The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-06-20
DECISION BY JUDGE Van YORST.
A Twenty Million Bond Suit Against the
Pennsylvania Railroad Company.
The ComPany's Liability as
an IndOrSer.

In question mado by the Commissioners OF the
Sinking Fund.- May l, 1871, and by II certain ferries
their apuurtenances were leased 10 the company
for period OF ten years tho nominal rent OF 81 per
annum, upon the condition OF concession 10 the way
or fares to persons using the ferries during certain
hours OF the day. In complaint alleged that
the city was the owner Of the ferries; that at tho time
or the making OF lease rents OF tho Same we're
pledged TO tho sinking fund to DO applied 70 tho pay
OF tho principal and interest OF tho city stocks
or the benefit relief Of the Inhabitants and tax
payers OF the city of New York; that the defend
ants, from May l, 1851, to May l, 1871,
held a lease from the city of these ferries.
paying therefor aggregate rent OF sos, 600
per annum which rent paid and received for the
OF the Commissioners Of the Sinking Fund.- that at
The time the complained oil was made the ferries
and appurenanccs were WORTH tor term OF ten years
from May 1871, and ought to have produced to the
city rent OF $780, 900 per annum for the OF the
Commissioners of the Sinking Fund.- that by force Of
ordinances OF the CITY, confirmed and ratified by laws
Of the State, 1t was the duty Of the Commissioners OF
The sinking Fund. officers appointed aud designated
by law collect and apply the rents OF these
ferries TO payment Of the interest accruing and 10
accrue on numerous funded debts anu stocks OF the
city OF New York outstanding and held by numerous
persons creditors of the city The cause WAS argued
recently before Judge Van Worst, IN Supreme Court,
Special Term, motion the part Of defendant 70
dismiss the complaint Yesterday the Judge
rendered his In ms opinion o.nao BE-
claimed in reason that tho Commissioners OF the
Sinking Fund could give away valuable franchise,
when had in the past yielded Us rent over
100000 per annum and which was, In iact.
worth $3.50, COO at the time Of tho making Of the
ease that they could make such gralultous dispo-
OF the ferry franchise there existed no reason
why they might not do the with respect to other
property OF the city; that II they could make this
lease at nominal rent upon u condition that persons
using tho ferries during certain hours OF the day
but that they could lease valuable lands and buildings,
owned by the city at collar year, upon the condi-
lion that tho lessees should let the same 10 under ten
ants at low rents at is IN tniest," the Judge con-
.inues "that the Commissioners OF tho Sinking
Fund stood In no such relation to these
ferries to be justified In disposng
Of them at nominal rent, In order that
they might secure advantages to persons using
the same during certain periods They were under no
duty aud mad no power to sacrifice the Interests Of
The inhabitants Of New York aud It's creditors to
secure ana concessions of TINS nature to
limited OF persons travelling The ferries.
Persons appointed or designated by The statute to mold
Official relations 70 municipal corporation ana
charged with specific trusts duties IN respect to
It's properly and It's appropriation, must act IN con-
tormity with the law which appoints or desigaates
them. They can legally perform NO duty other than
that snjolncd reasonably implied from the terms Of
the statute appointing them. he corporation Is bound
only ny the authorized acts OF It's officers and agents.
When they act otherwise 1t IS breach OF trust ana
abandonment OF duty aud the action sell 10 viola
ion OF paoIic policy. II cannot put DC Considered
upon the conditions imposed and above referred TO,
an unlawful withdrawal OF tbs resources which
belong and should be collected for the use or the
sinking fund created for the discharge OF the city
debt" As to the right OF the Court TO cancel the
lease the Judge says:'I cannot find that the plaintiff
has any remedy law. An action OF ejectment can
not be maintained. No action OF cjectment eau DO
brought Tor the recovery ferry franchise, which
ranks as an incorporeai hereditamen. Ejectment
be brought only Tor corporeai Entertainments Inc
right to review the proceeding by ccrtorari. were 1t
otherwise effective is gone In analogy to the l.mta
OF writ OF error the writ Of certiorar VIII not DO
granted after two years. | am, therefore, persuaded
.nat the plaintiffs only remedy IS through TINS action
brought tor u cancellation oil the lease" Alter citing
anumber Of bearing on the right OF the city 10
MAINTAIN its action in this equitable form the Judge
concIudes- think tho action 10 properly brought In
the name Of the municipal corporation, In their own
behalf and IN behalf oi all ana singular the Inhabitants
payers and IN the said city, and In behalf OF
all ana singular the holders OF the public stock
Of the city he contract which was the foundation
OF the lease was made by the Commissioners OF tho
Sinking Fund 1t Is not like the case of private per-
SUNG TO avoid The consequences Of his Individual
acts or 10 have cancelled made by him.
self individually. am of opinion that the mum cipa
corporation stands in such relation TO the properly
question that It may properly ask equity to
examine the validity oil tho conveyances made by
It's officers or persons upon whom duties are cast by
law with respect to 1t, and seek TO nave instruments
and deeds which convey away property TO the injury
OF the taxpayers and creditors, and which VOID
voldabe, cancelled and delivered up, so that the
property may be applied 10 the purposes to
winch II has by law been pledged. would have pre-
ferred TO have suspended decision upon the ques-
hcts presented by the defendants answer on the
merits before mo, ana have then disposed OF the
Ehoe case. Evidence may yet be offered on the trial
which may modify these conclusions and present the
whole a different light But as the counsel Tor
tho defcndent urged that his motion to dismiss tho
complaint made at the opening, should DO FULLY
sidered decided before urther proceed ing with
trial. and such acquicsced In by the plain.
ufs counsel. have been com PEELED to examine tho
complaint and alter giving the best consideration
able the objection urged and the carefully pre-
pared argumenso OF counsel, have come to the con-
cusion already Indicated that tho defendants motion
must he denied"
~ ID
A case involving legal questions OF than ordi-
nary importance and liability by railroad company
70 tho extent Of about $40. 600 900 argued and
submitted before Judge Donohuc, IN supreme Court,
Special Term yesterday. The importance OF the
cause necessarily brought to tho discussion of tho
questions involved counsel OF prominence The plain.
tiff in the represented by Mr.. William A.
Beach and Mr.. Brown his partner; the defendants by
Judge Stanley Matthews, OF Ohio, and Edmund Ran
dolph Robinson, OF this city. The suit was brought
by Augustus c. Brown to enforce against the Pennsyl-
wanna RAILROAD Company payment OF interest coupons,
amounting to $780, but involving the liability OF the
company TO pay the interest and principal
oil all similar bonds In any suit brought by bond.
holder. rho substance Of the complaint is that the
Pttsburg, Cincinnati aud - Louis Railway Company
was formed ny the consolidation OF three different
porations created by the laws OF OHIO West Virginia
and Pennsyvana, and was operating limo Of railroad
from pt,sourg. Pa, TO Columbus, Ohio; that the
Columbus, Chicago and Indiana Central Railway Com
pany was formed by tho consolidation OF Divers cor
poratons, some created ny the laws oil Ohio some by
the laws OF Indiana and some by the laws Of illinois,
and was operating line OF railroad from Columbus,
ONO, 10 Chicago, Ill In January. 1869, lease VAS
made Of the T.. Z. and L. 9. Company the Pitlsburg
Company and the Pennsylvania Railroad Company,
whereby tho Pltlsburg Company took all the
pr perry and franchises Of the c., T. and l.
T. Company for n term OF nincty-nne years.
with privilege OF renewal The income OF the road,
alter deduclng thirty per cent for taxes aud assess
mens, was 10 Ne devoted 10 the payment OF the inter-
est all the mortgage bonds OF the Columbus. Chi
cago and Indiana Central Company TO the extent OF
$50 900 000 In accordance with Their pcctyc caui-
lies aud prlorities After the execution OF the lease
the Columbus, Chicago ana Indiana Central Company
caused 10 be placed the back Of such It's bonds
rs renamed IN IT'S hands the follow ing ndor
Tbe within bond 10 additionally secured by lease OF
the road to the Pittsburg, Cincinnati aud ST. Lou,
Railway Company, and the payment OF the interest