UNITED STATES v. TWO ACRES OF LAND, MORE OR LESS, IN WILL COUNTY, ILL., et al., 144 F.2d 207

LINDLEY, District Judge. The facts pertinent to the issues presented in this appeal appear in United States v. Grace Evangelical Church, 7 Cir., 132 F.2d 460. Upon retrial in pursuance of our mandate, at the court’s direction, the jury returned a verdict for $7000 as just compensation for the land taken. From the judgment upon the verdict the Government appeals.

At the trial the Government produced one witness, who testified in chief that the property was fairly worth $4750 and, on cross-examination, that the church building could be reproduced for $6800; excluding, however, anything for leaded windows, oak pews and certain other items, constituting part of the equipment for religious services. Defendant relied upon the contract referred to in our earlier opinion and a stipulation of fact.

The Government renews here, as it did in its petition for rehearing in the first appeal, the propositions relied upon in our earlier review, namely: (1) that the contract is contrary to public policy in that it amounts to a cost plus contract in violation of the statute, 50 U.S.C.A.Appendix, § 1171; and (2) that the agreed purchase price was arrived at by including improper elements, and presents the new suggestion that the United States is not bound in condemnation proceedings by the price fixed in a contract of purchase.

We see no occasion to recede from the announcements of our opinion in 132 F.2d 460 or to add but little to what we said there concerning validity of the contract. The statute under which the Government proceeded,

Section 171, Title 50 U.S.C.A., provides that when the owner of land shall fix a price which in the opinion of the Secretary of War shall be reasonable he may purchase at such price without further delay. Acting under this authority, the War Department accepted an offer to sell, fixing the value at $7000 and wrote defendant advising it of the Government’s acceptance and election to purchase and directing defendant to surrender possession within 30 days from date and to deliver, at the earliest practical date, abstracts of title to Raymond Herman who would handle details of closing and settlement.

This was the same Herman whom, in paragraph 6 of the contract, it was provided the vendors would pay 5 per cent of the purchase price as compensation for procuring the sale and preparing the deeds for the conveyance of the land. It seems to us apparent that this was a contract openly and fairly entered into by the Government by its acceptance of an offer which it was not bound to accept but which, with notice of all terms and conditions, it did accept. As said in United States v.

Bethlehem Steel Corporation, 315 U.S. 289, 62 S.Ct. 581, 592, 86 L.Ed. 855: “Having made a bargain, the Government should be held to it unless there are valid and appropriate reasons known to the law. for relieving it from its obligations.” This is not a cost plus contract. There is no evidence that any commission was added to the purchase price. In this respect the contract differs from that involved in United States v.

Muschany et al., 8 Cir., 139 F.2d 661, at page 663, where, as reported by the court, the actual agreement was “that the landowner should then be allowed to add an additional five per cent as compensation for McDowell; and that the total should be inserted in the option as the gross sale-price figure.” We have here at the most only proof of an agreement by defendants that they will pay Herman for attending to the procurement of the sale and the execution of the deeds out of the purchase price of $7000. There is no evidence that any commission was added to the value or to the purchase price.

Obviously the War Department believed the price reasonable. Having so determined, it was authorized by the statute to execute an agreement of purchase. Therefore, when the Government later saw fit to bring condemnation proceedings, the measure of just compensation having been agreed upon by the parties, the court could only direct a verdict in accord with the figure stipulated by the parties. This, we believe, is in accord with Danforth v. United States, 308 U.S. 271, 60 S.Ct. 231, 236, 84 L.Ed. 240.

There the court held that when the Government condemns land, the purchase price of which it has agreed upon with the owner, that agreed price becomes the amount due for compensation for the property taken. True, the present contract contains no provision for condemnation as in the Dan-forth case, but we do not understand that the Government estops itself from bringing a condemnation suit merely because it has agreed with the owner upon the amount of compensation to be paid.

It is not improbable that in many instances the title is in such condition that an eminent domain proceeding against all probable or possible owners is advisable in order to acquire unimpeachable title. The court having exercised its jurisdiction to take the res, then, has the power to determine to whom the proceeds belong. So, here, the Government found a title in which there was possibility of reverter to the heirs of the original owners of the land upon which the church was located.

It may have thought it wise, in order to assure itself against all possible outstanding interests, to conduct a condemnation proceeding in which all such possible parties in interest would be brought into court and adequate title assured. True, eventually, an agreement was made with all such possible reverter owners. But none of these facts, it seems to us, distinguish this from the Danforth case, in which the court held the agreed price to be the proper measure of damages.

The Government insists that the District Court was without jurisdiction to entertain a cross-claim at the suit of defendants for the reason that no consent had been given for the sovereign thus to be sued. But, under the reasoning of the Danforth case, no cross-claim was necessary. The issue in a condemnation suit is what constitutes just compensation to the owner for the interest taken and, where the owner has stipulated with the Government, the agreed figure becomes the measure of damages to be assessed as just compensation for the land taken.

This necessitates no cross-claim but requires merely presentation of the agreement of the parties, or, as said in the Danforth case, a “motion to determine the value at the agreed price.” Such was the motion made by defendant here at the conclusion of the evidence. Had no counterclaim been filed, the same result would necessarily have followed. The Government further contends that in agreeing upon compensation of $7000 the Government and defendant took into consideration improper elements.

We think it too late, in the absence of mistake or fraud, to inquire whether the War Department and the owner, in agreeing upon the value of the land, considered this or that element. The Department was authorized, if it considered the offer reasonable, to accept it. This it did. Furthermore there is no competent evidence in the record that any of the parties ever took into consideration or gave weight tó any specific elements in arriving at $7000.

The Government offered an unsworn appraisal report to substantiate its theory in this respect, but the exhibit was not competent, for it was the unsworn ex parte statement of opinion of a witness not produced for cross-examination. We think the trial resulted properly on the merits. The sole witness for the Government testified to a replacement value of the building, exclusive of certain church fixtures such as pews and leaded windows, of $6800. In addition the plot of ground was taken.

In the case of nonprofit, religious or service properties, cost of replacement is regarded as cogent evidence of value although not in itself the only standard of compensation. But people do not go about buying and selling country churches. Such buildings have no established market values. Consideration must be given to the elements actually involved and resort had to any evidence available, to prove value, such as the use made of the property and the right to enjoy it. City of Chicago v. Farwell, 286 Ill. 415, 121 N.E. 795; Producers’ Wood Preserving Co. v.

Commissioners of Sewerage of Louisville, 227 Ky. 159, 12 S.W.2d 292; In re Simmons, Sup., 127 N.Y.S. 940; Orgel on Valuation Under Eminent Domain at page 122. Irrespective, therefore, of any question as to the validity of the contract, from the evidence submitted by the Government, the verdict was amply justified. The judgment is affirmed.