Ashland Oil & Refining Co. v. State

• Decision Date: 23 April 1970
• Docket Number: No. 42843,42843
• Citation: 258 N.E.2d 915,26 N.Y.2d 390,310 N.Y.S.2d 500
• Parties: , 258 N.E.2d 915 ASHLAND OIL & REFINING COMPANY, Appellant, v. STATE of New York, Respondent. Claim
• Court: New York Court of Appeals Court of Appeals

Page 500

310 N.Y.S.2d 500

26 N.Y.2d 390, 258 N.E.2d 915

ASHLAND OIL & REFINING COMPANY, Appellant, v. STATE of New York, Respondent.

Claim No. 42843.

Court of Appeals of New York.

April 23, 1970.

Horace C. Winch and Roy P. Ohlin, Buffalo, for appellant.

Louis J. Lefkowitz, Atty. Gen. (Henderson G. Riggs and Ruth Kessler Toch, Albany, of counsel), for respondent.

BREITEL, Judge.

This appeal involves the right of an oil company to recover the costs of relocation of its pipeline laid in the bed of privately-owned land subject to a town right of way, the roadbed having been appropriated by the State in eminent domain for a State highway. It is concluded that the courts below correctly determined that the claimant was not entitled to recover such costs, as distinguished from the value, probably inconsequential, of the easements that the oil company had obtained from the abutting owners who had held title to the roadbed.

Chestnut Ridge Road has been maintained and treated as a road of the Town of Amherst since 1841. By virtue of that use the town held an easement in the land for use as a public highway (Highway Law, Consol.Laws, c. 25, § 189, and predecessor statutes; James v. Sammis, 132 N.Y. 239, 246--247, 30 N.E. 502, 503). The abutting owners retained the fee to the roadbed, and could, therefore, devote it to any use not inconsistent with the easement of the town, with a right to compensation if the town or State devotes the land to any use other than that as a public highway (see, e.g., Heyert v. Orange & Rockland Utilities, 17 N.Y.2d 352, 357, 365, 271 N.Y.S.2d 201, 203, 210, 218 N.E.2d 263, 265, 270; Eels v. American Tel. & Tel. Co., 143 N.Y. 133. 138--139, 38 N.E. 202, 203--204).

Claimant, a private corporation engaged in the manufacture, sale, and distribution of petroleum products, obtained in 1952 from the abutting owners easements permitting installation and maintenance of the pipeline under the roadbed. Although the pipeline was to convey petroleum, the claimant also applied to the town for a permit under section 149 of the Highway Law, which authorizes, upon the consent of the town board, the laying of drainage, sewer, and water pipes in town roads. The permit, dated December, 1952, granted claimant permission to replace a crude oil pipeline apparently already laid.

Upon the appropriation to build a State highway, the State acknowledged its liability for the cost of relocating that part of the pipeline located outside the roadbed, but refused to pay relocation costs of the pipe under the town road. The cost of such relocation, never judicially determined, is estimated as $16,114. The State also acknowledged its liability for the value of the easements.

The Court of Claims and Appellate Division, in holding that compensation could not include the pipe relocation cost, relied on cases involving public utilities whose lines and mains were displaced as a result of eminent domain proceedings. The courts reasoned that the utilities' rights to the use of the street were conferred by the governmental body, but subject to reasonable regulation, including that the installations be relocated if the public health, safety, or convenience required. It is not altogether clear whether all of the cases relied upon involved publicly-owned land, but certainly most did. Under this rule, relocation costs are borne by the utility, and not by the condemnor (see, e.g., Matter of Consolidated Edison Co. v. Lindsay, 24 N.Y.2d 309, 318, 300 N.Y.S.2d 321, 326, 248 N.E.2d 150, 153; Transit Comm. v. Long Is. R.R. Co., 253 N.Y. 345, 351, 171 N.E. 565, 566; New Orleans Gas Light Co. v. Drainage Comm., 197 U.S. 453, 461--462, 25 S.Ct. 471, 49 N.Ed. 831).

Although the instant case differs from these utility cases in several respects, so that they serve as analogies only, they nevertheless are relevant on the incidence of relocation costs.

Initially, the fact that claimant is a private corporation, while the earlier cases have dealt with public utilities, should not be controlling. The pivotal factor would appear to be the conditional nature of the right to use the street, not the nature of the entity awarded this right, or the function performed by it.

A more significant distinction lies in the fact that the cases, generally, refer solely to the governmental 'franchise' as the source of a claimant's right to utilize the street. It is reasoned that such a conditional grant creates no compensable property right (see, e.g., Matter of Consolidated Edison Co. v. Lindsay, Supra, 24 N.Y.2d [258 N.E.2d 917] p. 318, 300 N.Y.S.2d p. 326, 248 N.E.2d p. 153; Transit Comm. v. Long Is. R.R. Co., Supra, 253 N.Y. p. 351, 171 N.E. p. 566).

In the instant case, the claimant's right to use of the roadbed derives, at least in part, from the easements granted by the abutting landowners, and for the rest it depends on the...