SOUTHERN RY. CO. v. MICHAELS et al. (Supreme Court of Tennessee. Nov. 26, 1912.) 1. EMINENT DOMAIN (§ 124*)-COMPENSATION -TIME OF ASSESSMENT.

In proceedings to assess compensation for, lands taken by condemnation, the valuation must be made as of the date of the actual taking, so that, where defendants, in a proceeding to condemn mill property, closed its plant after the filing of the petition, but before the taking of possession by the plaintiffs, that matter was proper to be considered in assessing damages.

[Ed. Note. For other cases, see Eminent Domain, Cent. Dig. §§ 332-344; Dec. Dig. § 124.*] 2. EMINENT DOMAIN (§ 134*)-COMPENSATION -ASSESSMENT-POTENTIAL VALUE OF PROP

the three cases referred to, has in recent complainant to relief if the grounds are years, when it intended that the overruling subsequently maintained in the evidence. In of a demurrer should have merely the ef- the present case the bill to which the demurfect of deciding there was enough in the rer was overruled was, after a remand of the bill to require an answer, generally, if not cause, dismissed on the complainant's own invariably, so stated in terms in its decree. motion, and a new bill prepared containing This sometimes occurs when the court is of the same matter, filed within a year therethe opinion that the bill is defectively drawn, after; the dismissal having occurred because not fully stating the equities of the complain- the complainant could not get his case ready aut, and that justice requires the facts for trial at the term of the court during should be examined by the court as displayed which it was called. Under such a state of at large in the evidence that may be adduc- facts the decision overruling the demurrer ed. It was never intended, by the rule re- would be binding on the parties, and not subferred to, to deny that when a single ground ject to question on proof of the facts allegof relief is well stated in the bill, and di- ed. The evidence fully sustains the allegarectly assailed by demurrer, and the demur- tions of the two bills, wherein they are the rer is overruled applicable to that particu- same. lar point, such decision is binding on all parties, and not subject to further question on the same facts, if the facts are subsequently proven in substance as alleged in the bill. If it were not intended that such adjudication, when precisely ascertained, should be binding, it would be idle to permit a discretionary appeal on overruling a demurrer, under section 4889 of Shannon's Code. Indeed, it was held in Groomes & Uhlrick v. Theime, 13 Lea, 320, that a decision overruling a demurrer is res adjudicata. It has been generally stated in our cases that a decree either overruling or sustaining a demurrer is res adjudicata. Murdock v. Gaskill, 8 Baxt. 22, and cases cited in headnote. It was said of these cases in Rodgers v. Dibrell, 6 Lea, 69, 74, and also in Battle v. Street, supra, that all that is decided in overruling a demurrer is that the bill contains sufficient equity to require an answer. The two classes of cases, we think, may be harmonized on this principle. Where a demurrer is sustained, and the bill dismissed, that is a clear adjudication on the facts of the case stated in the bill. Where the demurrer is overruled when filed to a bill stating a single ground of relief, and it thus can be seen precisely on what the court acted, that state of facts must be treated in that litigation as sufficient to furnish ground of relief, if substantially proven in the evidence. So, where a bill presents several grounds of relief, and it can be seen that each one of these was acted upon by the court, the same result follows. Where the bill presents several grounds of relief, and the decree overruling the demurrer is general, of course, it cannot be known on what ground the judgment of the court was enLANSDEN, J. The Southern Railway tered, and hence this results only in the de- Company filed its petition in the circuit cision that there is enough equity in the bill court of Knox county for the purpose of conto require an answer. Where there is an demning a right of way for the use of its opinion filed stating the grounds on which road through the property of the defendant the court acted in overruling the demurrer, Michaels. The defendant's property has a the matters so decided must be treated as frontage on the north bank of the Tennessee settled between the parties, and not sub- river of about 1,150 feet and a like frontage ject to be subsequently controverted in that on the south side of McCannon street. It case, and must be considered as entitling the is about 85 feet wide at the western end, and

ERTY.

In assessing compensation for land taken pocket in the river in which defendant had by eminent domain, the potential value of a stored logs when the property was used for mill purposes could only be estimated as a part of a going business, and where, before the taking of the property, the mill was closed, with little likelihood of its ever being reopened, its value as for a future use of the property for a mill site was too speculative to be considered. main, Cent. Dig. § 356; Dec.. Dig. § 134.*] [Ed. Note.-For other cases, see Eminent Do

Certiorari from Court of Civil Appeals. Proceedings in eminent domain by the Southern Railway Company against T. M. Michaels and others. From a judgment assessing damages for defendants, all parties bring certiorari. Reversed and remanded.

Jourolmon, Welcker & Smith, of Knoxville, for plaintiff. A. C. Grimm and Lucky, Andrews & Fowler, all of Knoxville, for defendants.

about 400 feet wide at the eastern end, and contains about 6 acres. The right of way condemned extends through the property its full length east and west. The defendant had a sawmill located on his property at the time the petition was filed, which he has operated for a number of years. His mill had a capacity of about 1,250,000 feet per annum. The north bank of the river adjacent to the mill site formed a pocket in the river on the south side of the mill, which was used by the defendant as a harbor in which to hold logs for the supply of his mill. The harbor has a capacity of about 1,000,000 feet, or practically enough to supply the mill for one year. The course of the defendant's business operations was to purchase logs adjacent to the tributaries of the Tennessee river many miles above Knoxville, and float them down to Knoxville, and harbor them in the pocket adjacent to his mill. In this way he kept his mill supplied with logs.

There is proof tending to show that the construction of the petitioner's road through the defendant's property had the effect to destroy the value of the harbor in connection with the operation of the mill on defendant's land.

The original petition was filed August 15, 1906, containing the usual averments in condemnation proceedings, and especially the averment of power in the petitioner to appropriate the defendant's property under the law of eminent domain. On September 6, 1906, the defendants answered the petition, and denied the power of the petitioner to condemn and appropriate a right of way across their premises. On February 21, 1907, the petitioner filed an amended petition, which is here mentioned only for the purpose of stating that the defendants in their answer to this pleading again denied the right of the petitioner to take and appropriate a right of way through their property.

was set aside and a new jury of view was appointed. The second jury estimated the value of the land at $3,000, the incidental damages at $3,800 and the incidental benefits at $800, making a total of $6,000. Both sides appealed from the report of this jury of view, and there was a trial before the circuit judge and a jury in the regular way, and the value of the property taken was fixed at $3,000, the incidental damages at $9,000, with no incidental benefits, and a judgment was entered upon this verdict in favor of the defendants for $12,000, together with interest from the day of the filing of the original petition, making all together $15,986.

The trial judge instructed the jury in substance that they should estimate the value of the land taken as of the day upon which it was taken, "which is the day on which defendants were served with a legal notice of the institution of the proceedings in this case." The Court of Civil Appeals held that the trial judge was in error in instructing the jury to assess the value of the property as of the day of the filing of the original petition, and held that the property should be valued as of the day when it was actually appropriated by the petitioner; but that court was of opinion that the error of the trial judge was harmless, for the reason that the right of way of the petitioner as located through the defendant's property destroyed the value of the defendant's mill, and also its future use for a mill site, to be operated after the manner that defendant had theretofore operated the mill in question. They modified the judgment of the circuit judge on the question of interest, and allowed interest only from the day of the actual appropriation of the property by the petitioner.

The Southern Railway Company filed its petition for writs of certiorari, and assigned the action of the Court of Civil Appeals in holding that the action of the circuit judge was harmless for error. The defendants filed a petition for writs of certiorari, and assigned the action of the Court of Civil Ap-. peals in disallowing interest from the day of the filing of the petition in the court below for error.

[1] That the charge of the circuit judge to the effect that the land sought to be taken should be valued as of the day of the filing of the original petition was error there can be no doubt, upon the authority of Railroad Co. v. Moggridge, 116 Tenn. 445, 92 S. W. 1114, and Cunningham v. Railroad Co., 126 Tenn. 149 S. W. 103.

Soon after the original petition was filed, the defendants sawed up what logs were anchored in the harbor above referred to and suspended the operation of their mill. The case was pending in the circuit court until April 8, 1911, a period of almost five years. There is no explanation of the cause of this long delay in the preparation and trial of the case, except what appears to be conceded by counsel to the effect that there was an understanding that the trial of this case should await the determination by this court of the similar case of Southern Railway Company v. E. T. Sanford et al. At all events, on April 8, 1911, the defendants moved the court to dismiss the petition for want [2] The petitioner introduced proof tendof prosecution, whereupon it appears that a tng to show the value of the property at the writ of inquisition was awarded, and a jury time it was appropriated by the railway of view appointed, and the case proceeded to company, and this line of testimony fixes the final determination without further delay. value at far less than the amount found by The first jury of view valued the land sought the jury. The defendant introduced testito be appropriated by petitioner at $3,000, the mony tending to show the value of the propincidental damage at $500, and the incidental erty on the day of the filing of the original

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Therefore, if the defendant's mill was being actually used in connection with the harbor at the time the mill was destroyed by the location of the railway line upon his property, he would be entitled to be com

was in full operation as a going business | particular use, and that value is being utilconcern. This line of testimony fixes the ized by the owner, he is entitled to be comvalue of the property at a much larger fig- pensated for the value of the property to ure than the testimony offered by the peti-him at the time it is taken. tioner, and a great many of the witnesses fix its value far above the verdict of the jury. There is proof tending to show that after the defendant abandoned its mill, and before the railway company took possession of its right of way, the plant depreciated ma-pensated for the fair cash value of his mill terially in its building and machinery. It can be clearly gathered from the testimony that the mill itself was abandoned indefinitely by the defendant, and that it would probably never again be used as it had been before the filing of the original petition of condemnation. At all events, this is a question that should have been submitted to the jury for their consideration in fixing the value of the defendant's property under the testimony of the witnesses.

as a going concern, and in this view the value of the harbor might be singled out in the testimony, and its use to his mill and mill operations could be estimated as a part of the value of the property taken. But if the mill had been abandoned, and the defendant was no longer using the harbor in connection with his mill, it would possess a potential value only, which could not be singled out by the witnesses, and a price placed upon it separate from the other elements of usefulness which the property might possess. In that event, the rule as stated in Alloway v. Nashville would apply, and in the first event the rule stated in Railway v. Memphis would apply.

With these cases in mind, it is impossible to say that the error of the trial judge was harmless. As previously stated, the testimony of the petitioner tended to show the value of the property after the mill had been abandoned, and at the time the land was appropriated by the railway company. The testimony of the defendant tended to show the value of the property when the mill was a going concern, and witnesses sought to state the value of the harbor to the mill while running, in dollars and cents. It needs no argument to show that the value of the harbor as a distinct element of usefulness in the property cannot be singled out and valued separately, when the owner is not devoting it to any particular use. In the first place, any opinion of its value would be merely speculative, and, in the second place, such a rule would require one appropriating the property to pay for a value which exists only potentially, and not actually.

It was held in Woodfolk v. Railroad, 2 Swan, 437, that the proper rule for the valuation of property taken under the law of eminent domain is the fair cash value of the land as if the owner were willing to sell and the appropriator were willing to buy that particular quantity at that place and in that form-that is, at the place where the land is taken and in the form in which it exists at the time it is taken. That case establishes the principle that the property is to be offered at its fair cash value and taken in statu quo. It was held in Alloway v. Nashville, 88 Tenn. 514, 13 S. W. 123, 8 L. R. A. 123, that the rule of just compensation required by our Constitution includes an appraisement of every element of usefulness and advantage in the property. But this does not mean that all of its capabilities of value are to be estimated separately, and the aggregate put down as the true value, for the reason that they do not exist independently of each other, and cannot all be realized at the same time. Likewise its value is not to be restricted to any particular capability, for the reason that that would not include the other elements of value, and would also tend to make the degree of benefit to the party appropriating the The justice of this holding is well illusland for particular purposes the real meas-trated when the holding of the court in Cunure of value. ningham v. Railroad, supra, is considered. In Southern Railway v. Memphis, 148 S. In that case it was held that the petitioner W. 662, April term, 1912, it was held that if might dismiss its petition for condemnation property taken for public use possess a par- at any time before it executes the bond reticular value to the owner, because of the quired by statute, or pays the money into actual use to which he is devoting it at the court. In this case there was a delay of time it is taken, the rule of just compensa- nearly five years from the filing of the petion requires that the owner be paid for the tition until the execution of the bond, and fair cash value of the property in the form in that time the defendant's mill was abanin which it is taken. So that, if property doned and ceased to be a going concern. appropriated for public use has potential the petitioner had dismissed its petition, as values merely, which are undeveloped by the it clearly had the right to do, and had abanowner at the time of the taking, every ele- doned its purpose to appropriate defendment of usefulness and advantage which the ant's property, it is manifest that the differproperty possesses is to be taken into view ence between the value of a going mill and in arriving at its fair cash value. But if an abandoned one would have fallen upon

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result, especially under the facts of this [ ceedings for disobedience of the injunctions case. The petitioner averred its right to take the defendant's property under the law of eminent domain, and this right was denied by the defendant, thereby staying the hand of the petitioner until the question was adjudged. Almost immediately after the filing of the original petition, the defendant abandoned his mill. This loss rightfully and properly should fall upon him. The result is that the judgments of the Court of Civil Appeals and of the circuit court are reversed, and the case remanded for a new trial.

ers of the property, or some of it. Laura view. We are not disposed to expand and Hines, Ada Culver, Lillian Sterling, and Annie Bouley were proceeded against as madames, or proprietors of houses, and the others as inmates.