Lead Opinion
delivered the opinion of the court :
The city of Chicago provided by ordinance for an improvement consisting of a thoroughfare with two levels extending north from East Randolph street along Michigan avenue over the Chicago river and thence north to the center line of East Chicago avenue, which is fully described in City of Chicago v. Farwell,
The trial occupied thirteen weeks, making a record of nearly 1000 pages, and the briefs and arguments in this court cover about 400 pages. In the brief for the appellant the points relied upon for reversal are stated under seventeen headings, but the argument which follows in their support does not regard the points, either in their order or in form. In the brief for the appellee the points are stated under twenty headings and they are not followed in the argument. The court is better able to understand and consider the questions involved in the review of a record where there is a systematic arrangement of points and arguments, but in this case the questions involved are neither numerous nor complex, and it will be the endeavor of the court not to omit or overlook anything material to a decision.
The appellant offered to prove that the buildings on the property had advanced in market value $150,000 and the machinery $300,000 after the proceeding was begun, and insisted that the compensation was to be fixed as of the time of the trial. The court refused to adopt that view of the law and the evidence was not admitted. The constitution provides that private property shall not be taken or damaged for public use without just compensation, and it is always held that the compensation is to be determined as of the time of the taking. There is a diversity of rule in different jurisdictions as to the time when a taking for public use occurs, but in this State that question has passed beyond the stage of discussion and has become a fixed rule, which is, that the compensation is to be determined as of the date of filing the petition and not at the time of the trial. (South Park Comrs. v. Dunlevy,
The report awarded compensation and damages as to fifty-one pieces of property. Summons was issued the day the report was filed. Trial on legal objections occupied the court until January 19, 1917. Trials on awards and assessments began February 6, 1917, and there was no delay chargeable to any party. If it should be held that the constitution requires the compensation to be fixed when the money is paid and possession taken another trial would be necessary, since part of the money must come from special assessments, and payment could not have been made at the time of the trial.
The appellant called Walter H. McDonald, one of the commissioners who made the report, and proposed to examine him as to what elements of value he put in his award, and upon what basis it was made, and the court refused to allow the examination, which was correct. (Wright v. City of Chicago,
The court fixed the market value of the property to be taken as the measure of compensation, and appellant contends that the question whether the property had a market value was one of fact, which' should have been submitted to the jury. The law is that market value is the measure of compensation. (Haslam v. Galena and Southern Wisconsin Railroad Co.
The principal and substantial complaint is that the appellant did not receive just compensation for the property taken, and appellant’s counsel say that by its evidence the whole plant was worth, as a living plant, $2,315,961, and, excluding enhancement of value by the improvement of what will be left, it will be worth no more than $750,200, entailing a loss of $1,565,761; and, even applying the enhancement in value of the remainder by the improvement, the net loss would be $1,481,247.54, while the verdict is for only $433,096. This difference arises not so much from divergent opinions of witnesses concerning values as to a difference concerning what was taken for the public use and to be compensated for in money. The constitution requires that the owner of property taken for public use shall be compensated by substituting for the property an equivalent in cash, so that he will be as well off afterwards as before. (Phillips v. Town of Scales Mound,
The case of Jeffery v. Osborne,
The difference which developed on the trial in the case at bar was whether just compensation included what was called “efficiency” value of the plant from its capacity for earning profits as a soap manufactory. The witnesses for the appellant were intelligent, experienced and capable of giving an opinion as to what they called “going” value or “efficiency,” and one of them testified that such value was $360,000 and another that it was $500,000, based on the fact that an established business was carried on there and the amount of soap produced in a year and the expense of producing the soap. This value would be included in just ..compensation if the city were taking the business or depriving appellant of it, but the law is fixed in this State that whenever property has a market value, evidence of profits derived from it is not admissible nor a basis for fixing compensation. (Jacksonville and Southeastern Railway Co. v. Walsh, supra; Braun v. Metropolitan West Side Elevated Railroad Co.
Errors are assigned upon the giving of instructions, but they were in harmony with what has been already said, and the only one particularly objected to is the fifteenth, which defined the meaning of real estate as vacant land, together with all buildings and structures thereon, and fhe machinery, apparatus and equipment upon the land and in the buildings, with directions to consider the vacant land and such buildings, structures, machinery and equipment as a whole, and to determine from the evidence whether or not the buildings, structures, machinery or equipment enhanced the fair cash market value of the vacant land by the amount of the sound value of such buildings, structures, machinery or equipment. The definition of real estate was faultless and the instruction told the jury to consider the property as a whole. The rule adopted and enforced throughout the trial was that appellant was entitled to the highest cash market value of the part taken, considered as a part of the whole, for the best use to which it was adapted, and the examination of witnesses was upon that basis. The court instructed the jury to allow appellant the fair cash market value for its highest and best use of that part of the tract taken when considered in its relation to and as a part of the-entire tract, and not as a separate and distinct piece of real estate disconnected from the residue of the tract. The objection is that the instructions did not include the so-called “efficiency" value, which did not enhance the value of the real estate but was only an element of property which was not taken from the appellant. Regarding the instructions as a whole there is no valid objection to them. ■
Before the taking of evidence the jury visited and inspected the plant and property and after the evidence was concluded again made a personal examination, and that fact is to be given proper weight in determining whether the conclusion of the jury was a just and proper one. Eliminating the improper elements insisted upon by the appellant, the verdict was within the range of the evidence and can not be disturbed as contrary to it.
The judgment is affirmed. T , . ,
. , Judgment affirmed.
Dissenting Opinion
dissenting:
I do not concur in the conclusions reached on several questions decided in the foregoing opinion. I am not in accord with the finding of the opinion that the date of the filing of the commissioners’ report in the county court must be fixed as the date of valuing the property condemned. The commissioners’ report was filed July 15, 1915. The trial as to this property began October 2, 1917, and a judgment on the whole case was entered March 8, 1918. Counsel for appellant offered to prove on the trial that its machinery had advanced in market value between the date of the filing of the commissioners’ report and the time of the trial over $300,000; that such machinery would cost that much more to re-instate' it in a new building. They also offered to prove that the buildings of appellant were worth $150,000 more at the time of the trial than at the filing of the commissioners’ report. The evidence in the record seems to show, without controversy, that the advance in building cost in that time was over twenty-five per cent. The city’s figures appeared to show that the enhanced cost of the buildings between those dates' would have been at least $105,000, while the testimony of appellant’s witnesses' is to the effect that the advance in the cost of the buildings would be $262,000.
The general rule is that damages should be assessed and compensation determined as of the time of the taking. Difficulties, however, sometimes arise in determining when the actual taking occurs and different rules have been laid down in different jurisdictions, doubtless because of the diversity of constitutional and statutory provisions governing eminent domain proceedings, In several jurisdictions the rule is that the date of filing the petition in eminent domain proceedings will be taken as the time when damages should be assessed, while in others the date is determined by that of the issuance of summons or the filing of the bond or assessment, appraisement or award, and in some States the rule varies in different classes of takings. (10 R. C. L. 214; 2 Lewis on Eminent Domain,—3d ed.—sec. 705.) Most of the authorities state that in condemnation proceedings the value of the land should be measured at the time of the taking or its appropriation by the public authorities. In Sanitary District v. Chapin,
Section 13 of article 2 of the constitution of 1870 provides that “private property shall not be taken or damaged for public use without just compensation.” It is manifest, under the decisions of this State and those of other jurisdictions construing similar constitutional provisions, that the owner should be compensated for the amount of his loss. This court has said that in condemnation cases the owner of the property “is not required to make any pecuniary sacrifices at all. He is entitled to whatever the property is worth to him or to anyone else, for any purpose to which" it is adapted.” (Chicago and Northwestern Railway Co. v. Chicago and Evanston Railroad Co.
It is true that it may be. impracticable, under our method of procedure, to ascertain the value at the time of the actual taking, as that would necessitate a supplemental hearing, but that does not answer the argument that in a proceeding of this kind to ascertain the value we should approximate, as nearly as practicable, to the actual time of the taking or appropriation. In an ordinary case, which .is quickly disposed of, the time of filing the petition will generally give a fair value as to the interests of all parties, yet to enforce that rule arbitrarily in 'all cases, even when years have elapsed between the filing of the petition and the time of the hearing to fix the value, will result in great wrong and injustice. It is true, as argued by counsel for appellee, that in exercising the right of eminent domain the question of just compensation to be paid to the owner means that such compensation is to be ascertained that is not only just to the individual whose property is taken but to the public which is to pay for it, (Searl v. School District,
I agree with the opinion that in the ordinary case the time for filing the petition,—or, under the Local Improvement act, the date of filing the commissioners’ report,— might well be taken, but in a case like this, where property has greatly enhanced in value since the beginning of the proceedings or has greatly depreciated in value during that time, such a rule, if strictly enforced, will necessarily not bring just and equitable results. In my judgment it is entirely practicable, in an exceptional case of this kind, to fix the" date of the beginning of the trial before the jury as to finding the value as the date at which the value of the property should be fixed. While such a date may not do exact justice, it will approximately come nearer doing so in cases of this kind than it will to follow an arbitrary rule by fixing the time as of the filing of the petition in the ordinary condemnation proceeding or the filing of the commissioners’ report under the Local Improvement act. I think the trial court should have permitted the appellant to make proof of the enhancement of the value as to the machinery and building materials between the date of the filing of the commissioners’ report and the date of the beginning of the trial. Under this reasoning it necessarily follows that the evidence of the value of the additional machinery put in the plant by appellant, if it was shown that it was installed in good faith to keep up the working efficiency of the manufacturing plant, should have been allowed, as well as the evidence to prove the actual damage to this additional machinery by the condemnation • of the plant. The owner of the property should not be prevented from improving the same in accordance with the needs of his business, pending hearing on the condemnation proceeding, if he does so in good faith. Driver v. Western Union Railroad Co.
The opinion in this case states that what constitutes market value is a question of law and not one of fact to be submitted to the jury. This, in my judgment, is not in harmony with the decision of this court in Chicago and Northwestern Railway Co. v. Chicago and Evanston Railroad Co. supra. I am in accord with the definition of market value as given in the foregoing opinion. In the case last cited one railroad was endeavoring to condemn a strip for right of way across the right of way of the Chicago and Northwestern railway as already located, and the question of market value and how to fix it was one of the chief questions in dispute. The court in that case said (p. 606) : “One of the controverted questions in the case was whether, as a matter of fact, property circumstanced as this was had any market value in that vicinity. We think the evidence tended to prove it had not, whatever the weight-of evidence may have been on that question. And as the court had refused all instructions, with the exception above mentioned, presenting this aspect of the case and had undertaken to instruct the jury fully with respect to their duty, it should have told them how the amount of compensation was to be determined if the proofs failed to establish a market value for property situated as that was. This the court did not do.” One of the instructions in that case, as shown by the records on file in this court, was to the effect that the jury were to decide, from the evidence, whether or not such land had a market value, and it is manifest from a reading of the opinion in that case that the court reversed the case, not because this instruction was given but because the jury were not fully instructed as to how they should decide upon the value if the proofs failed to establish that the property had a market value. It seems to me that the same conclusion was reached in Sanitary District v. Pittsburg, Ft. Wayne and Chicago Railway Co.
The claim of counsel for appellee that the question of market value was a preliminary question, which should be decided by the trial court as a guide to the admission of evidence, does not.fit the facts as found in this proceeding. The trial court did not deal with this question as if it were a preliminary one. As I understand the record, a motion for a ruling on this question was presented by counsel for the city, afterward joined in by counsel for the appellant. At the close of appellee’s testimony the attention of the court was called to this pending motion and a ruling of the court was asked as to whether the property had a market value or not. The decision of the court was postponed until the conclusion of the petitioner’s testimony. No distinct ruling on this motion was made until the end of the trial, although it appears that rulings were made at various times which in effect held that the market value was the test. Under the rulings of this court in Chicago and Northwestern Railway Co. v. Chicago and Evanston Railroad Co. supra, and in accordance with what I believe to be the proper rule of law, the trial court should have submitted to the jury, as a question of fact, whether or not this property had a market value, to be considered under instructions given setting forth fully the law as applied to the different theories of counsel, on the facts presented, as to whether or not the property did actually have a market value.
This brings me to the discussion of the question as to whether or not the opinion is right in holding that the evidence proved this property had a market value. The opinion concedes that property, in a few exceptional cases, may have such a special use that market value ought not to be considered decisive; that if it does not have such a value market value cannot be the legal standard to fix for the compensation to be paid for taking the same; but the opinion further holds that on the evidence in this case the property of appellant cannot come within such exception. I do not agree with that conclusion. The great weight of authority in other jurisdictions, it seems to me, is to the contrary, as well as the reasoning of this court in its former decisions. In St. Louis, Jerseyville and Springfield Railroad Co. v. Kirby,
I agree with the opinion that the cases cited by counsel for appellant that have to do with the taking over by cities or other public authorities of entire water systems, gas plants or other public utilities, including the entire business of the companies, are not controlling on a question of this kind, and, at the most, can only be persuasive in their reasoning; but there is another class of authorities that have applied a somewhat similar doctrine to manufacturing plants where the business could be continued after condemnation, the same as it can be in this case. Southern Railway Co. v. Michaels,
Yates & Donelson Co. v. City of Memphis, 194 S. W. Rep. (Tenn.) 903, was a proceeding to recover damages from the city and from several railway companies for interference with the Yates & Donelson Company’s right of ingress and egress to and from its flouring mill.- The court held the closing of access to the property by an established route was the taking of a property right for which compensation should be paid, and that in considering the compensation the company should be considered a going concern.
In St. Louis, Memphis and Southeastern Railroad Co. v. Continental Brick Co.
Jeffery v. Osborne,
The real estate witnesses for appellant in this proceeding, in testifying, gave the value of this property as an operating plant consisting of machinery, buildings and land, giving the values of these separate items. They testified that the property would be worth more than the market value of the different elements of machinery, buildings and land if taken separately; that when a manufacturing plant, operating, has been demonstrated to be a success it would be worth more than the mere valué of its physical elements; that "a plant which has stood the test of experience and had been found successful would have a “going value,” or what the witnesses and counsel for appellant call an “efficiency value.” Two witnesses also testified for appellant who had more or less extended experience in estimating the value of soap manufacturing plants, and they gave the efficiency or going value of this manufacturing plant as worth, independently of its physical parts, from $300,000 to $500,000. The real estate experts for the city all testified that they had valued the property only with reference to its physical elements. One of the witnesses conceded, on cross-examination, that he considered it only as if it were not a going concern; that he was estimating it as if there was no business conducted there,—as to the value of the land, buildings and machinery,—the latter two items being considered as junk. The opinion in this case practically reaches the same conclusion.
The evidence offered here shows that there had been no sales of soap manufacturing plants in Chicago or in the vicinity that in any way assisted in fixing the market value of this property if put on the market as a going concern. If, when a part of a mill site or an automobile plant or a brickyard is taken, the strict test "of market value should not be applied in finding the value to the owner, I do not see why the same rule should not be applied in taking a portion of a manufacturing plant, such as here in question. If it is proper in such cases to deduce a market value from the intrinsic value of the property and its value to the owner for the special purpose for which it is used,—that is, to prove all the varied elements of value, all the. facts which the owner would properly and naturally press upon the attention of a buyer with whom he was negotiating a sale, and all other facts which would naturally influence a person of ordinary prudence desiring to purchase a going concern,—then I think the owner is entitled to have similar evidence considered showing the capabilities of this property as to the business or use to which it has been devoted.
Counsel for appellee argue that as all the evidence on this question offered by appellant was admitted on the trial, therefore appellant has no reason to complain on account of the trial court’s rulings in this regard. It is true that the court admitted the evidence on this question offered on behalf of appellant, but the court’s rulings during the trial of the case and in the giving of instructions were practically to the effect that the property in question had a market value. These rulings would necessarily lead the jury to believe that the way to reach a verdict as to the fair and just compensation to be given to the owner was to ascertain such market value, and as the court by its rulings held that this property had a market value, the result was that the jury were told, in effect, that the value of the property for the peculiar use to which the owner was putting it in its business, as testified to by the witnesses for appellant, should not be considered by them in reaching their verdict as to the fair and just compensation to be given for the property. It was because of the misleading character of the rulings of the trial court and the instructions given on somewhat similar questions in Chicago and Northwestern Railway Co. v. Chicago and Evanston Railroad Co. supra, that the court reversed that case and held that in condemnation cases the owner of the property condemned was not required to make any pecuniary sacrifices at all.
If the rule be adopted as laid down in the foregoing opinion, that market value was a question of law to be decided by the court, then in my judgment the trial court was wrong in holding that under the evidence in this case this property had a market value in accordance with the ordinary use of that term. Furthermore, I can reach no other conclusion than that the valuation fixed by the jury as to the property taken and the damages to the remainder is contrary to the great weight of the testimony in this record.