Summary
encouraging reconsideration of the prohibition against the presentation of comparable sales evidence on direct examination
Summary of this case from Rausch v. City of MarionOpinion
11-16-1956
COUNTY OF LOS ANGELES, Plaintiff and Respondent, v. L. C. FAUS; Alhambra Bond Company, Trustee; Katharine Graves Armstrong, also known as Katherine Graves Armstrong; Emily W. Bell, as Executrix of the Will of George B. Wardman, deceased; Ruth Bradford; Bank of America National Trust and Savings Association; City of Alhambra; City of Pasadena; M. Richard Cohen; Carey H. Conley; Ethel T. Conley; Corporation of America, Trustee; Irene G. Dalton; Rameau W. Dalton; Mary G. Faus; First Federal Savings and Loan Association; Rufus Freitag, Trustee; Dorothy J. Gillette, also known as Dorothy J. Benson Gillette; Geraldine Virginia Gould; Francis P. Graves; Frances R. Harrison; Samuel L. Harrison; Elizabeth Reynolds Herbert, formerly Frances Elizabeth Reynolds, also known as Elizabeth Reynolds; Investors Savings and Loan Association; Herbert C. Iske; Ruth M. Iske; Alice V. Lewis; Los Angeles Trust & Safe Deposit Company, Trustee; Bernieta M. Maetta; Joseph R. Maetta; Henry Macias; Mary Macias; Charles R. Martin; Willa Mason; Celeste Merlo; Jean E. Naylon; Robert L. Naylon; Bess P. Newport; Charles L. Newport; Corinne McCann Noel; John Nuccio; Robert C. Nuccio; Paul Overton; Pacific Electric Railway Company; Mariquita W. Reeves, as Executrix of the Will of George B. Wardman, deceased; Henry Graham Reynolds; Security-First National Bank of Los Angeles; Shell Oil Company; Everett R. Smith Estate; Maude P. Speer; Mortimer T. Speer; State of California; Alice Graves Stewart; Eva C. Taylor; The Farmers and Merchants National Bank of Los Angeles, Trustee; The Marble Company, formerly The John M. C. Marble Company; The Northwestern Mutual Life Insurance Company; Title Insurance and Trust Company, Trustee; Ann Wagenseller, also known as Ann Dexter Wagenseller, a.k.a. Ann Dexter Wagonseller; Fred Baker Wallace; Walter John Wallace, Jr.; Dorothy M. Morris (sued as Doe One); William R. Morris (sued as Doe Two); Doe Three To Doe One Hundred, Inclusive; All Persons Unknown Claiming Any Titl
Holbrook, Tarr, Carter & O'Nell, W. Sumner Holbrook, Jr., Francis H. O'Neill, Los Angeles, for appellants. Harold W. Kennedy, County Counsel, and Arthur Loveland, Deputy County Counsel, Los Angeles, for respondent.
COUNTY OF LOS ANGELES, Plaintiff and Respondent,
v.
L. C. FAUS; Alhambra Bond Company, Trustee; Katharine Graves Armstrong, also known as Katherine Graves Armstrong; Emily W. Bell, as Executrix of the Will of George B. Wardman, deceased; Ruth Bradford; Bank of America National Trust and Savings Association; City of Alhambra; City of Pasadena; M. Richard Cohen; Carey H. Conley; Ethel T. Conley; Corporation of America, Trustee; Irene G. Dalton; Rameau W. Dalton; Mary G. Faus; First Federal Savings and Loan Association; Rufus Freitag, Trustee; Dorothy J. Gillette, also known as Dorothy J. Benson Gillette; Geraldine Virginia Gould; Francis P. Graves; Frances R. Harrison; Samuel L. Harrison; Elizabeth Reynolds Herbert, formerly Frances Elizabeth Reynolds, also known as Elizabeth Reynolds; Investors Savings and Loan Association; Herbert C. Iske; Ruth M. Iske; Alice V. Lewis; Los Angeles Trust & Safe Deposit Company, Trustee; Bernieta M. Maetta; Joseph R. Maetta; Henry Macias; Mary Macias; Charles R. Martin; Willa Mason; Celeste Merlo; Jean E. Naylon; Robert L. Naylon; Bess P. Newport; Charles L. Newport; Corinne McCann Noel; John Nuccio; Robert C. Nuccio; Paul Overton; Pacific Electric Railway Company; Mariquita W. Reeves, as Executrix of the Will of George B. Wardman, deceased; Henry Graham Reynolds; Security-First National Bank of Los Angeles; Shell Oil Company; Everett R. Smith Estate; Maude P. Speer; Mortimer T. Speer; State of California; Alice Graves Stewart; Eva C. Taylor; The Farmers and Merchants National Bank of Los Angeles, Trustee; The Marble Company, formerly The John M. C. Marble Company; The Northwestern Mutual Life Insurance Company; Title Insurance and Trust Company, Trustee; Ann Wagenseller, also known as Ann Dexter Wagenseller, a.k.a. Ann Dexter Wagonseller; Fred Baker Wallace; Walter John Wallace, Jr.; Dorothy M. Morris (sued as Doe One); William R. Morris (sued as Doe Two); Doe Three To Doe One Hundred, Inclusive; All Persons Unknown Claiming Any Title or Interest in or to the Property Sought to be Condemned Herein, Defendants,
L. C. Faus, Francis P. Graves, Paul Overton, Mary G. Faus, Katharine Graves Armstrong and Alice Graves Stewart, Appellants.
Nov. 16, 1956.
Rehearing Denied Dec. 14, 1956.
Hearing Granted Jan. 8, 1957.
Holbrook, Tarr, Carter & O'Nell, W. Sumner Holbrook, Jr., Francis H. O'Neill, Los Angeles, for appellants.
Harold W. Kennedy, County Counsel, and Arthur Loveland, Deputy County Counsel, Los Angeles, for respondent.
MOORE, Presiding Justice.
This appeal is from an award in condemnation.
Appellants are the owners of certain elongated strips of realty situate in the cities of Alhambra and San Marino. They are derelict portions of the abandoned right-of-way in the center of Huntington Drive which formerly provided the street car route from Los Angeles northeasterly through the Santa Anita area.
The description of the property is unusual and important to the issues presented by the litigants. The vacant right-of-way is sixty feet wide and divides the Drive. Parcel 20-2, bounded by Stoneman Avenue, Atlantic Avenue, and the two sides of Huntington Drive, is 113.71 feet in length; parcel 20-3 runs easterly from Stoneman to Granada Boulevard, a distance of 1435.13 feet. The northerly half of each parcel is located within San Marino; the southerly within Alhambra. Respondent has condemned a 30-foot strip running along the southerly edge of each parcel for the purpose of widening Huntington Drive. The jury returned a verdict resulting in a judgment for a sum which appellants contend is reversibly low because of material errors of law. Evidence of Sales to Potential Condemners
The majority of the alleged errors urged by appellants revolve about the competency or incompetency of the amounts paid by instrumentalities having the power of eminent domain for stretches of similar abandoned right-of-way located in other areas. Specifically, appellants complain of (1) the cross examination of their expert relative to his knowledge of those sales prices, (2) the court's refusal to strike the opinions of value of respondent's experts after cross examination disclosed the latters' reliance upon such sales prices in making their estimation, and (3) the refusal of the court to instruct the jurors as to the impropriety of considering the prices.
Two expert witnesses testified on behalf of respondent. (1) Frank C. Wood admitted on cross examination that he had based his estimate of the market value of the premises 'primarily' upon twelve previous sales of rights-of-way. Eight of these sales were made to government agencies possessing the power of condemnation. Five were of strips of land having no street access whatsoever. Three were located more than fifteen or twenty miles from the site of the subject property. Upon termination of Mr. Wood's testimony, appellants vainly moved to strike his estimate of the value of the premises. (2) J. B. Irvin testified as to his reasons for placing his valuation upon the property: 'Well, it was based on the investigation which I made, the various properties that were sold by open negotiation from the Pacific Electric to the various municipalities, and from the Huntington Land Company to the City of San Marino, and also the value of the land being sold by the Huntington Land Company up in the rear of the residences on the abandoned Oak Knoll line.' Despite the similarity of Irvin's testimony to that of Wood, no motion was made to strike his estimate. But had the motion been made upon exactly the same ground as the motion to strike Wood's testimony, it would inevitably have been denied.
Whenever cross examination reveals that the estimate of an expert as to the market value of property is based primarily upon consideration of incompetent factors, his estimate should be stricken upon appropriate motion. People By and Through Dept. of Public Works v. Dunn, 46 Cal.2d 639, 297 P.2d 964; Blumenstein v. City of Long Beach, 143 Cal.App.2d 264, 299 P.2d 347. Therefore, if the sales relied upon by the witnesses were indeed incompetent, the opinions of respondent's experts were incompetent and should have been stricken. It is true that both experts asserted that they had 'considered' other factors, such as sales prices of adjacent lands fronting upon Huntington Drive, but had rejected them due to their dissimilarity to the subject property.
The issue of law is clearly presented: Is an opinion of market value necessarily incompetent because admittedly based 'primarily' upon amounts paid for other similar property by a purchaser with the power of eminent domain, regardless of whether that power is actually a factor in the negotiations?
California authorities do not supply a definitive answer. In City of San Luis Obispo v. Brizzolara, 100 Cal. 434, 34 P. 1083, defendant property owners introduced into evidence the report of certain commissioners appointed by statute to compute the value of lands being condemned. The report included amounts paid by the condemner to other landowners in the area. The Court held that the report was incompetent to prove the market value of the subject property, commenting, 'we have not been referred to any case in which it has been held that the value fixed by an agreement between the owner and a corporation seeking the condemn his land by virtue of eminent domain can be taken as a criterion of the market value of other land in that vicinity.' 100 Cal. at page 436, 34 P. at page 1084, emphasis added. The policy behind the exclusion of evidence of such sales prices is based upon the theory that the prices so paid are neither more nor less than a compromise of litigation, present or prospective, rather than a price paid by a willing buyer to a willing seller where neither acts under any compulsion other than the circumstances of the market place and intensity of desire. In City of Los Angeles v. Cole, 28 Cal.2d 509, 170 P.2d 928 the Brizzolara case was cited for the proposition that 'it is not competent for either party in a condemnation proceeding to put in evidence the amount paid by a condemning party to the owners of adjacent lands, however similar they may be to that in controversy, because the price paid under such circumstances 'is not a reasonable or fair test of market value.'' 28 Cal.2d at pages 517-518, 170 P.2d at page 933. Emphasis added.
The precise facts of the Cole case are important to an understanding of its holding. The property involved was located in the immediate vicinity of the civic center of Los Angeles. The various governmental agencies involved had resolved that all the subject and surrounding property was to be acquired for an expansion of the center. Plans had been drawn and absolutely no other property would be suitable for the expansion. Thereupon, those agencies sought to condemn defendants' land. At the trial, defendants' expert witnesses admitted that their estimate of market value was largely predicated upon purchase prices paid by these same condemning agencies to other landowners in the area of the civic center as part of the same development program. The trial court properly instructed the jury that they were not to consider those sales in determining the value of subject property. As stated by the county counsel in his brief before the Cole court, 'The Bureau of Water and Power [the buyer in the questioned sales] had no choice as to what property it would buy. It was essential to buy a specific site. That site was necessarily within the Civic Center and in that area the amount of land privately owned was steadily diminishing. To suggest that the price which the public entities are required to pay for land under these circumstances constitutes market value, is simply to declare that as the public entities proceed to acquire Civic Center property, the more they are required to pay for that which they have acquired, the more they will be required to pay for the remainder of the property.' (Emphasis added.) In other words, the vice of the questioned sales was the lack of a 'willing' buyer.
Turning to authority from other jurisdictions, it is quite true that a majority of courts have stated at one time or another that evidence of sales prices where one party to the transaction possessed the power to condemn is irrelevant to market value because of the threat of ultimate litigation present during the negotiations. Note, 174 A.L.R. 386, 395-397; note, 118 A.L.R. 869, 893-904. However, a respectable number of jurisdictions have recognized that purchases by public bodies are not inevitably tainted with threats of compulsion; that when such purchases are of similar property as a result of negotiations instituted, for example, by the vendor and therefore free of compulsive elements, they may be perfectly competent as an aid to computing the value of the subject property. Washington Home for Incurables v. Hazen, 63 App.D.C. 185, 70 F.2d 847; Amory v. Commonwealth, 321 Mass. 240, 72 N.E.2d 549, 559-560; State Highway Commission v. Buchanan, 175 Miss. 157, 166 So. 537, 538; Eames v. Southern New Hampshire Hydro-Electric Corp., 85 N.H. 379, 159 A. 128; Curley v. Jersey City, 83 N.J.Law 760, 86 A. 197; Wadsworth v. Manufacturers' Water Co., 256 Pa. 106, 100 A. 577, 579-580. 'A sale otherwise competent is not necessarily inadmissible because the condemner was the purchaser if it does not appear that the sale was in connection with or in anticipation of condemnation proceedings.' Eminent Domain, 18 Am.Jur. § 352, p. 996.
The situation in the instant case is a convincing reminder of the inadvisability of constructing a rigid rule of evidence to exclude relevant indicators of 'market value.' The concept is already as evanescent as most minds can comprehend. Here lies property situated directly in the middle of a divided highway. What would a 'willing buyer' pay for it? Appellants insist that the true indicia of value are the sales prices of residential lots adjacent to and fronting upon Huntington Drive. Such lots are of normal depth and width, quite in contract with the 60-foot strip down the center of a thoroughfare which, at some points, is as much as eight feet higher than the adjacent highway. Proximity of a narrow, irregularly shaped plot in the center of a boulevard to tracts of orderly subdivided city lots, facing improved streets, does not per se give it a value comparable with that of such city lots. If the sales by the Pacific Electric of other portions of its rights-of-way were indeed free from threatened condemnation actions, it is quite likely that such sales, when admitted, would be of greater weight in determining the value of the subject strip than sale prices of neighboring lots along the boulevard. After all, the question of whether the sale price of another parcel of property is 'competent' here is solely a matter of logical relevancy. Is the property similar? Were the buyer and seller both willing?
Many courts which approved the admission of evidence of sales to bodies with power of eminent domain as part of the case-in-chief require that the proponent of such evidence lay a foundation for the sale; that is to say, demonstrate to the satisfaction of the trial court that not only was the property similar, but that no element of compulsion entered the sale. Amory v. Commonwealth, supra, 321 Mass. 240, 72 N.E.2d 549, 559-560. '[J]ust as the trial court must find sufficient similarity and likeness of conditions of the property sold to the property in question before the evidence of the sale is relevant, so, where the offer is of a sale to the condemnor, the court must likewise find that the circumstances of the sale, as respects the freedom of contract, are such that the sale has some tendency to evidence market value before it is relevant. Such findings, if not express, may be implied from the admission of the sales, while the contrary findings may likewise by implied from their exclusion. But in neither case can the respective findings be made without supporting evidence.' Eames v. Southern New Hampshire Hydro-Electric Corp., supra, 85 N.H. 379, 159 A. 128, 130. However, California does not allow the sales prices of similar lands to be brought out on direct examination as a part of the case-in-chief. People v. LaMacchia, 41 Cal.2d 738, 748, 264 P.2d 15. Once the expert offers his opinion of value, it is then the burden of the cross examiner to bring out the sales upon which he relies so as to impeach his estimate. The opponent may bring out that the sales prices were much lower, or higher, than the expert's valuation, or that the other properties sold were not similar to the subject property, or that the sales were not true market transactions. Therefore, it was incumbent upon the appellants here to extract from the opposing experts not only that they relied upon sales where one party to the transaction possessed the power to condemn, but that the latent power of eminent domain actually prevented the sale from being a true market transaction. The only questions asked relative to the voluntary nature of the transactions adduced the response from Mr. Irvin that he considered the sales 'openly negotiated'; 'I figured it was an open negotiated sale without threat of compulsion'; that he would consider all such sales relevant 'except under threat of condemnation'; that the city manager of San Marino had informed him that the Pacific Electric had instituted negotiations in at least one of the sales. No ground exist in the evidence for striking any of the estimates of market value.
Appellants complain of the refusal of the trial court to give certain instructions patterned after those expressly approved in the case of City of Los Angeles v. Cole, supra, 28 Cal.2d 509, 516-517, 170 P.2d 928 932. The instructions there directed the jury not to consider prices paid by the condemning agency for other property in the vicinity in computing market value of subject property because "such sales are not a fair criterion of value for the reason that they are in the nature of a compromise." Appellants' instructions here would instruct the jury that any sale wherein one of the parties possessed the power to condemn was irrelevant to market value by reason of the fact that such sale was in the nature of a compromise. As may be gathered from the conclusions hereinabove indicated, such a direction would not correctly state the law.
Among the instructions actually given by the trial judge was the standard admonition to the jury that instances of sales of other properties were brought out on cross examination not as evidence of market value but merely to determine the basis upon which the expert predicated his opinion. 'The opinion of a witness is no better than the reasons upon which such opinion is based, and when a witness gives an opinion as to the market value of property, it is permissible to ascertain the extent of his investigation into matters which would be a legitimate subject of inquiry by anyone desiring to purchase the property in question.' The instruction satisfactorily indicated that the similarity of the property involved in sales other than of the subject property was a factor to consider, but did not inform the jury of the problems involved when an expert relies upon sales transactions in which one of the bargainers is a government instrumentality. In other words, the jury should have been alerted to the possibility that sales of similar property to a potential condemner might not be relevant to market value because of an element of compulsion. But since appellants requested no correct instruction embodying such principle, they are not entitled to relief now. Potential Zoning Change
Respondent's experts testified that in their opinion subject property had no use other than as a park, recreational area or route for transportation because San Marino zoning ordinances would allow only such uses of the northern 30 feet of each parcel. Appellants attempted to prove that it was a reasonable probability that the zoning would be changed to allow commercial uses in the near future. The effect of the probability of a change in zoning upon the mind of an ordinary purchaser may be taken into consideration by the jury in fixing present market value. Long Beach City High School District of Los Angeles County v. Stewart, 30 Cal.2d 763, 768-769, 185 P.2d 585, 173 A.L.R. 249. The jury apparently chose to believe it was unlikely that San Marino would change the allowable use. The award made does not indicate that the jury considered the probability of normal business activity on the premises.
The jury was entitled to assume that there would be no change in the zoning of the property to business uses. San Marino had recently denied for the third time a request that nearby property be used for commercial purposes. All the surrounding property within the limits of San Marino is zoned residential. The only 'exceptions' are (1) a preparatory school located in a large residence which had apparently been constructed about 1913, long before the property was ever zoned, and (2) a medical office building located in a wash undesirable for residences and mandatorily screened by careful landscaping from the view of nearby homes.
However, appellants argue that a refusal to change the zoning of subject property by the city would be unconstitutional and therefore the jury could not consider the property unusuable commercially. This contention cannot affect the verdict. If the city indeed comtemplated no change in zoning, the best a purchaser planning to use the site for business could buy would be a lawsuit. The jury was entitled to believe that a potential purchaser for business use would not be interested in so dubious a proposition. In the second place, the situation presented here would not justify a finding that the zoning imposed by San Marino was unconstitutionally arbitrary and unreasonable. The property surrounding subject property within the boundaries of San Marino was primarily residential and certainly not so filled with business establishments as to force allowance of business activity on subject property. See Skalko v. Sity of Sunnyvale, 14 Cal.2d 213, 215-216, 93 P.2d 93, for the extreme situation required before a good faith zoning ordinance violates constitutional safeguards. Value in Use to Condemner
Respondent's expert witnesses testified that in their opinion the uses for which the property is zoned, to wit, park, recreation and transportation, are actually the highest and best uses. As regards use for transportation, the only feasible mode of use to which the property was immediately adapted was for 'street purposes.' Appellants assert that the opinion of market value advanced by those witnesses was thus based upon 'value in use to the condemner', an incompetent consideration. People v. La Macchia, supra, 41 Cal.2d 738, 754, 264 P.2d 15; City of Redding v. Diestelhorst, 15 Cal.App.2d 184, 193, 59 P.2d 177; City of Stockton v. Vote, 76 Cal.App. 369, 400, 244 P. 609.
Appellants misunderstand the meaning of 'value in use to the condemner' as a basis for incompetency. The beneficial result to be derived by the condemner's use of the property is not to be taken into consideration in determining market values, because compensation is based on loss imposed upon the owner rather than on the benefit received by the taker. People v. LaMacchia, supra. Therefore, applying this important rule to the instant matter, it would be incompetent to consider the advantages to the county in its attempt to widen Huntington Drive, namely, the amount of extra traffic that could be successfully steered along the streets, the easing of traffic control problems in the area, etc. See authorities cited immediately above. Nor may a jury consider the peculiarly dire need of the condemning agency for acquiring the property. In other words, the last parcel condemned for use as a roadway between two cities has no greater market value merely because it is the last link in the chain and thereby must be acquired by the condemning body.
If property has a particular adaptability for a certain use, that fact may be considered in determining its market value. Disregarding elements affecting value resulting subsequent to or because of the actual taking, the fact that the condemner actually plans to use the premises for the purpose to which it is specially adapted does not render that special adaptability incompetent as an indicium of value. United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 76-77, 33 S.Ct. 667, 57 L.Ed. 1063; Minneapolis-St. Paul Sanitary District v. Fitzpatrick, 201 Minn. 442, 277 N.W. 394, 398-400, 124 A.L.R. 897; Eminent Domain, 18 Am.Jur., § 245, p. 882. In San Diego Land & Town Co. v. Neale, 88 Cal. 50, 25 P. 977, 11 L.R.A. 604, where property was condemned for reservoir use, the 'jury had a right to consider the fact in determining the market value, that the land in controversy was in proximity to a dam-site, and to consider its adaptability for reservoir purposes,' 88 Cal. at page 66, 25 P. at page 981, but evidence of the benefit to be gained by the condemner because of the construction of a reservoir was incompetent.
From the foregoing considerations, it should be patent that respondent's experts properly testified that in their opinion the narrow strip down the center of Huntington Drive in San Marino is peculiarly adapted to street uses. Braket of Sales
Appellants argue that an opinion of market value based solely on the mathematical averaging of sales prices of other lands is not competent evidence and should be stricken. However, the record here discloses that respondent's experts considered a variety of factors indicating market value and did not, in effect, abdicate their duty to appraise by making a simple mathematical computation to the exclusion of other considerations.
Affirmed.
ASHBURN and FOX, JJ., concur. On Denial of Rehearing
PER CURIAM.
Petitioners' primary attack upon the decision in the above entitled case is against the procedural rule there invoked that the burden rests upon the opponent of an expert witness as to market value to extract from that witnesses not only that he primarily relied upon the sales of comparable property to bodies with power to condemn, but also that the potential power to condemn was actually a factor in the sales. Petitioner suggests that the expert should be required by direct examination to justify his opinion as to value by himself affirmatively volunteering that he relied upon such sales and testifying that they were indeed voluntary transactions.
The policy behind the California procedure in the trial of condemnation actions is professedly to eliminate detailed and time-consuming consideration of collaterial issues. 'The general rule which permits a witness to state the reasons upon which his opinion is premised may not be used as a vehicle to bring before the jury incompetent evidence. To so open up the inquiry would create a disastrous break in the dike which stands against a flood of interminable investigation. Upon direct examination, a witness never should be allowed to go into the details of particular offers for the property being condemned or specific sales or transactions in connection with other property.' People v. LaMacchia, 41 Cal.2d 738, 745-746, 264 P.2d 15, 21 '* * * witnesses * * * cannot, upon the direct examination, be allowed to testify as to particular transactions, such as sales of adjoining lands, how much has been offered and refused for adjoining lands of like quality and location, or for the land in question, or any part thereof, or how much the company have [sic] been compelled to pay in other and like cases--notwithstanding those transactions may constitute the source of their knowledge. If this was allowed, the other side would have a right to controvert each transaction instanced by the witnesses, and investigate its merits, which would lead to as many side issues as transactions, and render the investigation interminable. Upon cross-examination, however, the knowledge of the witnesses, and, therefore, the value of their opinions, may be tested in that mode, if desired by the party in whose interest the examination is conducted.' Central Pacific Railroad Company v. Pearson, 35 Cal. 247, 262. 'The courts have neither deviated nor retreated from this rule.' People v. LaMacchia, supra, 41 Cal.2d at page 744, 264 P.2d at page 20. The policy announced in these cases could not be served while requiring the expert witness to justify the sales he relies upon as voluntary transactions. Every sale relied upon by any expert might be involuntary, but he is not required to negate that possibility upon direct examination. Should the Supreme Court revamp the entire system so completely set forth in the LaMacchia case and allow sales prices of comparable property to be introduced as direct evidence, then it would be possible to follow those courts which require a 'foundation' for such evidence to be laid before its admission. However, as the case law stands at present, it would apparently be a 'disastrous break in the dike' to so require.
Under present law, an expert is to offer his estimation of market value without delving into side issues of other sales upon which he relies. Instead, the cross examiner is allowed to bring out that matter in order to impeach the expert's valuation. The cross examiner may first inquire of the expert whether he relied to a considerable extent upon other sales prices. If the answer is in the affirmative, the next query relates to the particular sales. Our holding is only that the opinion of the expert need not be stricken as a matter of law merely because he discloses that he has relied upon some sales where prospective condemnation might be a factor. Further questioning is required relative to the involuntary nature of the transaction. The proponent of the expert may then on re-direct attempt to rebut any inference that the sales relied upon were incompetent. People v. LaMacchia, supra, 41 Cal.2d at pages 748-749, 264 P.2d at pages 22-23. If the trial judge is satisfied that the expert's opinion rests primarily upon sales which are incompetent, he should strike that estimation of value if requested so to do. In the absence of such a motion, the judge upon proper request should instruct the jury that sales prices tainted by potential condemnation are incompetent considerations. City of Los Angeles v. Cole, 28 Cal.2d 509, 516, 170 P.2d 928.
Petitioner claims that our ruling has some particular vice in that the mere striking of an expert's opinion after its rendition does not truly erase its impression from the minds of the jury and that it is unrealistic to expect counsel to obtain correct and complete testimony as to the character of the various transactions from a hostile witness on cross examination. Petitioner's complaint seems to be with the entire California condemnation procedure which has been promulgated by a higher court than this. Once qualified, an expert may always give his opinion of market value; the opponent is always reduced to impeaching him on cross examination and even then the only remedy available is a retroactive striking or a cautionary instruction.
Rehearing is denied.
ASHBURN, Justice.
I concur in the court's opinion upon denial of rehearing in this case, and I would add some further observations.
Appellants' counsel in their criticism of this court's discussion of City of Los Angeles v. Cole, 28 Cal.2d 509, 170 P.2d 928, go entirely outside the record in a repeated statement that the County of Los Angeles, prior to institution of this suit, 'had publicly determined its necessity for and intention to acquire all abandoned rights of way of the Pacific Electric lying within unincorporated territory, either by private purchase or threat of eminent domain proceedings.' Reference to Faus v. Pacific Electric Ry. Co., 134 Cal.App.2d 352, 285 P.2d 1017, adds no efficacy to such gratuitous assertion for it is well settled that a court will not take judicial notice of the facts in another case for the purpose of importing those facts into the record under consideration. 18 Cal.Jur.2d § 53, p. 471.
It is indeed true that appellants' asserted grievance strikes at existing procedure in condemnation cases,--the rule that evidence of sales of similar property cannot be received on direct examination or be considered as proof of value of the parcel under condemnation. Appellants' counsel complain that under our instant ruling they, when confronted with sales to agencies having power of eminent domain, are limited to a futile effort to establish by cross-examination the existence of an element of coercion in such sales, while those courts which have heretofore approved of receiving that type of evidence accept it upon direct examination but only after preliminary proof of absence of express or implied threat of a taking in invitum. In this connection it is said at page 22 of the petition: 'In short, the proposed adoption of the so-called 'minority' rule, as to the use of sales transactions to public bodies with power of eminent domain as the foundation of an expert's testimony, cannot be engrafted onto the present evidential system of this State.'
The fact is that appellants herein suffer from exactly the same embarrassments which any other party faces in the ordinary eminent domain case. The witness for his opponent enumerates certain sales which he considers comparable and upon which he relies. The witness testifies upon the assumption and implied assertion that those sales had been freely negotiated and no one questions this assumption until cross-examination is reached. If the cross-examiner considers any of them to have been induced by need of money or necessity of closing a probate estate or other element of compulsion of either side, he may canvass those things upon cross. If he gets favorable answers all is well, but if unable to do so he is through upon those particular sales; he can do nothing more about them except by indirection and not always does he have that opportunity. If his witnesses have not previously testified he probably will be able to show by them that they have not considered those specific sales because not made voluntarily. But if his witnesses have testified first (if he represents the owner), there is no opportunity for him to do that; he must rest upon cross-examination, and if that is unsuccessful he must content himself with a reflection that such are the inequities of the law as applied to individual cases. It is interesting to note that the cited Massachusetts authorities, which hold that a preliminary showing of lack of compulsion is necessary in case of sales to agencies having power of eminent domain, start that inquiry with a presumption of absence of any element of coercion. Amory v. Commonwealth, 321 Mass. 240, 72 N.E.2d 549, 559-560, 174 A.L.R. 370; Epstein v. Boston Housing Authority, 317 Mass. 297, 58 N.E.2d 135, 138-139.
That appellant alone does not suffer from the restrictions of the California procedure is illustrated by the record at bar. The defendant property owner of course presented his evidence of value first. The initial mention of abandoned rights of way occurred on cross-examination of defendants' witness Frisbie. He denied any knowledge of such sales and so the cross-examiner could not go much further. Manifestly he could not prove by that witness the voluntary nature of the sales. He did assert the fact in his questioning, but of course that did not make proof. He attempted to bring out on cross-examination the prices for which those parcels had sold but was defeated therein by Mr. Frisbie's lack of knowledge. He never did get those prices into evidence. Some of the rights of way in question were sold to persons other than public agencies (Nos. 5, 10, 11 and 12), but counsel for the property owner elected not to ask about those prices and they never were placed before the jury in the form of evidence. Defendants' counsel having passed over that matter, the plaintiff's attorney was powerless to do anything about it.
All this difficulty grows out of the established rule that sales of similar properties are not receivable into evidence upon direct examination; which means not at all unless elicited upon cross-examination; and the fundamental trouble lies in the exclusion of evidence of other sales as proof of market value. The rule is designed to avoid collateral issues and resultant delays. It does not seem to be based on any concept of irrelevancy or immateriality, for it could not rest upon any such considerations.
The case of Spring Valley Water-Works v. Drinkhouse, 92 Cal. 528, 533, 28 P. 681, voices the rule (as do many others) that the jurors should know about and consider all matters which a reasonably prudent buyer would weight in determining upon a purchase. 'The rule is that the owner is entitled to the market value of his land, to be determined in view of all the facts which would naturally affect its value in the minds of purchasers generally, which necessarily makes it proper to consider for what purpose it is most valuable. 'Any existing facts which enter into the value of the land in the public and general estimation, and tending to influence the minds of sellers and buyers, may be considered.' Russell v. [St. Paul M. & M.] R. Co., 33 Minn. 213, 22 N.W. 379.' Spring Valley Water-Works v. Drinkhouse, supra, 92 Cal. at page 533, 28, P. at page 683.
Everyone recognizes that the first thing a prospective buyer of any kind of porperty wants to know is what other people have paid for like property in the recent past. If interested in a listed stock or bond he goes to New York or American or Los Angeles Stock Exchange quotations and takes note of prices paid on sales, as well as bid and ask prices. If the stock is not listed he goes to the over-the-counter market quotations. If it is wheat or hogs or cotton or other commodities which interest him he goes through much the same procedure to learn what others have paid recently for like property. If a sale has been made of the same real or personal property which is under examination at a trial, evidence of that sale is admissible upon its value. Bagdasarian v. Gragnon, 31 Cal.2d 744, 755-758, 192 P.2d 935. But when the valuation of realty is the problem, court and jury are suddenly cut off from informative sources and forced to rely (theoretically) upon opinions based principally upon undisclosed prices of other sales. The excuse for the rule is avoidance of collateral issues. How does this work in actual practice?
Long experience with application of the rule in the trial court has disclosed to me that the following pattern develops in the case of a property of substantial value which is tried by attorneys experienced in condemnation. Defendant calls his expert who testifies that he has considered in arriving at his valuation some 10, 20 or 30 comparable sales. He has them spotted on a map which is received in evidence and placed before the jury. The examiner then elicits from the witness the exact location and area of parcel number 1, whether improved or unimproved, when last sold, to whom and by whom, whether for cash or cash and credit, the terms of credit if any, and any other particulars which he can bring to mind. Then he says to the witness, 'Do you have the price on that sale?' 'Yes.' 'And you can give it to Mr. Loveland (opposing counsel) if he asks you about it on cross-examination?' 'Yes.' This is supposed to put the cross-examiner in a position requiring him to ask the price. Here the direct examiner must stop. Opposing counsel blithely ignores the challenge. He has objected to none of this because he has a map with 20 sales on it which he expects to use in the same manner. This process is repeated as to all of lots 2 to 20, inclusive, if 20 be the total number of lots on the map. The cross-examiner asks the witness about the sale price on such lots as he considers helpful to him (let us say all but numbers 1, 5, 10 and 15); but he is studiously silent as to those numbers and the attorney who called the witness is helpless with respect to them. This procedure occurs when each of the owner's witnesses is on the stand and again with the condemner's witnesses, and the case goes to the jury with information as to prices of all lots except those which are most helpful to the parties who called the respective witnesses. Before People v. LaMacchia, 41 Cal.2d 738, 748, 264 P.2d 15, the trial judge had some control over the matter. It had been held repeatedly that the details of other transactions cannot be given on direct, and the judge, if diligent and firm, could without help from either side hold the trial within a reasonably narrow compass. In De Freitas v. Town of Suisun City, 170 Cal. 263, 266, 149 P. 553, 555, it is said: 'It should not be difficult to prove value and damage in a legal manner by competent witnesses. By preliminary questions the examiner should elicit the facts relating to the qualifications of the witnesses; for example, that he has seen and examined the land, or that he knows something of its character and condition, or the market values of land in that vicinity, if such values have been established, or the values of land similarly situated, and the like. He may, thereupon, be asked to give his opinion of its respective values * * *. The weight of the testimony of such witnesses will, of course, depend upon the knowledge he shows in his answers to the preliminary questions and on cross-examination. He should not be asked regarding specific facts in the examination in chief. The rules controlling such examinations are well established. See Central Pac. R. Co. [of California] v. Pearson, 35 Cal. 262; Clark v. Willett, 35 Cal. 544.' See, also, City of Los Angeles v. Deacon, 119 Cal.App. 491, 493-494, 7 P.2d 378. But the LaMacchia opinion, supra, says, 41 Cal.2d at page 748, 264 P.2d at page 22: 'Although, as a general proposition, a witness upon his examination in chief should not be allowed to go into the details of particular sales or transactions, Reclamation Dist. No. 730 v. Inglin, supra, 31 Cal.App. at page 500, 160 P. [1098] at page 1100, the core of inadmissibility is the consideration. City and County of San Francisco v. Tillman Estate Co., 205 Cal. 651, 656, 272 P. 585; In re Estate of Ross, supra, 171 Cal. at page 67, 151 P. [1138] at page 1139. Where no price is mentioned, the rule laid down in Central Pac. R. R. Co. of California v. Pearson, supra, does not apply. City & County of San Francisco v. Tillman Estate Co., supra, 205 Cal. at pages 656-657, 272 P. at pages 586-587.' Since that decision the trial judge's hands are practically tied. The possibility of abbreviating the hearing has disappeared, and the jury must decide upon the basis of those sales which are the least helpful to each side and without others which would be helpful to it in ascertaining the truth. The main objective of the rule--avoidance of collateral issues--has proved abortive and the procedural aspect of the trial has changed for the worse.
The jury, having the case submitted to it upon the least enlightening evidence, is in for a real surprise when the instructions are given. Ever since adoption of the rule excluding other sales on direct it has been stated repeatedly that such sales, though the prices are given on cross-examination, are not evidence of value, are to be considered only upon the imputation of lack of information or trustworthiness of the witness. The jurors are so instructed. They know that sales are the basis on which mankind universally values properties; they have many of the pertinent sales before them; when they hear the judge instruct that those sales are not any evidence of value the jurors who are still listening begin to wonder what is the matter with the judge; but those who are listening, as well as those who are not, pay no attention to that instruction and proceed to do the job the best way they can despite the barriers placed in their path by the court. This whole picture is unrealistic.
That such an instruction must be given as well settled in the law of this state. Los Angeles City High School Dist. of Los Angeles County v. Schumann, 78 Cal.App. 353, 358-359, 248 P. 737; Palladine v. Imperial Valley Farm Lands Ass'n, 65 Cal.App. 727, 756, 225 P. 291; Merchants' Trust Co. v. Hopkins, 103 Cal.App. 473, 478, 284 P. 1072; City of Los Angeles v. Cole, supra, 28 Cal.2d 509, 518, 170 P.2d 928; People v. LaMacchia, supra, 41 Cal.2d 738, 745, 264 P.2d 15.
That the rule should be re-examined will be clear to anyone who will read or re-read the dissents of Justices Carter, Traynor and Schauer in City of Los Angeles v. Cole, supra, 28 Cal.2d 509, 519, 170 P.2d 928; and People v. LaMacchia, supra, 41 Cal.2d 738, 754, 264 P.2d 15; also that of Justices Carter and Schauer in Heimann v. City of Los Angeles, 30 Cal.2d 746, 760, 185 P.2d 597. Of course this court is not free to depart from rules established by the Supreme Court. Because we are powerless in the premises, and our decision heretofore rendered is in consonance with the presently established procedure, I join in the denial of the petition for rehearing. It is to be hoped that this rule of procedure (and that is all it is) will some day yield to the actualities and be revoked as one which has failed to achieve its desired objective. --------------- * Opinion vacated 312 P.2d 680. 1 If, as some trial judges assert, the cross-examiner obligingly brings out the prices of lal sales mentioned in direct, the vice of the exclusion rules is merely ameliorated thereby; the necessity of instructing the jury that such sales prices are not evidence of value remains.