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United States v. Certain Property Located

decided: March 13, 1967.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
CERTAIN PROPERTY LOCATED IN THE BOROUGH OF MANHATTAN, CITY, COUNTY AND STATE OF NEW YORK, CONSISTING OF ALL OF BLOCK 887 AND BOUNDED BY EAST 31ST AND EAST 32ND STREETS AND LEXINGTON AND THIRD AVENUES AND 193 REALTY CORP., ETC., DEFENDANTS, AND STEVEN AND MARTIN H. GOODSTEIN (TRACT 11), DEFENDANTS-APPELLANTS



Waterman, Moore and Kaufman, Circuit Judges.

Author: Moore

MOORE, Circuit Judge:

This is an appeal by defendants, Steven and Martin H. Goodstein (appellants) from a judgment in a condemnation proceeding brought by plaintiff, United States of America (the Government), awarding to appellants "as just compensation for the property acquired" the sum of $600,000. Appellants find nothing "just" in this award and attribute it to the District Court's exclusion of (to them) vital evidence and to error in its instructions to the Commissioners who fixed this value.

On July 26, 1962, the Government filed proceedings to condemn the fee simple to the land herein involved and on September 30, 1963, filed a declaration of taking for public use of "an estate in fee simple."*fn1

The Trial

The District Court (the Court) appointed three Commissioners. Rule 71A(h) of the Federal Rules of Civil Procedure. The Court and the Commissioners sat together throughout the trial. The Court ruled upon the admissibility of evidence and at the conclusion of the trial instructed the Commissioners as to the law, by which they were to be governed in reaching their determination of value upon the facts presented. Thus the Commissioners were, in effect, a jury of three, albeit the relationship between court and jury was substantially closer than upon an ordinary trial. However, virtually the same principles should be applied on appellate review, namely, the facts as found by the fact-finding body should not be disturbed unless they were based upon erroneous legal standards conveyed to it in the Court's instructions. Unlike the ordinary jury trial resulting in merely a general verdict, the nature of the basis for the determination here is disclosed by the Commissioners' Report and Supplemental Report from which may be obtained a quite accurate account of the strict adherence which they gave to the Court's instructions.

The Facts

The record reveals a remarkable agreement as to the facts and the invariable disagreement as to the experts' conclusions and as to legal theories.

In August 1961 appellants*fn2 entered into four contracts of sale for the purchase of four parcels of property on the west side of Third Avenue, New York City, between East 31st Street and East 32nd Street for the purpose of erecting a high-rise apartment house.

(1) 464-468 Third Avenue and 166 East 32nd Street were purchased for $165,000 subject to the Ginger Estates, Inc., lease on the Third Avenue property and the Ellen Estates, Inc., lease on the 32nd Street property. Appellants purchased these leases for $95,000 and $25,000, respectively, and thus obtained the entire fee.

(2) 168-170 East 32nd Street was purchased for $100,000 subject to the Gerber lease which was acquired for $5,000.

(3) 462 Third Avenue was purchased for $120,000.

(4) 458 Third Avenue was purchased for $180,000.

These properties referred to as Tract 11 were thus acquired for $690,000, $565,000 for the properties subject to the ...


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