860 Fifth Ave. Corp. v. Tax Commission of City of New York

• Decision Date: 29 April 1960
• Citation: 200 N.Y.S.2d 817,167 N.E.2d 455,8 N.Y.2d 29
• Parties: , 167 N.E.2d 455 In the Matter of 860 FIFTH AVENUE CORPORATION, Appellant, v. TAX COMMISSION OF The CITY OF NEW YORK, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 817

200 N.Y.S.2d 817

8 N.Y.2d 29, 167 N.E.2d 455

In the Matter of 860 FIFTH AVENUE CORPORATION, Appellant, v. TAX COMMISSION OF The CITY OF NEW YORK, Respondent.

Court of Appeals of New York.

April 29, 1960.

Alfred H. Hetkin and Harry L. Barshay, New York City, for appellant.

Charles H. Tenney, Corp. Counsel, New York City (Edith I. Spivack and Morris Handel, New York City, of counsel), for respondent.

VAN VOORHIS, Judge.

This tax certiorari appeal involves a 19-story and penthouse co-operative apartment building on Fifth Avenue, New York City, opposite Central Park, between East 67th and 68th Street, constructed in 1949-1950. The Appellate Division reinstated the assessed valuation, which had been reduced by Special Term. The issue is primarily one of fact. We think that the assessed valuation more nearly corresponds to the true value.

The occasion for an opinion is to comment on the criticism by appellant of the receipt of evidence of the selling price in 1948 of the subject property to the promoters of the co-operative, and of the sales prices of parcels of comparable properties to promoters for other co-operative apartment houses. In Matter of 5 East 71st Street, Inc. v. Boyland, 7 N.Y.2d 859, 860-861, 196 N.Y.S.2d 994, 995, the memorandum of affirmance stated: 'In so deciding, we do not find that the Official Referee erred in refusing to give weight to the 1948 sale to the cooperative corporation or to the separate sales to its tenant purchaser. It is sufficient to say that evidence of the original cost of the land and building in 1946 plus evidence of the sharp increase in value since that time are enough to sustain the assessed valuations.' In that case the 1946 sale of the land was made to the promoters of a co-operative apartment house. The sale to the promoters was regarded as a more reliable index of value than the sale in 1948 by the promoters to the co-operative corporation which they had organized, or the subsequent transactions between the corporation and its tenant purchasers. This is not to say that sales by promoters to co-operative corporations, or by the latter to their tenants cannot ever be evidence of value under any circumstances. They have little if any probative force in a sale resulting from a markup in value by the promoters soon after purchase but before sale by them to the co-operative corporation.

Sales of land to the promoters themselves are more significant. Time was when evidence was excluded of sales of the subject property or of comparable properties for the reason that vendor or purchaser might have made a bad bargain (Matter of Thompson, 127 N.Y. 463, 468, 28 N.E. 389, 390, 14 L.R.A. 52; Ettlinger v. Weil, 184 N.Y. 179, 77 N.E. 31). The selling prices of specific parcels could only be elicited on cross-examination of expert witnesses who had given opinion evidence of market value (Robinson v. New York Elevated R. R. Co., 175 N.Y. 219, 67 N.E. 431). Actual sales do not reflect market value where made under stress, but it came to be realized that they furnish valuable evidence of market value if consummated between willing buyers and sellers under ordinary market conditions. Accordingly, Robinson v. New York Elevated R. R. Co., supra, was overruled in Village of Lawrence v. Greenwood, 300 N.Y. 231, 90 N.E.2d 53, which held that evidence of specific sales is admissible on direct examination under such conditions.

This land sale to the builder of the present co-operative apartment house is attacked as evidence of value on the theory that the...