The Evergreens v. Commissioner

THE EVERGREENS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. The Evergreens v. Commissioner Docket Nos. 96513, 98635. United States Board of Tax Appeals 47 B.T.A. 815; 1942 BTA LEXIS 639; October 7, 1942, Promulgated *639 1. Prior Board adjudication of March 1, 1913, value of fully improved lots sold in petitioner's cemetery in 1929-1933, held, res judicata of value of that part of petitioner's cemetery property and hence binding in present determination of similar question as to lots sold in 1934 and 1935. 2. March 1, 1913, value of partially improved lots sold during the taxable period in question, held, not governed by prior determination and hence subject to independent valuation. Neilson Olcott, Esq., Valentine B. Havens, Esq., and Charles B. McInnis, Esq., for the petitioner. F. Samuel Gettle, Esq., for the respondent. OPPER *815 These consolidated proceedings challenge respondent's determination of the income tax deficiencies in the amounts of $18,870.67 and $3,196.05 for the years 1934 and 1935, respectively. Issues involving the depreciation on certain improvements made in 1934 and the proper basis for computing profit or loss on the sale of cemetery land repurchased by petitioner subsequent to March 1, 1913, have been disposed of by stipulation. The question presented for our determination is the March 1, 1913, value of certain*640 improved and partially improved cemetery land sold by petitioner during the taxable years. Petitioner urges that a prior proceeding involving this petitioner is res judicata of such valuation. *816 FINDINGS OF FACT. Those facts stipulated by the parties in a written stipulation of facts filed at the hearings 1 and facts orally stipulated are hereby found accordingly. Facts hereinafter appearing which are not from the above mentioned stipulations are otherwise found from the record. Petitioner is a corporation organized under the laws of the State of New York, with its principal office in Brooklyn, New York. Since 1872 petitioner has owned and continuously operated a cemetery known as "The Evergreens" located in Brooklyn, New York. The cemetery was established in 1845. Petitioner's returns for the years 1934 and 1935 were filed with the collector of internal revenue for the first district of New York. Heretofore respondent determined deficiencies of income taxes against petitioner for the years 1929 to 1933, inclusive, which deficiencies*641 were based upon alleged profit from the sale of cemetery land for burial purposes. Respondent's computation in his notices of deficiencies for those years used as a basis a uniform value of 46 cents per square foot as of March 1, 1913, for all sales of land made for burial purposes during the years 1929 to 1932, inclusive; for the year 1933 he used a uniform value as of March 1, 1913, of 11 cents per square foot. Petitioner sought a redetermination of the deficiencies in each case by an appeal to this Board. The prior cases were consolidated and heard in New York City on May 6 and 7, 1936. Evidence was adduced indicating that petitioner's land held for sale on March 1, 1913, was divided into two classes, viz., (a) land which was fully improved and ready for sale without further development, and (b) land which was partially improved, but could be made available for sale, consisting of portions of sections lying along the eastern boundary of the cemetery, comprising in all about 1,411,354 square feet, which area contained no drainage or water systems. In making his opening statement at the earlier hearing counsel for petitioner stated that the issue was "the fair market value*642 of the land as of March 1, 1913, of land sold by this cemetery company during the taxable years." In stating the issues in its memorandum opinion in the prior proceeding this Board said: All questions raised by the petitioner were disposed of by agreement or by admissions in respondent's answers herein, excepting the March 1, 1913, fair market value of the land sold in the taxable years by petitioner for burial lots and graves. As part of its finding of fact this Board found that petitioner had unsold land available for cemetery purposes on March 1, 1913, in the *817 total amount of 4,048,878 1/2 square feet; that on that date "the cemetery was laid out in sections and was fully improved and equipped with drainage and water systems, landscaping, roads and paths, with the exception of portions of sections lying along its easterly boundary comprising in all about 1,411,354 square feet, which area contained no drainage or water systems, and was not in a saleable condition"; that the improvements necessary to place this partially improved land in a salable condition would cost from 8 cents to 20 cents per square foot; that the average price per square foot computed on sales*643 from 1900 to 1913, inclusive, was $1.28; that the average selling price per square foot on sales of improved land for burial purposes in 1929 was $3.31; in 1930, $3.85; in 1931, $3.71; in 1932, $3.74; and in 1933, $3.68; and that the "fair market value of the improved land available for sale for burial purposes on March 1, 1913, was at that date $1.55 a square foot." Petitioner in the earlier proceeding sought a valuation based on a "weighted average" which "started with actual sales and sales prices, then applied those sales prices to comparable unsold land and divided the total by the number of square feet available for sale"; respondent sought a valuation based on Hoskold's formula under which the fair market value of all of petitioner's land available for sale on March 1, 1913, was first determined and then averaged over the total number of square feet available for sale on that date. In its opinion this Board rejected the methods of valuation proposed by petitioner and respondent and stated: * * * Better evidence, we think, under the circumstances in this case, lies in the record of actual sales over a reasonable period prior to the basic date and taking into consideration*644 in connection therewith any unusual facts or circumstances which would obviously affect actual sale prices. On this basis, we have found the fair market value of petitioner's property at the basic date to be $1.55 per square foot. The land sold for cemetery purposes during the years 1929 to 1933, inclusive, was located in 29 different sections of petitioner's cemetery. In applying this Board's findings and opinion under Rule 50 computation in the prior cases, respondent applied the value of $1.55 per square foot to the total of the 4,048,878 1/2 square feet held for sale on March 1, 1913, thereby reflecting a total value of $6,275,761.68 for such unsold land on March 1, 1913. This Board applied the value of $1.55 per square foot to all land sold from the 29 sections for cemetery purposes during the years 1929 to 1933, inclusive. The memorandum opinion in the prior cases was promulgated on May 11, 1937, and decision was entered on August 26, 1937. Decision has become final. *818 On March 1, 1913, petitioner had 4,048,878.5 square feet of unsold land available for sale for cemetery purposes, of which 2,904,953.5 were fully improved and 1,143,925 were partially improved. *645 During the year 1934 petitioner sold a total of 22,927 square feet of land for burial purposes, of which 22,714 square feet represented land which had been acquired by petitioner prior to March 1, 1913. The remaining amount of 213 square feet represented land which was repurchased by petitioner subsequent to March 1, 1913, at a total cost of $583.25. The 22,714 square feet of land sold during 1934 was sold from 10 different sections of petitioner's cemetery, out of each of which sales had been made for burial purpose, during the years from 1929 to 1933, inclusive, and which were all included in petitioner's fully improved land as of March 1, 1913. In addition to the above mentioned land sold during the year 1934 for cemetery purposes, petitioner sold to the city of New York for park purposes a total of 326,700 square feet of land lying along its easterly boundary, which was included in the area of 1,411,354 square feet heretofore referred to as partially improved land on March 1, 1913. No sales of lots or graves were made in 1929-1933, inclusive, from these lands. During the calendar year 1935, petitioner sold for burial purposes a total of 17,383 square feet of land, of*646 which 16,665 square feet had been acquired by petitioner prior to March 1, 1913. The remaining amount of 718 square feet represented land which petitioner had repurchased subsequent to March 1, 1913, at a total cost of $2,185. The land sold during the year 1935 for cemetery purposes, which had been owned by petitioner since March 1, 1913, was out of 12 different sections. All of the sales of land for burial purposes during the year 1935 were made out of the same sections out of which sales were made for burial purposes during the years 1929 to 1933, inclusive, with the exception of 54 square feet sold in the Ascension section and 456 square feet in the Cedar Vale section. The Cedar Vale section was fully improved and available for sale or burial purposes on March 1, 1913. The land sold the city was from the sections and in the amounts designated as follows: Sq. ft. Beacon Hill 108,127 Eastern Slope 111,000 Orient Hill 46,000 Pleasant Hill 56,773 Siloam 4,800 Total 326,700 Each of the sections lying along the easterly boundary of petitioner's *819 cemetery in which the 1,411,354 square feet of partially improved land were located also*647 contained fully improved land available for sale for cemetery purposes on March 1, 1913, and sales had been made out of the fully improved portion of each of the above mentioned sections for cemetery purposes prior to March 1, 1913, with the exception of Siloam. The amount of land sold from the improved portions of these sections for burial purposes prior to March 1, 1913, was as follows: Sq. ft. Beacon Hill 8,251 Eastern Slope 20,257 Orient Hill 63,450 Pleasant Hill 145,032 Siloam [0] Total 236,990 During the period 1900-1912, inclusive, the following quantities of land were sold out of the improved portion of the sections which also included partially improved land on March 1, 1913, at the indicated average selling price per square foot: Square feet sold Average price per square foot Eastern Slope [130] $1.81 Orient Hill 4,102 1.77 Pleasant Hill 20,856 1.13 During the years 1900 to 1912, inclusive, 807,392 square feet of cemetery land were sold for $1,003,841.70. The average selling price per square foot was $1.24. During the calendar years 1912 and 1913 sales were made for cemetery purposes out of improved portions*648 of the following sections in which some of the partially improved land involved in this proceeding was located in an amount and at an average selling price per square foot as indicated: [1913] Square feet sold Average price per square foot Square feet sold Average price per square foot Orient Hill [278] $2.00 [200] $2.00 Pleasant Hill [240] 1.55 [24] 1.55 There were no sales during those years from the fully improved portions of the Eastern Slope section, but in 1908 petitioner sold 24 square feet from that section at $1.46 per square foot. Its average selling price of land from the fully improved portion of this section for the period 1900 to 1912, inclusive, was $1.81 per square foot. *820 The 1,411,354 square feet partially improved on March 1, 1913, remained in the same general condition until the year 1934, at which time the 326,700 square feet were sold to the city of New York and a portion of the area in the Pleasant Hill section was fully improved and renamed Ascension section. After these improvements had been made, Ascension section was as completely improved and as desirable for burial purposes as any of petitioner's*649 other fully improved cemetery land. The cost as of March 1, 1913, of converting that portion of petitioner's partially improved land included in the Pleasant Hill section which subsequently became Ascension section into improved land available for sale for burial purposes was 11 1/2 cents per square foot. The cost as of March 1, 1913, of converting petitioner's other partially improved land included in Beacon Hill, Eastern Slope, Orient Hill, Siloam, and Pleasant Hill, other than the portion now designated as Ascension, into improved land available for sale for burial purposes was 13 cents per square foot. All of petitioner's partially improved land at March 1, 1913, if brought up to a state of full improvement, would have been equally comparable in availability and salability to other fully improved land. The rules and regulations of petitioner incorporated by reference in the deeds which it gave purchasers of cemetery property provided as follows: 1. All Lots in The EVERGREENS CEMETERY shall be used as a place of burial for the dead and for no other use or purpose whatever; and no transfer or assignment of any Lot, or any interest in any Lot therein, shall be valid without*650 the consent in writing of the President of said Corporation first had and endorsed upon such transfer or assignment. 2. No interment in any Lot in said Cemetery shall be made or permitted by the proprietor thereof for a remuneration; no disinterment from any Lot shall be made except upon express permission of the President of said Corporation first obtained; and no person who shall have died in any prison or been executed for any crime shall be interred in said Cemetery, except upon the like permission first obtained. The number of interments in the petitioner's cemetery from 1845 to 1933, inclusive, and the average yearly interments for the periods indicated are as follows: Year Total 1845 to 1900 163,689 1900 to 1912 58,014 221,703 [1913] 4,083 [1914] 4,168 [1915] 4,137 [1916] 4,074 [1917] 4,438 [1918] 5,346 [1919] 4,163 [1920] 4,131 [1921] 3,973 [1922] 4,020 [1923] 3,942 [1924] 4,005 [1925] 4,150 [1926] 4,431 [1927] 4,475 [1928] 4,630 [1929] 4,673 [1930] 3,808 [1931] 3,593 [1932] 3,528 [1933] 3,456 Total 308,927 Average yearly interments, 1845 to 1900 2,923 Average yearly interments, 1900 to 1912 4,462 Average yearly interments, 1913 to 1933 4,154 *651 *821 The net operating income of the petitioner on a cash basis from 1901 through 1912 was as follows: Year ended - Cemetery and lot grave sales Miscellaneous receipts Total income Expense of operation Net operating income 2-28-01 $62,899,59 $19,914.20 $82,813.79 $43,545.98 $39,267.81 2-28-02 55,076.05 20,266.92 75,342.97 40,578.77 34,764.20 2-28-03 68,510.35 17,801.82 86,312.17 41,054.69 45,257.48 2-29-04 66,701.28 24,883.35 91,584.63 48,177.68 43,406.95 2-28-05 83,142.73 31,400.08 114,542.81 48,980.02 65,562.79 2-28-06 80,496.40 28,236.85 108,733.25 29,790.92 78,942.33 2-28-07 90,727.90 31,530.03 122,257.93 55,108.13 67,149.80 5-31-08 1 118,245.41 48,268.87 166,514.28 86,197.71 80,316.57 5-31-09 81,217.15 40,971.79 122,188.94 71,359.98 50,828.96 5-31-10 77,778.80 40,879.29 118,658.09 48,468.95 70,189.14 5-31-11 79,111.40 43,522.66 122,634.06 52,020.51 70,613.55 5-31-12 65,933.90 40,092.39 106,026.29 50,601.71 55,424.58 12-31-12 2 39,893.78 20,921.66 60,815.44 34,285.59 26,529.85 Total 969,734.74 408,689.91 1,378,424.65 650,170.64 728,254.01 Average, 12 5/6 years 75,565.70 31,846.79 107,412.49 50,663.96 56,748.53 *652 The net average operating income of the petitioner on an accrual basis from 1901-1912 was $58,907.11. Deaths in greater New York for the years 1900 to 1934, inclusive, averaged approximately 74,000. The population of New York City for the decades 1910, 1920, and 1930 was 4,766,833, 5,620,048, and 6,930,466, respectively. The petitioner's net operating income on the accrual basis, based on the book value of land, and (loss) as shown by its income tax returns based on a claimed March 1, 1913, value for the calendar years 1913 to 1933, inclusive, are as follows: Books Tax returns [1913] $61,487.04 ($6,967.79) [1914] 49,519.28 (10,057.19) [1915] 49,237.78 (9,851.46) [1916] 41,339,90 (24,553.33) [1917] 51,049.77 (19,850.28) [1918] 120,721.77 (11,497.48) [1919] 78,016.04 (29,803.85) [1920] 108,205.62 (18,861.71) [1921] 94,613.95 (30,376.35) [1922] 87,160.52 (30,195.09) [1923] 99,129.23 (14,373.92) [1924] $104,241.49 ($17,939.54) [1925] 120,884.75 (8,769.11) [1926] 154,463.91 (8,713.09) [1927] 140,868.64 (10,799.88) [1928] 166,019.53 (35,259.70) [1929] 162,981.05 (29,527.12) [1930] 137,186.46 (39,773.97) [1931] 101,197.66 (5,815.62) [1932] 100,695.25 (31,593.85) [1933] 14,456.03 (3,377.89) *653 The petitioner carried on its books at December 31, 1912, its cemetery grounds at a value of $550,000. In the capital stock tax returns filed by the petitioner for the years 1916 to 1926, inclusive, and signed and sworn to by its officers, the highest value at which the petitioner reported the fair value of its capital stock during such period was slightly less than $800,000. In arriving at the fair value of the petitioner's capital stock, as reported *822 in such capital stock tax returns, the petitioner valued its real estate at approximately $607,000, which value was approximately 15 cents per square foot for its cemetery land. Some time prior to the year 1934 representatives of the Commissioner of Highways of the city of New York, surveyed a proposed park road through the middle of petitioner's cemetery. Such road, if constructed as originally surveyed, would have cut petitioner's cemetery into two parts and would have taken some of its best land, thereby spoiling its appearance and making the cemetery less desirable for burial purposes. After extended negotiations it was agreed to sell to the city of New York the 326,700 square feet of land out of petitioner's*654 partially improved land lying along its easterly boundary for a total consideration of $224,175, provided that the city would carry the roadway around petitioner's cemetery instead of constructing it through the middle of the cemetery as originally proposed. The trustees of the cemetery were willing to sell the 326,700 square feet at the price indicated as an alternative to having the road constructed by the city through the heart of petitioner's cemetery. In determining the profits from the sales of land made by petitioner during the years in question, including land sold for burial purposes and land sold to the city of New York, respondent used a uniform value of 30 cents per square foot as of March 1, 1913. In his notice of deficiency for 1934 he stated: On the basis of information of record in the Income Tax Unit, the Bureau holds that a fair value of all lots sold during the year, as of March 1, 1913, was $123,938.40, or at the rate of $0.30 a square foot. This valuation conforms in principle to the recent decision of the United States Board of Tax Appeals in the case of Oak Woods Cemetery Association, 38 Board of Tax Appeals #18, promulgated July 30, 1938. * * * *655 The March 1, 1913, value of the fully improved land available for sale on that date was $1.55 a square foot. The March 1, 1913, value of the partially improved land held for sale on that date and sold during the taxable years in question was $0.35 a square foot. OPINION. OPPER: By order of the Board the issues here were severed so as to consider separately petitioner's contention that the present question has already been determined in a prior proceeding binding upon both parties. A decision on that point in petitioner's favor would have disposed of the case without the introduction of additional testimony. Further proceedings were accordingly postponed pending disposition of this preliminary question. The basic issue before us is the March 1, 1913, value of certain cemetery property sold by the petitioner in the years 1934 and 1935. That, as petitioner concedes, is different from the value of other lots *823 sold from 1929 through 1933, the ultimate issue in the prior proceeding on which it relies (Docket Nos. 71187, 72271, 75422, 83294, and 83458, memorandum opinion entered May 11, 1937). It is clear, however, that as between the same parties "a right, question*656 or fact distinctly put in issue and directly determined by a court of competent jurisdiction as a ground of recovery, cannot be disputed in a subsequent suit by the same parties or their privies." . The rule applies to tax cases, and governs even if the question arising in a subsequent action between the same parties is "upon a different claim or demand." . Though the basic issue is different, there may still be aspects of a prior action binding upon the parties under the principle of res judicata, sometimes referred to as estoppel. "While the effect of the judgment as an estoppel is limited to matters involved in litigation, it is equally conclusive whether the point decided was of itself the ultimate vital point or only incidental, if its determination was necessary to the judgment. 'A judgment concludes not only the technical fact in issue but also every component fact necessarily involved in its determination.'" 2 Freeman on Judgments, 5th Ed., 1463. This application of the principle of res judicata is not to be confused*657 with that in which a former adjudication of the same issue justifies a complete plea in bar. Petitioner recognizes this. It urges, however, that in its disposition of the prior proceeding the Board necessarily arrived at decisions, including principally the significant one of the March 1, 1913, value of petitioner's property, which were material to its conclusion and that for that reason the question of value on the basic date, even though an issue here with respect to land sold in subsequent years, is concluded. It is alleged in the petition in the prior proceeding that "the average value of the unsold area of petitioner's cemetery property on March 1, 1913, was not less than three dollars ($3.00) per square foot." This, among other allegations, was denied in respondent's answer. As the opinion shows, the case was presented to the Board by each party in a manner which, if accepted, would have required for the determination of value that the figure be computed by dividing the basic-date value of all salable property by the area available for sale, or, in other words, by reaching an average value per square foot of all the property susceptible of disposition. Although rejecting*658 the formula proposed by both litigants, the findings in the prior proceeding nevertheless demonstrate that the Board did determine an average square foot value for the fully improved property as of the basic date. It is true that determination of an average value was requisite there only in order to compute *824 the March 1, 1913, worth of the lots then in issue. But no effort was made by the Board nor apparently by the parties to distinguish between the various presently salable lots whenever sold; and the usefulness of an average figure arose only from the tacit assumption apparently accepted by the Board and both parties that for purposes of valuation the square feet of salable land could be treated as interchangeable. It seems to us to follow that a finding by the Board of average value governs, as its term implies, the over-all value of all the square feet, and therefore of each one, regardless of the purpose for which the value may be material. The specific finding was that "the fair market value of the improved land available for sale for burial purposes on March 1, 1913, was at that date $1.55 a square foot." We are, therefore, of the opinion that the Board's*659 determination in the previous proceeding between the parties hereto is binding with respect to all the improved land available for sale on March 1, 1913, and it is on the strength of that prior adjudication and not upon independent evidence that the values of the plots sold therefrom in the taxable periods here in issue have been included in our findings of fact. Chicago Cemetery Association v.United States, 19Fed.Supp. 228. But some land was sold by petitioner in the instant years which was unimproved on March 1, 1913. There is present here, therefore, an issue which was not in controversy in the prior proceeding, namely, the value on the basic date of petitioner's unimproved land. This feature presents a more difficult question. It is pressed upon us with great emphasis that the same reasons require us to find a corresponding value for the partially improved land. The parties have stipulated the cost of improvement required to bring these portions to a comparable condition with the land which was fully improved in 1913. We are hence committed, the argument runs, to the purely arithmetical process of reducing the fully improved valuation by the cost of improvement. *660 This is said to be so for three somewhat related reasons: First, the value of the improved land is res judicata in this proceeding quite as much for purposes of appraising the partially improved as the wholly improved land, on the theory that a fact once found is so for all purposes; second, that it is necessary that the several findings in this proceeding shall not be inconsistent with each other, and that any figure adopted for the unimproved land can comport with that for the improved only if the difference is no greater than the cost of necessary improvements; and, third, that in the prior proceeding the Board adopted a method or principle for valuing petitioner's property which is equally binding here and requires us to look to *825 sales of comparable property at about the basic date as the exclusive test with respect to all parts of the cemetery, unimproved as well as improved. We can not agree, however, that we are bound in our consideration of the value of the unimproved land by the previous determination as to the property which was fully improved. We have accepted it here in considering the lots sold from the fully improved sections only because, the present*661 issue being identical, we consider it conclusive. We are not required in that connection to reexamine it for, if necessary, that "decision makes white black; black, white; the crooked, straight; the straight, crooked." Bouvier, Law Dictionary. But in applying that result to the partially improved portions of the cemetery, one inquiry must be "whether the point or question to be determined * * * is the same as that litigated and determined in the original action." It seems to us clear that in the present situation that is not so. While there may be a discoverable relation between the appraisal of wholly and partially improved property, it seems manifest that they are not the same thing. Hence we regard this aspect of the case not only as presenting a different claim or demand, but as involving a different issue from that previously decided. That a mathematically computable relationship may exist between the two determinations is in effect the foundation for petitioner's further contention that any value we may place upon the partly improved portions can not vary by more than the cost of improvement from that conclusively*662 fixed for the improved portions. But this, too, we think an unwarranted extension of the principle of res judicata. If our prior determination lacks conclusiveness because the issue is different, then the merely fortuitous inclusion of a foreclosed issue can not impose consistency here, any more than if this were a separate proceeding, or one between different parties. Nor do we grant that consistency is necessarily absent. , and , cited by petitioner for the proposition that unimproved land must be valued by deducting from the value of improved land the cost of improvement, were both decided upon an erroneous view of the Elmhurst case 2 made manifest by the Supreme Court's subsequent affirmance of Montrose Cemetery Co. v. Commissioner at . For example, the West View opinion takes the position that "it [is] quite evident that the Supreme Court, in the Elmhurst case * * * rejected the discount method contended for by the Commissioner * * *." This*663 is an interpretation *826 repudiated, not only by the Board, see, e.g., ; affd. (C.C.A., 7th Cir.), ; certiorari denied, , but even by the present petitioner, which concedes "that the Elmhurst case does not compel the application of an exclusive method." We think it no coincidence that these are the cases to which petitioner is forced to resort for authority on this point. For it seems apparent that, if the time element is a factor in estimating salability, a longer period may justifiably be assumed for the disposition of unimproved than of improved sections. than of improved sections. In fact, in his dissenting opinion in the West View case, Judge Sibley referred to "the unsold land in the improved area" and thought that "much of it would have to wait twenty or thirty years or more to find a sale. The semi-improved area would have to wait much longer * * *." He went on to point out that the Board "reduced or discounted the fair value of the semi-improved*664 area much more because it would probably have to wait much longer and would have to have money spent on it to sell at all." This can itself be the element which furnishes a basis in fact for attributing to unimproved land a lower value than mere reduction by the cost of improvement. Essentially, that is the very position taken here by petitioner; for the sales of unimproved land did not begin for twenty years, and on that ground petitioner denies the relevance of figures showing the intervening history of this same cemetery, and population growth and interment statistics, which petitioner asserts would be relevant only in valuing the improved land. It would not be unreasonable for a prospective purchaser, appraising the situation in 1913, to give consideration to this prospect of delay. And we have ourselves accepted the figures in question only because they furnish such evidence as there is of a trend. Finally, we find no justification for the suggestion that the method or principle of valuation adopted by the Board in the prior proceeding requires us to look here only to the record of actual sales to the exclusion of any other relevant considerations. The approach employed*665 by the Board might, as we have observed, be entirely at variance in dealing with unimproved sections. Nor are we clear that the disposition of the question of law involved in ruling upon an appropriate principle of valuation is one by which we can assume the Board would be bound where the condition of the record and the state of the law have changed. Be that as it may, however, there is nothing in the previous determination which so limits its effect. On the contrary, it contains specific language showing that the Board thought "that some consideration should be given to the undisputed fact that many years *827 must pass before petitioner's property will be sold out"; and that "This is emphasized by the fact that its sales over the fourteen year period from 1900 to 1913 had averaged 61,630 square feet and it had available for sale over 4,000,000 square feet at the basic date." We are accordingly unable to concur in petitioner's position, and are of the view that we may consider here the valuation to be placed upon the portions of the cemetery which were partly improved on March 1, 1913, entirely without reference to the prior adjudication as to the fully improved property, *666 or the value thereof, or the method used to find that value. Being of that opinion, and after the issues had been severed, as noted at the outset of this discussion, the Board issued its further order pursuant to which testimony was taken on the question of the value of the partially improved land. As was to be expected, petitioner opposed the admission of all evidence inconsistent with the improved land value less cost of improvements. Rulings taken under advisement at that hearing are now made in respondent's favor for the reasons already set forth. From the facts and opinion testimony there submitted, and placing particular weight on the price and volume of contemporary sales, we have come to the conclusion that as of March 1, 1913, 35 years was a reasonable average anticipation for the disposal of the partly improved land; that considering lots and graves together, $3 was a reasonable anticipated average gross return per square foot when sold; that costs of operation and expenses of sale could be expected to reduce this amount by 25 percent, leaving a net return of $2.25; that 6 percent is a reasonable interest factor to be employed and that at that figure the present value*667 of one dollar 35 years hence is 13.011 cents; all of this resulting in a fair market value per square foot of .13011 times $2.25, or slightly less than 30 cents per square foot. We have considered the other evidence in the case, but find it leads to the same result, except that the witnesses produced and vouched for by respondent arrived at higher figures, at least for the land sold in 1934, which is by far the greatest bulk. Since one witness' conclusion was 33 cents and the other 35, we have found as a fact that the land sold in 1934 was of a fair market value on the basic date of the higher of these figures. And since the distinction between the two parcels is none too clear on this record, and the second is insignificant, we have found, purely for purposes of this proceeding, that the particular land sold in 1934 and 1935 was of that basic value. It is true that one of the witnesses made a further downward adjustment of basis on the ground that the land sold in 1934, which the city of New York bought for parkway purposes, included parts which would be waste if devoted to cemetery use. This reduced his average *828 square foot figure for that particular parcel. But*668 while the presentation of the case leves this point in some doubt, we take the view that any such adjustment is inconsistent with the stipulated facts, and hence unsupportable. It is agreed that the land in question was part of the 1,143,925 square feet of land which was partially improved in 1913. That figure is a net quantity from which there has already been deducted the necessary wastage. Hence we think that all of the land sold should be regarded as included in the salable area, and that in computing its gross value the adjudicated basis should be multiplied by the total square footage which it contained. Reviewed by the Board. Decision will be entered under Rule 50. MELLOTT (Concurring in part) MELLOTT (Dissenting in part) MELLOTT, concurring in part and dissenting in part: While I concur in the holding of the majority that the prior decision of the Board is res adjudicata as to the value of the lots in the improved sections of the cemetery, I must respectfully dissent from the holding that it is not also res adjudicata as to the lots in the unimproved sections. The record in the prior proceedings indicates that the Board considered*669 the value of all of petitioner's cemetery property to be a relevant fact in determining the issue before it. This is evident not only from the findings, part of which are set out above, but also from the opinion of the Board. Therein it was said: "We also think that some consideration should be given to the undisputed fact that many years must pass before petitioner's property will be sold out. Petitioner estimates the period at 45 years from March 1, 1913; the respondent uses a 65 year period. Whichever period is nearer right, it is plain that the petitioner must wait a considerable period of time before it realizes anything from a part of its property * * *." This statement apparently had reference, at least in part, to the unimproved sections of the cemetery. That it was so construed by the parties is indicated by the computation filed by the respondent, the essence of which is shown in the following schedule: sq. ft. Total area of cemetery March 1, 1913 10,912,825 Deduct: sq. ft. Portion devoted to roads, walks, etc. prior to March 1, 1913 1,732,308 1/2 Lands sold prior to March 1, 1913 4,222,745 5,955,053 1/2 Lands unsold March 1, 1913 (including 1,411,354 sq. ft. unimproved) 4,957,771 1/2 Deduct, per Board's findings: Waste land 150,150for needed drives, walks, etc 758,743 sq. ft. 908,893 Total unsold improved and unimproved land 4,048,878 1/2 March 1, 1913 value - 4,957,771 1/2 X $1.55 $6,275,761.68 Deduct: Value recovered for years 1913 to 1928, incl. 1,904,353.98 Unrecovered value January 1, 1929 4,371,407.70 *670 *829 In the prior proceeding it was found that the cost of making the necessary improvements in the unimproved sections would be "from 8 cents to 20 cents a square foot." Since petitioner is relying upon the value determined in that proceeding, probably the most unfavorable estimate of cost should be used. As a matter of fact petitioner inferentially concedes that the 20-cent figure should be used. This would result in a holding, which I think should be made, that the March 1, 1913, value of petitioner's improved property was, as determined by the majority, $1.55 per square foot and its unimproved property $1.35 per square foot. LEECH agrees with the above. Footnotes 1. On motion of the parties severance of the res judicata↩ issue was granted and a separate hearing had thereon. 1. 15-month period. 2↩ 7-month period.