Lieberman v. Philadelphia Redevelopment Authority

302 A.2d 915, 8 Pa. Commw. 366, 1973 Pa. Commw. LEXIS 727
CourtCommonwealth Court of Pennsylvania
DecidedApril 4, 1973
DocketAppeal, No. 343 C.D. 1972
StatusPublished
Cited by2 cases

This text of 302 A.2d 915 (Lieberman v. Philadelphia Redevelopment Authority) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lieberman v. Philadelphia Redevelopment Authority, 302 A.2d 915, 8 Pa. Commw. 366, 1973 Pa. Commw. LEXIS 727 (Pa. Ct. App. 1973).

Opinion

Opinion by

Judge Rogers,

The Redevelopment Authority of the City of Philadelphia here appeals a judgment entered against it in a condemnation case tried below by a judge without a jury-

[368]*368The appellees, Irwin and Lillie Lieberman, conducted a taproom business in a premises owned by others located in center-city Philadelphia. The last written lease under which they occupied the premises was for a term of five years from November 1, 1961 with an option to renew for a further term of three years. The lease included a clause providing for its termination upon condemnation of the demised premises by any government agency. The Redevelopment Authority condemned the property on January 30, 1969, a date, as appears, nine months in advance of the termination of the Liebermans’ optional three year term. The Liebermans were evicted by the Authority on June 1, 1969.

The parties, before any litigation, settled on a list of machinery, equipment and fixtures in the premises belonging to the Liebermans for the taking of which they were entitled to compensation by Section 603(3) of the Eminent Domain Code, Act of June 22, 1964, P. L. 84, 26 P.S. §1-603(3). The proceedings below were informal in the extreme and more nearly resembled settlement negotiations than a trial of the issues. It is nevertheless clear that the Liebermans did not claim damages for the destruction of their leasehold. Nor, under Pennsylvania law were they entitled to such in the presence of the provision of the lease effecting its termination upon condemnation. Scholl’s Appeal, 292 Pa. 262, 141 A. 44 (1928). It is equally clear that the Liebermans did, however, from the outset claim compensation for injury to their liquor license and for business dislocation damages.

At the trial, the Liebermans’ only witness was Irwin Lieberman. He testified as to his opinion of the value not only of the machinery, equipment and fixtures but also, over objection, of the liquor license, which latter he stated was worth $35,000 to $40,000 before condemnation but was valueless thereafter because [369]*369a transferee who would pay anything for it could not be found. Mr. Lieberman was also permitted to state the amounts of oral offers for the business made in 1961 by persons now dead or otherwise unavailable and the amount of the net profits of the business. Some of this testimony was elicited by questions of the trial judge and little, if any, of it ivas objected to, although the number of interruptions and the length of the colloquies in the transcript make it difficult to ascertain with any certainty what was taking place.

The Authority’s evidence consisted only of an expert’s testimony as to the value of the machinery, equipment and fixtures.

The trial judge awarded the condemnees the total sum of $40,000, of which $35,000 was for “all elements” except business dislocation and $5,000 for business dislocation damages. The “elements” considered by the court to be compensable were the liquor license and the “going concern value of the business,” in discussing which the judge made a calculation of the value of the business by capitalizing the net profits. The amount of the award for business dislocation damages was arrived at by multiplying the monthly rental of $300 by 24 months.

The principal issues of the case are whether the liquor license was compensable and what amount, if any, of business location damages the Liebermans are entitled to.

As regards the license, the condemnees and the court below principally rely on Feitz Estate, 402 Pa. 437, 167 A. 2d 504 (1961). That case held that the statutory right to apply, after death, for the transfer of a liquor license owned by a decedent at the time of death was subject to inclusion as part of the decedent’s estate taxable for inheritance tax purposes. It follows, the appellees argue, that the liquor license is a property in[370]*370terest for the purpose of condemnation. The fatal weakness of the argument is that Feits reaffirmed the law of Pennsylvania that the liquor license, per se, is a purely personal privilege and not a property right,1 and clearly distinguishes between the license itself and the right of the holder of the license in some circumstances to transfer the same: “As between the Commonwealth and the licensee of a restaurant liquor license, the license is simply a personal privilege subject to termination for cause or upon the death of the licensee; by its very nature, the license itself does not become an asset of the estate of the deceased licensee. However, since, by legislative fiat, upon the death of the licensee, the board is invested with the authority to transfer the license to the licensee’s surviving spouse or personal representative or to a person designated by the licensee, the right to apply for such transfer is a right which possesses value. The legislative intent is evident; the holder of a restaurant liquor license has the right to designate the person who may apply for a transfer of such license after his death and, in the absence of such designation, the surviving spouse or personal representative may do so. The statute insures that the holder of the license, by action or inaction, may pass on the right to apply for a transfer of the license. It is this right — a valuable right — which the decedent has as distinguished from the license itself. Such a construction is not novel. In fact we have held that where a licensee bargains by contract to transfer [371]*371to another his license, an action will lie for specific performance of that contract, a clear recognition that the right to apply for a transfer of the license is a property right: [Cases omitted].” 402 Pa. at 444-5,167 A. 2d at 537-8. Irwin Lieberman’s testimony is that following the condemnation he placed the license, which, of course, the appellees still owned, with brokers for sale and that no one could be found who would pay anything for its transfer. Hence, the right to transfer held taxable in Feitz was of no value here; not because it was destroyed by condemnation, but because it had no value in the market place. More fundamentally the condemnation by the Authority of the premises in which the Liebermans did business was not a taking of their right to transfer the liquor license, which Feits held to be the only taxable incident of the license. This is not to say, however, that the fact that one holds a liquor license is not a factor to be considered with others in determining the before condemnation value of a premises or of a leasehold to which it attaches. Obviously, a valuation witness would and should consider (without testifying to dollar value assigned) the possible enhancement of the value of a property or a leasehold supplied by the fact of its being eligible for licensing as evidenced by the fact that it is licensed. In the instant case, however, as we have explained, because of the condemnation clause there was no leasehold to be valued.

The Court also erred in considering business profits. Old and firmly established case law prohibits such consideration2 and the Eminent Domain Code, although greatly liberalizing condemnees’ rights to compensation, does not provide for it. The Comment of the Joint [372]*372State Government Commission to Section 705(2) (iii), 26 P.S.

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Cite This Page — Counsel Stack

Bluebook (online)
302 A.2d 915, 8 Pa. Commw. 366, 1973 Pa. Commw. LEXIS 727, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lieberman-v-philadelphia-redevelopment-authority-pacommwct-1973.