Moore v. Eadie

Decision Date03 May 1927
PartiesMOORE et al. v. EADIE.
CourtNew York Court of Appeals Court of Appeals

OPINION TEXT STARTS HERE

Action by Benjamin Moore and another, as executors, etc., of Katharine T. Moore, deceased, against Colin M. Eadie, who filed a counterclaim. From a judgment of the Appellate Division (218 App. Div. 716, 218 N. Y. S. 825), affirming a judgment of the Special Term for plaintiffs, defendant appeals by permission.

Reversed and rendered.

Appeal from Surpreme Court, Appellate Division, First department.

Warren Leslie and Edgar A. Martin, both of New York City, for appellant.

Frank L. Holt and Charles L. Woody, both of New York City, for respondents.

CRANE, J.

On October 13, 1903, the plaintiffs' testatrix executed a lease to one Cornelia Burtt, of the premises known as No. 321 West Twenty-Fourth street, in the borough of Manhattan, city of New York. The term of the lease was for 21 years, beginning November 1, 1903. At that time there was a dwelling house standing upon said lot, which had been erected pursuant to the provisions of a previous lease, of which this lease in question was a renewal. A clause in said lease provided that, if the owner elected not to renew the same, the value of the building on the property should be determined as follows:

‘The said party of the first part, her heirs or assigns, shall nominate one fit and impartial person and the said party of the second part, her executors, administrators or assigns, shall nominate one other fit and impartial person, which persons so nominated shall, each respectively, be an owner in fee simple of one or more lots in the immediate neighborhood in which the said lot hereby demised is situate, to value said building in its then actual condition.’

If the two persons thus appointed could not agree upon the value of the building before the expiration of the lease--

‘then the parties hereto or either of them, or the heirs, representatives, successors or assigns of them or either of them, may, at any time after such expiration, apply to any person who as judge or justice may be holding chambers of the Supreme Court of the said state in said borough, to name a third fit and impartial person, to be associated for the purposes aforesaid, with the two persons so nominated or appointed, and the decision of any two of the three persons so chosen whether as to the value of said building or as to the amount of said rent, shall in all cases be final and conclusive when ascertained by them as hereinafter also provided.’

A method was provided in the lease for ascertaining the rent in case of renewal, but there was no method provided for ascertaining the value of the building in case of no renewal, except as contained in the words above quoted.

All the rights of the tenant, Cornelia Burtt, in and to the lease, and the building upon said lot, were subsequently assigned and transferred to the defendant herein.

On August 12, 1924, the landlord gave notice to the tenant, in accordance with the provisions of the lease, that she elected not to renew the same, and that she would pay to the tenant the just and fair value of said building. The term of the lease expired November 1, 1924. Thereupon the plaintiffs selected as appraiser, John C. Gabler, and the defendant, William C. Toby; and, these two men being unable to agree, a third appraiser, one Henry Brady, was appointed by a justice of the Supreme Court.

The appraisal was made; Brady and Toby decided that the building was worth $7,000; Gabler refused to join therein.

The plaintiffs refused to pay the award, and brought this action to set it aside, alleging that the award was unfair and improper; that the methods used in fixing the amount were without authority, and not according to the law, the terms of the lease, or the agreement of the parties. After a trial, judgment was given setting aside the award, and fixing the value of the building at $3,900, which judgment has been unanimously affirmed by the Appellate Division. We are convinced that the courts below have misconstrued the terms of the lease, and that the plaintiffs failed to make out any case justifying an interference with the appraisal.

[1][2] We can eliminate any question of fraud or wrongdoing, as no such claim is made. The only ground for attack is that the appraisers adopted a wrong rule of values. It was claimed by the respondents on the trial, and is urged here upon appeal, that the lease provided a method for valuing the building, which was by ascertaining the cost of its reconstruction, less depreciation. We find no such provision in the lease. The appraisers, according to the terms of that instrument, are to be owners in fee simple of one or more lots in the immediate neighborhood, and are to value the building ‘in its then actual condition.’ This specifies the time at which value is to be ascertained, but does not provide the method or manner of valuation. The appraisal was not to proceed like a judicial hearing (Matter of Fletcher, 237 N. Y. 440, 143 N. E. 248), and could have been made in any way which was fair and equitable. As the appraisers were to be lot owners in the immediate neighborhood, it is fair to assume that they were expected to have some knowledge of values, and could have made their appraisal without revealing the reasons for their conclusion. The appraisers, however, wrote an opinion in which they stated that they had arrived at the valuation of the building by valuing the property as a whole, and deducting from it the value of the land. All three appraisers agreed that the value of the land was $5,000; two agreed that the value of the entire property was $12,000, and that the difference, $7,000, therefore, must represent the value of the building.

Personally, I can see nothing wrong with this method of procedure. The appraisers all agreed that the structure on the lot was an appropriate improvement. The land was 16.8x35, and the building a three-story dwelling with brick front, 16.8x28. The section had been restricted to residences by the zoning ordinances. The land had a market value, which would not change with the nature of the building upon it, if we exclude the cost of removal, which is not in this case. If the land were vacant, in estimating its market value, appraisers or judges could and should take into consideration the most advantageous use to which it could be put. Such is the rule in condemnation cases. Lewis Eminent Domain (3d Ed.) § 706; City of Syracuse v. Stacey, 45 App. Div. 249, 61 N. Y. S. 165, affirmed 169 N. Y. 231, 62 N. E. 354;St. Louis, I. M. & S. R. Co. v. Theodore Maxfield Co., 94 Ark. 135, 126 S. W. 83,26 L. R. A. (N. S.) 1111;Gorgas v. Philadelphia Harrisburg & Pittsburg R. Co., 215 Pa. 501, 64 A. 680,114 Am. St. Rep. 974; 10 R. C. L. .S 113. In valuing the land, therefore, these appraisers could value it as though it were vacant, and susceptible of having upon it a building such as the one in question, or any other suitable and appropriate structure, or in fact any other use to which the land could be put. All three appraisers agree that the value of the land was $5,000. If, therefore, the value of the entire property was $12,000, the balance must have been the value of the building. The one to complain of this method of valuation is the tenant, as the building very likely did not add its structural value to the land value. In estimating the most advantageous use which fixes land values, the appraisers might have considered a better and more available building than defendant's. This would likely leave less for the...

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