State Highway Commissioner v. Dake Corp.

357 Mich. 20
CourtMichigan Supreme Court
DecidedJuly 13, 1959
DocketDocket No. 43, Calendar No. 47,739
StatusPublished
Cited by2 cases

This text of 357 Mich. 20 (State Highway Commissioner v. Dake Corp.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Highway Commissioner v. Dake Corp., 357 Mich. 20 (Mich. 1959).

Opinion

Kelly, J.

The Dake Corporation (appellee), located in Grand Haven, Michigan, manufactures arbor and hydraulic presses. Since 1953 its annual business has exceeded $1,250,000, and in 1956 approximated $1,900,000.

The factory is built on a rectangular parcel of land with an area of approximately 5 acres, with 11 buildings, plus a loading dock, concrete driveways, and fences.

In order to widen US-31, the highway department of the State of Michigan (hereinafter referred to as the department) condemned a strip of land involving 4 buildings, resulting in Dake’s loss of 40% of its manufacturing floor space and 17% of its land area, forcing Dake to move its entire productive facility to a new location.

In its presentation to the court commissioners Dake divided its proof as to damages in 3 general categories: (1) Damage to land and buildings; (2) Expense occasioned by business interruption; (3) Expense of relocating machinery and equipment.

This opinion will be written in respect to the propriety of testimony supporting Dake’s 3 claimed items of damages and the department’s contention [25]*25that prejudicial error resulted through Dake’s mailing a brief to the commissioners before the hearing*

No. 1. In re Dake’s mailing of brief.

A few days before hearing Dake mailed to the 3 commissioners a 22-page brief entitled “Memorandum on Behalf of Dake Corporation” and failed to present a copy to the department until the day of hearing.

In claiming prejudicial error, the department only refers to one paragraph of the memorandum reading as follows:

“In the final analysis the nature of this proceeding is such that its outcome will be determined by the exercise of a sound sense of values and good business judgment, rather than by resort to the many, and oftentimes perplexing, technicalities of the law.”

Ruling on the question of reversible error, the trial court stated:

“Counsel for the State makes an issue of the failure of the other side to provide it with a copy of the pretrial brief filed with the commissioners until the first day of the hearing. While the court understands that the ethics of the profession require that briefs be filed with opposing counsel at the same time as they are filed with the court, failure to adhere thereto does not seem a proper ground to upset this award in view of the fact that the brief so filed did not misstate the law nor was it prejudicial in tone and in view of the fact that counsel for the State took ample opportunity thereafter to explain its position.”

In concurring with the trial court that the filing of the brief did not constitute reversible error, we do not condone such practice in the future and emphat-. icallv state that a pretrial brief should never be presented to the tribunal who makes the final de[26]*26cisión unless under supervision and with the consent of the presiding- judicial officer.

No. 2. In re damages to land and buildings.

Appellant contends that appellee failed to submit proper proof of fair market value before and after condemnation because its witness Nedeau testified as to the value as a “going concern use” and not the market value.

Nedeau’s 23-page appraisal report, showing $338,-000 as a fair market value before taking- and $90,000 as value after taking, was admitted without objection. This report established that he considered both the capitalization-of-income method and the depreciated-reconstruction-cost approach and that he rejected the income method as not being applicable.

The department’s expert witnesses used the depreciated-reconstruction-cost approach, one reducing Nedeau’s $338,000 figure to $306,350, and the other reducing it to $277,920.

The problems of manufacturing heavy arbor and hydraulic presses compelled Dake to have a “special purpose building” and, being unable to acquire an existing building, was required to construct a new building. After condemnation Dake had no use for the remaining buildings, other than resale, and this decreased value of these buildings is allowable as compensation under our decision in In re Widening of Michigan Avenue, Roosevelt to Livernois, 280 Mich 539, 548, 549, wherein we said:

“Where only part of a parcel is taken, just compensation is to be determined by the amount which the value of the parcel from which it is taken is diminished. The value of the part actually taken is allowed as direct compensation, but the decreased value of the residue of the parcel on account of the use made of the land taken is also allowable as compensation. Port Huron & South-Western R. Co. [27]*27v. Voorheis, 50 Mich 506; Fitzsimons & Galvin, Inc., v. Rogers, 243 Mich 649; Johnstone v. Detroit, G. H. & M. R. Co., 245 Mich 65 (67 ALR 373); In re Widening of Bagley Avenue, 248 Mich 1. Where only a part of a bnilcling is taken, if the remaining portion is of great value and there can be advantageous reconstruction, rearrangement and new adjustment, then the cost of altering the building and all consequential damages because of such alteration, plus the value of the part taken, furnishes the rule for measuring the compensation to be awarded. If what remains after a part is taken is worthless, the jury should allow the whole value of the building. If not, they should consider what may be done with the remainder and the cost of doing it. City of Detroit v. Loula, 227 Mich 189; In re Widening of Bagley Avenue, supra.”

Nedeau based his judgment on the special nature of the buildings and that there was economic justification for their existence. He was justified in so doing, and in support thereof we quote from 18 Am Jur, Eminent Domain, § 247, p 885, as follows:

“The adaptability of the land, sought to be taken in eminent domain, for a special purpose or use may be considered as an element of value. If the land possesses a special value to the owner which can be measured in money, he has the right to have that value considered in the estimate of compensation and damages.
“While market value is always the ultimate test, it occasionally happens that the property taken is of a class not commonly bought and sold, as a church or a college or a cemetery or the fee of a public street, or some other piece of property which may have an actual value to the owner, but which under ordinary conditions he would be unable to sell for an amount even approximating its real value. As market value presupposes a willing buyer, the usual test breaks down in such a case, and hence it is sometimes said that such property has no market [28]*28value. In one sense this is true; but it is certain that for that reason it cannot be taken for nothing. From the necessity of the case the value must be arrived at from the opinions of well-informed persons, based upon the purposes for which the property is suitable. This is not taking the Value in use’ to the owner as contradistinguished from the market value. What is done is merely to take into consideration the purposes for which the property is suitable as a means of ascertaining what reasonable purchasers would in all probability be willing to give for it, which in a general sense may be said to be the market value.”

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Related

Chain Belt Co. v. Commonwealth, Dept. of Highways
391 S.W.2d 357 (Court of Appeals of Kentucky, 1965)
In Re Grand Haven Highway
97 N.W.2d 748 (Michigan Supreme Court, 1959)

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Bluebook (online)
357 Mich. 20, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-highway-commissioner-v-dake-corp-mich-1959.