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alternative, that the issue of compensation be withdrawn from the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
"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.
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
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
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) ...