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Attorney(S)

Thomas Wade Bruton, Attorney General, Harrison Lewis, Assistant Attorney General, Claude W. Harris, Trial Attorney for plaintiff appellee. Miller and Beck by Adam W. Beck for defendant appellants.

Judges

HIGGINS, J.

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Smart Summary

North Carolina State Highway Commission v. John C. Pearce and Annie Pearce — Supreme Court of North Carolina (Filed 6 May 1964)

Factual and Procedural Background

The State Highway Commission condemned a perpetual easement for highway purposes over part of a triangular tract of land containing 12 acres at the junction of U.S. Highway 220 and N.C. Highway 49A in Randolph County. A consent order signed by Judge Walker on March 30, 1963, resolved all issues except the amount of compensation. With its declaration of taking, the Commission deposited $5,950.00 as its estimate of just compensation for the taking of 0.35 acre. The defendants filed an answer claiming $20,000.00. Defendant experts placed the difference in before-and-after value between a low of $17,860.00 and a high of $24,650.00; plaintiff experts placed the difference between a low of $4,200.00 and a high of $6,546.00. The issue of just compensation was submitted to a jury, which returned a verdict awarding $8,500.00. The defendants appealed from the judgment entered on that verdict, assigning errors.

Legal Issues Presented

Whether the trial court erred in refusing to permit defendants' witnesses (Galloway and Roberts) to testify as to the price paid for other property in the vicinity (i.e., admissibility of comparable sales).
Whether the trial court erred in refusing to order a mistrial or set aside the verdict because of an allegedly improper argument by plaintiff's counsel.
Whether the trial court erred by failing to instruct the jury as to the correct rule for the assessment of damages (measure of damages and whether post-taking improvements could be included).

Arguments of the Parties

Defendants' Arguments

The trial court improperly excluded testimony by their witnesses Galloway and Roberts concerning the sale prices of nearby properties (Balfour Avenue lot and others), which the defendants offered as comparable sales to prove just compensation.
The court should have granted a mistrial or set aside the verdict because plaintiff's counsel made an improper argument to the jury (arguing plaintiff witness Trollinger had appraised many parcels for the Highway Commission and that most owners settled on that basis).
The court failed to properly instruct the jury on the measure of damages; specifically defendants contended the jury might have considered a building the owners completed after the taking in assessing the value of the remaining property, thereby reducing the award for the taking.

Plaintiff's Arguments

Plaintiff presented witness H. R. Trollinger, who testified as to fair market value before and after the taking and was described by plaintiff's counsel as having appraised approximately 180 parcels and having appraised more than 180 parcels for the Highway Commission (an argument the court sustained objection to and instructed the jury to disregard).
Plaintiff presented its valuation evidence in support of a lower measure of damages than the defendants claimed (see expert valuations listed in the record).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Barnes v. Highway Comm., 250 N.C. 378, 109 S.E.2d 219	Quoted for the principle that only sufficiently similar parcels may be compared; comparability is a matter within the sound discretion of the trial judge and it is good practice to hear comparability evidence in the absence of the jury.	The court relied on Barnes in upholding the trial judge's exclusion of alleged comparable sales where the dissimilarities were not reduced to a minimum and the judge properly exercised discretion after an in-chambers examination of comparability.
Gallimore v. State Highway Comm., 241 N.C. 350, 85 S.E.2d 392	Cited in support of the proposition that exclusion of evidence may be non-prejudicial where other record facts demonstrate the excluded evidence would not have aided the offering party.	The court cited Gallimore to support the conclusion that exclusion of Galloway's answer about the Balfour sale was not prejudicial because Roberts had disclosed the Humble sale was not an open-market sale.
Harmon v. Harmon, 245 N.C. 83, 95 S.E.2d 355	Cited in the same context as Gallimore—regarding prejudicial effect (or lack thereof) of excluding certain testimony.	The court cited Harmon along with other authorities to justify that the exclusion of the proffered testimony was not prejudicial under the circumstances shown in the record.
Brown v. Power Co., 140 N.C. 333, 52 S.E. 954	Cited for related authority on evidentiary rulings and prejudice in the admission or exclusion of evidence.	The court cited Brown to bolster its determination that the exclusion of the particular testimony here did not require reversal because other record evidence showed the sale in question was not an open-market sale.

Court's Reasoning and Analysis

The court first reviewed the defendants' challenge to the exclusion of testimony about the sale prices of nearby lots. It noted that the trial judge, after examining the proffered evidence in the absence of the jury, declined to admit testimony concerning the Balfour Avenue sale on hearsay grounds and because the sale to Humble Oil was shown by Roberts to be a forced or pressure purchase (not an open-market sale). The court invoked Barnes v. Highway Commission for the governing principle that comparability of parcels is within the trial judge's discretion and that parcels must be sufficiently similar for sales to be admissible. Based on the record, the court concluded the evidence of similarity was not sufficient to require admission of the sales prices.

The court acknowledged a procedural error: the trial judge should have allowed the defendants to have Galloway's excluded answer inserted into the record for appellate review. However, the court found this omission harmless because Roberts' testimony independently disclosed that the Humble Oil purchase was not an open-market sale, rendering the excluded testimony non-prejudicial. In reaching this conclusion the court cited Gallimore, Harmon, and Brown as supporting authorities that the exclusion of evidence may be non-prejudicial when the record otherwise shows why the evidence would not assist the offering party.

Regarding the alleged improper argument by plaintiff's counsel (suggesting Trollinger had appraised numerous parcels for the Commission and that many owners settled), the trial court promptly sustained the defendants' objection and instructed the jury to disregard the argument. The Supreme Court presumed the jury followed that admonition and held the prompt sustaining of the objection and the cautionary instruction cured the error, consistent with ordinary practice.

On the charge of the court about the measure of damages, the court quoted the instruction given to the jury: measure is the difference between fair market value of the entire tract immediately before the taking and the fair market value of what remains immediately after. The defendants argued post-taking completion of a building might have improperly increased after-taking value. The Supreme Court observed that all expert testimony and the court's charge related values to the date of taking (as required by statute, G.S. 136-112, and the stipulation of the date). Thus there was no reasonable basis to conclude the jury included value of improvements completed after the taking; the charge and evidence focused on immediately before and immediately after values only.

After reviewing the assigned errors, the court found no legal basis to disturb the verdict and judgment.

Holding and Implications

HOLDING: NO ERROR. The judgment entered on the jury verdict awarding $8,500.00 is affirmed.

Implications:

The defendants' appeal was denied and the jury's award of $8,500.00 stands as the adjudicated just compensation for the .35 acre easement.
The trial court's exclusion of the proffered comparable-sale testimony was upheld as within its discretion because the record did not show sufficient similarity and one sale was shown to be a forced purchase; although the trial judge should have allowed the excluded answer to be placed in the record for appellate review, the omission was harmless under the circumstances.
The court treated the plaintiff counsel's argument error as cured by the trial court's immediate sustaining of objection and instruction to the jury to disregard; the appellate court presumed the jury followed the instruction.
No broader or new rule of law was announced; the decision affirms application of established principles regarding comparability of sales, harmless-error analysis, and the proper measure of damages tied to values immediately before and after the taking.

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NORTH CAROLINA STATE HIGHWAY COMMISSION v. JOHN C. PEARCE AND WIFE, ANNIE PEARCE.

1. Eminent Domain 6 — Where there is evidence that the sale of another tract of land in the locality was not a sale on the open market but a purchase forced because of necessity, the evidence supports the court's ruling excluding evidence of the purchase price of such other tract because of want of showing of similarity between it and defendant's property.

2. Trial 15 — Where the court excludes certain testimony the court should permit the party offering the testimony to insert in the record what the witness' answer would have been for the purpose of review on appeal. But in this case the refusal of the court to do so was not prejudicial, since it appears from other parts of the record that the testimony was incompetent regardless of the answer.

3. Trial 11 — Ordinarily, argument of counsel outside the record will be held cured by the court's action promptly sustaining objection to the argument and cautioning the jury not to consider it.

4. Eminent Domain 11 — The failure of the court to charge the jury that it should not consider a building completed by the owner after the taking in fixing the value of the land remaining to the owner held not prejudicial in view of the fact that all of the evidence and the charge related to the value of the land immediately before and immediately after the taking, and thus excluded any value added after the taking.

HIGGINS, J.

All matters in dispute were settled by a consent judgment except the amount of just compensation which the plaintiff is due the defendants for the taking of a perpetual easement for highway purposes over their lands. With its declaration of taking, the plaintiff had deposited the sum of $5,950.00 as its estimate of the amount due. The defendants, in their answer, demanded $20,000.00. The jury fixed the recovery at $8,500.00.

The defendants demand a new trial upon the asserted ground the trial judge committed errors of law in three particulars: (1) By refusing to permit defendants' witnesses Galloway and Roberts to testify as to the price paid for other property in the vicinity; (2) by refusing to order a mistrial or set aside the verdict because of the argument of plaintiff's counsel; (3) by failing to instruct the jury as to the correct rule for the assessment of damages.

The defendants' witness Galloway, a real estate dealer, testified he knew the property involved and that immediately before the taking the 12 acres of defendants' property was worth $72,808.00; and immediately after, the remainder was worth $5,158.00, leaving a total damage of $24,650.00. The witness attempted to testify with respect to the sale of a lot on Balfour Avenue, (though he did not make the sale) to Esso (Humble Oil Company). Upon objection, the court excused the jury "to determine whether or not it was comparable." The court declined to permit the witness to tell how he knew the price, and refused to admit evidence on the ground it violated the hearsay rule. The court did not permit the defendant to insert in the record Galloway's answer to the question as to how he knew the price Esso paid for the lot.

The witness Roberts testified he knew the Pearce property and that immediately before the taking the whole was worth $74,439.00, and immediately afterwards the remainder was worth $48,001.00. In the absence of the jury the witness offered to testify that he sold a lot across 220 to "Carr Drug" and the Balfour Avenue property to Humble Oil Company, and the price paid by each purchaser. During the preliminary examination in the absence of the jury, it developed that the Oil Company had a lot on either side of the Balfour lot which was needed in order to complete the development. The judge held this sale to Humble was a pressure or a forced purchase, because of necessity — not on the open market and refused to permit the witness to testify as to the price paid.

Evidently, in excluding the proffered testimony of Galloway and Roberts as to the sale of other properties, the judge had in mind what the Court said in Barnes v. Highway Comm., 250 N.C. 378, 109 S.E.2d 219: "Actually no two parcels of land are exactly alike. Only such parcels may be compared where the dissimilarities are reduced to a minimum and allowance is made for such dissimilarities. . . . It is within the sound discretion of the trial judge to determine whether there is a sufficient similarity to render the evidence of sale admissible. It is the better practice for the judge to hear evidence in the absence of the jury as a basis for determining admissibility."

In this case the evidence of similarity between the defendants' property and the lots purchased by Carr Drug and by Humble Oil, was not sufficient to require the court to admit evidence of the prices at which they sold. However, the trial judge should have permitted the defendants to insert in the record Galloway's evidence as to how he knew the price Humble Oil Company paid for the lot on Balfour Avenue. Having excepted to the exclusion of the evidence, the defendants were entitled to have the answer of the witness inserted in the record for purposes of review on appeal. However, the defendants' witness Roberts disclosed that the sale to Humble was not a sale on the open market, so the exclusion of Galloway's answer was not prejudicial. Gallimore v. State Highway Comm., 241 N.C. 350, 85 S.E.2d 392; Harmon v. Harmon, 245 N.C. 83, 95 S.E.2d 355; Brown v. Power Co., 140 N.C. 333, 52 S.E. 954.

After the defendants had completed their evidence, the plaintiff called as a witness H. R. Trollinger who testified he lived in Asheboro, had been engaged in the appraisal of real estate for 20 years. He had made appraisals for many banks, oil and power companies, city, county, State and Federal agencies, and private individuals. He gave as his opinion the fair market value of the Pearce property immediately before March 8, 1962, was $45,996.00. The value of the remaining property immediately after the appropriation was $39,450.00. On cross-examination, the witness testified he had appraised approximately 180 parcels of land for the State. The attorney for the Highway Commission argued to the jury that Mr. Trollinger had appraised more than 180 parcels for the Highway Commission which had settled with the majority of the owners on the basis of his appraisals. The court promptly and properly sustained the defendants' objection to the argument and cautioned the jury not to consider it. We must assume the jury heeded the instruction and did not consider it to the defendants' prejudice.

Finally, the defendants contend the court committed prejudicial error by charging the jury: ". . . (T)he measure of damages in such a proceeding as this is the difference between the fair market value of the entire tract of 12 acres immediately before the taking and the fair market value of what is left after the taking of the .35 of an acre in this case. . . . the court has given you . . . the rule of law in determining just what is fair market value of the entire tract before the taking. When all of you have agreed upon that, then you will write the figure down. Then, you will determine what the fair market value of the remaining land is after the taking; write that figure down and subtract one figure from the other; . . . your difference will be your answer."

The defendants contend the evidence disclosed they had begun constructing a building on the remaining portion of the land before the taking and completed it afterwards, which added to the after-taking value; that the jury may have included the completed structure in their value of the remaining portion, thus reducing defendants' damages. However, the evidence of all witnesses fixed before and after value as of the date of the taking. There is no likelihood or reason to suppose the jury failed to understand they were dealing with the value of the whole immediately before the taking and what was left immediately afterwards, as required by G.S. 136-112. The date of the taking was stipulated. Nothing in the charge suggests the defendants were penalized by completing the building which they had previously begun; or that the jury failed to understand the issue before them.

A careful review of the assignments of error fails to disclose any reason in law why the verdict and judgment should be disturbed.

No error.

HIGHWAY COMMISSION v. PEARCE