# Appendix — Ex parte Cloud > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385610_0080%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1944 - **Citation:** 321 U.S. 743 ## Text Anited States Circuit Court of Appeals Fox the Ninth Circuit. —_--——_-— UNITED STATES OF AMERICA, Appellant, Vs. JOHN WATERHOUSE, ERNEST HAY WODE- HOUSE, WALTER FRANCIS FREAR and JOHN EDWARD RUSSELL, Trustees under the Will and of the Estate of Samuel M. Damon, deceased, et al.. Appellees, and UNITED STATES OF AMERICA, Appellant, vs JOHN WATERHOUSE, ERNEST HAY WODE- HOUSE, WALTER FRANCIS FREAR and JOHN EDWARD RUSSELL, Trustees under the Will and of the Estate of Samuel M. Damon, deceased, et al., Appellees. el Grauscript of Record Upon Appeals from the District Court of the United States for the District of Hawaii. = —————SS——=== —————— J PARKER PRINTING COMPANY. 548 SANSOME STREET. SAN FRANCISCO 00-8-14-48 Page Answer of Bishop National Bank of Hawaii at Honolulu (No. 434) es 26 Answer of the Trustees Under the Will of Samuel M. Damon, Deceased (No. 434)... 24 Answer of the Trustees Under the Will of Samuel M. Damoti, Deceased (No. $36)... 67 Appeal: Designation of Contents of Reeord on (Cir- euit Court of Appeals)... nus 449 Designation of Additional Contents of Ret- ord on (Cireuit Court of Appeals) .::...... 453 Desigtiation of Contents of Reeord on (Dis- trict Court) -...........: sistent : 100 Notice of (No. 434) set 36 Notice of (No. 436)... 76 Statement of Points on 0 452 Certifieate of Clerk to Transeript of Record....... 444 Declaration of Taking (No. 434). 15 Declaration of Taking (No. 436) 51 Designation of Cotitents of Record sii Appeal (Cirenit Court of Appeals) 449 ne United States of America Index Page Designation of Additional Contents of Record on Appeal (Circuit Court of Appeals)........... 455 Designation of Contents of Record on Appeal (District Court) 100 Instructions, Requested 78 Instructions to the Jury as Recorded by the Court Reporter 422 Judgment (No. 434) 34 Judgment (No. 436) 75 Motion for a Directed Verdict (No. 434)... 31 Motion for Directed Verdict (No. 436)................ 71 Motion for Order of Payment of Deposit (No. islken 28 Motion for Order of Payment of Deposit (No. 436) 68 Motion re Original Exhibits. 447 Names and Addresses of Attorneys of Record 1 Notice of Appeal (No. 434) 36 Notice of Appeal (No. 436) 76 Order and Judgment on Declaration of Taking (No. 434) ti 21 Order and Judgment on Declaration of Taking (No. 436) em Order Consolidating Causes on Appeal... 97 Order Enlarging Time for Filing Record and Docketing Cause (No. 434) vs. John Waterhouse et al. iii Index Page Order Enlarging Time for Filing Record and Docketing Cause (No. 436) 77 Order Enlarging Time for Serving and Filing Designation of Reeord on Appeal (No. 434) 37 Order Enlarging Time for Serving and Filing the Designation of Record on Appeal (No. 436) 78 Order Extending Time to File Record... 446 Order for Distribution of Money Deposited Ci ON inn acdeladeiiplesilmbinmmoi 30 Order for Distribution of Money Deposited (No. 436)... 70 Order for Judgment (No. 434)... 33 Order for Judgment (No. 436)... Order for Transmittal of Original Exhibits....... 97 Order re Original Exhibits 448 Petition for Condemnation (No. 434)... 9 Petition for Condemnation (No. 436)... 39 Reporter’s Transcript (For Detailed Index See ‘“‘Testimony’’) -. sinitiatiessues Tae Request for Extension of Time to File Record 445 Statement of Clerk... ‘ ve Statement of Points on Appeal... 452 Stipulation and Agreement for Consolidation... 93 i¥ United States of Amefica Inflex Page Testimony : aaa Sere 102 Certificate of Repottér to Tratiseript.___.. 44 Tnistfiicti6fis to the Jury 422 440 441 Verdict (No. 436) Verdict (No. 434) Witnesses for Defendants: Castro, A. D. —direct Damon, Sam R. —SGEe, GN. sonst —redirert —reeross —redirect —recalled, direct ..... Harrison, Wilfred F. —direet ............... ce SREY a AR cS Pec aa aR CUO citi —recross —redirect vs. John. Waterhouse et al. Index Henderson, Wellington 8. —direct Le Page — Cross Kearns, Ralph A. —direct -——CTO8s —redirect Russell, John F. —direct Nt) a | Waterhouse, Albert —direct Waterhouse, John —direct ... Witnesses for Petitioner: Crozier, Charles Campbell —direct —recalled, direct. ..... Fernandez, Vincent —direct Ee GREENS Seneca an Sager crm es Verdict (No. 436) . 140 in U. my C.C. A. Ninth Circuit.....--- Decree 7 Cader Ganging petition tor HES SS Fee Order staying issuance of mandate ‘ Clerk's certificate Order time within which to apply for : certiorari : 560631—43 NAMES AND ADDRESSES OF ATTORNEYS OF RECORD For the Petitioner: The United States of America: JOHN J. COURTNEY, Special Assistant to the Attorney Gen- eral, and ANGUS M. TAYLOR, JR., United States Attorney, District of Hawaii, Federal Building, Honolulu, T. H., For the Defendants: John Waterhouse, Ernest Hay Wodehouse, Walter Francis Frear, and John Edward Russell, Trustees under the Will and of the Estate of Samuel M. Damon, deceased, Mr. A. G. M. ROBERTSON of the firm of Robertson, Castle & Anthony, 312 Castle & Cooke Building, Honouulu, T.H, Honolulu Plantation Company, STANLEY, VITOUSEK, PRATT & WINN, 404 Alexander & Baldwin Building, Horolulu, T.7., United States of America Bishop National Bank of Hawaii at Honolulu, SMITH, WILD, BEEBE & CADES, Bishop Trust Building, Honolulu, T.H., Territory of Hawaii, _ Mr. J. V. HODGSON, Attorney General, Tolani Palace, Honolulu, T.H., City and County of Henolulu, Mr. JON WIIG, City and County Attorney, City Hall, Honolulu, T.H., Frank Leialoha Kaleimamahu, Mr. CHARLES B. DWIGHT, Damon Building, Honolulu, T.H. [1*] vs. John Waterhouse et al. 3 In the United States District Court for the Territory of Hawaii Civil No. 434 “THE UNITED STATES OF AMERICA, Petitioner vB. CERTAIN PARCELS OF LAND on the Island of Oahu, Territory of Hawaii, et al., ete., Defendants. Civil No. 436 THE UNITED STATES OF AMERICA, Petitioner, vs. 254.468 acres of land, more or less, in Moanalua, Honolulu, Island of Oahu, Territory of Hawaii, et al., ete. Defendants. CLERK’S STATEMENT Time of Commencing Suit: Civil No. 434 November 20, 1940 Petition filed Civil No. 436 November 27, 1940 Petition filed 4 Civil No. 436 Dates and Filing Pleadings: Civil No. 434 The United States of America, Certain Parcels of Land on the Island of Oahu, John Waterhouse, Ernest Hay Wodehouse, Walter Francis Frear, and John Edward Rus- sell, Trustees, Honolulu Plan- tation Company, Bishop National Bank of Hawaii at Honolulu, Territory of Hawaii, and City and County of Honolulu, The United States of America, 254.468 acres of land, John Waterhouse, Ernest Hay Wodehouse, Wat .. Francis Frear, and John Edward Rus- sell, Trustees, Honolulu Plan- tation Company, Bishop National Bank of Hawall at Honolulu, Territory of Hawaii, and City and County of Honolulu, November 20, 1940 December 10, 1940 United States of America Names of Original Parties: Civil No, 434 Petitioner Defendants Petitioner Defendants Petition for Condemna- tion Declaration of Taking Certified copy Letter of Necessity Order and Judgment on Declaration of Taking Answer of the Trustees under the Will of Sam- uel M. Damon, Deceased vs. John Waterhouse et al. 5 December 30, 1940 January 22, 1941 January 23, 1941 April 8, 1941 April 15, 1941 July 29, 1941 July 31, 1941 August 18, 1941 November 15, 1941 Civil No. 436 November 27, 1940 Civil No. 436 (Continued) December 10, 1940 December 20, 1940 January 23, 1941 Answer of Bishop Na- tional Bank of Hawaii at Honolulu Answer and Disclaimer (City and County of Honolulu) Disclaimer of the Terri- tory of Hawaii Motion for Order of Pay- ment of Deposit and Notice Order for Distribution of Money Deposited Motion for a Direct Verdict Verdict Order for Judgment Judgment Petition for Condemna- tion Declaration of Taking Certified copy Letter of Necessity Order and Judgment on Declaration of Taking [3] Answer of the Trustees under the Will of Sam- uel M. Damon, Deceased Appearance (Chas. B. Dwight) Answer of the City and County of Honolulu November 15, 1941 Dates When Proceedings Were Had: Civil No. 434 November 20, 1940 Civil No. 436 November 27, 1940 Civil Nos. 434 and 436 July 21, 1941 July 22, 1941 July 23, 1941 July 24, 1941 July 25, 1941 July 28, 1941 6 United States of America January 23, 1941 Disclaimer of the Terri- tory of Hawaii April 8, 1941 Motion for Order of Pay- ment of Deposit and Notice April 15, 1941 Order for Distribution of Money Deposited July 29, 1941 Motion for a Direct Verdict July 31, 1941 Verdict August 18, 1941 Order for Judgment Judgment Title of lands vested in the United States of America; Order and Judgment on Declaration of Taking signed and ordered filed. Title of lands vested in the United States of America; Order and Judgment on Declaration of Taking signed and ordered filed. Consolidation of cases for trial; Jury empan- eled ; Trial Further trial Further trial Further trial Further trial Further trial [4] vs. John Waterhouse et al. Civil Nos. 434 and 436 (Continued) July 29, 1941 July 30, 1941 July 31, 1941 Further trial Farther trial Verdicts Proceedings in the above entitled matter were had before the Honorable D. E. Metzger, Judge, United States District Court, Territory of Hawaii. Dates of Filing Appeal Documents: Civil No. 434 November 15, 1941 Civil No. 436 November 15, 1941 Civil Nos. 434 and 436 February 2, 1942 February 3, 1942 February 4, 1942 Notice of Appeal Order Enlarging Time Order Enlarging Time for Serving and Filing the Designation of Ree- ord on Appeal Notice of Appeal Order Enlarging Time Order Enlarging Time for Serving and Filing the Designation of Rec- ord on Appeal Stipulation and Agree- ment for Consolidation Order Consolidating Causes on Appeal Motion for Order for Transmittal of Original Exhibits Order for Transmittal of Original Exhibits Appellant’s Designation of Record on Appeal 8 United States of America CERTIFICATE OF CLERK TO THE ABOVE STATEMENT United States of America, Territory of Hawaii—es. I, Wm. F. Thompson, Jr., Clerk of the United States District Court for the Territory of Hawaii, do hereby certify the [5] foregoing to be a full, true and correct statement showing the time of com- mencement of the above-entitled causes; the names of the original parties, the dates when the respec- tive pleadings were filed; the dates when proceed- ings were had; the name of the judge presiding; and the dates when appeal pleadings were filed in the above entitled causes. In Witness Whereof, I have hereunto set my hand and affixed the seal of said District Court, this 19th day of March, A. D. 1942. (Seal) WM. F. THOMPSON, JR., Clerk, United States District Court, Territory of Hawaii. [6] vs. John Waterhouse et al. 9 In the United States District Court for the Territory of Hawaii October 1940 Term Civil No. 434 THE UNITED STATES OF AMERICA, Petitioner, vs. CERTAIN PARCELS OF LAND on the Island of Oahu, Territory of Hawaii, JOHN WATER- HOUSE, ERNEST HAY WODEHOUSE, WALTER FRANCIS FREAR and JOHN EDWARD RUSSELL, Trustees under the Will and of the Estate of Samuel M. Damon, deceased, HONOLULU PLANTATION COM- PANY, BISHOP NATIONAL BANK OF HAWAII AT HONOLULU, TERRITORY OF HAWAII, CITY AND COUNTY OF HONOLULU, JOHN DOE ONE TO JOHN DOE FIFTY, INCLUSIVE and MARY ROE ONE TO MARY ROE FIFTY, INCLUSIVE, unknown owners and claimants, Defendants. PETITION FOR CONDEMNATION To the Honorable, the Presiding Judge of the United States District Court for the Territory of Hawaii: Comes now The United States of America, Peti- tioner herein, by John E. Parks, Assistant United 10 United States of America States Attorney for the District of Hawaii, and acting under instructions of the Attorney General and at the request of the Administrator of the Fed- eral Works Agency, respectfully shows as follows: I. That in accordance with the Act of Congress approved October 14, 1940 (Public No. 849—T76th Congress), the President [8] of the United States of America has found that an acute shortage of housing exists in the area in or about the Island of Oahu, Territory of Hawaii; that pursuant to this finding and by virtue of the authority vested in him by the Act of August 1, 1888, 25 Stat. 357, (United States Code, Title 40, Section 257) ; the Act of Feb- ruary 26, 1931, 46 Stat. 1421 (United States Code, Title 40, Sees. 258 (a) to 258 (e)); the Aet of Octo- ber 14, 1940 (Public No. 849—76th Congress), funds having been appropriated under the Act of Sep- tember 9, 1940 (Public 781, 76th Congress) and transferred to the Federal Works Agency under the provisions of said Act of October 14, 1940 (Ap- propriation title ‘‘80-11X0004 (10) Emergency Fund for the President, National Defense Housing) transfer from war to said Federal Works Agency, Publie Buildings Administration)’’), the Adminis- trator of the Federal Works Agency has selected for acquisition by the United States of America the land hereinafter described and has designated that said land and the title in fee simple absolute are suitable and necessary for the purposes of the vs. John Waterhouse et al. i United States 2s a site for housing, for persons engaged in national defense activities and their families, which lands are situate at Moanalua, City and County of Honolulu, Island of Oahu, Territory of Hawaii, and being more particularly described as follows: Beginning at a point marked by a Territorial Highway Monument set in the southwesterly side of Dillingham Boulevard, said point being a corner of the United States Military Reser- vation designated as Hickam Field; thence from said monument the following azimuths (measured clockwise from true south) and dis- tances: . (1) Along Dillingham Boulevard to a monu- ment 296° 10’ 30”, 1293 feet ; (2) thence 26° 10’ 30”, 2047 feet to a monu- ment; [9] (3) thence 118° 14’ 30”, 2044.25 feet to a monu- ment ; (4) thence 226° 59’ 00”, 2110.93 feet to the point or place of beginning, containing an area of 77.288 acres, more or less, and designated as Lots C-1 and C-2, as shown by plat ‘Land proposed to be acquired through condemnation proceedings for the De- fense Housing Project at Fort Kamehameha and Hickam Field, Hawaii’, blue print of which is attached hereto and by reference made a part hereof and marked Exhibit ‘A”’, together with all improvements thereon. 12 United States of America I. That the interest sought to be condemned is an estate in fee simple absolute. ITT. That the information acquired by Petitioner indi- cates that the following persons are the purported owners of or may have some interest in the lands which are part and are contained in the interior boundaries of the above described area: John Waterhouse, Ernest Hay Wodehouse, Walter Francis Frear and John Edward Russell, Trustees under the Will and of the Estate of Samuel M. Damon, deceased, Hono- lulu Plantation Company, Bishop National Bank of Hawaii at Honolulu, Territory of Hawaii, City and County of Honolulu, John Doe One to John Doe Fifty, inclusive and Mary Roe One to Mary Roe Fifty, inclusive, unknown owners and claimants, whom are hereby made parties defendants to the end that they may come into this Court and by proper pleadings establish their claims, if any. And in this behalf the Petitioner further avers and shows that John Doe One to John Doe Fifty, inclusive, and Mary Roe One to Mary Roe Fifty, inclusive, named herein as defendants, are fictitious [10] names and represent owners and claimants of interests in said property, the true names of whom are unknown to Petitioner and are therefore vs. John Waterhouse et al. 13 made parties to this action by the name and de- scription as aforesaid. The above named defendants zenerally and all and singular the heirs, husbands, wives, devisees, executors, administrators, representatives, alienees, successors, assigns of each and every of the above named persons, and all unknown owners, lienors, and claimants having or claiming any right, title, estate, equity, interest or lien; and all occupants, lessees, licensees of and users and holders of said land and all owners or claimants to easements in, on, over, across or through said land; and all per- sons, companies, and corporations claiming any title or interest to or in the whole or any part of any of said tracts of land; are hereby made parties de- fendant to the end that they may come into Court and by proper pleadings make claim to said lands, or to the proceedings arising therefrom. Wherefore, Petitioner prays that the Court as- certain and determine according to law the com- pensation or damages for the taking of the land to be herein condemned; to ascertain and determine the rightful owners thereof and the parties entitled to the sum awarded as just compensation for said land; and upon payment to, or into the Registry of the Court for the use of, the persons entitled there- to, of the sum adjudged to be just compensation for the land condemned, to adjudge and decree that the title to said land is vested in the United States of Ameriea in fee simple absolute, and to grant such RE RNR en 4 United States of America other and further relief as may be lawful and proper. THE UNITED STATES OF AMERICA, Petitioner By (s) JOHN E. PARKS, Assistant United States Attorney, District of Hawaii. [11] The United States of America, District of Hawaii—ss. John E. Parks, being first duly sworn on oath, de- poses and says: That he is Assistant United States Attorney for the District of Hawaii; that he has read the fore- going Petition for Condemnation and knows the contents thereof and that the same is true to the best of his knowledge, information and belief. JOHN E. PARKS Subscribed and sworn to before me this 20th day of November, 1940. (Seal) (s) WM. F. THOMPSON, JR. Clerk, United States District Court for the Territory of Hawaii [Endorsed]: Filed Nov. 20, 1940. [12] ve. John Waterhouse et al. pt] [Title of District Court and Cause—Civil 434.] DECLARATION OF TAKING I, John M. Carmody, Federal Works Adminis- trator of the Federal Works Agency of the United States of America, do hereby declare that: 1. (a) The lands described in Schedule A hereto attached are hereby taken for the use of the United States under the authority of the Act of August 1, 1888, 25 Stat. 357 (U. 8. C. Title 40, Sec. 257); the Act of February 26, 1931, 46 Stats. 1421 (U. 8. C. Title 40, Sees. 258(a) to 258(e)) ; the Act of October 14, 1940 (Public No. 849, 76th Congress), funds having been appropriated under the Act of September 9, 1940 (Public No. 781, 76th Congress ) and transferred to the Federal Works Agency un- der the provisions of said Act of October 14, 1940. (b) The public use for which lands are taken is the purposes prescribed in said Act of October 14, 1940. 2. A description of said lands sufficient for the identification thereof is set forth in Schedule A, annexed hereto and made a part hereof. 3. The estate taken for said public use is the full fee simple title in and to said lands. 4. A plan showing said lands is annexed hereto as Schedule B [14] and made a part hereof. 5. The sum of money estimated by me to be just compensation for said lands, including all buildings and improvements thereon, if any, all appurtenances thereto, and all interests therein is set forth in Schedule A annexed hereto and made a part hereof. 16 United States of America Said sum I herewith deposit in the registry of this Court to the use of the persons entitled thereto. I am of the opinion that the ultimate award of compensation for the taking of said lands will be within any limits prescribed by law to be paid as the price therefor. In Witness Whereof, I, John M. Carmody, Fed- eral Works Administrator, thereunto duly author- ized have signed this Declaration of Taking, as Federal Works Administrator this 15th day of No- vember, 1940, in the City of Washington, District of Columbia. UNITED STATES OF AMERICA By JOHN M. CARMODY Federal Works Administrator [15] SCHEDULE “A”’ A tract of land lying and being at Moanalua, City and County of Honolulu, Territory of Hawaii, and described as follows: Beginning at a point marked by a Territorial Highway Monument set in the southwesterly side of Dillingham Boulevard, said point being a corner of the United States Military Reser- vation designated as Hickam Field; thence from said monument following azimuths (measured clockwise from true south) and distances: (1) Along Dillingham Boulevard to a monu- ment 296° 10’ 30”, 1293 feet ; vs. John Waterhouse et al. 17 (2) thence 26° 10’ 30”, 2047 feet to a monu- ment. ; (3) thence 118° 14’ 30”, 2044.25 feet to a monu- ment ; (4) thence 226° 59’ 00”, 2110.93 feet to the point or place of beginning, containing an area of 77.288 acres, more or less, and designated as Lots C-1 and C-2, as shown by plat ‘‘Land proposed to be ac- quired through condemnation proceedings for the Defense Housing Project at Fort Kamehameha and Hickam Field, Hawaii’’, blueprint of which is attached herete and by reference made a part hereof; together with the improvements thereon. The sum of money estimated by the acquiring authority to be just compensation for the aforesaid land in this proceeding and hereby taken is $33,- 498.00. ae, United States of America DEPARTMENT OF JUSTICE November 15, 1940 Pursuant to Title 28, Section 661, U. S. Code (Sec. 882, Revised Statutes), I hereby certify that the annexed paper is a true copy of the original record in this Department, of a letter dated No- vember 15, 1940, from John M. Carmody, Admin- i8 United States of America istrator, Federal Works Agency, to the Attorney General, requesting the institution of a condemna- tion proceeding, and the filing therein of a declara- tion of taking, for the acquisition of certain lands at Moanalua, Honolulu, County of Honolulu, Island of Oahu, Territory of Hawaii, for use as a site for housing for persons engaged in national defense activities. In Witness Whereof, I have hereunto set my hand, and vaused the seal of the Department of Justice to be affixed, on the day and year first above written. ; [Seal] NORMAN M. LITTELL Assistant Attorney General. [18] FORT KAMEHAMEHA, HAWAII HICKAM FIELD DEFENSE HOUSING PROJECT In reply please quote: L-McC November 15, 1940 The Honorable, The Attorney General of the United States. My dear Mr. Attorney General: The President of the United States has found, pursuant to the provisions of the Act of October 14, 1940 (Public No. 849, 76th Congress), that in the area in or about the Island of Oahu, Territory of Hawaii, an acute shortage of housing exists or im- ve. John Waterhouse et al. 19 pends which will impede national defense activities.. By virtue thereof and pursuant to the authority vested in me by the Act of August 1, 1888, 25 Stat. 957 (U. 8. C. Title 40, Sec. 257); the Act of Feb- ruary 26, 1931, 46 Stat. 1421 (U. 8. ©. Title 40, Secs, 258(a) to 258(e)); the Act of October 14, 1940 (Public No, 849, 76th Congress), funds having been’ appropriated under the Act of September 9, 1940 (Public No. 781, 76th Congress) and transferred to the Federal Works Agency under the provisions of said Act of October 14, 1940 (appropriation title ‘‘80-11X0004(10) Emergency Fund for the Presi- dent, National Defense Housing (transfer from War to Federal Works Agency, Public Buildings Admin- istration)”’), I have selected as a site for housing for persons engaged in national defense activities, and their families, certain lands at Moanalua, lying and being in the City of Honolulu, County of Hono- lulu, on the Island of Oahu, Territory of Hawaii, and more particularly described in Schedule A at- tached to and forming a part of the Declaration of Taking. I am informed that this land is owned by the Damon Estate. | I am of the opinion that it is necessary and ad- vantageous to the interests of the United States that said land be acquired by condemnation. I have the honor, therefore, to request that you cause the necessary proceedings to be instituted (including the filing of a Declaration of Taking) for the im- a nc A ee tet ALT CLE: 20 United States of America mediate acquisition, by condemnation, of said land together with all improvements thereon and any leaseholds and other interests therein. Prior to confirmation of any award will you kindly cause to be submitted to this Agency for considera- tion a statement showing the damages proposed to be allowed, separately, for land, buildings, lease- holds and other interests, and indicating the period of time within which such award must be confirmed. [19] I enclose herewith the following: (a) Copy of the Construction Engineer’s re- port, together with copies of offer for the sale of the land submitted on behalf of the Damon Estate, as has been received ; (b) Declaration of Taking; (ec) 1phs ? Mr. Courtney: Yes. Judge Robertson: If Your Honor please, I have not had any of my witnesses in attendance; I didn’t think the Government would rest so promptly. May 154 United States of America the case go over until 9:00 o’clock tomorrow morn- ing when I will have all of my witnesses here. The Court: That will be all right. In the mean- time can you endeavor to get any differences which may exist adjusted as to the photographs? Judge Robertson: If counsel will have them num- bered so as to dovetail in with the key map, that is the point I am driving at. [276] Mr. Courtney: That will be done. The Court: Very well. Court will adjourn until 9:00 o'clock tomorrow morning. (Adjourned : 11:27 o’elock a.m.) [277] On Thursd«;, thz 24th day of July, 1941, at 9:05 o’clock a. m., all parties being present in the court- room, the following further proceedings were had: The Clerk: Civil Numbers 434 and 436. Cases called for further trial. The Court: The jury is present and in the box. Judge Robertson: I might say just a word to the jury, Your Honor. As you have already been told more than once your functions as jurors in these ‘eases is to fix the value to be paid to the Damon Estate by the Government for the taking of these 331 acres of land. You have heard the testimony of the two so-called experts for the Government in which they stated that except for a 200-foot strip fronting on the highway they see nothing in that land or in that area but cane land. It is at that vs. John Waterhouse et al. 155 point that we split absolutely with the Govern- ment’s theory. Our contention is that that locality has outgrown its category as cane land and has become residence property and is residence prop- erty, ready and potentially available in November, 1940, and that this land was not to be valued at so many acres of mere cane land at all but as so many acres of potential residence property, and that, of course, makes a tremendous difference in the value of the land and the amount to be paid to the Damon Estate by the Government for the taking of those 331 acres,—not 331 acres of cane land but 331 acres of potential residence property. Mr. Cas- tro will you take the stand please. A. D. CASTRO being first duly sworn as a witness for the defend- ants testified as follows: [278] Direct Examination Questions by Judge Robertson: Q. Will you state your name, please? A. A. D. Castro. Q. Do you live in Honolulu? A. Yes, Sir. Q. How long have you lived in Honolulu? A. I have lived in Honolulu since 1897. Prior to that I was raised on the Island of Maui. Q. What is your line of business, Mr. Castro? A. I am engaged in buying and selling real es- tate for clients, development of real estate, insur- ance agencies and brokerage business engaging in securities. ee 156 United States of America (Testimony of A. D. Castro.) Q. How long has your experience in dealing in real estate and handling real estate existed f A. I began dealing in real estate and adminis- tering real estate interests in 1905. Q. Are you still in that line of business? A. I am, Sir. Q. Do you hold any Government position in con- nection with real estate ? A. Yes Sir, I am Chairman of the Public Land Board. Q. That is the Territorial Land Board? A. Yes Sir. Q. How long have you been connected with that Land Board? A. I was first connected with it for seventeen years, then I was out of it for five years and re- cently the Governor asked me to accept reappoint- ment, which I did. Q. What does the Territorial Land Board have to do with lands? A. The Public Land Board under the Organic Act passes upon all Government leases and sales, also exchange of [279] of public lands for other lands for public purposes. Q. In doing that work does the Land Board from time to time have to determine the value of land? A. The Land Board passes upon every recom- mendation made by the Commiss.oner and every vs. John Waterhouse et al. 157 (Testimony of A. D, Castro.) offer made by citizens or business entities for the purchase or lease of public lands. Q. The jurisdiction of the Land Board is throughout the Territory, is it not? A. Yes Sir. Q. Ineluding this Island? A. Yes Sir. Q. At the request of the Trustees of the Damon Estate have you examined the lands at Moanalua that are involved in these proceedings? A. I have, Sir. Q. Have you familiarized yourself with those area? A. I have, Sir. Q. What is the total area involved here? A. The aggregate area is 331.756 acres. Q. Call your attention to a map that is on the board here, Mr. Castro, and ask you if you have seen a map like this before,—can you see it from where you are or will you come down here ? A. I have seen it, Sir. Judge Robertson: This is Exhibit ‘‘A’’, Mr. Clerk? The Clerk: Yes Sir. Q. Are those 331 acres all in one parcel or are they separated for the purposes of this case into more than one parcel ? A. They are considered three parcels. Q. What are those three parcels, Mr. Castro? [280] A. One parcel is known as Lot ‘“‘D’’, otherwise ee 158 United States of America (Testimony of A. D. Castro.) known as the gore lot, which contains an area of 61.512 acres. Q. That parcel is mauka of the Boulevard, is it not? A. Yes Sir, it is situated between Kamehameha Highway, the old Puuloa Road and Pearl Harbor Road. Q. Where are the other areas? A. There is an area known as Lot C-1 and Lot C-2 containing 77.288 acres, and that is adjoining Hickam Field. Q. That is the area adjoining Hickam Field? A. Yes Sir, marked on this map C-1. Q. And the third area is where? A. The third area is East of that, towards town, known as Lot C-3-A C-B-1 and C-3-B 2-A. Q. The aggregate area is how many acres? A. The area of that parcel is 192.956 acres. Q. Prior to November, 1940 do you know what those areas were being used for? A. Yes Sir. Q. What? A. For the growing of sugar cane. Q. What, in your opinion, is the highest, best and most profitable use to which those areas were adaptable as of November, 1940? A. There are various economic uses to which the land as a whole is adapted, and the principal use, I would say, is for home, second for truck gardening. In connection with the homes there is vs. John Waterhouse et al. 159 (Testimony of A. D. Castro.) opportunity therc for stores. I would say that the principal economic use of the land, that the land is adapted to, is first residence, and second, truck gardening, and that in connection with the use for homes there was opportunity there and there is [281] for small businesses; places of recreation and places for assembling plants in connection with the business and enterprises of Honolulu. Q. You speak of areas for truck gardening, what rental does truck gardening area command ? Mr. Courtney: Objected to as incompetent and immaterial, Your Honor, too indefinite, remote, speculative. The Court: Overruled. A. For truck gardening purposes the land is worth $33.58 per acre per annum,—the average rental per annum is $33.58 per acre. Q. When you mention truck gardening, what do you include? A. I would include areas back of strips front- ing the highway. . Q. I mean it the other way, truck gardening contemplates the raising of what? A. Truck gardening contemplates the raising of vegetables that the community is in great need of, raising of poultry, and small farms consisting of one or two acres which would involve raising per- haps of seasonal things for the market. Q. Would that include vegetables? 160 United States of America (Testimony of A. D, Castro.) A. Yes. Q. Fruit! A. No fruit. Q. How about papayas? A. Oh Yes, you may class papayas as fruit, as a seasonal product. Q. How about flowers for the market? A. That would include that. Q. When you say that the rental value of lands in this [282] vicinity for that purpose is as you have stated $33.50-—— A. It would average $33.58 per acre per annum. Q. When you say the average rental, between what limits would you say such limits would run? A. 40; 35; 30. Q. Let’s take up for consideration, Mr. Castro, Lot ‘‘D’’, the gore lot? A. Yes Sir. Q. From your examination of the situation, qual- ity and capacity of that land, what, in your opinion, was that area worth in November, 19407 When I say ‘value’ I mean ‘market value’, which in turn is described as what a willing buyer would pay to a willing seller in money. A. The market value of that land on November, 1940, on condition that it would be available in April or May of 1941, was, in my opinion, $79,311.75. Q. Will you state to the jury your reasons for that conclusion, Mr. Castro? A. Yes Sir. In the first place that parcel of land as a whole,—may I stand up please, it bothers me sitting down, it holds my voice back,—commands vs. John Waterhouse et al. 161 (Testimony of A. D, Castro.) an average rental value per annum, that is the aver- age rental value covering the whole of $51.57. Mr. Courtney: May it be understood that our objection runs to all evidence tending to fix the market value in this way. We object to any evi- dence attempting to work back from the so-called average rental value. The Court: This is the witness’ explanation of his reasoning, his deduction and conclusion by work- ing it out as to its rental value. Objection overruled. Mr. Courtney: I wanted to be sure the record is [283] preserved. I objected to the previous testi- mony on this subject; we are now going across the road. I wanted to be sure it was covered. A. (Continuing): On the basis of that average rental of $51.57 per acre, the total annual rental for that parcel to any buyer would be $3,172.47. In other words, the land can be leased for that rental giving opportunity to the holder of the lase, pro- viding the lease is not less than twenty years, to develop the land and make substantial annual profits on the basis of that rent capitalized on the basis of the value of money today. Mr. Courtney: I likewise object to that as in- competent, Your Honor. The Court: I think it is not incompetent if the witness stated what the estimated value of money today is. Overruled. Mr. Courtney: At this time, because of the un- certainty in the Federal Rules of Procedure, I 162 United States of America (Testimony of A. D, Castro.) should like to ask counsel to stipulate and the Court to rule that it is unnecessary to repeat the word “*Exception’’ whenever and if any objection is over- ruled, as would be required under the old rule. There seems to be some little uncertainty as to whether the new rules as to actual trial procedure apply. In the former case we entered into a stipu- lation and the Court ruled that it was unnecessary for either party to repeat the perfectly useless and vexatious word “‘Exception’’ when a ruling is made. The Court: Unless there is objection, Judge Rob- ertson, the Court will rule that it isn’t necessary. [284] Judge Robertson: That is perfectly agreeable to me, Your Honor. Legislatures keep making new rules for us, but the new rules are generally worse than the old ones, and I am not at all surprised that counsel finds vagueness in the new rules. I have no objection to omitting the word ‘‘Exception’’ and letting the record merely show objections; that will be satisfactory to me. The Court: It carries the right of exception. Judge Robertson: Yes. The Court: The new rules, as I understand, do not apply to condemnation proceedings. Mr. Courtney: I wanted to be sure the record was preserved. Q. You were about to state what money was worth, Mr. Castro? vs. John Waterhouse et al. 163 (Testimony of A. D. Castro.) A. It is my opinion that that class of income should be capitalized at the rate of 4% per annum, a return at the rate of 4% per annum, because of the nature of the lease or the renting of the prop- erty,—the certainty of the income would be pretty well established, and on the basis of that rate the value of the whole of that parcel, in my opinion, is $79,311.75. That is the value based on income that the land is capable of yielding, net income I would say. Q. In expressing that opinion have you taken into consideration all the elements and factors that a willing buyer would have in mind at that time? A. I have. Q. In other words, a willing buyer could have made a good investment at that figure? [285] A. Yes Sir. Q. You have made a general statement that the area involved in this case would include residence property as well as truck gardening, does that state- ment apply to the gore lot? A. Yes Sir. Q. You have also mentioned business property, would that element apply to the gore lot? A. To part of it, Sir. Q. What part of the gore lot would you regard as potential business property in November, 1940? A. At the extreme easterly end and the extreme Westerly end. Q. By the extreme easterly end you refer to that portion of the lot at the junction of the two ' | : | 164 United States of America (Testimony of A. D. Castro.) highways? A. Yes Sir. Q. I don’t see any North marked on this map,— this (indicating on Government’s Exhibit ‘‘A’’) would be the Easterly end? A. Yes. That triangle there would involve an area of 48,000 square feet. Q. That corner is between the junction of the two highways, is it not? A. Yes Sir. Q. You spoke of another locality in Lot “D” as being potential business property, where is that? A. At the corner of Pearl Harbor Road and the Old Puuloa Road. Q. That would be in the left-hand corner as shown on this map (indicating Government’s Ex- hibit “‘A’’)? A. It is the right going West toward Pearl Harbor. [286] Q. As shown on this map it would be the mauka corner of the Puuloa Road and the adjoining boundary of the United States Military Reserva- tion? A. Puuloa Road and Pearl Harbor Road. Q. Are there two roads along here? A. One road and a railroad reservation. Q. When you say Puuloa Road, what are you referring to? A. The road on the Westerly line along the land toward mauka on the ewa side. Q. Isn’t that also Dillingham Boulevard ? The Court: Perhaps you had better step to the vs. John Waterhouse et al. 165 (Testimony of A. D. Castro.) map; there is a pointer lying there at the base of the stand. (Witness does so.) Witness: On the map here is Dillingham Boule- vard. Q. Where does that go? A. Pearl Harbor Road begius here, goes toward the Navy Yard. (Witness indicates a point on Gov- ernment’s Exhibit ‘‘A’’.) Q. When you say “‘here’’ you are referring now to the point where the two highways come together at the junction, do you not? A. Yes sir, the junction of the highway and Pearl Harbor Road. Q. Dillingham Boulevard ends at that point, is that it? A. That is my understanding. Q. From there on that continuation of the high- way is called Puuloa Road ? A. Pearl Harbor Road runs along the westerly boundary of this land. Q. Puuloa Road comes down from Kamehameha Highway to the—— A. Puuloa Road comes down from the old Gov- ernment Road [287] from Aiea. Q. Comes down from mauka and joins the Peart Harbor Road ? A. Yes sir, down by the water there. Q. It is those corners of Lot ‘‘D’’ that you con- sider potential business property, is that it? A. Adapted to business at this time. 166 United States of America (Testimony of A. D. Castro.) Q. This time, do you mean November 1940? A. November 1940 subject to availability in April or May of 1941. Q. Let us next take up, Mr. Castro, the 192- acre area, which is also a part of Case No. 436, what have you to say as to the character and suitability of that area? A. The land as a whole is adaptable to various economic uses. It is an extremel: desirable loca- tion for small homes, and there is opportunity there for one or two places of business and assembling plants, and for the time being land that would not be utilized for the purpose of homes could be used profitably for truck gardening, flower raising, and, perhaps, what we call domestic farming, small farming. Q. What was the best and most profitable use, in your opinion, for that area of land as of No- vember, 1940? A. As I have said the best and most profitable use, in my opinion, was first homes, second, small business, assembling plants, warehouses spaces and truck gardening, flower raising. Q. In your opinion could that area in November, 1940 be properly regarded as so much cane land? A. There is no question about its being extra- ordinarily good eane land, but it is my opinion that it was used as [288] cane land then because of a prior lease that existed and was to terminate in December, 1943. The fact that cane was growing vs. John Waterhouse et al. 167 (Testimony of A. D, Castro.) there then does not alter my opinion as to the other economic uses that are more profitable to the land, to the ownership of the land. Q. In other words, in your judgment it had out- grown the eategory of mere cane land ? A. That is my opinion, sir. Q. In your investigation and consideration of these matters did you form an opinion as to the market value of that 192-acre tract ? A. I did. Q. What was that value? A. The value based on the earning capacity of the land and based on general conditions and vari- ous other conditions, such as its proximity to the center of the City, the fact that that is a portion of a region of land which in my opinion is one of the best future available areas for the expansion of this City, was worth $227,572.50, based on an average value of $1,179.40 per acre, and this value per acre is based on the average rental value of that land of $47.176 per acre. Mr. Courtney: On the basis of the testimony so far given, I move to strike the evidence of the witness upon the ground that it is the conclusion of the witness, not based on fair market values, fair cash market values but on what he claims to be the rental value of the property. Judge Robertson: It is very obvious that the witness is basing his opinion on the elements and factors that a willing buyer would naturally have 168 United States of America (Testimony of A. D. Castro.) in mind when he made an offer to buy; that in- cludes rental value as well as fee [289] simple value. The buyer might decide to hold them, to lease, might decide to subdivide and sell. That is up to the buyer. The buyer had just as much right to consider rental values in buying as other ele- ments,—it certainly inheres in the value of the property. The Court: Overruled. Q. In expressing that opinion of a value of $227,572 for that area, have you taken into con- sideration all the elements and factors that a will- ing buyer would naturally take into consideration in making an offer? A. I have. Mr. Courtney: Objected to as leading and sug- gestive, Your Honor, calls for a conclusion, what he took into consideration. The Court: Overruled. Q. Let us now take up the remaining area, Mr. Castro, the 77 and a fraction acres involved in Case 434, that is the area immediately adjoining Hickam Field, is it not? A. Yes, on the mauka side of Pearl Harbor Road. Q. After examining that area and considering all the matters you have referred to, what was your opinion as to the highest, best and most profitable use that that area was adapted to in November 1940? A. My opinion is that this land is adapted to vs. John Waterhouse et al. 169 (Testimony of A. D, Castro.) the use of homes, truck gardening, places of recre- ation, flower raising, ete. Q. Did you find any potential business site areas in that section ? A. In my opinion a business house shouid not be established there. It is an ideal place for a church, as suggested to [290] me by a man who engages in missionary work. Q. In vour opinion what would a willing buyer have paid to a willing seller for the 77-acre area in November, 1940? A. The value of that land, the market value of that land based on its income, that is on the income that is possible, $9,855.43. It is my opinion that the average rental value per acre per annum is $41.25. Mr. Courtney: Same objection to this; I take it Your Honor will overrule me again. The Court: Overruled. A. (Continuing): -——or $3,188.60 per annum. That annual rental on the whole capitalized at the same rate would bring $79,715.43 net, with all charges taken ort. Q. You have referred to these three lands, Mr. Castro, these three areas, as potential home sites, do you know whether or not there was any demand last year for that class of property ? A. The experience of my office, and the experi- ence that has come to me is that if the land was available in November, on November 30th, 1940, at least one-third of it would be absorbed for homes 176 United States of America (Testimony of A. D, Castro.) because of the demand for land in that section of this City, and at that,—if I may be permitted, the land then subject to a lease that was pending and which was to terminate in December of 1943, would have sold without question in my mind for .02367 per square foot. Q. Is that involved in the valuation you already stated or does that make some change in your figure? A. It doesn’t make any change. Q. That is simply the rate at which these total figures were computed ? [291] A. Yes, that would be the rate per square foot that people would be interested in. I may say this, if the Court will permit, that because of the large area of those three parcels, the importance of that area as a potential locality for the expansion of Honolulu because of the need of such expansion, the sale of that land as a whole would constitute a proposition that would remove it from the ordinary market, as the market exists in this Territory. It would require special negotiation and systematic and intelligent financing in order to develop the area as a whole into a community section which in a reasonable period of time would be absorbed by the people in the market and made a valuable and important part of the City of Honolulu. Q. Is that one of the things that a willing buyer would have had in mind at that time? A. Yes sir. Q. Speaking generally, what has happened in vs. John Waterhouse et al. 171 (Testimony of A. D, Castro.) this City of Honolulu, is it growing, shrinking, or what ? A. The City of Honolulu is gradually growing, there is a demand for expansion, but within the last year, the last two years, certain restrictions asso- ciated with the development of new home sites have been made by the City which makes it difficult for the small investor to develop new home sites, and the result is that buyers for small homes are going as far as twelve miles beyond this City towar/ls what we call Maunalua, Koko Head, Niu, Palolo, Kilihi, parts down the country, Waianae, and most of those buyers to my knowledge would prefer to be within a distance of six and a half miles from the center of the City, and to my knowledge that sec- tion there consisting of that area [292] and adjoin- ing area offers to the City the solution to this problem of systematic expansion for convenience to buyers in relation to their work and daily life in the community. Judge Robertson: You may cross examine. Cross Examination Questions by Mr. Courtney: Q. Mr. Castro, to get one thing out of the way at a time, how much did you estimate the church on the corner would be able to pay in the way of rent? A. I estimated that the owner of the land would give the land for church purposes. 172 United States of America (Testimony of A. D. Castro.) Q. Now Mr. Castro, I understood you to say this, you have just finished saying that the people of this Territory who are irked by the restrictions in Honolulu are moving as far as twelve miles out, is that right? A. Yes, because it makes it difficult for the crea- tion of new home sites. Q. That is because of the restrictions in the City of Honolulu? A. Part of it. Q. You know Punloa Road and the ewa bound- aries of these properties ? A. Yes. Q. I take it that you would consider that there is some restriction of area which is suitable for development ? A. There is. Q. For homes? A. Yes sir. Q. Now, are you familiar with the lands of the Damon [293] Estate which are located on the mauka side of the highway ? A. Yes sir. Q. The entire ahupuaa of Moanalua belonged at one time to the Damon Estate, did it not? A. Yes sir. Q. Through the Will of Bernice Pauahi Bishop to Samuel M. Damon? A. (No answer by the witness) Q. How many acres of cane land are there on the maukaside of the road ? A. TI eouldn’t tell you because I didn’t check that. Q. I am going to help you a little if I can, Mr. Castro. I show you an Exhibit, which I have marked vs. John Waterhouse et al. 173 (Testimony of A. D. Castro.) Government’s Exhibit ‘‘B’’, being a map which I have obtained from the Tax Office of this City,— you are familiar with this,—I will ask you to re- fresh your recollection by looking at this map and tell us the amount of Damon Estate land in cane on the mauka side of the highway between the Honolulu side and the side next to Pearl Harbor,— low many acres of land in there, roughly? A. I would have to caleulate that. What are these marks here (witness indicates certain marks on map marked Government’s Exhibit ‘‘B’’). Q. Those are the marks of fields. A. But there is no way of my figuring that out because the sections don’t give the areas. I will say in connection with such a development every foot of land within a thousand feet from the highway will come within the same category as the lower land. Q. That is from the boundary which is marked here as Puuloa Road in about the center of the map next to the [294] ponds, is that right? A. That is right. Q. And what about the land back of the thou- sand feet? A. That would come in in a later development ; that would take a longer period of years to develop, —I have particular reference to a reasonable period whieh«wuch development would fit in. Q. You are familiar with this map (referring to 114 United States of America (Testimony of A. D, Castro.) map marked Government’s Exhibit ‘‘B’’) and ree- ognize it as something used by your profession? A. I recognize the map; I am not familiar with the characters indicated there. Q. Well, roughly, how many miles of frontage is there on the highway ? Judge Robertson: Are you putting that map in evidence, Mr. Courtney ? Mr. Courtney: I will, sir, later. A. I would say two miles. Q. Two miles? A. Yes sir. Q. Two miles from the old Pauloa Road and a depth of 1,000 feet? A. Yes. Q. There is still land available back of the 1,000 feet, is that right? A. That is rigbt. Q. That is all being used for sugar cane now? A. Yes. Q. Under lease to the Honolulu Plantation Com- pany? A. Except the high levels. [295] Q. Except the higher levels? A. Yes. Q. ‘You have no idea of the total acreage there? A. Ihave not. Q. All of that land is available for home sites, is it not? A. It is available; I would not say it is avail- able, but if the owners would offer it—— Q. It is the Damon Estate? A. Yes. Q. It can be made available by the owners if they so choose ? A. Yes. Q. If a man paid $1,000.00 an acre for the vs. John Waterhouse et al. 175 (Testimony of A. D. Castro.) locality with which we are dealing here what would happen to him if the Damon Estate undertook to open up this land on the mauka side of the high- way? A. It wouldn’t affect its value at all. Q. How many homes were built in Honolulu during the last year? A. To my knowledge 1825 homes. Q. How many the previous year? A. My recollection doesn’t go back that far. Q. Would you vall last year a very unusual year, Mr. Castro? A. In building of houses, yes, not in the sale or opening of new tracts. Q. Don’t you know how many houses were built in Honolulu in 1939 or 1938, weren’t conditions a little different then? A. I didn’t check. Q. Never concerned you how many houses had heen built ? [296] A. Yes it concerned me; I have the figures in my office. Q. Tell me how many you considered were built on the entire Island of Oahu? A. In 1939? Q. Yes? A. I would say about 2,000. Q. About 2,000? A. Yes. Q. Did you consider that when you were making up your estimate f A. Yes sir. Q. Those 2,000 were built in 1939 on the entire Island ¢ A. About that. Q. How many in 1938? 176 United States of America (Testimony of A. D. Castro.) A. I would say around 1800. — Q. How many in 1937? A. I couldn’t tell you. Q. Asa matter of fact the development of Sie lulu is in the other direction from this land, is it not? A. It is for the time being because land has been opened up on that side. Q. Bishop Estate has opened up Kahala and Maunalwua, is that right? A. Yes sir. Q. Many houses built out there? A. Quite a number. Q. As a matter of fact the first expansion that took place in this direction, that is in the direction of Pearl Harbor, took place on the makai side of the road? A. Yes sir. [297] Q. And immediately adjacent to the large pond, the Ahuu Pond? A. Yes, on the town side. Q. Extending out in the direction of Pearl Har- bor? A. That is it. Q. Did you consider the environment of this particular property ? A. I did. Q. Immediately adjoining Wheeler Field? A. Yes sir. Q. How far it was from the landing mat? A. Yes. Q. Do you know how many planes are regularly quartered at Hickam Field? A. I don’t know and I don’t care to know. vs. John Waterhouse et al. 177 (Testimony of A. D. Castro.) Q. Do you know what the personnel is at Hickam Field, in normal times, the garrison? I do not. How about the garrison at Pearl Harbor? I have never made inquiries in that respect. Don’t know anything about that? No. Du you know anything about the landing field on Ford Island? A. I don’t know what the personne! is there. Q. And the normal complement of aviators leav- ing and returning to that field? A. No sir. Q. Aw a matter of fact, Mr. Castro, the more desirable }«ads in this whole area are located on the Waikiki side of the Damon Estate, are they not, on the mauka side of [298] the road Waikiki or toward Honolulu ? A. You mean the land mauka of Dillingham Boulevard ? Q. Yes sir? A. That is considered better land than the land below. Q. Better land than the land condemned ? A. Yes sir. . The values recede as you leave Honolulu, do they not ? A. No they do not. Q. They remain the same for the purposes of this case, or what? A. They improve. Q. The farther away you get from Honolulu? A. Because of the center of activity on the other side. 178 United States of America (Testimony of A. D. Castro.) Q. What other side? A. On the Westerly side of this land. Q. What do you mean, Hickam Field, Pearl Harbor? A. Hickam Field, Pearl Harbor, Peari City, the plantations down as far as Waianae. Q. How large a subdivision is there outside of Schofield Barracks, where we have always had a - full division of troops? A. You mean a private subdivision ? Yes? There is the town of Wahiawa. What is the population of Wahiawa? The population of Wahiawa is around 5000, How about the borders of Schofield Barracks, how many stores and business houses have been put up there in the entire time that Schofield Barracks has been garrisoned with a full division of troops? A. None on private property with the exception of two. Q. Just two? [299] A. To my knowledge. Q. Did you ever hear of any of these being marked out of bounds by the Commanding Officer? A. Yes sir. Q. Don’t you suppose a business man would eon- sider that possibility and that hazard ? A. I don’t think so. Q. What would happen after this emergency was over and the personnel changed ¢ A. Out of bounds usually applies to places where OPore vs. John Waterhouse et al. (Testimony of A. D. Castro.) * nuisances exist, where the interests of the Post are not fully regarded, but I don’t think that would come about. Q. Did you ever hear out of bounds because of exorbitant rents? A. Yes sir, that becomes a nuisance. Q. You know that hazard exists? A. Not out there to my knowledge. Q. Den’t you know that three years ago the Commandant of the Navy Yard tried to interest private capital in some development to accommo- date Navy personnel ? A. Yes sir. Q. You know that? A. Yes sir, I do. Q. Don’t you know they turned it down because the hazard was too great? A. Not when I was approached. Q. Not when you were approached ? A. No. Q. You were perfectly willing to invest your money ? A. Absolutely if I could get the land at that time. Q. Your entire estimate, you say, is based upon a capital- [300] ization of 4% of rental value? A. It is based on the capitalization of the an- nual rental at the rate of 4%, which I consider the value of money, and also upon the fee simple prices that were obtainable at that time. Q. What fee simple prices and where,—never mind the prices but tell me where ? 179 — 180 United States of America (Testimony of A. D. Castro.) A. The prices obtainable. Q. Tell me where you are referring to fee simple prices ? A. In the market. Q. Where? A. In Honolulu. Q. Whereabouts in Honolulu? A. Under the skies and within the center of this City. Q. Where, what specific area did you consider fee simple value ? A. The parcel ‘‘D”’ as well as the other parcels. Q. What were you comparing it with? A. I was comparing it with prices elsewhere. Q. Where? A. I compared it with prices at Kuliouou, Woodlawn, Kalihi, Waianae, Waialua, Aiea Heights. Q. You tell us something about the developers of St. Louis Heights? A. (No answer by the witness) Q. Tell us about the recent auction of lots up there ? A. The recent auction of lots, the prices were fair but only to those who would have enough money to develop them, and that would take a consider- able sum to clear it off rocks, ete., that condition doesn’t exist in any of these areas. [301] Q. How about the presence of utilities or the absence of utilities? vs. John Waterhouse et al. 181 (Testimony of A. D. Castro.) A. Water is available, utilities are available, or could be made available. Q. But all the areas that you are comparing the fee simple with ave located in the direction of Koko Head, are they not? A. Toward there and toward the Westerly direc- tion of the City. Q. ,That direction is where the development of Honolulu is, is it not? A. For the time being until other lands are available on the other side. Q. Do you regard these times, Mr. Castro, as normal times ? A. I don’t regard them as normal times, I re- gard them as times based on requirements of cer- tain emergencies that exist, but I consider that the normal expansion of the City as it has been estab- lished for many years by experience justified my conclusion. Q. I ask you whether in 1940, due to the devel- opment in Honolulu, a purchaser would consider he was dealing in a normal market or with a nor- mal market ? A. I would say he was dealing with a normal market with fair business surrounding him. Q. Wouldn’t have to anticipate any change in the enlargement of Honolulu or reduction in the military or Naval garrisons? A. To some extent, Yes. The fact that it is a well known policy of the Nation that its posts, mili- — 182 United States of America (Testimony of A. D. Castro.) tary posts, such as we have in Hawaii, will be main- tained for many years, that these defenses will be continued to be maintained. [302] Q. By the way, what was the rental on this property from the Honolulu Plantation Company? A. The rental under the lease was $23.50 per acre. Q. Is that an average over the three properties? A. Yes Sir. Mr. Courtney: Now I desire to offer in evidence this map which has been marked Government’s Ex- hibit ‘‘B’’, which this witness has referred to, which is a tax map, for relation to his testimony. Judge Robertson: What does that Exhibit show, Mr. Courtney? Mr. Courtney: It shows the location of the land on the mauka side of the boundary of the Damon Estate and also shows the extent of their holdings in cane. Judge Robertson: That is rather indefinite; what is there about this map, Mr. Courtney, that shows the extent of the holdings of the Damon Estate in eane. This map requires some explanation before it is intelligent to the Court or the jury. Mr. Courtney: I shall supply that. Judge Robertson: O. K., on that understanding we have no objection. The Court: It will be received in evidence as Petitioner’s Exhibit ‘‘B’. — vs. John Waterhouse et al. 183 (Testimony of A. D. Castro.) (Thereupon the map referred to was received in evidence and marked Exhibit *‘B’’.) Mr. Courtney: I would like to exhibit to the jury the map to which the witness has referred; the area to which the witness makes reference on the mauka side of the tracks from the Puuloa Road is the point where my [303] finger is now placed,—do you fol- low me, Mr. Castro? A. Yes. Mr. Courtney (continuing): And extending is there to the areas with which we are concerned. Juror: I am a little confused about this Puuloa Road. Mr. Courtney: I beg your pardon, the Puuloa Road is marked on this map Exhibit ‘‘B’’ at this point (indicating a point on Government’s Exhibit “B’’), Juror: I thought Mr. Castro said it went on the Westerly side, is that Puuloa Road ? Mr. Courtney: I will ask Mr. Castro to explain. Witness: I may say that that map is based on the old boundary,—the Puuloa Road used to begin at Moanalua and go down,—Dillingham Boulevard didn’t exist then,—and went to Watertown, then from there up that began at the old Government Road at Aiea and shot right down to Watertown. They haven’t changed this Moanalua Road from Puuloa Road; it should be Moanalua Road leading te Dillingham Boulevard. Juror: In other words, it is the same road? 184 United States of America (Testimony of A. D. Castro.) Witness: It is the same road; the road on the Westerly side of this land that runs from Pearl Harbor to the old Government Road is also known as Puuloa Road. Judge Robertson: On the western side of Lot ““D”’, is it? Witness: Yes. Mr. Courtney: There are some markings on this map which we will explain at a later time. Q. (By Mr. Courtney): Now, as a matter of fact, Mr. Castro, don’t you know that the Bishop Estate has used 6% [304] for a rate of capitaliza- tion,—just answer that question do you know that or not? A. Ido. Q. Answer it if they use it Yes or No? Judge Robertson: Objected to as incompetent, irrelevant and immaterial, Your Honor. There was a time when everyone used 6% capitalization, but that time has passed out of the picture long ago, we are not dealing now with the horse and buggy days. The Court: It seems to me that that is irrele- vant. Mr. Courtney: If the witness is permitted to as- sume a 4% capitalization as the one supposed to be prevailing in the Territory, which I challenge, I think we have a right to ask about the other rates of capitalization since his whole testimony is based on capitalization of assumed rentals. It ean be answered. — — vs. John Waterhouse et al. 185 (Testimony of A. D. Castro.) The Court: Your examination goes to his rea- sons as to why he adopted 4%. Mr. Courtney: No, as to the justification as against practices prevailing in the community. Judge Robertson: This question, Your Honor, goes out of bounds,—we are not concerned with what the Bishop Estate did at some indefinite and unspecified time. If counsel wants to cross-examine the witness on how he arrived at 4% he is entitled to do that, of course, but what the Bishop Estate has done at some indefinite time is highly irrelevant and immaterial. Mr. Courtney: It purports to establish the rate of capitalization prevailing in the community. [305] Judge Robertson: It doesn’t do anything of the kind. We are not concerned here with what the Bishop Estate may have done twenty years ago, we are not dealing with ancient history. The Court: I ruled earlier on that. There is noth- ing before the Court now. We will take a short recess now. (Recess—9:15 a. m. to 9:30 a. m.) Continuation of Cross Examination of Mr. A. D. Castro Questions by Mr. Courtney: Q. Now, Mr. Castro, to go back to our question, —what rate of capitalization does the Bishop Es- tate use for residential development ? Judge Robertson: Objected to, Your Honor, as incompetent, irrelevant and immaterial, having no 186 United States of America (Testimony of A. D. Castro.) bearing on the issues in this case and being indefi- nite as to time. The Court: Sustained. Q. As to 1939 and 1940? Judge Robertson: The same objection, incompe- tent, irrelevant and immaterial, having no bearing on the issues in this case. The Court: Sustained. Mr. Courtney: I would like to make an offer of proof. Does the Court desire me to make it in open Court or into the record ? The Court: You may make it in open Court. Mr. Courtney: I offer to prove by this witness that this witness knows, and if called upon to tes- tify would state that the rate of capitalization used by the Bishop [806] Estate for rental valuations on residential properties is 6%. The Court: Offer denied. Mr. Courtney: I further offer to show in that same connection the extent of the Bishop Estate holdings. Judge Robertson: Same objection. The Court: Denied. Q. Now, Mr. Castro, you have placed a valua- tion for business purposes on the corner of Puuloa Road, which is located at the point indicated by my pencil, did you not, in excess of the value which you placed on other parts of that property? A. The value of that parcel is placed, together _ —— aha vs. John Waterhouse ef al. 187 (Testimony of A. D. Castro.) with a strip along the road that would contribute to the success possibility of that business location. Q. Do you mean a strip along the Ewa side of this gore lot ‘‘D’’? A. Yes. Q. Fronting on Puuloa Road ? The Court: The Ewa boundary, what do you mean by that? Mr. Courtney: I mean this boundary, the boun- dary nearest Pearl Harbor, nearest the Naval Res- ervation, is that the one you mean ? A. I consider—— Q. Just answer the question,—do you mean the boundary adjoining the Naval Reservation where the old Puuloa Road came down? A. No. Q. Where do you mean? A. I mean a strip along the Pearl Harbor Road from the old [307] Puuloa Road to the junction. Q. To this point (indicating a point on Gov- ernment’s Exhibit ‘‘B’’) ? A. Yes. Q. Then that is on the makai boundary of this tract ? A. Yes Sir. Q. Don’t you know there is the O. R. & L. Rail- way right-of-way running right along smack along that boundary ? A. I do. When I say Puuloa Road I mean the old private road which was used by the public but controlled by private ownership on the Westerly side of that line. Q. Come down and show us where that prop- erty is. ee NN TN 188 (Testimony of A. D. Castro.) A. (Witness does so). The old Puuloa Road came down from this boundary (witness indicates a point on Government’s Exhibit ‘‘A’’), which is the Westerly boundary of lot ‘‘D’’. Q. Now indicate with the letters ‘‘A’’ and “‘B” where it started and where it ended ? | Judge Robertson: Isn’t that the road we drove up yesterday, Mr. Courtney? Mr. Courtney: In part. Witness: I may say that the ownership of that road is controlled -—— Q. Let’s get it down first, I want to know just where that is, mark the letters ‘‘A”’ and ‘‘B”’ at the beginning and at the end, so we will know where it begins and where it ends. (Witness does so.) Q. How much value did you put in—— Judge Robertson: Did you mark that ‘A’”’ and “B’’? [308] The Witness: Yes I did. Mr. Courtney: So we will know where it begins and where it ends. Q. How much value did you put in that strip along that boundary between the letters “‘A’’ and “B’’? A. The strip reserved for the purpose of resi- dential lots that would contribute to the business section about 16.202 acres of land. Q. Fronting on the highway? United States of America vs. John Waterhcuse et al. 189 (Testimony of A. D. Castro.) A. Fronting on the highway, with a tier, two tiers of lots commencing on the road thk::* would be established 150 feet from the highway. Q. Let’s talk about Puuloa Road that you as- sume is there, how much value did you put on that strip because of frontage on that road? A. I placed no value on any strip fronting on that road. Q. I thought you said you placed a higher value to the road frontage ? A. I gave a higher value to the strip of land running parallel with Pearl Harbor Road. Q. Mark that on the map ‘‘C’’ and ‘‘D”’ so we will know what you are talking about, where the strip begins and where the strip ends? (~ itness does so.) Q. How much value did you put in that strip and how deep was the strip? A. The value put on that strip was $51,177.12. Q. $51,177.12? A. That is correct. [309] The Court: I would prefer that figures of value be not put on the Exhibit. Mr. Courtney: I will take it off. Q. A strip how deep? A. 340 feet deep. Q. What value did you put on this strip, be- tween ‘‘A’’ and ‘‘B’’ A. I put no value there except putting them to- gether with the remaining area. Q. What about the portion of the property lo- cated between the letters ‘‘A’’ and ‘‘B”’ and running 190 United States of America (Testimony of A. D. Castro.) along the Schofield Road to the intersection with the Puuloa Road? A. That is valued together with the remaining area. Q. So you placed all your increased value on this strip fronting Puuloa Road and the O. R. & L. right-of-way ? A. We placed a valuation on that strip of $51,177.12. Q. What is the remaining value? A. The remaining value is $28,134.66. Q. Now let us take this strip along the makai side of the O. R. & L. right-of-way and Pearl Har- bor Road, how much of your valuation is reflected there? Judge Robertson: The 192 acres, Mr. Courtney? Mr. Courtney: Yes Sir. Q. Let us take, first of all, this 77-acre parcel, our Civil 434, how much value did you reflect for that frontage? A. That frontage will embrace an area of 4.5506 acres. Tell me how deep it is? 150 feet deep. 150 feet deep? A. Yes Sir. All right, and how long? [310] It is 1320 feet long. How much of your valuation of this parcel was reflected in that strip? OPoOoPO —_ paggemeers vs. John Waterhouse et al. 191 (Testimony of A. D. Castro.) A. The valuation reflected was $30,865.00. Q. What in the balance of the parcel? A. $48,850.43. Q. That is an estimate of 4-1/2 acres on the frontage ? A. Yes sir. Q. Let’s get down to the adjoining piece, did you reflect any increased value on the land fronting Pearl Harbor Road? A. Yes. Q. If so, how much,—this is Civil No. 436, 192 acres ¢ A. The area embraced in that strip was 14.979 acres. Judge Robertson: Of what? Witness: Of land. Tell us how deep? A. 150 feet deep. For what distance? It has a distance of 4,390 feet. How much value did you reflect in that? $110,042.50. $110,042.50? A. Yes sir. In that one strip along this road? Yes sir. Did you make any distinction between the portions on the Honolulu side of Lot B-1, that is where the road divides? [311] A. This valuation took the strip as a whole. Q. You didn’t make any distinction between the point at which the road divides going on either side, or on both sides, of the O. R. & L. right-of- way? A. No sir. freerorece 192 United States of America (Testimony of A. D. Castro.) Q. Didn’t think there was any difference be- tween those two? A. What two? Q. Between those two portions of the strip? A. You mean that front strip and the rear strip? Q. Between the portions of the strip which are nearest Pearl Harbor and the portions of the strip which approach Honolulu? A. This is the valuation we placed on that entire strip. Q. How much is that a square foot? A. That is .168 per square foot. Q. You want this court and jury to believe that all of that land is equally valuable, is that it? | A. That is the valuation we applied in an av- erage way. Q. Is that your opinion of the fair market value of it? A. Yes sir. Q. Without distinction? A. Without distinction for the entire strip. Q. ‘That is based on a capitalization rate of 4%, is that it? A. Yes sir. Q. The same is true with reference to your valu- ation for the other property, 4%? A. Yes sir. Mr. Courtney: That is all with the witness. [312] Witness: There is one thing I might explain in this connection, if you will permit me—— - vas vs. John Waterhouse et al. 193 (Testimony of A. D. Castro.) Mr. Courtney: You-are very ably represented here and I have finished with you for the time being. Judge Robertson: You may make that state- ment. Mr. Courtney: I submit we are entitled to have a question so we can determine whether the evi- dence is material or not. Judge Robertson: The witness has expressed a desire to make an explanatory remark as to his evi- dence, which every witness has the right to do. My idea is to give the witness an opportunity to say what he has in mind. The Court: Is there any objection ? Mr. Courtney: I would simply like to know what the question is. The Court: It is an explanation he wants to make, Mr. Courtney: Of what? Witness: Relating to the determination of rates, rates of interest. Mr. Courtney: I don’t think that is material. T asked only one question about rates, that is what he used and what the Bishop Estate used. Judge Robertson: As I said before, we are not at all interested in what rate of capitalization the Bishop Estate at some indefinite and undefined time has used, what we are concerned with here is the earning power of money which this witness has said 194 United States of America (Testimony of A. D. Castro.) was not in excess of 4%. I am willing to let it go at that. The Court: Mr. Castro, before you leave the stand,—you spoke of the rental value that you had estimated on [313] these various pieces of land and once or twice you said that would be net rental? Witness: Yes Sir. The Court: Now, there is some confusion in my mind,—who would pay the taxes under that rate of rental ? Witness: The lessee. The Court: Who would pay any improvement assessments, if there were any? The Witness: The lessees. The Court: In using that word ‘‘net’’ just what did you mean? Witness: That the rent would be net to the les- sor-owner only subject to gross income tax and income taxes to the Government. The Court: That the land-owner would be free of all charges in connection with the land, is that what you mean ? Witness: Yes, such as real property taxes, cost of construction of roads, water rates and other rates such as electricity, etc. Mr. Courtney: At this time we move to strike out all of the testimony of this witness on the ground that it is the conclusion of the witness, and on the further ground that the testimony does not reflect the fair market value,—the premise is false. vs. John Waterhouse et al. 195 (Testimony of A. D. Castro.) The Court: Overruled. Any further examination of the witness ? Judge Robertson: Yes, Your Honor. Redirect Examination Questions by Judge Robertson : Q. Mr. Castro, you have stated on your cross- examination [314] that the expansion of Honolulu, now or heretofore, has been in the opposite direc- tion, in other words, towards the East instead of toward the West, do you know the reason for that tendency ? A. Yes, the class of people, although I don’t like to draw any distinction, that has been going toward the Easterly side of this City are of a tendency that would prefer to live on this side, the Easterly side. We have coming into age every year around 5,000 young men and women, and from this group a very large percentage undertake the responsibility of home-owning, and as far as I know their tendency is toward the Westerly side of this City. Q. Heretofore in what direction, East or West, have most of the subdivisions been opened up for settlement ? A. From say a point in Nuuanu, I would say East, Easterly. Q. In your opinion does the opening up of sub- divided tracts and putting them on the market have something to do with the direction of the tendency of the City to expand ? A. Yes Sir. 196 United States of America (Testimony of A. D. Castro.) Q. In your opinion is the fact that this Moana- lua land has been tied up with a plantation lease for several years a factor, has that anything to do with the lack of expansion in a Westerly direction? Mr. Courtney: That is objected to, Your Honor, as incompetent, vague, remote, contingent. Judge Robertson: Has a direct bearing on the tendency that counsel referred to on cross-examina- tion. The Court: Overruled. A. Yes Sir, without any question. [315] Q. So that upon the expiration of that lease in 1943 if those areas, or some of them were opened for subdivision and development, would that, in your judgmen’, aave anything to do with the direc- tion of the tendency of the City to expand? A. It would, Sir. Q. Are you aware of the fact, Mr. Castro, that heretofore the Damon Estate has subdivided and put on the market various areas at Moanalua? A. Yes Sir. Q. Im the vicinity of these lands we are talking about ? A. Easterly of the lands, Yes. Q. When you referred to the old Puuloa Road, which you have described as a private road, but open to public traffic on the Westerly side of Lot ““T)”’ as adding to the accessibility in case of a sub- division of Lot ‘‘D’’, in taking that into considera- tion is by virtue of the fact that a willing buyer of — vs. John Waterhouse et al. | 197 (Testimony of A. D. Castro.) that area would consider the fact of the existence of that old roadway ? A. I have not stated that road now accessible to that side of the land. I have not considered the availability of that land in the valuations I have worked out. Q. Possibly I misunderstood one of your an- swers On cross-examination. Did you on your cross- examination refer to some road as affording accessi- bility in case of a subdivision of Lot ‘‘D’’? A. Yes Sir. Q. What road was that? A. That is the road that would be constructed, the two tiers of lots parallel to Pearl Harbor Road, at small expense. [216] Q. That is a subdivision road that you assume a willing buyer would have in mind, is that it? A. Yes Sir. Q. Counsel has made reference to the fact that on the makai side of Lot ‘‘D’’ there is the O. R. & L. right-of-way, what do you consider a willing buyer would have in mind in that connection? A. A willing buyer would discount that railway right-of-way because he would provide for his pur- poses a road within the land 150 feet from this railroad. Mr. Courtney: If the Court please, I move to strike out all of the testimony of this witness on the ground that it is hazarding an opinion, irrelevant, contingent, remote, contentious. 198 United States of America (Testimony of A. D. Castro.) The Court: Overruled. Q. When you said that in this area of Lot ““D” there would be 16 and a fraction acres of land the market value of which would be $51,177.00, what would a willing buyer have in mind as to the adapt- ability, or its highest, best and most profitable use of that 16-acre piece ? A. He would have in mind either selling the lots for homes or leasing those lots at a reasonable rent for a period of not less than twenty-five years at a fair rental. Q. All that means the willing buyer would re- alize on his investment a fair return? A. Yes Sir. Q. As I understand you, that 16-acre area would be put into small house lots, is that it? A. Lots of not less, because of the location, of 60x150 feet, and that would sell for—— [317] Mr. Courtney: If the Court please, we object to that as incompetent, being the conclusion of the witness. Q. Never mind what they might sell for, Mr. Castro—— A. All right. Q. But in your opinion could a willing buyer have paid that value for that land as an investment where the willing buyer had in mind either selling or leasing ? A. Yes Sir. Q. State whether or not a similar line of rea- soning applies, Mr. Castro, to those strips 150 feet deep on the 192-acre area, and also the 77-acre area? ee os vs. John Waterhouse et al. 199 (Testimony of A. D. Castro.) A. It does, the same reasoning would apply there for immediate realization of those values. Q. And that line of house lots would have an existing frontage on the highway without any ad- ditional road construction, would they not ? A. Yes; there would be a little expense in con- nection with it. Q. Does the demand for such property that you have already stated to exist apply to those 150-foot strips? A. Tomy knowledge it does. Judge Robertson: That is all. Recross Examination Questions by Mr. Courtney: Q. Mr. Castro, if I understand your testimony now correctly, your value is based upon an assumed subdivision of the three parcels is it not? A. Not necessarily; could work either way. Q. In order to arrive at your value of Lot “D”’ you had to assume the existence of a road, did you not? A. Yes. [318] Q. That road if placed there would be a private road, would it not? : A. It would eventually be designated to the City. Q. The City is not obliged to accept it? A. As a matter of policy it would. Q. But it is not obliged to accept it? A. I should say it is when the construction is according to law. 200 United States of America (Testimony of A. D. Castro.) Q. As a matter of fact don’t you know that Puuloa Road, the section of Puuloa Read we have referred to next to the Naval Reservation is Navy property ? A. 1 have given no thought of value to that road. Q. You have just cut up these lots on this land and gave them a rental value and then arrived at your total figure, isn’t that right? A. Not in my mind but based on conditions that exist. Q. Isn’t that what you did, you subdivided it and then arrived at your total value? A. That was one way. Q. Isn’t that what you did? A. That is one way of determining the value. Q. Is that what you did? A. Yes sir. Mr. Courtney: I now move to strike the testi- mony of the witness on the ground that the same is incompetent, irrelevant and immaterial. The Court: Overruled. Mr, Courtney: That is all. Redirect Examination Questions by Judge Robertson: [319] Q. In stating that was what you did, Mr. Castro, in your opinion would a willing buyer have had a similar idea in his mind? Mr. Courtney: Objected to, Your Honor, as in- ae vs. John Waterhouse et al. (Testimony of A. D. Castro.) competent, irrelevant and immaterial, calling for a conclusion of the witness. The Court: Overruled. A. No question, sir. Judge Robertson: That is all. Mr. Courtney: No more questions. The Court: There is some question as to the dis- tance of this land from Honolulu, or some part of Honolulu City proper,—can that be cleared up? Mr. Courtney; That can be demonstrated. I don’t know whether this witness knows the exact dis- tances. We can certainly find out and agree on that I think. Judge Robertson: Distance from where? The Court: The distance from this land,—we know how long it is,—now the distance from some well known point in Honolulu, this building for instance. Mr. Courtney: I think that can be agreed upon without asking this witness to hazard a guess. Judge Robertson: I don’t know whether this wit- ness knows or not, but that could be ascertained from the City Surveyor. Moanalua by law is within the City limits. I presume that is understood. The City of Honolulu is defined as extending from Moanalua to Maunalua inclusive. This land of Moanalua we are talking about here is within the statutory City limits. I don’t know how far these areas are from the Post Office but we could find out and [320] and agree on it. 201 202 United States of America (Testimony of A. D. Castro.) The Court: There is some testimony, incidental perhaps, by another witness that it was 8 to 9 miles, whereas this witness made some reference to 6 or 6-1/2 miles. I think it should be settled. Mr. Courtney: If I remember the testimony of this witness correctly, this witness gave the dis- tance of five or six miles from the Puuloa Road boundary, which appears about in the center of this Government Exhibit ‘‘B’’, is that right, Mr. Castro? Witness: No. Mr. Courtney: What distance ? Witness: I said the land was approximately six and a half miles from the center of our city, from the Post Office. Mr. Courtney: 6-1/2 miles from the Post Office to what place? Witness: To this junction between Pearl Harbor and the Schofield Road. Judge Robertson: Have you ever had occasion to check that up, Mr. Castro? Witness: I did not. I must confess that I had my agents do it for me. Judge Robertson: I expect, Mr. Courtney, we could get together on a stipulation. Mr. Courtney: I think so. That is all Mr. Castro. Judge Robertson: Will you take the stand Mr. Harrison, please? vs. John Waterhouse et al. 203 WILFRED E. HARRISON being first duly sworn as a witness for the defense, testified as follows: [321] Direct Examination Questions by Judge Robertson: State your name, please. Wilfred E. Harrison. Where do you live? A. Honolulu. How long have you lived in Honolulu? Practically all my life. Born here? Born in the Island, yes sir. What is your occupation ? Assistant Vice President of the Bishop Trust Company. Q. In what particular department of the Trust Company ? A. In the Trust’ Department handling real es- tate properties. Q. How long have you been connected with the Bishop Trust Company ? A. Since 1922. Q. In connection with land matters what does your work involve, what do you do with respect to real estate? A. I am on the Appraisal Committee, apprais- ing all properties which are pledged under mort- gages, mortgage loans. Q. Does your experience include appraising property for other purposes than mortgage loans f rPOoOPrPOoPOoOOPS 204 United States of America (Testimony of Wilfred E. Harrison.) A. Yes sir, I have done that. Q. Does it include the valuing of property under leasehold ? A. Yes sir. Q. Does that include the valuing of property for the purpose of purchase or sale? A. Yes it does. Q. By reason of that sort of work have you become familiar [322] with land values on the Is- land of Oahu? A. I have. Q. At the request of the Trustees of the Damon Estate have you made an examination and investi- gation of the land areas involved in this law suit? A. I have. Q. What is the total area involved here? A. The total area is 331.756 acres. Q. Situated where? A. On the Dillingham Boulevard just this side of Pearl Harbor. Q. What is the name of that land? A. You mean the title of the land? Q. Yes? A. It is Moanalua. Q. In Moanalua? A. Yes. Q. In the course of your examination and in- vestigation of these areas, what did you find as to the situation of these lands? A. In my opinion these lands had outgrown the element of cane lands and had become more resi- dential and small farm areas. Q. You knew that heretofore these areas have been under lease and under cane cultivation? —ggeeemenacanes vs. John Waterhouse et al. 205 (Testimony of Wilfred E. Harrison.) A. I did, yes sir. Q. What is the basis of your view that these areas had outgrown their category as mere cane land ? A. I noticed the rapid increase in population, the demand for outside areas and the tremendous traffic going to and from the country down that way. [323] Q. In your opinion what was the highest and best and most profitable use for which these areas were adapted as of November, 1940? A. For residential and small farm areas. Q. At that time was there a demand for such areas ? A. There had been, yes. Q. Do you know how long that demand had been continuing ? A. The last four or five years. Q. What has caused that demand ? A. The increase in population; the fact that the small farmers have difficulty in finding places, —the pig men at Kahala when their leases termi- nate will have to look elsewhere, and there have been a number of inquiries for lots out that way. Q. I call your attention first, Mr. Harrison, to Lot ‘‘D’’, sometimes called the gore lot, that tri- angular area mauka of the highway, lying between the two highways, do you know the area of that lot? A. 61.512 acres. Q. What, in your opinion, was the value of that area in November, 1940, considering its market 206 United States of America (Testimony of Wilfred E. Harrison.) value which for present purposes means a price that a willing buyer would pay to a willing seller in money ? A. $63,449.43. Q. For what purpose or purposes was that lot adaptable in November, 1940? A. For residence lots and small farm areas. Q. Does this demand that you have stated you know to exist include both this category of resi- dence property as well as small farming? A. Yes it does. [324] Q. When you say that in your opinion Lot ‘‘D” is adapted to that purpose, do you mean one or the other, or a combination of both? A. A combination of both. Q. Are you now stating what you believe a will- ing buyer would have in mind in buying the prop- erty? A. Yes sir. Q. In your opinion would any portion of that area be adapted to business purposes ? A. It might after development of the residence lots out there. Q. Would that be a factor which you believe a willing buyer would likewise have in mind? A. Yes he would. Q. Well now, makai of the highway there is another area consisting of 192 acres, is there not? A. Yes sir. Q. Would you regard that as of November, 1940 as a mere area of cane land? vs. John Waterhouse et al. 207 (Testimony of Wilfred E. Harrison.) A. No sir, I believe that is in the same category as the other lot, Lot ‘‘D’’, Q. Residence and small farms? A. Residence and small farming areas. Q. From your experience could you say whether these small farming areas that you have in mind might yield a higher rent than cane land? A. Yes they would. Q. Such areas run to how much per acre per annum ? Mr. Courtney: That is objected to, Your Honor, on the ground that there is nothing there forming any basis for [825] comparison, indefinite, remote, contingent. The Court: Where located ? Judge Robertson: Maybe my question was too broad. Q. When you speak of this demand for small farming areas, in your opinion and judgment that demand would extend to these lands we are talking about in this case, as of November, 1940? A. Yes I do. Q. And these small farming areas, in your judgment, would run up to how much on rental per acre per annum? A. Between $30.00 and $40.00. Q. This 192-acre area, I think you have stated that that comes in the same category as you have described with reference to Lot ‘‘D’’? 208 United States of America (Testimony of Wilfred E. Harrison.) A. Yes I did. Q. A combination of residences and small farm- ing lands? A. Areas. Q. What part of that area would be particularly connected with residence lots, Mr. Harrison? A. We considered a depth of 150 feet along the entire frontage. That would be approximately 14.979 acres saleable in lots. Q. You referred to that as frontage, frontage on what? A. On Dillingham Boulevard. Q. Already in existence? A. Yes. Q. So that that line of lots would have their road frontage immediately available without any construction on the part of the owner? A. They would. Mr. Courtney: Objected to, Your Hower, incom- petent, irrelevant, assuming a false hypothesis, as- suming a subdivision which doesn’t exist. [326] The Court: Overruled. Q. When you refer to small farming areas you have in mind what would be in the rear of that line of residence lots? A. Yes sir. Q. Considering the highest and best and most profitable use that that 192-acre area was adapted as of November of last year, what, in your opinion, would a willing buyer have paid to a willing seller for that area? Mr. Courtney: Same objection; on the further ground that the evidence is not competent, no foun- dation for it,—assumes a false premise. vs. John Waterhouse et al. (Testimony of Wilfred E. Harrison.) The Court: Overruled. Q. You may state your answer. A. $182,058.00. Q. Let’s take up now the remaining area, 77 acres and a fraction involved in Case 434, did your examination and investigation include that area, Mr. Harrison ? A. It did. Q. How would you classify that area in eompari- son to these two other areas you have spoken of ? A. The same way,—residence and small farming lots. Q. Do you believe that as of November last vear that that 77-acre area could properly be classed as mere cane land ? A. No it couldn’t Q. Where would the portion of that 77-acre area that you classify as residence property extend ? A. Extend along Dillingham Boulevard to a depth of 150 feet. Q. That 150-foot strip would have the same class and [327] advantages as the 150-foot strip on the 192-acre area? A. It would, yes. Q. It would be an extension of the same line? A. Yes sir. Q. What, in your opinion, would a willing buyer have paid a willing seller for that area last No- vember, taking into consideration all the elements that you have mentioned as entered into the value of that area at that time? A. $63,772.35. Judge Robertson: You may cross examine. 210 United States of America (Testimony of Wilfred E. Harrison.) Cross Examination Questions by Mr. Courtney: Q. What rate of capitalization did you use, Mr. Harrison ? A. On what land? Q. On all of them. A. We used two, the residence lots of 4% and the area for small farm lands at 5%. Q. And using that factor on your estimated rentals you arrived at the values you have given, is that right? A. Yes sir. Q. Did you assume, in arriving at your opinion with respect to the gore tract,—I will take that first—did you assume a certain kind of subdi- vision ? A. Yes, we assumed a subdivision. Q. We? , A. I assumed a subdivision of lots along the frontage there along the railroad right-of-way. Q. Along the railroad right-of-way? A. Yes. Q. Were you in court when Mr. Castro was testifying? [328] A. I was not. Q. There is a line marked ‘‘C’’-‘‘D’’,—marked **A’’-“*B”’—T believe it should have been marked “C’'**T)"’ anyway it is the line that parallels the Oahu Railway right-of-way at the lower end of the tract? A. Yes. Q. Is that the place where you assumed a cer- tain number of lots? A. Yes. Q. How many? A. 77 lots. vs. John Waterhouse et al. (Testimony of Wilfred E. Harrison.) Q. And you valued each lot, did you? A. Yes. | Q. And multiplied the number of the lots with the value placed on them and thus arrived at your total value? A. Some of the lots had varying areas. Q. You made a little plat for yourself ? A. Yes, we figured the price of the lots in front and the various footages and multiplied that. Q. How much of your value did you reflect for that frontage? A. $88,223.12. Q. I am talking about this area on the gore lot mauka of the O. R. & L. right-of-way on the lower end of the tract ? A. The 77 acres. Q. I want to get your basis of valuation, what- ever it was just give it to me anyway you want, I don’t want to confuse you. A. We placed a valuation of 1214 cents on the front areas. [329] Q. 121% cents? A. 121% cents a square foot. Q. Along the lower or makai border of the gore parcel ? A. Yes. Q. That is Parcel ‘‘D’’? A. For the 77 lots. Q. You cut up 77 lots? A. Yes sir. Q. 150 feet deep? A. Yes sir. Q. At 12% cents a square foot and multiplied it and that gave you your total value? A. Yes. Q. Which was what? A. $88,223.12. 212 United States of America (Testimony of Wilfred E. Harrison.) Q. What about the rest of the property, how did you cut that up? A. We cut that up into small farm land areas, Q. How much? A. 41,892 acres. Q. We are going to run over the border pretty soon. I was talking to you about Lot ‘‘D’’,—we are going to be a little short of acres. A. 61.512 acres in Lot “‘D’’. We took out 16.202 acres for residence lots and roadway. Q. You placed a 12% cents per square foot value on each of the 77 lots and then you capital- ized that at 4%, is that it? A. Yes sir. Q. That is your valuation? A. Yes sir. [330] Q. How about the 41.82 acres, you cut that into how many lots? A. We didn’t cut that into lots; there was 41.892 acres. Q. How did you get your valuation on that? A. We figured that some of that area could be rented anywhere from $30.00 to $40.00 an acre. Q. Which and where? In that 41.892 acres. Where, what portion? A. In Lot “D” What part of Lot ““D’’? All over that area. $30.00 to $40.00 an acre? A. Yes. So you cut it into how many plots? We took ten acres at $35.00, ten acres at 2eoroer vs. John Waterhouse et al. (Testimony of Wilfred E. Harrison.) Q. Were these in one-acre tracts? A. No; we took them as 10-acre tracts. Q. 10-acre tracts? A. Yes. We took the balance of 21.892 acres at $30.00. Q. I don’t follow you yet,—you cut it up into 10-acre tracts or ten 1-acre tracts? A. Two 10-aecre parcels we gave $35.00 and $40 respectively to, and the balance 21.892 acres we gave a figure of $30.00 per acre. Q. But first you eut them up then you figured | out the rental at 5%, is that it? A. No, we cut them up and we put a rental on them, $30.00 per acre for the 21.892 acre tract, $35.00 and $40.00 on the balance. Q. That was on the basis of 5% ? [331] A. No. Q. What capitalization did you use? A. That gave us a valuation of rental, annual rental of $1,406.76. Q. What rate did you employ in order to get your fair market value ? A. Divide that by the number of acres which gave us an average per acre of $33.58. Q. Capitalized at? A. We capitalized that at 5%. Q. That is the value you thought the fair mar- ket value to which you have just testified ? A. Yes sir. Q. Let’s pass to the other side of the road—— 214 United States of America (Testimony of Wilfred E. Harrison.) Juror: Mr. Courtney, will you make it plain how he arrived at the value of the residence lots; he has worked that out at 121% cents and then the capitalization at the—— Mr. Courtney: Ask the witness. Juror: You capitalized the 12% cents? Witness: We capitalized this rental on the small farm areas. Juror: How about the residences? Witness: We gave 121% cents a foot, for that. Juror: You didn’t capitalize that? Witness: No. Q. (By Mr. Courtney): Where did the first 4% rate come in? A. We worked another scheme, a_ leasehold scheme on the same valuations. Q. Which valuation are you testifying about? [332] A. I am testifying about the fee. Q. Fee value? A. Yes. Q. Do you know whether these properties could be sold in fee? A. I don’t know whether the trust document would allow that. Q. In 1940? A. I don’t know. Q. How about the property on the lower side of the road, let’s take up 434, that, is the 77-acre tract, Mr. Harrison? A. 17.278 acres. Q. Let's finish with Civil 436, that has 100 some vs. John Waterhouse et al. 215 (Testimony of Wilfred E. Harrison.) odd acres outline in yellow, did you distinguish between those cases? A. I took the whole area as one area, 192.956 acres. Q. Did you reflect any different value in the lower frontage in that, parcel? A. No, we didn’t. Q. How did you arrive at $182,058.00 for that parcel, did you do it the same way as in the other instance ? A. We put 20-cents on the frontage on that land. Q. 20-cents up here? A. Yes sir. Q. I thought you told me you didn’t apportion the value on the frontage? = A. On Lot 0-3-A. Q. I am talking about Lot C-3-A, do you want to come to the board, Mr. Harrison? A. I know what you mean,—I took a depth of 150 feet [333] off the entire frontage for residence lots. Q. All the way down here (indicating a point on Government’s Exhibit ‘‘A’’), Yes all the way down. You took a depth of 150 feet? Yes. And how many lots did you cut up? That was cut up into 72 lots, 71 saleable and one we reserved as an entry lot. Q. How much did you value each lot? A. At 20-cents a square foot. POPS Pp 216 United States of America (Testimony of Wilfred E. Harrison.) Q. From that did you arrive at your total value ? A. Then we took—— Q. Did you take your total value by the multi- plication method for the residence lots? A. Yes. Q. Did you use any rate of capitalization? A. No. Q. You didn’t? A. No. Q. Where did this 4% come in that you testified to on direct examination, on direct examination you testified that in arriving at the value you capitalized the residence lots at 4% and capitalized the other lots at 5%, where did that come in, that 4% . capitalization ? A. I worked this appraisal out on the basis of fee sale plan and also on the basis if a person leased all the lands. Q. Now, what value are you testifying to in this court, are you testifying to the capitalized value or are you testifynig to the value of an as- sumed subdivision? [334] A. I am testifying to the fair market value. Q. Of an assumed subdivision, isn’t that right? A. What a willing buyer could do with that land. Q. You assumed that it would have to be cut up 150 feet deep and the length of the plot, didn’t you? A. Yes. Q. And that would give you a certain number of lots, isn’t that right ? A. Yes. vs. John Waterhouse et al. 217 (Testimony of Wilfred E. Harrison.) Q. Then you multiplied that and got your value, isn’t that right? A. Yes. Q. How about the back property ? A. We reapportioned there,—it consisted of ap- proximately 175 acres. Q. How did you arrive on your value at that? A. We figured that that land was useable there the same as in Lot ‘‘D’’, the fair rental would be $33.58, and, therefore, the average per acre would be $671.60. Q. What rate of capitalization did you base on that assumed rental ? A. 5%. Q. And that is the value to which you are tes- tifying here? A. Yes. Q. There is no doubt about that in your opinion? A. No. Q. You didn’t misunderstand my questions? A. I don’t think I did. Q. Let’s take Case 434, you placed a fair mar- ket value on that of $63,772.35? [335] A. Yes sir. ! Q. Did you reflect any different value in the frontage on that 77-acre tract? Yes I took—— Tell me what method you used on that? The same as the other two lots. Just exactly the same? A. The same. You eut up the frontage into lots? Yes. A. Q. A. Q. Q. A. 218 United States of America (Testimony of Wilfred E. Harrison.) Q. 150 feet deep? A. Yes. Q. How many lots? A. 22 lots. Q. Each lot worth how much? A. $1800.00 per lot. Q. And you multiplied that by the number of lots? A. Yes. Q. Did you use any rate of capitalization on that ? A. No sir. Q. You did use a rate of capitalization on the rear portion? A. Yes I did. Q. That is the fair market value to which you are testifying here today? A. It is. 'Q. Computed in that way? A. Yes sir. Q. Now, Mr. Harrison, for how many years do you think a purchaser would have to be interested in this property before he had it developed,—how many years would it take [336] to develop these 300-acres ? A. Before he sold them off? Q. Yes? A. I would say five or six years. Q. Part of the property was not available until 1943, the lower part of this property, the lease doesn’t expire until December 31, 1942, does it? A. December 31, 1943. Q. 19437 A. I believe so. Q. I don’t suppose one year would make very much difference when you have to figure on a 10- year program, isn’t that right? vs. John Waterhouse et al. (Testimony of Wilfred E. Harrison.) A. (No answer by the witness.) Q. He would have to hold it for three years and then take a chance on selling it for seven years in the future, is that right? A. I understand that Lot “‘D’’—— Q. Iam talking about the property on the lower side of the road, this property here (indicating on Government’s Exhibit “‘A’’), all this,—it would take about seven years to dispose of that? A. Yes. Q. That he was able to sell it? A. Less than that. Q. Seven years? A. I said about six years. Q. How about this property at the top (indicat- ing an area on Government’s Exhibit ‘A’’), how many years would it take to dispose of that? [337] A. That I believe could be disposed of within a year and a half. Q. Now, Mr. Harrison, you are an employee of the Bishop—— A. Trust Company. Mr. Courtney: 1 think that is all with the wit- ness. I move to strike the testimony, all of it, of this witness on the ground that it is wholly in- competent, nothing to establish the fair market value, based on a false premise, has no relevancy or materiality in this case. The Court: Overruled. Mr. Courtney: That is all. 220 United States of America (Testimony of Wilfred E. Harrison.) Redirect Examination Questions by Judge Robertson: Q. When you speak of your ideas as to the dif- ferentiation that might be made in each of these areas with respect to residence lots and small farm areas, is that what you have in mind a willing buyer might have in mind in making this offer? A. I do. Q. You realize the willing buyer might have plans of his own differing somewhat from what you had in mind? A. Yes sir. Q. In placing your market value on these various areas, do you make allowance for the fact that the willing buyer might possibly have a better method than you have in mind? Mr, Courtney: Objected to as incompetent, ir- relevant and immaterial, leading and suggestive, an attempt to impeach his own witness; the witness has testified as to his values. Judge Robertson: Counsel is doing some wishful thinking. The Court: The question is leading, sustained. [338] Q. In giving your opinion as to what a willing buyer would have paid to a willing seller for this property last November do you make any allowance for the possibility that the willing buyer might have some plan of subdivision differing from the plan you had in mind? vs. John Waterhouse et al. (Testimony of Wilfred E. Harrison.) Mr. Courtney: Same objection. The Court: Overruled. A. Yes, we in all cases in determining our value, my value, I took 20% as a possible profit for the buyer. Q. By that you mean that a willing buyer could have paid these values that you have testified to and made a profit of 20% over and above that, is that it? A. He would have a reduction of 20% over the value which I first arrived at. Q. Reduction of what? A. If the willing buyer purchased the property at the figure of $63,449.43 and developed ‘t along the lines I have placed here he would net approxi- mately 16%. Over and above his investment ? Over and above his investment. That assumes that he subdivided and sold? . Yes sir. Q. On the other hand, if the willing buyer had in mind a subdivision for leasehold, then what? A. That would come to about the same figure. Q. Come to about the same figure using your 5% rate of capitalization ? A. Yes sir. Q. On your cross-examination with reference to the gore lot, unless my hearing is defective, you used a figure of $88,223.00,—did I hear you cor- rectly or not? [339] A. That was on the gore lot. >rOore A eweee 222 United States of America (Testimony of Wilfred E. Harrison.) Q. So I understood. A. That was the value saleable in lots at 12% cents a square foot, total $88,223.12. Q. By that I understand you to mean if the willing buyer last November had acquired Lot ‘‘D” for $63,449.00 he could have disposed of it in a year and a half for $88,223.00? A. No sir. Q. What is it then? A. You mean the whole of Lot ‘‘D’’? Q. Lot “‘D” comprising an area of 614% acres, unless I heard you wrong you applied a figure of $88,223.00 to that area, is that right? A. No sir, that was to the )and saleable in lots, the 77 acres, I did not include the small farm lands. Q. 177 acres in which area? A. In Lot “D”. Q. Do you mean to say that the willing buyer after paying for that $63,000 could have sold the 77 lots for $88,223.00? A. Yes sir. Q. He would be making considerably more than 16% profit on his investment, wouldn’t he? A. He would have expenses to put that sub- division on. Q. You contemplate that in order to make that profit on those 77 lots he would spend some money for a roadway ? A. Roadway and development. Judge Robertson: That is all. vs. John Waterhouse et al. 223 (Testimony of Wilfred E. Harrison.) Recross Examination Questions by Mr. Courtney : Q. Mr. Harrison, do you want this court and jury to understand that a willing buyer, such as you conjured, would spend $182,000 on the lower end of this property, risk it now, as of November 1940, with possible sales extending over a period of seven years and only expect to realize 16%. Judge Robertson: We object to the question, it is misleading and involves a misconstruction of the witness’ testimony. Q. Do you want this court and jury to under- stanu—— Judge Robertson: I am waiting for a ruling, Mr. Courtney ? The Court: I have taken it that counsel has withdrawn the question and asking another. Mr. Courtney: I am asking another question. Judge Robertson: Counsel doesn’t keep us posted —am I to understand that the objectionable ques- tion is withdrawn ? Mr. Courtney: The question is withdrawn. Judge Robertson: You may use your own ad- jective, Mr. Courtney. Q. Do you want this court and jury to under- stand that after paying the prices, which you say are the fair market values of these properties, which you have testified to here, that you have 224 United States of America (Testimony of Wilfred E. Harrison.) limited the profit which could ultimately be derived from their sale to from 1644% to 20%? I am talking about Lot ‘‘D”’. I am going to take Lot “D’’? Yes I do. You limit that to 16% to 20%? Yes. [341] What about the others? Lot C-3-A and C-3-B, that is the 192-acre sienibi on the figure of $182,058, I figured that the buyer could make a profit of 2244%. Q. And that is in seven years? A. Yes sir. Q. $182,000 worth of property held seven years, —what about the other lot, 434? A. 22% profit. Q. Don’t you know what the experience of real estate subdividers is, and the price they can afford to pay for property for subdivision purposes, what percentage of the final value or prospective sales, in the universal experience of the profession? A. That varies,—it would run anywhere from 15% to 50%. Q. What about the experience right here in the City, wha* about the experience of St. Louis Heights, what about the experience of the Magoon subdivision,—what percentage ought to be employed in those cases,—what about Mokapu subdivision? Judge Robertson: That is objected to, Your Honor, as incompetent, irrelevant and immaterial, bPOor>OoPOoD vs. John Waterhouse et al. 225 (Testimony of Wilfred E. Harrison.) having no bearing on any of the issues involved in this case, what the profits or losses may have been upon some other subdivision. Q. Do you know—— Judge Robertson: Let’s have a ruling. Mr. Courtney: Withdraw the question. The Court: There are so many questions in- volved —— Mr. Courtney: I have withdrawn the question. Q. Do you know anything about the experience at Mokapu, St. Louis Heights and on the Magoon subdivision? [342] Judge Robertson: Objected to on the grounds already stated that the profits and losses on some other subdivision made at some indefinite time can have no possible bearing on the value of the land at Moanalua that they have condemned and taken in these proceedings. The Court: Sustained. Q. How many acres of land, do you know of, Mr. Harrison, on the mauka side of the property con- demned, owned by the Damon Estate in Moanalua, occupied by cane fields and otherwise, are available ‘for development ? A. I don’t know the exact area. ®. Do you know what would happen to the market if those lands were opened up for develop- ment, all of them? A. I knew they would not be. 226 United States of America (Testimony of Wilfred E. Harrison.) Q. You assumed they would not be? A. No, I found that out from the trustees. Q. Oh, you took it up with the trustees and they told you it would not be opened up? A. They did. Q. You were safe in saying this property would have no competition? A. No, but because they are conservative, used to put on a certain area at one time and then later on possibly put on another. Q. Based on what the prospects would be? A. (No answer by the witness.) Q. What would happen to your subdivision if the 2%4 mile frontage were opened up for develop- ment ? : A. No one would put on such a subdivision at that time. Q. It is available for subdivision, isn’t it? A. I don’t know what idea the trustees have. [343] Q. I am not asking you what ideas the trustees have, I am asking you to tell us from what you have seen, what you know, if that 24% or 3-mile frontage on the mauka side occupied by the Hono- lulu Plantation Company isn’t available for sub- division ? A. I don’t know. Q. You wouldn’t see that as you went by? A. Yes. Q. You had some conversation with the trustees vs. John Waterhouse et al. 227 (Testimony of Wilfred E. Harrison.) with reference to whether or not this other area on the mauka side of the road was available? A. I had. Q. Having it from their answer that they would not subdivide that other area you proceeded to place your value on orooreo 262 United States of America (Testimony of Ralph A. Kearns.) A. There was remaining 41.892 acres of truck farming land at a value of $671.60 per acre, or .01541 per square foot. Q. You arrived at your valuation in this case by capitalizing what you considered the possible lease income value of this property, did you not? A. Yes. Q. What rate did you use? A. 5%. Q. Throughout the property? A. 5% for all of the so-called truck farming Q. That is you subdivided the lots, added them up? A. Yes. Q. And got a value on that and then you turned around and you capitalized it at 5%, the remaining portion ? A. The agricultural or truck farming land we capitalized at 5%. Q. And that applied to both of these cases, is that right? A. What do you mean by both of these cases? Q. All the land? [375] A. All the land that we regarded as truck farming land the same thing applied. Mr. Courtney: I think that is all. The Govern- ment will move to strike the testimony of this wit- ness upon the ground that it is wholly incompetent, based upon a false premise and is not a test of the market value of this property. The Court: Overruled. Recess until called. (Recess—10 :28 a.m. to 10:46 a. m.) vs. John Waterhouse et al. 263 (Testimony of Ralph A. Kearns.) Judge Robertson: Mr. Kearns will you resume the stand, please. (Witness does so.) Redirect Examination Questions by Judge Robertson : Q. Mr. Kearns, you have stated upon cros ex- amination that the willing buyer, at the value you have stated, could make from 16% to 22% on his investment, do you apply one rate of profit to one section and another rate of profit to another section, or do you say on the whole investment a willing buyer could realize between 16% and 22%? A. Yes. Q. Which? A. On the figures shown that for Lot ‘““D’’ by itself, if it should be offered for sale based on the figures that I have indicated, a buyer would make approximately 16%, but when I make that state- ment I would like, if I am permitted to do so, add something to it, and that is this: A buyer of this property in November, 1946 would gain pos- session of it, one portion of it, in April of this year. [376] The Court: This year? Witness: This year. Lot “‘D’’, and the balance of the land the lease expires, as I understand it, in December, 1943. If this statement be correct I would like to say that in my opinion that by the time the man actually received these lands and com- 264 United States of America (Testimony of Ralph A. Kearns.) menced to operate, particularly with reference to Lot “‘D”’ and Lot C-3-A, it is very well within the realm of possibility that he might make consider- ably more by reason of the advance in value of the whole parcel. Q. In the meantime? A. In the meantime. Q. Would that factor enter into the mind of the willing buyer as of November, 1940? A. If he were a man of this community it would. Q. In other words, if he was a man who knew what he was doing? Mr. Courtney: That is objected to as leading and suggestive, I don’t see that any such conclusion can be drawn from the testimony of this witness. Q. My question started out, Mr. Kearns, when asking you your reason for stating two rates of profit, one at 16% and the other at 22%, my ques- tion was whether the 16% applied to some particu- lar portion of the area and the 22% profit to an- other portion of the area, or whether by saying 16% to 22% you mean that the willing buyer would make between 16% and 22% on his investment, which is it? A. Lot “D” of this area, under the figures indi- cated by me, would make approximately 16%. Q. You have already stated that, where does the buyer’s profit of 22% come in? [377] A. Under the figures stated by me for Lot C-3-A, ete., if the buyer paid $182,058 plus the vs. John Waterhouse et al. 265 (Testimony of Ralph A. Kearns.) expenses as set forth and sells for $248.030, he realizes approximately 22.47%. Q. I ask you to repeat what portion of the area that refers tof A. The big lot, 192 plus acres. Q. And on the 77-acre area, what would your figure for profit on that be? A. About 20%. Q. You have stated on your cross examination that the willing buyer would be able to realize on his whole purchase of the 331 acres in two or three years after the expiration of the lease in 1943, have you? A. I stated that in my opinion the whole thing of 331 plus acres would be disposed of between two and three years after the expiration of the lease which terminates in December, 1943, and if I re- member correctly I said as to Lot “‘D’’, which he would get in April of this year, that it was my opinion that he would be rid of that within eighteen months. I think that is what I testified. Q. Now ther, have you taken those facts into consideration in giving these values which you have stated a willing buyer would have been prepared to pay for these areas? A. Yes I think so. Q. Do you understand that until the terraina- tion of the lease in 1943 the willing buyer having purchased in November, 1940, would receive the rent that that lease calls for? A. Yes. Q. Have you taken that into consideration? ee 266 United States of America (Testimony of Ralph A. Kearns.) A. Yes sir. [378] Q. You have stated on your cross examination that the trustees showed you a plan of a proposed subdivision, what area did that have reference to? A. As far as I remember it took in the lands about which we have been discussing and also land on the mauka side of the road. Q. And when you say land on the mauka side of the road is it that you refer to? A. No. Q. Did this proposed plan that was shown to you cover also Lot “‘D’’? A. Yes. Q. On cross examination you also referred to these varying opinions that you mentioned that different people have as to the ratio of value be- tween subdivided land and raw land, did you not? A. Well, what I intended to convey was that during the extent of my experience in real estate matters in this community I have had and heard many discussions by real estate men and others as to what the gross realization should be from the land when subdivided as against what yo [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385610_0080%3A1. Public record. Not legal advice.