In re Long Island Water-Supply Co. , 73 Hun 499 ( 1893 )

BARNARD, P. J.

The legislature, by chapter 737, Laws 1873, and amendments thereto, authorized, by a general act, the formation of water companies in towns and villages within the state. Under these laws the Long Island Water Company was organized in 1881 to furnish water to the town of New Lots, which was then adjacent to the city of Brooklyn, but was not a part of it. By chapter 335, Laws 1886, the legislature annexed the town to the city of Brooklyn, and in the annexation act provided that the city of Brooklyn should not distribute or furnish water for consumption or use within the territory of the annexed town, or lay any pipes or mains for the distribution or supply of water therein, until the expiration of the charter of the water company, or until the city should purchase the property rights of the water company. The charter was taken for the term of 50 years from the 17th of August, 1881. By chapter 481, Laws 1892, the city of Brooklyn was permitted by law to acquire a title by condemnation to all the property of the Long Island Water-Supply Company, consisting of the reservoir, machinery, water pipes, and franchises for the public use; The act provided that a commissioner should be appointed to ascertain the just compensation to be made therefor. The commissioners were appointed in the manner provided for by the act, who have heard the testimony of the parties, and have made their report This report was set aside by the special term, and this appeal presents the question whether or not the award gives just compensation for the property taken for the public use.

The subject of the appraisal is an unusual one, and the proof is very conflicting as to values. The case is one which easily falls within the settled principle that where the witnesses are not harmonious in their views the report of the commissioners will be upheld, unless it is so clearly against the weight of the body of the evidence as to justify a reversal for that reason. This award must be affirmed, unless an erroneous basis was adopted by the commissioners in their appraisal. The commissioners have made a statement of the rule which governed them, and the important question is whether or not this rule was one which should not have been followed. The commissioners state that their appraisal was not based upon the exclusive right of the waterworks company to furnish water to the territory within the old town of New Lots. ■ This was a correct view. The act (chapter 737) of 1873 gives no such exclusive right to a corporation formed under its provisions. The town made a contract with the water company, but this contract did not even require a distribution of water to all of the inhabitants of the town. There are over 100 miles of streets, and the contract calls for only 15 miles of pipes. The fact is not very material, but it will become important when the effect of the legislative restriction in the annexation act is considered. The water company had no exclusive right in the town by force of the town permission and the contract. Syracuse Water Co. v. City of Syracuse, 116 N. Y. 167, 22 N. E. 381. The restriction in. the annexation act gave no additional power to the water company. It does not purport to do so. The restriction is to be considered with respect to the existing facts when it was inserted. The town water company existed, and had made expenditures under its charter. The restriction was designed only to protect the water company from injurious competition until the city made it a just compensation for its property. The water company seeks to use this humane provision to confer an absolute right to supply the district of New Lots with water for the entire period of the chartered life of the company, and to have this exclusive right assessed as part of the franchise of the company. The commissioners of appraisal took the proper view of the restriction. It conferred no additional right, and it could at any time be repealed; and no error of principle can be based upon an expectation that a repeal of the restriction would be made, if its effect was to greatly increase the value of the franchise of the water company as it existed at the date of annexation. The water company was not bound to supply the district annexed, and the city was forbidden to do so for a very long term of years. The legislature intended no such result, and the restriction is not to be so read. The city competition with the water company is stayed until it gets title to the water company,—title such as it was before the annexation act was passed. This is the construction of the court of appeals in Ziegler v. Chapin, 126 N. Y. 342, 27 N. E. 471, on the effect of restriction. The case does not hold that the value of the franchise was increased thereby, and must be paid for by the city. The case of People v. O’Brien, 111 N. Y. 1, 18 N. E„ 692, holds no such doctrine. The right of the water company cannot be taken away, but what the right was which was to be paid for was not determined by that case, and no such question was in it. It is not obligatory upon a commission to appraise lands taken for public use that an award shall be made, greater than the mortgage on the property. The value only is to be assessed, and the money will go where justice requires it to go, and no further; otherwise, an excessive mortgage will prevent condemnation for public use. The evidence as to value is very full, and even if, under strict rule of evidence, something was improperly admitted or rejected, it did not affect the result. The order refusing a confirmation of the report of the commissioners should be reversed, with costs and disbursements, and the motion to confirm be granted, without costs of that motion.