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COURT OF CLAIMS OF NEW YORK Claim No. 45891 1968.NY.43867 <>; 296 N.Y.S.2d 90; 58 Misc. 2d 388 December 12, 1968 FRONTIER TOWN PROPERTIES, INC., CLAIMANT,v.STATE OF NEW YORK, DEFENDANT De Graff, Foy, Conway & Holt-Harris (William F. Conway and Walter Feldesman of counsel), for claimant. Louis J. Lefkowitz, Attorney-General (Lawrence Wayne of counsel), for defendant. Henry W. Lengyel, J. Author: Lengyel

Henry W. Lengyel, J.

Author: Lengyel

 Approximately 134.593 +- acres of claimant's land were appropriated by the Department of Public Works and the Conservation Department on November 4, 1965, when maps and descriptions were filed in the Essex County Clerk's office.

The claim in the sum of $1,500,000 was filed with the Clerk of the Court of Claims and the Attorney-General on the 1st day of December, 1965. It has not been assigned.

Claimant was the purported owner of the property by reason of nine deeds which were received in evidence as Exhibits "15," "16," "17," "18," "19," "20," "22," "23," and "24." All of said deeds were recorded in the Essex County Clerk's office except for Exhibit "24" which was an unrecorded deed from Niagara Mohawk Power Corporation to the claimant herein, dated March 22, 1965.

The claimant contended that it owned certain lands which were designated as the "former Champlain & Sanford Railroad right of way" and the "National Lead Company transmission line right of way." It was claimant's position that it had obtained title to said property by conveyance from Frank and Albanie Palmer who held title by right of adverse possession. The State produced four deeds which indicated that Mr. and Mrs. Palmer, and a predecessor in title to one parcel, had conveyed said property to the Champlain and Sanford Railroad and the National Lead Company. These were not grants of a right of way but were outright conveyances, with Mr. and Mrs. Palmer reserving crossing rights over the National Lead Company conveyance. The claimant produced an "Indenture" which it had received from the Palmers in 1958 and recorded in the Essex County Clerk's office. Said "Indenture" was a recitation of alleged facts which claimant contended established its title by adverse possession. There was also testimony at the trial from the examination before trial of Frank Palmer relative to this point. In certain circumstances, this court has the right to determine title to real property. (Raquette Falls Land Co. v. State of New York, 156 Misc. 227, 228, affd. 247 App. Div. 837, 838; East Riv. Sav. Bank v. State of New York, 266 App. Div. 494, 498; Graham v. State of New York, 51 N. Y. S. 2d 437.) We cannot, however, determine title as between parties who are not all before the court. This is particularly true when title involves the complicated question of adverse possession. The record title, prima facie established by Exhibits "W," "X," and "Z", rests in the National Lead Company and the Champlain & Sanford Railroad. These parcels were excepted from the Conservation Department appropriation. It is possible that the Palmers had succeeded to this title by adverse possession but on the record before us we cannot determine that issue. We have not included that acreage in our before or after values or damages.

The State, in its fifth conclusion of law, took the position that: "The restriction in the deed from Niagara Mohawk Power Corporation to claimant, dated March 22, 1965, would have made it legally impossible for the claimant to use Palmer's Pond and the dam and the power plant for the generation of electrical energy or for any commercial use or development. [Cases cited.]" (Italics added.) We refused this proposed conclusion and believe we should explore the State's erroneous conclusion in some depth. The deed in question (Exhibit "24"), after describing the metes and bounds of the property conveyed, stated: "Reserving, however, unto the party of the first part, its successors and assigns, all water rights and riparian rights of every name and nature in and to the West Branch of the Schroon River flowing through the lands above described, except that the party of the second part, its successors and assigns, may maintain the existing dam so long as the waters impounded thereby are not used for power purposes or the generation of electric energy. * * * The party of the second part, by the acceptance of this deed, covenants, as a covenant running with the land and binding upon it, its successors and assigns, that said premises should not be used for power purposes or the generation of electric energy."

The State's trial counsel stated in his brief, at page 36, that the reservation contained in said deed reserved to Niagara Mohawk Power Corporation "all water rights and riparian rights to Palmer's Pond". A clear reading of the reservation demonstrated the error in said statement. Moreover, it was an error which apparently influenced to some extent the appraisal of Mr. Grant, who stated in Exhibit "A", at page 47: "Palmer's Pond (18 acres) has 500' of usable frontage at the easterly end; * * *. The subject (Frontier Town) owns the land under water but does not possess riparian rights and, therefore, has only a scenic amenity." The other State appraiser, Mr. Allard, came to the same conclusion.

As stated in Farnham, Law of Water and Water Rights (vol. II, p. 1565): "A comprehensive statement of the rights of a riparian owner is that he has a right to have the stream remain in place and flow as nature directs, and to make such use of the flowing water as he can make without materially interfering with the equal rights of the owners above and below him on the stream." (See, also, 6 Warren's Weed New York Real Property, Water, § 5.01.)

One of the uses that a riparian owner may make of the stream is to dam the flowing water to form a pond for either commercial or recreational purposes, so long as such ponding does not materially interfere with the quantity of water flowing in the stream. Of course, when the pond is formed on the land of the riparian owner of the stream, said owner has the water rights in the pond impounded on his land. (See, 6 Warren's Weed New York Real Property, Water, § 2.02.)

Niagara Mohawk clearly recognized the difference in the riparian right it had to the stream and the water right to the impounded water on its land. The reservation in the deed explicitly referred to "all water rights and riparian rights of every name and nature in and to the West Branch of the Schroon River flowing through the lands above described " (italics added). Then, in further recognition of the difference, Niagara Mohawk stated that Frontier Town might maintain the existing dam in the flowing stream so long as the impounded waters were not used "for power purposes or the generation of electric energy." In other words, Niagara Mohawk was not concerned with claimant's use of the impounded water except in the two named categories. Any other construction of the clear intent of the language used would be strained and implausible. The State Conservation Department certainly recognized claimant's right to utilize these impounded waters when it reserved to the claimant the "right to take water from said Palmer's Pond and the right to lay, maintain, and repair a pipeline and necessary appurtenances for the purposes of carrying said water to other lands of the reputed owner. * * * And further excepting [sic] to the reputed owner the right to maintain the dam at Palmer's Pond in its present location."

We cannot agree with claimant's counsel that the claimant had the right to utilize the waters of the West Branch of the Schroon River, within the boundary limits of said Niagara Mohawk deed, or the waters of Palmer's Pond, to create an electrical theme park attraction in conjunction with the powerhouse, which was located on said property. We are sympathetic to claimant's position set forth in its brief that: "Reservation of riparian rights are strictly construed against the grantor (see, e.g., Findley Lake Property Owners v. Town of Mina, 31 Misc. 2d 356, 383 * * *, and the operation of a theme park attraction simply as an exhibit could hardly be said to be the use of water for power purposes or the generation of electric energy in competition with Niagara Mohawk Power Corporation." However, not only did the Niagara Mohawk deed set forth a clear and explicit reservation but it also contained a clear and specific covenant which provided that the claimant should not use said premises for power purposes or the generation of electrical energy. As stated in Loch Sheldrake Associates v. Evans (306 N. Y. 297, 304, 305): "But a reservation or grant in a deed, like every other contract 'must be construed according to the intent of the parties, so far as such intent can be gathered from the whole instrument, and is consistent with the rules of law' (Real Property Law, § 240, subd. 3). It is only when language used in a conveyance 'is susceptible of more than one interpretation' that the courts will look into surrounding circumstances, the situation of the parties, etc. (French v. Carhart, 1 N. Y. 96, 102; Clark v. Devoe, 124 N. Y. 120, 124; Wilson v. Ford [209 N. Y. 186,] 196 * * *.)"

See, also, Uihlein v. Matthews (172 N. Y. 154, 159); Schoonmaker v. Hoyt (148 N. Y. 425, 431), and Hall v. Sterling Iron & Ry. Co., (148 N. Y. 432) for a review of the case law.

We find that claimant did not have a legal right to use the waters of West Schroon River and Palmer's Pond for the purpose of producing power or the generation of electrical energy. We further find that the claimant did not have a legal right to produce power or generate electrical energy on the land and with the improvements encompassed within the Niagara Mohawk Power deed.

We find that claimant had the right to develop the land area bordering on Palmer's Pond and the impounded waters of said Pond in any manner suitable for Theme Park, commercial or recreational purposes, other than the production of power or electrical energy.

Before the appropriation the property consisted of 408 +- acres of land plus improvements. Said property was located in the Town of North Hudson in Essex County. The property was in a beautiful section of the Adirondack Mountains and excellent use had been made of it in relation to the natural beauty of the physical setting. We have separated the property into three geographical areas.

Area "A" contained 134 +- acres of land located on the east side of Route 9 with approximately 2,900 feet of frontage on said highway. The frontage was separated into two parcels with 1,350 +- feet on the south end of said parcel and 1,550 +- feet on the north end. These two parcels joined to form one parcel of rear land property. Approximately 3 +- acres of this land were cleared in the south frontage area and had been improved by the construction of a service station. There was a sandpit located in the cleared area. Other portions of the road frontage could have been cleared and improved. However, the area to the rear of the road frontage must be considered wooded mountainous terrain, typical of the Adirondack area.

Area "B" contained 232.09 +- acres of land located on the west side of Route 9 and the south side of Blue Ridge Road. There were 1,400 +- feet of Route 9 frontage and 4,300 +- feet of Blue Ridge Road frontage. The area west of Route 9 and east of the Schroon River, the developed area, was located on three descending plateaus. The road frontage was generally at grade with the highway (920 +- feet above sea level) for a depth of 40 or 50 feet where it sloped gently down to another plateau. Claimant had constructed a motel, parking area and entrance drives on the first plateau. A restaurant-gift shop, entrance buildings, office, warehouses, a 30 foot by 100 foot billboard, large parking area, and a 1 +- acre swimming pond, had been developed on the second plateau. At the rear of the parking area and entrance buildings the land sloped down to the Theme Park location (880 +- feet above sea level) and remaining generally level to the east bank of the Schroon River (860 +- feet above sea level). The Theme Park developed area contained numerous buildings and improvements.

The land west of the Schroon River and north and immediately south of the West Branch of the Schroon River in Area "B" sloped gently uphill to the east end of Palmer's Pond (880 +- feet above sea level). Blue Ridge Road runs fairly close to the north boundary of Palmer's Pond and about 15 feet above the pond level. The south frontage along Palmer's Pond was above the grade of the Pond but was developable frontage. The land south of this frontage sloped fairly steeply uphill to a high point approximately 1,200 feet above sea level. The east frontage, 500 +- feet, of the pond was slightly above pond level. There was a total of 3,400 +- feet of pond frontage. The pond, within claimant's boundaries, covered 18 +- acres and extended for a short distance westward onto lands owned by other parties. The improvements west of the Schroon River in Area "B", which we shall refer to hereafter as the Palmer Pond Section, included a one-and two-story frame farmhouse, about 65 years old and in fair condition, with a stone and concrete foundation and full basement and contained six rooms and bath on the first floor and five bedrooms on the second floor; a one-story frame barn, in fair condition, 1,300 +- square feet, with an attached horse stall and roofed open shed; four small frame sheds in poor condition; two small frame sheds in fair condition; and, a power house, approximately 50 years of age, of frame construction on a poured concrete foundation with water passages built into the foundation. It contained an S. Morgan Smith Co. turbine, 48-inch input, and a General Electric alternating current collector generator, along with a control panel, knife switches, meters, and circuit breakers. There were 23 concrete flume supporters which ran from the powerhouse to the dam, which impounded the waters of Palmer's Pond. The dam was of solid concrete anchored to granite gorge walls. It was 20 +- feet thick at the base and 4 +- feet thick at the top. Its overall length was 85 +- feet with a spillway of 47 +- feet. The height of the dam was 40 feet with a water drop of approximately 26 feet. The dam was completed with gauge, geared controls, steel rods and control wheels. There were also about 1,000 linear feet of page and barb wire fencing, 100 linear feet of gravel driveway, a 500-gallon septic tank with leach field and numerous springs throughout this section.

Area "C", contained 41.91 +- acres, with broken frontage of 1,300 +- feet on the north side of Blue Ridge Road. Approximately 6 +- acres of the frontage were reasonably level and developable. This section contained a sand bank with approximately 120,000 cubic yards. The rear lands were mountainous, rising to 1,250 +- feet above sea level. There were two dirt woods roads leading into the rear lands. The road frontage was generally opposite and across the Blue Ridge Road from the Palmer Pond Section.

There was no zoning in the Town of North Hudson and subject property was in 1965 assessed at $45,685, which was divided into land at $2,290, water rights at $395, and improvements at $43,000. The equalization rate was 26%.

In 1962, the claimant made an application to the Town of North Hudson for a real property assessment revision. In that application the claimant stated that it would sell its property, exclusive of stock and personal inventory, for $200,000 to $225,000. We were not influenced by this 1962 admission. Very apparently the State appraisers also were not influenced by said application. It was made more than three years prior to the appropriation and substantial buildings and improvements were added to the property during this period. Also, Palmer's Pond was not purchased until March, 1965. As stated in Matter of City of New York (Maxwell) (15 A.D.2d 153, 163): "A certain degree of cynicism is no doubt warranted by the very general practice of landowners who have applied for writs of putting down estimates that vary widely from the claims that ...

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