Case ID: ad_50/html/0025-01.html
Source: Caselaw Access Project
Author: {"author": "Spring, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John A. Barhite, Appellant, v. The Home Telephone Company of Rochester, N. Y., and Others, Respondents.
    
      Judicial interference with the act of a municipal corporation in granting a franchise— what charges of fraud and illegality are insufficient — the grant is the exercise of a police power.
    
    The courts are chary of entering into a judicial investigation of the reasons actuating a municipal body in granting a franchise, upon a charge that they were inspired by corrupt motives.
    The simple fact that one man or set of men, of doubtful or unknown financial credit, offer to bid more for a franchise- to install a telephone system in the streets of a city than a competing corporation of known financial strength, does not require the common council of the city to accept such offer or to sell the franchise at public, auction, where the latter course is not made obligatory by the city charter.
    An allegation, contained in the complaint in an action brought by a taxpayer to obtain an adjudication that the resolution of the common council granting the franchise and the contract entered into in pursuance thereof were illegal, to the effect that the conduct of the common council was fraudulent and that the contract was illegal, not coupled with any allegations of fact in support thereof, does not constitute an issuable averment.'
    An allegation that the common council was actuated by a purpose to favor the corporation is not an averment of a distinct fact upon which a charge of fraud or collusion can be hinged.
    An averment that the mayor of the city attended the meeting of the special committee having the matter in charge and unlawfully voted thereat, is of no consequence, as the power is vested in, and exercised by, the common council.
    
      Semble, that the power to grant a franchise for the installation of a telephone system in the city of Rochester is vested in the Legislature, and that the power of the common council of that city in the premises is limited to the regulation, under its police power, of the manner in which the franchise may be exercised.
    Appeal by the plaintiff, John A. Bar hite, from an interlocutory judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Monroe on the 26th day of September, 1899, upon the decision of the court, rendered after a trial at the Monroe Special Term, sustaining the defendants’ demurrers to the plaintiff’s complaint.
    
      John, A. Barhite, for the appellant.
    
      George F. Yeoman, for the respondent, the Home Telephone Company.
    
      Porter M. French, Corporation Counsel, for the other respondents.
   Spring, J.:

The plaintiff is a taxpayer of the city of Rochester, and commenced this action April 21, 1899, pursuant to chapter 301 of the Laws of 1892, amending chapter 531 of the Laws of 1881, and section 1925 of the Code of Civil Procedure, to obtain a judicial determination that the contract set forth in the complaint and a resolution of the common council authorizing the same were illegal, and to enjoin the defendants from carrying out the same. The complaint, which is very voluminous, sets forth that the common council of the city of Rochester, on the 11th day of April, 1899, adopted a resolution granting to the defendant telephone company a franchise for its system in said city, and empowering and directing the mayor to execute a contract which had been prepared therefor, and a copy of which is contained in the complaint; that in compliance with such authority and direction said contract was duly executed and delivered by said mayor and said telephone company, and that said telephone company has already begun to carry out the same; that while said subject was pending before said common council, one Fred Gleason presented to said body his petition in which he purported to represent others, mainly citizens of Rochester, who were associated together in the enterprise outlined therein and offered for the said franchise which it was then intended to grant to the said Home Telephone Company the sum of $15,000, and to accept and perform the said contract. Said petition further contained an offer to bid for said franchise in the event that said common council determined that more than said sum could be obtained for such franchise ; and further agreeing to support its offer by “ bond, cheque or deposit of money ” for the faithful performance of any agreement entered into by said petitioner and his associates. The complaint avers that Gleason personally and by attorney supplemented his petition by appearance before the committee having the special charge of the consideration of the granting of the said franchise, and solicited the granting of the same to him and his associates, and that said franchise should be sold to the highest bidder therefor. The complaint further charges that said common council and the said special committee “ wrongfully, unlawfully, fraudulently and collusively, and in violation of their duties as officials of the city of Rochester, * * ignored the said petition * * * and refused to grant a franchise to said Gleason, and refused to grant said franchise to the person, persons or corporation who would pay the largest sum therefor to said city, and wasted the property and funds of said city for the purpose of favoring the defendant, The Home Telephone Company of Rochester, N. Y.; ” that while said lamp committee had said matter under consideration it “ wrongfully" and unlawfully ” permitted the mayor of said city and others to be present at its sessions, and to urge the execution of said contract with said defendant telephone company, and allowed said mayor to vote as a member of said committee upon the question of granting said franchise,, although not a member of said committee; that the construction and operation of said telephone system will be attended with danger to the citizens and their property for reasons set forth in said complaint. It is further alleged that the recommendation of said lamp committee was “ illegally, fraudulently and collusively adopted by said common council, and without a knowledge of the contents of said contract on the part of many of the members of said council who voted in favor thereof, and that said resolution and said contract were and are illegal, fraudulent and void, and "that the construction, maintenance and operation of a telephone system under and in pursuance of said contract would waste and injure the property and funds of the city of Rochester; ” that said resolution was adopted hurriedly and without the two weeks’ notice of such action provided for in the rules of said common council, unless the same is by the unanimous consent of said board, which was not given on the passage of this resolution ; that the resolution and contract were illegal and void and contrary to law, and against public policy.

This, in condensed form, is the complaint, and it is apparent it is meager of facts on which to hinge the charge of fraud. The common council of the city is its legislative body, and within its sphere of action its legislative cognizance is supreme and cannot be fettered or obstructed by judicial interference. (Kittinger v. Buffalo Traction Co., 160 N. Y. 377; People ex rel. Sturgis v. Fallon, 152 id. 1, 11.)

Judge Cooley, in his work on Constitutional Limitations (6th ed.), in discussing the independence of a legislative body from •interference by the courts, says at page 229: “ Restraints on the legislative power of control must be found in the constitution of the state, or they must rest alone in the legislative discretion. If the legislative action in these cases operates injuriously tó the municipalities or to individuals, the remedy is not with the courts. The courts have no power to interfere, and the people must be looked to, to right through the ballot-box all these wrongs.”

The charter of the city is the offspring of the Legislature. It vests the municipal body with legislative authority, because that delegation is deemed wise and practical on the assumption that the citizens of the municipality and its officers can better legislate for its inhabitants than the State Legislature. It is in furtherance of home rule, and is a normal product-of the principle of self-government. The transmission of this power vests in the local legislative body, within its restricted range, the same plenary force as if retained and executed by the Legislature itself, but it must be borne in mind that the power vests only by explicit warrant. As was said in People ex rel. Wakeley v. McIntyre (154 N. Y. 628), in construing a cognate delegation of authority: “ Within the limits of this delegated power the board of supervisors is clothed with the sovereignty of the state, and is authorized to legislate as to all details precisely as the legislature might have done in the premises.” (People ex rel. O’Connor v. Supervisors, 153 N. Y. 370; City of Buffalo v. N.Y., L. E. & W. R. R. Co., 152 id. 276.)

There is a class of cases where the authority exercised by the common council, though delegated by the Legislature, is purely administrative in its character, where a different rule prevails. (See Weston v. City of Syracuse, 158 N. Y. 274.)

If courts, even in a case of palpable fraud, possess the power to interfere and restrict a body executing its legislative authority within its prescribed compass, that power will be exercised only in an extraordinary case, and when public policy imperatively requires it. If the courts, on every general charge of fraudulent, collusive conduct against the members of a municipal body with delegated legislative power, should intervene to restrain the execution of its normal duties thus delegated, the clashing between the two co-ordinate branches would be fraught with immeasurable harm. The policy of our Constitution is to keep these two branches distinct, each to be supreme in its own domain, and transgression upon the province of the one would invite a like trespass upon the other until the barriers separating the two would be wholly removed.

In the present case the only fact upon which the charge of fraud hinges is, that the common council declined to accept the proposition of Mr. Gleason, involving, as it is claimed, loss to the city of $15,000. The petition presented did not apprise that body what the occupation, residence or responsibility of the petitioner was. It was significantly silent as to the names of his associates and their ability to undertake and perform this contract of so great importance to the city of Rochester. The defendant telephone company was a body corporate, and that it possessed the financial strength to execute successfully the obligation to be imposed by the contract was probably known to the members of the common council. That body was intrusted with an important duty and in its performance had a wide discretion. The simple fact that one man or set of men of doubtful or unknown financial credit offered to bid more than a competing company for a contract that was to be of permanent benefit or detriment to the citizens of the city,’ did not require the common council to accept that offer if its judgment favored another company. The larger sum bid in this case was not the all-controlling, determining factor. Other circumstances entered into the question, and the body intrusted with the granting of this franchise, in the fulfillment of its obligations to its constituency, was hound to weigh all the various considerations and then to decide what was for the best interests of the city, and when that decision was reached and made effectual by the agreement, its action could not be disturbed. There is nothing in the city charter making a sale at public auction obligatory upon the common council. The manner of the sale is wholly in the discretion of that 'body whenever it' possesses the right to sell. To be sure, the complaint imputes fraud and collusion to this body, but an analysis of the facts upon which the sweeping condemnation is based fails tó support it. As was said by Chief Judge Parker, in Kittinger v. Buffalo Traction Co. (160 N. Y. supra, at p. 387), in regard to a similar averment: “ Impressive as this allegation is when first read, it will be found on analysis not to .allege a single fact which would legally support a conclusion that any member of the common council was bribed, or that he voted in favor of the consent through promise of gain to himself or others.”

The bare allegation that the conduct of the common council was fraudulent, or that the contract was illegal, does not state an issuable fact. (Talcott v. City of Buffalo, 125 N. Y. 280.)

It is a conclusion entirely proper to be stated in summing up an array of' facts which support the general charge; but, independent of any fact to uphold it, it is of no weight.

It is contended that the allegation that the request of Mr. Gleason was ignored “ for the purpose of favoring the defendant, The Home Telephone Company of Rochester, N. Y.,” is an averment of a distinct fact upon which the charge of fraud or collusion can be hinged. It is a bald statement without any coincident fact to justify it, and the favor ” may have been from the worthiest of motives. It is inadequate in any event to warrant a judicial investigation into the reasons actuating a municipal body in granting a franchise on the charge it was inspired by corrupt motives — a field the courts are chary in entering. The averment that the mayor attended the meeting of the lamp committee and voted thereat is of no consequence as the power was vested with and exercised by the common council. Even if the interference of the mayor were unauthorized there is no suggestion he continued to exert his influence over the council itself, and no fact is alleged in the complaint from which we can spell out any improper, corrupt intermeddling with the granting of this franchise to the defendant telephone company.

But beyond this we are decidedly of the opinion that the city of Rochester had no franchise to sell. As has been suggested, the tendency of modern legislation is to transmit to the local authorities the exclusive dominion over the streets of the respective municipalities, but the transmission of that authority must be evidenced by specific warrant, for the power is in the State primarily. (Skaneateles W. W. Co. v. Village of Skaneateles, 161 N. Y. 154,165 ; Ghee v. Northern Union Gas Co., 158 id. 510; Adamson v. Nassau Electric R. R. Co., 89 Hun, 261.)

In every instance, so far as I have been able to discover, where the consent of a municipal body has been held to be a necessary preliminary to the occupation of its streets by a corporation, that consent has been based upon the delegation of power by the Legislature. In the Transportation Corporations Law (Chap. 566, Laws of 1890), pipe line corporations (§§ 45, 46), gas and electric light corporations (§. 61, subd. 1), water works corporations (§ 80), and others enumerated in this act, are required to procure the consent or permit of the street-governing body before any right to the use of the street ’exists in the corporation.

By the same act (§ 102) the right of telegraph and telephone corporations to use the public streets and highways for the construction and maintenance of its lines is given in unmistakable language and the consent of the local body is not required. This franchise, therefore, comes directly from the Legislature to the corporation.

By amendment to the charter of the city of Rochester, enacted in 1894 (Chap. 28, § 8, amdg. subd. 7 of § 40 of said charter), authority is given to the common council “ to regulate and control the erection, construction, laying, stringing, maintaining and removing of all wires, cables, poles, conduits and subways upon, over and under the streets, avenues, lanes, squares, parks, bridges, aqueducts and public places within said city.”

This provision does not relate to the right to the use of the streets, It is no infringement upon the power vested in the State Legislature to grant the franchise to telephone corporations. When a corporation of this kind is to avail itself of the legislative grant, the manner of its exercise, the location of its poles, the stringing of its wires, etc., are within the control and regulation of the local legislative body. That is one of the police functions committed to the municipality. This right of regulation is, however, entirely distinct from the original granting of the privilege. It is subordinate to that right. The local body has no authority to intervene until the corporation is seeking to exercise the privilege accorded it by the State, and then not to enjoin such exercise if within the letter of its authority, or to exact compensation for the franchise, but to protect the citizens and the public. It may intercede to reduce to a minimum this interference with the public usei-, to require that the privilege shall be exercised most beneficially to all people interested, or for any other purpose involving “ control and regulation ” by the local authorities. But this intervention recognizes the franchise as existing in the corporation.

The interlocutory judgment sustaining demurrers should' be affirmed, with costs of this appeal to each respondent and with leave to amend.

All concurred; Laughlin, J., concurring in result only.

Interlocutory judgment affirmed, with costs of this appeal to each respondent.