                                    No. 12187

          I N THE SUPREME C U T O THE STATE O MONTANA
                           OR    F           F

                                          1973



THE STATE O MONTANA, ACTING BY AND T R U H
           F                         HOG
THE STATE HIGHWAY COMMISSION OF THE STATE OF
MONTANA,

                            P l a i n t i f f and A p p e l l a n t ,



ROGER W. BENNETT and SANTINA BENNETT,

                            Defendants and Respondents.



Appeal from:         D i s t r i c t Court of t h e Third J u d i c i a l D i s t r i c t ,
                     Honorable S i d G. S t e w a r t , Judge p r e s i d i n g .

Counsel of Record:

    For Appellant :

            Daniel J. S u l l i v a n and Leo J. K o t t a s , Jr. argued,
             Highway Legal Department, Helena, Montana,

    For Respondents:

            Knight, Dahood, Mackay and McLean, Anaconda, Montana.
            Malcolm MacCalman argued, Deer Lodge, Montana.



                                                  Submitted:            June 18, 1973

                                                     Decided :

      rn7
Filed :       -;.   **3??
M r . J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e Court,

       This i s a condemnation a c t i o n by t h e S t a t e Highway Commission
i n v o l v i n g a 2.68 a c r e t r a c t of l a n d w i t h improvements, l o c a t e d f o u r
m i l e s west of Garrison, Powell County, Montanz,                           F o l l 0 b ~ i n gj u r y
t r i a l i n t h e t h i r d j u d i c i a l d i s t r i c t c o u r t b e f o r e t h e Hon, Sid G,
S t e w a r t , d i s t r i c t judge, judgment was e n t e r e d awarding t h e owners
$60,000 f o r t h e i r p r o p e r t y .        From t h i s judgment and d e n i a l of a
motion f o r a new t r i a l , t h e S t a t e a p p e a l s .
       The S t a t e of Montana, a c t i n g through t h e S t a t e Highway Com-
mission, seeks t o a c q u i r e t h e land i n q u e s t i o n f o r highway pur-
poses.      The p r o p e r t y owners a r e Roger W. Bennett and h i s w i f e ,
S a n t i n a Bennett,      T h e i r p r o p e r t y a b u t s U , S . Highway No. 10 along
t h e n o r t h ri.ght-of-way boundary l i n e .
       The p r o p e r t y i s known i n t h e a r e a a s The Golden Spike.
Located upon t h e p r o p e r t y were r e n t a l c a b i n s , s t o r a g e sheds and
a s e r v i c e s t a t i o n , w i t h home and shop combined,               Bennett t e s t i -
f i e d h i s b u s i n e s s c o n s i s t e d of running t h e s e r v i c e s t a t i o n and
s e l l i n g and r e p a i r i n g used c a r s , t r u c k s and t r a c t o r s ,
       A t t r i a l , t h e s t a t e ' s a p p r a i s e r t e s t i f i e d t h a t t h e "highest
and b e s t use1' of t h e land was f o r r u r a l homesites and f i x e d i t s
market v a l u e a t $25,650, based on t h e c o s t approach f o r t h e
b u i l d i n g s and t h e market d a t a approach f o r t h e land.                  Witnesses
f o r t h e p r o p e r t y owners t e s t i f i e d t h a t t h e "highest and              b e s t use"
of t h e p r o p e r t y was b u s i n e s s o r commercial.           The p r o p e r t y owner
valued h i s p r o p e r t y a t $100,000 and an independent f e e a p p r a i s e r
f o r the     owners,           u s i n g t h e c a p i t a l i z a t i o n of income approach,
valued t h e p r o p e r t y a t $81,367.44.
       The j u r y r e t u r n e d a v e r d i c t f o r t h e p r o p e r t y owners i n t h e
amount of $60,000.              Judgment was e n t e r e d and t h e S t a t e a p p e a l s
from t h a t judgment.
        O a p p e a l t h e S t a t e p r e s e n t s seven i s s u e s f o r review,
         n                                                                                        The
f i r s t t h r e e concern t h e a d m i s s i b i l i t y o f t h e owner's testimony a s
t o t h e v a l u e of t h e p r o p e r t y .     I s s u e s f o u r through s i x r e l a t e t o
t h e p r o p r i e t y of t h e c a p i t a l i z a t i o n of income approach used by
t h e p r o p e r t y owners' a p p r a i s e r .       I s s u e seven a l l e g e s e r r o r i n t h e
d i s t r i c t c o u r t ' s l i m i t i n g cross-examination by counsel f o r t h e
State,
        I n i s s u e s one through t h r e e t h e t h r u s t of t h e s t a t e ' s
argument i s t h a t owner               en nett's v a l u a t i o n of hi.s p r o p e r t y was
n o t a d m i s s i b l e because no proper foundation was l a i d ,                         The owner
t e s t i f i e d , over o b j e c t i o n , t o a f i g u r e of $100,000, a s t h e v a l u e of
h i s property.          The S t a t e , r e l y i n g on Alexander v. S t a t e Highway
Comm'n, 142 Mont. 93, 110, 381 P.2d 780, contends t h e owner's
testimony was n o t a d m i s s i b l e .           I n Alexander t h i s Court h e l d :
        ft*   $-
                   * t h a t an owner, upon prima f a c i e proof of ownership,
        s h a l l b e q u a l i f i e d t o e s t i m a t e i n a r e a s o n a b l e way t h e
        v a l u e of h i s p r o p e r t y f o r t h e u s e t o which he h a s been
        p u t t i n g i t , Such owner i s n o t q u a l i f i e d by v i r t u e of
        ownership a l o n e t o t e s t i f y a s t o v a l u e f o r o t h e r purposes
        u n l e s s he p o s s e s s , a s any o t h e r w i t n e s s a s t o v a l u e ,
         I
           some p e c u l i a r means o f f orming an i n t e l l i g e n t and c o r r e c t
        judgment a s t o t h e v a l u e of t h e p r o p e r t y i n q u e s t i o n beyond
        what i s presumed t o be possessed by men generally."'
        Here, t h e owner t e s t i f i e d only a s t o t h e v a l u e of t h e p r o p e r t y
f o r purposes t o which he had been u s i n g i t ,                        The S t a t e contends,
i n e f f e c t , t h a t t h e owner cannot s t a t e t h e v a l u e of h i s p r o p e r t y
f o r t h e purpose f o r which he was p u t t i n g i t when t h a t u s e i s n o t ,
i n t h e s t a t e ' s opinion, t h e h i g h e s t and b e s t u s e ,              The p r o p e r t y
owner p r e s e n t e d a f i g u r e of $100,000 a f t e r foundation was l a i d a s
t o h i s f a m i l i a r i t y w i t h t h e g e n e r a l a r e a , h i s purchase of t h e
p r o p e r t y and c o n s t r u c t i o n of t h e b u i l d i n g s , and h i s u s e of t h e
p r o p e r t y i n s e l l i n g g a s o l i n e , o i l , used c a r s and o t h e r v e h i c l e s
o v e r a p e r i o d of twenty y e a r s ,          With t h i s background, i t cannot
b e s a i d t h a t h i s v a l u a t i o n was e i t h e r s p e c u l a t i v e o r c o n j e c t u r a l .
        The competence of a w i t n e s s t o g i v e an opinion on v a l u e of
p r o p e r t y i s g e n e r a l l y i n t h e d i s c r e t i o n of t h e t r i a l judge.          One
who knows t h e r e a l p r o p e r t y i n q u e s t i o n and i s f a m i l i a r w i t h t h e
u s e s t o which i t may b e p u t , may t e s t i f y a s t o i t s market v a l u e .
Such w i t n e s s e s need n o t know of any s a l e s o r be t e c h n i c a l e x p e r t s .
S t a t e Highway Comrn. v , Wilcox, 155 Mont. 176, 468 P.2d 749; S t a t e
Highway Comm'n v. Barnes, 151 Mont. 300, 443 P,2d 16; S t a t e v.
P e t e r s o n , 134 Mont. 52, 328 P,2d 617.                      The p r o p e r t y owner, whether
g e n e r a l l y f a m i l i a r w i t h such v a l u e s o r n o t , ought t o be allowed
t o e s t i m a t e i t s worth.         The weight of h i s testimony i s f o r t h e
jury.      Alexander v. S t a t e Highway Comm'n, s u p r a ; 3 Wigmore,
Evidence $ 716 (Chadbourn r e v . 1970).                           The only r e s t r i c t i o n on
t h e owner's testimony i s when t h e n a t u r e of t h e answer i s s o un-
r e a s o n a b l e a s t o b e s p e c u l a t i v e , c o n j e c t u r a l , and c o n t r a d i c t o r y
t h a t h i s answer should be s t r i c k e n .               Alexander v. S t a t e Highway
Comm'n, s u p r a ,        Here, t h e owner's e s t i m a t e was n o t s o unreasonable
o r l a c k i n g i n foundation t h a t t h i s Court may hold t h e d i s t r i c t
c o u r t abused i t s d i s c r e t i o n ,
        s t a t e ' s i s s u e s f o u r through s i x a r e d i r e c t e d a t t h e v a l u a t i o n
f i x e d by t h e p r o p e r t y owners' a p p r a i s e r under t h e c a p i t a l i z a t i o n
of income approach,                 The S t a t e contends t h a t such an approach t o
v a l u a t i o n should n o t have been admitted because of i n s u f f i c i e n t
evidence of t h e n e t income t o c a p i t a l i z e ,
        It h a s been g e n e r a l l y h e l d t h a t t h e b e s t method of a r r i v i n g
a t market v a l u e i s r e c e n t s a l e s of comparable p r o p e r t y ,                    State
Highway ~omm'n v , Bare, 141 Mont. 288, 377 P.2d 357.                                        But where
t h e r e a r e no comparable s a l e s , evidence based upon revenue and
v a l u a t i o n based i n p a r t thereon i s competent and a d m i s s i b l e .
S t a t e Highway Comm'n v , Biastoch Meats, I n c ,                        ,   145 Mont. 261, 400
P.2d 274,
        I n t h e i n s t a n t c a s e t h e purpose f o r which t h e p r o p e r t y was
used i s indeed unique i n t h e a r e a ,                    Here, we have a s e r v i c e s t a t i o n
and r e p a i r shop i n an a r e a more t y p i c a l l y used f o r r u r a l homesites
o r farm l a n d ,
        The p r o p e r t y owners' a p p r a i s e r used t h e c a p i t a l i z a t i o n method
o f v a l u a t i o n i n determining t h a t t h e p r o p e r t y i n q u e s t i o n should be
valued a t $81,367.44.                 H e a r r i v e d a t t h i s f i g u r e by averaging t h e
                                                          C
owners' income t a x r e t u r n s f o r t h e p a s t two y e a r s on income from
t h e property.          He then deducted from n e t p r o f i t t h e sum of $120
f o r maintenance and $4,800 a s a f a i r amount a t t r i b u t a b l e a s wages
f o r t h e owners,        The balance of $4,884 was a t t r i b u t e d t o t h e

v a l u e produced by t h e p r o p e r t y i n l i e u of r e n t which when
c a p i t a l i z e d a t s i x p e r c e n t gave a v a l u e of $81,367.44. Weaknesses
i n formulating t h i s v a l u e go t o t h e weight of t h e e x p e r t ' s t e s t i -
mony t o b e evaluated by t h e j u r y ,                S t a t e Highway Comm'n v. Wilcox,
155 Mont. 176, 468 P,2d 749; S t a t e Highway Comfn v , Vaughan,
155 Mont. 277, 470 P.2d 967,
         Once proper foundation h a s been l a i d a s t o t h e w i t n e s s '
e x p e r t i s e he ghouldbe permitted t o g i v e h i s opinion u s i n g any
of t h e accpted means of c a l c u l a t i n g v a l u e ,             It i s t h u s incumbent
upon t h e S t a t e t o b r i n g out any weaknesses of h i s v a l u a t i o n upon
cross-examination.              The a p p r s i s e r ' s f i g u r e s were based on more
than c o n j e c t u r e and u n c e r t a i n t y and t h e r e f o r e can be d i s t i n g u i s h e d
from S t a t e Highway Comm'n v , Bare, 141 Mont. 288, 377 P,2d 357,
r e l i e d upon by t h e S t a t e ,
         I s s u e seven concerns t h e s t a t e ' s c o n t e n t i o n t h a t i t was unduly
l i m i t e d i n i t s cross-examination.
         I t i s a g e n e r a l r u l e i n t h i s s t a t e t h a t s e c t i o n 93-1901-7,
R,C.M.      1947, permits a wide range f o r cross-examination.                               The
r i g h t of cross-examination may n o t b e unduly r e s t r i c t e d and may
extend n o t only t o f a c t s s t a t e d by t h e w i t n e s s i n h i s d i r e c t
examination, b u t t o a l l o t h e r f a c t s connected w i t h them which tend
t o e n l i g h t e n t h e j u r y upon t h e q u e s t i o n i n c o n t r o v e r s y ,   The r u l e
necessarily includes questions t o bring out f a c t s i l l u s t r a t i v e
of t h e motives, b i a s and i n t e r e s t s f t h e w i t n e s s o r a s a r e f l e c t i o n
upon h i s c a p a c i t y and memory,            Kipp v . Silverman, 25 Mont, 296,
64 P. 884; Cobban v , Hecklen, 27 Mont, 245, 70 P. 805; Cuerth v ,
Arbogast, 48 Mont. 209, 136 P, 383; Herzig v. Sandberg, 54 Mont.
538, 1 7 2 P, 1 3 2 .
         W have thoroughly reviewed t h e r e c o r d and f i n d i t simply
          e
does n o t b e a r out t h e S t a t e ' s c o n t e n t i o n t h a t cross-examination
by t h e s t a t e of t h e p r o p e r t y owners' a p p r a i s e r was unduly r e s t r i c t e d .
           J u r y f i n d i n g s w i l l n o t be d i s t u r b e d u n l e s s they a r e s o
    obviously and palpably o u t of p r o p o r t i o n t o t h e v a l u e of t h e
    p r o p e r t y taken a s t o be i n excess of j u s t compensation,                    State
    Higl-c~sy~omrn'n v . Jacobs, 150 Mont. 3 2 2 , 435 P,2d 2 7 4 .
           Having reviewed t h e record and examined t h e i s s u e s r a i s e d
    by t h e S t a t e , we f i n d t h e r e was no s u b s t a n t i a l e r r o r i n t h e d i s -
    t r i c t c o u r t proceedings.
           The judgment i s a f f i r m e d ,




                                                         Associate J u s t i c e




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