425 Pa. 36 | Pa. | 1967
Opinion by
This is an appeal by the condemning authority from a judgment entered on a verdict of $246,000 in favor of the condemnee in an eminent domain case. Pursuant to the Eminent Domain Code, Act of June 22, 1964, P.L. 84, §101 et seq., 26 P.S. §1-101 et seq. (Supp. 1966), the Redevelopment Authority of the City of Lancaster (condemnor) filed in the Court of Common Pleas of Lancaster County a declaration of taking of certain property belonging to the condemnee. At the time of the condemnation, the property consisted of a
Condemnor has raised several meritorious issues in pursuit of a new trial. On direct examination, condemnee’s expert valuation witnesses testified that the property was capable of being leased by the owner for a rental of twenty or twenty-five percent of the gross theater admission receipts. Condemnor sought to cross-examine these witnesses as to their computations in arriving at their opinions, but upon objection, was not permitted so to do. Section 705 of the Eminent Domain Code provides in relevant part: “Whether at the hearing before the viewers, or at the trial in court on appeal: (1) A qualified valuation expert may, on direct or cross-examination, state any or all facts and data which he considered in arriving at his opinion, whether or not he has personal knowledge thereof, and his statement of such facts and data and the sources of his information shall be subject to impeachment and rebuttal. (2) A qualified valuation expert may testify on direct or cross-examination in detail as to the valuation of the property on a comparable market value, reproduction cost or capitalization basis, which testimony may include but shall not be limited to the following: ... (iii) The capitalization of the net rental or reasonable net rental value of the condemned property, including reasonable net rental values customarily determined by a percentage or other measurable portion of gross sales or gross income of a business which may
In order to test the credibility of the expert witnesses for condemnee, as well as the correctness of their opinions that a reasonable net rental value of the property would be twenty percent (according to one expert) or twenty-five percent (according to another expert) of the gross receipts of the theater, condemnor sought to establish, by way of cross-examination, that a financial statement used by the witnesses in their computations indicated that the net profit of the theater to the owner-operator was substantially less than the dollar figures equivalent to the percentages of gross receipts testified to by condemnee’s experts as the fair rental value of the property. Stated succinctly, all the condemnor sought to show by such cross-examination was that a tenant who leased the property at twenty or twenty-five percent of the gross receipts would pay more in rent than he derived as income on the property before the charge for rent. The comment to §705(2) (ni) states that the income or profits of any business conducted on the condemned property may not be capitalized to show the value of the property. But this does not prevent the use of such data to discredit the testimony of an expert witness who has presented to the finder of fact an entirely unrealistic estimation of fair market value. Accordingly, we conclude that the court below erred in restricting condemnor’s cross-examination with respect thereto.
Condemnor next complains of the trial court’s refusal to allow its expert valuation witnesses to testify as to the facts and data which they considered in arriving at their opinion of fair market value. In particular, condemnor argues that its expert witnesses
Condemnor further objects to two typewritten memoranda which the trial court permitted to be sent out with the jury over its objections: (1) showing the gross receipts of the property over the previous five-year period, which memorandum had been admitted in evidence as an exhibit; (2) setting forth a summary of the figures of fair market valuation of each witness, which memorandum had been prepared by the court but not admitted in evidence. The first memorandum should not have been admitted in evidence since it was highly prejudicial in that it emphasized to an extreme degree the large sum of gross receipts realized by condemnee from the operations of its property without any indication of the expenses incurred in the collection of that sum. Such a presentation of the economic status of the property, as we have already indicated, is not that contemplated by the Code. The second memorandum was, likewise, improperly submitted to the jury by the trial judge. As a general rule, the writing of memoranda by jurors is reversible error in Pennsylvania. Thornton v. Weaber, 380 Pa. 590, 112 A. 2d 344 (1955). Where, however, the notes are not taken into the jury room and no prejudice is shown, the mere taking of notes by a juror does not constitute grounds
Judgment reversed and new trial granted.
In a situation where income is derived from the commercial use of property, the amount of profit from the business depends to such an overwhelming extent “upon the capital employed and the fortune, skill and good management with which the business is conducted, that it furnishes no test of value of the property.” Sackman, Economic Approach to Valuation, 34 Appraisal Journal 511, 515 (1966), Utah Law Review (1966).