City of Houston v. Charpiot

292 S.W.2d 677, 1956 Tex. App. LEXIS 1702

• Court: Court of Appeals of Texas
• Decided: May 3, 1956
• Docket: 12977
• Status: Published

Opinions

GANNON, Justice.

This suit originated on the petition of Marion S. Charpiot et al. as owners of á certain 217.87'acre tract of land on the San Jacinto River in Harris County to' recover damages for waste worked .on said land by Wade Lahar Construction Company and to enjoin further .damage thereto. Wade La-har Construction Company, it appeared, liad entered on the land as a clearing contractor under the City of Houston and had commenced, but without right or authority from the owners, the clearing of the land preparatory to its flooding as a part of a lake or reservoir to result from the erection by the City of Houston of a dam on the San Jacin-to River.

Appellant City of Houston, as authorized by Article 3269, V. A. T. S., intervened, alleging itself to be the real party at interest and sought condemnation-of 122 acres, more or less, of plaintiffs’ .tract, -including all of the tract bordering on-the river. Thereafter Wade Lahar Construction Company was dismissed and the case proceeded purely as a district court condemnation solely between City of Houston, as condemner, and appel-lees, as condemnees.

Trial was to a jury., The case was submitted on one special issue which, with ex-planatoi-y definitions, is as follows:

Special Issue No. 1.

“What do you find 'from a preponderance of the evidence was the reasonable market value of the surface estate of the 117.78 acre tract óf land involved in this suit on March 1st, 1953.

“Answer- by stating the total amount • in dollars and cents.

“In connection with the foregoing issue you are instructed that reasonable market value is the price the property will bring when offered for sale by one who desires to sell but is npt obliged to sell and is bought by one who desires to buy t>ut is under no necessity of buying it.

“You are instructed that by the term ‘surface estate’, as used in the foregoing Special Issue, is meant the surface of the land in question, exclusive of oil, gas and other minerals.”

To this issue the jury answered $23,556. Thereafter the court rendered judgment divesting- title to the surface estate of 117.78 acres of land out-of the condemnees and vesting it in condemner, City of Houston. The judgment contained suitable provisions assuring the payment to condemnees of their constitutional compensation for the taking.

While the case was on trial, the parties entered into a stipulation evidently calcur lated to. expedite and simplify the trial; still, at the same time, equally calculated to set at rest and in advance .possible controversy which might arise between the parties after condemnation. The salient features of the stipulation are: (1) The City reduced the acreage, it ■ sought to condemn from 122 acres to 117.78 acres and agreed to condemn the surface estate only. (2) The City’s right to condemnation of the surface estate of the reduced ■ .acreage in the district court proceeding'was conceded, as was the City’s compliance with all formal prerequisites to the taking. (3) The stipulation recites that “The sole issue for determination [in the proceeding] is the market value of the Surface estate in the [117.-78 acre] tract of land.” (4) The con-demnees agreed that concurrently with the payment to them by the City of the “constitutional compensation awarded by the court” they would execute and deliver to the City a certain general warranty deed in the form'" attached to the stipulation. We find nothing in the agreement which expressly or by necessary implication would bind the City to accept such deed. The deed would convey, subject to certain conditions, exceptions and reservations, the fee to the 117.78 acres — the reduced acreage to be condemned. Such conditions, exceptions and reservations were: Grantors’ reserved (a) the use of so much of the surface area as might from time to time lie between the water’s edge'of the lake and the contour of the 45.0 foot elevation above sea level, (b) such riparian rights in the lake as they formerly had in the river, (c)' the oil, gas and other minerals under the land,'but with-the right to prospect for and produce such minerals limited to such work as could be done so “as not to endanger, damage or pollute” the lake water — grantors binding themselves or successors to re-inject salt water, and to be liable for all damage to the dam or lake resulting from numeral exploration even without fault, (d) an easement to dredge a boat channel to provide access by boat to grantors’ contiguous lands. By other provisions of the proposed deed, the City obtained the right, within specified’ limits, to flood certain contiguous lands of grantors, and grantors waived certain potential claims for damage to their' contiguous lands. The deed recites the conveyance to be a “purchase”.

Appellant’s points on appeal .are properly preserved. They are directed principally to the charge but appellant also complains of. the refusal of the trial court to reopen the case. to allow it to introduce further evidence, after all parties had closed, and of the insufficiency of the evidence to support the verdict.

Appellant first assigns error to the trial court’s definition of “market value”. This followed in haec verba that suggested and once revised by the Commission of Appeals in an opinion adopted by the Supreme Court. State v. Carpenter, 1936, 126 Tex. 604, 89 S.W.2d 194, and 89 S.W.2d 979 on rehearing. Specifically,' appellant objected to the definition because it would permit the jury to arrive at market value on the.basis of a credit transaction rather than “the price in cash the property would bring.” Appellant tendered and- requested the court to submit a. definition, of market ■ value identical with that given .the jury except for the inclusion of the words “in cash’’ after the word “price”. " Had the jury' been so instructed,' they. would have been limited to what the property would, have' brought in an all-cash “on- the barrel; head” transaction.' They would, .nót have-been allowed- even 'to value in cash, say, the present value of thé consideration-in a sale for part cash and part interest bearing notes well secured by the vendors and: deed of trust liens. The tax laws- and the diffi--culties of-safely investingmoney.being what they are, it is entirely possible that an owner willing to sell but .under no compulsion to do so might insist on a substantially higher price for an, all-cash sale than he would be' willing to take for part cash ánd part well ‘ secured notes. This of, course would not: likely be true in a transaction involving' movables, and for obvious reasons.

Appellant cites many Texas cases where.courts have approved as correct definitions - of market value in -substantially the form, of that requested by appellant, but none of-the cases turns on or discusses appellant’s • point. In fact,-neither party, cites any case, which actually turns on or discusses the precise issue, and apparently there is no ruling Texas authority. We have located the ' following text in 29 CJ.S., Eminent Domain, § 137, page 974; “Although market value has been defined in terms of the amount obtainable at a sale for cash, other authorities define it in terms of the amount obtainable at a sale on the terms customarily prevailing in similar sales.” Cited in support of the text are Mandl v. City of Phoenix, 1933, 41 Ariz. 351, 18 P.2d 271; Baucum v. Arkansas Power & Light Co., 1929, 179 Ark. 154, 15 S.W.2d 399, 401, and Matter of City of Buffalo, 1 Sheld. 408, 1 Buff. Super.Ct., N.Y., 408. We do not have access to the New York decision.

Mandl v. City of Phoenix, supra, is an out and out holding supporting appellant’s position, while Baucum v. Arkansas Power & Light Co., supra, is an out and out holding contra. We consider the Arkansas case to be better reasoned.'

In the Baucum case [179 Ark. 154, 15 S.W.2d 401], which was a condemnation proceeding, the trial court instructed the jury that condemnee was entitled to “the fair cash market value.” On appeal, this instruction was assigned as error because of the inclusion of the word “cash” in defining market value. It appears from the opinion that the constitution of Arkansas, as does that of Texas,' requires compensation in money for public taking. The court said:

“In other words, where one’s land is taken in the exercise of the right of eminent domain he must have full and just compensation in money, and market value is-the sum ‘the land would be reasonably worth on the market for a cash price,’ but the term cash price as here employed means a sum payable in cash, as contradistinguish-ed from an exchange of properties. It does not mean that the entire purchase price should be paid in cash upon the delivery of a deed. A sale would be for cash within the meaning of this definition if made for a sum paid in money or for a sum paid and payable in money. For instance, A owns a farm which he is willing but not required to sell. B wishes to buy it but is not’required to do so at an excessive price. A and B agree upon a price of $20,000, of which B pays in money $10,000, with balance payable in one year or other customary time, this balance being secured by a lien on the property itself, and bearing interest at a rate equal to the legal rate. If this- security is such that the balance of the. purchase price, with the interest thereon, can, in the' usual and ordinary course of business, be certainly realized out of the property, the sale is for-cash, because its equivalent will be realized.

It is a matter of common knowledge that farms are rarely, if ever, sold for a sum in cash laid down on the barrel head, and if the landowner is to be limited to such a sum as he could get when the entire purchase price is paid cash down, he would be deprived of the valuable right of having his property appraised according to the custom and usage in selling farm lands. Cash value simply means money value, the value payable in money, as distinguished from a price which would be employed as the basis of an exchange. It would be a sale far cash, as the term is employed in eminent domain cases, if the sale was for the equivalent of cash.

“We do not reverse the judgment because this instruction was given, but, in view of the specific objection made to it, the court should have defined the term ‘market value’ as herein defined without the addition of the word ‘cash.’ In other words, there should have been no’ implication in the instruction, in view of the specific objection made, that the market value could not exceed the sum which the owner could obtain for cash counted out and paid down.

“Of course, the market value, when thus ascertained, must be paid in money but this is true because the Constitution has provided that it is upon this condition that the right of eminent domain may be exercised. There is no element of contract in the exercise of this right. Indeed, it is ordinarily exercised only when, as in the instant case, the parties have been unable to agree- — to contract. In such a case the compensation guaranteed the owner by the Constitution must be paid in money, but the market value is arrived at by determining what one who is willing but not required to sell will take and what another who is willing but not required to buy will give, that sum being payable in cash when paid in accordance with the custom prevailing in similar sales.”

Appellant does not, by its request, seek to limit the term market value to the value “in money” of what could be realized from a sale on terms common to real estate transactions. It insists on limiting con-demnees to an all-cash sale. In our opinion, this would have been too restrictive and would have denied condemnees their right to the value in money which they could have realized from a fair sale on other than an all-cash basis. How such a restricted basis of sale would operate in every case is not clear. However, it is clear that it would be calculated to limit severely the number of desirable bidders and hence the realization of the full value of the land in money. We overrule appellant’s point.

Appellant next complains of the court’s definition of "surface estate”, contending on a basis wholly obscure to us that the definition permits the jury to allow for the “market value of the fee simple title to the land instead of the surface estate only of' said land.” Appellant additionally complains that the court erred in refusing to define surface estate as requested by it, as follows:

“By ‘surface estate’ as used in the foregoing Special Issue is meant all rights in and to the 117.78 acre- tract of land except all of the oil, gas and other minerals in and under said land which are reserved to the Plaintiffs with the limitation that Plaintiffs shall not drill upon or develop for any minerals on the surface of such land unless such drilling, exploration ■ and production is so conducted as not to endanger, damage or pollute the Reservoir or source of wafer supply, and except that the sole and exclusive use of the area within said land that may from time to time lie between the water’s edge arid the contour of 45.0 feet elevation above mean sea level and the right of access to the river or Reservoir across the same as the case may be is reserved to the Plaintiffs and the riparian rights which Plaintiffs had in' the river are reserved for Plaintiffs in the Reservoir.”

It is clear, we think, that the requested definition is a somewhat partisan and onesided effort to sum up the provisions of the deed favorable to condemnees, which condemnees agreed — apparently at the option of the City — to deliver to the City, but the agreement was that the deed was to be delivered only after the City had proceeded to condemn the surface estate to the 117.78 acre tract and had acquired full and unlimited title to such surface estate by condemnation and had made payment to condemnees of the constitutional compensation for such estate. The parties — wisely, we think- — did-not agree to inject into the condemnation proceeding the give and take —the quid pro quo — understandings to be evidenced by the deed. The record does not show the delivery and acceptance of' the deed. It may never be delivered, or, if tendered, accepted by the City. We find nothing in the record which would bind the City to accept it. Neither the stipulation nor the accompanying form of deed was read to the jury. It is true, the judgment includes in substance the provisions' of the proposed deed but apparently this was by agreement' arrived at after the verdict. There is nothing in the written stipulation entered into during the trial which would bind the City to the inclusion in the judgment of any of the provisions of the proposed deed. On the other hand, the stipulation leads to the thought that the judgment was to be' for the vesting in the City of the surface estate without limitation or dominant easements of any kind.' The trial was conducted on that basis and as we; have pointed out, the jury was never apprised of the -contents, of' the stipulation or the deed. ' But conceding arguendo that the damages should have been assessed by the jury in relation to the terms of the deed, this would require presentation to and consideration by-the jury of all of the terms of the deed, not- just those included in the requested instruction'which failed to incorporate any referencé to valuable rights to be acquired by-, the City under it, namely, the right to inundate to some extent con-demnees’ contiguous lands, including the right to police, such land, the release of potential damage claims, and the absolute right to hold an owner of the mineral estate.liable for all damages .flowing from mineral exploration regardless of fault.,, It is plain to us that- appellant’s requested definition of surface estate} :as applied to the instant record, was in any view neither complete nor .substantially correct and that as. prepared the instruction -was highly improper - and one-sided, and therefore prejudicial to the just rights.of condemnees. . We find no er,-ror in ,the refusal- of the requested instruction or in thq court’s definition of “surface estate”, on .any basis assigned.

. .The .refusal pf the court to .reopen the-case:, for. the1 introduction of evidence by appellant- after all parties had closed, or, as the trial.court put.-it, “irrevocably rested”, is 'assigned by appellant as abuse of disr cretion. We ,h.ave reviewed the record as it shows; the-material facts bearing .on the trial court’s action and are convinced that no -abuse of discretion is shown. This is -especially trne since, there is no bill, or other showing .of jthe probative fprce of the evidence which appellant says it was denied .the privilege of, offering,. i. e., the .testimony of the Harris County Deputy Tax Collector relating to. the rendition--of the property by condemnees for the year 1953. What such testimony would have ■ been is not disclosed. For .ought the record shows, such testimony might have tended, to bolster condemnees* cl.aims. of value.,- We could not reverse- in any '-event on the, speculation that, such, evidence might, have been helpful to, fhe Cify.

Appellant assigns the complete want of a.ny evidence to sustain the finding of the jury in answer to the one special issue submitted. There was no timely objection to the court submitting the issue but apparently such an obj ection is no longer required to .raise the point of no evidence on appeal. Myers v. Minnick, Tex.Civ.App., 187 S.W.2d 941. We are constrained to overrule appellant’s point. Three properly qualified witnesses testified to values based on surface uses entirely, which would have justified a much higher verdict than the approximately $200 per acre value found, by the jury. The testimony of such values ranged from $1,250, per acre (Charpiot) to $800 per acre (Lee and Peckinpaugh).

Finally, appellant says the verdict is contrary to the overwhelming weight of the evidence. Though its witnesses testified to valúes of only $40 per acre (Eversburg) and $45 per acre (Pounds), we find the verdict to be amply supported by the evidence.

Affirmed.