
    In the Matter of the Application of the City of New York, Respondent, Relative to Acquiring Right and Title to the Wharfage Rights, etc., to Piers Old Nos. 19 and 20, East River, in the Borough of Manhattan, etc. Elbridge T. Gerry and Others, Appellants.
    First Department,
    February 8, 1907.
    Eminent domain — acquisition of piers by city of New York — compensation for “ shedding license ” taken.
    When a pier owned partly by the city of New .York and partly by private owners is taken by eminent domain and the private owners have a license from the city to erect and maintain a shed upon said pier, the “shedding” right is an incorporeal hereditament enhancing the value of the property and cannot be taken without due compensation. This is true, although the license to build the shed provides that the manner of construction is subject to regulation by the police power and reserves a right to require changes and additions.
    Although the right to build a shed was originally given in 1873, which right, though unauthorized, was confirmed by chapter 249 of the Laws of 1875, the property right therein is not lost by reason of the fact that the shed has , beeu partially destroyed by fire, and the owner of that right is entitled to compensation therefor when the pier is taken by eminent domain.
    But when a pier having no present shedding right appurtenant thereto is taken, the owner is not entitled to compensation for the possibility that such permit might be granted in the future.
    Appeal by Elbridge T. Gerry and others 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 2oth day of July, 1906, overruling objections to the confirmation of the corrected report of the commissioners of estimate and assessment in condemnation proceedings, and also from an intermediate order entered in said clerk’s office on the 16th day of May, 1906,-sustain-ing the objections of the city of Yew York to the confirmatidn of the original report of said commissioners.
    
      William H. Harris, for the appellants.
    
      Theodore Gonnoly, Charles JD. Olend.Orf with him on the brief [William B. Ellison, Corporation Counsel], for the respondent.
   Clarke, J. :

This proceeding was brought by the city of Yew York through the commissioner of docks to acquire the interests not owned by the city in pier old Yo. 19 and pier old Yo. 20, East river, and the bulkhead rights appurtenant to the bulkhead between said.piers. While the rights of the city and the claimants to the piers in question were undivided-, yet said piers were, by practical construction, divided between the city and the claimants, so that the city was treated as the owner of the westerly half of pier old Yo. 19, and the easterly half of pier old Yo. 20, the other halves of the two piers being treated as in the ownership of the claimants.

Pier old- Yo. 19 was located at the foot of Fletcher street, extending from South street into the East river about 441 feet. It had no shed ;on it and never had been shedded. Pier old Yo. 20 was located at the foot of Burling slip, extending from South street into the East river about 417 feet.

On July 3,1873, a resolution was adopted by the department of docks, acting upon the request of C. H. Mallory & Co., who were then- and still were at the commencement pf the present proceeding, lessees, of the pier old Yo. 20, under the name of the Yew York and Texas Steamship Company, for permission to shed the pier as follows: “Resolved, that the portion of pier 20, East River, belonging to the city, be leased to C. H.-Mallory & Co. for the term of five years; * * * and further that permission be granted to said lessees (provided they obtain and file in the Department the written consent of the owners of the west half of the pier) to erect a shed on the pier, the same to be built in accordance with the fire laws of the city, and under the supervision of Superintendent Turner; said' lease to contain a covenant that in case the pier shall be required before the expiration of the above term, for making the contemplated bulkhead extension, the same shall be surrendered by the lessees upon three (3) months’ notice from this Department, without any claim for damages against the city.” The necessary consent was given by the lessees and "the pier was thereafter shedded. The • shed then built remained until the year 1900, when in the month of May it was burned down with the exception of some thirty feet at the end of the pier.

It is not disputed that the shed erected in 1873 under this permission was when built absolutely illegal. People v. Mallory (46 How. Pr. 281) decided this point in regard to this very pier. Thereafter there was passed the statute known as the Shedding Act,” chapter 249 of the. Laws of 1875, which provided among other things as follows: “ Section 1. Whenever any person, company or corporation engaged in the business of steam transportation shall be the owner or lessee of any pier or bulk-head in the city of Hew York, and shall use and employ the same for the purpose of regularly receiving and discharging cargo thereat, it shall be lawful for such owner or for such lessee, with the consent of the lessor, to erect and maintain upon such pier or bulk-head) sheds for the protection of property so received or discharged, provided- they shall have obtained from the department of docks in said city a license or authority to erect or maintain the same, and subject to the conditions and restrictions contained in such license or authority. All sheds or structures heretofore erected or maintained upon any wharf or pier in the city of Hew York under any license or permit granted by the department of docks in said city are hereby declared to be lawful structures subject to the terms and conditions of the license or permit authorizing the same. Such sheds shall be constructed subject to the regulations and under the authority of the superintendent of buildings and the department' of docks.” The effect of this statute has been considered by this court in Matter of City of New York, Pier No. 15 (95 App. Div. 501; 113 id. 903 ; affd., 185 N. Y. 607). Mr. Justice Ingraham said in regard to a shed which had been erected .under a license before the act of 1875 had been passed,, in construing the effect of said act upon the rights of owners : “ There being no authority given to the dock department to revoke such license or authority when once given, when that authority was given the structure became by the force, of the legislative enactment a lawful structure. It seems to me that the public authorities had no power to revoke the authority to erect a shed, and when the city attempted to condemn it in this proceeding they were bound to pay to the appellants the value of the pier with this right to shed the pier as an appurtenance to it. The department, of docks have never attempted to revoke this authority or to make this shed an illegal structure. When the city of Mew York, exercising the power of eminent domain, commenced this proceeding to acquire title to the property, it was a property upon which these appellants were- entitled to maintain this structuré; and it was the value of that pier, with the right to maintain this structure * * * to which these appellants were entitled.”

It, therefore, follows that if the situation in'the case at bar is the same as that which was presented to the court in the case just cited, it'would be governed by" that controlling decision.

The learned corporation counsel attempts to differentiate, by claiming that the original permission to shed given by the resolution of the dock department in . 1873 was by its terms a limited permit which might be terminated in.three months and whose life was at best five years. He claims that this clause, “ said lease .to contain a covenant that in case the pier shall be required before the expiration of the above term, for making the contemplated bulkhead extension, the samó shall be surrendered by the lessees upon three (3) months’ notice from this Department, without any claim for •damages against the city.” sustains his contention. We do not so interpret the paper. The resolution provided-for a lease of the portion of the pier 20 belonging to the city for the term of five years and* the clause alluded to had to' do solely with the right of the city to cancel its lease for the city’s half of the pier within three months without any claim for damages against the city for the cancellation of that lease. That provision could .not be.read into the rights of the owners of the half of the pier hot belonging to the city nor could the provision palpably relating to the lease be made to apply to the entirely independent provision giving permission to shed the whole pier, the only proviso as to that being that the les- ; sees should obtain the consent of the owners of the other half of the pier and that the shed,- when built, should be built in accordance with the fire laws of the city.

So far, then, as the first point is concerned, we construe this permit to shed as having been of the same character as that passed upon in Matter of City of New York, Pier No. 15 (supra).

The second point made is that the act of 1875, by the use of the language “ all sheds or structures heretofore erected or maintained,” confined the legalization of the sheds to those actually in existence at the time of the passage of the act, and that the shed which was then in existence and was so legalized having been destroyed by fire in 1900, the license- or permit to shed, which would otherwise have been irrevocable by the city under the Pier No. 15 case, was nevertheless- revoked by fire. . It is claimed that this was the con- ' struction put upon the situation by the owners and that they must be bound thereby. It appears that after the fire Mallory & Co. applied to the commissioners of the dock department for permission to shed part of the pier 20 in accordance with plans submitted, and that the .owners joined in the application of C. H. Mallory & Co. “for permission to erect temporary shed upon said pier as per plans to meet your approval,” and that the dock department granted a permit thereon as appears by the .following minute: “ From the President. 1st. Recommending that a temporary permit be granted C. H. Mallory & Co. to shed a portion of Pier 20, East River, in. accordance with plans submitted as amended, the shed to be erected under the direction and supervision of the Engineer-in-chief of this Department and to remain thereat only during the pleasure of the Board. Recommendation adopted.” And it appears that the she'd which was thereafter erected was erected in sections -of sixty feet, with open spaces of twenty feet, between the sections which were subsequently filled by iron material obtained from' another burned pier and was correctly described in the evidence as a temporary or patclied-up affair. -

While the facts are conceded we do not agree with the inference, sought to be drawn. - We take it that there are two separate things involved in. the permit, first, the., right to shed, arid, second,, the kind of shed' to be erected. .The first may be considered as in the nature of an. incorporeal hereditament, a valuable right adding greatly to the value of the property, and when once given^by the' city conferring a property fight irrevocable by it and not to-be taken without due* compensation. The second a control of the. character of fhé shed1, its construction and material subject to the police powers which, when -necessity arises, may be applied.. The right of "an .owner of land to build.upon his property is subject to the regulation, bv the police-power of the'manner of construction- ■ and of the material used,,and the right--to require changes and additions to. constructed buildings under said power has many times been applied and sustained by the courts.

If the right to shed obtained by the granting of .the first permit, as subsequently legalized by the Legislature, should be confined to the structure then in existence,, how much of a change in tlie'building dub . to wear and tear, the actions, of -the .elements, accident or disaster, would destroy that valuable property right.? It cannot be that such a right, held to be irrevocable by direct action of the city, would be subject to such chance or change. A portion of the original structure was still in existence when this proceeding ivas instituted: Is that portion of the pier to be considered as possessing the irrevocable right to he shedded with consequent compensation therefor, and the rest not? The moment it is conceded that the right to shed,, once granted,, is a valuable property right, entering in, as an important element, to-1 that due compensation which 1 must be paid by the city before it' can deprive the owner of his property in and to the pier, and the rights appurtenant thereto^ it must appear, it seems to .me, that that right which has existed from 1875 down to 1900 could not he destroyed by,the accident of fire, . but that it was the duty of the commissioners in valuing pier "20 to value it as a .pier to which -the right was appurtenant to be a slfedded pier with all that that means to the. owner in relation to the' steam commerce of the port.

So far as pier' 19 is concerned, for which no permit to shed had at any time been granted, and which never had been shedded, we are satisfied with the decision of the court below. It would he going altogether too far into the realm. of speculative finance to al.low, as an element of the value of a pier which had been for a long number of years in existence, and which never had been-shedded, the possibility that inasmuch as it was a pier, the time might come when, upon application, the dock department might grant permission to shed, it, especially as the dock department could attach conditions and restrictions to permits for sheds erected for the first time after 1875, and could make them revocable. A possible right to obtain a revocable permit is not a proper element of value.

It follows, therefore, that the order apjiealed from should he reversed arid the report be sent back to the commissioners with instructions to modify the same by treating pier 20 as a shedded pier with an irrevocable permit, and make ' their valuation accordingly, with ten dollars, costs and disbursements to the appellants.

Patterson, P. J., Ingraham, Laughlin and Scott, JJ., concurred.

Order- reversed and report sent back to commissioners, as stated in opinion, with ten dollars costs and disbursements to appellants. Settle order on notice.  