Imágenes de páginas
PDF
EPUB

sylvania this result has been assured by recent legislation. Contrariwise, several States hold that market value must be determined as of the date of taking without qualification. In many States, the courts have apparently not yet considered the specific question. However, testimony during the public hearings and other information received by the subcommittee indicates that the practice in several States, at least with respect to some agencies, is to pay only the market value as of the date of taking if the property has been decreased in value, but to follow the Miller rule for the purpose of excluding enhancement.

Contrasting points of view are illustrated by recent cases in Ohio and Missouri. In the Ohio case, the city of Cleveland authorized the St. Vincent urban renewal plan in 1957. At this time, the property was fully rented at a gross rental of more than $8,000 a year and its value was estimated at $65,000. In 1962, at the time of the trial, the only income from the property was the rent on one store, $50 per month. The value of the property was then estimated at approximately $26,000. The decrease in the gross income was directly caused by the activities of the city in furtherance of the renewal plan. Inhabitants of the area were urged by the city to move to other areas. The demolition of buildings, exodus of inhabitants and resulting lack of police protection, permitted extensive vandalism of the property during 1961–62.

The Court of Appeals, in reversing the lower court, held that the owner of property in an urban redevelopment area was entitled to a valuation of the property based on its fair market value immediately before the city took any steps in furtherance of its urban redevelopment plan, and not, as the city argued, as of the day of the trial (City of Cleveland v. Carcione, 190 N.E. 2d 52 (Ohio 1963); see also City of Cleveland v. Kacmarik, 177 N.E. 2d 811 (Ohio 1961)).

In contrast, the St. Louis Housing Authority condemned land for a low-rent housing project on October 31, 1960. Several months later commissioners were appointed to determine awards of compensation and awarded $4,500 for one of the parcels, the amount which they estimated to be the value of the property at the time the condemnation was announced.

The housing authority took exception to the award, and at a subsequent jury trial the court excluded all evidence of the effect of the announcement on the value of the property. Without the testimony as to the higher value of the property at the time of announcement of the project, the jury found the fair market value at the time of taking to be $2,200. On appeal the Supreme Court of Missouri upheld the jury award and held that under the Missouri constitution, the time of taking is the date upon which the commissioner's award 'is paid into court, and that any damages caused by the announcement and commencement of condemnation proceedings are not part of the damages for the taking and are not items of just compensation within the meaning of the constitution of Missouri (St. Louis Housing Authority v. Barnes, 375 S.W.2d 144 (Mo. 1964)).

It is suggested, however, that the 14th amendment may require the States to protect owners of property taken for public projects from decreased property values caused by the project, to the extent of the rule of the Miller and VEPCO decisions.

G. SEVERANCE DAMAGES

[ocr errors]

1. General

The law is well established that if only a part of a property is taken, the just compensation required by the fifth amendment must include not only the value of the part taken, but also any diminution in the value of the remainder caused by its severance from, and the use to be made of, the part taken (Bauman v. Ross, 167 U.S. 548, 574 (1897); United States v. Miller, supra; West Virginia Pulp & Paper Co. v. United States, 200 F.2d 100*(C.A: 4, 1952)).

In the Miller case, at page 376, supra, the Supreme Court stated the rule:

If only a portion of a single tract is taken, the owner's compensation for that taking includes any element of value arising out of the relation of the part taken to the entire tract. Such damage is often, thought somewhat loosely, spoken of

as severance damage. Under the Miller doctrine the payment for severance damage is a part of the compensation for the property taken, and technically is consistent with the concept that the fifth amendment requires payment only for property taken. In this sense, the term "severance damage" is a misnomer. 2. Unity of ownership

Severance damages may be awarded for injury to remaining land only if the remainder and the part taken are in the identical ownership (United States v. Honolulu Plantation Co., 182 F. 2d 172 (C.A. 9, 1950), certiorari denied, 340 U.S. 820). 3. Unity of use

Severance damages may not be awarded for injury to remaining land, even though in the same ownership, unless there is a unity of use between the part taken and the remainder (Sharp v. United States, 191 U.S. 341, 353–355 (1903); United States v. Mills, 237 F. 2d 401, 404 (C.A. 8, 1956)).

In the Baetjer case it was held that "integrated use" was the test of whether various properties should be treated as a unit, physical separation being important only to the extent that it indicated that the tracts could not be operated as a unit (Baetjer v. United States, 143 F. 2d 391 (C.A. 1, 1944), certiorari denied, 323 U.S. 772. 4. Concept technically inapplicable in easement takings

Courts have held that the concept of severance damage has no application to the taking of an easement but relates solely to the depreciation to the remainder property, where a part of a single parcel is taken in fee (United States v. 765.56 Acres of Land in Southampton, New York, 174 F. Supp. 1, 13–14 (E.D.N.Y. 1959)).

In practical effect, this distinction has little significance, for ordinarily the measure of compensation for the taking of an easement is the difference between the market value of the entire property immediately before and after the imposition of the easement. Use of the before-and-after process takes care of the problem of severance damage. (Olson v. United States, supra; United States v. Causby, 328 U.S. 256 (1946); United States v. Virginia Electric Co., 365 U.S. 624 (1961)).

5. Limits of compensable damage

A significant limitation of the Federal concept of severance damage is that ordinarily just compensation does not include any payment for the decrease in value of the remainder of a property, where the decrease results from the acquisition and use by the Government of land acquired from others, for the same public improvement.

To illustrate, in the Kooperman case the Government condemned fee title to certain land for ammunition storage and a buffer area, and it encumbered additional land with a safety easement. A 12-acre part of the defendant's property was taken in fee for the buffer area and 46 acres of the remainder was encumbered with the easement. The ammunition was all stored on land acquired to the north of the defendant's property.

The court of appeals held that the doctrine of severance damage does not include damage to one owner which may result or flow from the use to which the Government may put other lands acquired for the same project and approved the trial court's refusal to consider severance damage resulting from the storage (Kooperman v. United States, 263 F.2d 331 (C.A. 2, 1959)).

And to the same effect: Campbell v. United States, 266 U.S. 368 (1924); Boyd v. United States, 222 F.2d 493 (C.A. 8, 1955).

This limitation on the damage rule often is difficult to establish in practice; and invariably is a source of controversy. There is no doubt that the application of this rule can leave a property owner, after a taking, with compensation and remaining land valued at substantially less than the value of his entire property immediately before the taking;

It may be noted that there is no comparable rule that would limit the Government's right to deduct benefits to a remainder property to those caused by the specific part taken from an owner. There is no sound reason in logic or equity for applying a more restrictive rule to the payment of compensation for damages to the remaining property caused by a public improvement than the rule applied when the Government seeks to deduct benefits to the remaining property because of a public improvement.

H. BENEFITS

In many instances the remainder of a property is benefited rather than diminished in value when a part of the property is taken for public use. The owner of a farm remainder may find that it is in demand for residential or commercial purposes. It may have more convenient access, improved drainage, lake frontage, etc.

It is well established that the Fifth Amendment permits the deduction of benefits that are due to a public project from the compensation required for a taking. However, there has been much controversy over the years as to the type of benefits which may be deducted. The courts have used language indicating that “special” or “direct” benefits may be deducted, but that "general" or "indirect” benefits

may

not be deducted. Unfortunately, the guides provided for determining the proper classification of a benefit have tended more to obscure than to clarify the distinction.

The Federal rule appears to be that benefits to the remaining property because of a public improvement are deductible from the entire

!

compensation for the taking, to the extent that they actually enhance the market value of the remaining property immediately after the taking (Bauman v. Ross, 167 U.S. 548 (1897) ; McCoy v. Union Elevated Railroad Company, 247 U.S. 354 (1918); United States v. Miller, 317 U.S. 369, 376 (1943); Aaronson v. United States, 79 F. 2d 139 (C.A.D.C. 1935)).

In the Aaronson case, supra, the property owner contended that the jury could not properly consider special benefits without statutory authorization. The Circuit Court for the District of Columbia rejected the argument and held that the omission was of no legal consequence because benefits, like damages, were integral elements of just compensation, and were properly to be considered in the determination of just compensation.

In the McCoy case, supra, the Supreme Court held that the Fourteenth Amendment does not prevent a State from requiring a deduction for all benefits which actually enhance the value of a remainder property, and said:

*** And we are unable to say that he suffers deprivation of any fundamental right when a States goes one step further and permits consideration of actual benefits-enhancement in market value-flowing directly from a public work, although all in the neighborhood receive like advantages. In such case the owner really loses nothing which he had before; and it may be said with reason, there has been no real injury

(p. 366). And in Bauman v. Ross, supra, a case which arose in the District of Columbia, the Supreme Court, although using the term “special benefits," upheld a statute providing for the deduction of “benefits.” In the decision the Court emphasized the speculative nature of what is called "general benefits."

Close analysis of the case law suggests that the Federal courts give the distinction between "special" and "general” benefits more discussion than effect, and that proper application of the just compensation requirement makes the distinction virtually meaningless. This may be iliustrated by the following language by the Supreme Court:

*** Special benefits do not become general benefits because the benefits are common to other property in the vicinity. The fact that other property in the vicinity of the proposed railroad will also be increased in value by reason of the construction and operation thereof furnishes no excuse for excluding the consideration of special benefits to the particular property in determining whether it has been damaged, and if it has, the extent of the depreciation in value

(McCoy v. Union Elevated R.R. Co., supra, p. 364). For a more recent statement of the above see United States v. 2,477.79 Acres of Land, Etc., 259 F. 2d 23, 28 (C.A. 5, 1958).

The indicated Federal rule is logical and reasonable. It allows a deduction of all benefits which can be proved to have enhanced the value of a property as of the time of taking and adequately safeguards the property owner against claims of undefinable speculative benefits from the project which may cause land values to increase in the future.

* * *

The apparent disparity of treatment afforded owners who have a part of their lands taken for a public improvement as compared with others whose lands border a project but are not taken, is no greater or less than the disparity between those whose entire property is taken and those from whom none is taken.

When, for example, a flood control project or a highway project, for which a part of a farm is taken, so benefits the remainder that it is worth just as much, or even more, than the worth of the whole farm before the project, there is no reason why the owner should be paid the per acre value of the land taken, for he has suffered no loss.

As the court said in charging the jury in the early case of Lehigh Valley Coal Co.v.Chicago:

In considering the case the true question is whether the
property was injured by the improvement. If not, then there
is no damage, and can be no recovery. If there is, then the
recovery must be measured by the extent of the loss. If the
property is worth as much after the improvement as it was
before, then there is no damage done to the property. If
the benefits received from making the improvement are equal
to or greater than the loss, then the property is not damaged.
There can be no damage to the property without a pecuniary
loss. If there is no depreciation in value, there is no damage,
and if no injury, then there should be no recovery
(Lehigh Valley Coal Co. v. Chicago, 26 F. 415, 416 (N.D. Ill.

1886)).
And in a recent decision the Court of Claims said:

In arriving at just compensation there should be offset against the value of the thing taken and the damage to the remainder whatever enhancement in value may have resulted from the public work requiring the taking (Dick v. United

States, 169 Fed. Supp. 491, 494 (C. Cls. 1959)). The condition of benefit law at the State level can only be described as chaotic. A few States do not permit any deduction for benefits and in the others there are wide differences both as to the types of benefits and the amounts of benefits which may be deducted.

In general the various jurisdictions may be grouped in these five categories:

(1) Benefits may not be deducted.

(2) Special benefits may be set off against damages to the remainder, but not against the value of the part taken.

(3) Benefits, whether general or special, may be set off against damages to the remainder, but not against the value of the part taken.

(4) Special benefits may be set off against damages to the remainder and the value of the part taken.

(5) Benefits, whether general or special, may bet set off against damages to the remainder and the value of the part taken. The situation is further complicated by the confusion in State court decisions attempting to distinguish between "special" and "general” benefits. The courts and textwriters frequently use different terms in an effort to explain the distinction, but each new term contributes

« AnteriorContinuar »