## Facts

- A landowner owned property on both sides of the Neversink River and conveyed parcels to a buyer while retaining other riverfront land.
- The deed for a west-bank parcel imposed a restrictive covenant limiting the parcel’s use solely to construction, operation, and maintenance of a hydroelectric plant and necessary related facilities.
- The conveyance also reserved a hunting and fishing easement benefiting the grantor’s retained land.
- The restricted west-bank parcel was later conveyed to a utility’s predecessor and then to Orange & Rockland Utilities, Inc., expressly subject to the covenant and easement.
- The grantor’s retained land (the benefited/dominant estate) was later owned by Philwold Estates, Inc.; an individual defendant later acquired the benefited land and easement through a partnership withdrawal.
- In 1940, New York City condemned all of the utility’s riparian rights in the river, permanently preventing hydroelectric development on the restricted parcel.
- The utility sought to extinguish the restrictive covenant, alleging the restriction made the parcel economically useless and no longer benefited the owners of the dominant estate.

## Issues

1. Whether a restrictive covenant limiting land to hydroelectric use should be extinguished when condemnation permanently makes the permitted use impossible and the restriction leaves the burdened parcel effectively valueless.
2. Whether an action seeking equitable extinguishment of the covenant was barred by the statute of limitations.

## Decision

- The Court of Appeals affirmed the Appellate Division.
- The restrictive covenant was extinguished because condemnation permanently frustrated the covenant’s purpose and enforcement no longer provided a substantial, practical benefit to the dominant estate.
- The court rejected the trial court’s statute-of-limitations bar, treating the suit as one for equitable relief from an obsolete and oppressive restriction rather than as a time-barred challenge accruing solely at the time of condemnation.

## Legal Principles

- A restrictive covenant may be terminated in equity when external events permanently defeat its intended purpose.
- Courts may extinguish a covenant when it has become useless or provides no substantial benefit to the dominant estate while imposing a severe burden on the servient estate.
- In assessing enforceability of long-running land-use restrictions, courts may weigh present-day benefit against present-day hardship, including whether the restriction renders the burdened land economically unusable.
- For equitable relief from an obsolete servitude, limitations analysis may focus on the continuing operation of the restriction and current conditions, rather than treating a past event as a complete accrual bar.

## Conclusion

The court held that condemnation making hydroelectric use impossible destroyed the covenant’s purpose; because the restriction no longer conferred a meaningful benefit on the dominant estate and effectively eliminated the utility of the burdened parcel, equity required extinguishment, and the action was not time-barred as the trial court had ruled.


Orange & Rockland Utilities, Inc. v. Philwold Estates, Inc., 52 N.Y.2d 253 (N.Y. 1981)