Opinion
Hearing Granted by Supreme Court June 23, 1927.
Appeal from Superior Court, Los Angeles County; Frank H. Dunne, Judge.
Action in eminent domain by the City of Los Angeles against Peder C. Pedersen and others. From the judgment, defendants appeal. Reversed.
COUNSEL
Fred Mansur, of Los Angeles, for appellants Peder C. Pedersen and Catherine Pedersen.
L. B. Stanton, of Los Angeles, for appellants Ishikata and Inouye.
Jess E. Stephens, City Atty., and E. H. Delorey and Leslie K. Floyd, Deputy City Attys., all of Los Angeles, for respondent.
OPINION
THOMPSON, J.
In this proceeding in eminent domain, under the Park and Playground Act of 1909 (Deering’s Gen. Laws 1923, p. 2665, Act 6373), two appeals are prosecuted from the judgment in which Peder C. Pedersen and Catherine Pedersen were awarded the sum of $19,816, less the sum of $3,945 awarded to the other defendants and appellants, and less the sum of $3,000, together with interest and attorneys’ fees to the mortgagee, who, of course, has not appealed. The appellants Peder C. Pedersen and Catherine Pedersen, sometimes referred to in this opinion as owners, for the sake of convenience, were the owners of lot 36 of Sunnyside tract, subject to a leasehold owned by the Hoover Nursery Company, composed of the other appellants, who may from time to time be called the lessees.
The owners complain of the judgment on three grounds, as follows: (1) That the court adopted an erroneous principle in arriving at the amount of compensation to be made; (2) the erroneous admission in evidence on direct examination of the selling price of various other pieces of property in the neighborhood; and (3) that the finding that the value of the improvements belonging to the lessees in the sum of $1,000 is not supported by the evidence. We shall consider these objections before discussing the other appeal.
It appears from the testimony that the property consisting of some two or three acres had not been subdivided into city lots, but had a value by reason of the possibility of such a use. The owners are of the opinion that the court considered the property only as acreage-eliminating consideration of the possible subdivision purposes. We cannot, from a reading of the testimony, agree with counsel in this regard. The record discloses quite the contrary situation. After one of the witnesses had placed a value on the property, the trial judge asked this question:
"Was that (the potential value as a subdivision) taken into consideration in the estimate? A. The subdivision theory was taken into consideration, and the eventual best use of the property, but the value we set on it as it was, with the subdivision feature as a possibility, but like any other acreage, not an actuality."
And again the court went further in what was an apparent effort to consider the value from the standpoint of its highest available use. While appellants’ counsel was examining a witness on redirect examination, he queried:
"Then, in speaking of the Hoover street land, you are speaking, not of its price to the subdivider, but the price it will bring on the market, subdivided, is that correct? A. Yes; it would be worth that if Mr. Pedersen wanted to build on it.
"Plaintiff’s Counsel: I move that that be stricken out, the testimony of Mr. Davis, because he says he considers it as resale value, and your honor has already ruled that it is to be considered only as acreage.
"Appellants’ Counsel: I did not understand that the court ruled at all that this must be considered as acreage.
"The Court: I think that is all right; I will let it stand."
We cannot agree with appellants that the concluding words of the trial judge indicated that he was considering the property without regard to its availability for subdivision purposes. As we view the remark, it was to overrule the objection, letting the testimony adduced by appellants stand. If there be error in this ruling, and we do not say there was, it was that the court went so far as to consider the price of the property as though it had been subdivided. The true rule is to determine the market value of the property as it is found, considering all of the elements of value, inclusive of all of the uses and purposes for which the land is or may become adapted. Sacramento Southern Railway Co. v. Heilbron, 156 Cal. 408, 104 P. 979; Marin Water & Power Co. v. Railroad Commission, 171 Cal. 706, 154 P. 864, Ann. Cas. 1917C, 114.
The next objection presents a different situation. Evidence of sales of other property in the community and the price paid therefor was adduced, not on cross-examination, but as follows: Counsel for plaintiff on direct examination asked the question:
"Now have you a list of any sales there, that your figures are based on?
"Defendant’s Counsel: We again object to this evidence as to any specific sales tending to prove the value of this property, on the ground it is incompetent evidence.
"The Court: Well all these experts and sharps have been asked similar questions; I am not going to discriminate against Mr. Smith; he can tell what he knows about sales out there. I do not know that they throw very much light, perhaps, on it."
The answer follows, giving a list of sales and the prices at which the property was sold. Recognizing the rule that such testimony is not admissible as tending to prove value on direct examination for the reason that so many factors may enter into the selling price of property, such as financial embarrassment or other circumstances which may in fact force the sale (see Reclamation District v. Inglin, 31 Cal.App. 495, 160 P. 1098; Estate of Ross, 171 Cal. 64, 151 P. 1138), respondent attempts to avert the consequences of its consideration by saying that the court elicited the testimony as though on cross-examination. Just prior to the question quoted, counsel had asked the witness upon what he based his opinion of the market value, and was told that he based it upon the general conditions inclusive of the best use that the property might be put to and the sales of property in the neighborhood. There was no occasion for the question propounded by counsel as to whether or not the witness had a list upon which his figures were based, and the objection was pointed squarely at evidence of other sales, and the court so understood it, as is made apparent by his remark. A motion to strike would have been fruitless, for the reason that the court had already determined to admit testimony of other sales. The conclusion cannot be escaped that it was error. Nor was it saved by the remark of the court that "perhaps" "they do" not "throw very much light" on it. We have no measure by which to determine how much light the trial judge considered they did throw on the question other than the admission in evidence of the testimony. They should have thrown no light and in law they could throw none. The only purpose for which such questions may be asked is on cross-examination to test the familiarity of the expert with surrounding conditions and the investigation he may have made with respect thereto. Reclamation District v. Inglin, supra; Estate of Ross, supra.
The values placed upon the property by the expert witnesses were as follows: $13,958, $15,518, $29,325, $30,000, $31,000. The value placed by the court was, as we have stated, $19,816, from which it will be observed that the amount awarded more nearly agreed with the price fixed by the witness who gave this testimony and valued the property at $15,518 than with any other witness. Under these circumstances we cannot say that the error complained of did not prejudice the rights of the defendants.
The attack upon the finding of the trial court that the improvements of the Hoover Nursery were of the value of $1,000 must fail for two reasons, either of which is sufficient. In the first place, the Hoover Nursery was not served with appellants’ briefs, and therefore was not given an opportunity to reply, and in the second place we find that the testimony of the cost of the improvements was admitted without objection, aggregating $1,230, and, further, the court made a personal inspection of the property and the improvements. Considering the fact that knowledge gained from a view of the premises is independent evidence (City of Oakland v. Adams, 37 Cal.App. 614, 174 P. 947), the finding is fully supported.
The appeal of the lessees, the owners of the Hoover Nursery, which we shall now consider, also presents a very interesting question; i. e., whether the lessees, engaged in raising nursery stock planted in the ground, are entitled to compensation for the value of the nursery stock, or, in the event of severance, to the cost of its removal to other land. The court found that the nursery stock was personal property, and that the lessees were not entitled to compensation, although admittedly the young trees and shrubs were growing in the earth and attached thereto by roots. Undoubtedly, as between the lessors and lessees, the stock thus grown was capable of, and the lessees had the right of, severance and sale thereof as personalty. This, however, does not conclude the question. It has been held that, although as between lessor and lessee the latter may have the right of removing fixtures or improvements, which, except for the agreement, would constitute a part of the realty, nevertheless as between the lessee or lessor and a third party it retains its natural character and may be subjected to the claim of a creditor as part of the realty. McNally v. Connolly, 70 Cal. 3, 11 P. 320; San Francisco Breweries v. Schurtz, 104 Cal. 420, 38 P. 92. Also it has been held that, as between the seller of personal property, on a conditional sales contract of property which is subsequently attached to the land, and a bona fide mortgagee of the realty, the property so purchased and annexed is subject to the lien of the incumbrance, although as between the original parties "the contract may be such that the property would be deemed personalty, and *** treated as such in law." Oakland Bank of Savings v. California Pressed Brick Co., 183 Cal. 295, 191 P. 524. No one can doubt that, had the trees and shrubs been growing upon the property for the purpose of beautifying the land and the property were sought to be condemned, they would properly be considered as improvements pertaining to the realty. The question then resolves itself to this: Whether the business in which lessees were engaged can alter the natural character of the property in question. It is undoubtedly the rule in California that the owners of a business are not entitled, in proceedings in eminent domain, to compensation for their business or damages thereto. Oakland v. Pacific Coast Lumber Co., 171 Cal. 392, 153 P. 705; Morris v. San Francisco, 59 Cal.App. 364, 210 P. 824. On the other hand, suppose the owners of such property were engaged in the lumber business, would it or could it be argued that the potential personalty standing upon the real property in the shape of trees was not a part of the realty? Until felled and converted into personal property by the act of severance, they remain a part of the land. Even growing crops are considered as part of the realty to such an extent as to pass with a grant thereof, and testimony of an oral understanding to the contrary will not be received if not mentioned in the written agreement. Wilson v. White, 161 Cal. 462, 119 P. 895. It seems from the discussion so far that the subject of intention has very often been given undue consideration, except as determinative of the question between the parties or their privies. Where, as here, the question of agreement cannot be taken into account, it would seem that the only line of demarcation that can logically be drawn is that of actual and not possible severance. To further illustrate-suppose that shortly before the service of summons these lessees had determined to sell no further nursery stock then growing, but to change it into a Japanese garden (stranger things have happened) and to beautify it to such an extent as would permit them to charge admission. Would the trees and shrubs be a part of the realty or would they be considered personalty incident to a business? As between strangers, we think the true test must be held to be the nature of the attachment to the soil and whether severed or unsevered. Lessees were entitled to compensation for the trees and shrubs actually growing in the ground and not severed therefrom.
In the instant case objections were made to the introduction by defendants of evidence of the value of the trees and shrubs; ruling was reserved, and the finding of the court that the stock was personal property was in effect a ruling excluding the evidence. Citiens’ Bank of Los Angeles v. Jones, 121 Cal. 30, 53 P. 354. This ruling was erroneous.
The judgment, in so far as it concerns the award to appellants Peder C. Pedersen and Catherine Pedersen and T. Ishikata and S. Inouye, doing business under the firm name and style of Hoover Nursery, is reversed.
We concur: WORKS, P. J.; CRAIG, J.