Lands of P. & M. Materials Corp., In re

• Decision Date: 28 March 1963
• Citation: 38 Misc.2d 734,238 N.Y.S.2d 896
• Parties: In re LANDS OF P. & M. MATERIALS CORPORATION. Application of The COUNTY OF WESTCHESTER, Petitioner-Plaintiff, To Acquire Title to Lands of P. & M. Materials Corporation and Boyce Thompson Institute for Plant Research, Inc., Defendants, Melsac Corporation, Intervenor-Defendant.
• Court: New York Supreme Court

Page 896

238 N.Y.S.2d 896

38 Misc.2d 734

In re LANDS OF P. & M. MATERIALS CORPORATION Application of The COUNTY OF WESTCHESTER Petitioner-Plaintiff, To Acquire Title to Lands of P. & M Materials Corporation and Boyce Thompson Institute for Plant Research, Inc., Defendants, Melsac Corporation, Intervenor-Defendant.

Supreme Court, Westchester County.

March 28, 1963.

Francis J. Morgan, County Atty., White Plains, for petitioner-plaintiff; John B. Gilleran and Louis Rubenfeld, White Plains, of counsel.

Kent, Hazzard, Jaeger & Wilson, White Plains, for defendant P. & M. Materials Corp.; William James Greer, White Plains, of counsel.

Cerrato, Nayor & Edmiston, Yonkers, for defendant Boyce Thompson Institute for Plant Research, Inc.; M. Morton Edmiston, Jr., Yonkers, of counsel.

Close, Griffiths, McCarthy & Gaynor, White Plains, for intervenor-defendant Melsac Corp.; Martin Drazen, White Plains, of counsel.

CLARE J. HOYT, Justice.

The County of Westchester, hereinafter called the County, acquired by condemnation title to a tract of land situate, in the City of Yonkers and Town of Greenburgh, Westchester County. The court, pursuant to the provisions of the Westchester County Administrative Code (Art. 8, tit. B, secs. 101-124, L.1948 c. 852), is called upon to 'determine the just compensation to be made to the owner or owners of and the persons interested in such property'. (Section 110, Westchester County Administrative Code).

The proceeding was commenced by the filing of a petition on July 19, 1961 and on August 2, 1961 a judgment of condemnation was entered. The defendants named in the petition were P. & M. Materials Corporation, the record owner, (herein referred to as P. & M.) and the Boyce Thompson Institute for Plant Research, Inc., a former owner and presently the holder of a purchase money mortgage on the condemned parcel (herein referred to as the mortgagee). Melsac Corporation, (herein referred to as Melsac) a purchaser under contract at the time of the petition and judgment of condemnation and not originally a party to the action, was granted leave to intervene.

The condemned parcel contains 213.16 acres of which 166.08 acres are in the City of Yonkers and 47.08 acres in the Town of Greenburgh. The parcel is set forth as Schedule A on a map annexed to the petition herein and is described in paragraph '10' of the petition. The parcel, unimproved except for an abandoned house and small barn to which the court attaches no value, is approximately 7400 feet long and 1200 feet wide. A high ridge traverses the long axis of the property in a generally north and south direction. To the west of the ridge the property slopes down to and is bounded by the New York State Thruway. To the east the property slopes down to and is bounded by Grassy Sprain Reservoir and lands of a utility company. The property is heavily wooded except for a small cleared portion adjacent to the Thruway and other minor portions on the easterly side which have precipitous slopes and outcroppings of rock. The property has two means of access: on the north, Jackson Avenue, a highway in the Town of Greenburgh, abuts the property for approximately 200 feet; and on the southwesterly corner of the property access is had to Sprain Road by means of a bridge over the Thruway. There is no access to the Thruway. A dirt road running through the property connects these public roads.

At the time of condemnation that portion of the property located in the City of Yonkers was zoned for single family residences with a minimum plot of 10,000 square feet and that portion of the property located in the Town of Greenburgh was zoned for single family residences with a minimum plot of 20,000 square feet.

The premises, once an aboretum, had lain idle from 1954 until their sale in 1959 by the mortgagee to P. & M. The mortgagee took back a purchase money mortgage in the amount of $650,000 and the amount due on the mortgage on the date title vested in the County was $503,750 with interest at 5% accrued from May 2, 1959. P. & M. excavated some earth from the premises and then in July of 1960 contracted to sell the premises to Melsac on the condition that Melsac procure tax abatement and a zoning change by April of 1961. Although the tax abatement and zoning change were not procured by Melsac by the specified date, the contract between P. & M. and Melsac was modified on April 19, 1961 to make it absolute. Additional cash was paid thereon and the closing was scheduled for August 2, 1961, the day the County acquired title by condemnation.

The court has viewed the premises and has been furnished wth three allegedly expert valuations of the property:

                       Party          Valuation
                       -----          ---------
                The County's expert  $1,200,000
                P. & M.'s expert      2,300,000
                Melsac's expert       4,000,000
                

The parties not only differed markedly in their valuation of the premises; they also differed greatly in the basis of their valuation.

In order to determine the award here payable the court must find the actual loss sustained by the owner by virtue of the taking (Westchester County Administrative Code, sec. 101, subds. 6 and 9; Matter of County of Westchester (Brontown Realty Corp.), 204 Misc. 1031, 127 N.Y.S.2d 24, affd. 285 App.Div. 1169, 141 N.Y.S.2d 824).

As was held in St. Agnes Cemetery v. State of New York, 3 N.Y.2d 37, 41, 163 N.Y.S.2d 655, 659, 143 N.E.2d 377, 380, 62 A.L.R.2d 1161:

'It is axiomatic that in appraising land the fundamental question to be answered is 'What has the owner lost? not, what has the taker gained?' (Boston Chamber of Commerce v. City of Boston, 1910, 217 U.S. 189, 195, 30 S.Ct. 459, 460, 54 L.Ed. 725), and that an owner whose property is acquired by condemnation is not limited in compensation to the use which he made of his property but is entitled to receive its market value 'based on the most advantageous use' (United States v. Miller, 317 U.S. 369, 375, 63 S.Ct. 276, 87 L.Ed. 336; Sparkill Realty Corp. v. State of New York, 254 App.Div. 78, 82, 4 N.Y.S.2d 679, 682, affirmed 279 N.Y. 656, 18 N.E.2d 301; Olson v. United States, 292 U.S. 246, 54 S.Ct. 704, 78 L.Ed. 1236).'

In arriving at this loss by virtue of taking or the market value, the court must consider the methods of appraisal or theories of valuation used by these experts and determine which methods and theories, if any, are sound and acceptable.

As was observed in In re Mountain Lakes in Westchester, Inc., Sup., 219 N.Y.S.2d 140, 144, quoting from Hazard Lewis Farms, Inc. v. State of New York, 1 A.D.2d 923, 924, 149 N.Y.S.2d 658, 662):

'It is a rare condemnation proceeding indeed where the experts are not widely apart in their testimony as to value and the trier of the facts is usually compelled to adopt a figure of his own based upon a reasonable analysis of the problem presented.'

The County's expert based his appraisal on comparable sales and claimed that the best use of the premises was for a single-residence development with large plots. P. & M.'s expert based his value on comparable sales and said that the best use of the premises was for commercial purposes and high rise apartments. The expert for Melsac rejected both these methods, claiming that the property was too unique to permit any other sales being considered comparable, and said that the only sound basis upon which to value would be the land residual method based upon a capitalization of earnings.

The County maintains that Melsac, a purchaser under contract, has no interest in the award other than a return of the moneys paid by it under the contract and in accordance therewith the County objected to any proof by Melsac as to the value of the premises on the taking date. The court reserved decision and permitted Melsac to offer its proof. In a condemnation proceeding the rights of a purchaser under contract who has neither possession nor title (Melsac's situation here) at the time title vests in the condemnor are not well defined by the New York courts.

Prior to the enactment of section 240-a of the Real Property Law (L.1936, c. 731, eff. May 26, 1936), a purchaser under contract, as the equitable owner of the property condemned, became entitled to the award subject to the payment of any balance due under the contract to the vendor (Clarke v. Long Island Realty Co., 126 App.Div. 282, 110 N.Y.S. 697 [1908]; Reife v. Osmers, 252 N.Y. 320, 169 N.E. 399, 67 A.L.R. 1101 [1929]; In re Duncker's Estate, 22 N.Y.S.2d 29 [Sur.Ct., Richmond County, 1940]).

Real Property Law, section 240-a (Uniform Vendor and Purchaser Rick Act) provides in pertinent part:

'1. Any contract hereafter made for the purchase and sale or exchange of realty shall be interpreted, unless the contract expressly provides otherwise, as including an agreement that the parties shall have the following rights and duties:

'(a) When neither the legal title nor the possession of the subject matter of the contract has been transferred to the purchaser:

'(1) if all or a material part thereof is * * * taken by eminent domain, the vendor cannot enforce the contract, and the purchaser is entitled to recover any portion of the price that he has paid; * * *.'

The taking involves all of the lands owned by P. & M. and purchased from the mortgagee except for an unimproved parcel of .86 acres on the westerly side of the Thruway. No claim is made for damages to this small parcel. Where as here neither title nor possession has passed to Melsac, paragraph 1(a)(1) of Section 240-a of the Real Property Law becomes applicable.

The question squarely presented is whether by virtue of this statute the purchaser under contract with neither title nor possession is relegated to the return of its down payment on the purchase price as its sole recovery.

It must first be determined whether these provisions of the statute are integrated in the contract between Melsac and P. & M. and this depends upon whether their contract made provision...