No. 12187
I N THE SUPREME C U T O THE STATE O MONTANA OR F F
— 1973 —
THE STATE O MONTANA, ACTING BY AND T R U H F HOG THE STATE HIGHWAY COMMISSION OF THE STATE OF MONTANA,
P l a i n t i f f and A p p e l l a n t , ROGER W. BENNETT and SANTINA BENNETT,
Defendants and Respondents.
Appeal from: D i s t r i c t Court of t h e Third J u d i c i a l D i s t r i c t , Honorable S i d G. S t e w a r t , Judge p r e s i d i n g .
Counsel of Record:
For Appellant :
Daniel J. S u l l i v a n and Leo J. K o t t a s , Jr. argued, Highway Legal Department, Helena, Montana,
For Respondents:
Knight, Dahood, Mackay and McLean, Anaconda, Montana. Malcolm MacCalman argued, Deer Lodge, Montana.
Submitted: June 18, 1973
Decided :
rn7 Filed : -;. **3??
M r . J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e Court,
This i s a condemnation a c t i o n by t h e S t a t e Highway Commission i n v o l v i n g a 2.68 a c r e t r a c t of l a n d w i t h improvements, l o c a t e d f o u r m i l e s west of Garrison, Powell County, Montanz, F o l l 0 b ~ i n gj u r y t r i a l i n t h e t h i r d j u d i c i a l d i s t r i c t c o u r t b e f o r e t h e Hon, Sid G, S t e w a r t , d i s t r i c t judge, judgment was e n t e r e d awarding t h e owners $60,000 f o r t h e i r p r o p e r t y . From t h i s judgment and d e n i a l of a motion f o r a new t r i a l , t h e S t a t e a p p e a l s . The S t a t e of Montana, a c t i n g through t h e S t a t e Highway Com- mission, seeks t o a c q u i r e t h e land i n q u e s t i o n f o r highway pur- poses. The p r o p e r t y owners a r e Roger W. Bennett and h i s w i f e , S a n t i n a Bennett, T h e i r p r o p e r t y a b u t s U , S . Highway No. 10 along t h e n o r t h ri.ght-of-way boundary l i n e . The p r o p e r t y i s known i n t h e a r e a a s The Golden Spike. Located upon t h e p r o p e r t y were r e n t a l c a b i n s , s t o r a g e sheds and a s e r v i c e s t a t i o n , w i t h home and shop combined, Bennett t e s t i - f i e d h i s b u s i n e s s c o n s i s t e d of running t h e s e r v i c e s t a t i o n and s e l l i n g and r e p a i r i n g used c a r s , t r u c k s and t r a c t o r s , A t t r i a l , t h e s t a t e ' s a p p r a i s e r t e s t i f i e d t h a t t h e "highest and b e s t use1' of t h e land was f o r r u r a l homesites and f i x e d i t s market v a l u e a t $25,650, based on t h e c o s t approach f o r t h e b u i l d i n g s and t h e market d a t a approach f o r t h e land. Witnesses f o r t h e p r o p e r t y owners t e s t i f i e d t h a t t h e "highest and b e s t use" of t h e p r o p e r t y was b u s i n e s s o r commercial. The p r o p e r t y owner valued h i s p r o p e r t y a t $100,000 and an independent f e e a p p r a i s e r f o r the owners, u s i n g t h e c a p i t a l i z a t i o n of income approach, valued t h e p r o p e r t y a t $81,367.44. The j u r y r e t u r n e d a v e r d i c t f o r t h e p r o p e r t y owners i n t h e amount of $60,000. Judgment was e n t e r e d and t h e S t a t e a p p e a l s from t h a t judgment. O a p p e a l t h e S t a t e p r e s e n t s seven i s s u e s f o r review, n The f i r s t t h r e e concern t h e a d m i s s i b i l i t y o f t h e owner's testimony a s t o t h e v a l u e of t h e p r o p e r t y . I s s u e s f o u r through s i x r e l a t e t o
t h e p r o p r i e t y of t h e c a p i t a l i z a t i o n of income approach used by t h e p r o p e r t y owners' a p p r a i s e r . I s s u e seven a l l e g e s e r r o r i n t h e d i s t r i c t c o u r t ' s l i m i t i n g cross-examination by counsel f o r t h e State, I n i s s u e s one through t h r e e t h e t h r u s t of t h e s t a t e ' s argument i s t h a t owner en nett's v a l u a t i o n of hi.s p r o p e r t y was n o t a d m i s s i b l e because no proper foundation was l a i d , The owner t e s t i f i e d , over o b j e c t i o n , t o a f i g u r e of $100,000, a s t h e v a l u e of h i s property. The S t a t e , r e l y i n g on Alexander v. S t a t e Highway Comm'n, 142 Mont. 93, 110, 381 P.2d 780, contends t h e owner's testimony was n o t a d m i s s i b l e . I n Alexander t h i s Court h e l d : ft* $- * t h a t an owner, upon prima f a c i e proof of ownership, s h a l l b e q u a l i f i e d t o e s t i m a t e i n a r e a s o n a b l e way t h e v a l u e of h i s p r o p e r t y f o r t h e u s e t o which he h a s been p u t t i n g i t , Such owner i s n o t q u a l i f i e d by v i r t u e of ownership a l o n e t o t e s t i f y a s t o v a l u e f o r o t h e r purposes u n l e s s he p o s s e s s , a s any o t h e r w i t n e s s a s t o v a l u e , I some p e c u l i a r means o f f orming an i n t e l l i g e n t and c o r r e c t judgment a s t o t h e v a l u e of t h e p r o p e r t y i n q u e s t i o n beyond what i s presumed t o be possessed by men generally."' Here, t h e owner t e s t i f i e d only a s t o t h e v a l u e of t h e p r o p e r t y f o r purposes t o which he had been u s i n g i t , The S t a t e contends, i n e f f e c t , t h a t t h e owner cannot s t a t e t h e v a l u e of h i s p r o p e r t y f o r t h e purpose f o r which he was p u t t i n g i t when t h a t u s e i s n o t , i n t h e s t a t e ' s opinion, t h e h i g h e s t and b e s t u s e , The p r o p e r t y owner p r e s e n t e d a f i g u r e of $100,000 a f t e r foundation was l a i d a s t o h i s f a m i l i a r i t y w i t h t h e g e n e r a l a r e a , h i s purchase of t h e p r o p e r t y and c o n s t r u c t i o n of t h e b u i l d i n g s , and h i s u s e of t h e p r o p e r t y i n s e l l i n g g a s o l i n e , o i l , used c a r s and o t h e r v e h i c l e s o v e r a p e r i o d of twenty y e a r s , With t h i s background, i t cannot b e s a i d t h a t h i s v a l u a t i o n was e i t h e r s p e c u l a t i v e o r c o n j e c t u r a l . The competence of a w i t n e s s t o g i v e an opinion on v a l u e of p r o p e r t y i s g e n e r a l l y i n t h e d i s c r e t i o n of t h e t r i a l judge. One who knows t h e r e a l p r o p e r t y i n q u e s t i o n and i s f a m i l i a r w i t h t h e u s e s t o which i t may b e p u t , may t e s t i f y a s t o i t s market v a l u e . Such w i t n e s s e s need n o t know of any s a l e s o r be t e c h n i c a l e x p e r t s . S t a t e Highway Comrn. v , Wilcox, 155 Mont. 176, 468 P.2d 749; S t a t e
Highway Comm'n v. Barnes, 151 Mont. 300, 443 P,2d 16; S t a t e v. P e t e r s o n , 134 Mont. 52, 328 P,2d 617. The p r o p e r t y owner, whether g e n e r a l l y f a m i l i a r w i t h such v a l u e s o r n o t , ought t o be allowed t o e s t i m a t e i t s worth. The weight of h i s testimony i s f o r t h e jury. Alexander v. S t a t e Highway Comm'n, s u p r a ; 3 Wigmore, Evidence $ 716 (Chadbourn r e v . 1970). The only r e s t r i c t i o n on t h e owner's testimony i s when t h e n a t u r e of t h e answer i s s o un- r e a s o n a b l e a s t o b e s p e c u l a t i v e , c o n j e c t u r a l , and c o n t r a d i c t o r y t h a t h i s answer should be s t r i c k e n . Alexander v. S t a t e Highway Comm'n, s u p r a , Here, t h e owner's e s t i m a t e was n o t s o unreasonable o r l a c k i n g i n foundation t h a t t h i s Court may hold t h e d i s t r i c t c o u r t abused i t s d i s c r e t i o n , s t a t e ' s i s s u e s f o u r through s i x a r e d i r e c t e d a t t h e v a l u a t i o n f i x e d by t h e p r o p e r t y owners' a p p r a i s e r under t h e c a p i t a l i z a t i o n of income approach, The S t a t e contends t h a t such an approach t o v a l u a t i o n should n o t have been admitted because of i n s u f f i c i e n t evidence of t h e n e t income t o c a p i t a l i z e , It h a s been g e n e r a l l y h e l d t h a t t h e b e s t method of a r r i v i n g a t market v a l u e i s r e c e n t s a l e s of comparable p r o p e r t y , State Highway ~omm'n v , Bare, 141 Mont. 288, 377 P.2d 357. But where t h e r e a r e no comparable s a l e s , evidence based upon revenue and v a l u a t i o n based i n p a r t thereon i s competent and a d m i s s i b l e . S t a t e Highway Comm'n v , Biastoch Meats, I n c , , 145 Mont. 261, 400 P.2d 274, I n t h e i n s t a n t c a s e t h e purpose f o r which t h e p r o p e r t y was used i s indeed unique i n t h e a r e a , Here, we have a s e r v i c e s t a t i o n and r e p a i r shop i n an a r e a more t y p i c a l l y used f o r r u r a l homesites o r farm l a n d , The p r o p e r t y owners' a p p r a i s e r used t h e c a p i t a l i z a t i o n method o f v a l u a t i o n i n determining t h a t t h e p r o p e r t y i n q u e s t i o n should be valued a t $81,367.44. H e a r r i v e d a t t h i s f i g u r e by averaging t h e C owners' income t a x r e t u r n s f o r t h e p a s t two y e a r s on income from t h e property. He then deducted from n e t p r o f i t t h e sum of $120 f o r maintenance and $4,800 a s a f a i r amount a t t r i b u t a b l e a s wages
f o r t h e owners, The balance of $4,884 was a t t r i b u t e d t o t h e
v a l u e produced by t h e p r o p e r t y i n l i e u of r e n t which when c a p i t a l i z e d a t s i x p e r c e n t gave a v a l u e of $81,367.44. Weaknesses i n formulating t h i s v a l u e go t o t h e weight of t h e e x p e r t ' s t e s t i - mony t o b e evaluated by t h e j u r y , S t a t e Highway Comm'n v. Wilcox, 155 Mont. 176, 468 P,2d 749; S t a t e Highway Comfn v , Vaughan, 155 Mont. 277, 470 P.2d 967, Once proper foundation h a s been l a i d a s t o t h e w i t n e s s ' e x p e r t i s e he ghouldbe permitted t o g i v e h i s opinion u s i n g any of t h e accpted means of c a l c u l a t i n g v a l u e , It i s t h u s incumbent upon t h e S t a t e t o b r i n g out any weaknesses of h i s v a l u a t i o n upon cross-examination. The a p p r s i s e r ' s f i g u r e s were based on more than c o n j e c t u r e and u n c e r t a i n t y and t h e r e f o r e can be d i s t i n g u i s h e d from S t a t e Highway Comm'n v , Bare, 141 Mont. 288, 377 P,2d 357, r e l i e d upon by t h e S t a t e , I s s u e seven concerns t h e s t a t e ' s c o n t e n t i o n t h a t i t was unduly l i m i t e d i n i t s cross-examination. I t i s a g e n e r a l r u l e i n t h i s s t a t e t h a t s e c t i o n 93-1901-7, R,C.M. 1947, permits a wide range f o r cross-examination. The r i g h t of cross-examination may n o t b e unduly r e s t r i c t e d and may extend n o t only t o f a c t s s t a t e d by t h e w i t n e s s i n h i s d i r e c t examination, b u t t o a l l o t h e r f a c t s connected w i t h them which tend t o e n l i g h t e n t h e j u r y upon t h e q u e s t i o n i n c o n t r o v e r s y , The r u l e necessarily includes questions t o bring out f a c t s i l l u s t r a t i v e of t h e motives, b i a s and i n t e r e s t s f t h e w i t n e s s o r a s a r e f l e c t i o n upon h i s c a p a c i t y and memory, Kipp v . Silverman, 25 Mont, 296, 64 P. 884; Cobban v , Hecklen, 27 Mont, 245, 70 P. 805; Cuerth v , Arbogast, 48 Mont. 209, 136 P, 383; Herzig v. Sandberg, 54 Mont. 538, 1 7 2 P, 1 3 2 . W have thoroughly reviewed t h e r e c o r d and f i n d i t simply e does n o t b e a r out t h e S t a t e ' s c o n t e n t i o n t h a t cross-examination by t h e s t a t e of t h e p r o p e r t y owners' a p p r a i s e r was unduly r e s t r i c t e d .
J u r y f i n d i n g s w i l l n o t be d i s t u r b e d u n l e s s they a r e s o obviously and palpably o u t of p r o p o r t i o n t o t h e v a l u e of t h e p r o p e r t y taken a s t o be i n excess of j u s t compensation, State Higl-c~sy~omrn'n v . Jacobs, 150 Mont. 3 2 2 , 435 P,2d 2 7 4 . Having reviewed t h e record and examined t h e i s s u e s r a i s e d by t h e S t a t e , we f i n d t h e r e was no s u b s t a n t i a l e r r o r i n t h e d i s - t r i c t c o u r t proceedings. The judgment i s a f f i r m e d ,
Associate J u s t i c e / Associate ~ u s t i c < s ,