Guptill Holding Corp. v. State

• Decision Date: 13 July 1965
• Docket Number: No. 36563,36563
• Citation: 261 N.Y.S.2d 435,23 A.D.2d 434
• Parties: The GUPTILL HOLDING CORPORATION, Respondent, v. The STATE of New York, Appellant. Claim
• Court: New York Supreme Court — Appellate Division

Page 435

261 N.Y.S.2d 435

23 A.D.2d 434

The GUPTILL HOLDING CORPORATION, Respondent, v. The STATE of New York, Appellant.

Claim No. 36563.

Supreme Court, Appellate Division, Third Department.

July 13, 1965.

Louis J. Lefkowitz, Atty. Gen., Albany (Paxton Blair and Julius L. Sackman, Albany, of counsel), for appellant.

Carter & Conboy, Albany (James S. Carter, M. James Conboy and John W. Cebula, Albany, of counsel), for claimant-respondent.

Before GIBSON, P. J., and HERLIHY, REYNOLDS, TAYLOR and AULISI, JJ.

AULISI, Justice.

This is an appeal from a judgment of the Court of Claims for direct and consequential damages arising out of an appropriation of lands in the Town of Colonie, County of Albany, for purposes of the Northway.

In our decision on the first appeal of this case (20 A.D.2d 832, 247 N.Y.S.2d 800) we noted that 'the State would define the issue as the question: 'May two contiguous, jointly-used tracts which are separately owned, one by an individual, and the other by a corporation owned and controlled by that individual, be treated as one tract?'' We indicated in that decision our belief, which we also adopt here, that there was sufficient proof in the record of contiguity and common use, that no problem as to apportionment of damages was presented because of an assignment by Charles Guptill to the claimant corporation of his claim for damages to the Miller tract, and that 'mutual interest and advantage would clearly have demanded--had the proprietors determined to sell--that the tracts be treated as a unit for purposes of evaluation by, and sale to a willing buyer' (20 A.D.2d 832, 833, 247 N.Y.S.2d 800, 802).

While recognizing the rule that unity of title or ownership, contiguity and common use were all necessary 'as an abstract proposition' at least, in order to warrant severance damages for a piece of property, we nevertheless formulated the question 'whether the rule might have to be relaxed, or whether close and long-term control could be equated to unity of ownership' where the additional factors mentioned above were also present. We were unable to answer this question, or in turn the related question raised by the State, 'inasmuch as the record is devoid of any proof whatsoever as to Mr. Guptill's interest in or other relationship to the corporation, other than that he was its president' (ibid). We, therefore, returned the case to the Court of Claims for a new trial, primarily to supply a fully-developed record on the issue of control.

On retrial the record of the first trial was adopted by stipulation and further evidence was taken. The Court made an award for damages in the same amount as before, found that the subsequent trial confirmed its prior findings and award and made additional findings.

Claimant has made an exceptionally strong case on the issue of control and has proven, to our satisfaction, as the Court of Claims states, that 'He [Charles Guptill] was the master of all he surveyed and used the corporations merely as legal devices to run his many interests efficiently and with a minimum of confusion.' (43 Misc.2d p. 633, 251 N.Y.S.2d p. 768.) The facts which show his control are not in dispute. Of the two parcels involved here, Charles Guptill had owned the Wade tract in his own name from 1947. On the advice of his auditors and attorneys he formed three family-type corporations in 1956 to operate his various businesses. He continued, however, to manage said businesses as previously. The claimant, Guptill Holding Corporation, took title to all the Guptill family real estate in exchange for shares of stock. Charles Guptill received 498 shares of the 500 shares issued while his wife received one share and his father also received one share. These three were the directors and he served as president and treasurer while his wife served as vice-president and...