Smith v. State, 35 N.Y.2d 453 (1974)

When a railroad right-of-way has been appropriated by the state, the potential use of adjacent land should be considered in determining its value if there is a reasonable probability that access could be obtained, even if the potential use extends beyond traditional agricultural purposes.

Summary

This case concerns the interpretation of “farm crossing” in the context of land appropriation by the state. The claimants owned landlocked properties due to a former railroad right-of-way. The central issue was whether the “farm crossing” access could be expanded to include potential industrial use when assessing the land’s value after the state’s appropriation of the right-of-way. The Court of Appeals held that if there was a reasonable probability the claimants could have obtained unrestricted access for industrial development, the land’s potential for such use should be considered when determining its value.

Facts

The claimants owned adjacent properties bounded by a former railroad right-of-way. Access to their properties was provided by two farm crossings, one by deed reservation and the other by statute. The railroad ceased operations in 1958, and the tracks were removed in 1962. On December 21, 1962, the State appropriated the right-of-way, effectively landlocking the claimants’ properties. Appropriation maps were filed later, but the compensation was stipulated to be determined as of the date of the de facto appropriation.

Procedural History

The Court of Claims determined that the claimants had a reasonable likelihood of purchasing the right-of-way from the railroad for access. Therefore, they valued the properties as acreage with industrial potential and added an increment to the fair market value. The Appellate Division affirmed, stating that a farm crossing should include any crossing useful to the landowner and that the railroad would have been compelled to provide a crossing suitable for industrial purposes if the properties had been developed that way.

Issue(s)

Whether the Appellate Division erred in affirming the increment allowance by deciding that the “farm crossing” could be expanded to include access for potential industrial use when determining the value of the land after appropriation.

Holding

Yes, because where a railroad has ceased operating and the right-of-way has been appropriated by the State, the potential use of the land should be considered in determining value if a reasonable probability of adequate access is established by competent proof.

Court’s Reasoning

The court reasoned that a strict interpretation of “farm crossing” as solely for agricultural purposes would unduly restrict the use of adjoining land, especially when the railroad has ceased operations. While early cases and the Railroad Law focused on agricultural needs, the court acknowledged that the statute intended to protect landowners’ rights to use their land profitably. The court cited Buffalo Stone & Cement Co. v. Delaware, Lackawanna & Western R. R. Co., 130 N.Y. 152, 159, stating, “The statute does not limit the right of adjoining owners to crossings solely for agricultural purposes, but they may be ordered to enable owners to remove the natural products of the land, like stone and minerals.” The court emphasized the language “whenever and wherever reasonably necessary for the use of the owners and occupants of the adjoining lands.” It held that if a reasonable probability exists that claimants might have purchased and the railroad would have sold a crossing adequate for industrial development, then the potential for industrial use should be considered when valuing the land. The court emphasized that this determination was fact-specific, based on the evidence presented by the claimants. The court affirmed the lower courts’ findings that such a reasonable probability existed in this case, justifying the increment for potential industrial use. The court also noted Syracuse Ready-Mix Concrete Co. v. State of New York (43 A D 2d 800) where it was held that the term farm crossing should be construed as including any crossing useful to the adjoining owner.