Yates & Donelson Co. v. City of Memphis

137 Tenn. 642

• Court: Tennessee Supreme Court
• Decided: April 15, 1917
• Status: Published

Opinion

Mr. Justice Williams

delivered the opinion of the Court.

This is an action by the Tates & Donelson Company, a body corporate, to recover of the city of Memphis and several railway companies damages for an interference with and obstruction of its right of ingress and egress or easement of access to and from its mill, caused by the construction of a subway in Mississippi avenue.

The plaintiff - is the owner of a flouring mill of large capacity, which does a business of about $1,-000,000 per annum. It is located along the margin and south of Bailroad avenue and fronts on Henderson place. The business section of the city is located north-of Bailroad avenue, and the plaintiff’s business is largely with wholesale grocers in that section. A -very considerable traffic, to and fro, by teams, trucks, etc., results, and this had moved customarily along Mississippi avenue^ before the building of the subway.

Henderson place is a public thoroughfare that runs at right angles with Bailroad avenue. At a point in that avenue a few feet northeast of the mill, Mississippi avenue, running diagonally, crosses Bail-road avenue, and such traffic passed from the mill first along Henderson place to its connection with Bailroad avenue, thence across the area which is the intersection of Bailroad avenue and Mississippi avenue. In other words, teams would leave or reach Henderson place across territory common to both of said avenues.

The city and the railway companies constructed the subway on Mississippi avenue, so as to leave a large number of railroad tracks on Bailroad avenue above, or on the original grade of that highway, by making a cut several feet deep in the former. This cut off the ingress and egress referred to and caused the closing of Henderson place at the margin ~of Railroad avenue; and the suit is to recover consequent damages to the property of plaintiff.

The mill site abutted not merely on Henderson place and Railroad avenue, but also, in the exceptional surroundings, on the area common to the latter avenue and the third, diagonal Mississippi avenue — the intersection area of the two avenues, whether that he called a part of the one or the other. Henderson' place, for all practical purposes, merged into Mississippi avenue north of the railroad avenue .before the cut was made.

Manifestly the closing of .the easement of access on these streets was a taking of a property right of plaintiff company for a public use for which compensation must he made. Ill. Cent. R. Co. v. Moriarity, 135 Tenn., 446, 186 S. W., 1053.

Other assignments of error relate to the measure of, and the basic factors to support, allowable damages.

The trial judge first entertained the view that the plant should be considered, for purposes of assessing damages, as a going concern, and he permitted witnesses to testify on that basis; but later on in the trial he conceived that this was erroneous, and he instructed the jury to disregard that testimony. This last ruling was erroneous. It sheds light on the charge given the jury as follows:

“The measure of damages, if you should find from, the proof that plaintiff is entitled to recover, is the difference, if any, between the fair cash market val-ne of the real estate in question just before the improvements were made and the fair cash market value of the same after the improvements were completed. By real estate the court means the land, the buildings thereon, and such part or portions of the machinery in the building as you find from the proof were attached or affixed to the buildings or real estate so as to form a part thereof.”

On the question raised by an assignment as to whether the damages should be assessed upon the basis of the mill of plaintiff company being a going concern, the governing .principle has been declared by this court.

In Railroad v. Michaels, 126 Tenn., 702, 151 S. W., 53, the condemnation of a railway right of way through a sawmill property was involved, and the strip taken separated the mill proper from a log harbor. The ' effect was - to impair or destroy the value of the harbor in connection with the operation of the mill. The court held that the value of the property in one alternative was properly to be fixed on the basis of the mill plant, inclusive of the harbor, being a going concern. It was there said that if the "defendant’s mill was actually being used in connection with the harbor at the time the mill was destroyed by the location of the railway line upon his property, he would be entitled to .be compensated for the fair cash market value of his mill; as a going concern, and the harbor’s use to the mill and mill operations could he estimated as a part of the property taken.

It is elementary that damages consequent upon a taking of property or a property right are fixed on the value or depreciation of the property affected for any use for which it would ordinarily sell in the market, whether it he that use to which it is presently put, or some different use to which it is adapted. The structures on the property were built for flouring mill purposes, and were peculiarly suited for that use; and the whole was being operated at the time of' the taking, involved in the curtailment or loss of ingress and egress, and was not to he treated as a dead or severed plant.

We are of opinion that the ruling on testimoy and the charge led or left the jury to disregard the fact that the property affected was in actual use by plaintiff as a going concern. The jury allowed no damages to plaintiff. That phase should have been embodied in the instruction.

On another trial the jury should be instructed more fully as to the character of the fixtures that may be considered in the assessment of damages. In determining whether a thing is a fixture, and therefore a part of the realty, the rule to be applied is that enforceable as between vendor and vendee, and not that governing between landlord and tenant. Re Post Office Site, 210 Fed., 832, 127 C. C. A., 382.; Jackson v. State, 213 N. Y., 34, 106 N. E., 758, L. R. A., 1915D, 492, and note, Ann. Cas., 1916C, 779. The distinction is .a material one in favor of the plaintiff in relation to the manner in which the thing is required to he annexed to the realty. The mill carried, as a part of it, appliances annexed for trade purposes, essential to complete such a property' as a workable unit, and to be deemed fixtures, though hut slightly attached to the soil or building; or so connected with other machinery so annexed as to be, in substance, a permanent part of the working unit, denominated the plant.

Thus in White v. Cincinnati, etc., R. Co., 34 Ind. App., 287, 71 N. E., 276, where the railway company was condemning a property in use as a paper mill, it was said:

“One -machine essential in the manufacture of paper might be so annexed to or constitute such part of a building that it could not be removed, and another machine equally essential might be easily re¿ moved, and yet, when the two machines are separated, each is without value for the uses intended. In such case both of the machines should be considered as attached to the freehold — one by real, and the other by constructive, annexation. As the machinery is permanent in its character, and, being essential to the purpose for which the - buildings are used, is a fixture, it must be regarded as realty, and go with the building.”

On the other hand the rule laid down on appeal by the court of civil appeals is too broad, and too stringent on the condemnor. Personal effects, tools, and movable appliances are not to be considered as a part of the plant for the purpose referred to. Unless personal effects are actually taken as material to be used by the condemnor there can be no recovery for injury done thereto. Missouri Pac. R. Co. v. Porter, 112 Mo., 361, 20 S. W., 568; annotation L. R. A., 1916D, 719; 4 Sutherland, Damages (3 Ed.), section 1067.

The writ of certiorari is granted, and the judgment of the court of civil appeals modified; and the cause is remanded to the circuit court for a new trial in accordance with this opinion, and a supplemental memorandum filed.