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United States v. City of New York.

December 9, 1942


Appeal by defendant from a decree of the District Court for the Southern District of New York.

Author: Chase

Before L. HAND, CHASE and FRANK, Circuit Judges.

CHASE, Circuit Judge.

The controversy, which led to an action by the United States against the City of New York in the District Court for the southern District of New York to enforce specific performance of a contract for the sale of land by the plaintiff to the defendant and to a decree for the plaintiff from which the defendant has appealed, grew out of the following facts and circumstances.

In 1867 the city conveyed to the United States certain land in City Hall Park in Ne York City for use as the site of a building to be erected for use as a post office and court house. The conveyance was upon the condition that the land and any building erected thereon should be used only for the above named purposes and if such condition was broken the land would revert to the city. The United States erected a building on the land which it used exclusively for the named purposes for many years. By 1919 the reasonable needs of the gevernment could not adequately be met by the continued use of the building so erected and the erection of a new and adequate building on the same site was taken under consideration.

This site, which will hereinafter be called the old post office site, was wanted by the city for inclusion in, and use as a part of, City Hall Park. To accomplish that end, the Board of Estimate and Apportionment of the city authorized the beginning of negotiations with the government for its acquisition and these were undertaken with the aid and support of civic organizations. The government was willing to relinquish the old post office site provided it could acquire adequate and suitable land elsewhere and after some time the idea took form that the new land should include two separate sites on one of which the government should erectr a new court house and on the other a new post office.

It was apparently easier to find a suitable site for the contemplated new court house and in 1928 a site for it in the civic center, now called Foley Square, on land owned by the city had been found to be suitable and the Secretary of the Treasury wrote to the then Mayor of New York inquiring whether the city would sell it to the government and leave for further consideration the occupancy of the old post office site for a post office. The Mayor replied that the Board of Estimate and Apportionment had unanimously decide that the civic center site for a court house would be given to the government in consideration for the removal of the building on the old post office site.The Secretary replied that the government would exchange the old post office site for an adequate new one but that the latter had not been found and asked for the price at which the proposed court house site could be purchased. The Board of Estimate and Apportionment on October 4, 1928, passed a resolution expressing its opinion that it was unfair for the government to expect the city to provide two sites and requesting that the government purchase a new post office site and vacate the old one. The Secretary replied on October 13, 1928, that the difficult problem was to provide for the postal service in New York City and that the ideal location of the present post office made it of "vital importance" that any other site offered in exchange by the city should be in close proximity to the old. He further stated that "the * * * possibility of greater latitude for the selection of a site for a building for the federal courts" and the need for prompt action to provide such a building made it essential to treat that "as a separate problem."

On the 31st of the same month the Mayor again wrote the secretary to the effect that the Board was willing to provide free of cost the civic center site valued at $2,250,000 for a court house and in addition property on Church Street, between Vesey and Fulton Streets, which the city owned and valued at $340,000 which could be used with adjacent property the government might acquire for a post office. The Secretary replied to this proposal on November 21, 1928, by stating some of the difficulties to be overcome in fulfilling the desire of the city to have the old post office site made available for addition to its municipal grounds but expressed a disposition to help in that regard and said that, "If the City finds it possible to offer a site suitable for post office purposes but does not care to donate at the same time a site for a Court House as indicated in out previous correspondence, this Department would be prepared to take up the question of purchasing the Court House site."

In this way it came about that the arrangement for adding the old post office site to the city's park eventually took the form of a purchase by the government from the city of a site in Foley Square on which a court house was erected nd the acquisition by the government of land on Vesey Street, partly by purchase and partly by condemnation, on which a new post office was built. The government has paid the city $2,450,000 for the site for the court house and there is no dispute as to that phase of the matter. It has moved its post office into a new building on Vesey Street and vacated the building on the old post office site. That building has been torn down by the city and the site added to its park under a stipulation providing that if the government does not prevail in this suit it may within one year take over the old site and erect a building thereon for the use to which it was at liberty to put the building torn down without regard to any failure meanwhile to continue such use.

This suit and stipulation followed the request of the city for permission to begin teraring down the old building befoe the government moved the post office to the new building and the insistence of the government that the city pay to it what it claims was the purchase price of the old posst office site under a contract providing for its conveyance to the city. The city refused to recognize any obligation to pay anything for the right to add the land to its part.This refusal was based upon the contentions (1) that no contract so to do which was definite enough to be valid was made; (2) that any contract made did not satisfy the requirements of the Statute of Frauds; and (3) that it was never either authorized or ratified so as to become binding upon the city.

These issues can be resolved only by reference to the pertinent correspondence between the then Mayor and Secretary which followed the tentative plan, already set forth, for accomplishing the results both parties desired of the subsequent steps taken in behalf of the city for it is undisputed that no formal written contract was ever executed and that the Board of Estimate and Apportionment never authorized, one in the manner provided by the city's charter.

After 1928 the matter continued to be considered by representatives of the city and of the government until on april 30, 1930, the Commissioner of Public Works of the city recommended to the Mayor that the city pay the government $3,750,000 for the old post office site and the government pay the city $2,700,000 for the Foley Square site. This proposal was made known to the Under Secretary of the Treasury and on May 12, 1930, the Secretary wrote the Mayor suggesting, in accordance with a formula proposed by the Merchants' Association, that the price of the Foley Square site be set at $2,450,000 and that the city agree to pay the government for the old post office site that proportion of the cost of the Vesey Street site which the area of the old site bore to that of the new one.

This is the background against which the following three letters must be read which the government contends show the consummation of the contract it relies on. On June 6, 1930, the Mayor wrote the Secretary as follows:

"Your letter of May 12, 1930, referring to the proposed disposition of the Federal Building in City Hall Park, received careful consideration by the members of the Board of Estimate and Apportionment in executive session, at their meeting today.

"It affords me great pleasure to be able to inform you that your suggestion that the valuation of approximately $2,450,000 for the city protpery in the Civic Center, as appraised by the Special Appraisals Committee of the Real Estate Board of New York, was ...

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