85 N. H. 379,159 A. 128; Wateree Power Co. v. Rion, 113 S.C. 303, 102 S.E. 331;Honolulu Redevelopment Agency v. Pun Gun, 49 Haw.,426 P.2d 324; State v. Levy, 242 La. 259, 136 So. 2d 35; Frederickson v.Hjelle (N. D.), 149 N.W.2d 733; cf. Washington Home forIncurables v. Hazen (C. A. D.C.), 70 F.2d 847 (condemnee permitted to introduce evidence of comparable sale prices to condemner); Nash v. D.C. Redevelopment Land Agency (C. A. D.C.), 395 F.2d 571 (condemnee allowed to introduce evidence of comparable sales to condemner).

Rules of law should be based on reason and logic, and the mere fact that one of the parties to a sale has the power to condemn does not, of itself, make the sale compulsory or unfair, and evidence of such sales to a condemnee should be admissible.Covina Union High School District v. Jobe, 174 Cal. App. 2d 340, 345 P.2d 78, citing Cityof Los Angeles v. Cole, 28 Cal. 2d 509, 170 P.2d 928.

Instead of arbitrarily concluding that the sale to a condemner can never be a voluntary sale and, therefore, can never be of any assistance in determining the fair value of the land, it is much more logical and reasonable to approach this problem from the standpoint that all facts and circumstances should be taken into consideration, and that any objection to such evidence goes to its weight rather than its admissibility. 2 Wigmore, Evidence, 505, Section 463 (3rd. ed. 1940). Although such sales are less likely to have useful evidentiary value than sales to strangers, "no logical reason in principle is perceived why they should not have the same treatment." City of LosAngeles v. Cole, supra. Such comparable sale prices, it was stated, in Masheter v. Hoffman, 34 Ohio St. 2d 213, 221, "* * * are factors that would influence any reasonable and prudent person in making a determination of the market value of the land in question." The court said further: "In the interest of substantial justice, such factors should not be disguised and confused beneath outmoded and unreasonable procedure."

Because of the foregoing unassailable logic contained in Cole and Hoffman, supra, and in many other cases which could be excerpted, the legal conclusion, unsupported by facts or sound reason, contained in Masheter, Dir. of Hwys., v. Yake, 9 Ohio App. 2d 327; Naftzger v. State, 24 Ohio App. 183; andCincinnati Union Terminal Co. v. Banning, 27 Ohio Nisi Prius (NS) 548 (Hamilton County Court of Common Pleas), that sales to a condemner are not comparable nor admissible as proof of fair market value should not affect or control our determination. These three cases are not controlling judicial precedent upon this court of appeals, and are not persuasive authority because of an absence of facts and reasoning to support the bald assertion that negotiated sales to a condemner are not voluntary.

Plaintiff also contends that the burden of proving that the sale of a pipeline easement was between a willing buyer and a willing seller is upon the landowner, and cites in support the cases of Ornstein v. C. O. R. R. Co., 26 Ohio Law. Abs. 78; State v. McDonald, 88 Ariz. 1, 352 P.2d 343;Collins v. Pulaski County, 201 Va. 164, 110 S.E.2d 184; andAmory v. Commonwealth, 321 Mass. 240, 72 N.E.2d 549. TheOrnstein case, supra, nowhere in the headnotes or opinion states such proposition. McDonald, supra, an Arizona case, which we are not compelled to follow, comes close to saying that the burden of proof is upon the landowner to show that a sale to a condemner is voluntary, but not quite. In McDonald, headnote 4 of 352 P.2d states: "In condemnation case, burden was on condemnee to establish foundation for admission of evidence of sale of neighboring property to government, and in absence of anything from which a lack of compulsion, coercion or compromise could be inferred, it was error to admit evidence of such sale."

In our case there was no evidence that the comparable sales to a condemning authority were compelled or coerced. A presumption of regularity should and does exist that a transaction is voluntary and normal until one of the parties introduces evidence to the contrary. This is a rule of reason. Why should a party have the burden to prove a negative or nothing, or the absence of coercion, until either party, by some evidence, raises the issue and then shifts the burden of proof to the party offering such proof of comparable sales, viz., in this case the landowners? The same observations are applicable to the Collins and Amory cases, supra.

Defendant, in arguing the foregoing proposition concerning a comparable sale to a condemning authority and that the sale must be voluntary and in the open market, relies on Tennessee GasTrans. Co. v. Mattevi, 75 Ohio Law. Abs. 396, and excerpts extensively from pages 399-400 of the opinion, that "whether the other land is similar * * * and whether the sale was in a fair and open market * * * should be determined by the trial judge in the exercise of a sound discretion * * *." This excerpt from the Columbiana County Court of Appeals opinion is a direct quotation from the defendant's brief in that case. The Court of Appeals did not state this as a proposition of law, and, by quoting from the brief, did not make it the law controlling in that appellate district. Even if the court has made this a rule of law, it did not clarify the meaning of "open market" and did not affect the rule of admissibility of evidence concerning comparable sales. For the reasons discussed, I would conclude that the first assignment of error is well taken.

A query has been made as to the admissibility of the sale and sale prices of comparable easements because the rule as to admissibility of evidence of comparable sales and sale prices concerns the sale in fee simple of a unit of land or a unit of developed real estate and not the sale of an easement or limited interest in real estate. It is true that a quantum of real estate and its title for an easement differs factually from the quantum of a fee simple title for the sale of a unit of land or developed realty. However, there is no reason in law or logic to treat these differently and to make the rules contrary to one another for the admissibility of evidence of comparable sales thereof. Wateree Power Co. v. Rion, 113 S.C. 303,102 S.E. 331; 27 American Jurisprudence 2d, Eminent Domain, Sections 323 (n. 13-16), 344, 430; 29A Corpus Juris Secundum 424, 601 Eminent Domain, Sections 105(1) and 143; Annotation 85 A. L. R. 2d 110, 171, Section 10(b).

The second assignment of error is that the court erred in excluding all opinion evidence of value based upon the development and use of the land for residential purposes. The evidence in the present appropriation of the Roller farm reveals that already there were home sites on the Roller farm; that a plated addition, known as the village of Dowling, adjoins the northwest portion of the farm; that across the road was a school, church and cemetery; that a golf course was close, and that there were many residences all through the area besides the village of Dowling, and that a rectangular portion of approximately 1,000 feet by 700 feet of the Roller farm is already zoned residential. All the cited circumstances are indicative that there is a reasonable probability of a change in the zoning classification of the Roller farm from agricultural to residential, if it is requested. Proper residential use in a rural, agricultural area is no more odious nor undesirable to the legislative authority or the surrounding area landowners than an agricultural use. The second assignment of error is well taken, and it was error to exclude expert opinion testimony of residential use and value based upon the development site theory because of the following applicable propositions of law.

In the determination of market value of land which has been condemned, and awarding just compensation therefor, existing zoning restrictions should be taken into consideration, but where there is some plausibility as to a change of an existing zoning resolution which affects the value of property being condemned, it is proper for the jury, under appropriate instructions, in estimating the value of such land, to consider the reasonable probability of a change of the zoning resolution and the reasonable influence on the market value of such probability. Budney v. Ives, 156 Conn. 83, 239 A.2d 482;Sayers v. Mobile, 276 Ala. 589, 165 So. 2d 371.

A general change in the character of the use of property in the neighborhood has been held to show a reasonable probability of a change in zoning. Park District of Highland Park v.Becker, 60 Ill. App. 2d 463, 208 N.E.2d 621; Hall v. West DesMoines, 245 Iowa 458, 62 N.W.2d 734. The plaintiff relies heavily upon two appellate decisions: namely, Bd. of Edn. v.Graham, 15 Ohio App. 2d 196, and Euclid v. The Lakeshore Co.,102 Ohio App. 96, paragraph 7 of the syllabus. These cases are distinguishable because there was no evidence that would indicate any purpose on the part of the public authority or the slightest probability that the zoning authority would, within the foreseeable future, lessen the use restriction. Euclid v.Lakeshore, supra at page 110. Further, these are appellate decisions from other appellate districts and are not binding upon us. They do not contain reasoning to persuade the conclusions reached therein. The nature and process of determining market value, as demonstrated by the general trend and the weight of authority, compels a conclusion that the Graham and Lakeshore cases, supra, are inapposite to the facts in the Roller case.

The remaining cases cited by plaintiff in support of its second assignment of error — namely, Preston v. Stover FlyingService, 174 Ohio St. 441; In re Appropriation for Hwy.Purposes, 15 Ohio App. 2d 131; and Bd. of County Commrs. v.Thormyer, 169 Ohio St. 291 — do not consider the legal issue involved in the second assigned error and are, therefore, inapplicable.

The recent case of Masheter v. Wood, 36 Ohio St. 2d 175, is distinguishable and inapplicable. It held that in appropriation proceedings, opinion testimony of an appraiser as to the reasonable probability of a zoning change and a higher and more valuable use classification is not competent because it is too speculative as to future administrative action.

The opinion and reasoning in Wood, supra, reveals that the holding should be limited to the facts in that case. The opinion reveals that (1) the zoning change considered as probable was from a residential to a business use — i. e., from a more restricted use to a less restricted business use — and (2) no facts were stated which indicated any factors, such as a change in land use in the area or prior rezoning activities, which would indicate any likelihood of a zoning change.

By contrast with Wood, supra, the transcript of proceedings in our case reveals: (1) The zoning change considered as probable to serve as a basis for the site development value was from an agricultural to a residential use — i. e., usually considered for practical purposes as a change from a less restricted use to a more restricted use, the exact opposite of the situation inWood, supra — and (2) many factors were proven by the landowner, such as a change in land use in the area and prior rezoning activities, which would indicate a likelihood of a zoning change.

Furthermore, in Wood, supra, the Ohio Supreme Court held that it was error for the trial court to admit opinion testimony of the landowner's appraisers that a zoning change was probable from residential to business classification. By contrast, in this case that was not the issue, and defendants did not attempt to proffer an expert opinion through an appraiser that a zoning change was probable.

The proffered evidence by the landowner as to value based on the site development theory was properly admissible by the guidelines set forth in Wood, supra, at 178, which states as follows:

"An expert witness may testify as to those factors within his particular knowledge and expertise which would indicate the likelihood of a zoning change, such as a change in land use in the area, prior rezoning activities, or sales prices of comparable properties which are higher than their present use would justify."

The exodus consideration is whether the errors of the trial court are prejudicial and thus warrant a reversal and new trial, or are non-prejudicial and thus call for an affirmance of the judgment. This is a judgment call. It should be noted that the jury verdict of only $15,000 is many times closer to the value and damage figures given by the two appraisers for the plaintiff, Toledo Edison, than to the figures given by the landowner, Roller, and his two appraisers. It is my view that the jury received only part of the proper loaf of evidence of values and damage legally admissible and the amount of the jury verdict indicates that a higher jury verdict was likely and justified if the jury had the entire loaf of evidence to which it was entitled. I would conclude that either of the two errors is sufficiently prejudicial so that the judgment should be reversed and a new trial granted.