United States v. 564.54 Acres of Land

576 F.2d 983

• Court: Court of Appeals for the Third Circuit
• Decided: March 27, 1978
• Docket: No. 77-1238
• Status: Published

Opinions

OPINION ANNOUNCING JUDGMENT OF THE COURT

VAN DUSEN, Circuit Judge.

The principal issues in this appeal are whether the jury; charged with determining damages owed by the United States to the Southeastern Pennsylvania Synod of the Lutheran Church in America (“Synod”) for land taken under the power of eminent domain, was properly instructed in the law and whether the jury was sufficiently misled by a remark made by counsel for the Government to 'require a new trial. We hold that the combination of inadequate instructions by the trial judge and a misstatement of law made by the Government during its closing argument require a new trial.

I.

The trial in this case arose from a condemnation by the Government, as part of the Tocks Island Recreational Project, of three summer camps located on the Delaware River and owned and operated on a not-for-profit basis by the Synod. Prior to trial, the Synod sought a ruling that the proper measure of damages for just compensation under the Fifth Amendment is the cost of constructing substitute facilities to replace the camps, rather than the fair market value of the camps. Noting that the substitute facilities doctrine had only been applied in cases in which the condemnee was a governmental entity, the district court ruled that the substitute facilities doctrine was inapplicable. In an interlocutory appeal under 28 U.S.C. § 1292(b), this court reversed, holding that the substitute facilities measure of fair compensation is available to private owners.of non-profit facilities if there is no ready market for the facilities and if the facilities are “reasonably necessary to public welfare.” United States v. 564.54 Acres of Land, 506 F.2d 796, 800 (3d Cir. 1974). This court did not decide whether the property in this case met the test for the application of the substitute facilities doctrine, but left that issue for the determination of the district court.

Trial was divided into two phases. The first phase considered the issue of whether the substitute facilities doctrine applied to the condemned camps. Via a special interrogatory, the jury found that it did not apply. The second phase consisted of a damage determination using the fair market value test. The jury returned a verdict awarding $740,000. in damages. The Synod moved for a new trial on the phase one issue. Shortly thereafter, the trial judge died, and the judge to whom the case was reassigned denied the motion. This appeal followed.

The record establishes that the three pieces of property, acquired between 1927 and 1947, were treated as one for administrative purposes and that the camps were operated on a not-for-monetary-profit basis by the Eastern Pennsylvania Lutheran Camp Corporation, a Pennsylvania nonprofit corporation. The camps lost money each year and were subsidized by gifts from members of the Lutheran Church. The camps provided activities such as water and land sports, nature appreciation activities, and arts and crafts. They were open to children without any restriction as to race or religion. Scholarships to the camps were given to underprivileged and emotionally disturbed children. Campers included children from inner-city Philadelphia, some of whom were provided an opportunity to go to camp as a means of alleviating the “gang” problems in the inner-city. A number of charitable organizations paid the tuition of children who could not otherwise go to camp. These children included Protestants, Catholics, Jews, and children expressing no religious affiliation. These organizations could not afford to send children to camps operated for a profit. Additionally, many campers were not economically deprived and did not receive financial assistance.

Evidence was introduced by the Synod to show that during the period when the Synod knew that the camps were going to be condemned, no camp was on the market, nor was any combination of camps simultaneously on the market which would have adequately replaced the condemned camps. Consequently, the Synod felt the only way to continue the camping operation was to purchase land and construct new camping facilities. The Synod’s expert witness testified that a conservative estimate was that it would cost approximately $4,361,000. to replace the camps by constructing new facilities. Apparently, the reason for the great disparity between this figure and the $740,000. fair market value of the camps is attributable to the fact that the condemned camps were allowed to operate in noncompliance with state and federal housing and environmental legislation under grandfather clauses, but a newly constructed camp would require elaborate facilities to comply with this legislation. 564.54 Acres I at 798.

Although the Government did not acquire the camps until 1970, the publicity regarding the Tocks Island Recreational Area caused the Synod to anticipate the condemnation, and in 1964 the Synod purchased land in the Poconos for construction of a replacement camp.

II.

At the conclusion of phase one of the trial, the court submitted to the jury, together with a lengthy charge, the following interrogatory: “Under the principles I have given you, does the doctrine of substitute facilities apply?” The crucial issue in this appeal, as we see it, is whether this interrogatory was submitted to the jury in a confusing and misleading manner in light of the charge to the jury and remarks made by counsel for the Government in summation.

The Synod specifically argues that the court should not have submitted an omnibus question to the jury, but rather should have submitted each of the elements of the substitute facilities doctrine to the jury in a separate question. Our discussion of these elements infra shows that, due to their complexity, this position has great merit, and, in light of our discussion of the elements, the district court may wish to adopt this approach on remand. However, we decline to consider this specific contention, which is part of the larger question of whether the special interrogatory was confusing or misleading, as a ground for reversal. The Synod did not object to the form of the interrogatory at trial, although given ample opportunity to do so, and where a party does not object to the wording of a written interrogatory at trial we will not review it cn appeal. Frankel v. Burke’s Excavating, Inc., 397 F.2d 167, 170 (3d Cir. 1968). See also Kirkendoll v. Neustrom, 379 F.2d 694, 698 (10th Cir. 1967); Wyoming Construction Co. v. Western Casualty and Surety Co., 275 F.2d 97, 104 (10th Cir.), cert. denied, 362 U.S. 976, 80 S.Ct. 1061, 4 L.Ed.2d 1011 (1960).¹

A determination of whether the jury was confused or misled in answering the interrogatory requires us to examine in detail the principles established by 564.54 Acres I and its progeny and determine whether the charge given to the jury and the alleged prejudicial misstatement of law made by the Government comport with those principles. This will require us to review the jury instructions, to which the Synod did not object in the district court. Although generally jury instructions will not be reviewed on appeal if they were not objected to at trial,² we have the discretion to review instructions sua sponte if the error is fundamental and highly prejudicial or if the instructions are such that the jury is without adequate guidance on a fundamental question and our failure to consider the error would result in a miscarriage of justice.³ Though this discretionary power should be exercised sparingly, Trent v. Atlantic City Electric Co., 334 F.2d 847, 859 (3d Cir. 1964); Mazer v. Lipschutz, 327 F.2d 42, 52 (3d Cir. 1964), we think it is exercised appropriately in this case. As the following discussion demonstrates, “[t]he jury was without adequate guidance on [a] fundamental question . . . .” Wilson v. American Chain and Cable Co., 364 F.2d 558, 562 (3d Cir. 1966). Failure to rectify this error could result in a miscarriage of justice because it could mean that the Synod would receive several million dollars less in compensation than that to which it is entitled. We turn now to an examination of the principles of 564.54 Acres I, the charge, and the remarks made in the Government’s closing argument.

III.

In 564.54 Acres I we held that the substitute facilities doctrine applied to privately owned property if three conditions were met: (1) the property must be operated on a not-for-profit basis; (2) there must be no ready market for the particular type of property; and (3) the property, or facilities, must be “reasonably necessary to the public welfare.” Id. at 796. Each of these conditions has complexities and we will analyze each of them in turn.

A. NOT-FOR-PROFIT BASIS

The dispute at the trial over this element of the substitute facilities test concerned whether “not-for-profit” refers to monetary profit or to any type of profit. Specifically, the dispute is whether operating facilities for “spiritual profit” precludes application of the substitute facilities doctrine.

During closing argument, counsel for the Government made the following statements:

“On the question of not-for-profit, we concede they are a religious and charitable organization which was operating on a not-for-monetary profit. No question about it. But, is that the only kind of profit? Think about it. They were putting in operation a camping program which was for the betterment of their religious teachings. Is that not a profit for a religion? [The Synod’s counsel] said, ‘And if by chance some kid might be converted. . . . Isn’t that what they are there for? Isn’t that their mission?’ So, maybe they were operating not for a monetary profit but maybe for a spiritual profit. [140a]

“He [Pastor Gulliford] said he visited Camp William Penn. I don’t know if you recall that. It was just a short part of his testimony. He said that’s a city-run camp. He said it handled roughly the same number of children. But he said the difference was, and here’s your tip-off why this is not to be considered as a not-for-profit operation; he said, ‘They had different goals.’ Sure they did. They were there to take care of the children from the ghetto areas, period. They weren’t there to promote their religion or any religious teachings, or doctrine.” [144a — 45a]

The Synod argues that this is a misstatement of the law, and that these statements misled the jury as to the proper test for application of the substitute facilities measure. Of course, a misstatement of law which is prejudicial and not cured can be grounds for a mistrial. See Hockaday v. Red Line, Inc., 85 U.S.App.D.C. 1, 3, 174 F.2d 154, 156 (1949). The Government, however, makes three arguments in response. It argues, first, that this is not a misstatement of law; second, that even if it were, it was cured by the judge; and, third, that the Synod is precluded from raising this issue because it failed to make a timely objection. We reject all three of these arguments.

First, it is clear that the court in 564.54 Acres I was referring to monetary profit. In the context of a discussion of the camps’ not-for-profit operation, the court noted that the Synod claimed that the camps were operated at a loss. Surely this means that the camps operated at a monetary loss, not a spiritual loss, and therefore the court also must have been referring to monetary, not spiritual, profits. Moreover, the court noted that if property has no marketplace, the substitute facilities measure is applicable to non-profit facilities and the present value of capitalized future earnings measure is applicable to profit-making facilities. Id. at 799. Because spiritual earnings cannot be capitalized, “profit” in the context of this discussion means monetary profit. This is the only reasonable interpretation of “not-for-profit,” for to hold that a private owner cannot qualify for application of the substitute facilities doctrine if he receives any type of profit, no matter how intangible or ephemeral, from his property would render the doctrine inapplicable to private owners in every instance. Every charitable organization receives some type of profit from its public works in the form of the feeling of achievement and satisfaction the contributors derive from their good work or the enhancement of the image of the organization and its members in the eyes of the community.⁴

We conclude that the remarks by counsel for the Government constituted a clear misstatement of law.

Aside from being a misstatement of law, one of these remarks was improper for a second reason. The second statement quoted above clearly implies that the purpose of the camps was to promote the Lutheran religion, teachings and doctrine. This may have influenced the jurors to find that the substitute facilities measure did not apply because they did not want the taxpayers’ funds to be used to convert campers to the Lutheran religion. There is absolutely no evidence in the record to indicate that the Synod used the camps to proselytize. Therefore, this remark was highly inaccurate, as well as prejudicial.

We do not think the trial judge cured this misstatement of law and the resulting prejudice. Counsel for the Synod objected to these remarks and the court overruled the objection without comment (N.T. 784), apparently thinking either that this was not a misstatement of law or that it was not sufficiently prejudicial to require curative instructions. In the charge, the trial judge did tell the jury “to follow the law as stated in the instructions of the Court” (N.T. 788) and that “statements of counsel are not evidence” (N.T. 795). The court, however, never told the jury that the statements of counsel are not law, never told the jury to disregard statements of law by counsel, and never singled out the offending remarks as being erroneous. Because of the inaccurate and highly prejudicial nature of these remarks, we do not think these general instructions cured the damage. Moreover, the only times the charge referred to the non-profit element of the substitute facilities test the court did not specify not-for-monetary-profit (N.T. 798, 802). It would have been an easy matter for the district court to expressly state that the Government’s remark was a misstatement of law. The general remarks the dissent finds to be curative fall far short of the type of explicit statement that would have eliminated any possibility of prejudice. The fact that the district court overruled the Synod’s objection to this remark (N.T. 784) indicates that the court did not intend to cure the effect of this error.

We think the objection to the improper remarks was timely. The Synod did not object to the remarks at the time they were made nor attempt to rebut them in its closing argument. Rather, counsel objected in chambers after the trial had recessed for the day. Relying on two cases from other circuit courts of appeals, Sanden v. Mayo Clinic, 495 F.2d 221 (8th Cir. 1974), and Hyman v. Life Insurance Company of North America, 481 F.2d 441 (5th Cir. 1973), which held that objection is waived if counsel does not either object or move for a mistrial at the time remarks are made, the district court held that the Synod had waived objection. Although the better practice is to object at the time the remarks are made, the rule of Sanden and Hyman has not been adopted in this circuit. Rather, the rule in this circuit is that, to be reviewable, an error must be called to the attention of the trial court so that the trial court has an opportunity to rule on the matter and correct any prejudicial errors. Shepler v. Crucible Fuel Co., 140 F.2d 371 (3d Cir. 1944). On this standard, the objection was timely, since the trial judge could have corrected any impropriety in supplemental instructions to the jury the next morning.

We note finally that the evidence established that the camps were run on a not-for-monetary-profit basis and that the Government conceded this. Accordingly, the jury could not have properly found that this element of the substitute facilities test was not met, and the court should have ruled that it was met as a matter of law.

B. NO READY MARKET

The jury instructions on the no ready market condition were substantially correct at times and somewhat confusing at one point. Taken alone, iherefore, the instructions on this point would not be grounds for reversal. However, since the parties disagree on the meaning of the no ready market condition, and since a clarification of the meaning of that condition by this court will enable the district court on remand to instruct the jury more clearly and succinctly, a discussion of this point is necessary. Although there was no fundamental error in the instructions on this point, any departure from a clear, succinct statement would tend to blur the confusing task the jury faced in answering a complex, multifaceted question.

The Synod interprets the condition that there be no ready market to mean that the facility must be unique in the sense that it cannot be replaced in the marketplace at a cost roughly equivalent to its fair market value. The Government interprets the condition to mean that no market value can be established because the facility cannot be sold in the marketplace. Of course, if there is no market, the facilities can be neither bought nor sold. When the substitute facilities doctrine was first developed, it was in the context of facilities such as highways, which have no market value in this economic sense, see, e. g., Fort Worth v. United States, 188 F.2d 217 (5th Cir. 1951); United States v. Los Angeles County, 163 F.2d 124 (9th Cir. 1947). Highways are never bought or sold on the market. However, when the Court of Appeals for the Second Circuit applied the substitute facilities doctrine to such facilities as a gymnasium, United States v. Certain Property, 403 F.2d 800 (2d Cir. 1968), and we applied the doctrine to camps, it became clear that the concept of a ready market took on a different meaning because camps and gymnasia are bought and sold privately and have market values.

It is important to distinguish between the market for the underlying property adaptable to various uses and the market for the existing facilities. Although a camp owner can readily sell camp property either for use as a camp or because he can obtain a market price determined by alternative uses of the property, a displaced camp owner may not be able to purchase a comparable existing facility because, in a given area, there may be a limited number of camps whose facilities may vary substantially. Thus, a camp at certain times and under certain economic conditions may be sufficiently unique to be irreplaceable in the market,⁵ requiring the displaced camp owner to purchase property and construct facilities equivalent to those taken. Cf. Newton Girl Scout Council v. Massachusetts Turnpike Authority, 335 Mass. 189, 197-198, 138 N.E.2d 769, 775 (1956). If this is so, the “no ready market” condition is met.

In 564.54 Acres I, at 799-800, the court stated:

“The basic principle underlying the constitutional requirement of ‘just compensation’ is one of indemnity. The condemnee ‘is entitled to be put in as good a position pecuniarily as if his property had not been taken. He must be made whole but he is entitled to no more.’ Olson v. United States, 292 U.S. 246, 255, 54 S.Ct. 704, 708, 78 L.Ed. 1236 (1934).

“If the government condemns property for which there is a ready market (commodities are a classic example) payment of the fair market value is complete indemnity since, whatever its intended use, the condemnee can readily replace it in the marketplace.

“ . . . Indeed, the Second Circuit in United States v. Certain Property, 403 F.2d 800, 803 (2d Cir. 1968), and the Ninth Circuit in California v. United States, 395 F.2d 261, 266 (9th Cir. 1968) have made it clear that even in those comparatively rare instances where there is a market value for the community facility taken (for example a possible sale of a public building for private use) the government’s duty to indemnify is to provide the cost of a more expensive public substitute facility. . . . Simply stated this method insures that sufficient damages will be awarded to finance a replacement for the condemned facility.”

(Footnote omitted, emphasis supplied.)

This language makes clear that regardless of whether the Synod could have sold the camps, and regardless of whether the camps had fair market value, this condition of the substitute facilities doctrine is met if the Synod could not have replaced the camps’ facilities in the marketplace for a cost roughly equivalent to the fair market value of the camps.⁶ Therefore, a facility will be deemed replaceable in the marketplace if the owner, exercising reasonable diligence,⁷ could have purchased a functionally equivalent replacement at a cost roughly equal to the fair market value of the taken facility⁸ during a reasonable time after notice of condemnation.⁹

C. “REASONABLY NECESSARY”

To qualify for the substitute facilities measure the facility must be “reasonably necessary to public welfare.” 564.54 Acres I at 796. “Reasonable necessity” is an elusive concept, and consequently this is a difficult element of the substitute facilities doctrine to apply. The Government interprets “reasonable necessity” to mean that the facility must be necessary to the community in a strict sense, in the sense that it is indispensable and the community cannot get along without it. Brief for appellee at 12, 25. The Synod, on the other hand, equates “reasonable necessity” with community benefit. Brief for appellant at 32. We think the Synod’s interpretation comes closer to capturing the correct meaning of “reasonably necessary.”

In some early cases, courts required that for replacement facilities to be necessary, the governmental owner must be compelled by law to replace them. E. g. United States v. Board of Education of County of Mineral, 253 F.2d 760, 764 (4th Cir. 1958); Clarksville v. United States, 198 F.2d 238, 243 (4th Cir. 1952); United States v. Wheeler Tp., 66 F.2d 977, 984 (8th Cir. 1933). The court in 564.54 Acres I expressly rejected the legal necessity test. Most courts have adopted a “factual necessity” test holding that, in some sense, the facilities must be necessary in fact. E. g. United States v. 3,727.91 Acres of Land, 563 F.2d 357 at 359 n.2 (8th Cir. 1977); United States v. Streets, Alleys & Public Ways, Etc., 531 F.2d 882, 886 (8th Cir. 1976); United States v. Certain Property in Borough of Manhattan, supra at 803-04; United States v. Certain Land in Borough of Brooklyn, supra at 695; Washington v. United States, 214 F.2d 33, 40 (9th Cir. 1954); Fort Worth v. United States, 188 F.2d 217, 222 (5th Cir. 1951); California v. United States, 169 F.2d 914, 924 (9th Cir. 1948); United States v. Arkansas, 164 F.2d 943, 945 (8th Cir. 1947); United States v. Los Angeles County, 163 F.2d 124, 125 (9th Cir. 1947); United States v. Des Moines County, 148 F.2d 448, 449 (8th Cir. 1945). An examination of the facts of many of those cases which reject the application of the substitute facilities doctrine on the ground that substitute facilities are not factually necessary shows that “factually necessary” may not mean necessity in a strict or absolute sense. In a number of those cases, constructing substitute facilities would have provided virtually no benefit, which was deprived by condemnation, to the community, either because the condemned facility was unused prior to condemnation,¹⁰ or because the condemnation eliminated any need for the facility,¹¹ or because the condemnor constructed a functionally equivalent facility to serve the purpose the condemned facility had been serving.¹² Therefore, interpreting “necessary” to mean “beneficial” is consistent with the results of these cases. Furthermore, at least one early circuit court of appeals decision adhering to the factual necessity test expressly rejected a strict interpretation of “necessity.” Fort Worth v. United States, supra at 222.¹³ We also note that commentators have supported rejection of a strict interpretation of necessity. Note, Duke L.J., supra note 4; Note, Substitute Facility Measure of Just Compensation Is Available to Private Owners of Nonprofit Community Facilities in Appropriate Cases, 6 Seton Hall L.Rev. 711 (1975); Note, Just Compensation and the Public Condemnee, 75 Yale L.J. 1053 (1966).

Although it is not clear that there ever was a generally accepted rule that substitute facilities must be strictly or absolutely necessary, if there were such a rule, 564.54 Acres I and other cases have abandoned that rule by qualifying “necessary” with “reasonably.” Certain Property in Borough of Manhattan, supra; Certain Land in Borough of Brooklyn, supra. See 3,727.91 Acres of Land, supra; Streets, Alleys & Public Ways, Etc., supra; Washington v. United States, supra. Moreover, in holding that the substitute facilities measure can apply to such facilities as camps, playgrounds and gymnasia, these courts established that “reasonably necessary” cannot possibly mean “absolutely necessary” or “indispensable” because no one camp, playground or gymnasium could ever be absolutely necessary or indispensable to a community. Therefore, a court that held that the substitute facilities doctrine is applicable to this type of facility, but only if the facility is absolutely necessary, would be giving with one hand and taking away with the other. Additionally, the entire expression used by the court in 564.54 Acres I, “reasonably necessary to public welfare,” also includes the elusive concept of public welfare. This suggests that the facilities need not be “reasonably necessary” to the existence of the community, but only to the well-being of the members of the community. They need not be so essential that they are required to make the community meet minimal standards, rather they need only make the community a better community. Read against the background of the history and development of the “necessity” requirement, the facts of the cases applying both the “factually necessary” test and the “reasonably necessary” test, and the ordinary language meaning of the expression “reasonably necessary to public welfare”,¹⁴ the meaning of this element of the substitute facilities doctrine becomes clearer. There are two aspects to “reasonable necessity.” First, for a facility to be “reasonably necessary” it must provide a benefit to the community or be rationally related to the public welfare.¹⁵ Of course, to say that a facility provides a benefit to the community is not to say that it serves everyone in the community. For example, a small neighborhood park that serves only the people living within walking distance from it may provide a benefit to the community. In this case, the Synod attempted to show that the camps helped alleviate the “gang” problem in inner-city Philadelphia. If the camps did help reduce such juvenile crime, then they provide a benefit to the entire community of Eastern Pennsylvania, not just to the campers.

Secondly, for a facility to meet the “reasonably necessary” test, the condemnor must not have eliminated the need or purpose which the condemned facility served. For example, if the condemnor has provided a functionally equivalent replacement facility, or if the condemnor renders a, replacement facility useless by flooding the town it would have served, the condemnor has eliminated the need or purpose the condemned facility served, and it is not “reasonably necessary” to replace it. To summarize, for a facility to be “reasonably necessary to public welfare,” it must provide a benefit to the community that will not be as fully provided after the facility is taken.

Again, the jury instruction on this point did not accurately reflect our interpretation of the law. Although at one point the instruction regarding “reasonable necessity” referred to “fulfilling a community need or purpose” (N.T. 798), the instructions never equated “reasonably necessary” with community benefit. More seriously, the instructions seem to have emphasized the strict sense of necessity which we have rejected here. For example, they stated that for the “reasonably necessary” test to be met, the Synod must have a duty to replace the facility and the duty need not be legally compelled but may arise from necessity (N.T. 801). Moreover, the words “need” and “necessary” were used throughout the charge, but “benefit” was never used.¹⁶ Therefore, the charge on the “reasonably necessary” issue was confusing and misleading.

IV.

In part III above we established that three conditions must be met for the substitute facilities measure to apply to privately owned property. With the caveat that a summary cannot articulate the complexities discussed above, we summarize the three conditions as follows: (1) the condemned facility must have been operated on a not-for-monetary-profit basis; (2) the owner, exercising reasonable diligence, must have been unable to purchase a functionally equivalent replacement at a cost roughly equal to the fair market value of the taken facility; (3) the facility must have provided a benefit to the community that will not be as fully provided after the facility is taken.¹⁷ Therefore, on remand for a new trial, whether these three conditions are met must be determined.

The order of the district court denying the Synod’s motion for a new trial will be reversed and the case remanded for a new trial in accordance with this opinion.

1 . The Synod also argues for the first time on appeal that it was error to submit the special interrogatory to the jury because it poses a question of law to be answered by the court. At trial, the Government argued that this question was one for the court, but the Synod did not join this argument nor object when the court ruled that the interrogatory would be submitted to the jury. Apparently, the Synod preferred to have the jury answer this question, but now, having lost, argues that the court should have answered it. Since the Synod did not challenge submission of the question of the applicability of the substitute facilities doctrine to the jury in the district court, we decline to address this contention on appeal. See Kirkendoll, supra at 698; Wyoming Construction Co., supra at 104.

2 . F.R.Civ.P. 51 provides in pertinent part:

“No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection.”

3 . This circuit first recognized an exception to F.R.Civ.P. 51, note 2, supra, in Callwood v. Callwood, 233 F.2d 784, 788 (3d Cir. 1956), which stated that the court could review a jury charge not objected to if the error in the charge was fundamental and highly prejudicial. In our frequent application and reaffirmance of this principle, we have stated it a number of different ways. In Ratay v. Lincoln National Life Ins. Co., 378 F.2d 209, 212 (3d Cir.), cert. denied, 389 U.S. 973, 88 S.Ct. 472, 19 L.Ed.2d 465 (1967), we stated that we would engage in such a review because the erroneous instruction related to a critical issue and it did not affirmatively appear from the whole record that it was not prejudicial. The charge was reviewed in Wilson v. American Chain and Cable Co., 364 F.2d 558, 562 (3d Cir. 1966), because “[t]he jury was without adequate guidance on [a] fundamental question . . . . A verdict so arrived at is one ungovemed by the legal principles which determine the dispute between the parties and therefore may not be sustained as the ultimate product of the judicial process.” Pritchard v. Liggett & Meyers Tobacco Co., 350 F.2d 479, 486 (3d Cir. 1965), cert. denied, 386 U.S. 1009, 87 S.Ct. 1350, 18 L.Ed.2d 436 (1967), held that “[wjhere it is apparent on the face of the record that a miscarriage of justice may have resulted from counsel’s failure to properly protect the interest of his client by timely objection, the error must be noticed and rectified.” In Trent v. Atlantic City Electric Co., 334 F.2d 847, 859 (3d Cir. 1964), we stated that “[tjhis court has on occasion reversed sua sponte on the basis of plain or fundamental error respecting the charge.” In McNello v. John B. Kelly, Inc., 283 F.2d 96, (3d Cir. 1960), we reversed on the basis of instructions not objected to because the instructions were so inadequate that they were “tantamount to no instructions at all.” Accord, Mazer v. Lipschutz, 327 F.2d 42, 52 (3d Cir. 1964) (“an appellate court may in its discretion, disregard Rule 51 when the error claimed is plain and may result in a miscarriage of justice . . . .”); Leposki v. Railway Express Agency, Inc., 297 F.2d 849, 850 n.1 (3d Cir. 1962).

4 . Nothing we have said should be taken to imply that a facility will qualify for the substitute facilities doctrine if it is run on a non-profit basis for other than the purpose of charity or for the purpose of providing a service at a low cost; for example, if it does not make a profit because of mismanagement or inefficient operation or because certain employees are paid high salaries. In the present case, the Synod attempted to show that the potential to make profits was transferred to the community as a community benefit, and our discussion is limited to this factual situation. One rationale for the substitute facilities measure is to indemnify not only the owner of the condemned facilities, but those who have an interest in the continuing existence of the facilities, in this case, according to the Synod, the general public. See United States v. Certain Property in Borough of Manhattan, 403 F.2d 800, 804 (2d Cir. 1968); Note, Cost of Substitute Facilities As A Measure of Just Compensation When There Is A Private Condemnee, 1975 Duke L.J. 1133, 1149. See also 564.54 Acres I at 800: “[T]he owner of a facility devoted to a non-profit, public use has a proprietary as well as a community interest in it . . .”

5 . 564.54 Acres I suggests that the facilities must be unique for the substitute facilities measure to apply. This is not a separate condition but rather part of the “no ready market” condition.

6 . See also United States v. Certain Land in Borough of Brooklyn, 346 F.2d 690, 694 (2d Cir. 1965):

“ . . . strict application of the market value rule of compensation will often be abandoned when the nature of the property or its uses produce a wide discrepancy between the value of the property to the owner and the price at which it could be sold to anyone else.”

Accord, United States v. Certain Property in Borough of Manhattan, 403 F.2d 800, 802 (2d Cir. 1968).

7 . To show that reasonable diligence was exercised, it may not be enough for the condemnee to show that no camps were advertised openly during the relevant time period if there is evidence that camps were being bought and sold or that unadvertised camps could have been purchased if inquiry had been made. In attempting to purchase facilities, however, the directors of a charitable or religious organization are not necessarily expected to exeicise the skill and business acumen of a profit-motivated businessman. Whether the Synod exercised reasonable diligence is a question of fact to be decided on remand.

8 . It may be possible to purchase functionally equivalent facilities for a cost far in excess of the fair market value of the condemned facilities. For example, the only functionally equivalent camps in the area may be in the path of industrial or residential development, and therefore camping may not be the highest and best use of the property. In this situation, the substitute facilities doctrine is applicable, but if it would cost less to purchase the equivalent camp than to construct a new one, the cost of substitute facilities should be based on the purchase price of this camp if the condemnee could have purchased it exercising reasonable diligence.

9 . As noted above, we do not find fundamental error with the jury instructions on this point; however, the jury instructions were not completely clear in explaining the proper meaning of “no ready market.” Although the court correctly told the jury that it must find that there was no ready market for the facilities if the Synod could not replace the camps (N.T. 802) and that “if the fair market value of the condemned property is substantially less than the cost of constructing functionally equivalent substitute facilities, then the substitute facilities doctrine is a proper method of valuation” (N.T. 797), the court also stated that if the jury found that the camps had market value in the usual sense, the substitute facilities doctrine would not apply and the property should be treated like that of any other private condemnee. The court stated:

“The general rule is that just compensation is to be measured by the fair market value of the interest taken. That is the price which would have been agreed upon in the open market between a willing buyer and a willing seller. Fair market value is the normal and useful standard of just compensation. There are, however, instances where because the property taken either is public property of a state or a municipality or is a rarely transferred specialty, where no market value in the usual sense exists. If you find this is the case in this proceeding, then the substitute doctrine will apply. If you do not find this to be the case, then the property should be treated like that of any other private condemnee.” (N.T. 800-01; emphasis supplied.)

The italicized language is clearly inconsistent with the language of 564.54 Acres I quoted above. The court attempted to correct this error by stating:

“Members of the jury, at one point in my Charge, I told you as follows: ‘There are, however, instances where because the property taken either is a public property of a state or of a municipality or is a rarely transferred specialty no market value in the usual sense exists. If you find that this is the case in this proceeding, then the substitute facility doctrine will apply. If you do not find this to be the case, then the property taken should be treated like that of any other private condemnee.’

“I will ask you to disregard that and consider my other instruction because the doctrine can apply to something which is not public. But the factors have to be present which I have given you.” (N.T. 808-09)

This curative instruction only cures the error created by the implication in the earlier instruction that the substitute facilities doctrine applies only to public property. It leaves open the inference that the substitute facilities doctrine applies only where there is no market value in the usual sense. Therefore, the jury may have incorrectly thought that, for the substitute facilities doctrine to apply, the facilities must have no market value.

10 . For example, in California v. United States, supra, the “streets” taken were actually proposed streets 20 feet below water in the San Francisco Bay.

11 . For example, in Woodville v. United States, 152 F.2d 735 (10th Cir. 1946), there was no benefit to be gained by constructing new roads because the entire town the roads served had been taken by condemnation and flooded. Similarly, in United States v. 3,727.91 Acres of Land, supra, the condemnee would have served no purpose by constructing new levees and drainage ditches to control flooding because the Government took the land on which flooding could be controlled. In United States v. Streets, Alleys & Public Ways, Etc., supra, new streets and alleys would have provided no benefit because the population of the town had decreased to 30 under threat of condemnation for a reservoir, and new streets constructed by the condemnor were adequate for that number of people. In Washington v. United States, supra, constructing a substitute road would have served no purpose because some of the communities served by the road were being flooded and a new road constructed by the condemnor adequately served the other communities. In arguing that these cases are inconsistent with the community benefit interpretation of “reasonably necessary” (dissenting opinion, note 8), the dissent fails to distinguish between benefit to a few individuals and benefit to the community. It does not follow from the fact that substitute facilities would have benefited a few people in these cases that substitute facilities would have been sufficiently valuable or important to provide a community benefit. We realize there may be difficulties in defining “community” in some cases, but this case does not present that problem.

12 . See United States v. Streets, Alleys & Public Ways, Etc. and Washington v. United States, both discussed in note 11, supra.

13 . In rejecting the Government’s strict interpretation of “necessary,” the court stated:

“[I]t will not at all do to say that in determining the cost of providing any necessary substitutes, an award in condemnation may be denied because there are already in existence other available routes which will in some fashion handle the traffic diverted by the condemnation. ... In any proper view of the requirements of just compensation, the substitute ‘necessary’ is that necessary to readjust its street and highway system to serve the municipality’s requirements and needs in as adequate a manner and extent and with equal utility as such system would have provided had the facility in question not been condemned, so far as this is reasonable and practical.”

14 . The expression “reasonably necessary” is not commonly used in ordinary language, but rather appears to be an expression framed by the courts. Consequently, it must derive its meaning primarily from the facts of the cases in which it has been applied and the cases from which it developed. However, insofar as it is proper to qualify the word “necessary” with the word “reasonably” in ordinary language, the expression “reasonably necessary” seems somewhat analogous to an expression like “reasonably good,” meaning not entirely good but somewhat good. Therefore, in ordinary language, “reasonably necessary” must mean “not entirely necessary, but somewhat necessary” to the welfare of the community. This is roughly equivalent to “beneficial to the community” and is consistent with our analysis of “reasonably necessary” as a legal term of art. Furthermore, as noted above, the facility must be “reasonably necessary to public welfare” and public welfare connotes community benefit. The dissent misinterprets our discussion in this footnote. We do not equate the expression “reasonably necessary” with the expression “reasonably good.” We think that because the expression "reasonably necessary” is not commonly used in ordinary parlance, comparing it with a common expression like “reasonably good” helps to clarify its meaning. Of course, as the dissent notes, the words “reasonable” and “necessary” are used in ordinary language every day. The expression “reasonably necessary,” however, is not so common to laymen, some of whom are vitally interested in the principle in this case, and, as noted, appears to be an expression framed by the courts.

15 . See Note, Duke L.J., supra note 4 at 1141. The dissent disagrees with this interpretation of the “reasonably necessary” test because “[ujnder the proposed standard, governmental condemnors would be subject to the whims and caprices of private nonprofit swimming clubs, ice-skating clubs, tennis clubs, and myriads of other nonprofit recreational and social organizations who might discern need for their facilities but which the community might find frivolous.” Dissenting opinion, note 9. This point is reiterated in the dissenting opinion, note 11. We do not think this result would follow from our decision. It is not the whim of the owner of a nonprofit facility that will determine whether the Government will have to replace the facility. This will be determined by the jury. Under our standard, a trial judge would be free to instruct a jury that it might find that any facility not open to the public does not meet the community benefit or public welfare standard. Therefore, there is no likelihood that the Government would have to replace private clubs under our standard. Secondly, since the jury is the conscience of the community, we must assume that any facility a jury finds beneficial to the community or rationally related to public welfare would not be found “frivolous” by the community. In short, with regard to both private clubs and frivolous facilities, the jury acts as a safeguard on the whims of the owners. There is another reason why we think our broad interpretation of “reasonably necessary” is preferable to the dissent’s narrow interpretation. Under the dissent’s standard not only would swimming pools, skating rinks, and tennis courts be excluded, but such clearly beneficial and educational facilities as art museums and zoos would also be excluded. Juries might find these facilities to be quite beneficial to the community, yet not reasonably necessary to the community, as many cities have no zoo and no significant art collections. Rather than framing a narrow standard that would jeopardize the continuation of such valuable facilities, we prefer to interpret the “reasonably necessary” standard broadly so that a jury can assure that a valuable community facility is replaced when it has been taken by the Government, whether that facility be as humble as a neighborhood skating rink or as stately as the Philadelphia Museum of Art.

16 . The language of the charge relating to the “reasonably necessary” condition is set out below with emphasis supplied:

“You may find that the substitute facilities doctrine applies if the facilities were . fulfilling a community need or purpose. [N.T. 798]

“These two valuation doctrines rest upon the theory that if the Synod is under a duty to continue operating the taken facility, it is entitled to sufficient recompense to permit it to continue but if the Synod is not under such a duty, the property should be treated like that of a private condemnee.

“In determining which doctrine is to apply, the determination rests fundamentally on the existence or nonexistence of the community’s need for the property condemned. This will be your first and fundamental question. The duty to replace need not be legally compelled. It may arise from necessity.

“Therefore, you must decide whether the Synod has shown the condemned facility to be reasonably necessary. You should note the fact that the Synod may have drawn up plans for replacing the appropriate facilities, that the Synod has committed itself to use any award to construct a replacement, or the fact that it acquired a site for a substitute facility; none of these is conclusive evidence that the substitute facility is needed.

“You should also note that not every condemned facility needs to be replaced. Substitution may be unreasonable or unnecessary. The public need may no longer exist or adequate alternative facilities may be available. [N.T. 801-02]

“If you find that the Synod has proved a need to replace the condemned camps, the substitute facilities doctrine requires that the Synod be awarded a sum of money which would allow it to replace the camps functionally equivalent to the condemned facilities.” [N.T. 803]

17 . In this formulation of the third condition, we have consciously avoided using the expression “reasonably necessary.” Because this expression, not commonly used in ordinary language, could easily be misinterpreted by a jury, we think avoiding it is desirable.