City of Houston v. Charpiot
City of Houston v. Charpiot
Opinion of the Court
This suit originated on the petition of Marion S. Charpiot et al. as owners of á certain 217.87'acre tract of land on the San Jacinto River in Harris County to' recover damages for waste worked .on said land by Wade Lahar Construction Company and to enjoin further .damage thereto. Wade La-har Construction Company, it appeared, liad entered on the land as a clearing contractor under the City of Houston and had commenced, but without right or authority from the owners, the clearing of the land preparatory to its flooding as a part of a lake or reservoir to result from the erection by the City of Houston of a dam on the San Jacin-to River.
Appellant City of Houston, as authorized by Article 3269, V. A. T. S., intervened, alleging itself to be the real party at interest and sought condemnation-of 122 acres, more or less, of plaintiffs’ .tract, -including all of the tract bordering on-the river. Thereafter Wade Lahar Construction Company was dismissed and the case proceeded purely as a district court condemnation solely between City of Houston, as condemner, and appel-lees, as condemnees.
Trial was to a jury., The case was submitted on one special issue which, with ex-planatoi-y definitions, is as follows:
Special Issue No. 1.
“What do you find 'from a preponderance of the evidence was the reasonable market value of the surface estate of the 117.78 acre tract óf land involved in this suit on March 1st, 1953.
“Answer- by stating the total amount • in dollars and cents.
“In connection with the foregoing issue you are instructed that reasonable market value is the price the property will bring when offered for sale by one who desires to sell but is npt obliged to sell and is bought by one who desires to buy t>ut is under no necessity of buying it.
“You are instructed that by the term ‘surface estate’, as used in the foregoing Special Issue, is meant the surface of the land in question, exclusive of oil, gas and other minerals.”
To this issue the jury answered $23,556. Thereafter the court rendered judgment divesting- title to the surface estate of 117.78 acres of land out-of the condemnees and vesting it in condemner, City of Houston. The judgment contained suitable provisions assuring the payment to condemnees of their constitutional compensation for the taking.
While the case was on trial, the parties entered into a stipulation evidently calcur lated to. expedite and simplify the trial; still, at the same time, equally calculated to set at rest and in advance .possible controversy which might arise between the parties after condemnation. The salient features of the stipulation are: (1) The City
Appellant’s points on appeal .are properly preserved. They are directed principally to the charge but appellant also complains of. the refusal of the trial court to reopen the case. to allow it to introduce further evidence, after all parties had closed, and of the insufficiency of the evidence to support the verdict.
Appellant first assigns error to the trial court’s definition of “market value”. This followed in haec verba that suggested and once revised by the Commission of Appeals in an opinion adopted by the Supreme Court. State v. Carpenter, 1936, 126 Tex. 604, 89 S.W.2d 194, and 89 S.W.2d 979 on rehearing. Specifically,' appellant objected to the definition because it would permit the jury to arrive at market value on the.basis of a credit transaction rather than “the price in cash the property would bring.” Appellant tendered and- requested the court to submit a. definition, of market ■ value identical with that given .the jury except for the inclusion of the words “in cash’’ after the word “price”. " Had the jury' been so instructed,' they. would have been limited to what the property would, have' brought in an all-cash “on- the barrel; head” transaction.' They would, .nót have-been allowed- even 'to value in cash, say, the present value of thé consideration-in a sale for part cash and part interest bearing notes well secured by the vendors and: deed of trust liens. The tax laws- and the diffi--culties of-safely investingmoney.being what they are, it is entirely possible that an owner willing to sell but .under no compulsion to do so might insist on a substantially higher price for an, all-cash sale than he would be' willing to take for part cash ánd part well ‘ secured notes. This of, course would not: likely be true in a transaction involving' movables, and for obvious reasons.
Appellant cites many Texas cases where.courts have approved as correct definitions - of market value in -substantially the form, of that requested by appellant, but none of-the cases turns on or discusses appellant’s • point. In fact,-neither party, cites any case,
Mandl v. City of Phoenix, supra, is an out and out holding supporting appellant’s position, while Baucum v. Arkansas Power & Light Co., supra, is an out and out holding contra. We consider the Arkansas case to be better reasoned.'
In the Baucum case [179 Ark. 154, 15 S.W.2d 401], which was a condemnation proceeding, the trial court instructed the jury that condemnee was entitled to “the fair cash market value.” On appeal, this instruction was assigned as error because of the inclusion of the word “cash” in defining market value. It appears from the opinion that the constitution of Arkansas, as does that of Texas,' requires compensation in money for public taking. The court said:
“In other words, where one’s land is taken in the exercise of the right of eminent domain he must have full and just compensation in money, and market value is-the sum ‘the land would be reasonably worth on the market for a cash price,’ but the term cash price as here employed means a sum payable in cash, as contradistinguish-ed from an exchange of properties. It does not mean that the entire purchase price should be paid in cash upon the delivery of a deed. A sale would be for cash within the meaning of this definition if made for a sum paid in money or for a sum paid and payable in money. For instance, A owns a farm which he is willing but not required to sell. B wishes to buy it but is not’required to do so at an excessive price. A and B agree upon a price of $20,000, of which B pays in money $10,000, with balance payable in one year or other customary time, this balance being secured by a lien on the property itself, and bearing interest at a rate equal to the legal rate. If this- security is such that the balance of the. purchase price, with the interest thereon, can, in the' usual and ordinary course of business, be certainly realized out of the property, the sale is for-cash, because its equivalent will be realized.
It is a matter of common knowledge that farms are rarely, if ever, sold for a sum in cash laid down on the barrel head, and if the landowner is to be limited to such a sum as he could get when the entire purchase price is paid cash down, he would be deprived of the valuable right of having his property appraised according to the custom and usage in selling farm lands. Cash value simply means money value, the value payable in money, as distinguished from a price which would be employed as the basis of an exchange. It would be a sale far cash, as the term is employed in eminent domain cases, if the sale was for the equivalent of cash.
“We do not reverse the judgment because this instruction was given, but, in view of the specific objection made to it, the court should have defined the term ‘market value’ as herein defined without the addition of the word ‘cash.’ In other words, there should have been no’ implication in the instruction, in view of the specific objection made, that the market value could not exceed the sum which the owner could obtain for cash counted out and paid down.
“Of course, the market value, when thus ascertained, must be paid in money but this is true because the Constitution has provided that it is upon this condition that the right of eminent domain may be exercised. There is no element of contract in the exer
Appellant does not, by its request, seek to limit the term market value to the value “in money” of what could be realized from a sale on terms common to real estate transactions. It insists on limiting con-demnees to an all-cash sale. In our opinion, this would have been too restrictive and would have denied condemnees their right to the value in money which they could have realized from a fair sale on other than an all-cash basis. How such a restricted basis of sale would operate in every case is not clear. However, it is clear that it would be calculated to limit severely the number of desirable bidders and hence the realization of the full value of the land in money. We overrule appellant’s point.
Appellant next complains of the court’s definition of "surface estate”, contending on a basis wholly obscure to us that the definition permits the jury to allow for the “market value of the fee simple title to the land instead of the surface estate only of' said land.” Appellant additionally complains that the court erred in refusing to define surface estate as requested by it, as follows:
“By ‘surface estate’ as used in the foregoing Special Issue is meant all rights in and to the 117.78 acre- tract of land except all of the oil, gas and other minerals in and under said land which are reserved to the Plaintiffs with the limitation that Plaintiffs shall not drill upon or develop for any minerals on the surface of such land unless such drilling, exploration ■ and production is so conducted as not to endanger, damage or pollute the Reservoir or source of wafer supply, and except that the sole and exclusive use of the area within said land that may from time to time lie between the water’s edge arid the contour of 45.0 feet elevation above mean sea level and the right of access to the river or Reservoir across the same as the case may be is reserved to the Plaintiffs and the riparian rights which Plaintiffs had in' the river are reserved for Plaintiffs in the Reservoir.”
It is clear, we think, that the requested definition is a somewhat partisan and onesided effort to sum up the provisions of the deed favorable to condemnees, which condemnees agreed — apparently at the option of the City — to deliver to the City, but the agreement was that the deed was to be delivered only after the City had proceeded to condemn the surface estate to the 117.78 acre tract and had acquired full and unlimited title to such surface estate by condemnation and had made payment to condemnees of the constitutional compensation for such estate. The parties — wisely, we think- — did-not agree to inject into the condemnation proceeding the give and take —the quid pro quo — understandings to be evidenced by the deed. The record does not show the delivery and acceptance of' the deed. It may never be delivered, or, if tendered, accepted by the City. We find nothing in the record which would bind the City to accept it. Neither the stipulation nor the accompanying form of deed was read to the jury. It is true, the judgment includes in substance the provisions' of the proposed deed but apparently this was by agreement' arrived at after the verdict. There is nothing in the written stipulation entered into during the trial which would bind the City to the inclusion in the judgment of any of the provisions of the proposed deed. On the other hand, the stipulation leads to the thought that the judgment was to be' for the vesting in the City of the surface estate without limitation or dominant easements of any kind.' The trial was conducted on that basis and as we; have pointed out, the jury was never apprised
. .The .refusal pf the court to .reopen the-case:, for. the1 introduction of evidence by appellant- after all parties had closed, or, as the trial.court put.-it, “irrevocably rested”, is 'assigned by appellant as abuse of disr cretion. We ,h.ave reviewed the record as it shows; the-material facts bearing .on the trial court’s action and are convinced that no -abuse of discretion is shown. This is -especially trne since, there is no bill, or other showing .of jthe probative fprce of the evidence which appellant says it was denied .the privilege of, offering,. i. e., the .testimony of the Harris County Deputy Tax Collector relating to. the rendition--of the property by condemnees for the year 1953. What such testimony would have ■ been is not disclosed. For .ought the record shows, such testimony might have tended, to bolster condemnees* cl.aims. of value.,- We could not reverse- in any '-event on the, speculation that, such, evidence might, have been helpful to, fhe Cify.
Appellant assigns the complete want of a.ny evidence to sustain the finding of the jury in answer to the one special issue submitted. There was no timely objection to the court submitting the issue but apparently such an obj ection is no longer required to .raise the point of no evidence on appeal. Myers v. Minnick, Tex.Civ.App., 187 S.W.2d 941. We are constrained to overrule appellant’s point. Three properly qualified witnesses testified to values based on surface uses entirely, which would have justified a much higher verdict than the approximately $200 per acre value found, by the jury. The testimony of such values ranged from $1,250, per acre (Charpiot) to $800 per acre (Lee and Peckinpaugh).
Finally, appellant says the verdict is contrary to the overwhelming weight of the evidence. Though its witnesses testified to valúes of only $40 per acre (Eversburg) and $45 per acre (Pounds), we find the verdict to be amply supported by the evidence.
Affirmed.
070rehearing
' On Motion for- Rehearing,’
The appellant City of Houston has-filed a motion for rehearing consisting solely of formal “Points of Error on Reheáring” without-Submitting argument or,■ discussion in their support. - •
However, the League of Texas Municipalities, the Texas Cities Attorneys Association, and the law firm of Hofheinz, Sears, James & Burns have sought and obtained leave to file an amicus curiae brief .and argument urging that our holding with respect to “market value” is contrary to settled Texas law. The amicus curiae presentation is an able and exhaustive one.
It is claimed that our holding is contrary to.prior holdings of the Supreme Court, pf qther Courts pf Civil Appeals, and of our o.wn Court in. the. following cases. McInnis v. Brown County Water Imp. Dist. No. 1, Tex.Civ.App. Austin 1931, 41 S.W.2d 741, error refused, without qualification; McInnis v. Brown County Water Imp. District
West Texas Hotel Co. v. City of El Paso was a tax case and we do not consider it applicable. For reasons which appear from the face of the opinion, we also feel that King v. IVlcGuff is inapplicable; however we are convinced that our holding is not to be reconciled with the holdings in the two Mclnnis cases or with that in Fort-Worth & D. N. Ry. Co. v. Sugg, the latter being based apparently on the former cases.
The Mclnnis cases were companion súits and the second of these was décided on-the basis of the opinion in the first which is reported in 41 S.W.2d 741, 746.‘ The outright refusal of a writ of error by the Supreme' Court in these cages'amounts to1'an adoption by the Suprem'e Court of the opinión as well as the judgment'in the twó’ cases so as to give what is said in the opinion of the Court of Civil Appeals the force and effect of Supreme Court law. '
In the Mclnnis cases the trial court defined the market value of the property there involved as “ ‘the price which it will bring in cash when offered for sale by one who desires to sell, but is not obliged to sell, and is bought or purchased by one who desires to purchase it, but is under no necessity of doing so.’ ” The Court of Civil Appeals observed that this definition of “market value” accords generally with accepted definitions in condemnation cases, and stated that the rule in Texas was not otherwise.
Coming to the- precise objéctions urged against the definition, to wit: the use in it of the words “in cash” the court said: “While the particular question does not appear to have been often raised, we find the expressions ‘market value,’ “fair market value,’ ‘cash market value,’ and ‘fair cash market value’ used synonymously throughout the reports. See Baucum v. Arkansas Power & Light Co., 179 Ark. 154, 15 S.W.2d 399; State v. Woodward, 208 Ala, 31, 93 So. 826, 827; from the latter of which we quote: ‘ “Cash” is the antonym of “crédit.”- - •* * * The phrase “actual cash value” is practically synonymous with “fair cash'value” '(and means) the price it (prop-' erty) will-bring in a fair market.- * * * A sale on credit would *' ■ * * ■ have a ten-, dency “to iincrease the number of -bidders and td enhance the -price.”. And-that .en--hancement would vary ad infinitum according to the minitude of the cash.-payment: and the magnitude and duration of -the- credit.’-”
While it is true that the court cites Baucum v. Arkansas Power & Light Co., 179 Ark. 154, 15 S.W.2d 399, it is also true that. the court 'actually- quotes-- from' the. Alabama case of State v. Woodward, 208, Ala. 31, 93 So. 826, apparently with 'ap-. proval. The court does.not .undertake to deal with-the objection urged to the charge in language of its own,.but.we take it the quotation .-from-the Alaba'ma case, is -to-be given greater weight than the citation of. the Arkansas case and. that-as between the divers holdings of the .two cases we' are to, assume that the Austin court intended to. follow the reasoning of the .Alabama' case, and that, a similar intention is to be imputed to the Supreme Court by its refusal-of.a writ of error. This being true, it is not to. be gainsaid that' the clear implication of the quoted language of the Alabama case, is that credit sales, or sales partly for cash and partly for credit, are- not to be taken in-, to consideration in determining market value in'-condemnation -cases. If this- analysis be correct,, and we think its is,! .then our holding.is in conflict with :a prior holding of the Supreme Court on the same question, and it is withdrawn.' Our function as an intermediate court of appeals is not to anticipate growth and change in the law so as to keep it in step with1 changing
Much has been written on fair value, market value, fair market value, cash market value, etc. We apprehend that much of the confusion in the cases on the precise point before us stems from a failure to recognize an obvious distinction between a price in cash, that is to say a sale for cash money in an on-the-barrel-head transaction, and the value in cash of whatever consideration one may be able to realize from the sale of land based on a sale for part cash and part secured credit which is the basis of sale in the vast majority of land transactions. If one can realize, say, only $800 from a cash sale of land, but could realize $1,000 payable $500 in' cash and $500 by a well secured note from a sale of the same land, which note, for illustration, would have a market value immediately upon execution and delivery of $400, no reason occurs to us in fairness or justice why a condemnee should be limited in his money compensation to an $800 figure rather than to the $900 total money value of his land on a sale partly for cash and partly for credit. However, as we have already pointed out, if the law as apparently declared in Mclnnis v. Brown County Water Imp. Dist. No. 1, supra, -is to be altered and changed to put it in step with modern conditions where credit is the very life blood of the business world, that amendment and change will have to come about through Supreme Court action. It is beyond our right and power. We do observe in passing, however, that since 1931, the date of the Mclnnis decision, and the present there has occurred a vast change in the function and use of credit in ordinary commercial transactions so that cash no longer commands the respect it once did. We also observe in passing that the effect of the tax laws on the desirability or lack of it of cash transactions from the standpoint of a seller is vastly different today than in 1931. In 1931 it was inconceivable that one would prefer a deferred payment to a cash transaction. That in many instances is no longer true. In recent times it has not been uncommon even for automobile paper to be bought at its full face value. See our recent opinion in Mossler Acceptance Company v. Tips, 289 S.W.2d 295.
We have said we do not consider West Texas Hotel Co. v. City of El Paso, supra, applicable because it is a tax case. The point is the question decided there really turned on the construction of tax statutes which refer to “reasonable cash market value”, Art. 7211, V.A.T.S., and to “cash value, the market value of such property,” Art. 7214, V.A.T.S. The same is true of the Alabama case of State v. Woodward, supra, on the authority of which the Mclnnis cases were decided. There the court was construing an Alabama tax statute which provided for the assessment of property at “ ‘its fair and reasonable cash value.’ ” Gen.Acts 1919 Ala. § 7, pp. 282, 287. We perceive there may be a distinction between, tax cases where only uniformity and equal protection of the laws is concerned, and condemnation cases where just compensation must under the Constitution be the rule of decision. Many considerations would support a valuation, based on a cash price for determining a tax base. Such a classification of property would not be unreasonable. But that is not necessarily to say that the same considerations would justify the taking of private property for something less than the real or actual present cash value thereof. That is to say the value in cash or money of whatever consideration the condemned property would bring on the market. This may or may not explain the absence of the word “cash” in Article 3265 providing a rule of damages in eminent domain cases. It is there set out that the damages “shall be the market value of the property.” There is no reference in Article 3265 to “cash market value” such as is found in our own taxation stat
If, as we have held, the trial court erred, under the ruling-in the Brown County Water Imp. Dist. case, in refusing to include the words “in cash” in- its definition of market value, this brings us to the question of whether such refusal constitutes reversible error. It probably would under the abandoned rule of Bell v. Blackwell, Tex.Com.App., 283 S.W. 765, but under the present harmless error rule before we can reverse we must be able to say, not only that error was committed, but that the error was one which was calculated to prejudice and probably did prejudice appellant in the end result. From a review of the record, we are unable to reach such a conclusion.
All of the valuation witnesses for ap-pellees stated their opinions of “market value.” The City’s witnesses testified to their opinions of “cash market value.” In the presentation of the case to the jury and in the examination of the witnesses, no point was made by the parties of any distinction between “market value” and “cash market value” nor was any evidence adduced by any party indicating that the opinion of any expert witness on market values was based on other than a cash transaction. In fact, there is no way to determine from the record whether appellees’ witnesses did or did not take into consideration, in arriving at their estimate of market values, sales other than sales for cash. In this state of the record, we are unable to see how appellant has been prejudiced1 by the' refusal of the trial court to give its requested definition of market value since there was no evidence before the jury to indicate that appellees’ witnesses, in expressing their opinions of market value, were taking into consideration any sales other than cash sales, and if, as is stated in the Brown County Water Imp. Dist. case, the expressions “ ‘market value,’ ” “ ‘fair market value,’ ” “ ‘cash market value,’ ” and' “ ‘fair cash market value’ ” are synonymous, then it follows, in the absence of some indication to the contrary, that appellees’ witnesses must have had in mind only cash market value. If this be correct, then there was no evidence in the record of any market value other than the cash market value, and we must presume that the jury determined the case alone on the basis of the evidence before it. There is no indication or proof that the jury went outside the record to consider other and higher values than those testified to, i. e., values which might have been realized from credit as distinguished from cash transactions.
Appellant’s motion for rehearing is refused.
Reference
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- CITY OF HOUSTON v. Marion S. CHARPIOT Et Al.
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