Kingsland v. Mayor of New York — 18 N.Y. St. Rep. 701

Majority

p. 701

William M. Kingsland, App’lt, v. Mayor, etc., of New York City, Resp’t.^[1]

(Court of Appeals,

Filed October 26, 1888.).

Headnote

1. Wharfs and bulkheads—Wharf-right—What rights and privileges THE OWNER OF A BULKHEAD IN THE CITY OF NEW YORK HAD prior to Laws 1871, chap, 574.

The plaintiff’s wharf-right, for the value of which this action is brought, was situated between two piers in the city of New York, numbered 44 and 45 respectively, and was a bulkhead forming the water line of the exterior street, known as West street, and had a length between the two piers of 104 feet. The city had constructed and owned pier 45, and the ownership of pier 44 was in persons other than the plaintiff or his predecessors. They had simply á wharf-right for the length of the bulkhéad between the two piers. In -1852, the city permitted the owner of the bulkhead to bridge out, as it was called, on piles thirty-five feet from the bulkhead line, which gave the owner an area for the landing and movement of freight outside of the exterior street. This platform stood upon city land

p. 702

under water, and the value of its use as an incident of the wharf-right was a pure gratuity to the wharf owner while the permission lasted. That permission was, however, unlawful and void, and both given and acted upon in direct defiance of the direct statutory prohibition, which forbade any structures, except piers and bridges, connecting with the street outside of the bulkhead line, or line of solid filling. In 1872, the Inman Steamship company were the lessees of pier 45, and had covered it substantially with a shed. They had done this with the assent of the city, which could give no lawful assent, and were maintaining upon the pier a convenient and useful, but illegal structure They rented the bulkhead from the plaintiff, and got permis-ion from the common council to complete a platform running the whole length of the bulkhead and extending sixty-five feet west from the water, and upon this to build a shed. This extension was built after the adoption of the plan provided for in the Laws of 1871, chapter 574, and was forbidden by that act. Held, that the plaintiff, as owner of his wharf-right, was entitled to the wharfage which it yielded, and such added value as its privilege of preferential use, when leased to the adjoining steamship line gave it, but beyond that, had no other right as incident to his ownership ; that neither he nor his lessees had any right to the platform or the shed upon it, and could be stripped of both at any moment by an appeal to the law, or without that by a revocation on the part of the city,

2. Same—When taken bt right of eminent domain—What cannot be CONSIDERED IN ASCERTAINING VALUE.

Evidence was given upon the trial of some possibility of the continuance of plaintiff’s platform and shed, and chance of such continuance was allowed to increase the value awarded, and it was an element of the judgment fixing the value of the wharf-right taken. Held, erroneous; that the subject of valuation was not the tangible property which could be measured or weighed, but an incorporeal right which could only exist by force of the law, and under its shelter, and can never be more than that law creates and sanctions; that the city had, and was required, to pay for such an incorporeal right, and its extent or value could not be broadened or increased, because its situation furnished a convenient opportunity to commit a trespass or maintain a nuisance; that compensation was to be made for the wharf-right, not for the wharf-wrong, for what the law authorized and recognized, and not foT what it forbade and condemned.

8. Same—The chance to violate the law furnished by the position of THE BULKHEAD IS NOT AN ELEMENT OF VALUE.

Adding to the value of the wharf-right, with its lawful incident of preferential use, by taking into account an unlawful platform and shed, and the chance of maintaining it unmolested, is giving to the property, as an element of increased value, its convenient situation for violating the law and capitalization existing, expected profits of that violation. The city not only did not take from the plaintiff the right to maintain a platform and shed in front of the bulkhead, but it did not get any such right from any source' whatever, and will not have it when its own constructions are finished.

4. Same—City could revoke its license.

The city could, as it did, revoke the license by removing, or directing the removal of, the platform and shed without the least possibility for the resulting injury. That the taking and revocation happened at the same time could not" alter the inherent character of either.

5. Same—City cannot extend bulkhead beyond the line fixed by LAW.

The city will get a new pier in place of forty-five, and a new bulkhead in place of plaintiff’s, but it will not have and cannot have a right to build out a new bulkhead over the water and shed that extension, for the law forbids it.

p. 703

6. Same-*-The wharf-owner is entitled to be paid for value of wharf-age, CRANAGE AND PREFERENTIAL USE OF BULKHEAD.

The wharf-owner is entitled only to the capitalized value of his wharfage, cranage and the right of preferential use of his bulkhead by the steamship line which was attached thereto by force of law.

7. Same—City could not allow sheds, etc., on bulkhead under Laws 1871, chap. 574—Effect-of Laws 1875, chap. 378.

The law of 1871, chap. 574, in no manner made lawful the erection of sheds upon piers or bulkheads, and no authority existed for their construction. They were forbidden by positive law. The law of 1875, chap. 378, commonly known as the shedding act, authorized the department of docks to grant permits for the maintenance and construction of sheds upon the piers or bulkheads, but these permits were revokable in their nature without consideration, and expressly subject to the rules and regulations of the department of docks to whose discretion the matter was confided. It in no respect authorized platforms beyond the bulkhead line, nor sheds upon them, and it has expressly saved and preserved the prohibition of the Laws of 1871.

Appeal from a judgment of the supreme court, general term, first department, reversing a judgment in favor of the plaintiff, entered in the New York county clerk’s office on the report of a referee.

W. W. McFarland, for app’lt; James C. Carter, for resp’t.

We have already determined that the destruction of the wharf-rights belonging to private owners, consequent upon the construction by the city, under the act of 1871, of an exterior fine of docks owned and controlled by the municipality, involved the necessity of compensation to such owners for the property rights thus taken away. Langdon v. Mayor, 93 N. Y., 129 ; Williams v. Mayor, 105 id., 419, 7 N. Y. State Rep., 529.

What shall be the measure and basis of that compensation, is the question now presented, and in a form which excludes damages for a tort or redress for a wrong, but treats the case solely as one in which the city takes, by right of eminent domain, the private property destroyed, and is simply bound to pay the fair and just value of what it has taken. The parties litigant disagree widely as to that value, and mainly because certain privileges and incidental conveniences have become associated with the wharf-rights as owned and possessed, and have added enormously to the prices along the water front.

Originally, as we have elsewhere said, the duty of building wharves and exterior streets, and filling out to them, was imposed upon the riparian owners, and was, perhaps, for a time, more of a burden than a benefit, since such owner gained no exclusive rights in the wharf at his water front beyond that of the sums payable as wharfage, cranage and dockage by the vessels enjoying its use. The wharf or exterior street was a public wharf, open to the

p. 704

commerce of the port, and the free passage of the "people; and authority to incumber it was not only wanting from its inherent nature and character, but any such incumbrance was positively forbidden by statute. Nevertheless, the needs and convenience of commerce, and the persistent encroachments of private interest gradually pushed aside the prohibition of the law, or modified its restraints by new legislation. Lines of steamers sought and obtained exclusive privileges at particular wharves, paying rentals therefor, which steadily grew ■ to very large amounts. They needed also sheds to cover and protect their freight, and these were built not only upon the piers, but upon piles driven into the land under water in front of the wharves which bound the exterior street. These constructions gradually converted the public wharf into what became practically, and for the time being, a private ownership, the price of which steadily increased as it encroached upon the public right, and fed upon the submission and endurance of the municipality. This gradual progress toward the ultimate result, and the character of the privileges obtained, may be usefully studied in connection with the history of plaintiff’s wharf-right for'the value of which this action is brought. It was situated between two piers, numbered 44 and 45, respectively, and was a bulkhead forming the water line of the exterior street known 'as West street, and had a length between the two piers of a few inches over 104 feet. The city had constructed and owned pier 45, which was at the foot of Charlton street, and the ownership of pier 44 was in persons other than the plaintiff or his predecessors. They had, therefore, simply a wharf-right for the length of the bulkhead between the two piers. No vessel exceeding that length could lie at the wharf for the purpose of loading or unloading, and its use was consequently confined to canal boats and the smaller class of vessels carrying brick or lumber. Its separate value as a wharf was therefore small. It was rented in 1866 in connection with the upland lots used as a lumber yard for a total of $3,000 a year; a provision in the lease indicating that the wharf’s proportion of the annual rent was $1,000. Asíate as about 1872 the lessees sublet the wharf for the last year of their lease for $800. And this moderate rental, but little more than the wharfage possible of collection, was charged and paid, although two things happened which added to the usefulness of the property. In 1852 the city permitted the owner of the bulkhead to bridge out, as it was called, or build a platform on piles extending thirty-five feet from the bulkhead line, which construction practically extinguished the wharf-right as it was granted, or pushed it to the outer edge of the platform,

p. 705

and so gave to the owner an area for the landing and movement of freight outside of the exterior street. This platform stood upon the city’s land under water, and the value of its use as an incident of the wharf-right was a pure gratuity to the wharf owner, while the permission lasted. That permission, however, was unlawful and void, and both given and acted upon in direct defiance of the existing statutory prohibitions. The law of 1798, which was then in force (chapter 80), and the act of 1801 (chapter 129, § 10), and Laws of 1875 (chapter 378), forbade any structures except piers and bridges connecting them with the street outside of the bulkhead line or Une of solid filling, and the city had no power to grant the permission given, and the wharf owner acquired no rights under it. Beyond that the permission, even if lawful, was merely a Ucense and revocable in its nature, a privilege which the city might withdraw at any moment, -and which it was its duty to withdraw.

But the pressure of lines of steamships for fixed and permanent accommodations along the water front led in 1858 to the enactment by the legislature of a law which did add value to the wharves and bulkheads as sources of profit and revenue. That act (chapter 261), provided, in substance, for what may be called a preferential use by steamboat lines when lessees of a pier or bulkhead. It gave them the exclusive use so far as needed for conducting their business, and left the wharf open to the public only when not needed for the boats of the line. Of course this reservation of a public right was rather formal than real, and the preferential use became in fact an exclusive use, since the lessee would be sure always to need the dock facilities and the public would avoid a wharf from which they were liable at any moment to be removed. This privilege of exclusive use was a governmental regulation, indicating a settled and permanent policy, and over which the city had no control. It necessarily added value to every bulkhead or pier which the steam commerce of the port desired to lease and occupy, for it gave that commerce a permanent home at the water front, and secured to it undisturbed facilities for the transaction of its business. Previous legislation had gone no further than to permit the assignment of classes of vessels to specific localities, but leaving their rights at such points equal and without preference. The act of 1858 gave to the owner of a pier desirably situated and at which the largest steamers could lie and receive or discharge their cargo, a rental value much beyond the mere wharfage collectible by law. And wherever a bulkhead was adjacent to a pier thus occupied it became a desirable acquisition to the steamboat company occupying the pier. A lease of it would enable such to control the entire or basin.

p. 706

could push their vessels up to the bulkhead and occupy in addition to the area of their pier the one hundred feet of wharf forming the shore boundary for the reception or discharge of cargo. So much they could do lawfully and it is not at all impossible that a bulkhead so situated had a somewhat greater value for purposes of a lease to a steamer line than the annual wharfage fixed by law. This increment of value, if in fact it existed, was a legal incident of the wharf right which belonged to the wharf owner, which did not depend upon any discretion of the municipality and which was taken from him when his wharf right was destroyed. Whether it added much or little to the value of that right we cannot accurately determine from the evidence.

In 1871 (chapter 574), the city charter of the previous year was amended so as to change the whole dock system of the harbor. The law provided for a plan which should girdle the city with new wharves and piers, belonging wholly to the municipality, and ending all private ownerships along the water front. The wharves of private owners were to be purchased by agreement or taken in the ordinary manner by proceedings under the right of eminent domain. Those rights, thus to be obtained, were described in the act as “ any rights, terms easements and privileges pertaining to any wharf property in said city and not owned by said corporation.” Whatever could be held against the pnblic was to be bought or taken, but what could not was already in their ownership or control. The act vested in the department of docks authority over the whole system and enacted that, “from the time of the adoption of said plan no wharf, pier, bulkhead, basin, dock, slip, or any wharf, structure or superstructure, shall be laid out, built or rebuilt, within such' territory or district except in accordance with such plan.”

At this date sheds existed on many piers leased by steamer lines, and which excluded the least opportunity of anything like a public use and made them in effect completely private wharves. These sheds, whether erected with or without the assent of the city, were unlawful and a violation of positive law. In People v. Mallory (2 S. C. Rep., 76), the question was raised. An attempt was made to argue from the use of the word “structures” in the act of 1871, an intention to legalize existing sheds and ratify their construction. The attempt failed. The court held, and I think with entire accuracy, that the act of 1871 in no manner made lawful the erection of sheds upon piers or bulkheads, that no authority existed for their construction, and that they were forbidden by positive law.

In 1872 the Inman line of ocean steamships were lessees of pier 45 and had covered it substantially with a shed. They had done this with the assent of the city which could give no lawful assent, and were maintaining upon the

p. 707

pier a convenient and useful but illegal structure. They had rented0plaintiff’s bulkhead from his lessees for a moderate rent to get rid of the lumber commonly piled upon it, and which threatened danger of fire and became the hiding place of tramps. They conceived a plan for getting additional shed room which involved the complete extinction of plaintiff’s wharf right. Simultaneously they did two things. They rented the bulkhead for $5,000 a year, and got permission from the common council to build a platform running the whole length of the bulkhead and extending sixty-five feet west over the water, and upon this to build a shed. Not only was this permission without legal authority and incapable of transferring any legal right, but the action under it seems to have transcended the permission. The agent of the company testifies that he built the platform out over the water, not sixty-five feet in width from the bulkhead line but seventy feet from the line of the old platform, and on that extension built the shed and used the old platform as a means of approach. It is agreed that the plan provided for in the law of 1871 was formally adopted in "April of that year. The extension was built after the adoption of that plan, and was forbidden by the act of 1871 because inconsistent with the plan adopted, as well as by the existing laws which fixed the bulkhead line and forbade any structures beyond it except piers and their approaches. In this manner the lessees destroyed the wharf right and occupied the city’s land under water for a shipping warehouse, and it was for this illegal use that it paid its rent to the wharf owner consenting to the lawless act and charging a large price for that use.

The Mallory Case was decided in 1873, and the decision inspired alarm among the wharf owners and their lessees, who saw the true character of their encroachments disclosed; and they appealed to the legislature, moved largely by their personal interests, but pleading the necessities of the growing commerce of the port.

In 1875 an act was passed, commonly known as “the shedding act,” which authorized the department of docks to grant permits for the maintenance and construction of sheds upon the piers or bulkheads, but these permissions were revocable in their nature, without consideration, and expressly subject to the rules and regulations of the department of docks to whose discretion the matter was confided. The act of 1875 gives no help to the plaintiff’s case for two reasons. It authorized permits for sheds upon piers or bulkheads, but in no respect authorized platforms beyond the bulkhead line and sheds upon them, and it expressly saved and preserved the prohibition of 1871. Besides, the permit of the Inman line was given in 1872, and while the act of 1875 legalized existing structures on the piers or bulkheads, it in legal effect merely ratifies, if that be possi

p. 708

ble, the previous permission under which the structure was built, and that permission was in terms revocable and running only during the pleasure of the city.

Our investigation thus far discloses that the plaintiff as owner of his wharf right was entitled to the wharfage which it yielded and such added value as its privilege of preferential use when leased to the adjoining steamboat line would give it, but beyond that had' no other right as incident to his ownership. Neither he nor his lessees had any right to the platform or the shed upon it, and could be stripped of both at any moment by an appeal to the law or without that by a revocation on the part of the city.

That revocation came. The city acted under the law off 1871 by adopting a plan which involved the termination of all private ownership of docks and wharves and the construction of a new outer line. The improvement finally reached Charlton street. The municipality directed the removal of the platform and shed in front of plaintiff’s bulkhead, and by that direction and the action taken under, it effectually revoked plaintiff’s license, if that needed to be revoked, which was never lawful at all and never had any right behind it. The city also constructed a new bulkhead in front of plaintiff’s wharf, cutting the latter off from the water and destroying access by solid filling. By this latter process it took plaintiff’s wharf right with its lawful incidents, and if the judgment which he recovered had embraced no more than the value of that we should affirm it without hesitation. But much more than that was allowed. Some possibility of the continuance of plaintiff’s platform and shed and the chance of such continuance was allowed to increase the value awarded when the possibility was ended and the chance did not exist. Evidence was given upon that basis, and the learned referee made it an element-of his judgment and a ground of his valuation, for he defined what it was that he valued by adding, “the purchaser taking all the chances of being permitted to continue to maintain said platforms and shed and devote the-property to exclusive use;” and the value that he fixed was upon “ the plaintiff’s said bulkhead together with said riparian rights and privileges.” By the latter phrase he plainly intended a right or privilege to build or maintain a platform and shed over the water, and assumed that as an existing right for the continuance of which some chance-remained. So far as the platform and shed are concerned we think the valuation, which reached over one hundred thousand dollars, was erroneous.

It must be kept in mind that the subject of valuation is-not physical and tangible property which can be measured or weighed, but an incorporeal right which can only exist.

p. 709

"by force of the law and under its shelter (Langdon v. Mayor, supra), and can never be more than that law creates or sanctions. The city took and was required to pay for such an incorporeal right, and its extent or value cannot be broadened or increased because its situation furnished a covenient opportunity to commit a trespass or maintain a nuisance. Compénsation was to be made for a wharf-right; not for a wharf-wrong; for what the law authorized and recognized; not for what it forbade and condemned. The city did not take from the plaintiff the right to build a platform beyond the bulkhead line and maintain a shed upon it since he never had any such right to be taken away. It never had an existence. It stood only upon sufferance and that sufferance had ended. Adding to the value of the wharf right with its lawful incident of preferential use by taking into account an unlawful platform and shed and the chance of maintaining it unmolested, is giving to the property as an element of increased value its convenient situation for violating the law and capitalizing the existing and expected profits of that violation. The same reasoning might lead to an increase of value in cases much more harmful and reprehensible. Suppose the city, under competent authority, should take a house and lot for the purpose of a park, and destroy the dwelling, and the owner seeking its value shows, that owing to its peculiar location, it can be rented as a house of ill-fame or as a gambling den for twice the rent obtainable for any lawful purpose, and when reminded that such uses are illegal, should answer that he had obtained such rental for years, and the city had winked at it and never once raided his house or enforced the law; that he could have sold for the amount he claimed, the purchaser taking the chance of the blindness of the police or the endurance of the citizens; and that what he could sell for to another in the same business was market value, and market value he should have. We can all see the absurdity of that claim, but not so readily when the illegal use, for which value is claimed, is merely illegal and not also immoral and criminal.

The view we have just taken rests upon the absolute illegality of any structures save piers outside of the fixed bulkhead fine. That has been the uniform prohibition of the state and was essential to a permanent outer line, for, if wharf owners could push out beyond, the harbor was doomed and the legal bulkhead line a farce. The consolidation act of 1882, which gathered and compacted the laws affecting the city, repeats the prohibition. (§T32.)

But if we concede some shadow of authority to the city’s license, the sitution is not changed. The license of the dock

p. 710

department to plaintiff’s lessee, was after the passage of the act of 1871, and by its very terms was operative only during the pleasure of the city. Those who received it knew when they received it that it conferred no fixed property right, but merely a privilege which the city might withdraw at any moment, and that the plan of 1871, contemplated and would compel that withdrawal. Until then they could afford to pay $5,000 a year rent, but would have been very far from buying the bulkhead for the capitalized value of that income. When the city acted, its inevitable result was twofold. It operated to destroy the wharf right which the plaintiff owned, and to that extent took from him his property. It operated also as a revocation of the license or privilege given. The value of the one the city was bound to pay; the value of the other it was not bound to pay. It could, as it did, revoke the license by removing or directing the removal of the platform and shed without the least responsibility for the resulting injury. That the taking and revocation happened at the same time, cannot alter the inherent character of either.

The city not only did not take from the plaintiff the right to maintain a platform and shed in front of the bulkhead, but it did not get any such right from any source whatever, and will not have it when its own constructions are finished. And this is an answer to the suggestion pressed upon us that the value unpaid to the wharf owner the city will get for nothing. One thing in this connection should be observed. The city owned pier 45, and did not own the bulkhead. It will get a new pier in place of 45, and a new bulkhead in place of plaintiff’s; but it will not have and cannot have what he claimed to possess, a right to build out from the new bulkhead over the water and shed that extension, for the law forbids it. Laws of 1882, chap. 410, § 732. So that if it pays for plaintiff’s unlawful structure it will neither get that, nor a new one in exchange, but give a large sum for revoking a license made without consideration and terminable by its terms at its own pleasure. If it gets shedding room inside of the new bulkhead it will be because it owns the land and has extinguished plaintiff’s easement of water approach.

The learned counsel for the appellants frames as a test of our conclusion a supposed collision between the city and the state after the new docks are built,.and asks if the state should destroy them by- a new exterior line what would be the compensation due to the city, and whether it would be merely the value of the wharf right unaffected by the incidents of exclusive use and sheds for freight, or the value of[1] that right with its incidents and as it stood when taken. The cases are not parallel. The state has a double right,

p. 711

as proprietor and as sovereign, and the capacity in which it acted might come in question; and the city will hold its wharf rights and their incidents by a different tenure from a bare license, and under authority of law, and after having paid a very large consideration. Without attempting to decide a hypothetical question little likely to arise, since the state will hardly seek to fence in its metropolis, it is enough to say that the cases are radically "different as respects the compensation to be paid, and not such as to decide each other.

We are thus required to say that the referee erred in allowing as an element of value the existing platform and shed, and the chance of maintaining it in the future, and so the reversal by the general term was right. But we do not hold that the wharf owner is entitled only to the capitalized value of his wharfage and cranage, for the law has attached to his bulkhead a right of preferential use by steamship lines, and this bulkhead adjacent to a steamship pier and in a desirable part of the harbor may have possessed a serious increment of value resulting from that incident. For that value, honestly ascertained and fairly measured, the wharf owner should recover, but not for any value resulting from his platform and shed.

The judgment of the general term should be affirmed, with costs, and judgment absolute for the defendants be rendered on the stipulation.

All concur, except Euger, Oh. J., and Gray, J., dissenting.