State Ex Rel. State Highway Commission v. Bowling , 414 S.W.2d 551 ( 1967 )

STOCKARD, Commissioner.

In this action for condemnation of land for highway purposes the jury award of just compensation was $15,000, and the landowners have appealed. The difference between the award and that to which they claim they are entitled under the evidence exceeds $15,000.

The tract of land owned by appellants contained 29 acres and was located in the City of Columbia on the north side of Old U. S. Highway 40, now designated as Business Loop 70. The tract had approximately 1,000 feet frontage on Business Loop 70 with a depth of 1,320 feet. The southern 300 feet of the tract was zoned “C-3” for “highway business,” and the remainder of the tract consisting of approximately 23 acres was zoned “R-l” for single family residences. For purposes of constructing a one-way ramp from Business Loop 70 to Route B the Highway Commission of Missouri obtained by condemnation in October 1963 a portion of the above described tract consisting of approximately 61,500 square feet. The portion taken was a strip bordering on Business Loop 70 and extending westward from the eastern boundary a distance of 760 feet. At the east end the portion taken had a depth of 165 feet, the northern boundary was irregular, and the portion was 50 feet in depth at the west terminus.

As is frequently the case, there was a wide variance between the expert witnesses as to the damages sustained by appellants by reason of the appropriation. Appellants’ witnesses placed the damages in various amounts ranging from $50,000 to $99,-086. The witnesses of the State placed the damages from $1,526 to $9,100. The only issue on this appeal pertains to the refusal of the trial court to permit one of Appellants’ witnesses to testify concerning the terms of an executory contract for the sale of nearby property.

Mr. Richard C. McDonnell, vice president of the Boone Realty Corporation, was a qualified expert witness called by appellants. He testified that he had made an appraisal of appellants’ property on October 17, 1963, to determine the damages sustained by appellants by reason of the appropriation, and he stated that in arriving at his estimate of damages he took into consideration the physical features of the property and five recent sales of other comparable property which he described in detail. Before he stated the result of his appraisal of appellants’ damages, he was asked if he had made an appraisal of “any tracts of land on Business Loop 70,” and he replied that he had appraised “the southwest corner of Business Loop 70 and Old 63 South early in 1963” (known as the “Driv-a-teera tract”) for a man in Chicago by the name of Aker. An objection was sustained when he was asked the result of that appraisal.

Mr. McDonnell then testified that the Driv-a-teera tract was the subject of a contract of sale entered into in April of 1965 and that he was aware of the terms of the contract. When asked “the amount of the sale price,” an objection was made on the ground that “there is no showing that the sale is a finished sale.” This objection was sustained, and appellants then made an offer of proof that if permitted the witness would testify “that he had personal knowledge and had verified the terms of a contract of sale for a tract of land located at the Southwest corner of Business Loop 70 and Business 63 South, * * * [that] the tract under contract contained 102,000 square feet, and the contract is dated April 30, 1965, and is between the owner, Mr. and Mrs. James Akers and the buyer MFA Central Cooperative, for a total consideration of $80,000. * * * The date of closing will be October 1, 1971. On the date of closing, [a] properly executed warranty deed [is to be delivered] containing the usual customary warranty pertaining to said real estate. The sum of $20,000 cash [is to be paid] on date of closing and the remainder of the purchase price, $60,000, will be evidenced by an unsecured corporate note. * * * [T]he purchaser under this agreement will hold the premises for a period of six years commencing October 1, 1965, and ending September 30, 1971, as lessee for a monthly rental of $400 a month. And the contract of purchase is as of the date at the end of the lease.”

Although not uniformly applied in all states, see the annotation at 85 A.L.R. 2d 110, the rule has long been established in this state that evidence of the price paid by a willing purchaser to a willing seller for property comparable to that being appropriated for public use, when the sale was made reasonably near to the time of appropriation, is admissible to aid the triers of fact in determining the compensation to which the owner is entitled for the appropriation of his property. Kansas City & Grandview Railway Co. v. Haake, 331 Mo. 429, 53 S.W.2d 891, 84 A.L.R. 1477; State ex rel. State Highway Commission v. Koberna, Mo., 396 S.W.2d 654. There is no contention in this case by respondent that the land to which the contract of sale applied was not comparable to appellants’ land, or that the contract was not bona fide in all respects and entered into at arms length by a willing seller and purchaser.

Respondent asserts that the evidence was properly refused by reason of the rule in School Dist. of Clayton v. Kelsey, 355 Mo. 478, 196 S.W.2d 860. In that case, on the issue of the fair market value of the land taken by condemnation, the landowner offered in evidence a contract between him and another for the sale of a tract of land across the street from the land condemned. The contract was dated March 7, 1945, and the date for closing the transaction was June 7, 1945. After commenting that recent consummated sales of property in the neighborhood of the condemned property were competent on the issue of fair market value, this court further commented, “but we find no Missouri authority for the proposition that a sale contract, even though enforcible by specific performance, is competent,” and then concluded that even though there was “nothing to suggest that the sale contract * * * was not bona fide in all respects, * * * to permit such contracts to be offered * * * would open the door to contracts made in bad faith and with no intention of completion and consummation.” The evidence of the contract of sale was held to have been properly excluded.

We cannot agree with the total exclusionary rule of the Kelsey case. The tendency is to admit evidence which reasonably sheds light on the question of fair compensation for the taking of land by condemnation. ■ “Artificial rules of evidence which exclude from the jury matters which men consider in their everyday affairs hinder, rather than help, the arrival at a just result.” State ex rel. State Highway Commission v. Barron, Mo., 400 S.W.2d 33, 37. See also 30 C.J.S. Eminent Domain § 430. In the determination of the value of land reasonable men in their everyday business affairs would take into consideration, substantially to the same extent as a consummated sale of comparable property, the price provided for in a bona fide and binding contract of sale entered into ’by a willing purchaser and seller when the sale price reflects the present value of the land contracted to be sold. It is a common practice for a contract of sale of land to provide for a reasonable period of time for the completion of details relating to the transfer or for the correction of title defects, and in such circumstances the sale price provided in the contract reflects the sale value of the land so conveyed as of the time of the contract. After the trial court has satisfied itself that the contract of sale is bona fide and without collusion and fraud, and that the period between the time the contract is entered into and the sale is to be completed is not of such duration that the price agreed upon constitutes a speculation of a future value, we see no reason why evidence of the sale price in such a contract should automatically be excluded from consideration by the jury solely because the actual transfer of title has not yet occurred. See United States of America v. Certain Parcels of Land in the City of Philadelphia, 3 Cir., 144 F.2d 626, 155 A.L.R. 253. This does not mean, however, that all bona fide executory contracts for the sale of comparable land should be admitted into evidence. The landowner cannot show speculative future uses of his own land to enhance its value, nor can he show an estimate of what his property will be worth at a future day or in an altered condition. In re Armory Site in Kansas City, Mo., 282 S.W.2d 464; Brewer v. Blue Mountain Consolidated Water Co., 126 Pa.Super. 553, 191 A. 408. For the same reason the landowner should not be entitled to show, as bearing on the market value of his land at the time of the taking, the speculative value of a comparable piece of property at some future date.

Respondent has not urged on this appeal that the ruling of the trial court was proper for any reason other than that stated in the Kelsey case. However, Civil Rule 83.13(b), V.A.M.R., provides that no appellate court shall reverse any judgment, unless it believes that error was committed by the trial court against the appellant, materially affecting the merits of the action. Even though we do not agree with the total exclusionary rule announced in the Kelsey case, we are compelled to conclude that in the circumstances shown by the offer of proof the trial court did not commit error against the appellant in refusing to admit evidence of the price provided for in the contract of sale.

The issue before the jury was the just compensation to which appellants were entitled for the taking of a portion of their property, and that was to be determined as of the time of the appropriation. KAMO Electric Cooperative, Inc., v. Baker, 365 Mo. 814, 287 S.W.2d 858. This just compensation consisted of the fair and reasonable market value in October 1963 of the land taken, and the consequential damages sustained by appellants to the remainder of their land by the taking of the part. KAMO Electric Cooperative, Inc., v. Baker, supra; City of St. Louis v. Vasquez, Mo., 341 S.W.2d 839; Union Electric Company v. Saale, Mo., 377 S.W.2d 427. Stated another way, it was the difference between the fair and reasonable market value of their entire tract of land immediately before and immediately after the taking. State ex rel. State Highway Commission v. Kendrick, Mo., 383 S.W.2d 740. Evidence of the sale price of other comparable land (when otherwise competent) is admissible because it tends to afford a basis for the determination by the triers of fact of the fair and reasonable market value of the land taken as of the time of the appropriation. State ex rel. State Highway Commission v. Koberna, Mo., 396 S.W.2d 654, 662. Therefore, in order to afford a basis for comparison the price paid for other comparable land should reasonably reflect the value of that land at the time of the appropriation of the land condemned. In this case, in April of 1965 the owners of the comparable land agreed that six years and five months later, or approximately eight years after the date of taking of appellants’ land, the fair market value of the land covered by the contract would then be $80,000. In view of the probabilities of inflation and the changing uses for land in the neighborhood, the parties to the contract were in April of 1965 speculating on the value of the land in October 1971. The present value of a right to purchase land six and one half years in the future does not necessarily reflect the fair and reasonable market value of the land at the time of the agreement, and without any more showing than the existence of the contract and the price to be paid, such evidence is not material. To permit the evidence offered in this case to be submitted to the jury on the issue of the market value of appellants’ land on the date of appropriation would inject such elements of speculation and conjecture as to confuse the issue and mislead the jury. For this reason, we conclude that the evidence of the price contracted to be paid in October 1971 for the comparable land was properly rejected.

The judgment is affirmed.

PER CURIAM:

The foregoing opinion by STOCKARD, C., is adopted as the opinion of the Court en Banc.

EAGER, J., concurs in separate concurring opinion filed. STORCKMAN, C. J., and DONNELLY, J., concur in result in separate opinions filed. HENLEY, J., concurs in result. FINCH, J., dissents in separate opinion filed. HOLMAN and SEILER, JJ., dissent and concur in separate dissenting opinion of FINCH, J.