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Hickey v. United States.

decided: October 14, 1953.

HICKEY ET AL.
v.
UNITED STATES.



Author: Biggs

Before BIGGS, Chief Judge, and GOODRICH and McLAUGHLIN, Circuit Judges.

BIGGS, Chief Judge.

This is an appeal by the United States in a condemnation proceeding. On February 6, 1951, the United States condemned a lot and a building, the Penn Athletic Club at 18th and Locust Streets, facing Rittenhouse Square, in the central business district of Philadelphia. The United States deposited estimated just compensation in the amount of $1,250,000 in the Registry of the District Court for the Eastern District of Pennsylvania. The owners of the property, being dissatisfied with the estimated compensation, requested the appointment of a board of view. The board of view reported that $2,865,000 was the fair value of the property taken. The United States, in turn dissatisfied with this figure, demanded a jury trial. The trial, from which this appeal is taken, resulted in a verdict of $2,100,000 in favor of the condemnees.

The Penn Athletic Club is a fourteen story building, standing upon a lot measuring 195 feet by 175 feet. The building was erected in 1926 and the original cost was $1,250,000 for the land and approximately $7,000,000 for the building and its furnishings. It was built as an athletic club with the usual facilities for sports together with those ordinarily found in any large residential club. The Penn Athletic Club occupied the building from 1926 to 1942, when it could no longer afford to stay, and deeded the property to the trustee of its bondholders, Girard Trust Company. Girard leased the building (except the first floor stores) to the Securities and Exchange Commission for use as an office building from 1942 to February 7, 1948. Girard sold the property to the present condemnees on August 30, 1948, for $1,250,000. The building was vacant from the time the Securities and Exchange Commission left until the condemnation proceedings in the instant case began on February 6, 1951.

At the trial condemnees offered four experienced real estate brokers to testify as experts to the value of the Penn Athletic Club. These witnesses testified that the property was worth $3,850,000, $3,325,000, $3,250,000, and $3,150,000, respectively. Three experts testifying for the United States estimated the value of the property at $1,575,000, $1,550,000 and $1,500,000. The jury, as we have said, returned a verdict of $2,100,000.

The United States has set out six assignments of error as its grounds for seeking to reverse the judgment. These will be discussed in order.

(1) The United States contends that certain statements made by the trial judge during the trial were prejudicial to its case. It also claims that the trial court misstated the applicable law in the presence of the jury. These claimed errors do not go to the admissibility of evidence or any rulings upon the evidence by the trial judge, but refer only to statements made during the conduct of the trial.

For example, a sharp difference of opinion developed during the trial between the United States and the condemnees as to the weight to be given to the sale of the Penn Athletic Club by Girard to the condemnees in 1948. This controversy arose at the inception of the Government's case. The United States took and takes the position that the sale referred to was a very important factor in determining the compensation to be awarded by the jury. The condemnees, on the other hand, tried to minimize the importance of this sale and to emphasize other elements of value. George H. Brown, a witness for the United States, who was at the time of the sale a senior officer of Girard, testified in detail as to the history of the property between 1942 and 1948, the period during which Girard as trustee was in possession. The trial judge intervened in this examination. The colloquy in the margin then took place.*fn1 The United States contends that the statement of law as given by its attorney during this colloquy was correct and that, consequently, the action of the trial judge in striking out the statement is error.

The point at issue is the relative weight to be given to the recent prior sale of the property condemned and to recent sales of other, comparable property. As between the two, it is the position of the United States that a prior sale of the precise property condemned was, as a matter of law, entitled to more weight than sales of comparable property.

As a statement of law, applicable to all condemnation cases, we cannot agree that the statement made by the Government's counsel, quoted in the fourth paragraph of note 1, supra, is correct. It is too broad. In some cases the principle insisted on may properly be applied. The precedents most favorable to the United States say no more than this.*fn2 But counsel made his statement as a flat rule of law universally applicable in condemnation cases and by inference in this condemnation case in particular.

We reject the conception that a prior sale or sales of condemned property must always, as a matter of law, be given more weight in condemnation proceedings than sales of comparable property. Recent sales of the very property condemned are entitled to considerable weight, but sales of similar property are entitled to weight also; and the relative importance of the two is dependent upon the facts in the particular condemnation proceeding.*fn3 While it is true that prior sales of the condemned property eliminate any question as to whether another sale was of a comparable piece of property, nevertheless the comparison of sales of other properties have their advantages too. For example, the sale of another property may be closer in time to the date of the taking, and therefore would reflect more accurately the condition of the market at the time of the taking. In the instant case sales of other properties which took place within a few months of February 6, 1951 were testified to. By comparison the prior sale of the Penn Athletic Club itself occurred almost three years before the condemnation was begun. The issue presented is peculiarly within the discretion of the trial judge in the light of the facts in each case. We hold that the trial court did not exceed the bounds of legal discretion here.*fn4 In view of the fact that the trial court correctly ruled on the issue presented by the government's counsel, the fact that he did so in the presence of the jury can scarcely be viewed as prejudicial, at least on the basis of this single instance.

But the United States goes further and asserts in effect that it was prejudiced because the trial judge reiterated several times during the presentation of its case that it was placing too much emphasis on the 1948 sale of the condemned property.*fn5 As a matter of fact the comments of the trial judge indicating that in his opinion too much stress was being put by the Government on the 1948 sale were made at least half a dozen times. The reiteration of the comment may have made a somewhat substantial impression on the minds of the jury. On the other hand the references made to the 1948 sale by the court in its instructions to the jury gave considerable weight to that sale. The court stated in part as follows: "You know the details of that sale, because you have heard it. You have heard the circumstances under which it took place almost three years prior to February 6, 1951, and it is important that you consider it and determine what weight you will give to it, because the sale of an identical property in a time reasonably near the taking is a very desirable standard by which to conform a judgment, as I read the law."

Although a district judge has considerable latitude in commenting upon the evidence, his statements have much influence on the jury. Consequently statements which the trial judge may make and which may fairly be said to be prejudicial will compel reversal. See Billeci v. United States, 1950, 87 U.S. App.D.C. 274, 184 F.2d 394, 402.And it has recently been held in a condemnation case that several prejudicial comments by the trial judge before a jury warranted a new trial. United States v. Ham, 8 Cir., 1951, 187 F.2d 265. But we cannot say that these statements of the trial judge in the instant case, in and of themselves, had the effect of precluding a fair and dispassionate consideration of the evidence by the jury. The issue of value was fairly put to the jury in the charge, as we have stated, and much of what the trial court said, to which the United States now objects, was evoked by what was, in our opinion, too great an emphasis sought to be placed on the 1948 sale by zealous counsel. On the other hand the trial judge by his remarks, during the course of the trial, did subject the 1948 sale to some disparagement. It would have been more correct for the trial court to have said less. At the new trial our suggestion in this regard should be borne in mind but we do not reverse the judgment and grant a new trial on this ground.

(2) Under its second assignment of error, the United States contends that the court below created the impression in the jury's mind that the 1948 sale of the condemned property was not truly representative of the market value of the property at the time of the sale. The United States asserts that the trial court indicated to the jury that the 1948 sale was a "forced" sale, and that therefore the property was sold for less than it should have brought. The precise complaint of the United States is confined to two instructions given to the jury. In these the court suggested several times that the jury should consider whether there was a ...


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