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Cook County v. Vulcan Materials Co.

OPINION FILED MARCH 20, 1959

THE COUNTY OF COOK, APPELLEE,

v.

VULCAN MATERIALS COMPANY ET AL., APPELLANTS.



APPEAL from the Superior Court of Cook County; the Hon. DONALD S. McKINLAY, Judge, presiding.

MR. JUSTICE HOUSE DELIVERED THE OPINION OF THE COURT:

Rehearing denied May 19, 1959.

The petitioner, the county of Cook, filed this suit to condemn a 12-acre strip through 65 acres of land owned by Vulcan Materials Company and occupied by it and the other respondents for stone quarrying and asphalt manufacturing purposes. It proposed to construct the Congress Street Expressway over such strip. Respondents appeal from the judgment entered upon the jury verdict of $243,000 as compensation for land taken and $382,000 for damages to land not taken. A freehold is involved.

The property in question is located in the village of Hillside about 18 miles southwest of Chicago and is intersected by Harrison Street just west of Mannheim Road. Consumers Division of Vulcan owns 39 acres immediately north and 26 acres south of Harrison. A quarry pit occupies the northwest 21 acres of the 39-acre tract plus 6.7 acres immediately west thereof on an 8-acre tract leased for quarrying from the Holland family. In the southeast 2 acres of the remainder of the 39-acre tract, a small plot is leased to Allied Asphalt Paving Company, upon which is located an asphalt plant, and the remaining 16 acres are occupied by limestone processing facilities, ready-mix concrete aggregate plant, auxiliary buildings and improvements, railroad service and switching tracks, and stock piles of sand, gravel and processed stone. Vulcan maintains an office building, garage, machine shop and various low-value wooden buildings and dwellings upon the northerly part of 26 acres south of Harrison. The northerly 1 1/2 acres thereof is leased to Seneca Petroleum Co., which maintains a second asphalt plant thereon. The remaining southerly 20 acres had been occupied by Lewistown Pipe Company, as a concrete pipe plant where various sizes of sewer pipe were poured and stored, but was vacated prior to the trial of this cause. All of the lessees were required to and did purchase as raw materials for their asphalt and pipe the products processed by Vulcan.

The Congress Street Expressway roughly parallels Harrison Street at this point and requires the northerly 10 acres of Vulcan's south 26 acres, together with 2 acres just north of Harrison on the east end of the quarry property for the construction of the west half of a cloverleaf at Mannheim Road. The expressway is a limited access highway of two traffic lanes separated by a median strip with service drives on either side. It will be about 17 feet below existing ground level.

Respondents produced expert testimony on their theory of the highest and best use, geological data and land values. They also made proof of location, thickness, depth below the surface, quantity, quality, and quarryability of this and other limestone deposits, quarry methods and their problems. The evidence ranged through limestone crushing and processing, ready-mix concrete aggregate and asphalt plant operation; land, plant and machinery values; zoning laws, and much technical evidence including plats, maps, charts and computations.

Proof was made by respondents to support their contention that the Hillside quarry is so located with reference to its market and competition as to make it very valuable, that it has a good stone deposit, that no quarries are located in the Chicago area north of it, and that since transportation costs dictates the price of a bulk commodity such as limestone, the location enhanced the value of the whole quarry. They concede that limestone deposits abound in the area, but at least one expert witness testified that in his opinion another large pit would never be opened in the area because of zoning restrictions. They further offered proof that the south 26 acres was their reserve of limestone for the future, that they had feasible plans for quarrying it, but that if the north ten acres be taken the balance could not be economically quarried. Their theory is that the award for land taken was inadequate, inconsistent and against the manifest weight of the competent evidence in the record.

Petitioner produced evidence of the widespread location of limestone deposits in the area, contended that the 26 acres south of Harrison could not be economically operated because of its location and overburden and that the quarry company had no intention of quarrying it until plans were made for the expressway. Sales of tracts in the area said to be comparable were proved, as were sales by predecessors and part owners of the predecessor companies. The sale value of such other tracts were in line with petitioner's witnesses's values placed upon respondents' property. Petitioner's theory is that the verdict of the jury was well within the range of the testimony and sustained by the clear weight of the evidence.

Petitioner's valuation witnesses, Lester Porter and William Kaplan, testified that the highest and best use of the 26 acres was industrial, and fixed the value of lands taken at $239,500 and $237,500, respectively, with no damages to the remainder not taken. They expressed no opinion as to the value of the whole 65 acres before the taking nor the value of the remainder after the taking.

Respondents, on the other hand, contend that the whole 65 acres is a going quarrying unit and that the taking of the 12 acres would so separate their pit and plants from the segment left to the south as to make it uneconomical to quarry the stone therefrom. Their four valuation witnesses testified that the highest and best use for all of the 26 acres was quarrying. Such witnesses fixed the value of land taken from $1,466,435 to $1,858,500 and damages to land not taken from $1,164,750 to $2,216,700.

The award is within the range of the evidence, although the valuation evidence is widely divergent and conflicting. Under such circumstances, where the jury views the premises, the rule is that a verdict will not be disturbed unless there has been a clear and palpable mistake or the verdict was the result of passion or prejudice. County of Cook v. Colonial Oil Corporation, 15 Ill.2d 67; Dept. of Public Works and Buildings v. Lambert, 411 Ill. 183.

Respondents contend, however, that petitioner has not sustained the original and basic burden imposed upon it of proving the fair cash market value of the land. Before going into this problem, which necessarily entails an extended analysis of the testimony of petitioner's valuation witnesses, we will consider the charge of serious prejudicial error in the admission and use of a balance sheet.

Petitioner, on rebuttal, introduced in evidence a consolidated balance sheet of Consumers Company as of December 31, 1953, and July 1, 1954, which was part of a voluminous proxy statement filed with the Securities and Exchange Commission in connection with a proposed merger of Consumers with two other corporations. The merger was consummated in 1954 and the organization became Union Chemical and Material Corporation. (The name was changed to Vulcan Materials Company after arguments on this appeal and we have granted a motion to substitute the new name in the briefs and in this opinion.) The trial court admitted that portion of the balance sheet which set out property, plant and equipment values, together with footnote 3 attached, but the whole balance sheet went to the jury. Footnote 3 was specifically made an integral part of the balance sheet. It disclosed that values were based on an appraisal of March 1, 1937, plus subsequent additions at cost, less depreciation on a straight-line basis at rates varying from 2 6/7 per cent to 20 per cent per annum, and less depletion at rates designed to amortize the recorded value of stone deposits on the basis of recoverable yardage.

The balance sheet showed such physical assets to be valued at $7,534,389 minus depreciation and depletion reserves of $3,013,007, leaving a net value of $4,521,382. Included in the gross value before setting up reserves was land, stone and gravel deposits in Illinois, Indiana and Wisconsin at $664,565. Petitioner brought out on cross-examination that the stone acreage at Hillside was about one tenth of the stone land owned by Consumers. The balance sheet was offered in evidence as an admission against interest to show that the value ...


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