153 N.Y. 98 | NY | 1897
Lead Opinion
The relator is a corporation of the state of New Jersey, operating certain steamship lines between the port of New York and European ports. It is the tenant and occupant, under three leases made in 1894 by the city of New York, of two piers in the waters of the North river and of bulkheads between the same, or adjoining thereto. The leases, under which the relator acquired the right to occupy and to use this property, contain among their provisions one which obligated the lessee "to erect, construct and maintain upon the said pier as widened, during the term of these presents, a shed." The provision requires the shed to be erected in accordance with the laws and regulations in such *100 cases and in conformity with plans and specifications approved by the dock department, and continues thus: "Said shed to become the property of the parties of the first part on the expiration or sooner determination of this lease or any renewal thereof, free of all claims, charges and incumbrances of every kind whatsoever, etc." The relator shedded the leased property, as required by its lease, and, in 1896, the buildings were assessed as its property for taxation. According to the return made by the commissioners of taxes and assessments of the city of New York to the writ of certiorari, which issued upon the petition of the relator, the structures assessed against the relator were "substantial sheds and buildings" and were "firmly affixed to the land."
The question is whether these structures, or sheds, as they are described in these leases, could be legally assessed for taxation purposes as the property of the relator. The learned corporation counsel admits, if the sheds belonged to the city of New York, that they were exempt from taxation; while the counsel for the relator admits, if they were the property of the relator, that they had been properly assessed. Under the statute in force, all lands within this state, owned by individuals or by corporations, shall be liable to taxation; and the term "land" is to be construed to include the land itself and all buildings and structures erected upon or affixed to the same. (1 R.S. ch. 13, tit. 1. secs. 1 and 2.) These sheds must be deemed, therefore, to partake of the nature of realty and the question of their ownership must turn upon the terms of the leases. The appellants rest their argument, with respect to the question of ownership, upon the provision of the lease above mentioned, that the shed shall become the property of the city after the expiration of the lease; which provision, as they maintain, shows that it was in contemplation of both parties that the erections should be the property of the steamship company during the term of the lease.
We think that this is an incorrect view of the situation. It is a familiar rule, that, when structures are erected by persons not owners of the land, they become part of the realty, *101
and, as such, the property of the landowner. It requires an agreement to be expressed in order to prevent the operation of this rule. If the right of removal is reserved to the lessee in a lease, then, in such a case, he will be regarded as an owner of real estate for the purpose of taxation. (People ex rel. VanNest v. Commissioners of Taxes,
The general rule, where the lease is silent upon the subject, imposes upon the lessor the obligation to pay the taxes upon the leased property and, in this case, it would be a seeming incongruity, if the city, which is the taxing power, could assess its tenant for taxation. The obligation to erect the structures, as one of the conditions of the letting, and the denial of the right of removal are considerations, which irresistibly militate *102 against the assertion of a right to assess them as property of the relator for taxation.
The order appealed from should be affirmed, with costs.
Dissenting Opinion
It seems to me that the prevailing opinion ignores the contract entered into by the city of New York and the relator corporation.
The property embraced in this proceeding is included in three separate leases running ten years, from January, 1894, with the privilege of one renewal.
The city of New York, as party of the first part, agreed with the International Navigation Company, the party of the second part, that the latter should keep and maintain the wharf property and the structures thereon in good repair, and, in addition, the party of the first part licensed, authorized and extended to the party of the second part the right to, and the party of the second part bound itself to erect and maintain upon the pier during the term a shed, which was "to become the property of the party of the first part on the expiration or sooner determination of the leases, or any renewal thereof," etc.
The party of the second part is also bound, if the wharf property shall be destroyed by fire, etc., to rebuild the same.
It seems to me clear that it was the intention of the parties that the shed should remain the property of the relator until the leases expired or otherwise terminated. The language is perfectly clear, the shed is "to become the property" of the city at the expiration of the leases.
It is the well-settled law of this state that it is competent for parties by contract to so regulate their respective interests that one may be the owner of the building and another of the land. (People ex rel. Muller v. Board of Assessors,
The learned counsel for the respondent is quite frank in the position he takes. He says: "Ownership necessarily implies *103 perpetuity, or at least the possibility of perpetuity. * * * No form of words can make ownership anything different from what it is in point of law. Even if the lease had expressly provided that the tenant should be the owner during the term, and the city should become the owner at the end of it, still the interest of the tenant in the shed would be only that of a termor and the city would have been the legal owner of it all the time."
I think this statement involves an obvious fallacy and is contrary to the settled law of this state.
If it is competent, as the authorities hold, that parties by contract can so regulate their respective interests that one may be the owner of the building and another of the land, it is difficult to see what legal obstacle in the case at bar prevented the contracting parties entering into covenant that the company shall erect and maintain and replace, if destroyed by fire, etc., certain structures on the wharf to remain its property during the twenty years that these leases may possibly continue, and, at the end of that period, in the express language of the contract, they are "to become the property" of the city; that is to say, by the terms of the contract the title is then transferred. This is nothing more than a contract for the future transfer of title.
It is admitted by counsel for respondent that this provision of the contract was probably inserted to prevent the removal of the shed at the end of the term as a trade fixture.
In this case we are simply considering the title, which is the subject of taxation, as the statute makes the shed "land."
The Revised Statutes (Part 1, chap. 13, tit. 1, sec. 1) provide that, "All lands * * * within this state, whether owned by individuals or corporations, shall be liable to taxation. * * *
"§ 2. The term `land,' as used in this chapter, shall be construed to include the land itself, above and under water; all buildings and other articles and structures, substructures and superstructures erected upon, under or above, or affixed to the same; * * *" *104
Under this statutory definition of land it seems to me clear that the structure to be erected by the company is taxable as the land or property of the company, and without regard to the fact that the fee of the soil is vested in the city.
The further point urged against this assessment, that it is illegal, because the structures on the two piers and bulkhead are made in a lump sum, is not, in my opinion, well taken.
I think the order appealed from should be reversed, with costs.
ANDREWS, Ch. J., O'BRIEN, HAIGHT and MARTIN, JJ., concur with GRAY, J., for affirmance; BARTLETT, J., reads for reversal; VANN, J., not voting.
Order affirmed.