Opinion
Argued October 10, 1956
Decided November 30, 1956
Appeal from the Appellate Division of the Supreme Court in the Third Judicial Department, JOSEPH P. MOLINARI, J.
Peter Campbell Brown, Corporation Counsel ( Seymour B. Quel and Robert E. Hugh of counsel), for appellant.
Herman E. Gottfried for respondent.
This proceeding was commenced under title K of chapter 41 of the Administrative Code of the City of New York, known as the Water Supply Act, to acquire property for the purpose of constructing in Delaware County a reservoir that will provide New York City with an additional supply of water. The commissioners of appraisal unanimously awarded claimant $35,000. Because it thought the award was 25% too high, Special Term rejected the commissioners' report, and ordered a new hearing unless claimant stipulated to accept $28,000. The Appellate Division unanimously reversed, and granted claimant's cross motion to confirm said report.
The city asserts that "The sole issue presented by this appeal relates to the quantum of the award of $35,000 to the claimant". (Emphasis supplied.) The question presented to us is whether there is any competent evidence to support the determination of the appraisers ( Matter of Huie [ Merrill — City of New York], 306 N.Y. 951).
The position of commissioners of appraisal in our legal system is a somewhat unique one. They have been a part of our condemnation procedure for well over a century, having been originally provided for in the Constitution of 1846 (Report of New York State Constitutional Convention Committee, 1938, Vol. 6, p. 122). They are given wide latitude in arriving at their determination ( Matter of Thompson, 121 N.Y. 277, 279; see Matter of City of New York [ A. W. Realty Corp.], 1 N.Y.2d 428, 432). In addition to hearing the proofs of the parties, they are required to view the real estate (Administrative Code, § K41-12.0). While their determination cannot be without any support in the record ( Matter of Simmons [ Ashokan Reservoir], 132 App. Div. 574, 576), the commissioners are not bound by the opinions of expert witnesses ( Matter of Bronx Parkway Comm. [ Farley], 192 App. Div. 412, 418, affd. 230 N.Y. 607; Matter of City of New York [ Inwood Hill Park], 197 App. Div. 431, 435); even a jury may disregard uncontradicted expert testimony ( Commercial Cas. Ins. Co. v. Roman, 269 N.Y. 451, 456). Appraisers are, in general, "untrammeled by technical rules of evidence" ( Matter of Town of Guilford, 85 App. Div. 207, 211), and may use their own judgment and experience as well as information obtained from a personal inspection of the property ( Matter of Thompson, 121 N.Y. 277, 279, supra; Matter of City of Rochester [ Smith St. Bridge], 234 App. Div. 583, 585; see Administrative Code, § K41-12.0).
The commissioners also have wide discretion as to the factors upon which they may base their determination of value. The Constitution provides only that the owner receive "just compensation" for the property taken (N.Y. Const., art. I, § 7, subd. [a]); the Administrative Code (§§ K41-12.0, K41-13.0) provides for "just and equitable compensation which ought justly to be made by the city". In the determination of that just compensation, there is no single element which is controlling, and it is competent for the commissioners of appraisal to consider all factors indicative of the value of the property, such as its fair market value as of the date of appropriation ( Matter of Board of Water Supply of City of N.Y., 277 N.Y. 452, 456-458), the reproduction cost of improvements less depreciation ( Matter of City of New York [ Blackwell's Is. Bridge], 198 N.Y. 84), sales of similar property ( Village of Lawrence v. Greenwood, 300 N.Y. 231, 235), location ( Matter of Board of Water Supply of City of N.Y., supra, p. 458), income ( id.; see, also, Onondaga County Water Auth. v. New York Water Service Corp., 285 App. Div. 655, 662), highest suitable use ( Sparkill Realty Corp. v. State of New York, 254 App. Div. 78, 82, affd. 279 N.Y. 656), and consequential damages to property not taken but affected by the condemnor's use ( South Buffalo Ry. Co. v. Kirkover, 176 N.Y. 301). "Omission of an attempt to enumerate all is of no consequence here. It would be a difficult and unsatisfactory venture. No single element standing alone is decisive" ( Matter of Board of Water Supply of City of N Y, supra, p. 458).
The power of the courts to review an award of the commissioners is strictly limited, and every intendment is in favor of the action of the commission ( Adirondack Power Light Corp. v. Evans, 226 App. Div. 490, 493). The Supreme Court at Special Term cannot modify their award, but must either confirm or reject their report (Administrative Code, §§ K41-16.0, K41-23.0). This is not the case of a review by the court of a verdict of a jury ( Adirondack Power Light Corp. v. Evans, supra). The courts will reject a determination of the commissioners only for irregularity in the proceedings, or if based on an erroneous principle of law (see Matter of City of New York [ Northern Blvd.], 258 N.Y. 136, 155), or, if it "shocks not only one's sense of justice, but one's conscience" ( Matter of City of New York [ Old Third Ave.], 241 App. Div. 13, 16, appeal dismissed 265 N.Y. 503; see Adirondack Power Light Corp. v. Evans, supra; Matter of Huie [ Merrill — City of New York], supra; Matter of Cibulas v. Village of Menands, 266 App. Div. 895).
With these principles in mind, we do not see how we may disturb the order appealed from, since there is ample evidence to support the award of the commissioners of appraisal.
Claimant's property, designated as parcel 2259, was located on the corner of Main and River Streets, in Shavertown, Delaware County. It consisted of 0.387 acre of land, on which two separate structures were situated. The principal structure was a two-story frame building with a one-story addition in the rear and a cellar. The main floor was used as a general country store and post office and contained five rooms. The second story was used as a residence by claimant and contained a living room, dining room, bathroom, kitchen, sewing room and three bedrooms. The other structure, called the warehouse, was located on the opposite side of a road dividing the property, and consisted of four connected buildings, a garage, a photo studio, and two storerooms.
The city's expert testified that the property "is the social center of the village, it is the information center of the village, it is the commercial center of the village — I believe it is the center of the village". Moreover, it was described by him as one of the most desirable commercial plots in Shavertown, with river frontage. The store was the only one of its kind in Shavertown which, as described by claimant's expert, served as the shopping center for the farmers of the area, and was well known as a trout fishing spot by fishermen throughout the East and all over America.
The estimates of value by the experts for the parties, the commissioners of appraisal and the court are as follows:
Claimant's expert, as to the reconstruction cost of buildings: $25,205.34; claimant's real estate expert, as to land and buildings: $46,000; city's real estate expert, as to buildings: $12,400, land $600, total $13,000; commissioners' award: $35,000; Special Term value: $28,000.
The city contends that the award is excessive "as a matter of law" for two reasons: first, that it is greater in amount than the value of the land plus the reconstruction cost of the improvements thereon less depreciation; and, second, that it is not supported by legally sufficient evidence.
In support of its first contention, the city cites the rule enunciated in People ex rel. Manhattan Sq. Beresford v. Sexton ( 284 N.Y. 145, 149) that "In assessing an improvement upon real estate for tax purposes the maximum value which ordinarily may be placed upon it is reconstruction cost less depreciation * * * at least in the absence of extraordinary circumstances" (emphasis supplied). Since then, this rule has been reiterated by us several times ( People ex rel. Hotel Paramount Corp. v. Chambers, 298 N.Y. 372, 375; People ex rel. Parklin Operating Corp. v. Miller, 287 N.Y. 126, 130), but only in tax assessment cases.
The rule has not been applied in condemnation proceedings. As a matter of fact, until our decision in Matter of City of New York ( Blackwell's Is. Bridge) ( 198 N.Y. 84, supra), evidence of reconstruction cost was not even admissible in condemnation proceedings. Moreover, that case made it clear (p. 87) that such evidence was "by no means a conclusive test as to the market value of premises condemned for public use" (emphasis supplied). Subsequent cases have employed reconstruction cost only as another factor to be considered ( Onondaga County Water Auth. v. New York Water Service Corp., 285 App. Div. 655, supra; Matter of City of Rochester [ Smith St. Bridge], 234 App. Div. 583, 586, supra; Matter of City of New York [ School of Ind. Arts], 2 Misc.2d 403; Cookingham v. Village of Richfield Springs, 140 Misc. 760, 762).
Tax assessment and condemnation proceedings are essentially different in their nature. In tax cases, a separate valuation is made of land and improvements. In condemnation proceedings, on the other hand, land and improvements are not required to be valued separately (Administrative Code, § K41-13.0). Moreover, as heretofore pointed out, the commissioners are required to inspect the property, and may act not only upon the proofs, but upon information obtained as the result of such personal inspection, coupled with their own judgment and experience.
In the case before us, there is no indication as to what portion of the award was for land and what portion for improvements. We have no right to guess that the commissioners adopted the reconstruction cost less depreciation as the value of the improvements and the balance of the award as the value of the land. Nor does it serve any useful purpose to say that an award for a fraction of an acre seems large when one places a corresponding value on an entire acre, since the fraction may be by far its choicest part. The testimony of the city's expert that the value of the land was $600 is not, as the city contends, the only evidence in the case as to land value, for the appraisal of claimant's concededly qualified real estate expert included both land and improvements.
Upon hearing all the testimony and upon a personal view of the premises, the commissioners determined, as so often happens in condemnation cases, that they would not adopt entirely the appraisals of any of the witnesses, and made an award somewhere between their estimates. Clearly there is evidence in the record to support this determination. It is essentially one where judgment and discretion are based on the facts before it plus a personal inspection of the premises. A mere difference of opinion between the court and the commissioners is not enough, for the cases have consistently held that the award must shock the conscience of the court before it may be rejected. It is difficult to understand how upon this record the sense of justice of Special Term could be shocked by an award of $35,000 but not by $28,000. The value of real estate cannot be determined with such precision.
The city's final contention is that, aside from the fact that it greatly exceeds reconstruction cost less depreciation, the award is excessive as a matter of law because the only testimony upon which it could possibly be based was that of claimant's real estate expert, which is "mere naked opinion", and, consequently, legally insufficient to sustain the award. The qualification of this witness was stipulated to by the city. His testimony included a complete description of the property, its physical condition, its location, and its highest suitable use. He testified that, in forming his opinion as to the fair market value of the property, he took into consideration all of these factors, as well as three sales of comparable property which he designated by name, all located in the same county. The city's expert testified as to comparable sales outside of Delaware County, 50 to 60 miles from claimant's property, and confessed ignorance as to the sales testified to by claimant's expert. Examination of the testimony of claimant's expert, summarized above, demonstrates that it was more than "mere naked opinion". His failure to give details as to the comparable sales which he considered does not render his testimony in this respect worthless, for the city could have elicited the details on cross-examination, which is the customary procedure in condemnation cases, but failed to do so.
Moreover, until our decision in Village of Lawrence v. Greenwood ( 300 N.Y. 231, 235, supra, overruling Robinson v. New York El. R.R. Co., 175 N.Y. 219), evidence of other sales was not admissible at all on direct examination because it presented too many collateral issues. It is just another one of the factors which may be considered in arriving at a determination of value. No single factor is decisive.
Of course the evidence produced by both sides was conflicting, but we have no right to weigh the evidence, even though we thought the award here was too liberal. It was substantially less than the estimate set by claimant's expert, and substantially greater than that testified to by the city's. Inasmuch as the award falls within the range of the experts' differing valuations and was predicated on relevant factors, there appears to have been no valid basis for Special Term's rejection thereof ( Adirondack Power Light Corp. v. Evans, supra; Matter of City of New York [ Croton Riv. Dam], 129 App. Div. 711; see Matter of City of New York [ Fourth Ave.], 255 N.Y. 25, 33; 6 Nichols on Eminent Domain [3d ed.], § 26.731, subd. [2]; 1 Orgel on Valuation under Eminent Domain [2d ed.], § 130). We may not disregard the fact that the commissioners, one of whom was a resident of the city of New York (Administrative Code, § K41-9.0), saw and heard the witnesses and viewed the premises, and we do not see how we can say as a matter of law that their award is so obviously wrong that it shocks the sense of justice or the conscience of the court. We are therefore of the opinion that the evidence in this record, as in Matter of Huie ( Merrill — City of New York) ( supra), involving the same project, is legally sufficient to sustain the award.
Accordingly, the order of the Appellate Division should be affirmed, with costs.
The evidence regarding the single parcel at issue upon this appeal strongly supports the order of Special Term vacating as excessive the award of $35,000 by the commissioners of appraisal. Special Term remitted the claim for a new hearing and determination before new commissioners, unless claimant would stipulate to accept $28,000. Claimant's only expert witness upon the subject testified that the reproduction cost of the buildings, less depreciation, is $25,205.34, which would leave $9,794.66 as the land value ascribed to this one third of an acre in the hamlet of Shavertown, in Delaware County. Perhaps reproduction cost less depreciation does not constitute maximum value as matter of law in condemnation cases, as it does in tax certiorari proceedings ( People ex rel. Manhattan Sq. Beresford v. Sexton, 284 N.Y. 145; People ex rel. Hotel Paramount Corp. v. Chambers, 298 N.Y. 372), but it furnishes a reliable index of maximum value as a question of fact in the absence of unusual circumstances, which have not been shown here. The value ascribed to this land alone would be even greater than this figure of $9,794.66, if claimant's expert witness has overstated the reproduction cost of the building less depreciation. The $28,000 figure upon acceptance of which a rehearing was conditioned by Special Term, indicates a minimum land value for this parcel of $2,794.66, which would still reflect a land value in the area at a rate of more than $8,000 per acre. There can be no doubt about our jurisdiction to reinstate the order of Special Term, which set aside the commissioners' award as excessive acting under section 15 of the Condemnation Law. Pursuant to that section, any party may move for the confirmation of the report of the commissioners, "and upon such motion, the court may confirm the report, or may set it aside for irregularity, or for error of law in the proceedings before the commissioners, or upon the ground that the award is excessive or insufficient. If the report is set aside, the court may direct a rehearing before the same commissioners, or may appoint new commissioners for that purpose, and the proceedings upon such rehearing shall be conducted in the manner prescribed for the original hearing, and the same proceedings shall be had for the confirmation of the second report, as are herein prescribed for the confirmation of the first report." (Italics supplied.)
That is what Special Term did in this instance. A land valuation at the rate of nearly $30,000 per acre, which is reflected by the commissioners' appraisal, was clearly excessive. Special Term was empowered to attach a condition to the new hearing which was ordered before new commissioners, that it should be conducted only if claimant within 30 days failed to stipulate to a reduction of the award from $35,000 to $28,000. Such a condition can be attached as effectively as where a new trial is granted by the Supreme Court in an action pursuant to sections 549 or 584 of the Civil Practice Act ( O'Connor v. Papertsian, 309 N.Y. 465).
The order of the Appellate Division should be reversed insofar as it relates to the Amanda Fletcher parcel (parcel No. 2259), and the portion of the order of Special Term in reference thereto should be reinstated.
CONWAY, Ch. J., DESMOND and FULD, JJ., concur with FROESSEL, J.; VAN VOORHIS, J., dissents in an opinion in which DYE, J., concurs; BURKE, J., taking no part.
Order affirmed.