United States ex rel. Tennessee Valley Authority v. Davis

41 F. Supp. 595, 1941 U.S. Dist. LEXIS 2486

• Court: District Court, E.D. Tennessee
• Decided: July 26, 1941
• Docket: Nos. 102, 80, 87, 2144, 94, 75, 76
• Status: Published

Opinions

PER CURIAM.

In a consideration of the cases before this court on exceptions to the award of the commissioners, our work was somewhat more difficult because in the argument, as well as in the several records, we found opinion evidence as to values which in many instances was obviously the result of calculations based upon assumed facts as to productivity of the soil. In some instances witnesses professed to have actual knowledge of its productivity and no other, or but little other knowledge related to market values. Such evidence is practically valueless. In some of the cases that type of evidence appeared as the major portion of respondents’ proof. The court not being permitted to consider it by Federal Rules was obliged to consider only such of respondents’ evidence as appeared to come within the rule. Olson v. United States, 292 U.S. 246, 54 S.Ct. 704, 78 L. Ed. 1236; Bauman v. Ross, 167 U.S. 548, 17 S.Ct. 966, 42 L.Ed. 270; United States v. River Rouge Improvement Co., 269 U.S. 411, 46 S.Ct. 144, 70 L.Ed. 339; Louisville & N. Railroad v. Western Union Telegraph Co., 6 Cir., 249 F. 385; Karlson v. United States, 8 Cir., 82 F.2d 330; Central States Life Insurance Co. v. Koplar Co., 8 Cir., 85 F.2d 181; Brett v. United States, 9 Cir., 86 F.2d 305, 307.

What was said in the cases of Welch v. Tennessee Valley Authority (Lewis v. Tennessee Valley Authority), reported in 6 Cir., 108 F.2d 95, at page 102; is equally applicable to much of the evidence introduced at the hearings before the commissioners in these cases:

“Analysis of the testimony of these witnesses only proves the rule that'the opinion of witnesses as to value of property taken in condemnation proceedings is a variable and uncertain class of testimony. Here a study of the different theories and processes submitted by the witnesses for ascertaining the value of the property leads to widely differing results and conflicting a-nd wholly irreconcilable opinions.”

We recognize, as did the court in the Welch and Lewis cases, supra, that production, rental income, location, and the like are in the minds of seller and buyer when they are trying to ascertain market value. But we also recognized that no intelligent buyer would part with the amount of cash required to buy farm land on a plan of so-called capitalization values, particularly if the supporting data was largely estimated. Such method of ascertaining cash market value, which is the recognized equivalent of just compensation, is uniformly rejected by the courts because speculative. It should not be heard or considered by the commissioners.

This same speculative principle was recognized and denounced in Morton Butler Timber Co. v. United States, 6 Cir., 91 F.2d 884, as there applied to timber lands. In that case the respondents’ witnesses fixed the value as great as one million four hundred thousand ($1,400,-000) dollars. The jury awarded four hundred eighty-three thousand five hundred ($483,500) dollars because much of respondents’ evidence contained the improper speculative element which leads, not to fair market value, not to just compensation, but to an amount which all men of business know is far in excess of market value. The same objectionable speculative element appeared in the evidence in the Nichol case (No. 75), and moreover the basis of the accounting procedure was not, in our opinion, supported by a preponderance of the evidence.

We have endeavored to give due weight to the facts within the observation of the commissioners in the several cases but have been forced to differ from them as to some awards because not supported by a preponderance of admissible and persuasive evidence. We believe this memorandum will disclose the basis of our action in the several cases and it is our desire that it will aid other commissioners in the application of what we consider correct rules of evidence and principles for ascertaining as nearly as may be just compensation.

Our award of just compensation is as announced in the separate judgments this •day lodged with the Clerk.