Courtesy Sandwich Shop, Inc. v. Port of New York Authority

17 A.D.2d 590, 237 N.Y.S.2d 820, 1963 N.Y. App. Div. LEXIS 4346

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 19, 1963
• Status: Published

Opinions

Rabin, J.

On these companion appeals we are called upon to determine the validity and constitutionality of chapter 209 of the Laws of 1962. Speaking generally, this statute would authorize the Port of New York Authority to acquire, through condemnation, the Hudson Tubes and appurtenant properties and also to condemn 13 blocks in lower Manhattan for the purpose of developing a project known as the “ world trade center.”

Subsequent to the enactment of the concurrent statutes by New York and New Jersey, an action was commenced by persons having an interest in the property sought to be condemned, for a declaration that the statute in question is unconstitutional and is invalid for other reasons. Plaintiffs in that action moved for a temporary injunction restraining the proposed—then imminent— condemnation of the tube properties. This motion was denied by an order entered on July 17, 1962. An appeal was taken from this order and is now before us.

Following the commencement of the declaratory judgment action the Port Authority, through a subsidiary,

* commenced a condemnation proceeding to take over the tube properties. In that proceeding three orders were entered on July 26, 1962, which (1) granted the petition for an order of condemnation; (2) granted an order of possession; and (3) denied a cross motion by appellants to dismiss the condemnation petition. The appeals taken from these orders are likewise before us for consideration.

The appellants urge that that portion of the act which authorizes the creation of a trade center is unconstitutional and that by reason of that invalidity the entire act must fall. In consequence, they assert that there may be no condemnation of the tube properties. They likewise state that if the act be declared invalid the temporary injunction applied for in the declaratory judgment action should be granted.

The Justices at Special Term made no determination as to the constitutionality of that portion of the act involving the trade center. The Justice considering the application for a temporary injunction held that the validity of that portion of the act would be considered at the time of the trial of the declaratory judgment action and that the issue could likewise be raised in connection with the condemnation proceeding. The Justice in the condemnation proceeding thought it unnecessary to pass upon that question and did not do so.

The threshold question is whether it would be permissible to allow condemnation of the tubes if the trade center portion of the act be declared invalid. If, in that circumstance, such condemnation be not permissible, must we not now consider the constitutionality of that portion of the act.

As indicated, the statute contemplates two projects which the Legislature, had it so desired, might have set up as being independent of each other. However, section 18 of the act entitled “ Severability ” appears to mandate that they be considered “as a unified project”. While the severability clause — as does the traditional severability clause—provides that the invalidity of any portion of the act “ shall not affect or impair the validity of the remainder of this act ”, it also contains a limiting provision as follows: “so long as the act or remainder of the act shall nonetheless permit the effectuation, as a unified project, of the Hudson tubes, Hudson tube extensions and the world trade center ”.

What is the effect of that limiting provision? The intention of the Legislature is clear. It intended that the Hudson Tube project and the world trade center project stand or fall together. To permit one to stand if the other should be declared invalid would be nullifying the legislative intention—so clearly expressed—that they be considered as a unit. It would, in effect, be rewriting the legislation and constitute an invasion of the legislative domain. That the Legislatures of New York and New Jersey wrote the unification provision as a mandate is evident from the history of the legislation. In 1961, New York enacted a law essentially similar to the 1962 law, except that it permitted the Port Authority to effectuate the trade center and the tube project together, or either of them standing alone. New Jersey, however, did not join in that legislation. However, it did pass concurrent legislation when the 1962 statute contained the unification clause now being considered.

We conclude therefore, that if the trade center phase of the statute should for any reason be declared invalid, the Authority may not be permitted to take over the tubes. In that conclusion there is unanimous agreement by all the parties to this litigation.

In the light of the foregoing it was error for the condemnation court to refuse to consider and pass upon the constitutionality of the trade center authorization. It was likewise error for the court, in the declaratory judgment action, to fail to decide that question for, in determining whether or not an injunction should issne — even though it be a temporary one — that question was squarely before it (see Fifth Ave. Coach Lines v. City of New York, 11 N Y 2d 342).

The act gives the Authority the power of condemnation with respect to each of the projects. Of course, without such power the statute would serve no useful purpose. The Legislature has the power to authorize the Authority to condemn. However, the condemnation must he for a public purpose and, unless it be for such purpose, no such authority may be granted. In the light of that fundamental principle we examine the several sections of the statute.

No one doubts that the operation of the Hudson Tubes would constitute a public purpose. Nor would it be improper to take the buildings presently erected over the existing terminal. It is asserted that the land on which these buildings stand is needed for the improvement and the expansion of the existing facilities, or for the construction of a new terminal. If that be so then the buildings may properly be condemned at the time the tubes themselves are taken. In any event they now stand over the terminal and they cannot be segregated from it. We might say, in passing, that if a new terminal be erected on the land so condemned, the construction of a building, or buildings over it that will yield incidental revenue, would appear to be permissible. (See Bush Term. Co. v. City of New York, 282 N. Y. 306.)

We now examine that section of the act which authorizes the creation of a trade center. Does it authorize condemnation for other than a public purpose? Whether it does is for the courts to decide (Denihan Enterprises v. O’Dwyer, 302 N. Y. 451, 457; Matter of New York City Housing Auth. v. Muller, 270 N. Y. 333, 339). That the project may be desirable, or that it may have some indirect public benefit is not the equivalent of a public purpose (Matter of New York City Housing Auth. v. Muller, supra, p. 343). To conclude otherwise could well result in a rule or law that the power of eminent domain may be exercised in almost any situation where some nexus with the public good may be established.

There is no question but that the creation of a world trade center, in concept, is a public purpose. In this connection it is argued that all we need look to is the concept. However, we may not stop at that point. We must examine the statute to see if the powers granted the Authority to effectuate that concept are not too broad. It is argued that the constitutionality of these powers should be determined progressively as the several contemplated proceedings to acquire particular pieces of property are institutued.* There are some basic and fundamental objections to this approach. Implicit in the severability clause is a direction that such course be not followed. In making the Hudson Tubes and the world trade center a unified, nondivisible project, it in effect required that the decision as to the validity of the world trade center be made at the time of the taking of the tubes should condemnation proceedings with respect to the tubes be the first step in the effectuation of the purposes of the statute. A subsequent finding of the unconstitutionality of the world trade center provision might leave the Port Authority with a well-advanced, or a completed tubes project, without the possibility of effectuating the world trade center.* Such a result the Legislature expressly prohibited. There is no disagreement among the parties in this regard. That is not to say that the Authority may not proceed with the tube project in advance of the trade center, provided, of course, that portion of the act with respect to the trade center is not, on its face, unconstitutional.

A further objection to such an approach is that the parties whose properties might be the subject of condemnation might not have a sufficient opportunity—before an actual takeover— to present the question as to whether a public use is contemplated. The Court of Appeals in Fifth Ave. Coach Lines v. City of New York (11 N Y 2d 342, supra) held that notice must be given with respect to the institution of proceedings to determine the amount of compensation to be paid for the taking of property and also on the question of public use. It held however that such notice need not be given prior to the taking of title and more particularly, prior to the taking of possession. While the nature of the property condemned in the Fifth Ave. Coach case was such that the status quo could possibly have been restored if it should have been subsequently found that the property was not taken for a public use, in the proceeding which we are now considering it may very well be that the opportunity to determine the question of public use will, as a practical matter, be foreclosed. The bulldozers may come before the trial. Such a contingency may be avoided by a present consideration of the validity of the trade center project as written. For, in considering the constitutionality of the statute we must look not to what the Port Authority might do with the property it seeks to condemn, but rather to what the statute authorizes it to do. It would seem then that the appropriate time to determine the constitutionality of the entire world trade center project is now rather than later in piecemeal fashion.* We do not consider the constitutionality of the act by what the Authority might do in the future. We assume that it will stay within the powers given by the statute. Indeed, we will even assume that it will not exercise those powers which may be deemed to be unconstitutional. However, we must determine the constitutionality of the act by the powers it does give rather than by those which might be exercised.

Acts of parties may very well be deemed unconstitutional although done under an act which is constitutional. The converse is also true. Parties may act in a manner which would be considered constitutional although the statute itself may be unconstitutional. However, in the latter case we must strike the statute. Cases which construe acts of parties rather than the statute itself, of course are inapposite.

If the statute authorizes not only the condemnation of private property for a public purpose, but also permits condemnation for nonpublic purposes—unless the latter can be properly excised — the statute must be declared unconstitutional. In considering whether this statute does offend in that respect we must be mindful of the injunction laid down by the Court of Appeals in the case of Bush Term. Co. v. City of New York (282 N. Y. 306, supra) when it said at page 316: “ Of course, the power to construct terminals which incidentally contain ‘ storage space and space for other facilities ’ might be transcended if, under cover of that power, the Port Authority assumed to construct an office or loft building intended primarily for revenue and only incidentally for terminal purposes.”

It seems that this statute would give the Port Authority the right to do exactly what the Court of Appeals says it has no right to do. It would permit the use of the property “ primarily for revenue ”. It permits the use of areas that may “ not be devoted to purposes of the port development project other than the production of incidental reverme available for the expenses of all or part of the port development project.” (§2.) (Emphasis supplied.) We cannot conceive of how language could have been written more directly contrary to the caveat of the Court of Appeals. Under this grant of power there is no structure of any kind that may not be built in the 13-block area, provided such structure produces revenues to support the project. In effect, as written, the statute contemplates the building of structures that will provide the fuel to run the railroad and the means to support the trade center portion of the project. The quoted provision cannot be supported under any theory.

However, the respondents point to the Bush Terminal case as authority to support that grant of power. Permitting structures producing incidental revenue to be erected above areas necessary for public use is quite different from permitting condemnation of other areas not needed for the public purpose, but merely to provide funds to support the public project.

We might add that there is nothing in the statute which limits the area which the Port Authority might use for this revenue producing purpose. While it might not do so, what is to prevent it, if it so chooses, and acting within the powers conferred by this statute, from using nine-tenths of the 13 blocks for revenue producing purposes and but one-tenth for public purposes? If it did so it would be acting well within the power conferred by the statute. The very magnitude of the permissible taking lends credence to the possibility of the Authority using a greater portion for revenue producing purposes than for public purposes.

We point to another instance where the powers granted by the statute are so broad as to mandate a finding of unconstitutionality. The Legislature authorized the Authority to construct such buildings as custom houses, custom stores, foreign trade zones and like facilities—all clearly public purposes—but failed to limit such authorization to that type of building. On the contrary, it expressly permitted the Port Authority to erect buildings and use warehouses for functions “incidental to * * * the exchange, buying, selling * * * of commodities and other property in world trade and commerce ”(§ 2). Exercising this power would indeed make this project, in reality, what the appellants call a real estate development. It is so broad that it is difficult to think of any enterprise, or any business in the City of New York, which could not find a home within the condemned area, although devoted exclusively to private purposes. Nor is it even required that the business be of such a nature as to be considered, in legal contemplation, foreign commerce. Every retailer who has foreign goods for sale; every shipper who handles imported merchandise; every trucker who transports foreign goods or goods destined for the foreign market; every manufacturer of goods for export, and countless others would appear to be eligible for space in the trade center. There are very few, if any, commercial buildings within the City of New York that do not house enterprises of the nature contemplated.

We do not say that the State, or the Port Authority through delegated powers, may not take private property to be developed by private interests if the underlying object is for a public purpose (Cannata v. City of New York, 11 N Y 2d 210). However, to permit private interests to use condemned land for private purposes solely to produce revenue for the maintenance of a public project is, as we have indicated, expressly prohibited (Bush Term. Co. v. City of New York, 282 N. Y. 306, 316, supra). That is exactly what this statute does. The frequent use of the word “ incidental ” does not dam the flood of private enterprise that could submerge the public purpose contemplated. The public purpose contemplated may constitute but an island in the sea of private use.

Is it possible for us to excise these powers which we consider to be in excess of the Legislature’s power to grant? What would be left of the trade center concept if we were to do so? Would the project then be feasible? Would the grant of power to condemn 13 square blocks be essential? It would seem that if we were to excise the objectionable portions of the statute we would be excising portions without which the Legislature would not have authorized the creation of the trade center. It would be an invasion of the legislative function to allow the residue of the statute to remain. It perhaps would be writing a statute that the Legislature never would have written. That we may not do.

In the circumstances we find that portion of the act which permits of the creation of a world trade center to be unconstitutional. In consequence, and because of the unification provision, the Authority may not go forward with the condemnation proceeding in connection with the tube project.

In the light of this finding we deem it unnecessary to consider the other points raised in support of the position that the act is invalid. Accordingly, the orders under review must be reversed, on the law, with costs. A temporary injunction restraining the condemnation of the tube and tube properties should issue; the Port Authority may not be permitted to condemn or be given possession of the properties involved, and the cross motion of the respondents to dismiss the condemnation proceedings should be granted. Settle order.

The statute in question permitted the Authority to make use of a subsidiary corporation if it found it “necessary, convenient or desirable” to do so. (L. 1962, eh. 209, § 14.) The Port Authority Trans-Hudson Corporation is the subsidiary employed for that purpose.

It is interesting to observe that while the Authority has been given the extraordinary power to condemn 13 square blocks of Manhattan, there has not as yet been submitted any detailed finally accepted plan as to the manner of the development of that large area. Had such a plan been submitted it might well have allayed fears of the possibility of the use of the land for purposes not properly related to Port activities. However, we do not base our determination on the failure to submit such detailed plans.

The briefs of the Port Authority seem to indicate that it is not clear even at this f-imo that the effectuation of the world trade center project is feasible.

Another reason for the necessity for passing upon the validity of the act in its entirety at this time, is the stated inability of the Authority to raise funds — in view of the cloud of uneonstitutionality — to pay for the tubes project as mandated. The Authority’s statement that it has no funds presently with which to finance the tubes project may well lend support to one of the arguments advanced for the defeat of the condemnation proceedings.