State v. Woodham

264 So. 2d 166, 288 Ala. 608, 1972 Ala. LEXIS 1277
CourtSupreme Court of Alabama
DecidedJune 15, 1972
Docket4 Div. 425
StatusPublished
Cited by9 cases

This text of 264 So. 2d 166 (State v. Woodham) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Woodham, 264 So. 2d 166, 288 Ala. 608, 1972 Ala. LEXIS 1277 (Ala. 1972).

Opinions

[610]*610'MERRILL, Justice.

This appeal is from a judgment in a highway condemnation proceeding which was appealed to circuit court and resulted in a jury- verdict and judgment for $309,000.00. The only material questions presented on appeal are rulings on evidence.

The parties have stipulated and agreed that both parties appealed to the circuit court, and that the only questions to be considered on this appeal are those raised by proper assignments of error relating to .the amount of compensation and rulings of the court on evidence pertaining thereto.

A motion for a new trial was overruled and this appeal followed.

The Woodhams, appellees, owned a tract of land on which they operated “Wood-ham’s Foodliner” in Dothan, a super market type grocery store. Originally, the highway curved around the store, but the new design for the highway called for it to be widened and straightened and this would cause it to run through the store building.

There are twenty-two assignments of error and all but two of them relate to rulings on objections to evidence. One group, assignments 1-8, charge error in permitting appellees to show the income of the store for several years, the rent they paid the Woodham family, the gross sales of the business, the fact that the appraiser • made an “income study” of the business, the volume of business done, and the introduction of a profit and loss statement showing profits from 1965 to 1969.

These assignments of error are related and raised the question whether in a condemnation proceeding, the property owner may introduce evidence of income, gross sales, volume and profit and loss statements of the business conducted in a building which must be destroyed for the building of a six-lane highway where the building stood.

We have not been cited to nor have we . found an Alabama case deciding this exact point. The case of City of Dothan v. Wilkes, 269 Ala. 444, 114 So.2d 237, not mentioned in briefs, cites many authorities where' the questions involved here are considered. The only difference in that case and the instant case is that there, a tenant operated the business, while here, some of the owners of the property operated the business. The authorities cited in the Wilkes case are to the effect that income from business profits is not admissible in eminent domain proceedings except in those states which, like Florida, have specific statutes which permit consequential damages in some instances. Wilkes was tried in the same court that the instant case was heard.

It is well settled that when land occupied for business purposes is taken by ■ eminent domain, the owner or occupant is not entitled to recover compensation for destruction of his business, or the injury thereto by its necessary removal from its established location unless otherwise provided by statute. Furthermore, as the business is something entirely distinct from the market value of the land upon which it is .conducted, it is not considered in determining the value of such land, except so far as it illustrates one of the uses to [611]*611which the land taken may be part. Nichols on Eminent Domain, Vol. 4, § 13.3. To the same effect is 27 Am.Jur.2d, Eminent Domain, § 275, pp. 83-84; 29A C.J.S. Eminent Domain § 273(3), p. 1198; Jahr, Law of Eminent Domain Valuation and Procedure, § 150, pp. 231-232, Annotation, 16 A. L.R.2d 1113; Mississippi State Highway Commission v. McCardle, 243 Miss. 111, 137 So.2d 793; Mississippi State Highway Commission v. Ladner, 243 Miss. 139, 137 So.2d 791; Mitchell v. United States, 267 U.S. 341, 45 S.Ct. 293, 69 L.Ed. 644.

In 2 Orgel On Valuation Under Eminent Domain, 2d Ed., § 246, p. 259, we read:

“ * * * In the case of revenue-producing properties, income deserves important consideration, but here the courts make a sharp distinction between income derived from rentals and income derived from business profits. The courts admit the former type of evidence, but they exclude the latter on the ground that what is taken is the real property, not the business, and further, that the income derived from the business is so largely due to the owner’s personality and management that it furnishes no satisfactory index or guide to the market value of the property taken. * * * ”

It is the generally accepted rule that when a piece of land upon which buildings have been erected and affixed to the soil is taken by eminent domain, so far as the buildings add to the market value of the land, that must be considered in determining the compensation to be awarded to the owner. Cumbaa v. Town of Geneva, 235 Ala. 423, 179 So. 227.

Under the authorities cited supra, and those in the Wilkes case, it is obvious that the trial court erred in failing to sustain objections to those questions which brought income, net profits and prospective loss of profit into the evidence considered by the jury.

The appellees, and evidently the trial court in permitting the evidence to be introduced, relied mainly on the following statement in Alabama Power Co. v. Herzfeld, 216 Ala. 671, 114 So. 49:

“Income is an element of market' value. ‘The value of property, generally ' speaking, is determined by its productiveness — the profits which its use brings to the owner.’ Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S. Ct. 622, 37 L.Ed. 463. ‘The net revenue arising from the use of land'may be shown on an issue as to value, although it does not furnish a conclusive test.’ ' 22 Corpus Juris, 181. These questions were proper for the purpose of testing the accuracy of the knowledge of the witness, the reasonableness of his estimate, and the credibility of his testimony. * ' * ”

We have gone to the original record for a better understanding of the quoted paragraph. The two tracts of land sought to be condemned in Herefeld were parts of agricultural lands which were going to be flooded because of the erection of a dam by the utility. The condemnor sought to show that the lands had not been productive by asking the following questions, and objections to all of them were sustained:

“Q. It hasn’t been producing any net income, has it?
“Q. To refresh your recollection, didn’t you appear before them in 1917 and 1918 and state to them that that home place was assessed too high, and never had made a profit?
“Q. How much revenue did it produce during those years?
“Q. Do you know what it cost to produce those crops'?”

“The value of crops, grass, and trees growing on condemned land may be taken into account in awarding compensation.” 29A C.J.S. Eminent Domain § 173; 27

[612]*612Am.Jur.2d, Eminent Domain, § 279; Wiggins v. Alabama Power Co., 214 Ala. 160, 107 So. 85; City of Mobile v. McClure, 221 Ala. 51, 127 So. 832; Hicks v. United States, 266 F.2d 515, 6th Cir.

While the case of Alabama Power Co. v. Herzfeld, 216 Ala. 671, 114 So.

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Bluebook (online)
264 So. 2d 166, 288 Ala. 608, 1972 Ala. LEXIS 1277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-woodham-ala-1972.