Freedman v. Cholick

• Decision Date: 13 March 1963
• Citation: 379 P.2d 575,233 Or. 569
• Parties: Ben FREEDMAN, Appellant. v. Joseph CHOLICK and Edith A. Cholick, husband and wife, Respondents and Cross-Appellants.
• Court: Oregon Supreme Court

Page 575

379 P.2d 575

233 Or. 569

Ben FREEDMAN, Appellant. v. Joseph CHOLICK and Edith A. Cholick, husband and wife Respondents and Cross-Appellants.

Supreme Court of Oregon, Department 1.

Argued and Submitted Feb. 8, 1963.

Decided March 13, 1963.

Paul R. Meyer, Portland, for appellant. With him on the briefs were Kobin & Meyer, Portland.

Thomas J. Moore, Portland, for respondents and cross-appellants. With him on the briefs were Schedler & Moore, Portland.

Before McALLISTER, C. J., and ROSSMAN, SLOAN, GOODWIN and LUSK, JJ.

GOODWIN, Justice.

This is an action for damages for breach of contract.

Plaintiff paid defendant $250 for an option to buy a corner lot in downtown Portland for $115,000. Plaintiff in due course elected to exercise the option. Defendant was unable to deliver possession. This action followed. Plaintiff demanded in damages the difference between $115,000 and $132,000, the alleged market value of the property at the time he exercised the option. He also demanded $250 as return of his consideration for the option and $320 as lost interest on purchase money deposited in escrow by plaintiff. The jury found for plaintiff but awarded him only $570 in damages. Plaintiff appeals, and assigns error to certain rulings upon the evidence.

Expert witnesses testified in plaintiff's case-in-chief that the market value of the land and its improvement (a parking-garage) was between $130,000 and $132,000 at the critical time. Plaintiff's witnesses swore the building could be remodeled and used as an office building. In defendant's case, his value witness testified that the land as improved was worth only $100,000. Defendant's witness gave the building virtually no value. The value of the improvement thus became the central issue before the jury.

The defendant's value witness stated that in his opinion the garage building could not economically be converted into a commercial office building. He conceded on cross examination that it was technically possible so to remodel. However, it was his conclusion that the building did not enhance the present market value of the land. He said that in order to develop the land to its highest and best use it would be better, in his opinion, to demolish the existing building. He acknowledged that he had based his opinion, in part at least, upon an assumption that the building was brick rather than brick facing on reinforced concrete. Plaintiff's witnesses earlier had sworn that the building was concrete with brick facing and trim.

In rebuttal the plaintiff asked a contractor whether the existing improvement could be converted into a modern office building. The answer was affirmative. The plaintiff then asked the contractor the cost of such conversion. This evidence was excluded. The plaintiff then made an offer of proof, and combined in his offer of proof the contractor's testimony (a) that the building could be remodeled and (b) the cost thereof. Another offer of proof consisted of the testimony of a property-management expert concerning the earnings which could be expected from a modern office building on the site in dispute. By its various rulings, the court sustained objections to all of this proffered testimony. Plaintiff has assigned error to these rulings.

In general, rebuttal testimony will be excluded except for that made necessary by the opponent's case-in-chief. State v. Fischer, 75 Adv.Sh. 571, 575, Or., 376 P.2d 418 (1962); 6 Wigmore, Evidence (3d ed.) 510, § 1873. Whether such evidence is necessary is ordinarily a matter of discretion. Parmentier v. Ransom, 179 Or. 17, 22, 169 P.2d 883 (1946).

Normally, where the vendor breaches his contract to sell land, the vendee may recover the difference between the market value of the land at the time it should have been conveyed and the contract price. Crahane et al. v. Swan, 212 Or. 143, 156, 318 P.2d 942 (1957); McCormick, Damages 680, § 177. Present market value obviously includes the value of existing improvements on the land; e. g., Public Market Co. of Portland v. Portland, 179 Or. 367, 170 P.2d 586 (1946), cert. den. 330 U.S. 829, 67 S.Ct. 861, 91 L.Ed. 1278 (1947); City of Los Angeles v. Klinker, 219 Cal. 198, 211, 25 P.2d 826, 90 A.L.R. 148; 2 Orgel, Valuation under Eminent Domain 4, § 189. The quest for present market value also makes relevant an inquiry into the possible future uses of the land (within limitations not in issue here). Boom Co. v. Patterson, 98 U.S. 403, 408, 25 L.Ed. 206 (1878); 1 Sedgwick Damages (9th ed.) 510, § 253; 1 Orgel, Valuation under Eminent Domain, §§ 29-31. This inquiry is usually referred to as a search for the highest and best use of the land.

In the case at bar, the jury had heard plaintiff's value witness swear that the existing building was a valuable asset. The jury had also heard the defendant's witness say that he considered the building to be of little or no value. He reached a figure $30,000 lower than that of the plaintiff's witness because he thought the building ought to be torn down. There was, then, a conflict in the testimony of the two realestate appraisers. Plaintiff sought to rebut the defendant's expert by asking two other kinds of experts (a builder and a rental manager) to swear that there was a valuable building on the land.

Plaintiff relies upon State Highway Comm. v. Deal et al., 191 Or. 661, 233 P.2d 242 (1951), as authority that his proffered testimony was admissible in rebuttal. In the Deal case, the state's witnesses had sworn in the state's case-in-chief that the land taken could not be used for subdivision purposes. The point then under inquiry was the highest and best use of certain ocean-frontage land. During the owner's case-in-chief, he put in evidence to show that the best use of the property would be for subdivision purposes. The state objected when the owner then offered to prove how the land could be subdivided into lots, and when he sought to show the price for which the lots could be sold. The state argued, correctly, that this evidence was speculative. We held, however, that although the evidence normally would have been inadmissible as too speculative, it had become admissible in that case for a limited purpose. The state had opened up the collateral question of the cost of improvements and whether these costs could be recaptured in the selling price of the lots. We held that the defendant was thus entitled to meet the state's evidence with his own evidence that the lots could be sold. The testimony was admissible solely to prove that subdivision was feasible, and then only because the state had opened the inquiry.

In the case at bar, there is no dispute about the highest and best use of the land. Both parties agree that such use would be for a modern office building. Further, with reference to the value of the existing building and its future usefulness, it is clear that when plaintiff's witnesses testified to the market value of the property as a whole they took into account the value of the existing building as the start of a remodeled office building. Thus, when the rebuttal evidence was offered, the jury already had before it two different figures on market value, two extended explanations of how the figures had been reached, and two conflicting views on the feasibility of adapting the existing building.

The Deal case might give some support to the plaintiff's position in the case at bar if in the Deal case the trial court had permitted the state to come back in rebuttal with proof that the lots could not be sold at the prices sworn to by the owner. That matter, however, was never presented, and we had no occasion to pass upon it. In any event, we have been cited to no authority that would require a court to receive such evidence.

That portion of the proffered testimony which the plaintiff sought to elicit from the building contractor, i.e., that the existing building could be remodeled, was cumulative. Testimony on...