Competency of Witnesses.
Each party objected to the testimony of the opposing expert on value.
Mr. Mitchell, Harbison's expert, was born in Clearfield and since his younger days has had close contacts with the area. He is Harbison's vice-president and as such has been in charge of mining for 8 or 9 years. He is also a director and stockholder of the company. Prior to attaining his present position, he was general mine superintendent. Of his 42 years in Harbison's employ, 40 years have been spent in the mining department. His duties, among others, have been to provide Harbison with the raw clay for manufacturing refractories and bricks, and in doing so, he supervised the leasing, optioning, and procurement of clay properties, as well as the drilling, prospecting, mining and testing associated with its production. In a 10-year period through 1963, his department obtained 1785 mining leases, leased 107 company properties, purchased 207 properties, conveyed 206 properties, obtained 31 rights-of-way, and granted 107 rights-of-way. Mr. Mitchell knew the condemned land and testified that he knew its value.
On October 11, 1963, after a year and a half of negotiations, Harbison sold developed clay land in Fayette County, Pennsylvania, approximately 100 to 200 miles distant from Clearfield. This after-condemnation sale of similar flint and plastic clay was the result of lengthy negotiations and was uninfluenced by the condemnations for the Curwensville Reservoir. It was not too remote in distance,
or in time,
and is entitled to consideration.
However, we think the Fayette sale can be accorded but little weight. The Fayette clay was classified as 'deep mine' and sold for approximately $ 3,585.00 per acre, which was only $ 322.00 an acre more than Harbison's claim of compensation for the condemned clay.
Mr. Mitchell, who participated in the Fayette sale on behalf of Harbison, agreed that the Fayette and Clearfield properties were 'dissimilar' (T., p. 82), and it is obvious that the value of a developed body of 'deep mine' clay (T., p. 80) which was 'strippable' (T., p. 82) would be much greater than the value of clay in the condemned tract where a deep mine would have to be opened. This is especially so in this day of high labor costs, and, as stated, the witness was unable to estimate the costs of developing Tract 503.
Undoubtedly Mr. Mitchell possessed the means to form intelligent opinions derived from his specal knowledge of the nature and kind of clay land in controversy, and its value; he had and utilized means superior to those available to the fact finder.
Thus, we think this witness, as an officer of Harbison, although not a licensed mining engineer nor a licensed real estate appraiser, was competent to testify as to the value of land in Clearfield County containing flint and Kittanning clay deposits, because of his vast experience and expertise acquired from personal experience with this kind of property.
His testimony is entitled to consideration, but in all the circumstances, its weight is quite limited.
Mr. Bromfield was a licensed real estate broker who was engaged in business in Clearfield and, since 1957, had been doing appraisal work exclusively. He, too, knew the condemned land and testified as to its value. His estimates of market value before and after condemnation were based upon the opinion of Mr. Yost that mining the clay in Tract 503 was economically infeasible because of high labor costs necessarily to be incurred in opening the mine, and upon two alleged comparable sales of mountain land in the vicinity, neither of which was known to contain veins of flint or plastic clay.
We accord little weight to the opinions of Mr. Bromfield because we find that mining the clay in the condemned tract was economically feasible to supply Harbison's probable future needs for clay, and thus the two sales are hardly comparable. However, we think both Mr. Yost and Mr. Bromfield were competent witnesses and their testimony is entitled to consideration.
Valuation of Condemned Clay Deposits
No one knew of any sales of clay land in the Clearfield area. The absence of comparable mineral sales in the vicinity presents a difficult problem, but the existence of fire and plastic clay deposits cannot be ignored since they may be of value and a proper factor to be considered in arriving at the just compensation to which the owner is entitled. 4 Nichols, Eminent Domain, 4th ed., § 13.22.
The law seems well settled that opinions of witnesses as to value of minerals in place need not be based on sales of the same or similar mineral deposits. Cf. Montana Railway Co. v. Warren, 137 U.S. 348, 11 S. Ct. 96, 34 L. Ed. 681; United States v. Silver Queen Mining Company, 285 F.2d 506 (10th Cir. 1960); III Wigmore, Evidence, 3d ed., §§ 714(3), 714(4). As stated in Montana Railway Co. v. Warren, supra, 137 U.S. at page 352, 11 S. Ct. at page 97:
'It may be conceded that there is some element of uncertainty in this testimony, but it is the best of which, in the nature of things, the case was susceptible.'
Also, in United States v. Miller, 371 U.S. 369 at p. 374, 63 S. Ct. 276 at p. 280, 87 L. Ed. 336, it is stated:
'Where, for any reason, property has no market 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.' (Emphasis supplied.)
Cf. Kimball Laundry Co. v. United States, 338 U.S. 1, 6, 69 S. Ct. 1434, 93 L. Ed. 1765.
Although at the time of taking there was no open mine on Tract 503 and, it is possible, there never would be, nonetheless the adaptability to the purpose of mining flint and plastic clay gave these mineral deposits a present value in the market, and Harbison is entitled to that value, even though the prospect of actual mining was at some indefinite time in the future. The owner is entitled to the present market value of its condemned clay for the best use to which it is adapted. The availability of the clay veins for valuable use, and not their present employment, seems to be the criterion from which their value is to be determined.
Harbison purchased these minerals as a reserve stock. At the time of taking the possibility that it would have in the future mined the clay for use in its Clearfield plant is not so remote, speculative and improbable to require the court to disregard the evidence of its value. The refractory industry in the Clearfield area indicates an existing as well as an expected continuing future demand for plastic and flint clay for the manufacture of clay products. Although the quality of the evidence requires considerable speculation and conjecture, the fact finder is nonetheless obligated to reach a standard of value dictated by the nature of the case. 'In this estimation the owner is entitled to have consideration given' to the capabilities of the clay and the present and expected future demand therefor, 'and to any and every use to which it may reasonably be adapted or applied. And this rule includes the adaptation and value of the property for any legitimate purpose or business, even though it has never been so used, and even though the owner has no present intention to devote it to such use.' 4 Nichols, Eminent Domain, 4th ed., § 12.2(3), pp. 61-62; Boom Company v. Patterson, 98 U.S. 403, 25 L. Ed. 206.
The Finding of Just Compensation.
It is well known that a witness estimating just compensation in eminent domain cases will usually reflect his optimism or pessimism, as well as his interest in the party for whom he testifies. No matter how honest the expert may be, he cannot ignore the fact that the expert on the other side will be prejudiced. He, therefore, increases or decreases the amounts in his testimony to offset the other side's figures. Thus, the opinion of each expert must be subjected to careful and critical scrutiny.
We think Mr. Mitchell and Mr. Bromfield were informed persons, but in all the circumstances, in our opinion, Mr. Mitchell's estimate of value is exaggerated, but on the other hand, Mr. Bromfield's estimate is minimized. The court is not required to accept the value opinions of the witness for either side, but may find just compensation to be within the range of values placed thereon by those witnesses.
In determining the elusive market value of the clay deposits at the time of taking, we have regard for the existing demands of the refractory industry in the Clearfield vicinity and believe those same demands reasonably may be expected to continue into the future.
In accordance with our best judgment and in the light of the evidence and principles herein set forth, we have found $ 8,500.00 to be the just compensation to which Harbison is entitled.
This opinion is intended to serve as findings of fact and conclusions of law as required by Rule 52, 28 U.S.C.