City of Little Rock v. Moreland

Citations: 1960 Ark. LEXIS 345; 231 Ark. 996; 334 S.W.2d 229Docket: 5-1997

Court: Supreme Court of Arkansas; April 4, 1960; Arkansas; State Supreme Court

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The City of Little Rock initiated condemnation proceedings to acquire 1,300 acres of land owned by the Morelands for a reservoir related to the city’s water supply system. After trial, the City was permitted to condemn only 1,165.1 acres, and the Morelands were awarded $211,425, approximately $181 per acre. Both parties appealed; the City argued the judgment was excessive and that the entire 1,300 acres was necessary, while the Morelands contended the compensation was inadequate, asserting the land was worth at least $775,000 and that the City did not need the additional 134 acres.

Three key issues arose on appeal: the appropriate valuation of the land taken, the relevant date for determining this valuation, and whether the City should be allowed to condemn the entire 1,300 acres. Prior to litigation, the parties had an agreement allowing the City to take possession of the land up to 290 feet above sea level while negotiating value, with a stipulation to file condemnation proceedings within thirty days upon the Morelands' notification. The City failed to initiate the suit within this timeframe, prompting the Morelands to seek damages in circuit court, which was later transferred to chancery court.

The valuation agreement specified that the market value should be assessed as of September 16, 1956. The Morelands, suspecting valuable minerals on the land, engaged a geologist who later confirmed the presence of bloating clay, significantly more valuable than ordinary dirt. The City contested the inclusion of this value in determining land worth, claiming it was not established by the specified valuation date. The City maintained that the land's value at the time of taking was consistent with its worth post-taking, despite later revelations about its true value.

A ruling that allows the State or a private corporation to compensate a landowner solely at the land's low market value, without accounting for hidden resources like diamonds, is deemed unfair. Courts have consistently ruled that property owners are entitled to recover the actual value of their land. The City asserts the land's market value ranges from $43,831 to $55,250, claiming that the presence of bloating clay does not enhance its worth. Conversely, the Morelands argue that the bloating clay significantly increases the property’s value, estimating it between $775,000 and $1,735,320. The Morelands provided evidence that bloating clay is valuable for lightweight aggregate production, with market prices and feasibility for local manufacturing. The City countered with evidence suggesting that the land's condition—covered with scrub timber, lime concretions, and flood risks—renders the clay worthless. Additionally, the City claimed that other clay sources in the area and the distance from Little Rock diminish the economic viability of exploiting the Moreland clay. Despite the City’s arguments, evidence showed that light-weight aggregate produced from the Moreland clay had been successfully manufactured. The ongoing debate hinges on whether the local market can sustain the development of the Moreland clay for commercial use.

Evidence suggests that Pulaski County's light-weight aggregate market extends beyond Little Rock, with potential sales in other locations similar to those from Baton Rouge and Memphis. The Morelands received approximately $181 per acre for their land, but there is a lack of evidence supporting that alluvial lands containing bloating clay can be purchased for that amount, given that such lands are typically more valuable. The judgment amount is deemed consistent with the evidence presented.

Regarding the condemnation of 134 acres in addition to the 1,165.1 acres previously approved, the City is justified in its need for the entire 1,300 acres. The Morelands argue that the 134 acres are not essential for the reservoir, citing legal precedent that requires land to be absolutely necessary for condemnation. However, evidence indicates the land is needed to establish clear property boundaries, avoid engineering complications, and maintain sanitary conditions in the watershed. Only about 9 acres do not contribute to the watershed.

The 134 acres, valued at $4,725, were not included in the original judgment. The decree from the chancery court must be amended to allow for the condemnation of these acres and to increase the total judgment to $216,150. The modified decree is affirmed.