James McMillin Printing Co. v. Pittsburg, Carnegie & Western Railroad

Opinion by

Mr. Justice Fell,

This action was by a subtenant to recover the loss sustained by the taking of the leased property by the defendant in the construction of its road. The plaintiff conducted a printing establishment on the third floor of a building owned by H. C. Bair, who had leased the whole building to the Bair & Gazzam Manufacturing Company for a term of ten years expiring April 1, 1907. The manufacturing company leased the third floor to the plaintiff for a term which expired April 1, 1903, and on January 28, 1903, extended the lease to April 1, 1907. A bond to secure the owner of the building was approved November 22, 1902. At this time municipal consent to enter the city of Pittsburg had not been obtained. Proceedings had been instituted by the city to enjoin the construction of the road and it was decided January 5, 1903, that municipal consent was necessary ; see Pittsburg v. Ry. Co., 205 Pa. 13. Consent was obtained in February, 1903, and the defendant by direction of the court of common pleas filed another bond to secure the owner. This bond was approved April 28,1903. A bond to secure the plaintiff in this case was approved June 6, 1903.

The time of the appropriation of the owner’s interest in the building became of importance because of the contention of the defendant at the trial that the extension of the plaintiff’s lease on January 28, 1903, was made after the whole building had been appropriated; that the plaintiff acquired no additional right by it, and that the term for the taking of which it could recover ended April 1,1903, and not April 1,1907. The answer to this contention is that the extension of the plaintiff’s lease antedated any valid proceedings by the defendant to appropriate the owner’s interest in the building. Until consent had been obtained, it had no right to enter the city and it could not appropriate any property therein. The court was therefore right in holding that there was no appropriation until the approval of the second bond, and that the plaintiff’s term extended to April 1, 1907.

The instruction as to the measure of damages was that the plaintiff was entitled to recover the value of its lease and in addition thereto the reasonable cost of removing the machinery, and that in determining the value of the lease the increased rental it was required to pay and the actual, direct loss occasioned by the stopping of its machinery might be taken into consideration. That the cost of removing the machinery was submitted as a distinct item for which there could be a recovery and not merely as evidence of the value of the right of which the plaintiff was deprived, is a matter of which the appellant should not now complain. The case was tried by both sides on the theory that there could be a recovery of the cost of removal in addition to the value of the lease. The appellant’s counsel asked the court to instruct the jury that, there being no evidence of the value of the unexpired term of the lease, the measure of damages under all the testimony was the actual amount shown to have been expended in the removal of the machinery and other property from the building, and that the verdict should be limited to that amount. "When a case has been tried on the ground taken by the appellant at the trial, he should not be heard to question its correctness: Carpenter v. Lancaster, 212 Pa. 581.

Whether in an action by a tenant whose leasehold interest has been taken under the right of eminent domain, the cost of removing machinery used in the business in which he was engaged and losses directly resulting from interruption of the business can be considered, is a question on which the decisions are not harmonious. The market value of the land taken is the test universally applied in an action by an owner, and it is as accurate a measure of his loss as any that can be set up. What he is entitled to is the value of the land ascertained by a fair appraisement, and of this value the selling price of land similarly situated is prima facie the best evidence. But market value is an unsatisfactory test of the value to a tenant of a leasehold interest. It is really no test at all, because a lease rarely has any market value. Generally it is not assignable at the will of the tenant, and he pays in rent all that the right of occupation is worth. The right of which he is deprived and for which he is entitled to full compensation is the right to remain in undisturbed possession to the end of the term. The loss resulting from the deprivation of this right is what he is entitled to recover. The value of the right he is forced to sell cannot ordinarily be measured by its market price, for there is no market for it, nor can it always be measured by the difference between the rent reserved and the rental value if the lease should be a favorable one. If, as was the case here, a tenant engaged in a business requiring the use of heavy machinery and appliances should secure a new place equally well adapted to his business and at the same rent, he wonld still be at the expense of removal and at a loss because of the stoppage of his business. These are matters to be considered in connection with others, not as substantive elements of damage, but as tending to prove the value of the leasehold interest.

This subject was considered in Getz v. Railroad Co., a case twice before this court, reported in 105 Pa. 547 and 113 Pa. 214, in which a part of the leased property, used as a marble mill, was taken, compelling a removal of the tenant’s business. It was held that in ascertaining the damages to the tenant the value of the lease and also of the machinery and fixtures in place were to be taken into consideration and that, as tending to show the difference in value of the machinery and fixtures before the taking of the property and their value to be removed and applied to the same or other use, the expense of removal was evidence. In Kersey v. Railroad Co., 133 Pa. 234, a part of the tenant’s coal yard was taken in building a railroad. Evidence was admitted to show the cost of reconstructing appliances used in the business, the increased cost of handling coal, and the increased waste resulting from breakage, as affecting the value of the leasehold. In Ebret v. Railroad Co., 151 Pa. 158, the plaintiff used the leased premises in carrying out a contract to remove daily from the city gas works large quantities of coal tar, and evidence was received to show the additional cost necessarily incurred in performing the contract. In none of these cases was there a departure from the rule that the tenant’s recovery is restricted to the value of the unexpired term. The evidence was admitted to show this value. Becker v. Railroad Co., 117 Pa. 252, is not in conflict with these cases. The plaintiff there was the owner of the building taken, in which he carried on the business of a merchant tailor. The attempt at the trial was to show the difference between the value of his goods in the store to be sold to his customers and their value if removed and sold elsewhere. This difference was the profit of his business and it had no bearing on the question at issue, the value of the real estate.

The judgment is affirmed.