State Roads Commission v. Warriner

Brune, C. J., delivered the opinion of the Court. The principal question in this case is whether or not a possible, future zoning reclassification of a piece of property ⁴⁸⁴ might properly be submitted for the consideration of the jury in determining the fair market value of the land at the time of its being taken for public use under eminent domain proceedings. The State Roads Commission (the “Commission”) instituted such proceedings against the appellee, Mildred C. Wolsh, now Mildred C. Warriner, on April 26, 1954. On that day it paid into the Circuit Court for Baltimore County the sum of $17,139.80 as its estimate of the “fair value of the land and improvements taken and damages done to the * * * property” sought to be condemned, and it took possession of the property.

April 26, 1954, is, accordingly, the date of the taking. La Fontaine’s Heirs v. La Fontaine’s Heirs, 205 Md. 311 , 107 A. 2d 653 . The trial resulted in a judgment for the defendants, Mrs. Warriner and her present husband, entered upon an inquisition, awarding them damages of $49,825. The Commission appeals from that judgment.

At the time of the taking the property in question (referred to. in the testimony and below as the “Wolsh tract”) was zoned for residential use. Testimony was offered on behalf of the appellees to show that as of that time the property should have been reclassified, and a prospect that it would have been reclassified, for light industrial use within a reasonable time after April 26, 1954, if it had not been taken by eminent domain. The appellees also offered testimony with regard to :the value of the property if it were so reclassified. The Commission concedes that it “is not contended that :there can be no case where consideration of changed zoning (classifications can be given in arriving at the fair market -value.” The question has not previously been passed upon by this Court, but the rule is recognized both by text writers and by numerous cases in other jurisdictions that evidence of a reasonable probability of a change in zoning classification within a reasonable time may properly be admitted and its influence upon market value at the time of the taking may be taken into account.

See Nichols, Eminent Domain, 3rd Ed., Vol. IV, Sec. 12.322 (p. 141); Orgel, Valuation under Eminent Domain, 2nd Ed., Vol. 1, Sec. 34 (p. 167) ; City of Beverly Hills v. Anger, 110 Cal. App. 626 , 294 P. 476 , a state ⁴⁸⁵ ment from which is quoted with approval by the Supreme Court of California in Long Beach City High School Dist. v. Stewart, 30 Cal. 2d 763 , 185 P. 2d 585, at 590 ; State v. Williams, Sup. Ct. of Mo., 289 S. W. 2d 64 ; City of Austin v. Cannizzo, 153 Tex. 324 , 267 S. W. 2d 808 ; Portland & S. Ry. v. Ladd, 47 Wash. 88 , 91 P. 573 ; Re Gibson and City of Toronto, 28 Ont.

L. Rep. 20, 11 D. L. R. 529; Cunard v. Rex, 43 Can. Sup. Ct. 88. We think that the rule above stated is correct.

The general measure of damages in condemnation cases is the fair market value of the land at the time of the taking. As was said in Pumphrey v. State Roads Commission, 175 Md. 498, at 506 , 2 A. 2d 668 : “In determining the fair market value of the land, consideration may be given to any utility to which it is adapted and for which it is immediately available. Market value is defined as the price which an owner willing but not obliged to sell would accept for the property and which a buyer willing but not obliged to buy would pay therefor.” See also State Roads Commission v. Wood, 207 Md. 369 , 114 A. 2d 636 . In Bonaparte v. City of Baltimore, 131 Md. 80 , 101 A. 594 , the property taken under eminent domain was a dwelling which had been used up to the time of the taking only as a single residence.

It was, however, so constructed as to be adapted to use as an apartment house. It was held that the owner was entitled to have such use of the property, which would have been more profitable than renting the entire building as a unit, considered by the jury in determining the amount of damages. Judge Urner, writing the opinion of the Court, said ( 131 Md. at p. 83 ) : “The measure of the compensation to which the appellant is entitled in this proceeding is the actual market value of the property condemned. Its market value depends upon the uses for which it is available, and any special utility which may tend to enhance its value in the market is a proper element to be considered.

The availability of the property for a particular use, contributing to its market value, is not to be ignored merely because it has not in fact been applied to that use. The valuation for condemnation purposes must disregard the effect of the public project, for which the ⁴⁸⁶ property is acquired, but must take into consideration all the uses to which it is capable of being applied at the time of the appropriation and which affect its marketability. Consolidated G. E. L. & P. Co. v. Baltimore, 130 Md. 20 ; Baltimore v. Carroll, 128 Md. 73 ; Brack v. Baltimore, 125 Md. 378 ; 128 Md. 437 ; Baltimore v. Garrett, 120 Md. 613 ; Callaway v. Hubner, 99 Md. 529; Baltimore v. Smith, 80 Md. 458 ; Patterson v. Baltimore, 130 Md. 645 .” In Reindollar v. Kaiser, 195 Md. 314 , 73 A. 2d 493 , the fact that zoning regulations had not yet gone into effect in Howard County, where the land was located, at the time of the taking of the property, was shown by the testimony. It was held proper for the trial judge to say in his charge to the jury: “You may take into consideration the fact that the Howard County Zoning Laws had not become operative at the time the property was taken, so that at that time it could have been utilized or sold for any purpose the owner decided to utilize or sell it.” Judge Collins, speaking for the Court, said ( 195 Md. at 322 ) : “At the time of the taking the owners could have used it for any purposes and this of course affected its value then and made it more valuable.” It seems at least a fair inference that the fact that zoning restrictions were imminent must also have had some effect in determining the value of the property.

Conversely, in the instant case the fact that the property was restricted at the time of the taking to residential use was very clearly before the jury. We see no reason why testimony to show a substantial possibility or probability of a reclassification should not also have been adduced in evidence. If the evidence offered proved to be insufficient to establish a reasonable probability of rezoning within a reasonable time after the date of taking, it would, we think, have been entirely in order for the trial court to have instructed the jury as to the insufficiency of such evidence and to have stated that no element or enhancement of market value could be based upon the mere possibility that at some time in the future a reclassification might occur. Patterson v. City of Baltimore, 127 Md. 233 , 96 A. 458 ; Brack v. City of Baltimore, 128 Md. 430 , 97 A. 548 .

Such, however, was not the situation here. Without reviewing the testimony in detail, ⁴⁸⁷ we think that the showing as to the growth in population of the Towson area, the marked expansion of its commercial area outwards along the York Road towards the Wolsh tract and the demand for property for industrial use in the Towson area, the proximity of a tract already zoned as light industrial, the adaptability of the tract to such use, two widenings of the York Road and the opening of a part of the Baltimore-Harrisburg Expressway in the vicinity, and the opinions of expert witnesses that the highest and best use of the Wolsh tract was for light industrial use, were sufficient to meet the test of at least a reasonable probability of reclassification within a reasonable time. The appellant seeks to discredit all such testimony by insisting upon the improbability of rezoning. This asserted improbability is rested primarily upon the fact that most of the property around the Wolsh tract was still zoned as residential in April, 1954, and upon the fact that applications made in 1945 and in 1949 for reclassification of the Wolsh tract as commercial had been denied, and a later application for such reclassification also made in 1949 had been withdrawn without prejudice.

Much of the force of the denial of these applications is lost because a principal reason for their denial appears to have been the existence, at the time when these applications were acted upon, of ample land in the neighborhood —to the south of West Road — already zoned as commercial. There is a good deal of force to the Commission’s objections, but we do not think that the evidence as to the possible rezoning was so insubstantial as to require the trial court to instruct the jury to disregard it. Its weight was for the jury. It is interesting to note that in 1949 one of the considerations which led the Planning Director to recommend against the rezoning then sought was this: “If the owner has no specific development project in mind but is merely seeking rezoning in order to increase the possible sales value of his frontage, perhaps with the knowledge that this is the point proposed for the Expressway to cross, then reclassification would simply have the effect of increasing the cost of land acquisition for the Metropolitan District and the State Roads Commission.” When we compare the amount returned upon the inquisi ⁴⁸⁸ tion, $49,825, with the amounts of the appraisals of the appellees’ expert witnesses, $75,000 and $75,600, respectively, it seems quite evident that the jury did not fully accept either these appraisers’ views as to market value or their complete optimism as to the prospects of rezoning, or both.

See State Roads Commission v. Wood, supra, where a somewhat comparable situation developed with regard to expert testimony as to the value of land available for development as lots, but not actually so developed, prior to the time of the taking. Here, as in the Wood Case, the appellees seek to uphold the verdict on the basis of appraisals of the property for sale at retail for residential use, less the development costs of making it available for such sales. These appraisals were elicited in part by direct examination of one of the appellant’s witnesses and in part by cross-examination of one of the appellees’ witnesses, and by deducting from the gross amount of such appraisals a sum stated to be equal to the estimated cost of putting in a street and installing utilities. There is, however, little evidence in the record to support the cost of the utilities and none to support the cost of paving.

Even though the appellees’ brief informs us that this basis of valuation was argued to the jury, we cannot assume that this was the sole basis for the jury’s finding, and that value attributable to rezoning prospects did not enter into the jury’s calculations. Although the Commission concedes that there are cases in which consideration can be given to the possibility or probability of a change in zoning restrictions if the prospect of such a change is sufficiently likely to have an effect on market value, five of the twelve