Hydraulic Power Co. v. Pettebone-Cataract Paper Co.

198 A.D. 644, 191 N.Y.S. 12, 1921 N.Y. App. Div. LEXIS 8157
Appellate Division of the Supreme Court of the State of New York·Decided November 23, 1921·Published·Cited by 14 cases

Opinion

Lambert, J.:

These actions involve identical issues and differ only slightly in their facts. They were tried together and come to this court upon a single record. Decision in one necessarily controls in the other.

[646]*646The plaintiff is.the owner of a hydro-electric system at Niagara Falls. By means of a canal it taps the Niagara river above the falls and conveys water therefrom to a basin located on the high bank of the river below the falls. From this basin the water is carried over the bank onto turbines near the river level and thereby much electric power is generated.

The defendants by mesne conveyances (the details of which are not of controlling significance) are respectively the owners of certain water rights, by virtue of which they take and have for years taken quantities of water from such basin and conducted the same to turbines upon their properties and thereby generated electrical power for their own private uses.

The defendants’ title extends only to the edge of the high bank below the falls. That bank is about 215 feet above water level in the river. Between that title and the margin of the stream is the slope of the bank (of varying width) which is owned by the plaintiff.

The turbines of the defendants are located about 100 feet below the top of the high bank and after the water was run onto those turbines it was formerly discharged on the sloping bank so owned by the plaintiff, down which it flowed into the river.

Prior to the making of the contracts of January 1, 1900, hereinafter discussed at length, the plaintiff’s predecessor (The Niagara Falls Hydraulic Power and Manufacturing Company) owned those rights and equities, important here, and which, it is now claimed, have passed to this plaintiff by virtue of a merger of such predecessor into the present plaintiff corporation.

The controlling element in these litigations is to be found in the construction and effect of two certain contracts between plaintiff’s predecessor on the one part and the defendants respectively on the other, which contracts were made as of January 1, 1900.

Prior to the making of those agreements (which are substantially identical in form) controversies had arisen between plaintiff’s predecessor and each of the defendants respecting the past usage by such defendants of water from such basin. There was then pending at least one litigation arising out ■of such controversies and the respective rights of the parties [647]*647had led to numerous and conflicting claims. After considerable negotiations and with the aid of able counsel upon each side those contracts were made.

Such recite the pendency of differences and disputes and of a suit involving the relative water rights of the parties and a purpose to adjust all such matters in such contract. Such contracts definitely fix the quantity of water to which each of the defendants is entitled, in cubic feet per second. They fix payment for excess water used in the past and detail at great length the methods and agreements for the measuring of the water to be used in the future. They then treat of the matter here involved and in connection therewith recite as follows:

“ And whereas, it is contemplated by said party of the second part, that it will sometime in the future construct a tunnel, flume or other conduit along or within the easterly bank of Niagara River for the purpose of collecting the water discharged by the mills operating on the top of said bank, and otherwise flowing over said bank, and of accumulating such water and making use of the same, in the development of power on the lower portion of said bank.”

Then therein follow detailed provisions which accomplish the following results:

First. The granting of a right to construct the tunnel and appurtenant constructions for the collection and utilization by plaintiff of the waste water from defendants’ turbines.
Second. Provision for contingencies of construction, operation and repair.
Third. Provision that such tunnel should be at least seventy-five feet below the surface.
Fourth. Provision for submission of plans and sketch to the defendants, prior to the commencement of construction.
Fifth. Provision for written objection by the defendants within thirty days.
Sixth. Provision that, upon the occurring of differences as to the practicability of the plans submitted, the engineers of the parties should confer in attempting an adjustment.
Seventh. Provision that, if such engineers should be unable to agree, then that a third engineer should be called in.
Eighth. That if there should arise inability to agree upon [648]*648the third engineer, then that such third engineer should be the chief engineer of the Holyoke Water Power Company.
Ninth. A general acquittance between the parties.
Tenth. A provision in the following words: “It is hereby mutually understood and agreed that this agreement shall bind and inure to the benefit of the parties named and also to their respective successors and assigns.”
Eleventh. A provision in the following words: In case of the sale by said party of the second part of all its property and franchises to a corporation which shall assume its liabilities, and it shall thereupon be deemed advisable to dissolve said party of the second part, it is further agreed by said first party that in such case it will consent to the substitution of said purchasing corporation in place of said second party, and will look to it, said purchasing corporation, for the fulfillment of all the obligations which it shall assume.”

In 1914 (nearly fifteen years after the delivery of such contracts) (the plaintiff’s predecessor having then been merged into the plaintiff) plaintiff served written notice on the defendants of its purpose to commence construction of the tunnel and appurtenances, and submitted a sketch in connection therewith. Very clearly, this was an effort upon the part of the plaintiff to literally comply with the provisions of this contract and embodied the assertion upon its part of its ownership by succession to the rights of its predecessor thereunder.

Both defendants immediately adopted a position antagonistie to that on the part of the plaintiff and, after various correspondence on the subject, definitely took the position that each repudiated said contract and all of its provisions and such defendants refused to join in any engineering conference and entirely failed and omitted to participate either in conference or in the selection of a third engineer. After waiting the period of time contemplated by such contract the plaintiff called in the chief engineer of the Holyoke Water Power Company and that engineer and the engineer of the plaintiff passed on and approved (with some slight modification) the contemplated plans of plaintiff for the construction of such tunnel.

It is thus seen that the plaintiff in the detail of the establish[649]*649ment and adoption of its plan of construction has followed specifically the provisions of such contract.

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Hydraulic Power Co. v. Pettebone-Cataract Paper Co., 198 A.D. 644, 191 N.Y.S. 12, 1921 N.Y. App. Div. LEXIS 8157 (N.Y. Ct. App. 1921).

198 A.D. 644 (Hydraulic Power Co. v. Pettebone-Cataract Paper Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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