¶1(dissenting):
¶2I respectfully dissent. I believe that the trial court erred in disregarding the value of the property as established in the condemnation proceeding.
¶3The function of a condemnation proceeding is to determine the total compensation required to be paid for the property taken. City of Dothan v. Wilkes, 269 Ala. 444, 114 So.2d 237 (1959). The compensation is to be equivalent to the full value of the property which is commonly expressed as its “fair market value.” 4 Nichols, The Law of Eminent Domain § 12.1 (3d ed. 1977). Where there are different interests in the property, all parties are, of course, entitled to compensation; however, the proper procedure is to ascertain the total compensation, or, value of the property, as if the property belonged to one person and then allocate this value among the respective parties in interest. City of Dothan v. Wilkes, supra. Therefore, once the value of the property has been established, all that remains is to apportion the award to the interested parties.
¶4In the present case, the value of the property was fixed in a consent condemnation award where all parties in interest were represented. After entering the order for the condemnation award, the trial court expressly retained jurisdiction of the case for the sole purpose of allocating the award between the various parties in interest.
¶5The majority says that the parties are not “bound to determine the fair value of the lessee’s interest by a fixed percentage of this amount,” that is, the fair market value of the property. However, experts for both the lessors and lessee testified that commercial property should yield 10 per cent of its market value as its annual rental or economic rent. Lessors’ expert, Mr. Haynes, testified as follows:
Q. All right. So, if I had a $400,000.00 piece of property and I went to you and I said, “Mr. Haynes, I want you to handle this for me and I want you to get as much as you can in handling it,” you would do a decent job for me and try to get me ten or eleven percent of that $400,000.00 on an annual basis?
A. That’s correct, or otherwise I wouldn’t take the listing.
Q. So, that if you assume that this property — I mean, forget about your predisposition about the value, but if you assumed that this property is worth $400,000.00, let’s just assume that it is fixed and X’d and stoned and is worth $400,000.00 and everybody agrees, everybody in the market place, everybody in the whole wide world agrees that it is worth $400,000.00, you would expect that property if you were handling it to be able to fix a lease on it from $40,000.00 to $44,000.00 a year, wouldn’t you?
A. If it had a $400,000.00 value.
Q. If it had a $400,000.00 value?
A. That’s right.
¶6Mr. McGehee, another expert for lessors, testified similarly:
Q. What do you — if you are going to list some property for me, what kind of yield would you expect on a rental basis?
A. I would say today more people are trying to — more investors are trying to get a safer — safer tenant, safer *297income stream, and maybe coming down from — there was a period three or four years ago that people talked in the 12 to 15 percent return range, and I would say now they are — the last few years they have been more in the 9, 10 and 11 percent return range, if their — if they have a good sound lease and substantial tenant.
Q. So, you would expect commercial property back in ’75 — -in 76 in the Birmingham area to yield approximately, in terms of annual rent, 10 percent of its value?
A. I would say that would be a good figure to hand your hat on.
¶7The trial court, in its final decree, determined that the economic rent or the fair rental value was $20,000. By so computing this fair rental value or economic rent, it necessarily follows that the fair market value of the property was $200,000, not $400,-000 as fixed by the condemnation award.
¶8Lessors maintained that the fair market value of the property condemned was in fact worth only $200,000, not $400,000.
¶9Accordingly, the trial court disregarded the amount of the condemnation award as to the fair market value of the property condemned. I would hold, that absent fraud or collusion, the award fixed in a condemnation proceeding is determinative as to the fair market value of the property taken and should be utilized to apportion the' award between the various parties in interest, i. e., between the lessor and the lessee.
¶10It is my opinion that the majority erred when it stated:
It is true, as Shell points out, that the trial court, in arriving at the fair market value of the unexpired portion of the lease, accepted Shell’s argument that this amount could be determined by calculating 10% of the total value of the property, but rejected its contention that the fair market value of the property for this purpose was the amount of its condemnation award. The trial court arrived at the $20,000 per annum figure by taking 10% of $200,000, not $400,000. . . .
We agree with Shell that where all of the parties agree to the condemnation award as they did here, they are bound to accept that figure as the value of the property in determining the value of the unexpired lease term. They are not, however, bound to determine the fair value of the lessee’s interest by a fixed percentage of this amount.
¶11But it was the lessors’ own witnesses who testified that the fair rate of return was about 10 per cent of the value of property at this time in Birmingham.
¶12Accordingly, I would reverse and remand this case to the trial court for an appropriate decree apportioning the award between the lessors and the lessee consistent with this opinion.
¶13(dissenting).
¶14I respectfully dissent. I believe that the amount apportioned to the lessee, Shell Oil Company, was inadequate, and that it does not fairly represent the difference between the fair and reasonable market value of the unexpired portion of the lease and the amount of rent which Shell would have had to pay during the unexpired portion of the lease, as of the time of the taking.
¶15It is undisputed that the lessee was entitled to remove the building within sixty days after the expiration of the lease. Therefore, the lessee should be entitled to be compensated for the value of this building taken by the condemning authority. U. S. v. Seagren, 60 App.D.C. 183, 50 F.2d 333 (1931).
“If, as against the lessor, the lessee has the right, prior to or upon the expiration of his term, to remove fixtures, structures, or other improvements installed or erected by him upon the property taken, he is, generally speaking, entitled to be compensated for such improvements.” 27 Am.Jur.2d Eminent Domain § 292, p. 100 (1966). Accord., Annot. 3 ALR 2d 286 (1949); 4 Nichols, Eminent Domain, § 13.121[1] (1977).
¶16By taking the building, the condemning authority has abridged the right of the les*298see Shell to remove the building at any time; or upon the expiration of the lease, to sell it to the fee owner or new lessee. Thus, it is the lessee, not the lessor, who has been damaged and who should be awarded the value of the building. The record shows that the building was valued at $64,000 and this amount was included in the $400,000 consent award. Obviously, the lessee is entitled to at least the value of the building which was included in the condemnation award.
¶17In this case, the trial court placed the fair market value of the lessee’s interest at $20,-000 (including the value of the building). The majority’s attempt to uphold the inadequacy of the award to the lessee is bottomed on the theory that the trial judge came to a correct conclusion by using the wrong method. It is obvious from the trial court’s decree that he allowed the lessees nothing for their building (valued at $64,-000) because “over a period of twenty-seven years, the value of the improvements would be substantially, if not completely, depreciated). He obviously determines that the fair market value of the lease is $20,000. This value for the leasehold, in my opinion, is grossly inadequate. The condemnation award was $400,000. Although this was a consent award, there is $400,000 which the public pays and which stands in the stead of the pi’operty. It is this amount which is to be apportioned, not some theoretical amount. The trial court permitted experts to testify at the apportionment hearing that the fair market value of the property was between $180,000 and $240,000. This was completely improper, in my opinion. The public is paying $400,000 for the property. For the purposes of apportionment between lessor and lessee, the actual award, whether by a jury verdict or by consent, is the amount to be apportioned, not some theoretical amount. As was said in City of Dothan v. Wilkes, 269 Ala. 444, 114 So.2d 237 (1959):
“In State ex rel. McCaskill v. Hall, 325 Mo. 165, 28 S.W.2d 80, 81, 69 A.L.R. 1256, the Missouri court cited as a general rule the following, which is taken from Lewis on Eminent Domain:
“ ‘ “When there are different interests or estates in the property, the proper course is to ascertain the entire compensation as though the property belonged to one person and then apportion this sum among the different parties according to their respective rights. The value of property can not be enhanced by any distribution of the title or estate among different persons or by any contract arrangements among the owners of different interests. Whatever advantage is secured to one interest must be taken from another, and the sum of all the parts cannot exceed the whole.” 2 Lewis on Eminent Domain (3d Ed.) § 716, p. 1253.’
“The same rule is laid down in 4 Nichols, The Law of Eminent Domain, 3d Ed., § 12.36[1], as follows:
“ ‘It was formerly looked upon as one of the most firmly established principles of law of eminent domain, and it is still the law in the usual case, that when a tract of land is taken by eminent domain, as the land itself is taken by a paramount title rather than the separate estates of different persons having interests in the land, the compensation awarded is for the land itself, and not for the sum of the different interests therein. The duty of the public to make payment for the property which it has taken is not, it- is said, affected by the nature of the title or by the diversity of interests in the property. The public pays what the land is worth, and lets the amount so paid be divided among the various claimants, according to the nature of their respective estates. The rule was expressed in the following language:
“ ‘ “No contracts between the owners of different interests in the land can affect the right of the government to take the land for the public use, or oblige it to pay by way of compensation more than the entire value of the land as a whole.” ’ ” (Emphasis added.)
¶18Can the lessor take the value paid to him by the public and apportion at a different value? I think not. The $400,000 award is *299the value of all the interests in the land, and the apportionment among the intérests should be made on that value, certainly in the absence of fraud or collusion.
¶19The lessee Shell claims that the economic rent should be 10% times the condemnation award. I do not agree with that premise, because that would mean that the lessee would have been entitled to an economic rent of $40,000 per year, and the lessee would get an excessive windfall. Nevertheless, I would say that the economic rent, should never be less than the legal rate of interest times the condemnation award, which would have been $24,000 (6% X $400,000). As I said, the award stands in the stead of the property.
¶20I cite another example that the award to the lessee here was inadequate. In awarding damages, it is proper to consider the highest and best use to which the property could be put. Sayers v. Mobile, 276 Ala. 589, 165 So.2d 371 (1964). Expert testimony established that the highest and best use of this property would be the rental of parking spaces. The experts testified that between 160 and 189 cars could be parked on this area. With the going rate of $15.00 per month, the rental of this property for parking would be worth between $28,800 and $34,020.
¶21I would reverse and remand with instructions to the trial court to make a new determination on value.
¶22I am clear to the conclusion that the lessee was entitled to at least that part of the condemnation award which represented the value of the building, not because the building added to the value of the leasehold, but because the building belonged to the lessee, and its value entered into the value of that which was taken.
¶23ON DENIAL OF REHEARING
¶24(dissenting).
¶25I would grant rehearing to prevent a gross miscarriage of justice.
¶26The property owners state in their brief in opposition to the application for rehearing, in part, as follows:
“The minority opinion stressed the fact that appraisers on both sides stated that an investor in real estate ought to receive a return of ten per cent (10%) on his investment. Both of the real estate appraisers for the Appellee stated, however, that regardless of the amount of the award, in their judgment the County overpaid for the property. Nevertheless, it is common knowledge that a parcel of property, particularly if it is vacant, may be worth a million dollars and at the same time have a nominal rental value because of the lack of improvements. In any event, the Lessee is not entitled to the same measure of damages as the fee owner. The Lessee owns a commodity, namely, a leasehold. The valuation of a leasehold is measured by the reasonable market value of the rent that it produces irrespective of the value of the fee.
“ ‘The term “rental value”, as applied to realty, is but another form of saying the value of the use, and means simply the value of the use of the land’. White Roofing Company v. Wheeler, [39 Ala.App. 662] 106 So.2d 658 (1957).
¶27If his leasehold has not increased in value he is not entitled to anything. He cannot recover for personal property, permanent improvements, nor for loss of business. White Roofing Company v. Wheeler, supra.
¶28“The ten percent (10%) factor used by the witnesses on both sides and also by the Court was merely an interest factor to commute to its present value the total amount of the increase in the rental value over the contract rental for the entire term of the lease including the option periods.”
¶29… *
¶30“Under the terms of the lease Shell was not entitled to be reimbursed out of the award for the improvements. Paragraph 13 of the lease provided as follows:
“ ‘Any automobile service station erected on the premises, together with all pumps, machinery, . . shall be and remain Shell’s property and Shell shall have the right to remove any or all of the same from the premises at any time during, and within sixty (60) days after any ter*300mination of, this lease or any tenancy thereafter.
“ ‘All other buildings, structures and improvements placed upon the leased premises by Shell during the continuance of this lease, of a kind and character normally deemed in law to become a part of the realty . . . shall be and remain the property of Lessor, and upon the expiration or termination of this lease shall be delivered to Lessor, natural wear and tear and damage from fire or other casualty excepted.’
¶31“The removal of the building would have no practical value'to Shell because the expense of removing the building from the leased premises and storing the remnants would be prohibitive and would more than offset any value attributed to the debris. Furthermore, under the law, in view of the lease provision, the building would be deemed personal property and is not recoverable as a permanent fixture. We quote from 36A C.J.S., § 15, FIXTURES, Page 631:
“ ‘Effect as rendering article personalty. The cases are ordinarily to the effect that an article which is annexed by the tenant, subject to a stipulation granting him the right of removal, retains its chattel character, as long as the right of removal continues, as between the parties, although it may lose its chattel character, if so closely annexed as to become an integral part of the land.’
¶32“We cite the following headnote from Powers v. Harris, 68 Ala. 409: ‘A house, fence or any other erection placed upon the land of another with his permission and with the intention that it should be held as property of the builder is personal property and not a fixture.’ For the difference between a chattel and a fixture, see Southern Cotton Oil Company v. Lowery, 163 So. 629, 231 Ala. 119 (1935); also Groves v. Segars, 261 So.2d 389, 288 Ala. 376 (1972).
¶33“Furthermore,
“ ‘The authorities in support of the holding in Wilkes are the same we would cite here and will not be repeated. The trial court erred in failing to sustain objections to the questions relating to personal property in the store building.
“ ‘. -. . There is, in this state, no constitutional provision or statute requiring compensation for damages to personal property in a condemnation of realty. Consequential damages to personal property have never been compensable in Alabama. The usual reason stated for the rule is that personalty which is not affixed to realty can be removed by the owner to another place. See Ridings [Ridings v. State, 16 Ala.App. 467, 79 So. 141], supra.' State v. Woodham [288 Ala. 608, 264 So.2d 166], supra.
¶34“If the building becomes an integral part of the land and loses its chattel character it becomes the property of the Lessor, or if by the provision in the lease, is deemed to be personal property and not a fixture, in either event, the Lessee under the law in Alabama, is not entitled to recover damages therefor out of the award.”
¶35I have quoted from the landowners’ brief because I think it appropriate that bench and bar know exactly what this case holds.
¶36The property owners impliedly admit that witnesses on both sides testified that economic rent should be 10% of the fair market value of the property. They say, however, the county paid too much for the property. My question is: Did the county pay twice what the property was worth? The consent award was $400,000 and the court’s finding of fair market value for the purpose of distribution was $200,000.
¶37Also, the landowners say the building was “personal property” and that the leaseholder, even though having a right to remove, was not entitled to a penny out of the condemnation award. Yet, the landowners got $60,000 for the value of this improvement. The landowners contend in brief that Shell’s building was not worth anything because to remove and store it would be prohibitive. Nevertheless, the landowners were awarded $60,000 for this “personalty”, which they contend belongs to Shell.
¶38At the very least, Shell should be paid $60,000 in addition to the amount originally *301awarded by the trial court under any theory of what would be considered a fair and just apportionment of the award.
¶39TORBERT, C. J., concurs.