(211 N.Y.S.)

the state tore out their wing dam in about 1826 and erected its own dam for the canal. And such is now the legal presumption because we have no record of any appraisement following the original appropriation; because we have no record of the compensation which the state agreed to pay claimant's predecessors for taking away their wing dam and destroying their water power other than the dam itself; because we have no witnesses who can testify to the actual transactions as they occurred at that time. We must, therefore, as was said in the Fulton Light, Heat & Power Co. Case, have recourse to what was actually done.' The original dam structure, therefore, becomes the record of this transaction. This record discloses the right, and all of the right which claimant or any of its predecessors have had since the state constructed its first dam, or now have to the use of the surplus waters of the Oswego river at this point. And it does not appear that claimant's predecessors down to the time of Barge Canal construction ever contended that they had any greater rights. Claimant has never been entitled to use all the surplus waters of the river not necessary for the canal or for the purposes of navigation simply because its grantors were limited to such portions of that surplus as will pass through 540.5 square feet of openings in the dam at a head of 72 feet, and none of them, therefore, could convey any greater interest." 111 Misc. Rep. at page 48, 181 N. Y. S. 605.

In the light of this background of history which reveals to us how the original water rights of riparian owners on the Oswego river were affected by the appropriations made by the state for the old Oswego Canal, nearly 100 years ago, we may have a clearer understanding of what the claimant's rights are to the use of the waters of the Oswego river on the premises in question. It is plain that this claimant and its immediate predecessors in title never were in possession of those riparian rights appurtenant by law to upland on a nonnavigable stream in its natural state. Those rights, at the time of the building of the old Oswego Canal, were exchanged for what Judge Fennell speaks of in Bulger v. State of New York, supra, as "contractual rights"; that is, the riparian owner agreed to accept a definite amount of water limited by the size of the bulkhead openings in the state dam which he could utilize for power at the increased head available at such dam, and thereafter that amount of flow and head were the limit of his rights to use the waters of the Oswego river.

That was the situation of Charles Fletcher, the immediate grantor of this claimant, when in 1897 the state proposed to raise the crest of the upper Fulton dam about 2 feet; for he realized, apparently, that this change in the elevation of the crest of the dam meant an augmentation of his water power beyond any right which he possessed to have it increased by law. Consequently he gave the state a release, which declares that, in consideration of the state raising this dam about 2 feet, he not only would never file any claim for damages by reason. thereof, but that he would construct the steel bulkheads at his own expense for the state and under its supervision at the west end of the dam, and forever maintain them. And ever since 1897 the owners of

this property have freely enjoyed that increase in head of 2 feet above and beyond any right or power which they had in and of themselves to secure it. After 1897 the crest elevation of this dam was 347.8 feet. Barge Canal datum, and the crest elevation of the lower dam was 331.85 feet, Barge Canal datum.

Thus in 1897 claimant's rights in the Oswego river were fixed by the foregoing dams, assuming for the purposes of this case, without deciding it, that it had a vested right in the 2 feet of additional head it then received by reason of raising the crest of the upper dam. It will be noticed that, when the state raised the crest of this dam in 1897, Fletcher not only constructed the new bulkheads at the west end of the dam, but agreed with the state to forever maintain them. It is possible that this action on Fletcher's part might be held to be a consideration moving to the state sufficient to warrant the court in holding that Fletcher thereby bcame possessed of a vested right in the 2 feet of additional head made available by raising the crest of that dam. However, we do not, at this time, pass on that proposition. Fletcher and this claimant at least have had the benefit of this additional head, whether they have a vested right in it or not. Claimant was not entitled in the language of the Waterford Case (Waterford Electric Light, Heat & Power Co. v. State, 208 App. Div. 273, 283, 203 N. Y. S. 858), "to the natural flow of the stream along his land and its descent, and all the force to be derived therefrom," because the pool of the lower dam prevented it. There was a fall of only about 3 feet from its tailrace, which carried away the discharge from its water wheels to the crest of the lower dam.

In this situation in 1909 the claimant had built up a great woolen mill, which was being operated by its assignor. The power for operating this mill was derived from water wheels in three different wheel pits. Mills Nos. 2 and 3 were operated by three wheels in wheel pit No. 1. Wheel pit No. 2 had seven wheels geared to a shaft 175 feet long extending into the mills, from which power was transferred to the machinery. Wheel pit No. 3 was in mill No. 1, and contained one wheel. Nine of these wheels were 66-inch Hunt wheels, one a 60-inch Hunt wheel, and one a 45-inch Hercules wheel. This was the old type of water power machinery, and according to the state's witnesses practically obsolete. The wheels were inefficient, could not make an economical use of the water, and were not capable of developing the power available at this point on claimant's property.

Such was the situation of claimant and the extent of its rights when on June 19, 1906, the superintendent of public works of the state of New York, pursuant to the provisions of chapter 147, Laws 1903, entered into a contract known as Barge Canal contract No. 10. It provided for the raising of the crest of the upper dam 5 feet and the lower

(211 N.Y.S.)

dam 3.15 feet, for the construction of new bulkheads at the west end of the upper dam in a slightly different location from the bulkheads then existing, for the construction of this canal and lock on the east shore of the river, and six taintor gates, each 26 feet in width, in the upper dam. This contract also provided as follows:

"The rights of owners of water power shall be maintained with as little interference with or interruption thereto as possible."

It was very evident from this language that the state did not intend to "take" or "appropriate" any of claimant's property; and neither before nor during the performance of the work mentioned in that contract was any map or notice served on claimants, apprising them that the state had appropriated any of their property. It was more than three years after the date of this contract before the state contractor interfered in any way with claimant's water power. On July 21, 1909, however, in order to build new bulkheads at the west end of the upper dam, this contractor shut off claimant's supply of water by a cofferdam. This condition of affairs continued until September 29, 1909, about two months, when the new bulkhead gates were completed and thrown open for use. During these two months was the only time in all this construction that the claimant was deprived of its water by the state. Claimant, having ample notice that its water supply would necessarily be shut off during the construction of the new bulkheads, had installed a steam plant to supply the necessary power to operate its mills, so that it was not compelled to shut down while the bulkheads were being built. Then the state work proceeded as follows:

August 16, 1909, state began work of raising lower dam from crest elevation, 331.85, to 335 feet. On November 28, 1909, a portion of the crest of the lower dam, 300 feet long, had been raised to the new elevation. Work was then stopped on the lower dam until August 16, 1913, when the work of raising the crest of the dam to the new elevation was resumed, and completed on November 5, 1913. On July 25, 1912, the work of raising the crest of the upper dam from elevation 347.8, Barge canal datum, to elevation 352.8 feet, Barge Canal datum. was begun. This work was completed November 5, 1912.

It will be observed, therefore, that the first interference with claimant's water power began on July 21, 1909, when its water was shut off by a cofferdam, which condition existed for only about two months; also that the last work of the state affecting the claimant's water power was on November 5, 1913, when the work of raising the crest of the lower dam was completed. It will also be observed that the only actual physical interference with claimant's property, except as the increased elevation of the dams set the water back therefrom to some

small extent more than theretofore upon claimant's lands and structures, that took place during the course of this construction was when the state contractor was building the new bulkheads.

While the head at which claimant could utilize the water was raised 5 feet at the upper dam, yet the raising of the lower dam 3.15 feet backed the water up in its tailrace, and thereby cut down the increase in head to 1.85 feet. The state's experts testify that the net gain in head by the claimant is something over 2 feet, which they arrive at by taking the difference between the elevation of the two pools. However, it is sufficient to say that the net available head of claimant's water power has been increased from about 14 feet to 16 feet or over, which we conclude from the evidence has increased the value of claimant's property by at least $100,000.

The claimant, knowing, years before the reconstruction of the dams took place, just what effect that reconstruction would have on its property, took steps to utilize the increased amount of power that would thereafter be available. It could, at an expense of about $15,000, have raised its water wheels and adjusted them to the new level. But, inasmuch as the rated capacity of its 11 water wheels, when new, was less horse power than could now be derived by an efficient use of the water it was entitled to use at the new head, it became an economical necessity to discard its old, antiquated, and obsolete water power machinery and build a new, modern hydroelectric plant.

On or about September 9, 1912, therefore, it discarded all water power, took out its old water wheels, and sold the 11 of them for $940, and commenced the construction of its new plant. For the purposes of this litigation, claimant concedes that the new hydroelectric plant was completed September 9, 1913. This plant had three units of 1,000 horse power each, which actually develop 1,200 horse power each. Provision was made in the plant for installing two more similar units when needed. All that claimant needs to operate the machinery of its. mill is 1,441 horse power. It has, therefore, a surplus of about 2,160 horse power now, which will be increased to 4,560 horse power when the other two units contemplated are installed.

The net result of the state's reconstruction of the two dams in question, therefore, was to greatly increase the potentiality of claimant's water power, by increasing the head at which the water could be utilized without in any way permanently impairing claimant's property, or the rights which it possessed to the use of the waters of the Oswego river. As we have already pointed out, it was impossible for this claimant ever to obtain any increase in the available head of its water power, unless the state should find it necessary to increase that head for the purposes of the Oswego Canal. This is just what happened by reason of the construction under consideration, and again,

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as in 1897, the owner of this property becomes the beneficiary of the state.

But the present owner, unlike Fletcher, considers that its property, including water rights, has been taken, injured, and destroyed by the aforesaid operations of the state, and demands that the state should be made to respond to it in damages. On March 27, 1914, claimant filed a notice of intention to file a claim against the state, as required by section 264 of the Code of Civil Procedure, then in force. This notice announced the intention of claimant to file a claim against the state for $750,000 "for lands, structures, and water appropriated and the damage done to claimant's mill properties, rights, privileges, and water power known as the Fulton Mills * by the state of New York * * * in the improvement of its canals, etc." On April 2, 1914, claimant filed an amended notice of intention in the same form as the prior one, except that it recited the assignment to it of the claim of the American Woolen Company of New York. On January 23, 1915, claimant filed its first claim against the state. leged, among other things, the following:

* *

It al

"This claim is for the appropriation of property and riparian rights belonging to the claimant and to American Woolen Company of New York, its assignor, by the construction of dams in the Oswego river as part of the plan for the canalization of said river authorized by chapter 147 of the Laws of 1903. The claimant's assignor is a corporation duly organized and existing under and pursuant to the laws of the state of New York. It is the intention of the state to maintain these dams permanently at their present heights, and to raise the level of the water in the Oswego river to the level of the top of these dams, and to acquire and appropriate from the claimant and its assignor the right and privilege so to raise and maintain said dams and the level of the water in the Oswego river at that point.

"As a result of the acts of the state hereinbefore described, and in order to avoid the flooding of power units Nos. 1, 2 and 3, it became necessary for the claimant and its assignor either to install an entirely new water power plant or else (1) to remove the wheels and reconstruct the wheel floors and gear floors at higher elevations; (2) to strengthen or reconstruct the side walls and supporting structures at power units Nos. 1, 2 and 3, including the building of new bulkheads at power units Nos. 2 and 3; (3) to raise and strengthen the side walls of the forebay, in order to resist the increased pressure resulting from the raising of the upper dam. The course actually adopted by the claimant and its assignor was to tear down storehouse No. 2 and to concentrate its entire water power plant in a new building erected about fifteen (15) to twenty (20) feet above the location of the storehouse No. 2, such power plant being of greater capacity than the former plant, and involving an expense to claimant or its assignor, for cost of construction alone, without regard to incidental damages, exceeding two hundred fortyseven thousand three hundred and sixty-five dollars ($247,365) If the new plant had been of the same capacity as the old plant, the total cost of constructing same, without regard to incidental damages, would have exceeded two hundred forty-six thousand four hundred and twenty-five dollars ($246,425). But for the changes made by the claimant and its assignor to 211 N.Y.S.-11