Abstract

A practicing lawyer actively engaged in the trying of condemnation suits, will, at sometime in his career, undoubtedly encounter the problem of whether the price paid in comparable land sales, to a party with the power to condemn, is admissible as evidence of the value of the land in controversy. The purpose of this article is to discuss the problem, point out the divergent views, and trace the development of this point in Arizona.

By the time a condemnation suit has reached the trial stage, generally the basic issue to be resolved is the "valuation" of the property (assuming for purposes here that there is no controversy over the power to condemn). Constitutional and statutory provisions almost universally provide that just compensation must be paid when property is taken through eminent domain. However, few statutes undertake to define "just compensation," so it has been incumbent on the courts to do so, and they have generally construed it to mean the value of the property taken. The term "value" is somewhat nebulous and is not susceptible to simple determination. The courts, as a result, have found it necessary to establish a standard by which to measure value, and the one most commonly applied is "fair market value."

The setting of a standard as a basis for determining the compensation to be paid does little more than delineate the problem to be solved; the solution requires a proper determination of the amount of compensation. It thus is incumbent upon the parties to the action to present proof of what the fair market value is, and because there is no precise definition of the standard, conflicts arise as to what evidence of value is admissible. A single, uniform definition of market value is almost impossible to come by. However, one criterion that has become well established is the concept of a "willing seller" and a "willing buyer." This concept is implicit in nearly all judicial definitions of "fair market value" and embodies the notion that an arms-length transaction between parties not under compulsion is a fairly accurate indicator of market value. The importance of this concept should be kept in mind when the admissibility of prior sales is being considered.

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