Gottus v. Redevelopment Authority of Allegheny County

• Decision Date: 24 May 1967
• Citation: 425 Pa. 584,229 A.2d 869
• Parties: August GOTTUS and Theresa Gottus, his wife v. REDEVELOPMENT AUTHORITY OF ALLEGHENY COUNTY, Appellant.
• Court: Pennsylvania Supreme Court

Page 869

229 A.2d 869

425 Pa. 584

August GOTTUS and Theresa Gottus, his wife v. REDEVELOPMENT AUTHORITY OF ALLEGHENY COUNTY, Appellant.

Supreme Court of Pennsylvania.

May 24, 1967.

Rehearing Denied June 22, 1967.

Sylvan Libson, Alan L. Ackerman, Pittsburgh, for appellant.

William Claney Smith, Pittsburgh, for appellees.

Before BELL, C.J., and MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.

OPINION

EAGEN, Justice.

On June 27, 1963, ¹ the Redevelopment Authority of Allegheny County (Authority) by virtue of its power of eminent domain, through proper resolution, condemned and appropriated certain lands, including improvements and fixtures thereon, of August and Theresa Gottus for the purpose of redevelopment. The Board of View of Allegheny County awarded the owners damages in the amount of $65,000. Both sides appealed to the Court of Common Pleas of Allegheny County, and a jury trial resulted in a verdict in favor of the owners in the amount of $87,125. (including detention damages). The Authority appeals from the judgment entered on the verdict.

The appellant contends that prejudicial trial errors require a new trial. The assignments of error will be discussed ad seriatim.

The land condemned consisted of a double lot, forty feet by one hundred and twenty feet, in the central business district of McKees Rocks. The improvements consisted of three buildings. The owners conducted a retail cleaning business on the premises which included a retail front for the collection and distribution of clothes, clothes racks, pressing equipment and machinery for the washing and cleaning of chothes. The last mentioned equipment was housed in a building specially constructed for this purpose.

After the taking was effected the Gottuses established the business at a new location. They removed, from the condemned premises to the new business address, all of the clothes racks and pressing equipment, but left behind the cleaning and washing machinery which was eventually sold by the Authority at public sale.

The washing and cleaning machinery was described as a Stoddard Solvent System. It was not unique and merely bolted to the floor. However, through the installation of piping and special electrical wiring, the premises were adapted to the use of this equipment. In the cleaning process a petroleum base solvent circulated through the washers, was recovered from the washers, dryers, and extractor, then purified by a filter and still and deposited in an underground tank for further use. Specifically, this machinery included as an integral part of the operation two washers, three dryers, a filter, an extractor, two reserve tanks, a water repellant machine and three pumps.

At trial the condemnees took the position that the cleaning machinery was a compensable part of the realty by application of the Assembled Industrial Plant Doctrine, and introduced expert opinion testimony as to the value of the realty as an assembled operating cleaning plant. These witnesses first fixed the fair market value of the realty as a cleaning plant in operation, without consideration for good will, and deducted from that sum the value of the equipment removed and taken to the new business location. The condemnor, on the other hand, maintained that the machinery involved could have been removed without damage to the realty, was personal property and should not be considered in fixing the realty value. The trial court charged the jury that in determining the value of the property condemned, the land, buildings And machinery were to be taken into consideration; the Assembled Industrial Plant Doctrine applied; and thereunder machinery and equipment which were necessary to the operation of the plant and placed therein the operation of the plant and placed therein for permanent use became fixtures, irrespective of whether they were physically attached to the realty. This is assigned as error. Hence, the prime question presented by this appeal is whether or not the Assembled Industrial Plant Doctrine applies in eminent domain. It is a question of first impression in Pennsylvania.

The doctrine stems from Voorhis v. Freeman, 2 Watts & S. 116 (Pa.1841). ² The contest therein was between a purchaser at a mortgage foreclosure sale and a creditor of the mortgagor who levied upon certain machinery in an iron rolling mill, and concerned priority rights in the machinery. In holding in favor of the purchaser of the realty, Mr. Chief Justice Gibson speaking for the Court at 119, fashioned what was to become the Assembled Industrial Plant Doctrine, when he said: 'Whether fast or loose, therefore, all the machinery 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.'

The doctrine has often been applied by the courts in at least two variations of the original industrial mortgage situation. See, e.g., Central Lith. Co. v. Eatmor Chocolate Co., 316 Pa. 300, 175 A. 697 (1934) (subsequent sheriff sale purchaser and unpaid chattel vendor), and In re Taylor and Dean Mfg. Co., 136 F.2d 370 (3d Cir. 1943) (trustee in bankruptcy and the holder of the real property interest).

The doctrine has also been applied in the separate area of local real estate taxation in order to bring plant machinery within the assessment base. See, United Laundries v. Board of Property Assessment, 359 Pa. 195, 58 A.2d 833 (1948).

In United Laundries v. Board of Property Assessment, supra, it was specifically held that a commercial laundry is an 'industry' within the meaning of the Assembled Industrial Plant Doctrine for the purpose of real estate taxation. While the question therein involved the construction of the Act of May 22, 1933, P.L. 853, Art. II, § 201, as amended by the Act of July 2, 1941, P.L. 219, § 1, 72 P.S. § 5020--201, the court based its conclusion that the machinery (although not attached to the realty) was subject to assessment and taxation on the premise that it came within the specific provision of the statute covering 'all other real estate.'

We recognize that the underpinnings of the doctrine in its various applications stem from different policy considerations. In the mortgage cases we have one consideration; ³ in the taxation case (United Laundries) supra, there is the statutory language; and, in eminent domain cases there are still other underlying considerations, mainly economic. Regardless, it appears anomalous to us to hold that the machinery of a commercial laundry is realty for tax assessment purposes and not such for eminent domain.

Some measure of the motions involved in applying the doctrine to a taking by eminent domain may be garnered from the language of Mr. Justice Cardozo in Jackson v. State of New York, 213 N.Y. 34, 35, 106 N.E. 758, L.R.A.1915D, 492 (1914): "Condemnation' is an enforced sale, and the state stands toward the owner as buyer toward seller. On that basis the rights and duties of each must be determined....