
    In the Matter of the Application of the Mayor, Aldermen and Commonalty of the City of New York to Acquire Title to Pier 39, East River. City of New York and Screw Dock Company, Respondents; Maine Steamship Company and Bridgeport Steamboat Company, Appellants.
    
      Eminent domain — right of a lessee and sub-lessee of property condemned—their failure to exercise rights of renewal — their compensation must be taken from the value of the fee.
    
    Where tenants and sub-tenants of property taken in condemnation /-proceedings, are entitled.to an award, such award must be deducted from the value of the fee.
    Where, in such a case, the lease and sub-lease each contains a privilege of renewal, and it appears that the condemnation proceedings -were commenced during the original terms thereof, that the lessee and sub lessee were parties to the proceedings, and that at the time the report was made the original terms had expired, and it does not appear that the lessee and sub-lessee ever exercised the privilege accorded to them by the lease and sub-lease to demand a renewal, an award of one dollar each to the lessee and sub-lessee will be sustained.
    X/AUGhlin, J., dissented.
    
      Appeal by the Maine Steamship Company and another from an order of the Supreme Court, made at the Yew York Special Term and entered in the office of the clerk of the county of Yew York on‘the 26th day of December, 1900, confirming the report of commissioners of estimate and assessment.
    
      James E. Kelly, for the appellants.
    
      Theodore (Jonnoly, for the respondent City óf Yew York.
    
      William, J. Kell/y, for the respondent Screw Dock Company.
   Patterson, J.:

This appeal is from an order confirming the report of the commissioners of estimate and assessment appointed in this proceeding, which was instituted under condemnation proceedings begun by the city, of Yew York upon the. petition of the department of docks March 25, 1895. The proceeding was initiated upon notice to all parties interested, including the present appellants. Hearings were had before the commissioners on June 1, 1897, and were attended by all parties interested, including the appellants. The final report was made in Yovember, 1900. The Screw Dock Company, the owner of the property, was awarded the sum of $291,680, that being the full value of the fee. The Maine Steamship Company and the Bridgeport Steamboat Company claim to be entitled to an award, the former as lessee and the latter as sub-lessee of the Screw Dock Company of part of the premises in question. The two companies so claiming were awarded one dollar each. They appeal, contending that they should have been allowed in the aggregate $14,684 as the value of their unexpired terms,, as such value was fixed by the testimony of an expert witness. The city has no interest in the appeal other than confining the amount of an award to the fee value of the premises. It insists, and properly, that if the tenants are entitled to an award it must be out of the gross sum of $291,680 (Matter of Trustees, etc., 137 N. Y. 95 ; Matter of Daly, 29 App. Div. 286), it being conceded that that is the value of the fee. The tenant and sub-tenant or occupants of the pier, the present appellants, claim the right to a substantial award under these circumstances: On May 26,. 1894, the Maine Steamship Company leased from the Screw Dock Company this pier for a term of five years at a rental of $12,000 per annum,, with the privilege of renewal for an additional term of five years, provided written notice were given to the lessor on or before January 1, 1899: On May 28, 1894, the Maine Steamship Company sublet part of the pier to the Bridgeport Steamboat Company for four years from May 1, 1894, at an annual rental of $9,000, with provisions for renewal similar to those contained in the lease from the Screw Dock Company to the Maine Steamship Company. By the provisions of the lease and the sublease, therefore, the terms of those entitled to possession thereunder expired on the 1st of May, 1899. At that time this proceeding was pending and these appellants were parties to it. The final report was not made until November,. 1900, more than eighteen months after the expiration of the terms under the original lease and sublease. Meantime the appellants- were in possession- of the property. There is no evidence whatever to show that their leases were renewed or that they exercised their option to renew by giving notice as required by the terms of their leases to the Screw-Dock Company. It is, therefore, manifest that the commissioners of estimate and assessment could not have found that these appellants were entitled under leases to any substantial part of the gross award made for taking the fee of the premises. Indeed, the situation would indicate that any renewal that they might have demanded would have been subject to the city taking the property. But, at all events, the record is barren of any evidence upon which a substantial award could have been made for the dispossession of the appellants from the premises. Their terms having expired, no renewal of the leases having been shown and no exercise of the privilege to demand a renewal appearing, and the appellants remaining in possession with full notice of, and being parties to a proceeding on the part of the city to acquire the property, it is as reasonable a presumption as any' that they remained in possession at sufferance, and not under a term granted by the owner by way of renewal of the lease or of a new term for any fixed period. There were, therefore, no data before the commissioners upon which they could have made a substantial award to these appellants, and we are obliged to hear this appeal upon the evidence taken before the commissioners and to determine it upon the merits, both as te matters of-law and fact. (Greater New York Charter [Laws of 1897, chap. 378], § 988.)

Without, therefore, considering other questions that have been; discussed on the appeal,, we conclude that for the reasons above-assigned the. order of confirmation must be affirmed, with costs.

Van Brunt, P. J., - McLaughlin and Hatch, JJ., concurred ; Laughlin, J., dissented.

Laugh-lin,'J. (dissenting):

I think the report should not be confirmed. The awards are required to be made and the rights of the respective parties are to be determined) so far as the questions here presented are concerned, as of the date of the commencement of the eminent domain proceeding. (Matter of Department of Public Parks, 53 Hun, 280, 287; Lewis Em. Dom. § 477.) At that time the Maine Steamship Company had an unexpired term of more than four years under its original lease, with the right of renewal for five years longer. Its time to elect to renew had not expired. It was entitled, therefore, to have carved but of the entire award made to the owner the value of its léase) including the right to renew the same. It does not affirmatively appear whether the Maine Steamship Company exercised the right-to renew the lease. The proceeding having been commenced, this of course could not have been done as against the city, The time to exercise the option to renew had expired and the tenant was holding over before any evidence was introduced with reference to the value of the unexpired leasehold. The evidence as to the value of the lease for the renewal period was received without objection. If, as against the landlord, the tenant, to entitle it. to an award, should have formally given notice of its election to renew the lease, then this evidence, without proof of the giving of such notice, was inadmissible and immaterial. The theory of the dock department, however, as shown by the proceedings before the commissioners, and as indicated by the opinion at Special Term, was not that the lessee had no rights owing to its. neglect to exercise its option to renew the lease, but that this was a destruction or change -of the pier by the dock department within the meaning of -the clause' of the lease which reads as follows: “ And it is further agreed and understood that in case the said wharf or premises hereby demised shall be destroyed or substantially -changed by the direction and authority of the Department of Docks or other parties by law having control of the wharves and piers and waters adjacent in the city of New York then this lease shall cease and terminate, and the party of the first part shall not be liable in damages for such destruction or change. But the party of the second part does not hereby release its claim for damages against any other party or parties for any damages it may sustain.”

I am of opinion that it is not the fair construction of this clause of the lease, and that it was not within the contemplation of the parties to relieve the owner from sharing with the tenant a just proportion of an award made in an eminent domain proceeding by which the entire title to the property is acquired for public purposes.

Order affirmed, with costs.  