DISTRICT COURT, E.D. NEW YORK
May 15, 1941
CERTAIN LANDS IN THE BOROUGH OF BROOKLYN, COUNTY OF KINGS, STATE OF NEW YORK, FOR THE ESTABLISHMENT OF RECEIVING BARRACKS et al.
The opinion of the court was delivered by: MOSCOWITZ
MOSCOWITZ, District Judge.
This is a motion made by Regis Holding Corporation for the payment of $12,000 deposited by the United States of America for Damage Parcel No. 19 in the above proceeding.
The Government does not oppose the motion in its entirety, it claims that "a sufficient sum" of money should remain on deposit with the Registry of the Court as security to cover contingencies.
The proceeding herein is for the condemnation of certain properties including property owned by the Regis Holding Corporation, which proceeding is based upon Title 40 United States Code Annotated, Sections 257, 258 and 258a.
Section 257 provides that where a proper officer of the Government deems it necessary and advantageous to the Government that certain property be condemned, he shall have the authority to institute condemnation proceedings through the Attorney General of the United States, in the United States district court of the district in which the property is located.
Sections 258 and 258a govern the nature of the practice and procedure. Section 258 provides as follows: "The practice, pleadings, forms and modes of proceedings in causes arising under the provisions of section 257 of this title shall conform, as near as may be, to the practice, pleadings, forms and proceedings existing at the time in like causes in courts of record of the State within which such district court is held, any rule of the court to the contrary notwithstanding."
In an instance where there is a procedural question which is not expressly covered by the United States Statutes or the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, or otherwise covered by the Civil Rules of this district, Rule 45 of the Civil Rules would apply to such procedural question. Rule 45 is as follows: "Whenever a procedural question arises which is not covered by the provisions of any statute of the United States, or of the Federal Rules of Civil Procedure, or of these rules, it shall be determined, if possible, by the parallels or analogies furnished by such statutes and rules. If however, no such parallels or analogies exist, then the procedure heretofore prevailing in courts of equity of the United States, or in default thereof the procedure which shall then prevail in the Supreme Court of the State of New York shall be applied."
In view of the fact that the new Federal Rules of Civil Procedure do not apply to condemnation proceedings (See Rule 81(a) (7) which reads as follows "In proceedings for condemnation of property under the power of eminent domain, these rules govern appeals but are not otherwise applicable.") and that there is no Federal condemnation procedure, the law of the State where the property is situated, as near as may be, governs the practice, pleadings, forms and proceedings, therefore the New York State Condemnation Law, McKinney's Consolidated Laws, c. 73, Volume 9A, relating to practice, pleadings, forms and proceedings is to be followed in all proceedings to condemn lands in New York State, subject to the express provisions of Sections 257, 258 and 258a of Title 40 of the United States Code Annotated. Any provision of the New York State Condemnation Law relating to any subject other than practice, pleadings, forms and proceedings is therefore not applicable in a Federal condemnation proceeding. Under the New York law there is no provision for the taking of title prior to the termination of the condemnation proceeding.
Under Section 258a the Government acquired title to the property immediately after filing its petition in condemnation and is not required to wait until the final judgment.
Section 258a provides that in a condemnation proceeding of this character the Government may file with the petition or any time before judgment, a declaration of taking signed by the authority empowered by law to acquire the land described in the petition, declaring that said land is to be taken for the use of the United States. The declaration must contain a statement of the sum of money estimated to be just compensation for the land taken. Upon such filing and the deposit in court, to the use of the persons entitled thereto, of the estimated just compensation, the land is condemned and title vests in the Government. The court is thereupon empowered in its discretion to order the deposit or any part thereof to be paid for on account of the just compensation to the persons entitled thereto.
Section 258a provides that the Government is required to pay just compensation for the land and as part of the just compensation awarded, interest at the rate of 6% per annum on the amount finally awarded as the value of the property as of the date of taking, from that date to the date of payment, but interest shall not be allowed on so much thereof as shall have been paid into court, the deposit stands in place of the land taken.
Prior to the enactment of Section 258a the bill, which was subsequently enacted as Section 258a, was discussed in the House of Representatives on December 5, 1930, as appears from the appended excerpt from the Congressional Record, Volume 74, page 777.
A reading of these discussions clearly indicates that it was the intention of the Congress that the money deposited by the Government be paid immediately to those persons who are entitled to receive it.
Section 258a, as has been stated, provides for interest only on the excess over the amount deposited. The Congress could not deprive an owner of its property without just compensation.It was the intention of the Congress to provide that the amount deposited should be immediately paid in full to the persons entitled to receive the same, otherwise it would violate the Fifth Amendment to the Constitution of the United States. See Hessel v. A. Smith & Co., D.C., 15 F.Supp. 953; United States v. Eighty Acres of Land, D.C., 26 F.Supp. 315.
In this proceeding the Government acquired title to the premises by the filing of a declaration of taking on the 24th of January, 1941, and a judgment thereon was entered on January 25, 1941. At the time of filing the declaration of taking a notice and petition in condemnation was filed, and attached to said petition is a notice which recites that the persons to whom it was directed may appear on or before June 8, 1941, and interpose an answer to the petition.
The Regis Holding Corporation, the movant, is not required to wait until June 8, 1941, to receive the deposit made by the Government -- as a matter of fact it may be many months beyond that, as the proceeding is likely to be protracted. Regis Holding Corporation became the owner of the premises pursuant to a deed dated July 1, 1939, and duly recorded in the office of the Register of the County of Kings on November 16, 1939, in Liber 5789 of Conveyances, at page 396. It and its immediate grantors have been in peaceable, continuous and undisturbed possession of the property for over twenty years prior to the time title vested in the United States of America. Its title has never been disputed, questioned or rejected nor has it sold, assigned, conveyed or contracted to sell, assign or convey, or in any way transfer the premises or the money deposited therefor. The premises are free and clear of all mortgages, leases or other encumbrances, except real estate taxes due the City of New York. There is therefore no reason to wait until after the return day of the petition in condemnation for the payment of the deposit. Many months may elapse before the proceedings are terminated. If the Government's position is correct the owner of the property in the meantime can be deprived of its property or the deposit. This was not the intention of the Congress.
Section 258a expressly provides that the Court upon application of the parties in interest, may order that the money deposited in court or any part thereof be paid forthwith for or on account of the just compensation to be awarded in the proceeding.
If it should appear in a condemnation proceeding that the applicant is not entitled to the entire deposit, the court may nevertheless award him the part to which he is entitled (See Memorandum of Judge Byers, dated March 31, 1941, in United States of America v. Certain Lands Located in the Borough of Brooklyn, County of Kings, State of New York, for the establishment of Receiving Barracks and Allrich Luhrs et al., Damage Parcel No. 13, and Memorandum of Judge Byers, dated April 12, 1941, in United States of America v. Certain Lands Located in the Borough of Brooklyn, County of Kings, State of New York, for the establishment of Receiving Barracks and Allrich Luhrs et al., Damage Parcel No. 31, or the court could withhold a certain portion of the deposit pending the disposition of liens and encumbrances, or withhold the deposit or any part thereof pending clearance of the title of the person applying for the payment of the deposit. It appearing that the applicant is the owner of the property no good reason exists for withholding the deposit and it should be paid to it at once.
It appears from the affidavit of the attorney for the Government that the premises were occupied by the Shawmut Transportation Company, Inc., under a landlord and tenant relationship.
The attorney for the Regis Holding Corporation has made an affidavit in reply in which he states that the tenant was in possession of the property under a month to month lease and has no claim whatever against Regis Holding Corporation nor has it any interest in the award to be made for the land and building. He further states in his affidavit that the moving party will either produce a release of claim by this tenant, or else join the tenant in the motion, if the court so directs.
The claim of a tenant in a condemnation proceeding is for the market value of the unexpired term of the lease. A month to month tenant such as Shawmut Transportation Company would have no such unexpired term and therefore would not be entitled to any award. In view of the fact that the attorney for the moving party is willing to produce a release of claim by the tenant or else join the tenant in the motion, the entry of the order will, in the meantime, be withheld.