Thе District Court, sitting by consent of the parties without a jury in a condemnation proceeding, awarded the City of Baltimore $1 as full and just compensation for the taking by the United States of the City’s interest in one and a half acres of land on which were located public alleys in a real estate development in the City known as Fairfield, and taken by the United States for use as a shipyаrd for the building of ships. The City appealed on the ground that for all practical purposes it owned the land in the bed of the alleys and was entitled to the market value thereof in the sum of $5,432 less $1 for the value of the naked fee owned by the abutting owners.
The situation confronting the Judge is described in the following passage from his carefully considered opinion:
“Numerous privаte lot owners were affected by this proceeding. They have either settled their claims with the Government for their respective interests taken, or have litigated their claims and been awarded compensation after jury trials in this Court. The Mayor and City Council of Baltimore were also made defendants in this proceeding because of the ownership by the municipаlity of certain public alleys running through parts of the land condemned, which was laid out some years ago as a residential development, intersected by both street and alleys, which were dedicated and accepted by the City. Both the streets and the alleys were, however, merely ‘paper’ improvements, because never actually laid out, although under the beds of some of the would-be streets, the City had actually constructed some sewer and water lines, and by agreement with the City, no part of the bed of any of the streets was condemned — contrary to what was done with respect to the bed of certain of the alleys. No sewerage or other lines or any improvements had ever been constructed under or upоn these alleys. The land constituting the beds of these alleys which are 20 feet wide, has an area of approximately 1% acres, or, roughly, 67,900 square feet. None of these proposed alleys w~as ever abandoned by the City. The City has filed an answer to the Government’s petition, claiming compensation for this area which has been taken. In the various jury awards madе to property owners whose parcels bordered on these proposed alleys as well as upon the proposed streets, *788 the effect of the public easement created by these rights of way was taken into consideration by both the Government and the property owners in presenting, at the trial of the various cases, the values placed by the respective parties upon the parcels of land involved. However, the question of what, if any, compensation the City is entitled to, by virtue of the condemnation of the beds of these alleys, was deferred and heard separately by the Court, by agreement between counsel for the Government and for the City, jury trial being waived.”
The alleys had not been graded or paved or improved in any way by the City but they were used to some extent, as abutting owners had built on the back of their lots adjacent to the alleys a number of garages which were poor in character and dilapidated in condition when the land was taken. The contentions of the parties are summarized as follows in the judges opinion: “It is the contention of the Government that these alleys had, at the time of the taking, in and of themselves, no market value — that all their value has gone into the abutting lots, and that, therefore, the City is entitled to recover for the taking of these alleys no more than nominal damages. On the other hand, the City claims that at the time of the taking, the owners of the abutting lots possessed, according to Maryland law, only what is called a naked fee, whereas the City possessed the entire beneficial use of the land embraced in the alleys; that the lot-owners suffered no pecuniary damages by the taking, whereas the City has lost pecuniarily the value of the land embraced in the beds of these alleys; that it has lost not only its highway rights therein but also its right to lay sewer and water pipes and othеr sub-surface or surface structures therein or thereon; that if- and when the general area embraced in this condemnation proceeding is devoted to either private industrial or residential purposes, the City will be called upon to provide and maintain such structures, and will be required to pay the then owners of the land for re-acquisition of the right to do so; and that, therefore, since just compensation for the taking of private property for a public use must be the full and perfect equivalent of the property taken, so that the owner shall be put in as good a position pecuniarily as he would have occupied if his property had not been taken, the City is entitled to be paid the fair market value at the time of the taking of these alleys which, according to the Government real estate expert who testified and the fairness of whose testimony, on a purely appraisal basis, is not questioned by the Government, is 8$ per square foot, or the sum of $5,432.”
We are in accord with the District Judge in his conclusion that the contention of the City should not be sustained, for it is based upon the thesis that the City is entitled to the same compensation as the owner of unencumbered land would be entitled to receive for the taking of his property by condemnation. The nature of the interest owned by the municipality in public streets and alleys, as contrasted with the interest of the abutting owners, has been defined by the courts of Maryland, and the decisions show that the view maintained by the City is. untenable. The interest of the City in public streets and alleys is not for all practical purposes equivalent to a fee. It is true that when land is dedicated to the City for street purposes, the City acquires as trustee for the public not only the easement of passage but also the right to grade and improve the surface, and to lay drains, sewers and pipes for various utilities beneath the surface of the land. But, on the other hand, the person in whom the fee resides, e.g., the abutting owner, retains substantial rights notwithstanding the dedication. He may maintain trespass or ejectment or waste for the invasion of his rights, such as the unauthorized deposit of material or rubbish upon the soil, Murray v. McShane,
These decisions demonstrate that the City is not entitled to compensation as if it were the owner of an unqualified interest in the land. It seems that the precisе question in issue in the pending case has not been decided by the Maryland courts but decisions elsewhere point the way. We are not dealing merely with property in which the ownership is divided among a plurality of persons, but rather with property whose use is divided, and the compensation to be paid to any one whose interest is taken must be reckoned by the value of thе use to which he is entitled and not by the value which the land, if unencumbered, would have. The question here is the value of the City’s right as trustee for the public to use the land for highway purposes, and it does not follow that the City is entitled to the full value of the land even if the value of the interest of the abutting owner may have been reduced to a nominal amount by the dedication of the lаnd to perpetual public use. Nor does it follow that the sum total of the value of the interest of the City and that of the abutting owner must equal the value of the unencumbered land. The fact is that the value of the land in the bed of the highway as land has been diminished by its devotion to a limited purpose.
In a number of cases effect has been given to these views. In Boston Chamber of Commerce v. Boston,
The City of Baltimore made no effort to approach the pending case from this viewpoint and stood firmly upon its contention that it was entitled tо compensation as if it had been vested with complete title to the land occupied by the streets. For authority it relied chiefly on the decision in United States v. Benedict, 2 Cir.,
It is obvious that in two respects the facts of this case differ from those in the case at bar, and on this account the precedent may seem less persuasive; but, however, that may be, we do not think that the method adopted should be followed in the present case. We think that the District Court was correct in rejecting the expert evidence offered by the City, and accepting the view of the Government’s expert that the City’s interest in the alleys had only a nominal value. It is true that it is held in condemnation cases in Maryland that abutting property owners are entitled to nominal damages only for their interest in the fee in the streets. Moale v. Mayor, etc., of Baltimore,
It must not be supposed that the City’s pecuniary interests are ignored or neglected by this treatment of the situation. When a street is opened in Baltimore the municipal authorities customarily assess the costs involved upon the adjacent prоperty owners on the ground that they have received benefits of equal amount; and the increased value of the lots finds expression in the increased taxable basis on which the City thereafter collects annual taxes from the owners of the property.
We do not suggest that the city’s damages upon the condemnation of its interest in a street must always be limited to а nominal amount. Frequently it occurs that the taking of a street causes substantial loss for which the city must be compensated. This happens when the municipality is required to establish and improve another street in place of the one condemned or to relocate underground structures such as water mains or utility pipes. In such cases the measure of compеnsation is the cost of supplying the substitute, as was held in Brown v. United States,
In Brown v. United States, supra, where it was necessary to condemn and relocate a portion of a town in order to make place for the construction of a reservoir by the United States, Chief Justice Taft pointed out the propriety of such a measure of damages in these words (
In the pending case the City had made no improvements whatsoever to the alleys when they were taken by the United States, but had merely accepted the dedication without any expenditure on its part. The alleys are now closed and there is no need either to reopen them or to relocate them elsewhere. When taken they had no market value and their extinction imposed no obligation upon the City to replace them. It is suggested that the Government’s need for the shipyard may cease at the expiration of the war and the land may be returned to private ownership and the City may bе obliged to incur expense to lay out new alleys for the use of the residents. This possibility, however, is too speculative to furnish a basis for substantial damages. Value cannot be placed upon a remote possibility. Cameron Development Co. v. United States, 5 Cir.,
Affirmed