In re City of Brooklyn

• Decision Date: 27 November 1894
• Citation: 38 N.E. 983,143 N.Y. 596
• Parties: In re CITY OF BROOKLYN. In re LONG ISLAND WATER-SUPPLY CO.
• Court: New York Court of Appeals Court of Appeals

143 N.Y. 596

38 N.E. 983

In re CITY OF BROOKLYN.

In re LONG ISLAND WATER-SUPPLY CO.

Court of Appeals of New York.

Nov. 27, 1894.

Appeal from supreme court, general term, Second department.

Proceedings by the city of Brooklyn under Laws 1892, c. 481, to condemn the property and franchise of the Long Lsland Water-Supply Company, organized in the town of New Lots, which town was afterwards annexed to the city of Brooklyn by Laws 1886, c. 335. From a judgment of the general term (26 N. Y. Supp. 198) reversing a judgment of the special term (24 N. Y. Supp. 807) denying the motion by the city to confirm the commissioners' report, the water-supply company appeals. Affirmed.

The Long Island Water-Supply Company was incorporated in 1881, for a term of 50 years, under chapter 737 of the Laws of 1873, and the acts amendatory thereof. At the time of incorporation, these acts constituted the general law which permitted the organization of water-works companies in towns and villages throughout the state. As a prerequisite to the right to incorporate, the promoters were obliged to apply to the local authorities of the town or village, and to state in the application certain facts relating to the persons proposing to form the company, the proposed capital stock, the number and character of the shares, and the sources from which the water is intended to be supplied. Such an application was made to the proper authorities of the town of New Lots, and it was properly acted upon by them and granted. The certificate was thereupon filed as required by the law, and the water-works company became a body corporate, having the right to lay pipes, etc., for the delivery of water in the public streets and places, and being ‘authorized and empowered to supply the authorities and inhabitants * * * with pure and wholesome water, at such rates and cost to consumers as they shall agree upon.’ Shortly after the incorporation, the company entered into an agreement with the town which provided for the laying of pipes in the streets and avenues, to the extent of 15 miles thereof, as the authorities might from time to time designate, and for the erection of hydrants, etc. The cost of supplying water was therein limited to the established charges in the city of Brooklyn, and the term of the contract was for 25 years, which was subsequently extended. Subsequently, and in 1886, chapter 335 of the Session Laws of that year was passed, which provided for the annexation to the city of Brooklyn of the town of New Lots. Authority was provided in that act, by section 5, for the acquisition by the authorities of the city of all the various properties and franchises of this water company, by agreement of purchase, or, in the event of inability to agree, by the right of eminent domain, to be exercised within two years. By another provision of the act the city was inhibited from supplying water for consumption within the territory comprehended within the town of New Lots ‘until the expiration of the charter of the company, or until the city shall purchase, or acquire the property of the company as in the next section provided.’ Nothing in the direction of an acquisition of the water company's properties was done until after the expiration of the period of two years, when, in 1890, an agreement was entered into for their purchase at a price equal to the sum of $1,250,000. This contract of purchase was annulled, as the result of an action brought by a taxpayer of the city. The case came before this court, and the action was held maintainable upon the sole ground that the authority to purchase did not outrun the two years mentioned in the annexation act. Ziegler v. Chapin, 126 N. Y. 342, 349,27 N. E. 471. In 1892, chapter 481 of the Session Laws of that year was enacted, which, reciting that ‘the public interest requires the acquisition by the city of Brooklyn, for the public use, of the reservoir, wells, machinery, pipes, franchises and all other property of the Long Island Water-Supply Company,’ authorized the city ‘to acquire the same for such use by condemnation.’ The act required the proceeding to be instituted by the presentation of a petition to the supreme court, which should describe the property, name the owners and any parties having claims or liens thereupon, and which should pray ‘that the said city may be authorized to take and hold said property and franchises forever, for the public use, * * * upon making just compensation therefor and that commissioners of appraisal be appointed to ascertain the just compensation to be made,’ etc. The act made provision respecting the service of a notice of the presentation of the petition upon all parties, and for the making of an order by the court, when presented, authorizing the city ‘to take and hold said property and franchises forever for the public use, free of all liens, etc., upon making just compensation therefor’; and it was also provided, further, that any parties having an interest in the property or franchises ‘shall have a right to be heard in person, or by attorney, upon the said application, and upon any subsequent application to the court and to be heard and to present his proof upon any hearing before the commissioners.’ The proceedings before the commissioners were regulated, and the court, upon an application to confirm their report, was empowered to set it aside for irregularity, or for error of law, or upon the ground that the award was excessive or insufficient. It was further provided that, upon payment of the compensation, the city shall possess the property and franchises, and ‘hold the same in fee for the public use’; and authority was given for the issuance of city water bonds sufficient for the payment required. The city proceeded in conformity with this act, and, upon the presentation of its petition, commissioners were appointed, who held hearings and took proofs, and reported that a just compensation for the condemned property would be the sum of $570,000. Their report apportioned the compensation as follows: For the lands, the sum of $77,500; for the buildings, pipes, machinery, materials, etc., the sum of $292,500; and for the franchises and contract rights, ‘including the contract with the town of New Lots,’ the sum of $200,000. In this report the commissioners defined the nature of the company's franchises and rights, and stated the principle upon which they had proceeded for their valuation. They refused to consider that the company had any exclusive right to publicly purvey water, or a right which could not be taken away by the legislature, and they therefore allowed materially less as compensation than would have been allowed if the company's rights were so exclusive as to preserve them from rivalry or from legislation. They valued the franchise ‘upon these assumptions, viz.: (1) That at present the water company alone has the right publicly to purvey water in the twenty-sixth ward; (2) that the exclusiveness now incident to its right may at any time be taken away from it by the legislature, or by local authorities acting under legislation; but (3) that neither the legislature nor local authorities would, in determining whether to take from the company the exclusiveness of its right, fail to have such due regard as is demanded by ample and fair public policy to the past investment, risks, and services of the company, and to the reasonably just expectations which those who invested money in its work had im mind when so investing.’ At the special term the report was set aside, and new commissioners of appraisal were appointed; but, upon appeal to the general term, the order of the special term was reversed, and the report of the commissioners was confirmed.

William C. De Witt, B. F. Tracy, and Thomas E. Pearsall, for appellant.

Albert G. McDonald and George G. Reynolds, for respondent.

GRAY, J. (after stating the facts).

Upon the facts, as they have been stated, the legal propositions which seem to have been urged by the water company, and which were passed upon in the court below, in their consideration of the report, as we perceive from the record and the opinions, were, in substance, that the company gained, by incorporation, and by its contract with the town of New Lots, certain rights to purvey water to the town, which were exclusive and permanent during the term of the corporate charter, and that the commissioners' award of compensation should have been based upon a recognition of the inviolable nature of the franchise and the rights of the company. Upon this appeal, a further point is raised as to the constitutionality of the act of 1892, which authorized the city to take the appellant's property. The argument on the appeal has been made with great ability; the propositions contended for have been pressed with much earnestness. And the main question is of high importance; for it concerns the guaranty given to the citizen that he shall be protected in the enjoyment of his property, and that it shall not be taken from him unnecessarily and without a just compensation being made. We have therefore given to the question the serious consideration which it demands.

Upon this appeal the question of the amount of the award is not one we can, or should, review. The act provides for the appointment of five commissioners ‘to ascertain the just compensation to be made for the taking’ (section 5); and, upon the application to confirm their report, the supreme court is authorized to confirm it, or it may set it aside for irregularity, or for error of law in procedure, or upon the ground that the award is excessive or is insufficient (section 10). An appeal is then permitted to the petitioner, owner, or any aggrieved person, to the general term of the Second department, and, ‘when the report is confirmed, the court shall enter a final order, which shall be binding upon all persons, etc., directing that compensation be made pursuant to the determination of the...