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decided: November 28, 1967.


Appeal from judgment of Court of Common Pleas of Lackawanna County, Jan. T., 1960, No. 469, in case of Pennsylvania Gas and Water Company v. Pennsylvania Turnpike Commission.


Joseph E. Gallagher, with him John W. Bour, Gomer W. Morgan, Carlon M. O'Malley, Charles E. Thomas, and O'Malley, Morgan, Bour & Gallagher, and Metzger, Haefner, Keefer, Thomas & Wood, for appellant.

John A. Morano, Local Counsel, with him Richard D. Holahan, Chief Counsel, and Henry E. Harner, General Counsel, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Cohen dissents. Dissenting Opinion by Mr. Chief Justice Bell. Dissenting Opinion by Mr. Justice Eagen.

Author: Roberts

[ 428 Pa. Page 76]

The first question raised by this appeal is whether the plaintiff-appellant, the Pennsylvania Gas and Water Company, may show that the highest and best use for its condemned property is as a site for the construction of a reservoir, even though at the time of the condemnation no physical improvements had been made on the property. Finding as a matter of fact that the use of appellant's property as a reservoir was mere speculation and hence not provable as the highest and best use, see Rothman v. Commonwealth, 406 Pa. 376, 178 A.2d 605 (1962); Spring City Gas Light Co. v. Pennsylvania Schuylkill Valley R.R. Co., 167 Pa. 6, 31 Atl. 368 (1895), the trial judge rejected much of the proferred evidence by which appellant sought to show 1) that the property was physically suited for a reservoir site; 2) that the appellant was going to construct a reservoir thereon; and 3) that there was a great need in the community for additional water supply.

Following an award of $72,000 (based upon the valuation of appellant's land for recreational and residential purposes), both the water company and the Turnpike Commission filed exceptions, all of which were subsequently dismissed by the Court of Common Pleas of Lackawanna County.*fn1 Judgment was entered on the award as made by the trial judge, and this appeal followed.

Since before the turn of the century, appellant water company, and its predecessors in title, have owned several contiguous tracts of land totaling about 275 acres in South Abington Township, Lackawanna County. It is conceded by all concerned that this property

[ 428 Pa. Page 77]

    was acquired with an eye toward the eventual construction of a reservoir, although it has remained unimproved for over 50 years.*fn2 Nevertheless, the appellant's witnesses did testify that as a matter of sound industry practice water companies frequently hold potential reservoir sites for periods of time as long as this so that future water needs may be adequately met. This is especially true in the present case since the water company's property is naturally suitable for a reservoir site given the presence of several creeks which intersect on the lower portion of the tract.

On June 8, 1954, pursuant to the provisions of the Pennsylvania Turnpike Northeastern Extension Act of September 27, 1951, P. L. 1430, 36 P.S. ยง 600.8(a), the Pennsylvania Turnpike Commission condemned 15 acres from the appellant's tract. The condemned portion was precisely that part of the tract needed for the erection of a dam, without which the reservoir could not be constructed. As a result, the tract, in its present condition, is useless for reservoir purposes.

It is well settled in Pennsylvania that condemnation damages need not be based upon the use currently being made of the condemnee's property if in fact its highest and best use is shown to be for some other, more valuable purpose.*fn3 Gilleland v. New York State Natural Gas Corp., 399 Pa. 181, 159 A.2d 673 (1960); Erie City v. Public Service Comm., 278 Pa. 512, 123 Atl. 471 (1924); Stone v. Delaware, Lackawanna & Western Railroad Co., 257 Pa. 456, 460, 101 Atl. 813,

[ 428 Pa. Page 78814]

(1917); Savings & Trust Co. of Indiana v. Pennsylvania Railroad Co., 229 Pa. 484, 488, 78 Atl. 1039, 1040 (1911). However, there is at least one substantial limitation on this principle. Even if a piece of land is physically suited for a particular purpose, it must also appear that such use is not based upon mere speculation. Sgarlat Estate v. Commonwealth, 398 Pa. 406, 158 A.2d 541, cert. denied, 364 U.S. 817 (1960); Laureldale Cemetery Co. v. Reading Co., 303 Pa. 315, 154 Atl. 372 (1931); Marine Coal Co. v. Pittsburgh McKeesport & Youghiogheny Railroad Co., 246 Pa. 478, 485, 92 Atl. 688, 690 (1914).

The real problem here arises from the difficulties involved in ascertaining the precise meaning of the terms "speculative use" and "mere speculation." Both the lower court and the appellee have assumed that a use is speculative whenever the condemnee has made no physical change in his property pointing toward such a use. However, our case law indicates that such is not the rule. See Gilleland, Erie City, and Stone, supra. Nor is it true that to escape the label of "speculative," the condemnee must show that there are plans to convert the property to the desired use immediately or in the very near future. As this Court said in North Shore Railroad Co. v. Pennsylvania Co., 251 Pa. 445, 449, 96 Atl. 990, 992 (1916): "'The true rule is that any use for which the property is capable may be considered, and if the land has an adaptability for the purposes for which it is taken, the owner may have this considered in the estimate as well as any other use for which it is capable.'"

Moreover, in Marine Coal, supra, it was said at page 486, 92 Atl. at 690-91: "'Clearly it [the condemned land] is of insignificant value for agricultural purposes, and there is neither a wharf, a factory, or a saw mill on it, and there may never be. But if its adaptability to these purposes or any one of them give

[ 428 Pa. Page 79]

    it a present value, the owner is entitled to that value, though in fact no one now proposes to use it for any of these purposes.'"

Finally, were it necessary for the condemnee to show that the land was actually being used for the purpose upon which he seeks to base condemnation damages, a suggestion frequently advanced below, there would be nothing left at all of the highest and ...

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