The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-01-03

the city's investment in property leased
to the Il. r. T. system. Mr.. Whitneys ,
statement follows:
Following a conference at the Office
OF the Public Service Commission on
Wednesday, ex-Judge william l.. Ran
som. formerly counsel to the com
mission and retained on b. r. T. ,
matters, had a conference Thursday
morning with Judge Mayor with re-
| spect to an application by the Public
, Service Commission for the appointment
, of joint receiver of the New York
Consolidated Railroad Company and ,
the New York Municipal Railway |
| Corporation.
1.-THE commission considers that, as
| Contract 4 Zone of the dual contracts) !
| imposes obligations upon the commission
with respect to financial matters, 1t Is
under a duty to ask the Court to APP !
point joint receiver. 1t was stated
by Judge Mayer, after ex-Judge Ran
| som lad left the conference with Judge
Mayer. that an application would be
SO made on January Is. which is the
return day before Judge Mayer of the
| temporary receivcrship
| Under the dual contracts, the gross
| receipts are used first, for the payment
of operating expenses, maintenance
expenses. fixed charges on the companys
investment preferential and then fixed
the commission Is given the right to
check and audit the financial accounts
OF the companies to make sure that
only proper deductions are being made
from the gross revenues in order that
the city's investment may be protected.
The two companies in question are us
ing rapid transit lines upon which the
city's expenditure amounts to over
500. 100000, and it is the protection
of this interest that causes the com
mission to make the application TO the
Court"
Decision Against Higher Fare.
Judge Chatfield in the Federal Court
In Brooklyn rendered yesterday dec
sion which denied the application of the
receivers of the North Side Traction
| Company Of Queens for permission to
increase the fare on their lines from 5
cents TO cents. This decision is ex-
pected to have an effect on tho efforts
of all rapid transit companies to get
higher fares.
In the case OF the North Shore Trac-
ton, the franchise fixed specific rate
and Judge Chatfield set forth that the
, court had no power to increase fares
when the rates are thus specified In
. franchises. The remedy. according to
Judge Chatfield. IS for the company to
apply to tho Board Of Estimate and the
) Public Service Commission for modifica-
: ton of the franchise. Judge Chat field
, in his opinion said in part:
''In other words the receivers have a
= property right 20 hold and operat" A
) cent fare collecting business. with its
Y physical accessories and implements. but
= il cannot he put to other use without the
, making Of another contract. This court
= has not the power to force such new
. contract on the city, or 10 regulate fares
I upward beyond he limits fixed by the
V contract creating the right to act at all.
2 The court has not the power 10 ttN the
y rate at which the city must allow the
I | road TO be onerated.
Nor can the court proceed to exercise
the franchise by holding it unconstitu-
tonal.
. Can Prevent Breach of Contract.
e There is no vested right TO operate a
e road for public convenience. unless that
y right be the one which the contract eS-
i tablishes. Tho court may prevent a
}, breach OF contract hy the city in rcduc-
= ing rates. II NAV hold a statute unconsti-
= tutional, as confiscatorv, II a proceeding
e Is brought under Section 266 OF the
Judicial Code. but Il cannot abrogate a
d contract by holding unconstitutional the
l. law under which the contract is made
n thereupon enlargiug the terms of tbs
= contract. in order to avoid consequence:
q Of ceasing to act under the contract
= Nor should the court order its receiver:
= to treat the public unequally by allow
r ing them 70 collect an excess fare from
n thoae passengers who do not refuse e
e pay.
y 1.-The remedy must he sought by april
q cation to the city or tnsthe Public Ser
wee Commission for a modification q
!, the franchise. ii the receivers deem Il e
:, the interests OF the creditors 10 continue
u the franchise rather than liquda Thu
:. rights and convenience Of the puhlt
n must he looked on; for by the receiver
:. and the city, from N" standpoint Of th
y consequences II tho receivers stop uper
atlng, bat the end VIII u't justify h
means So as II give the CONT jur sdis
ton to prevent the proper authority from
" deciding what franchise the publ!
should grant for It's own welfare.
Tho application must ne denied hu
without thereby preventing or h!1derin
d the receivers from seeking any source o
u relief from the Terms Of the fraTchis
themselves.