United States v. 2,095 Acres of Land
United States v. 2,095 Acres of Land
Opinion of the Court
This matter came on for hearing as an appeal from the award of -the commissioners appointed to determine the fair rental value of lands taken by the United States Government and used for a period of twenty-two and one-half months.
Exercising its power of eminent domain, and under the specific authority of Acts of Congress, the United States Government, acting through the Secretary of the Army, condemned, for a term of years, 2,095 acres, located at the West End of St. Thomas, for use as a military reservation in connection with the San Jose project of the Chemical Corps of the Army. The 2,095 acres comprised seven tracts of land under different ownership:
Tract No. 2 — Estate Bordeaux — consisting of 499.1 acres and belonging to Winthrop Hughue, et al.
Tract No. 3 — Estate Fortuna — consisting of 648.7 acres and belonging to Angelo de Lugo, et al.
Tract No. 4 — Estate Bethesda — consisting of 16.2 acres and belonging to Samuel Scatliffe, et al.
Tract No. 5 — belongs to the United States Government and is, therefore, not involved in the case.
Tract No. 6 — Estate Hope — consisting of 229.2 acres and belonging to the Municipality of St. Thomas and St. John.
Tract No. 7 — Estate Perseverance — consisting of 139.8 acres and belonging to Fortunato Beretta, et al.
The United States Government, plaintiff in the original suit and appellant here, was represented by the United States District Attorney, and the owners were all made parties defendant and are before the court as appellees. Attorneys Mass & Bailey, William' W. Bailey, Esq., of counsel, represented defendants Smith and Falck, owners of tract No. 1, defendants Hughues, owners of tract No. 2, and defendants Berettas, owners of tract No. 7. Attorneys Dudley, Hoffman, and McGowan, George H. T. Dudley, Esq., of counsel, represented defendants Scatliffes, owners of tract No. 4. The Assistant District Attorney represented the municipality, owners of tract No. 6, but did not contest the award. Defendants Lugos, owners of tract No. 3, withdrew from the suit. No award was necessary for tract No. 5 which already belonged to the United States Government.
Botany Bay (388 acres) $ 853.90 annual rental
Bordeaux (499 “ ) 1,060.93 “
Fortuna (648 “ ) 1,357.73 “
Bethesda (16 “ ) 32.40 “
Hope (229 “ ) 389.00 “
Perseverance (139 “ ) 394.65 “
It is from this award of the commissioners that the United Etates Government has appealed.
The first question before the Court is whether this appeal is in the nature of a trial de novo or is merely a review of the award made by the commissioners.
Counsel for defendants argues that in an appeal from the findings of commissioners appointed by the Court, the Court is limited in its review to plain errors of law,
The commissioners were appointed under authority of chapter 20 of the Municipal Code, and section 14 of said chapter (1921 Code, Title II; 28 V.I.C. § 418), provides that:
“An appeal from any assessment made by the Commissioners may be taken and prosecuted in the court where the report of the commissioners is filed by any party interested . . . and the same shall be brought on for trial upon the same notice and in the same manner as other civil actions; and the same shall be tried and the damages to which appellant shall be entitled by reason of the appropriation of this property shall be reassessed upon the same principle as hereinbefore prescribed for the assessment of such damages by commissioners.”
The Code further provides as to “other civil actions” mentioned above, to wit, civil actions in the police court, as follows:
“Upon the filing of the transcript with the Clerk of the District Court the appeal is perfected, and the action shall be deemed pending and for trial therein as if originally commenced in such court, and the District Court shall proceed to hear, try, and determine the same anew, without regarding any error or other imperfection in the original summons and the service thereof, or on the trial, judgment, or other proceeding of the Police Court.” Sec. 9, chap. 87 (1921 Code, Title III; 4 V.I.C. § 33).
Since the Court is clearly directed by chapter 20, section 14, to “reassess” the value of the property, an appeal from the commissioners’ award amounts to a trial de novo. The Court, therefore, heard the testimony of witnesses for plaintiff and defendants as well as the arguments of counsel, and has taken into consideration all of the evidence before it in determining the just compensation due to the owners in this case.
The Government’s appraiser testified that, while he had in fact personally inspected the land very carefully and had actually assessed the value of each tract, his estimate of the rental value had no relation to the value of the fee but was based solely on two previous leases of land in that vicinity (Estates Bordeaux and Hope). He further admitted that he had considered only the uses to which the properties in question were then being put and also, that he had not taken into consideration leases of land in other parts of the island, for he had found none of a comparable nature. The commissioners did not find the past leases a satisfactory basis for determining a reasonable return on the properties at the date of taking and in the absence of other indicia of rental value made their award on the basis of a capitalization of the value of the properties as assessed by the government’s appraiser. On this basis they arrival at an overall award of 5% of the appraised value as a “fair return” for unimproved land, including provision for payment of taxes.
The Court has carefully considered the testimony presented in this case and the various theories adduced by counsel for determining fair rental value. The Court recognizes that the authorities are sparse where less than a fee is taken and also that the whole question of valuation in condemnation proceedings is governed by few general principles and that even such principles as appear well established yield to exceptional circumstances in particular cases. Accordingly, counsel on both sides and for the various defendants have put forth different circumstances as controlling and determinative of the application of differ
The Goernment argues that market value is the only test which the Court may apply in condemnation cases to determine “just compensation” to the. property owner. Counsel further argues that market value is the test whether a fee or a lesser interest is taken and that capital investment is not a factor in market value, although a showing of the value of improvements may be relevant. When less than a fee is taken, the market value of the use of the land during the period for which it is used becomes the test and, in this respect, prior or existing leases are determinative.
On the other hand, counsel for defendants contend that when the Government takes a leasehold, and not a fee, it is the fair annual rental value which must be found, and that this is determined by a consideration of all factors which bear on the value and uses of the land. “Where land is taken in condemnation only for a temporary use-, the measure of compensation is not the market value, but what the property is fairly worth for the time during which it is held.” United States, v. Certain Parcels of Land in Los Angeles, 63 F. Supp. 175.
In 1943 the United States Supreme Court gave extensive consideration to the question of compensation in condemnation cases and it might be well to quote from its opinion in United States, v. Miller, 317 U.S., 369, 63 S. Ct. 276, 87 L. Ed., where the court said:
“The Fifth Amendment of the Constitution provides that private property shall not be taken for-public use without just compensation. Such compensation means the full and perfect equivalent in money of the property taken. The owner is to be put in as good position as he would have occupied if his property had not been taken.
“It is conceived that an owner’s indemnity should be meas*236 ured in various ways depending upon the circumstances of each case and that no general formula should be used for the purpose. In an effort, however, to find some practical standard, the courts early adopted, and have retained the concept of market value . . .
“Where for any reason, property has no market value, resort must be had to other data to ascertain its value; and even in the ordinary case, assessment of market value involves the use of assumptions which make it unlikely that the appraisal will reflect true value with nicety. It is usually said that market value is what a willing buyer would pay in cash to a willing seller. Where the property taken, and that in its vicinity, has not in fact been sold within recent times or in significant amounts, the application of this concept involves, at best, a guess by informed persons.”
On the strength of this opinion, which is often cited by other courts, e.g., Washington Water Power Co., et al., v. United States, 135 F.2d 541, this court is inclined to agree with counsel that this is a proper case for “resort to other data”.
Where, as here, there have been no sales in the locality, one of the most used criteria in determining market value is missing. It is accepted, as we have pointed out, that in such instances reasonable value may be established by other means. In this respect, counsel for defendants contends that it is only when the renting of property is its best use, or at least a plausible use, that the realized or estimated rentals are a successful guide to the appraiser. Arguing that not only were the leases on which the government appraiser based his valuation old and vague, but that they did not constitute the best use of the property, counsel suggests that a comparison with values outside the district should be made. The Government did not deny that this would be a reasonable means of arriving at just compensation, but its appraiser testified that he had not found any comparable land elsewhere in the island. Defendants presented evidence to establish the comparability of certain lands in the East to the section under condemnation in
Another proposition put forth by counsel is that when land is uncultivated, reasonable rental value is the prevailing rate of interest on the fair value of the property. In re: Condemnation of Lands for Military Camp, 250 Fed. 314.
It is uncontested that the majority of land under condemnation is uncultivated, only some of it being in pasture land. Therefore, it is argued that this formula should apply, counsel for defendants concluding that where there is no evidence as to fair market value or rental, a “capitalizing” is the only method by which just, fair compensation can be arrived at. In support of this proposition, counsel cites the case of United States v. 5174 Acres, 51 F. Supp. 147, in which the court made a finding of the market value of the land and improvements and then capitalized this at 10 % to arrive at the “fair market rental value” per annum.
The Court is of the opinion that the usual tests of market value are not controlling in this case, since a fee was not taken, and that the owners should be compensated for the reasonable use of their land for a term of years. The Court is further of the opinion that the rental value of this land cannot be determined, solely, on the basis’ of the
The Court, therefore, makes the same award of the commissioners, to wit:
Botany Bay .................... $ 853..90 per year
Bodreaux ........,........... . 1,060.93 “ “
Fortuna ..............'....... . 1,357.73 > “
Bethesda. . , .................... 32.40 “
Hope ....................... . 389.00 “ “
Perseverance • .- .................... 394.65 “
Under these circumstances, defendants pray for recovery of the damages to the road in that they are entitled to be placed in the same or similar position as they were at the time of taking. Defendants contend that since they have suffered peculiar injury by the destruction of the road, they have a right of recovery for damages where the Municipality fails to act or interest itself in the matter and, in the event that they do not apply the sum recovered to the repair of the road, it is for the Municipality to take action against them. However, these defendants have no right to sue the Federal Goernment in the name of the Municipality, neither have they any right to recover money from the Federal Government and then have the Municipality sue them. It is clear, also, that they have no right to force the Municipality, by lawsuit, to repair
The Court agrees with the contention of defendants that the damage to the road has caused them great inconvenience and may actually have resulted in a decline in the value of their property by making it more inaccessible, but the Court finds no authority for granting damages of this nature to defendants in an action of this kind. In Mitchell v. United States, 267 U.S. 341, 45 S. Ct. 293, 69 L. Ed. 644, the Supreme Court of the United States declared that “the settled policy of Congress, in authorizing the taking of land and appurtenances, has been to limit the right to compensation to interests in the land taken.” Defendants have no property interest in the road nor can they recover on the basis of consequential damages as the Supreme Court stated its opinion in this matter to the effect that consequential losses or injuries resulting from the taking are not compensable under the Fifth Amendment (U.S. Const. Amend. 5). Mitchell v. United States, supra; United States v. Miller, 317 U.S. 369, 376, 63 S. Ct. 276, 87 L. Ed. 336. Recognizing that “not all losses suffered by the owner are compensable under the Fifth Amendment” as the Supreme Court again said in United States ex rel. TVA v. Powelsen, 319 U.S. 266, 281, 63 S. Ct. 1047, 87 L. Ed. 1390, this court denies the prayer of defendants for damages to the road.
The decree may be drawn in accordance with this opinion.
Reference
- Full Case Name
- United States v. 2,095 ACRES OF LAND, MORE OR LESS, Situate on the Island of St. Thomas, V. I., el al.
- Status
- Published