People Ex Rel. Department of Public Works v. S. & E. Homebuilders, Inc.

DORAN, J.

The plaintiff condemnor appeals from a judgment rendered after a jury’s verdict awarding the owner of so-called Parcel 2, the sum of $111,930 as fair market value for said parcel and $31,114 as severance damage. The eminent domain proceeding here involved was instituted for the purpose of acquiring this and other parcels of land in fee for use in construction of what is known as the Harbor Freeway.

Parcel 2 consists of 13.65 acres which is part of a larger tract of 27.25 acres owned by the defendant Bank of America, herein referred to as respondent. Except for 4.04 acres, all of respondent’s land, including Parcel 2, was separately leased

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to Universal Consolidated Oil Company and Shell Oil Company for so long as oil and gas are produced in paying quantities. The oil field has been estimated to have a remaining life of 14 or more years. Amendments to the complaint excepted from acquisition all oil, mineral and gas below a 100 foot level and allowed slant drilling beneath such level. No oil wells or other structures are located on the part sought to be taken. It appears that neither oil company is at this time willing to relinquish the lease rights to use the surface of the land.

It is appellant’s position that the property “was not presently available for light industrial use and could not become available for such use for the life of the oil fields, some 14 or 15 years, because of the existing oil leases.” Witnesses testified that the highest and best use of the entire parcel was for light manufacturing purposes, either exclusively, according to the state’s witnesses, or in conjunction with oil production purposes according to respondent’s witnesses. In respect to this matter, appellant contends that the trial court committed prejudicial error in refusing to instruct the jury that the oil and gas leases might be considered for the purpose of determining the availability of the property for its highest and best use, and in instructing- that such leases are immaterial for the purpose of determining fair market value and severance damages.

At the outset of trial, it was stipulated that the date of valuation to be considered was the date of commencement of the trial, namely, December 6, 1954. On inquiry by the trial judge, the state expressly elected, as provided in Code of Civil Procedure, section 1246.1, to have the award at the first stage of the trial in lump sum form as to the interests of all parties, and to relegate division of the total award as between individual interests, to a second stage of the trial in which the state would not participate.