Appeal from judgment of Court of Common Pleas of Potter County, Sept. T., 1964, No. 166, in case of Raymond L. Christman v. United Natural Gas Company.
Harold R. Fink, Jr., for appellant.
Benjamin G. McFate, with him McFate, McFate and McFate, for appellee.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice O'Brien.
Appellant, in August of 1948, leased certain land in Wharton Township, Potter County from the County, for the purpose of operating for gas and oil. Two producing gas wells were drilled by appellant in 1948 and 1949 and production continued until April of 1963. On the latter date, appellee instituted proceedings to condemn the two gas wells. In due course, a board of view was appointed and assessed damages. Appellee's appeal of the viewer's award resulted in a jury verdict considerably smaller than the award of the board of view. This appeal followed the denial of appellant's motions for new trial and judgment n.o.v. and the entry of judgment on the jury's verdict.
The question requiring our consideration is the proper measure of damages for the taking here involved. Appellant argues that one of the factors which should have been considered was the value of the two wells for gas storage purposes. Appellee, on the other hand, contends that the condemnee was entitled to the fair market value of his property, taking into consideration the present use of the property and its value for that use; the highest and best reasonably available use to him of that property and its value for such use; and the machinery, equipment and fixtures forming part of the real estate taken. Appellee argues that appellant received the value of all of these items even though the court below refused to allow testimony relative to the value of the 2 wells for gas storage purposes. The court, of course, did allow testimony on the value of the remaining gas, the machinery and all of the items which appellee concedes were properly compensable. The narrow question, then, is whether the trial court erred in refusing to permit the jury to consider the possible use of the premises for gas storage purposes by the condemnor.
The problem of the effect on market value of the possibility of a different use being made of condemned
land is not a novel one. Most recently, in Pa. Gas & Water Co. v. Pa. Turnpike Comm., 428 Pa. 74, 236 A.2d 112 (1967), we had occasion to review in detail the law in this field. In that case, we reversed and remanded in order that the condemnee water company might have the opportunity to introduce evidence on the issue of a reservoir as the highest and best use of the condemned land, even though the land was not being put to such a use at the time of the condemnation. After reviewing the case law, Mr. Justice Roberts, speaking for the majority, significantly said in the footnote at page 82, "In citing these three cases we wish to make clear that we are using them only for the proposition that a condemnee is not bound by the use currently being made of his property if it is physically suited for some other purpose. These cases do not stand for the proposition that a condemnee farmer can recover reservoir damages when no demand for a reservoir exists other than that shown by the condemnation and where the farmer himself is unable to construct a reservoir. In each of these cases above there was evidence that other buyers were interested in the farmer's property for private reservoir use, thus establishing a market value for that use. Of course, when, as in the present case, the condemnee is a water company which can, itself, construct a reservoir, the absence of a market value based on demand will not preclude the showing of a reservoir as the highest and best use. . . ." (emphasis in original).
Although this court was divided in Pa. Gas, there was agreement on the critical determination which controls the case at bar. In his dissent, Mr. Justice Eagen, apropos of the material quoted from Mr. Justice Roberts, said, at page 88, "Moreover, [the majority] concedes, as it must, that if the situation were reversed and the same land was condemned by the water utility, the private owner or condemnee 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 ...