388 P.2d 113 | Or. | 1963
This is an appeal by defendants Stewart and Christianson from an award made by the trial court to defendants G-euther and Schierholz in a condemnation proceeding.
The State Board of Higher Education brought an action to condemn certain real property consisting of land and building which defendants Stewart and Christianson were purchasing under a contract from defendants Moore. Defendants Geuther and Schierholz were lessees of defendants Stewart and Christian-son under a ten-year lease which had approximately eight and a half years to run at the time of the taking by plaintiff. The jury fixed the value of the property at $30,000. In the supplemental proceeding the trial court fixed the value of the leasehold at $5,000. Defendants-appellants contend that there was no evidence to sustain the valuation fixed by the court.
Prior to the taking the lessees operated a threéchair barbershop on the premises. Thé only evidence of the value of the leasehold adduced by the lessees was their pwn .estimate and the testimony of-four
It appears that counsel for the lessees confined his witnesses to those engaged in the barber’s trade because he felt that the leasehold would have to be evaluated solely in terms of its use in carrying on the barbering business. This conclusion seems to have been drawn from the assumption that the highest and best use of the property was for the operation of a barber shop and that the testimony would necessarily be limited to the value for such highest and best use.
It is not necessary for us to decide to what extent highest and best use controls the character of evidence as to value for other uses.
It is evident from the testimony in this case that the property held under lease was suitable for a variety of commercial uses. The effort should have been made to arrive at the market value of the leasehold
It has been observed that the appraisal of leases is a complex process presenting even greater difficulties of evaluation than those found in appraising full ownership.
The judgment is reversed and the cause is remanded for a new trial.
1 Orgel, Valuation Under Eminent Domain § 30 (2d ed 1953).
“Establishing a valuation for a leasehold is one of the most difficult and complicated problems that an expert appraiser is called upon to solve. Even for the Realtor who has been appraising real estate of all kinds for many years it presents some of the most perplexing questions ever encountered in the valuation field.” McMichael, Appraising Leasehold Estates, American Institute of Real Estate Appraisers, Selected Readings in Real Estate Appraisal, p. 1188 (1953).
Jahr, Eminent Domain-Valuation and Procedure § 130 (1953); 4 Nichols, Eminent Domain § 12.42 (3d ed 1962); 1 Orgel, Valuation Under Eminent Domain §§ 120-127 (2d ed 1953); McMichael, supra note 2; Horgan, Some Legal and Appraisal Considerations in Leasehold Valuation Under Eminent Domain, 5 Hastings L J 34 (1953); Boyer and Wilcox, An Economic Appraisal oí Leasehold Valuation in Condemnation Proceedings, 17 U Miami L Rev 245 (1963); Sando, Appraisal oí Leasehold Interests, Third Annual Institute on Eminent Domain 79 (1961).