COMMUNITY REDEVELOPMENT AGENCY OF CITY OF LOS ANGELES v. ABRAMS

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Court of Appeal, Second District, Division 2, California.

The COMMUNITY REDEVELOPMENT AGENCY OF the CITY OF LOS ANGELES, Plaintiff, Appellant and Respondent, v. Arthur J. ABRAMS, Defendant, Respondent and Appellant.

Civ. 42058.

Decided: September 05, 1974

Eugene B. Jacobs, Agency Counsel, Robert J. Hall and Oliver, Stoever & Laskin, Special Counsel, by Thomas W. Stoever and C. Edward Dilkes, Los Angeles, for appellant Community Redevelopment Agency. Fadem, Kanner, Berger & Stocker, P.C., by Gideon Kanner, Beverly Hills, for appellant Abrams.

Arthur Abrams has been a pharmacist for 40 years. For the past 28 years he operated a pharmacy in an area embraced by the Watts Redevelopment project. He was the owner in fee simple of the real property on which the pharmacy was located. At the time of the commencement of this action Mr. Abrams was 64 years of age and suffered from rheumatoid arthritis.

On February 24, 1971, the Community Redevelopment Agency of the City of Los Angeles (the Agency), in the course of implementing the Watts Redevelopment Plan, filed an action in eminent domain to acquire the real property on which Mr. Abrams' pharmacy was situate. This parcel was part of an area of approximately 20 square blocks falling under the sweep of the Agency's proposed condemnation. The total condemnation not only took Abrams' pharmacy but eliminated the neighborhood from which his clientele came.

By his answer Mr. Abrams specifically prayed that the value of two types of personal property should be included in any determination of ‘just compensation’ for the Agency's taking of his property. These two types of personal property were (1) a quantity of ‘ethical drugs'1 which were in inventory on the premises, and (2) the business or ‘goodwill.’ He alleged that the value of the drugs was $60,000 and the value of the business or goodwill was $25,000.

In support of his contention Mr. Abrams alleged that because of State imposed restrictions on the sale of ‘ethical drugs' his stock thereof were rendered valueless by the elimination of his place of business and that because of his own particular situation and the circumstances of this particular ‘taking'2 he is incapable of relocating his business.

The trial court, on the basis of substantial evidence, found that (1) by reason of his age and physical condition, Mr. Abrams is unemployable, and must rely for a livelihood on his own business, and for that reason his business constitutes his only present and potential source of livelihood, and his principal asset, and (2) Mr. Abrams is incapable of starting a new business located in a new area.

The evidence established that because of State requirements the inventory of ethical drugs could not be sold to another pharmacist without a certification as to purity. The cost of such testing and certification would exceed the value of the drugs. It was stipulated that the value of the drugs was $10,000.

As a result the trial court concluded that the goodwill of Mr. Abrams' business was ‘taken, damaged, and destroyed’ and that the market for the drugs had been ‘destroyed’ by the condemnation action.

On the basis of these findings and conclusions the trial court awarded Mr. Abrams $10,000, the stipulated value of the drugs, in addition to the value which the jury placed on the real property and fixtures but denied any award for the goodwill of the business on the grounds that as a matter of law it was non-compenable. Both the Agency and Mr. Abrams have appealed.

Since on appeal we do not reweigh the evidence, our starting point is the well supported findings of the trial court that the two forms of personal property at issue were taken, damaged or destroyed by the condemnation action. Their value has been reduced to zero.

From this base we proceed to determine who should bear the loss. The essential question to be answered is whether a failure to compensate for these items would result in the owner of private property being asked to bear a disproportionate share of the cost of a public improvement. (Clement v. State Reclamation Board, 35 Cal.2d 628, 220 P.2d 897.)

On this appeal the Agency suggests an issue which was not raised below,3 that is that Mr. Abrams did not mitigate the damages. This claim is based on two different notions.

As to the inventory of drugs the Agency contends that Mr. Abrams made no effort to dispose of the drugs but instead continued to keep his inventory current. The Agency did not seek an order for immediate possession, hence Mr. Abrams continued in business until conclusion of the trial. It appears that he conducted that business with his inventory at normal levels.

Administrative Code section 1710 requires the owner of a pharmacy to maintain an adequate supply of drugs and chemicals. Be that as it may, the Agency is really suggesting that we reweigh the evidence since the trial court found that Mr. Abrams could not otherwise dispose of the drugs he had on hand. Mr. Abrams was not required, prior to judgment, to allow his business to atrophy.

Concerning the loss of the business the Agency contends that Mr. Abrams should have availed himself of certain relocation assistance afforded by provisions of the Government Code.

Government Code section 7262 provides that as a cost of the acquisition of real property for a public use, a public entity shall compensate a displaced person for (1) expense of moving the business, (2) expense in searching for a replacement of the business, (3) actual direct loss of tangible personal property as a result of moving or discontinuing a business.

In lieu of such compensation a business man who is displaced by a condemnation action may elect to accept a lump sum payment based on annual average net earnings not to exceed $10,000. This latter option is conditioned on the public agency being satisfied that the business cannot be relocated without substantial loss of patronage.

This statute appears to us to be legislative recognition of the need to compensate for loss of business as a result of a condemnation action but contemplates that such compensation be independent of the condemnation proceedings. The relocation assistance contains a certain amount of ‘hedging’ by the Legislature in giving the Agency the fact-finding power on the issue of relocatability and in limiting absolutely the amount of compensation available.

Further, section 7270 of the Government Code provides that nothing in these provisions shall be construed as creating in any condemnation proceedings any element of damages not in existence on the date of the enactment. Section 7274 specifically provides that these provisions create no rights or liabilities. Thus these provisions are not an adequate substitute for the constitutional requirement of just compensation.

We discuss the Legislature's power to limit compensation infra. At this point for the reasons stated and because the issue was not raised at trial we reject the Agency's contention that Mr. Abrams failed to mitigate damages.

The remaining contention of the Agency is essentially that personal property is, as a matter of law, non-compensable in an action for condemnation of real property.

Article I, section 14 of the California Constitution provides that ‘Private property shall not be taken or damaged for public use without just compensation . . ..’ That very simple statement of one of the most fundamental tenets of our tradition and culture has resulted in volumes of case law and text material dealing, under varying circumstances, with the issues of what has been ‘taken or damaged’ and what are the ingredients of ‘just compensation.’

The Constitution refers to ‘property’ without distinction as to its character as real or personal. (See Sutfin v. State of California, 261 Cal.App.2d 50, 67 Cal.Rptr. 665, where in an inverse condemnation action it was held that plaintiff could be compensated for damage to a number of automobiles on plaintiff's property caused by flooding from state flood control works.) Contrary to the Agency's contention here, if the state takes or damages personal property in the exercise of its power of eminent domain it is obligated to pay just compensation to the owner. (Sutfin, supra; also see Van Alstyne, Statutory Modification of Inverse Condemnation: The Scope of Legislative Power, 19 Stanford L.Rev. 727; 1 Nichols, The Law of Eminent Domain (rev. 3d ed. 1973) § 1.13[3], pp. 1–18.) We see no difference between the damaging of automobiles in Sutfin and the destruction of the personal property here.

In determining whether property, real or personal, has been taken or damaged the test is the loss to the owner and not benefit to the taker. (People v. La Macchia, 41 Cal.2d 738, 264 P.2d 15; United States v. General Motors Corp., 323 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311.)

Thus in the case at bench it matters not that the Agency does not intend to operate a drug store on the premises or make use of Abrams' inventory or business. (Boston Chamber of Commerce v. Boston, 217 U.S. 189, 30 S.Ct. 459, 54 L.Ed. 725; United States v. Fuller, 409 U.S. 488, 93 S.Ct. 801, 35 L.Ed.2d 16; Almota Farmers Elevator & Whse. Co. v. United States, 409 U.S. 470, 93 S.Ct. 791, 35 L.Ed.2d 1.)

The fundamental issues for the courts in these cases are simply whether a property right has been taken or damaged and the value of that private property right as of the time of the taking or damaging. Just compensation means the full and perfect equivalent in money of the property taken or damaged. Its owner is to be put in as good a position pecuniarily as he would have occupied if his property had not been taken or damaged. (United States v. Miller, 317 U.S. 369, 373, 63 S.Ct. 276, 87 L.Ed. 336.)

The determination of these issues is purely a judicial function and that function cannot be circumscribed by the Legislature. When the state through its executive arm takes or damages private property it cannot through its legislative arm limit the price it will pay or the manner of its payment. (Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S.Ct. 622, 37 L.Ed. 463; United States v. New River Collieries, 262 U.S. 341, 43 S.Ct. 565, 67 L.Ed. 1014; Beals v. City of Los Angeles, 23 Cal.2d 381, 144 P.2d 839; County of Los Angeles v. Ortiz, 6 Cal.3d 141, 98 Cal.Rptr. 454, 490 P.2d 1142.)

The law in California and elsewhere has long recognized compensable consequential damage to property rights which, while not actually ‘taken’, are damaged or destroyed by the physical appropriation of a portion of the owner's property. (See People v. Giumarra Vineyards Corp., 245 Cal.App.2d 309, 53 Cal.Rptr. 902; Southern Calif. Edison Co. v. Railroad Com., 6 Cal.2d 737, 59 P.2d 808; 4A Nichols, Eminent Domain, § 14.1.) There seems to be no logical reason why that principle should not apply with equal force where, in condemning real property, personal property, though not ‘taken’, is damaged or destroyed.

Of course, if personal property which is located on the real property can simply be picked up and moved without loss to the property then the condemning agency takes and pays for only the land and fixtures. In the latter situation the condemning agency has not taken or damaged the personal property. But that is not the same as saying that such personal property is never compensable when it has been taken or damaged as a result of condemning the underlying real property.

Where the removal or relocation of either tangible or intangible personal property, under the circumstances of the particular case, is impossible, then the owner's just compensation should not be limited by an arbitrary notion that in eminent domain any particular form of recognized property right if noncompensable.

‘This is so because, as was said in People v. Superior Court, 145 Cal.App.2d 683, 690, 303, P.2d 628, hearing denied, the constitutional concept of just compensation expresses a principle of fairness. If any compensable constituent element of value, . . . is omitted in arriving at just compensation this constitutional mandate has not been met. [Citations.] Every rule of condemnation law, be it statutory or decisional, for determining the value of land taken in condemnation, must in its every application conform to this constitutional mandate. [Citations.]’ (People ex rel. Dept. Pub. Wks. v. Lynbar, Inc., 253 Cal.App.2d 870, at 883, 62 Cal.Rptr. 320, at 329.)

The Agency relies heavily on City of Los Angeles v. Allen's Grocery Co., 265 Cal.App.2d 274, 71 Cal.Rptr. 88, where it was stated ‘. . . the taking of real estate does not affect the ownership of personal property kept on the premises taken, but not permanently affixed thereto. The owner of the personal property is entitled to remove said personal property, and evidence of the value of the unsold and removed stock in trade retained . . . is not a proper element of damages under the circumstances.’ (Page 279, 71 Cal.Rptr. page 92.) (Emphasis added.)

The circumstances in the Allen case were that real property upon which a grocery store was located was being condemned. The owner sought compensation for his inventory of grocery items, however, there was nothing in the Allen case to indicate that the grocery items were in any way different than the usual inventory of a grocery store nor was there any special problem in removal and resale. This is markedly different from the situation of Mr. Abrams' inventory of ethical drugs. Since the state itself through its regulation of the transfer of these drugs made the transfer impossible it may not be heard to say that Mr. Abrams could or should have somehow disposed of them.

We turn now to the issue of whether Abrams should be compensated for the loss of his business. Of course the goodwill of a business is property and recognized as compensable in both contract and tort actions between private litigants. (Civ.Code, §§ 654, 655; Bus. & Prof.Code, § 14102; Carrey v. Boyes Hot Springs Resort, Inc., 245 Cal.App.2d 618, 54 Cal.Rptr. 199.) It is recognized as community property in cases of dissolution of marriage. (Golden v. Golden, 270 Cal.App.2d 401, 75 Cal.Rptr. 735; In re Marriage of Fortier, 34 Cal.App.3d 384, 109 Cal.Rptr. 915.)

The California Supreme Court in Oakland v. Pacific Coast Lumber, etc., Co., 171 Cal. 392, 153 P. 705, held that Code of Civil Procedure section 1248 limited compensation to the value of the property taken and/or severance damages accruing to property not condemned. Thus the court declared that damage to business situated on the condemned real estate was not recognized by the statute as an element of compensation.

The court in Oakland, supra, at p. 398, 153 P. at p. 707, stated: ‘It is quite within the power of the Legislature to declare that a damage to that form of property known as business or the goodwill of a business shall be compensated for; but, unless the Constitution or the Legislature has so declared, it is the universal rule of construction that an injury or inconvenience to a business is damnum absque injuria and does not form an element of the compensating damages to be awarded.’ (Emphasis added.)

This rule enunciated in 1915 has been widely criticized. (20 Hastings Law Journal, p. 675, The Unsoundness of California's Noncompensability Rule as Applied to Business Losses In Condemnation Cases; 67 Yale Law Journal, pp. 62–74, Eminent Domain Valuations in an Age of Redevelopment.)

The Oakland court itself took the pains to state that it did not wish to be understood as saying that the rule should not be otherwise.

The California Law Revision Commission, as recently as January of 1974, at page 45, of its tentative recommendations relating to condemnation law and procedure pointed out that eminent domain frequently works a severe hardship on owners of businesses affected by public projects and recommends that steps be taken to compensate for the loss of goodwill of a business that has been taken or damaged.

There has been considerable development in the law since the oakland decision. Of course, the Constitution still does not say that a property right in a business is compensable. On the other hand, the Constitution does not say that it is not compensable, and it is now well established that since the mandate for payment of just compensation comes from the Constitution itself, the courts need not await legislative authorization in order to determine the ingredients of such compensation.

The private ownership of property is fundamental to our system of government and its protection against governmental intrusion is constitutionally guaranteed, hence the requirement that the government pay for its taking should be liberally construed in favor of the property owner. An arm's length bargain-seeking posture on behalf of a condemning agency in dealing with a property owner is really contrary to the spirit of our Constitution.

‘The constitutional requirement of just compensation derives as much content from the basic equitable principles of fairness, [citations] as it does from technical concepts of property law.’ (United States v. Fuller, supra, 409 U.S. 488, at 490, 93 S.Ct. 801, 803, 35 L.Ed.2d 16.)

In 1936, Oakland v. Pacific Coast Lumber, etc., Co., supra, 171 Cal. 392, 153 P. 705, was distinguished and found inapplicable in Southern Calif. Edison Co. v. Railroad Com., 6 Cal.2d 737, 59 P.2d 808. The City of Tulare intending to operate its own municipal electrical system condemned Edison transmission lines which had previously served electrical consumers within the City of Tulare. The Supreme Court approved an award of severance damages to Edison based upon a reasonable return on capital investment, and rejected the condemnor's contention that, based on Oakland v. Pacific Coast Lumber, etc., Co., no damages for interference with business should be allowed. The distinction which the court found to exist was in a 1917 amendment to the Public Utilities Act providing for severance damages, stating ‘The deficiency in the law in 1915 (the time of the Oakland decision) was thus supplied in 1917 and the contention of the city is no longer available.’ (Southern Calif. Edison Co. v. Railroad Com., 6 Cal.2d at pages 750–751, 59 P.2d at p. 814.)

Another distinction which is sometimes advanced as a reason for denying compensation for goodwill of a business was that in Edison the condemnor intended to operate the business, while in Oakland the condemnor did not so intend or desire. This distinction loses its significance in light of the ‘loss to owner’ test of La Macchia, United States v. General Motors and United States v. Fuller, supra, and the Oakland decision in light of Edison as well as those cases appears to have lost some of its vitality. At least it does not appear to stand as an insurmountable barrier to compensation in hardship cases such as the one at bar.

Furthermore, since there are many readily available formulae for evaluating the worth of a business (see In re Marriage of Fortier and Southern Calif. Edison Co. v. Railroad Com., supra) it cannot be earnestly suggested that compensation should be denied on the basis that it is too speculative or difficult to ascertain.

The most recent and persuasive language pointing to an abandonment of the former rigid rule is to be found in Klopping v. City of Whittier, 8 Cal.3d 39, 104 Cal.Rptr. 1, 500 P.2d 1345, where our Supreme Court in an inverse condemnation action approved compensation for loss of rental income occasioned by an announcement of future condemnation action.

The court in Klopping quoted with approval the following at pages 53–54, 104 Cal.Rptr. at page 12, 500 P.2d at page 1356, from a decision of the Wisconsin Supreme Court in Luber v. Milwaukee County, 47 Wis.2d 271, 177 N.W.2d 380:

“The importance of allowing recovery for incidental losses has increased significantly since condemnation powers were initially exercised in this country. During the early use of such power, land was usually undeveloped and takings seldom created incidental losses. Thus the former interpretation of the ‘just compensation’ provision of our constitution seldom resulted in the infliction of incidental losses. The rule allowing fair market value for only the physical property actually taken created no great hardship. In modern society, however, condemnation proceedings are necessitated by numerous needs of society and are initiated by numerous authorized bodies. Due to the fact people are often congregated in given areas and that we have reached a state wherein re-development is necessary, commercial and industrial property is often taken in condemnation proceedings. When such property is taken, incidental damages are very apt to occur and in some cases exceed the fair market value of the actual physical property taken. . . . The rule making consequential damages damnum absque injuria is, under modern constitutional interpretation, discarded . . ..” (Emphasis added.)

In State v. Saugen, 283 Minn. 402, 169 N.W.2d 37, the Supreme Court of Minnesota also discarded the rule that consequential damages are damnum absque injuria by holding that where a condemnee is unable to transfer his business from the condemned real property to a new location the loss of the business in compensable.

Following the lead of Minnesota and Wisconsin, the California Supreme logical approach and to eliminating hardship in these types of cases. We follow along that path by affording Mr. Abrams the relief for which the circumstances here cry out.

The judgment is reversed and the matter is remanded to the trial court for the sole purpose of determining the value of the business that was destroyed by the condemnation. When that value is determined it shall be added to the judgment.

Defendant Abrams to recover costs on both appeals.

I dissent.

In my view the trial court correctly determined that business goodwill is not a compensable item of damages in the condemnation of real property for public use. The Supreme Court of California has consistently held such damages noncompensable (Oakland v. Pacific Coast Lumber, etc., Co. (1915) 171 Cal. 392, 398–399, 153 P. 705; People v. Ricciardi (1943) 23 Cal.2d 390, 396, 144 P.2d 799; People v. Ayon (1960) 54 Cal.2d 217, 226, 5 Cal.Rptr. 151, 352 P.2d 519; Breidert v. Southern Pac. Co. (1964) 61 Cal.2d 659, 667, 39 Cal.Rptr. 903, 394 P.2d 719), and the California Legislature has repeatedly rejected attempts to make business goodwill a generally compensable item in condemnation proceedings.

The Federal Constitution does not require that such forms of intangible property as contingent rights, future interests, privileges, servitudes, expectancies, permits, and licenses be made compensable in eminent domain. (Mitchell v. United States (1925) 267 U.S. 341, 345, 45 S.Ct. 293, 69 L.Ed. 644 (Brandeis, J.); United States ex rel. T.V.A. v. Powelson (1943) 319 U.S. 266, 283–284, 63 S.Ct. 1047, 87 L.Ed. 1390 (Douglas, J.); United States v. Fuller (1973) 409 U.S. 488, 493–494, 93 S.Ct. 801, 35 L.Ed.2d 16 (Rehnquist, J.).) Business goodwill is merely a shorthand term for expectation of future business profits. (Bell v. Ellis, 33 Cal. 620, 625.) The extent of compensation for such expectancies has been left to the good judgment of the Congress and the state legislatures, bodies well-equipped to evaluate to what extent such speculative interests should be compensated in the condemnation of real property for public use.

In California the line between compensable and noncompensable property has been consistently has been consistently drawn to exclude business goodwill as a generally compensable item of damages. While in certain cases a forceful argument can be made for the inclusion of business goodwill as a compensable item, in others it can be argued with equal force that future business profits, that is to say business goodwill, are inherently speculative and should be excluded as items of cost in the acquisition of real property for public use. A measured and temperate evaluation of the extent to which such expectancies should be recognized in eminent domain is particularly needed today when a myriad of environmental problems presses upon us, including protection of coastline, preservation of scenic areas, slum clearance, purification of urban atmosphere, rectification of surface waters, mass transit, urban renewal (as at bench), and reformation of suburban sprawl, each accompanied by its inseparable auxiliary of limited available means to achieve unlimited ends. In the equation between private expectancies and a balance must be struck which will allow the private owner adequate compensation for what he has irretrievably and categorically lost and at the same time permit the public to move against critical environmental problems without being saddled with exorbitant costs that could foreclose effective action. The need for reasonable accommodation between private expectancies and the public interest may be seen from the facts of such cases as California v. Superior Court (Veta Co.), Cal., 115 Cal.Rptr. 497, 524 P.2d 1281 filed August 2, 1974 (coastal preservation); Candlestick Properties, Inc. v. San Francisco Bay Conservation, etc., Com., 11 Cal.App.3d 557, 89 Cal.Rptr. 897 (tidelands preservation); Selby Realty Co. v. City of San Buenaventura, 10 Cal.3d 110, 109 Cal.Rptr. 799, 514 P.2d 111 (compulsory dedication for public use); Friends of Mammoth v. Board of Supervisors, 8 Cal.3d 247, 104 Cal.Rptr. 761, 502 P.2d 1049 (controlled use of private property); Gion v. City of Santa Cruz, 2 Cal.3d 29, 84 Cal.Rptr. 162, 465 P.2d 50 (prescriptive rights in shoreline).

In this equilibrium between private expectancy and public outgo, business goodwill is a critical factor, for its monetary value may be inflated to whopping amounts.1 The degree of recognition to be given in condemnation proceedings to such open-ended claims presents a problem that has always been considered in california a matter for legislative solution. (Oakland v. Pacific Coast Lumber, etc., Co., 171 Cal. 392, 398, 153 P. 705.) The same is true elsewhere, for in the absence of statute general compensation for business goodwill has been consistently denied. (United States v. General Motors Corp. (1945) 323 U.S. 373, 377–380, 65 S.Ct. 357, 89 L.Ed. 311; Nichols on Eminent Domain (3d ed.) §§ 5.76, 13.3, 13.3[2], 13.31, 13.31[1].) The Community Redevelopment Agency's brief asserts that only two states, Vermont and Florida, compensate for loss of general business goodwill in condemnation, and both of these do so by statute. A third state, Pennsylvania, formerly compensated by statute for business goodwill, but repealed its law in 1971.

The California Legislature has not been oblivious to the difficulties encountered by persons displaced by condemnation of real property for public improvements, and in the Relocation Assistance Act it provided, among alternative benefits, compensation up to $10,000 for a displaced person who has discontinued a business that cannot be relocated (Gov.Code, §§ 7260, 7262(c); see also the federal Uniform Relocation Assistance Act, 42 U.S.C. §§ 4601, 4622(c).) Even now, the Legislature is reviewing the entire field of eminent domain, including compensation for loss of business goodwill, and it has before it the recommendation of the California Law Revision Commission that loss of business goodwill be made compensable to the extent the loss is not preventable and not compensated for elsewhere. (‘Tentative Recommendation Relating to Condemnation Law and Procedure,’ Jan. 1974.) Whether the Legislature will accept or reject the tentative recommendation of the Law Revision Commission on business goodwill, or adopt it with limitations on maximum amounts payable, I have no way of knowing. But I do know that compensability of business goodwill involves a legislative decision which affects basic fiscal policy and requires evaluation of other competing interests seeking recognition from the public purse. In view of the long state history consistently holding that compensation for loss of business goodwill involves a legislative determination, I think it inappropriate for this court to preempt a basic legislative function under the guise of constitutional decision and impose upon the state a policy of unlimited, unrestricted compensation for loss of future business profits, a policy that would remain frozen against any change short of constitutional amendment.

Required here is a legislative scalpel, not a constitutional meat ax. (Cf. Michelman, Property, Utility, and Fairness: Comments On The Ethical Foundations Of ‘Just Compensation’ Law, 80 Harv.L.Rev. 1165, 1253–1256 (1967).) The Legislature still remains our best-equipped agency of government to wrestle with hard, intractible problems and arrive at workable solutions which will bring about an acceptable equilibrium among competing interests.

I would affirm the judgment.

FOOTNOTES

1.  ‘Ethical Drugs' are those drugs which cannot be sold without a prescription.

2.  It is claimed by Abrams and not denied by the Agency that the Watts Redevelopment plan contemplates that the area acquired by the Agency will eventually be turned over to private interests for the purpose of establishing various commercial enterprises which could include a drug store.

3.  During pretrial Proceedings the Agency's position was that compensability per se of the contested items of personal property was at issue. It did not challenge Abrams' claim of inability to relocate the business or dispose of the ethical drugs.The final pretrial order states as follows: ‘Plaintiff and defendant can now stipulate and agree that the legal issue is as follows: Whether on the facts at bar, defendant A. J. ABRAMS is entitled to be compensated for business good will, if any, and his stock of ethical drugs, if any, pursuant to Article I, § 14 of the California Constitution and the Fifth and Fourteenth Amendments of the U. S. Constitution.’

1.  Unlimited acceptance of future business profits as a compensable item of damages in eminent domain could multiply the costs of public improvements many-fold. Compare, for example, the value of the real property condemned with the amounts sought for loss of future business profits in the following cases:C1CasesL2Real EstateL3Future Business Profits ClaimedOakland v. Pacific Coast Lumber, etc., Co., 171 Cal. 392, 397, 153 P. 705 $49,000$304,000Mitchell v. United States, 267 U.S. 341, 343, 45 S.Ct. 293, 69 L.Ed. 64476,000 100,000United States ex rel. T.V.A. v. Powelson, 319 U.S. 266, 275, 63 S.Ct. 1047, 87 L.Ed. 1390976,0006,524,000

COMPTON, Associate Justice.

BEACH, J., concurs.