New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-10-22
BELMONT TUBE
SUIT UPSET
COURT OF APPEALS
DECIDES ACTION.
Chief Judge Cullen Says State
Should Haze Been PARTY
IN Franchise Fight.


the Court Of Appeals had reversed the
decisions against the city IN its suit for
the forfeiture OF the Steinway or Bel
mont tunnel franchise.
The suit OF the city was brought
against z. P. Bryan. August Belmont.
Andrew Freedman. James Jourdan. III.
Van R. Kennedy. Walter. Luttzen. W.
c. Oakman. William Barclay Parsons.
John Pierce. George w. Young and the
Long Island Railroad Company.
Under decision OF the Public Service
Commission the city refused to purchase
the tunnel for S7.o0O.O0o. Before the
tunnel was completed the corporate ex-
istence OF the company lapsed on Janu-
ary 1. 1907.
The matter got into the courts. and
the AppelIate Division determined that
the directors Of the corporation acting
as trustees OF the creditors and stock
that portion Of the tunnel which was
completed and enjoining the city from
interfering with such possession
The question before the Court was
whether on the dissolution OF a corpora
ton which Is in default IN performance
Of the conditions under which It holds its
corporate power the franchise can pass
to the trustees
JUDGE CULLEN'S OPINION.
Chief Judge Cullen wrote the opinion
Of the court. declaring that the state In
stead Of the city should have been a
party to this action. saying:
The legal status Of this franchise ana
the rights OF the trustees of the company
70 which they succeeded 70. the property
and structures created in the execution
of the franchise should be determined
only in litigation between the people OF
the state from whom the franchise
sprang and the defendant. wherein a de-
termination viii be binding and con-
elusive on everybody.
In commenting upon the action Chief
Judge Cullen says:
when the Legislature enacted that
the powers OF the corporation should
cease it intended thereby that in the
same contingency the franchises con-
ferred on the corporation should cease.
What possible benefit would accrue
from the dissolution Of a corporation for
failure to exercise it's franchises in
time if the franchise itself Is to. con-
tinue for the benefit Of the stockhold-
ers. who might form a new corporation
and 70 ii transfer the franchise2 This
doctrine cannot prevail It may be thar
public convenience and advantage VIII
best be subserved by allowing the de-
fendants TO complete and operate that
portion of their road which has been in
process of construction.
1T may be that for the permanent
protection of defendants privileges a
general statute is necessary. What the
legal status is of a railroad partly
constructed where the company fails TO
complete it within the prescribed period
has not as yet been determined by the
courts of this state. Treating the case
from the point of view of the Appellate
Division. the statement Of facts was in
adequate to enable the court 70 render
any Judgment"
An official of the Corporation COunsefs
office last night said:
The decision was handed down on
Tuesday. but because OF the Unimportant
looking title. I suppose. word was not
received about the decision till to-day
BY the decision the Court of appeals re-
verses the findings Of the Supreme Court
and the Appellate Division. and decides
that the old Steinway tunnel. purchased
BY Belmont interests and now known as
the Belmont tunnel. goes to the city.
There is. in my opinion. no further ap-
peal possible.
Under section ) of the general rail-
road laws it was compulsory for all
railroads building under franchises to
fulfil their contracts in a limited time.
One of the railroads which secured a
contract and franchise from the city
under this section was the old Steinway
tube concern. Through a legislative act
the contract was extended to January.
1907. The city. seeing that the contract
was not fulfilled. brought suit against
the Steinway- Belmont interests. and the
city lost in the Supreme Court and again
in the Appellate Division.
NO GROUND FOR APPEAL.
'No copy OF the decision has reached
the Corporation CounseFs Office so far.
but we have positive assurance BY wire
that the city wins. So TAR as I can see.
there is no ground for an appeal TO the
United States courts. and unless such
ground can be found the tunnel becomes
city property"
Corporation Counsel Pendleton said
last night that the only word he had
was a fve-wOrd telegram. reading: "De~
Cision below reversed; proceedings dis
missed"
This is very ambiguous" ne said
The first three words indicate that the
city has won. the last two that it has
not. I have --legraphed 70 Albany for
the full text Of the decision, and Il
should be on hand the first thing to-
morrow. I think it probable that the
city has wOn.'