New York, O. & W. R. Co. v. Livingston
New York Court of Appeals
144 N.E. 589 (1924)
A will devised a life estate in a farm to Charles Octavius Livingston (Octavius), remainder to his son Charles Victor Livingston (Victor) (defendant), while barring any conveyance of the farm outside the family. Octavius nonetheless conveyed the farm to Morss, who in 1872 granted a right of way and adjoining land in fee to the New York, Ontario & Western Railroad Company (plaintiff), which then built improvements including a train station and freight house, believing it owned that land outright. After Octavius died in 1914, Victor asserted ownership, won an ejectment action, and the railroad filed an eminent-domain claim to formally take the land it needed. The land itself was valued at $15,000 and the railroad's improvements at $49,000; the trial court ordered the railroad to pay the full $64,000 combined value, and the railroad appealed.
Whether a railroad that occupied and improved land under a good-faith but mistaken belief that it owned the land in fee is entitled to deduct the value of its improvements from the just compensation owed to the true owner in a subsequent eminent-domain proceeding.