Court Opinion

ID: 9763979
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:05:54.836087+00
Date Added: 2024-06-11T07:29:52.040063
License: Public Domain

Dissenting Opinion by
Mr. Justice Eagen :
The condemnee involved herein is an excellent public utility. Its officers and directors are the highest *86type of individuals who continually strive to serve the public in the best possible manner. Nevertheless, the majority opinion in this case may result in giving the utility a windfall for which there is no legal precedent. I therefore must dissent.
It is well established that the owner of land taken through eminent domain is entitled to recover the difference between - the market value of the whole tract before the taking, unaffected by the taking, and the market value of the land remaining after the taking, as affected by the taking. Market value is the price that a willing buyer with general needs would pay, or that a willing seller with general needs would accept for the property. Although a buyer with an extraordinary need might pay more than the market value, and although the owner thereof, because of its unique value to him, would not have sold for the same amount as an ordinary owner, the value for the purpose of justly compensating the condemnee for the taking is not the value which is placed thereon by these unique individuals, but rather the price that the property would bring at a sale in the open market. In short, the measure of relief in a condemnation case is not the “value” to the taker or to the owner, but the value to the average buyer in the market place.
Uses other than those to which the condemned property was devoted at the time of condemnation are relevant because they influence the market price of the property. See Sav. & Trust Co. v. Pa. R.R. Co., 229 Pa. 484, 488, 78 A. 1039, 1039-1040 (1911); Boom Co. v. Patterson, 98 U.S. 403 (1878). For example, the market value of a private home in a thriving commercial district reflects the possibility of converting it from residential to commercial use. Since the owner prior to condemnation might have sold the house at a price representing its value for commercial use, he is permitted to show that use so that he will be indemnified *87not solely for the loss of residential property, but also for the loss of a saleable commercial site. The adaptability of land io a particular use is not relevant, however, unless it appeals to the general or average buyer and thereby affects the market price of the land. Sgarlat Estate v. Commonwealth, 398 Pa. 406, 409, 158 A. 2d 541, 543 (1960) ; Graham & Co., Inc. v. Pa. Tpk. Comm., 347 Pa. 622, 632-33, 33 A. 2d 22, 27-28 (1943); Sav. & Trust Co. v. Pa. R.R. Co., supra. We have labeled as “speculative” a use for which there is no general demand. Chiorazzi v. Commonwealth, 411 Pa. 397, 192 A. 2d 400 (1963) ; Ogden v. Penna. R.R. Co., 229 Pa. 378, 78 A. 929 (1911). Until today this has been the law of Pennsylvania.
Since the franchised water utility in this case has a monopoly on public water service, the adaptability of the condemned site to public reservoir use does not affect the price that an average buyer will pay for the site. The market value of the site depends on its adaptability to commercial, residential and recreational use. Consequently, the lower court properly disregarded the adaptability of the site to public reservoir use and based its assessment of damages on the value of the property for commercial, residential and recreational uses.
The majority here, however, would allow public reservoir use to be the “highest and best” use of the property in spite of the fact that the adaptability of the condemned site to this use is not an element of its market value. How, then, is a court to decide that, at the particular time and place involved in this case, a reservoir was more valuable than a housing project, a shopping center, or an alternative public use? What criteria can be used to judge whether a particular use is “highest and best” when its value compared to alternative uses is not appraised by the market? Where a decision on what is the “highest and best” use is un*88guided by the market, that decision becomes as completely subjective as the concept of value itself. See Kimball Laundry Co. v. United States, 338 U.S. 1, 5-6 (1949).
The majority’s endorsement of replacement or restoration damages if a reservoir was needed at the time of condemnation and is determined to be the “highest and best” use of the property, is likewise an unreasoned and a dangerous departure from well settled law. The majority recognizes that the measure of relief in condemnation cases has consistently been based upon market value. Moreover, it concedes, as it must, that if the situation were reversed and the same land was condemned by the water utility, the private owner or cohdemnee could not collect on the basis that the land was adaptable to reservoir use unless he could also establish that a demand for private reservoirs exists to give the land market value for that use.1 Why, then, is a different rule applied in this ease?
The only reason suggested by the majority is that the utility has a duty to supply adequate water service in the area. It seems apparent, however, that the duty is part of the price that the utility pays for its exclusive franchise. It is a duty assumed in return for a monopoly on public water services at rates designed to give the utility a fair return on its investment. Why, then, should a public utility be entitled to more on condemnation than anyone else because of a duty it is otherwise paid to perform.2
*89Let there be no mistake: it is the utility and its owners not the utility’s customers, who would benefit from a payment in excess of market value. Water rates will be no lower because the utility receives a special benefit and will be no higher if it does not. Assuming that the condemned site is considered in rate-making,3 the gain resulting from its condemnation is a nonrecurring income item that will not be included in the company’s “operating revenues,” used in rate-making by the P.U.C. to calculate the utility’s return on its investment. If the company buys a substitute site or restores the partly condemned site to its original capacity, its investment, used in rate-making by the P.U.C. to determine what revenue is reasonable, will be no less because it is traceable to condemnation damages. See Burgettstown v. West Penn Water Co., 29 P.U.C. 410 (1951).
Eminent domain cannot be exercised except upon condition that just compensation be paid to the owner. The compensation paid, however, must be just not only to the person whose property is taken but also to the taker (which generally is the public) who must pay for it. Garrison v. City of New York, 88 U.S. (21 Wall.) 196 (1874). This is the reason for the adoption of the market-value measure of condemnation damages. As this Court explained many years ago in Searle v. The Lackawanna and Bloomsburg Railroad Company, 33 Pa. 57, 63-64 (1859) : “When the state takes private property for public use or authorizes it *90to be taken, this market value is all that it pays for it. This is the necessary measure, in order to avoid the favouritism, or oppression that would attend any other measure. Every man holds his property subject to this eminent domain, dominion, or ownership of the whole society. Re must give it up when society needs it, on being paid its value according to the estimate put on it in the market, that is, by common' consent.” (Emphasis supplied.) See also, Kimball Laundry v. United States, supra.
I see no legal or moral justification for treating this case as an exception from the law as it has been formulated and followed for over a century. Since the majority opinion offers no reasons for its departure from well-settled law, it appears to me to invite favoritism toward utility owners, with a resulting unjust burden on those who pay condemnation damages.
I dissent.

 See Boom Co. v. Patterson, supra. Compare Bitting v. Philadelphia Suburban Water Co., 73 Montg. Co. L. Rep. 235 (1956), with Gearhart v. Clear Spring Water Co., 202 Pa. 292, 51 A. 891 (1902). If anything above market value were awarded on the condemnation of a public reservoir site, the owner-condemnee would be taking advantage of the public necessity for water services.

 in this case the cost of restoring or replacing the site is greatly in excess of the market value of the property taken. To *89be just compensation, restoration or replacement cost would always hare to be more than the market value of the property taken. Anything less than market value would not indemnify the utility for loss caused by the condemnation because prior to condemnation the utility is able to sell the property at the market price. See United States v. Miller, 317 U.S. 369, 373-74 (1943).

 If the site is not part of the “rate base,” any gain derived from it certainly will not affect rates.