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UNITED STATES v. 26.81 ACRES OF LAND

August 30, 1965

UNITED STATES OF AMERICA, PLAINTIFF,
v.
26.81 ACRES OF LAND, MORE OR LESS, IN BENTON COUNTY, ARKANSAS, AND THE KOCH COMPANY, A CORPORATION, ET AL., AND UNKNOWN OWNERS, DEFENDANTS. UNITED STATES OF AMERICA, PLAINTIFF, V. 318.98 ACRES OF LAND, MORE OR LESS, IN BENTON AND WASHINGTON COUNTIES, ARKANSAS, AND STANLEY C. JOHNSON ET AL., AND UNKNOWN OWNERS, DEFENDANTS.



The opinion of the court was delivered by: John E. Miller, Chief Judge.

  Silica Products Company, Inc., (hereinafter referred to as Silica) on January 24, 1964, filed a motion for modification of the court's instructions to the Commission, or, in the alternative, that the issue of compensation be withdrawn from the Commission and tried to the court without a jury. The ownership of the parties in all the tracts in these two actions is set out in detail in the court's opinion in 226 F. Supp. 829. The additional instructions that were given to the Commission as a result of the consideration of the motion of Silica appear in the report of the Commission, beginning on page 29 and designated as Addendum No. 3.

Following the decision of the court on March 3, 1964, in 226 F. Supp. 829, the Commission proceeded to hold a hearing for the purpose of ascertaining just compensation. The hearing began on April 13 and was concluded April 16. On May 4, 1964, the report of the Commission was filed.

In awarding just compensation for the surface estate the Commission stated:

  "Therefore, the Commission fixes just compensation to
  the surface owners in Tract No. 1516 (Dyer) at $2,800
  and fixes just compensation for the surface owners in
  Tract No. 1542 (Reis) at $4,400. With respect to
  Tract No. 1517 (Ford), the Commission finds that the
  fair market value of the surface from which Tracts
  Nos. 1517-1, 1517-2, 1517-3, 1517E-1, and 1517E-2 are
  taken is $13,600, and the fair market value of the
  remainder is $3,600 on the date of the taking, and
  therefore fixes just compensation for the taking of
  Tracts 1517-1, 1517-2, 1517-3, 1517E-1, 1517E-2 in
  the sum of $10,000."

There were no objections or exceptions filed to the above awards as to the surface estates, and the court is of the opinion that the findings and conclusions of the Commission fixing compensation for the surface estates, as above set forth, are supported by substantial testimony and are not clearly erroneous. The court, therefore, adopts and approves the awards as to the surface estate, and a separate judgment will be entered fixing just compensation for the surface estate as set forth above. This leaves for consideration the value of the mineral estate in Tracts 1516, 1517-1, 1517-2, 1517-3, 1517E-1, 1517E-2, and 1542.

On May 12, 1964, the Government filed its objections to the report of the Commission. On May 14, 1964, Silica filed a preliminary response to the objections, in which it requested that consideration of the objections be deferred until a transcript of the evidence could be obtained, and that the court extend the time for it to file objections to the report of the Commission for a period of five days from May 13, 1964. The court extended the time for the filing of objections, and on May 18 Silica filed its objections to the report of the Commission.

The Government strenuously objects to (1) the failure of the Commission to sustain the Government's motion to strike the testimony of Mrs. Mertie A. Harris, Sam C. Cook, Jr., Charles E. Baxter, Jr., and Robert L. Markland; (2) to Finding of Fact No. 7 on the ground that such finding of fact was not supported by any competent evidence and was contrary to the clear weight of all the evidence; (3) that the Commission's Finding of Fact No. 8 is unsupported by any competent evidence and is contrary to the clear weight of all the evidence; (4) that the Commission committed error in failing to sustain the Government's motion at the conclusion of all of the evidence that it enter an award for the taking of the mineral estate underlying the tracts for an amount no greater than the Government's testimony, which was zero; (5) that the Commission totally failed to reveal the reasoning it used in deciding that Silica should be awarded $35,000 rather than some other amount; (6) that the award is clearly erroneous (a) as there was no acceptable "unity of use" between the particular 67 acres of silica sand and the silica sand plant owned by Silica at Guion, Arkansas; (b) that there could be no severance damages to the small amount of land owned in fee simple by Silica upon which its plant is located near Guion, Arkansas; (c) that under the valid findings of fact the award to Silica is speculative and conjectural; (d) that the award rests on a conclusion as to damages to Silica which are a consequence of the taking and therefore noncompensable; and (e) that the award to Silica, under the findings of the Commission, is not based alone on the fair market value of the estate taken but rather on special value personal to the condemnee.

The objections of Silica are as follows:

    "I. The Commission's finding of fact No. 10 is
  contrary to the clear weight of all of the evidence,
  the vast preponderance of the evidence, and is
  clearly erroneous. This finding is based solely upon
  opinion evidence that is demonstrated by the other
  evidence to be purely speculative and conjectural.
    "II. The Commission's finding of fact No. 14 is
  vague and ambiguous, the term `immediate vicinity'
  not being defined. If it is meant within a few miles
  of the deposit, then the finding is irrelevant. If
  the term means within the actual market area of
  Silica Products Company on the date of the taking,
  then the finding is clearly contrary to all of the
  evidence in the record and clearly erroneous.
    "III. The Commission's finding of fact No. 21 is
  contrary to the clear weight of all of the evidence.
  Finding 21 ignores the principle of law that
  knowledge in the neighborhood of the imminence of the
  building of the condemnor's project and the resultant
  taking long before the date of taking, and the effect
  of this general public knowledge upon the value of
  the lands taken or the use of the lands taken, is not
  to be considered.
    "IV. The Commission's finding of fact No. 22 is
  contrary to the clear weight of all of the evidence,
  and contrary to the vast preponderance of the
  evidence, and is clearly erroneous."

The Government has furnished to the court a complete transcript, consisting of 815 pages, along with Government Exhibits 1 through 10, inclusive, and Silica's Exhibits 1 through 25 inclusive. The parties have submitted excellent briefs and extensive arguments in support of their respective contentions. The court has considered the contentions of the parties and has examined with care the authorities cited in support of their respective contentions.

The 67-acre tract is sometimes referred to as "Martin's Bluff on the White River." The tract is approximately seven miles northeast of Springdale, Arkansas, through which city the Frisco Railroad runs. Silica has been engaged in the sole business of mining, processing, and selling silica sand principally to glass manufacturers and foundries since prior to 1930. Its mining operations and processing plant has been located at Guion, Arkansas, on the Missouri Pacific Railroad during this period, and for about ten years Silica also operated a small plant at Everton, Arkansas, but because of the abandonment of the Missouri & Arkansas Railroad, the plant at Everton was closed. The Guion plant consists of extensive processing, purifying, screening, grading and mixing equipment and machinery affixed to the realty at the plant site adjacent to the Missouri Pacific Railroad. The processing plant at Guion, Arkansas, is more than 100 miles from the 67 acres involved herein. The so-called reserves or the amount of silica sand at Guion is practically inexhaustible. There the depth of the deposit is approximately 150 feet. The fee simple ownership at Guion is only approximately 40 acres. The remainder of the reserves, which total approximately 3,000 acres, are held under long-time mining leases. Of this acreage, 300 could be mined without having to move the plant. The reserves at Guion, or the sand available for processing, are sufficient to meet the present sales of silica for 50 to 100 years on the 300-acre tract alone.

Beginning at the bottom of page 5 of its brief, Silica stated:

    "During the defendant's thirty-two years of
  ownership of the Martin's Bluff silica sand reserve,
  from the date of defendant's acquisition down to the
  dates of taking in these actions, this reserve has
  served the defendant with four uses which have
  substantially increased the overall value of the
  defendant's entire real property interests employed
  in its sole business of production and sale of silica
  sand, consisting of Martin's Bluff reserve, the fee
  owned reserves and leasehold reserves and the fee
  owned plant site and improvements thereon located at
  Guion, Arkansas. These uses have been: (1) serving as
  an actual adequate proven reserve which Silica
  Products Company, Inc. could fall back on in the
  event of any change in circumstances interfering with
  its continued profitable operation at its Guion
  properties (mine disaster, abandonment of the branch
  of the Missouri Pacific Railroad serving Guion,
  increased freight rates, deterioration of the quality
  of the Guion reserve, etc.); (2) an additional
  separate reserve deposit sufficient to satisfy the
  defendant's glass manufacturing market (which
  customers, because of the nature of their operations,
  require their producers to demonstrate adequate
  reserves for a continuous fulfillment of their
  requirements of raw materials over long periods of
  time); (3) in obtaining much more favorable rates
  from the Missouri Pacific Railroad for the
  defendant's Guion plant to its markets to the
  northwest, west and southwest than would otherwise
  have been obtainable because of the strategic
  location of the Martin's Bluff reserve 100 plus miles
  to the west of Guion and located upon a competing
  railroad, the Frisco; (4) ...

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