United States of America, and v. 4,566.26 Acres of Land, More or Less, Situate in Maricopa County, State of Arizona, John W. Wesson, And

450 F.2d 274, 1971 U.S. App. LEXIS 7547
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 19, 1971
Docket25218
StatusPublished
Cited by1 cases

This text of 450 F.2d 274 (United States of America, and v. 4,566.26 Acres of Land, More or Less, Situate in Maricopa County, State of Arizona, John W. Wesson, And) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States of America, and v. 4,566.26 Acres of Land, More or Less, Situate in Maricopa County, State of Arizona, John W. Wesson, And, 450 F.2d 274, 1971 U.S. App. LEXIS 7547 (9th Cir. 1971).

Opinions

BYRNE, District Judge;

This appeal is from judgment awarding compensation for the taking of land by condemnation. The central point in issue is the manner in which the value of the land’s cotton allotment was determined.

Pursuant to Congressional action authorizing construction of the Painted Rock Dam and Reservoir, (See, Pub.L. 81-516, 64 Stat. 163), a flood control project in the Citrus Valley of the Gila River Basin in Maricopa County, Arizona, the United States, in 1959, brought a condemnation action to acquire the land of appellee Wesson. The said land contained 1285.20 acres, including 295.6 acres which had been allotted for growing cotton. The balance of the good farmland was used for growing grain and cover crops, e. g., barley, silage, Bermuda grass and Sudan grass, for the feeding of cattle. At the time of the condemnation suit there were 700 to 800 head of cattle on the property.

The formula used to calculate Wesson’s condemnation awarded was the one previously approved by this court in United States v. Citrus Valley Farms, Inc., 350 F.2d 683 (9th Cir. 1965); First, the land was valued with the cotton allotment included. From this was deducted the value, if any, of Wesson’s [276]*276right under 7 U.S.C. § 1378(a) 1 to transfer his cotton allotment to other land owned by him.

At the trial there was the usual spread between the testimony of the government’s expert witness and that of the landowner and his witnesses with respect to the value of the land as enhanced by the cotton allotment. Appel-lee Wesson estimated the value of his property with the cotton allotment to be $730,968. A neighboring cotton farmer placed the value at $700,000. A real estate appraiser valued Wesson’s land at $616,900. The government appraisers believed that the land with the allotment was worth, respectively, $425,000 and $440,000.

With regard to the right under Section 1378 to remove the allotment of 295.6 acres, a government appraiser expressed the view that such a right was worth $90,000 to $94,000. The real estate appraiser called by the appellee estimated the right’s value to be $31,000. Wesson’s cotton farming neighbor was unimpressed with the argument that the right did have value. In his view, the Section 1378 right was worth “very, very little money.” Wesson and James Carter, a research coordinator for the Arizona Cotton Growers Association and formerly a Maricopa County Agricultural agent for the University of Arizona, agreed with this assessment, stating that the allotment was intrinsically without value.

The triers of fact sided with appellee Wesson: the jury valued the 1285.20 acres at $620,000 and the allotment right under 7 U.S.C. § 1378(a) to be $1.-00. Pursuant to the Citrus Valley formula, appellee Wesson was awarded a special verdict of $619,999.

In 1961 Wesson purchased 800 acres of land near the Wellton-Mohawk Irrigation Project; the following year he purchased an additional 80 acres. Wesson’s decision to purchase said lands was principally due to the water supply which was comparable in price and quality to that of his condemned farm. It was on these lands that Wesson exercised his right under Section 1378 and transferred his cotton allotment.

From 1961 to 1963, Wesson leased the Wellton-Mohawk property to one Pew. During this period, Pew raised Delta Pine cotton on Wesson's land. (Wesson had raised Acala cotton on his condemned farm.) Although Pew was able to increase his yield from 1.5 bales per acre in 1961 to 2.4 bales per acre in 1963, he was still unable to show a profit as a cotton farmer. Pew’s inability to make a profit was attributable to rising production costs and to dropping price supports for cotton.

At the trial, the government sought to introduce evidence showing that Wesson had purchased the Wellton-Mohawk property for $431,773 and had sold it in 1965 for $950,000. The trial court thwarted the government’s effort, noting “that the period is too remote from the date of taking to determine the value of the cotton allotment at that time, and there are too many variables with re[277]*277spect to the value of the property in 1965 * * * to allow that evidence to come in to show the value of the cotton allotment that was transferred.” On appeal the government maintains that the trial court’s ruling deprived it “of the best and most logical evidence of the value of the § 1378(a) right. In short, the government asserts that Wesson was the recipient of a windfall because by “ignoring the actual subsequent transaction involving this allotment” it was “impossible to arrive at a realistic just compensation.”

In support of its position, the government has placed primary reliance upon United States v. Brooklyn Union Gas Co., 168 F.2d 391 (2d Cir. 1948). There, the government condemned certain facilities of two public utility companies. At the hearing to determine the amount of compensation to be paid the companies, the district court refused (on the ground of “irrelevancy”) to consider evidence offered by the United States that the utilities had, in fact, incurred no loss as a result of the government’s taking. On appeal, the Second Circuit deemed, in effect, the trial court’s refusal a misguided avoidance of reality:

“ * * * the value at the time of taking must be developed, in default of a sale price, largely from a consideration of past earnings and such showing of prospective earning power as can be made. * * * It would seem an eerie conclusion that a court must resort to guess, closing its eyes to reality, when its decision must ae-tually be formulated after the true facts have become available. We think the evidence admissible not as a standard of value in itself, but for its bearing upon the prospective values at the time of taking. After all, the nature of the improvement was not shrouded in mystery. There were clear grounds for expecting some development of the kind that actually happened, and evidence of such actual happening is useful to support or check the assumed prospects.” 168 F.2d at 397.

The situation present in United States v. Brooklyn Union Gas Co., supra, is hardly analogous to the matter now in controversy. In the former case, the government’s assertion that the utility companies suffered no ill economic effects from the acts of condemnation was supported by an offer of proof laden with specific factual allegations.2 By contrast, in the instant case, the government’s offer of proof was limited to showing that Wesson had sold his Well-ton-Mohawk property at a considerable profit. It is noteworthy that the government did not then, nor does so now, specifically attribute this considerable profit to Wesson’s cotton allotment right under 7 U.S.C. § 1378(a). The government’s reluctance to credit Wesson’s cotton allotment right with being the factor responsible for the sizeable profit made by Wesson is understandable given the evidence which was introduced at trial: it is clear from the record that cotton farming in the sixties had ceased to be [278]

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