Coastal Industrial Water Authority v. Trinity Portland Cement Division, General Portland Cement Co.

523 S.W.2d 462, 1975 Tex. App. LEXIS 2585
CourtCourt of Appeals of Texas
DecidedApril 3, 1975
Docket16454
StatusPublished
Cited by13 cases

This text of 523 S.W.2d 462 (Coastal Industrial Water Authority v. Trinity Portland Cement Division, General Portland Cement Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coastal Industrial Water Authority v. Trinity Portland Cement Division, General Portland Cement Co., 523 S.W.2d 462, 1975 Tex. App. LEXIS 2585 (Tex. Ct. App. 1975).

Opinion

PEDEN, Justice.

Eminent domain proceeding. Appellant condemned appellee’s Tract A, containing 4.4615 acres, and Tract B, containing 161.-3366 acres. The condemnee appealed from the Special Commissioners’ award of $788,840 and obtained a judgment for an additional $2,537,473.74.

*466 Appellant presented 76 points of error, which may be grouped into several large categories. Its first thirteen points complain of the admission of evidence as to the value of clay deposits on Tract B. It was undisputed that a portion of Tract B had a substantial deposit of clay suitable for the manufacture of type 1 cement. The appellee is engaged in the cement manufacturing business and since 1927 has continually used clay from Tract B in its Houston plant.

The appellee called only two witnesses who testified as to value. One was Mr. George L. Reed, a real estate appraiser. The other was Mr. Alden McElrath, a mining geologist, who qualified as an expert in evaluating raw materials used in manufacturing cement. He testified in detail as to the results of his tests to determine the quality and quantity of the clay in Tract B. He described the location of the clay, the availability of required transportation and he obtained from the con-demnee information about the cost of getting it to the market, which includes mining, transportation and processing costs. McElrath testified that he considered the cost of replacing the lost clay after the land was condemned, and stated that in his opinion the value of the clay in place as of August 14, 1970, the date of taking, was $1,458,282. He said he was not an appraiser and was not testifying to the market value of the land or of the clay, only its value in place. On cross-examination he stated that the value of the clay in place was $1,052 per cubic yard and that his survey showed there were 1,386,202 cubic yards of recoverable usable clay on Tract B, so its total value was $1,458,282.

Appellant complains that this testimony was inadmissible because it involved a computation of quantity times unit price, and because Mr. McElrath took into consideration the cost of extraction and' of transporting the clay after it was removed from the ground in determining the value of the clay in the ground.

We do not agree with the appellant’s position on this matter. A few Texas cases have discussed this matter. In Brazos River Authority v. Gilliam, 429 S.W.2d 949 (Tex.Civ.App.1968, writ ref. n.r.e.) the court stated at page 952:

“Mineral deposits, when taken as a part of the whole property condemned are proper to be taken into consideration in a determination of the whole value. Brazos River Conservation and Reclam. Dist. v. Costello, 169 S.W.2d 977, 988 (Eastland Civ.App., 1943, writ ref. w.o. m.). It is proper that evidence be heard and considered in eminent domain cases of the value of sand and/or gravel as it lies in its natural state in the ground. Reilly v. State, 382 S.W.2d 116 [Tex.] San Antonio Civ.App.1964, writ ref’d., n.r.e.).”

The court further stated in that case that for an expert witness to assume a value per cubic yard for the gravel in place and to multiply it by the number of cubic yards shown existence on the land “and to be examined and cross-examined upon such calculations as an element in opinion evidence as to value of the realty upon which such had consequential effect is in our opinion procedurally proper.”

We quote from 4 Nichols on Eminent Domain (rev. 3rd ed.1974), Section 13.22 beginning at page 13-95:

“ . . . The rule is widely prevalent in this country that the existence of mineral deposits in or on land is an element to be considered in determining the market value of such land .
“[T]he rule has been correlatively stated that the value of such mineral deposits cannot be determined independently of the land of which it is a part. The land taken must be valued as land, with the factor of mineral deposits given due consideration. In determining just compensation to be paid to the owner, it is not permissible to aggregate the value of *467 the land and value of the deposit. Thus, the value as stone land suitable for quarrying — but not the value of the stone separate from the land — is a proper subject of consideration, both by the witnesses and the jury in fixing the amount of just compensation to be awarded. The value of the land is not measured by such facts. The stone is a component part of the land. However, while the profits, price or value of the minerals, taken separately, may not be considered, yet the value, extent and quality of such minerals as exist upon the land may be considered. If the extent and quality and value of the stone as it lies on the land may not be considered, there would be no way by which the value of the land with the minerals could be shown. All legitimate evidence tending to establish value of the land with the minerals in it is permissible. This is not to say that such minerals are to be separately evaluated, but that consideration may be given to the quantity of the mineral that can be extracted and to the value thereof; purely as evidence for arriving at the value of the land. If a piece of land contains valuable improvements, those improvements apart from the land may not be considered. But certainly the character, nature, and extent of the improvements (and the revenue derived therefrom) are as essential to be considered in arriving at the value of the land as the land itself or the uses to which it may be put. The admissibility of such evidence lies in the sound discretion of the court.
“In a leading case the law was summarized as follows:
“ ‘(1) that a landowner in dealing with a parcel of land on which there is a mineral, timber or like substance may not introduce expert testimony by which the expert multiplies the gross material present by the market value per unit thereof and thereby arrives at a figure which purports to be fair market value for the parcel;
‘(2) that the landowner may not by expert testimony capitalized the present or future value of a business enterprise and thereby arrive at fair market value; that rental value may, however, be capitalized ;
“ ‘(3) that the landowner is entitled to have an expert or lay witness describe the commodity or substance on the land, the quantity thereof, the going price thereof as factors only, upon which the expert may in part base his value as to the fair market value of the parcel in question; that the landowner is not entitled to present testimony as to the fair market value of the mineral or timber or other substance apart from the value of the land. * * * In other words, a clear distinction must be drawn between what is presented and considered as a factor underlying the expert’s opinion as contrasted with opinion as to the fair market value of the substance, timber or mineral itself, apart from the land.

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Bluebook (online)
523 S.W.2d 462, 1975 Tex. App. LEXIS 2585, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coastal-industrial-water-authority-v-trinity-portland-cement-division-texapp-1975.