McCoy v. Union Elevated Railroad Company/Opinion of the Court

William A. McCoy, testator of plaintiffs in error, owned a hotel situated at the northwest corner of Clark and Van Buren streets, Chicago. During 1897 defendants constructed along the latter street and in front of the building an elevated passenger railroad of the ordinary type and have continued to maintain and operate it. Charging that construction, maintenance, and operation of the railroad had caused and would continue to cause injury to the property by noise, smoke, dirt, shutting off air and light, disturbing privacy, and impairing the freedom of ingress and egress, and that its market value had been greatly reduced, McCoy brought a common-law action (September, 1902) in a state court to recover the entire damage.

The declaration does not allege plaintiff's ownership of the fee in the street, but asserts his interest in the lot and right to the 'easements and privileges which legally appertain and rightfully belong to property abutting public streets' in Chicago, including the right of light, air, access, privacy, view, etc. Trial to a jury upon plea of not guilty during February, 1914, resulted in verdict for defendants, and judgment thereon was affirmed by the Supreme Court, a writ of error having been sued out by McCoy's executors. 271 Ill. 490, 111 N. E. 517. That court's statement of facts follows:

'During the years 1896 and 1897 what is generally known as     the 'loop' was constructed, under authority conferred by      ordinances of the city of Chicago, for the joint use of the      three systems above mentioned and another elevated system then in course of construction. The     loop consists of an elevated structure in the streets      encircling the central portion of the business district of      the city, upon which are laid tracks for the passage of the      elevated trains of all of the defendant companies completely      around the central portion of the business district. Before     the construction of the loop the elevated trains of the      defendant companies stopped at their respective terminals. The structure forming the south side of the loop was placed     in that portion of Van Buren street extending from Wabash      avenue on the east to Fifth avenue on the west, Clark street      being one of the streets intersecting Van Buren street      between these two avenues.

'Stations to permit passengers to board and leave the     elevated trains were established at intervals around the loop      and stairways were constructed leading from each station to      the surface of the street. One of these stations in Van Buren     street was established at La Salle street, about 100 feet      west from the McCoy Hotel, and another was established at      Dearborn street, about 300 feet east from the hotel. The     elevated structure in Van Buren street obstructed the passage      of light to the storerooms in McCoy's building, and the noise      from the passage of trains over the structure and the fact      that passing trains were on a level with the windows of the      second floor of the building rendered the rooms on the south      side of the second and third floors of the building less      desirable for hotel purposes. Large upright columns     supporting the elevated structure were placed just inside the      curb in front of the premises and rendered the premises less      accessible from the street.

'There is no material controversy over the facts in the case. The witnesses all agree that the matters above mentioned,     when considered by themselves, would be detrimental to the      premises. They also agree that there was a steady increase of     from 5 to 10 per cent. per year in the value of the premises from the construction of the     loop until 1905. It also appears from the evidence that the     rents from the storerooms on the ground floor constantly      increased after 1897. The plaintiff called but one real     estate expert as a witness. He testified that the damages to     the property from the construction of the elevated structure,      and the operation of the trains thereon, amounted to $81,999,      being 15 per cent. of the value which the witness placed upon     the interest of McCoy in the premises. He admitted that there     had been a continuous increase in the value of the premises      since the completion of the loop, and that a port on of that      increase, which he said it was impossible to estimate, was      due to the increased travel brought to the premises by the      elevated railroad, but that he did not take that into      consideration in fixing the damages.

'The real estate experts called by the defendants, on the     other hand, testified that at least one-half of the increase      in the value of the premises was due to the increased travel      in front of the premises resulting from the operation of the      elevated railroad in Van Buren street as a part of the loop. In support of the testimony of these witnesses defendants     proved that the number of persons boarding the elevated      trains at the La Salle street station, in Van Buren street,      during the three months of the year 1897 in which trains were      operated around the loop, was 161,763, and that the number      constantly increased, until in 1905 there were 3,659,583      persons who boarded the trains at that station. It was also     shown that during the period in 1897 above mentioned 194,904      persons boarded the elevated trains at the Dearborn street      station, in Van Buren street, and that the number constantly      increased each year until in 1905 there were 2,558,976      persons who boarded the trains at that station.'

During the trial, over plaintiff's objections, questions concerning evidence were determined in accordance with repeated rulings by the Illinois Supreme Court that the effect of construction, maintenance, and operation of an elevated road upon market value was the point for determination, and that increase in such value caused by the improvement itself should be considered and treated as a special benefit, although enjoyed by other neighborhood property.

Among others, plaintiff requested the following instructions:

'The jury are instructed that the Constitution of this state     provides that 'private property shall not be taken or damaged      for public use without just compensation.' This action is      brought by plaintiff for an alleged damage to the property of      plaintiff arising from the construction [maintenance and      operation] of the structure in the abutting street for      elevated railroad purposes. Such damages in the eye of the     law can only be a loss in the market value of the property      arising from the said construction [maintenance and      operation] for the purposes aforesaid. Whether the premises     in question have in fact been so damaged is for the jury to      find from the evidence, according to the method and within      the limitations of other instructions given you.

'The court instructs the jury that 'benefits' and 'damages'     spoken of in the instruction mean benefits and damages to the      market value thereof, and that by the term 'market value' of      property, as used in these instructions, is meant the price      at which the owner, if desirous of selling, would under      ordinary circumstances surrounding the sales of property have      sold the property for, and what a person desirous as      purchaser would have paid for it under the same      circumstances.

'The jury are instructed that, in considering the question of     whether the premises in question were or were not damaged by      the construction of the structure in the abutting street for      elevated railroad purposes, they are to exclude from consideration all benefit which      accrued to the said premises or to the owners thereof by      reason of improved travel facilities furnished by said      elevated railroad.'

The words 'maintenance and operation' were inserted in the first of these requests and as thus amended it was given; the others were refused.

The following instructions were also given:

'The court instructs the jury that benefits and damages     spoken of in these instructions mean benefits and damages to      the fair cash market value thereof, and that by the term      'fair cash market value of the property,' as used in these      instructions, is meant its value as determined by what it      would sell for in the market for cash in the due course of      business. This does not mean the price at which it would sell     under special circumstances,  ut its value as sold in the      market under ordinary circumstances for cash, and not on      time, and assuming that the owner is willing and not      compelled to sell, and the purchaser is willing and under no      compulsion to purchase.

'The jury is instructed that, if you believe from the     evidence that plaintiff's premises have been increased in      their fair cash market value by the construction,      maintenance, and operation of defendants' said railroad, and      if you also believe from the evidence that other property in      the neighborhood of the plaintiff's premises not abutting      upon the defendants' railroad have been likewise increased in      their fair cash market value by the construction,      maintenance, and operation of said railroad, but to a greater      extent than the plaintiff's said premises, you have no right      from that fact to find that the plaintiff's premises have      been damaged.

'Special benefits are such benefits as are special or     peculiar to a particular piece of property, and which      beneficially affect its fair cash market value, as      distinguished from those benefits which are common to the public at large, and which are termed general benefits; and      you are instructed that in determining the effect of the      construction, maintenance, and operation of defendants'      elevated railroad upon the fair cash market value of      plaintiff's said premises, you are not to take into      consideration any general benefits which you may believe from      the evidence to have arisen out of the construction,      maintenance, and operation of said elevated railroad, but you      should take into consideration special benefits, if any,      shown by the evidence to plaintiff's said premises from the      construction, maintenance, and operation of defendants' said      elevated railroad.

'The jury is instructed that, if you believe from the     evidence that the property of the plaintiff described in the      declaration of this case was enhanced in its fair cash market      value by reason of the construction, maintenance, and      operation of the elevated railroad of the defendant, such      increase in market value is a special benefit to the property      of the plaintiff, and not a general benefit, notwithstanding      you may believe from the evidence that the other property in      the vicinity of plaintiff's property also was enhanced in      fair cash market value to a greater or less degree by reason      of the construction, maintenance, and operation of      defendants' said elevated railroad.

'The jury is instructed that the measure of damages in a case     of this kind is the difference between the fair cash market      value of the premises with the elevated railroad constructed,      maintained, and operated in the street in front of it and      what the fair cash market value of said premises would have      been had not said elevated railroad been so constructed,      maintained, and operated. If you believe from the evidence     that the fair cash market value of the plaintiff's premises      with the railroad constructed, maintained, and operated in      Van Buren street has not been diminished below what you      believe from the evidence the fair cash market value of said premises      would have been if the said elevated railroad had not been      constructed, maintained, and operated in said street, then      said plaintiff's premises have not been damaged by the      construction, maintenance, and operation of defendants'      elevated railroad.'

'The contention made by plaintiffs in error upon which most     of the assignments of error depend is that the benefits to      the premises by reason of the increased travel in front of      the premises resulting from the operation of the elevated      railroad in Van Buren street as a part of the loop cannot be      considered in determining whether the premises have been      damaged by the construction of the elevated structure and the      operation of trains thereon: First, because such benefits are      general benefits, common to all the property in the vicinity;      and, second, because such benefits are conjectural and      speculative. The same contention was made in Brand v. Union     Elevated Railroad C ., 258 Ill. 133 [101 N. E. 247, Ann. Cas. 1914B, 473, L. R. A. 1918A, 878] Geohegan v. Union Elevated     Railroad Co., 258 Ill. 352 [101 N. E. 577, Ann. Cas. 1914B,     572, 45 L. R. A. (N. S.) 167], and Geohegan v. Union Elevated      Railroad Co., 266 Ill. 482 [107 N. E. 786, Ann. Cas. 1916B,     762], and in each of those cases we held that such benefits      should be considered in determining whether premises abutting      on a public street have been damaged by the construction and      operation of an elevated railroad in such street. The reasons     for such holding were fully set forth in the opinions filed      in the cases above mentioned, and it would serve no useful      purpose to repeat them here. It is sufficient to say that we     adhere to the views expressed in the former cases involving      the same question as is here presented. * *  * Complaint is      made of the action of the court in giving certain      instructions on behalf of defendants in error and in refusing      or modifying certain instructions submitted by plaintiff. * *      * Moreover, the evidence in this case would not have      sustained a verdict in favor of the plaintiff, and any error committed by the trial court in giving,      refusing, or modifying instructions was therefore harmless.'

In their brief here counsel for plaintiffs in error declare:

'Plaintiff presented his case, therefore, upon the basis that     his damage was to be estimated:

'(1) By taking the market value of the premises immediately     before the advent of the loop; then

'(2) To consider how the structure in question placed in the     block upon which his premises abutted (which defined the      'physical' scope of his property or rights), forever      dedicated to railroad uses and to be operated therefor, would      actually interfere with the actual use and enjoyment of the      premises; and then

'(3) To estimate to what extent such structure put or     dedicated to such use, would reduce that market value. That     is, to capitalize the permanent interference, i. e., damage. (As laid down in Lewis [3d Ed.] § 693).

'In the trial court the main conflict was waged over the     question as to whether or not the court should admit on      behalf of defendants evidence of 'general' or 'travel'      benefits occurring from the establishment of the loop in its      entirety, or whether the evidence should be held down to the      issue of 'direct, proximate, and physical effect.' Said      court, following the late ruling of the Illinois Supreme      Court in Brand v. Union Elev. R. R. Co., 258 Ill. 133, 101 N.     E. 247, Ann. Cas. 1914B, 473, L. R. A. 1918A, 878 (a review     of which was asked in this court in 238 U.S. 586, 35 Sup.      Ct. 846, 59 L. Ed. 1471, same title), tried the case upon the      basis of allowing this special damage to be offset or reduced      by, or considered in connection with, the estimated amount of      market benefit that accrued to the premises from 'travel      benefits."

And they now maintain that the judgment below is erroneous because it: (1) Impairs the contract which their testator made when he purchased the property contrary to section 10, art. 1, Federal Constitution; (2) denies to them the equal protection of the law; and (3) deprives them of property without due process of law in violation of the Fourteenth Amendment. The first claim is clearly untenable; the contract clause prohibits legislative, not judicial, action. Ross v. Oregon, 227 U.S. 150, 161, 164, 33 Sup. Ct. 220, 57 L. Ed. 458, Ann. Cas. 1914C, 224; Moore-Mansfield Co. v. Electrical Co., 234 U.S. 619, 623, 624, 34 Sup. Ct. 941, 58 L. Ed. 1503; Frank v. Mangum, 237 U.S. 309, 344, 35 Sup. Ct. 582, 59 L. Ed. 969. Nothing in the record affords support for the second claim. The third demands consideration.

We may examine proceedings in state courts for appropriation of private property to public purposes so far as to inquire whether a rule of law was adopted in absolute disregard of the owner's right to just compensation. If the necessary result was to deprive him of property without such compensation, then due process of law was denied him, cont ary to Fourteenth Amendment. Chicago, Burlington, etc., R. R. v. Chicago, 166 U.S. 226, 246, 17 Sup. Ct. 581, 41 L. Ed. 979; Backus v. Fort Street Union Depot Co., 169 U.S. 557, 565, 18 Sup. Ct. 445, 42 L. Ed. 853; Fayerweather v. Ritch, 195 U.S. 276, 298, 25 Sup. Ct. 58, 49 L. Ed. 193. Our concern is not to ascertain whether the rule adopted by the state is the one best supported by reason or authority nor with mere errors in course of trial, but with denial of a fundamental right. Appleby v. Buffalo, 221 U.S. 524, 532, 31 Sup. Ct. 699, 55 L. Ed. 838. And see McGovern v. New York, 229 U.S. 363, 371, 33 Sup. Ct. 876, 57 L. Ed. 1228, 46 L. R. A. (N. S.) 391. And here it must be noted that the claim is for damages to property not actually taken from the owner's dominion.

'Private property shall not be taken or damaged for public     use without just compensation.'

In Peoria, Bloomington & Champaign Traction Co. v. Vance et al., 225 Ill. 270, 272, 80 N. E. 134, 135 (9 L. R. A. [N. S.] 781) where the owner sought damages to the balance of his farm resulting from taking a right of way for an electric road, the court pointed out the applicable doctrine long established in the state. It said:

'Since the adoption of the Constitution of 1870 it has been uniformly held by this court, in such cases as this,     that the measure of damages to land not taken is 'the      difference in the fair cash market value of the land before      and after the construction of the railroad,' or 'the amount,      if any, which lands not taken will be depreciated in their      fair cash market value by the construction and operation of      the proposed road.' *  *  * Under the rule adopted in this      state for determining whether or in what amount, property not      taken will be damaged by the construction and operation of a      railroad, any benefits which are not conjectural or      speculative, and which actually enhance the market value of      such property, are to be considered as special benefits, and      not as general benefits, within the meaning of the rule that      general benefits cannot be considered in determining whether,      or in what amount, property not taken will be damaged. Special benefits do not become general benefits because the     benefits are common to other property in the vicinity. The     fact that other property in the vicinity of the proposed      railroad will also be increased in value by reason of the      construction and operation thereof furnishes no excuse for      excluding the consideration of special benefits to the      particular property in determining whether it has been      damaged, and, if it has, the extent of the depreciation in      value.'

This doctrine was again expressly affirmed in Brand v. Union Elevated Railroad, 258 Ill. 133, 101 N. E. 247, Ann. Cas. 1914B, 473, L. R. A. 1918A, 878, a proceeding like the present one to recover damages caused by constructing, maintaining, and operating an elevated railroad along the street. The trial court below accepted and applied the approved rule, and we are now asked to declare that it absolutely disregards the owner's fundamental right to just compensation; that it necessarily deprives him of such compensation.

How far benefits must be considered in determining damages to property when claimed on account of a public improvement is a vexed question which has given occasion for numberless decisions in different states, as well as much legislation. The matter is elaborately treated and the cases collected in Lewis on Eminent Domain and Nichols on Eminent Domain. In the former (section 687, 3d Ed.) it is said:

'The decisions may be divided into five classes, according as     they maintain one or the other of the following propositions:      First. Benefits cannot be considered at all. Second. Special     benefits may be set off against damages to the remainder, but      not against the value of the part taken. Third. Benefits,     whether general or special, may be set off as in the last      proposition. Fourth. Special benefits may be set off against     both damages to the rema nder or the value of the part taken. Fifth. Both general and special benefits may be set off as in     the last proposition.'

The latter work, at section 256 (2d Ed.) says:

'It is universally recognized that when there is no taking     the damages to a tract of land from the construction of a      public work cannot be correctly ascertained without      determining whether the tract has been depreciated in value,      and to determine this all the effects of the public work,      beneficial or injurious, must be considered. Strictly     speaking, it is said, it is not a question of benefits at      all, except that proof of benefits might be one way of      showing that there had been no injury. The real question is,     had the property in question been decreased in market value      by the construction of the public improvement, and the amount      of damage is the decrease in such value. In most states,     however, it is only special benefits that can be set off; but      in the states which allow the set-off of general benefits to      remaining land when part of a tract is taken, the same      latitude is given in awarding damages when no land is taken.'

The fundamental right guaranteed by the Fourteenth Amendment is that the owner shall not be deprived of the market value of his property under a rule of law which makes it impossible for him to obtain just compensation. There is no guaranty that he shall derive a positive pecuniary advantage from a public work whenever a neighbor does. It is almost universally held that in arriving at the amount of damage to property not taken allowance should be made for peculiar and individual benefits conferred upon it; compensation to the owner in that form is permissible. And we are unable to say that he suffers deprivation of any fundamental right when a state goes one step further and permits consideration of actual benefits enhancement in market value-flowing directly from a public work, although all in the neighborhood receive like advantages. In such case the owner really loses nothing which he had before; and it may be said with reason, there has been no real injury.

This subject was much discussed in Bauman v. Ross, 167 U.S. 548, 574, 584, 17 Sup. Ct. 966, 976 (42 L. Ed. 270). Through Mr. Justice Gray we there said:

'The just compensation required by the Constitution to be     made to the owner is to be measured by the loss caused to him      by the appropriation. He is entitled to receive the value of     what he has been deprived of, and no more. To award him less     would be unjust to him; to award him more would be unjust to      the public. Consequently, when part only of a parcel of land     is taken for a highway, the value of that part is not the      sole measure of the compensation or damages to be paid to the      owner; but the incidental injury or benefit to the part not      taken is also to be considered. When the part not taken is     left in such shape or condition, as to be in itself of less      value than before, the owner is entitled to additional      damages on that account. When, on the other hand, the part     which he retains is specially and directly increased in value      by the public improvement, the damages to the whole parcel by      the appropriation of part of it are lessened. * *  * The      Constitution of the United States contains no express      prohibition against considering benefits in estimating the      just compensation to be paid for private property taken for the public use; and, for the reasons      and upon the authorities above stated, no such prohibition      can be implied; and it is therefore within the authority of      Congress, in the exercise of the right of eminent domain, to      direct that, when part of a parcel of land is appropriated to      the public use for a highway in the District of Columbia, the      tribunal vested by law with the duty of assessing the      compensation or damages due to the owner, whether for the      value of the part taken, or for any injury to the rest, shall      take into consideration, by way of lessening the whole or      either part of the sum due him, and special and direct      benefits, capable  f present estimate and reasonable      computation, caused by the establishment of the highway to      the part not taken.'

See Martin v. District of Columbia, 205 U.S. 135, 27 Sup. Ct. 440, 51 L. Ed. 743.

Affirmed.