On appeal from the Supreme Court.
For the plaintiff-appellant, Charles H. Stewart.
For the defendant-respondent, King & Vogt (Elmer King).
The opinion of the court was delivered by
BODINE, J. The plaintiff sued to recover damages for an alleged breach of a warranty contained in a deed with full covenants. The jury returned a verdict of no cause of action. The deed is dated June 7th, 1928, and refers to a diagram annexed to a contract of sale dated June 7th, 1926. The description of the lands conveyed is as follows: "Beginning at the fifth corner mentioned in a deed from Chester P. Grassmuck and Louise M. Grassmuck to said Susie Banghart, dated the 4th day of March, 1926, and recorded in the Sussex county clerk's office in book 290 of deeds at page 128 and running thence (1) along the said fifth course mentioned in said deed south 14 degrees, 50 minutes east along an old fence one hundred and seventy (170) feet more or less to the edge of the reservoir of the Morris Canal and known as Lake Musconetcong, thence (2) along the edge of said reservoir and known as Lake Musconetcong in a westerly direction two hundred and one (201) feet, thence (3) north twenty-five degrees east two hundred (200) feet, more or less, to the southerly line of Musconetcong Avenue, thence (4) along the southerly line of Musconetcong Avenue north seventy-six (76) degrees thirty (30) minutes east fifty (50) feet to the point or place of beginning."
The diagram shows the courses called for in the description. After the plaintiff entered into possession she was informed that title to the lands between the reservoir mentioned in the first and second courses of her deed and a point approximately fifty feet to the north, was vested in the State of New Jersey. She thereupon procured a lease for such lands and brought the present suit.
The state's claim to the lands was predicated upon the charter of the Morris Canal and Banking Company and conveyances
made to it. The Morris Canal and Banking Company was incorporated in 1824. Pamph. L., p. 158. Section 26 of the act provides as follows (page 170): "That at the end of ninety-nine years from the passing of this act, it shall and may be lawful for this state, to take to itself, and on its own account the said canal and its appurtenances, paying to the said company the fair value thereof, to be estimated and fixed upon by ten commissioners or a majority of them, to be mutually chosen by this state and the said company; or in case that shall not be done at that time, or within one year thereafter, this charter shall continue so far as respects its canal operations and privileges for the further term of fifty years, when it shall cease, and the said canal with its appurtenances become the sole property of this state."
In 1924, the legislature authorized the Morris Canal and Banking Company to discontinue the use of its canal as a means of transportation by water. Pamph. L. 1924, p. 506. The act also provided: "The rights vested in the Morris Canal and Banking Company to impound and divert waters of lakes, ponds and streams, and the property and rights vested in the said company in * * * Lake Musconetcong (otherwise known as Stanhope Reservoir) * * * together with all such lands, easements, rights and other property, the title to which is vested in the said company in trust for the State of New Jersey * * * shall be retained by the said company in trust for the State of New Jersey, for the public use of conserving the public waters of the state, and shall be and are hereby dedicated to such public use * * *."
When the canal was chartered, railroads were unknown. The legislature regarded the creation of such a public highway as of so much importance that the franchise must be limited. The right to an interest in reversion or remainder was preserved to the state. McCarter, Attorney-General, v. Lehigh Valley Railroad Co., 78 N.J. Eq. 346.
The canal company acquired title to the lands in question by deed dated December 16th, 1846, from Charles Brooks, and wife, the description being by metes and bounds. The instrument is ...