Bd. of Hudson River Regulating Dist. v. Fonda, J.&G.R. Co.

• Decision Date: 31 December 1928
• Citation: 249 N.Y. 445,164 N.E. 541
• Court: New York Court of Appeals Court of Appeals
• Parties: BOARD OF HUDSON RIVER REGULATING DIST. v. FONDA, J. & G. R. CO. et al.

249 N.Y. 445

164 N.E. 541

BOARD OF HUDSON RIVER REGULATING DIST.

v.FONDA, J. & G. R. CO. et al. ^*

Court of Appeals of New York.

Dec. 31, 1928.

Condemnation proceeding by the Board of Hudson River Regulating District against the Fonda, Johnstown & Gloversville Railroad Company and another. Judgment of the Special Term (127 Misc. Rep. 866, 217 N. Y. S. 781), confirming the award of commissioners as to damages, was affirmed by the Appellate Division (223 App. Div. 358, 228 N. Y. S. 686), and defendants appeal.

Modified and affirmed.Appeal from Supreme Court, Appellate Division, Third Department.

Edward C. Bailly, W. W. Miller, Lindley M. Garrison, and Charles E. Gately, all of New York City, and F. Law Comstock and Wesley H. Maider, both of Gloversville, for appellants.

Nathan L. Miller, of New York City, and Charles W. Walton, of Albany, for respondent.

Albert Ottinger, Atty. Gen. (C. T. Dawes, Asst. Atty. Gen., of counsel), for the State.

O'BRIEN, J.

Plaintiff is a public corporation created pursuant to section 432 of the Conservation Law (Consol. Laws, c. 65), and is authorized, pursuant to section 446 of that statute, to acquire real estate by condemnation. It brought this proceeding to acquire title to, and possession of, certain property of the Fonda, Johnstown & Gloversville Railroad Company in Fulton county. Its stated purpose was the construction of a dam and reservoir for the regulation of the flow of the waters of Sacandaga river, which lie within the territory of the Hudson river regulating district. Commissioners were appointed to ascertain the compensation to be paid for the property taken, and they rendered a report which was confirmed. The order of confirmation has been unanimously affirmed on the law and the facts, and it is attacked on several grounds.

Appellants contend that the finding of fact, that plaintiff in good faith endeavored to purchase the lands and was unable to agree with the owners, is without evidence to support it. The New York Trust Company is trustee for mortgage bondholders of the Fonda, Johnstown & Gloversville Railroad Company, and as such is the owner of the mortgage which constitutes a lien on the railroad property, and, therefore, is an ‘owner,’ as defined by section 2 of the Condemnation Law (Consol. Laws, c. 73). Section 446 of the Conservation Law provides that, if the board cannot agree with the owners upon compensation and damage, it shall serve upon them a notice that the real estate has been appropriated. Prior to the institution of this proceeding, the board requested a summary of the railroad's claim. As presented by the railroad and accompaniedby a letter of approval from the attorneys for the trust company it exceeded $4,000,000. After an informal oral discussion between representatives of the board and of the railroad, the board made a written offer to the railroad of $550,000. Other oral conferences occurred which no direct representative of the trust company attended. The award in this proceeding was $1,442,130 for property which the railroad and the trust company claimed to be worth more than $4,000,000. The board's offer, while far less than the amount awarded, is so much closer to the actual value than to the defendants' demand that no justification can be found in the charge that the board did not act in good faith. The trier of the facts found that the offer was bona fide, and that finding is fully supported. After the board's attempt to agree with the railroad ended unsuccessfully, any effort to agree with the holder of the mortgage would have been futile, and, therefore, was not required. When one of two owners of the same property refuses to come to an agreement, the other owner, even if willing, is powerless to act. When the negotiations for purchase failed, the board adopted a resolution appropriating the real estate, and, in accordance with section 446 of the Conservation Law, served written notice to that effect upon the railroad. It failed so to notify the trust company, except by the petition in this proceeding. Appellants argue that the words, ‘as hereinafter provided,’ were inadvertently inserted in section 446, and are surplusage. The trial court held them to be without meaning, and we agree. The petition was served upon the trust company 12 days prior to the date required, and it included a statement that the board had appropriated the real estate described therein.

Among the principal attacks made upon the validity of this proceeding is one which rests upon appellant's argument that the Sacandaga reservoir is primarily and predominantly a power project. Section 430 of the Conservation Law defines the term, ‘regulating reservoir,’ and declares: ‘Such term is not intended to include a reservoir created by a dam constructed or maintained for power purposes, but is intended to include a reservoir at or by reason of which there may be, as an incident to the construction, maintenance and operation of such regulating reservoir, the possibility of the utilization of a portion of the water stored thereby for power purposes, without in any way interfering with the primary purpose of a reservoir constructed under the provisions of this article.’ The creation of river regulating districts is authorized by section 431, in order that they may construct, maintain, and operate reservoirs for the purpose of regulating the flow of streams ‘when required by the public welfare, including public health and safety.’ By the statute, the generation of power is made an incident of a regulating reservoir; promotion of public health and safety is its primary purpose. The board's determination and all its acts conform with the theory that it acquired defendants' property for the primary purpose of protecting public health and safety. By resolution it so declared. The facts before it are matters of common knowledge, and are set forth in this record. They do not convince us that the board's declaration was a subterfuge employed for the purpose of erecting a reservoir to be used primarily for generating power. The evidence proves that the territory through which flow the Hudson and its tributaries, including the Sacandaga, has long been subject to alternating droughts and floods. The floods devastate property, render cities and villages unsanitary, and impede the operation of street traffic, railroads, and factories. The droughts tend to deprive the inhabitants or wholesome water for drinking and bathing, interfere with filtration plants, cause accumulation of sewage, and breed noxious germs. These facts, known to all, are abundantly proved.

Appellants argue, however, that such conditions do not constitute the real motive for the board's action, but are used as a pretext for disguisingthe actual project of a power plant. They say that the assessment of only 5 per cent. of the cost upon the cities of Albany, Troy, Rensselaer, and Watervliet, and the village of Green Island, as against 95 per cent. Upon private millowners in the district, is a significant point in such an argument. They urge that the extent of the benefits which will be derived by private business organization from the reservoir, its capacity and the point of regulation, together with the activity of private beneficiaries toward the creation of the district, show that power development is the primary purpose which the board had in view. Lastly, they proclaim that conditions affecting public welfare, including public health and safety, will be improved only to a comparatively minor extent, With this argument we cannot agree. Public health and safety are superior to other considerations, and their promotion in the measure shown in this case is sufficient justification for regulating the flow of the waters in this district. Other interests have been benefited by the promotion of this primary purpose. That does not matter. U.S. v. Chandler-Dunbar Water Power Co., 229 U. S. 53, 33 S. Ct. 667, 57 L. Ed. 1063. Those beneficiaries must pay for what they got. Section 460 of the Conservation Law directs that the assessment of cost shall be ‘in proportion to the amount of benefit which will inure to each such public corporation and parcel of real estate by reason of such reservoir.’ The increased advantages derived by manufacturers can be measured in money. Salutary results to public health and safety are difficult, if not impossible, to appraise in terms of cash. That these private manufacturers exerted themselves toward the creation of this district from mixed motives may be taken for granted; doubtless their conduct was not wholly altruistic. By their efforts, partly selfish, the public good was enhanced. By their zeal, maybe for personal profit, they contributed to a beneficent public purpose. Nowhere on the Hudson watershed could a reservoir be constructed which would more effectually regulate the flow. So testified defendants' engineer, and so the courts have found. The evidence fully supports the finding that the board's avowed purpose was the actual one. It was to regulate the flow, as required by public health and safety.

Perhaps the most emphatic line of attack against this judgment and this...