State v. D & J Realty Co.

SANDERS, Justice (dissenting). The property expropriated in the present case was leased by the owner, D & J Realty Company, Inc., to S & S Realty Co. The lessee subleased a portion of it to Albert Thibeaux. The question is whether the sublessee’s damages should be taken from the market value of the land awarded to the owner or paid by the Department of Highways, the expropriator. To justify a deduction from the landowner’s award, a lease advantage as to the whole of the expropriated leased property must be established by competent evidence. This is true because unless the basic lease results in a lease disadvantage to the owner, the lease produces no diminution in the value of the land. The owner is getting all the lease is worth, that is, the full economic rent. See State, Through Dept. of Highways v. Levy, 242 La. 259 , 136 So.2d 35 (1961). In its answer the lessee, S & S Realty, claimed no lease advantage. No evidence in the record establishes a lease advantage or the inadequacy of the contract rent, based on current economic evaluations. Hence, there is no evidentiary basis for paying the sublessee’s claim from the landowner’s award of the market value of the land. The decision in State, Through Department of Highways v. Holmes, 253 La. 1099 , 221 So.2d 811 (1969) is inapposite. In that case, the court found from the evidence a lessee’s advantage, reducing the market value of the property. The rule adopted by the majority would permit a lessee, by means of subleases at a nominal rent, to siphon off the landowner’s award for the market value of his property. Such a result is inequitable and deprives the owner of just compensation guaranteed by the Constitution of Louisiana. Art. I, Sect. 2, Louisiana Const. The sublessee is of course entitled to compensation for its damages from the expropriating agency, the Department of Highways. Columbia Gulf Transmission Company v. Hoyt, 252 La. 921 , 215 So.2d 114 (1968). For the reasons assigned, I respectfully dissent. SANDERS and SUMMERS, JJ., are of the opinion a rehearing should be granted.