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SINGER v. OIL CITY REDEVELOPMENT AUTHORITY (01/30/70)

decided: January 30, 1970.

SINGER, APPELLANT,
v.
OIL CITY REDEVELOPMENT AUTHORITY



Appeal from judgment of Court of Common Pleas of Venango County, Jan. T., 1965, No. 19, in case of Victor Singer v. Redevelopment Authority of the City of Oil City.

COUNSEL

Benjamin G. McFate, with him McFate, McFate and McFate, for appellant.

John D. Rynd, Jr., with him Rynd and Olmes, for appellee.

Bell, C. J., Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Eagen. Mr. Justice Cohen and Mr. Justice Roberts concur in the result. Mr. Justice Jones took no part in the consideration or decision of this case.

Author: Eagen

[ 437 Pa. Page 58]

This case involves the condemnation of real estate owned by Victor Singer in Oil City, Pennsylvania, in and upon which he operated a retail grocery store. Said premises, together with several other properties, were condemned by the Redevelopment Authority of the City of Oil City as a part of an urban renewal project. The condemnation was prosecuted in accordance with the provisions of the Eminent Domain Code, Act of June 22, 1964 (1964 Special Session) P. L. 84, 26 P.S. ยง 1-101 et seq. (Supp. 1969), the Declaration of Taking being filed December 7, 1964.

Singer was dissatisfied with the damages awarded him by the Board of Viewers and filed an appeal in the Court of Common Pleas. The case was then tried before a judge without a jury, and a judgment was finally entered in Singer's favor in the sum of $60,790.50, allocated as follows: $55,000 for damages to real estate; $5,000 for business dislocation and loss of patronage under Section 609 of the Eminent Domain Code; and $790.50 for moving expenses under Section 610 of the Eminent Domain Code. In the court below, Singer claimed that certain items of machinery and fixtures used in the operation of the grocery store constituted part of the real estate taken under the Assembled Industrial Plant Doctrine, and if this were so, he was entitled to be compensated in an additional amount of $22,855*fn1 for damages to the real estate. In the alternative, Singer contended that if the Assembled Industrial Plant Doctrine did not apply, he was entitled

[ 437 Pa. Page 59]

    to additional damages of $17,725 for the reasonable expenses of removing, transporting and reinstalling the machinery, equipment and fixtures under Section 608 of the Eminent Domain Code. Both contentions were denied in the trial court, and Singer appealed here. The appeal concerns only the merit of these two claims for additional damages.

The first issues for decision, therefore, are whether the Assembled Industrial Plant Doctrine is still viable under the new Eminent Domain Code, and if so, does it apply under the facts of this case.

The Assembled Industrial Plant Doctrine stems from Voorhis v. Freeman, 2 W. & S. 116 (Pa. 1841), a case involving priority rights in the machinery of an iron rolling mill between a purchaser at a mortgage foreclosure sale and a creditor of the mortgagor who had levied on the machinery. In holding in favor of the purchaser of the realty, Mr. Chief Justice Gibson said, at 119: "Whether fast or loose . . . all the machinery of a manufactory which is necessary to constitute it, and without which it would not be a manufactory at all, must pass for a part of the freehold." This statement became the germ of the Doctrine. It has been applied in various industrial mortgage situations (e.g., In re Taylor and Dean Mfg. Co., 136 F. 2d 370 (3d Cir. 1943), and Central Lith. Co. v. Eatmor Chocolate Co. (No. 1), 316 Pa. 300, 175 A. 697 (1934)) and in the separate area of local real estate taxation (e.g., Jones and Laughlin Tax Assessment Case, 405 Pa. 421, 175 A.2d 856 (1961), and United Laundries v. Board of Property Assessment, 359 Pa. 195, 58 A.2d 833 (1948)). The Doctrine has eventually evolved to: If the machinery, whether fast or loose, is vital to the business operation of an "industrial plant" and is a permanent installation therein, it is to be considered part of the real estate. See Gottus v. Allegheny County Redevelopment Authority, 425 Pa. 584, 229 A.2d 869 (1967).

[ 437 Pa. Page 60]

This Court held, as a matter of common law, in Gottus v. Allegheny County Redevelopment Authority, supra,*fn2 that the Assembled Industrial Plant Doctrine applied in the area of eminent domain, where the taking occurred prior to the effective date of the Eminent Domain Code of 1964, supra. This Doctrine was there carefully considered and approved. Unless, therefore, a contrary policy can be derived from the statute, this Doctrine, with whatever modifications are necessary or desirable therein due to the passage of the statute, will be extended to eminent domain cases under that statute.

Appellee-condemnor claims that our decision in Gottus, supra, was impelled by a necessity to fill a void in the law of eminent domain concerning damage to personal property of condemnees whose real property was taken; that the legislature acted to fill this void in the Eminent Domain Code of 1964; that this code, by its terms,*fn3 provides "a complete and exclusive procedure and law to govern . . . the assessment of damages"; that the code does not provide for the application of the Assembled Industrial Plant Doctrine, although it specifically provides other remedies concerning the personal property of condemnees; that such should be interpreted as an intent to exclude the application of the Assembled Industrial Plant Doctrine in eminent domain cases. We do not agree.

There is no doubt that the statute provides a complete legal scheme in the area of eminent domain, including

[ 437 Pa. Page 61]

    the assessment of damages. Therefore, some authorization, whether explicit or implicit, must exist in the words of the statute for the Assembled Industrial Plant Doctrine to continue to be applicable in eminent domain cases.

Section 601 sets forth the standard of "just compensation," which term is defined thus in Section 602: "Just compensation shall consist of the difference between the fair market value of the condemnee's entire property interest immediately before the condemnation and as unaffected thereby and the fair market value of his property interest remaining immediately after such condemnation and as affected thereby, and such other damages as are provided in this article."

Section 603 provides in part: "Fair market value shall be the price which would be agreed to by a willing and informed seller and buyer, taking into consideration, but not limited to, the following factors: . . . (3) The machinery, equipment and fixtures forming part of the real estate taken."

There are no criteria set forth in the statute as to when machinery, equipment and fixtures are part of the real estate and when merely personal property. This is left to the courts as a matter of common law. It is to this issue that the Assembled Industrial Plant Doctrine directly relates. Therefore, statutory language does exist for the continued application of the Doctrine, if and when its application is necessary to provide the condemnee with "just compensation." The extent to which the Doctrine, as presently existing, should be adopted under the Code should be determined in the light of the intent of ...


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