Source: https://supreme.justia.com/cases/federal/us/295/264/
Timestamp: 2019-04-22 18:40:38+00:00

Document:
1. In condemnation proceedings, as in lawsuits generally, the Fourteenth Amendment is not a guaranty that a trial shall be devoid of error. P. 295 U. S. 277.
2. A mere underestimate of the compensation to be paid for property token in condemnation will not characterize the proceeding, otherwise fair, as wanting due process; the error must be gross and obvious. P. 295 U. S. 277.
3. The City of New York condemned and removed a spur of an elevated railway system, which, in operation, was no longer of value to the business and which had been found by state authority to be no longer a public convenience and necessity and to have become an obstruction to the public use of the street in which it stood. The state courts, in determining damages, which were assessed against the owners of the abutting lots, allowed the company nothing on account of its franchise or its easement to use the street, and only the scrap value of the demolished structure. For so-called easements -- i.e. the right to obstruct or impair each abutter's easements of light, air and access -- which, by the law of New York, the Company had been obliged to acquire by purchase or condemnation as a condition to lawful erection and operation of the spur, the award was the amount judicially determined to be their value when the rights were acquired from the abutters years before -- an amount much less than would be the cost of acquiring them anew, in changed conditions.
(1) Whatever the precise classification of the rights acquired from abutting owners, they are not separable from the franchise, and it cannot be said that the state courts infringed the constitutional limitation, or even that they erred as a matter of law, in valuing them at no more than their original cost. P. 295 U. S. 281.
(2) It was not arbitrary or unreasonable, upon the evidence, to value the structure as scrap (since the value of the "easements" could be realized only by abandoning the spur), and to allow nothing on account of the railway's corporate franchise or its public easement in the street. P. 295 U. S. 284.
4. Damages in condemnation are measured by the loss to the owner, not by the gain to the taker. P. 295 U. S. 282.
265 N.Y. 170, 192 N.E. 188, affirmed.
Certiorari, 293 U.S. 554, to review judgment sustaining an assessment of damages for the taking in condemnation by the City of a spur forming part of the elevated railway system of the Manhattan Railway Company. Reports of the earlier proceedings in the State Supreme Court at trial term and in the Appellate Division will be found in: 126 Misc. 879; 141 id. 565; 143 id. 129; 229 App.Div. 617; 238 id. 832.
compensation in violation of the restraints of the Fourteenth Amendment.
The length of the demolished structure was about 900 feet. At the east, it was connected with the elevated station at Forty-Second street and Third avenue. At the west, it had a terminal on Park Avenue opposite the Grand Central Station . For a number of years, traffic upon the spur had been dwindling, especially so since the completion of the subways, receipts being less than the cost of operation. Traffic became so light that the spur ceased to contribute value to the business of the railroad, either as an independent unit or as a feeder to the system. With these developments, a movement to take the structure from the highway acquired rapid headway. Travelers on Forty-Second street, afoot or in vehicles, were impatient of obstructions that had ceased to be useful. Lot owners, contiguous to the railway and nearby, looked forward with eagerness to the removal of an unsightly edifice in the expectation of enhancing the value of their lots. The city too had an interest in the growth of taxable values, as well as in the promotion of the safety of the streets. In 1919, the Legislature of New York came to the relief of city, lot owners, and travelers through the adoption of a statute. By Chapter 611 of the Laws of 1919, the Public Service Commission was empowered to determine whether the spur and its appurtenances were "necessary and convenient for the public service, or whether, even if necessary and convenient, such tracks, structure, station and appurtenances" constituted "an impediment or obstruction to the public use of the street." Upon the certificate of the Commission as to the existence of either of these conditions, the city might condemn "the rights, easements and franchises of the said Manhattan Railway Company" through appropriate proceedings. See also Laws 1923, c. 635.
(Manhattan Railway Co.), 229 App.Div. 617, 243 N.Y.S. 665. The cause was remitted to the trial court, which heard additional evidence and made a new decree. As a result of that decree, the value of the private easements was fixed at $539,117.41; the scrap value of the structure was fixed at $235, the value of the franchise nothing. 143 Misc. 129, 257 N.Y.S. 37. There were cross-appeals to the Appellate Division, which affirmed without opinion (238 App.Div. 832, 262 N.Y.S. 973), and then to the Court of Appeals, where there was an affirmance by a divided court. 265 N.Y. 170, 192 N.E. 188. This Court granted a writ of certiorari at the instance of the receiver of the railway company and those allied with him in interest. 293 U.S. 554.
A statute of New York in force at the taking of the spur directs the court to "ascertain and estimate the compensation which ought justly to be made by the city of New York to the respective owners of the real property to be acquired." Greater New York Charter, § 1001, as amended by Laws 1915, c. 606. Cf. L. 1923, c. 635. Such a system of condemnation is at least fair upon its face.
"If there has been any wrong done, it is due not to the statute, but to the courts having made a mistake as to evidence or, at most, as to the measure of damages."
Constitution is not infringed unless there has been "absolute disregard" of the right of the owner to be paid for what is taken. Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226, 166 U. S. 246; Backus v. Fort Street Union Depot Co., 169 U. S. 557, 169 U. S. 565; Appleby v. Buffalo, 221 U. S. 524, 221 U. S. 532. At other times, we are told that due process is not lacking unless "plain rights" have been ignored, with a reminder that much will be overlooked when there is nothing of unfairness or partiality in the course of the proceedings. McGovern v. New York City, supra, at p. 229 U. S. 373. From the very nature of the problem, these phrases and others like them are approximate suggestions, rather than scientific definitions. In last resort, the line of division of dependent upon differences of degree too subtle to be catalogued. Hudson County Water Co. v. McCarter, 209 U. S. 349, 209 U. S. 355; Klein v. Board of Supervisors, 282 U. S. 19, 282 U. S. 23. Cf. Davidson v. New Orleans, 96 U. S. 97, 96 U. S. 104. One cannot hope to mark its bearings in a sentence or a paragraph. Enough for present purposes that, when the hearing has been full and candid, there must ordinarily be a showing of something more far-reaching than one of dubious mistake in the appraisal of the evidence. Due process is a growth too sturdy to succumb to the infection of the least ingredient of error. "It takes more than a possible misconstruction by a court to make a case under the 14th Amendment." Seattle, R. & S, Ry. Co. v. Linhoff, 231 U. S. 568, 231 U. S. 570.
In the setting of this background, we approach the consideration of the rulings that are here assigned as error.
"the railroad merely exhausted the right of the abutting owners to complain because the railroad was in the street and so trespassing on their property."
Per Pound, C.J., in the present case, 265 N.Y. at p. 180. What was conveyed was the right to persist in a course of conduct that otherwise would have been a wrong.
Even then, the process of condemnation or its equivalent did not so obliterate the easements as to leave abutters helpless in the face of new encroachments. If the user was substantially aggravated, as, for example, by an added tier of tracks, there was another right to be extinguished. Knoth v. Manhattan Ry. Co., 187 N.Y. 243, 79 N.E. 1015; American Bank-Note Co. v. New York Elevated R. Co., 129 N.Y. 252, 266, 29 N.E. 302. The company was under a continuing duty to rid its presence in the highway of the character of a trespass as against the title of abutters.
Whether these rights or interests, though easements in the ownership of the abutters, retained the same quality after release or conveyance to the railway, we do not now determine. They are spoken of in many cases as if their quality in the new ownership continued what it was before. See, e.g., People ex rel. Manhattan R. Co. v. Barker, 165 N.Y. 305, 59 N.E. 137, 151; People ex rel. Manhattan R. Co. v. Woodbury, 203 N.Y. 231, 96 N.E. 420. This may have been merely for convenience with the thought that the description was at least sufficiently accurate to serve the case at hand. Elsewhere, the same interests are spoken of as "quasi-easements" (American Bank-Note Co. v. New York Elevated R. Co., supra, p. 272) or by some other and equivalent term. Matter of City of New York (Manhattan R. Co.), 126 Misc. 879, 901, 216 N.Y.S. 2; 229 App.Div. 617, 625, 243 N.Y.S. 665; Stevens v. New York Elevated R. Co., 130 N.Y. 95, 101, 28 N.E. 667. After acquisition by the railway, they are not susceptible of separation from the ownership of the franchise. Kernochan v. New York Elevated R. Co., 128 N.Y. 559, 29 N.E. 65; Drucker v. Manhattan R. Co., 213 N.Y. 543, 108 N.E. 74; Heard v. City of Brooklyn, 60 N.Y. 242. * They are not easements in gross assignable to strangers generally.
265 N.Y. 170 at 181. They may be factors to be considered in determining the value of the franchise while the road is in operation, for they are effective as a release from liability for past or future damages. This is very far from saying that they contribute elements of value when operation has been proved to be impossible except at a continuing loss. Still less does it connote a value equivalent to the estimated present cost of condemning them anew.
We have said that there will be no attempt in this Court to classify the rights acquired by the company as easements or as something else. For present purposes, we accept the ruling of the state court that, irrespective of their precise nature, they had a value to be paid for upon the termination of the franchise and the removal of the structure by force of eminent domain. If all this be assumed, the petitioners fall short by a long interval of making out a defiance of constitutional restraints. Their argument, it seems, is this: property that is to be condemned must be paid for in accordance with the value at the time of the taking; these easements, when acquired about half a century ago, had a value then judicially deter mined of about half a million dollars; owing to changes in the neighborhood, the same easements, if acquired in 1923, would have cost $3,600,000; an award has been made for the first amount only; the difference between the first amount and the second is an increment of value condemned without requital.
in the interpretation of the record, it was not so gross or obvious as to justify a holding that the restraints of the Constitution were forgotten or ignored. But, in truth, there was no error, or none to the prejudice of the owners of the property condemned. Much could be said in support of the position that the value of the so-called easements was nothing more than nominal. If so, the petitioners have been overpaid by more than half a million dollars. We do not go into that question now, for the city and the abutters are not petitioners in this Court, and must acquiesce in the award as made. Problems open in the state court and there considered in the opinions (see especially the dissenting opinion in 265 N.Y. at p. 183) are beyond our jurisdiction here. Enough for present purposes that the award is not too low, though perhaps it is too high. Excess is not an error of which the owner may complain.
Too low it certainly is not. "The question is, What has the owner lost? Not, What has the taker gained?" Boston Chamber of Commerce v. Boston, 217 U. S. 189, 217 U. S. 195; United States v. Chandler-Dunbar Co., 229 U. S. 53. If we assume these easements to be property, what were they worth to the railway in 1923? The petitioners do not urge that it was practicable to find a buyer who would pay for the easements in connection with the franchise and with a view to continuing the operation of the road. The spur had proved to be a failure, a mere impediment to public travel. Substantial prices are not paid for the privilege of conducting a business at a loss. The petitioners do urge, however, that abutters would have been willing to pay for an abandonment of the road, and that such abandonment would have been equivalent to the surrender of the easements or to a deed of reconveyance. Voluntary abandonment was permissible (New York Railroad Law, § 237; also L. 1917, c. 788) until the franchise with its appurtenances was taken over by the city.
From this, the conclusion is drawn that the easements are worth what the abutters would have paid for them. Implicit in such an argument are assumptions that would be worthy of scrutiny if the need for scrutiny were here. The inquiry would then be whether easements or quasi-easements inseparable from a franchise must be paid for as property at the peril of infringing the Fourteenth Amendment when their value for sale presupposes the abandonment of the franchise to which they are appurtenant. To carry the amendment to that point approaches, though it may not touch, the acceptance of the nuisance value which Hough, J., on one occasion excluded from the reckoning with words of trenchant emphasis. Consolidated Gas Co. v. New York City, 157 F. 849, 874. For the time being and provisionally, we put aside these doubts, resolving in favor of the company whatever problems they suggest. Granting that the value of the easements is whatever abutters would have paid for a surrender of the franchise, how much would this have been?
York v. Sage, 239 U. S. 57, 239 U. S. 61; Olson v. United States, 292 U. S. 246, 292 U. S. 256.
"What the owner is entitled to is the value of the property taken, and that means what it fairly may be believed that a purchaser in fair market conditions would have given for it in fact -- not what a tribunal at a later date may think a purchaser would have been wise to give, nor a proportion of the advance due to its union with other lots."
New York v. Sage, supra, at p. 239 U. S. 61. Discordant voices among the group would surely have been raised in protest if an attempt had been made by amicable treaty to get rid of the spur at the value put upon it by the railway. Perhaps the abutters would have paid something. But how much would it have been? The courts below have found in the evidence no basis for the belief that the price would have exceeded the value of the easements as judicially ascertained at the time of acquisition. 229 App.Div. at p. 629; 265 N.Y. at p. 181. We cannot say that this was error. Still less can we say that some other and higher figure was established with such persuasive power that the Constitution of the United States has been flouted in the refusal to accept it.
The structure was appraised as junk, the city having undertaken to bear the cost of removal. Such an appraisal might be too low were it not for the award for the private easements. To realize the value of those easements, an abandonment of the spur was necessary. "The railroads could not release their rights to the abutting owners and continue to operate their railroads in the street." 265 N.Y. at p. 181. The structure, in the circumstances, had no value except as scrap.
departing from the restraints of the Constitution of the nation.
With the value of the franchise gone, the public easements in the street, as distinguished from the private ones, had a worth that was merely nominal at least for any showing to the contrary in the pages of this record.
* Many decisions are collected in 40 Yale Law Journal 779, 1074, 1309.

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