NO. 3472 Philadelphia, 1982, NO. 3612 Philadelphia, 1982, Appeal from the Order entered November 15, 1982 in the Court of Common Pleas of Bucks County, Civil, No. 81-01775-14.
John A. Van Luvanee, Doylestown, for appellant in No. 3612 and for appellee in No. 3472.
William G. Kozub, Doylestown, for appellants in No. 3472 and for appellees in No. 3612.
Brosky, Wieand and McEwen, JJ.
[ 329 Pa. Super. Page 220]
These cross-appeals have been taken from the order of the distinguished Judge Edward T. Biester, Jr., which established, pursuant to the provisions of the Deficiency Judgment
[ 329 Pa. Super. Page 221]
Act, 42 Pa.C.S. § 8103 et seq., $385,000.00 as the fair market value of certain real property. We affirm.
The real property in question, an irregular tract composed of 68.922 acres and located in New Britain Township, Bucks County, was the subject of a mortgage agreement by Peace Valley Lakeside Community and Agricultural Trust Co., Inc. (Peace Valley),*fn1 in favor of First Pennsylvania Bank (the Bank) as security for a loan in the amount of $410,000.00. Peace Valley defaulted on its mortgage obligation and the Bank, after it had confessed judgment against Peace Valley in the amount of $675,523.28, issued a writ of execution, and purchased the premises for costs when sold by the sheriff on July 10, 1981. After the Bank had assessed damages in the amount of $697,843.17, it petitioned the Court of Common Pleas to establish the value of the property as of the sale date. Both the Bank and Peace Valley have appealed from the conclusion of the court that the fair market value was $385,000.00.
Both parties dispute the market value ascribed to the property by the court. The Bank contends that the court, as it determined the value, improperly considered the potential for a change in the zoning classification of the property, while Peace Valley asserts that the sum is unduly low by reason of the failure of the court to provide adequate consideration of and weight to expert evidence upon the "highest and best use" of the property.
[ 329 Pa. Super. Page 222]
The scope of appellate review of this issue is, of course, limited to a determination of whether there is sufficient evidence to sustain the holding of the hearing judge, or whether the court committed reversible error of law. Union Nat. Bank of Pittsburgh v. Crump, 349 Pa. 339, 340, 37 A.2d 733, 734 (1944); Shrawder v. Quiggle, 256 Pa. Super. 303, 311, 389 A.2d 1135, 1139 (1978). Accord Cheltenham Federal Savings and Loan Assoc. v. Pocono Sky, 305 Pa. Super. 471, 474, 451 A.2d 744, 746 (1982). Although the Deficiency Judgment Act does not define the term "fair market value", the appellate courts of this Commonwealth, when called upon to apply judicial scrutiny to fair market value from other perspectives, have defined the term as the price a purchaser, willing but not obligated to buy, would pay an owner, willing but not obligated to sell. P. & R.C. & I. Co. v. North'd Co. Com'rs., 323 Pa. 185, 186 A. 105 (1936) (tax assessment); Genztel Corp. v. Boro. of State College, 13 Pa. Commw.Ct. 116, 124, 318 A.2d 415, 419 (1974) (condemnation proceeding). This formula must, of course, be tempered by recognition that, in instances arising under the Deficiency Judgment Act, "the actual situation is that of a 'purchaser' obliged to buy in, in order to protect the loan it made, and an 'owner' obliged to sell his property at Sheriff's sale, because he is unable to pay his debt" and, therefore, the hearing court must consider "what reasonably the judgment creditor can get out of the property in partial or complete recapture of the loan and interest on loan . . . ." Cheltenham Federal Savings and Loan Assoc. v. Pocono Sky, supra 305 Pa. Super. at 479-81, 451 A.2d at 748-49.
We first address the contention of the Bank that the hearing court erred when it considered the possibility of a change in zoning classification as an element of the fair market value of this property. While it is clear that evidence of increased value is inadmissible where the increase would result from a use ...