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Krieger v. Mayor and City Council of Baltimore

Decided: April 10, 1964.

KRIEGER, EXECUTOR AND TRUSTEE, ETC.
v.
MAYOR AND CITY COUNCIL OF BALTIMORE



Appeal from the Superior Court of Baltimore City; Foster, J.

Henderson, Hammond, Horney, Marbury and Sybert, JJ. Hammond, J., delivered the opinion of the Court.

Hammond

In this condemnation case the property owner complains that an erroneous instruction caused the jury to bring in too low an award.

The right of Baltimore City to condemn and the fact that an irredeemable ground rent of $130 annually on the property had a fair value of $2,600 were stipulated. The only issue for the jury was the fair value of the owner's leasehold interest in the four-story business building and the underlying land at Baltimore and Greene Streets.

The real estate expert who testified for the City used three methods of appraisal -- that of replacement cost less depreciation, capitalization of income and comparable sales -- to reach a value in fee for land and improvements of $26,000 from which he deducted the $2,600 value of the ground rent, leaving a value for the leasehold interest of $23,400. He said that in arriving at the fee simple figure by the first approach he used a building cost of 63 cents a cubic foot which resulted in a reproduction cost of $40,752, which he depreciated fifty-five per cent and found a present value of the improvements of $18,339. He then said:

"Then I estimated the land value, and I estimated the land value in this particular case -- the value of the corner lot -- the land under the building -- to be $6 per square foot. There are 1377 square feet in this

site, resulting in a valuation of $8,262 as the value of the site, which I added to the depreciated value of the building, and arrived at a total valuation by the cost approach of $26,600."

One expert for the owner estimated a reproduction cost of $67,550, took fifty per cent depreciation and, to the remaining present value of the buildings of $33,755 added his appraisal of the land -- $11,000 -- and said the fee simple value of land and buildings was $44,775. The other expert for the owner found a reproduction cost of $71,447, took fifty-five per cent depreciation, leaving a present value of the buildings of $32,151, to which he added his value of the land -- $10,125 -- to arrive at a fee simple value of $43,401 for both land and buildings. Both experts who testified for the owner told the jury that $2,600 should be deducted from their fee simple estimates to arrive at the present value of the owner's leasehold interest, and made the calculation for the jury.

Judge Foster charged the jury that "Mr. Samuel Krieger's estate [the owner] does not own the land, the estate owns only the improvements, and your responsibility is to bring in a value for those improvements on this lot of ground."

The appellant excepted to this instruction and urges here that its effect was to perpetuate in the minds of the jury "the deep rooted fallacy" as to the "commonly accepted misinterpretation" of the interest of a leasehold owner because it told the jury that the leasehold owner owns only the improvements and the owner of the reversion owns the land and, therefore, the value of the ground rent is equal to the value of the land.

We think it is clear that the court's charge, read as a whole, correctly instructed the jury and was not open to the effect claimed by the appellant.

Immediately after the part of the charge complained of, Judge Foster told the jury that their responsibility to bring ...


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