City of Los Angeles v. Deacon

The admission of evidence as to the net profit made in operating a rock and gravel plant on the property being condemned in this action, was error which, it is our opinion, requires a reversal of the judgment. Mr. Newberry, a witness for the defendants, and himself one of them because of his interest as a sublessee of the premises, testified in detail concerning the rich deposit of rock and sand on the property; outlined the commercial future of the rock business in southern California, stating the extent of the demand, the limits of the supply, and the economic advantages his plant possessed over others, and related much more along this line. Then, over timely objections and while still on direct examination, he was permitted to make a statement of his net profit at the plant during the year 1928, after paying rent to his lessor and rent to the owner.

The only legitimate object of all this testimony was to obtain an answer to the one question: What was the market value of the property being condemned, "that is to say, the highest price estimated in terms of money which the land *Page 493 would bring if exposed for sale in the open market, with reasonable time allowed in which to find a purchaser, buying with knowledge of all of the uses and purposes to which it was adapted and for which it was capable"? (Sacramento etc. R. Co. v.Heilbron, (1909) 156 Cal. 408 [104 P. 979, 980].) In arriving at an answer to this question for himself, a person of ordinary business judgment would want to know the answer to a number of preliminary inquiries. It is just possible he would want to know at what figure the property was assessed by the county assessor. He might find it of interest to know what value was put upon it by the appraisers when it was recently involved in a probate proceeding. He certainly would be interested, if it was the market value he sought to determine, in any offers that had been made for the property, and in the price at which it and property similarly situated had recently been sold. He would, most likely, be interested in the amount of profit that had been made in the use to which the property had been put.

But conceding that all these facts would be taken into consideration by one endeavoring to determine the market value of a piece of property, it is, nevertheless, the settled law of this state that none of them may be proven for the purpose of establishing the market value. [1] The procedure which is recognized as proper, is for the witness, when found to be qualified to give an opinion as an expert, to state, first, what is, in his judgment, the market value of the property. (DeFreitas v. Town of Suisun City, (1915) 170 Cal. 263 [149 P. 553, 555].) On this, the examination in chief, it may not be shown: For what sum the property was assessed (San Jose etc. R.Co. v. Mayne, (1890) 83 Cal. 566 [23 P. 522]; Yolo Wateretc. Co. v. Edmands, (1920) 50 Cal.App. 444 [195 P. 463];McNulty v. Lawley, (1919) 42 Cal.App. 747 [184 P. 50]); nor the value placed upon it by the appraisers in a probate proceeding (see Central Pacific R. Co. v. Feldman, (1907)152 Cal. 303 [92 P. 849]); nor the price offered for the property being condemned (Central Pac. R. Co. v. Pearson, (1868)35 Cal. 247; City of Santa Ana v. Harlin, (1893) 99 Cal. 538 [34 P. 224]; Merchants Trust Co. v. Hopkins, (1930) 103 Cal.App. 473 [284 P. 1072]); nor yet that offered or paid for lands in the neighborhood (Spring Valley *Page 494 Waterworks v. Drinkhouse, (1891) 92 Cal. 528 [28 P. 681];City of San Luis Obispo v. Brizzolara, (1893) 100 Cal. 434 [34 P. 1083]; Estate of Ross, (1915) 171 Cal. 64 [151 P. 1138]; City of Los Angeles v. Hughes, (1927) 202 Cal. 731 [262 P. 737]; Reclamation Dist. No. 730 v. Inglin, (1916)31 Cal.App. 495 [160 P. 1098]; Palladine v. Imperial ValleyF.L. Assn., (1924) 65 Cal.App. 727 [225 P. 291]; Dickey v.Dunn, (1927) 80 Cal.App. 724 [252 P. 770]; Fishel v. F.M.Ball Co., Inc., (1927) 83 Cal.App. 128 [256 P. 493];Merchants Trust Co. v. Hopkins, supra; and see leading case of Central Pac. R. Co. v. Pearson, supra.) "He should not be asked regarding specific facts in the examination in chief." (DeFreitas v. Town of Suisun City, supra.) On cross-examination, however, questions may be asked about these various matters. (Assessment and probate appraisals — Central Pacific R. Co. v.Feldman, supra; prices offered and paid for other properties —East Bay Mun. Utility Dist. v. Kieffer, (1929) 99 Cal.App. 240 [278 P. 476, 279 P. 178]; and see Central Pac. R. Co. v. Pearson, supra; Spring Valley Waterworks v. Drinkhouse,supra; City of Santa Ana v. Harlin, supra; Estate of Ross,supra, and Reclamation Dist. No. 730 v. Inglin, (1916)31 Cal.App. 495 [160 P. 1098].) [2] When evidence of sales, etc., is received on cross-examination, however, it is solely for the purpose of testing the value of the witnesses' testimony, it is not in itself evidence of value of the property. (City of SanLuis Obispo v. Brizzolara, (1893) 100 Cal. 434 [34 P. 1083];Palladine v. Imperial Valley F.L. Assn., (1924) 65 Cal.App. 727 [225 P. 291].) Nor is the rule any different on redirect examination than it is on the opening examination in chief, even though some specific sales may have been gone into during the cross-examination. (Reclamation Dist. No. 730 v. Inglin,supra.)