Case Name: Charles Kuhn, Appellant, v. Erastus C. Knight, as Mayor of the City of Buffalo, and Others, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1906-11-21
Citations: 115 A.D. 837
Docket Number: 
Parties: Charles Kuhn, Appellant, v. Erastus C. Knight, as Mayor of the City of Buffalo, and Others, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 115
Pages: 837–842

Head Matter:
Charles Kuhn, Appellant, v. Erastus C. Knight, as Mayor of the City of Buffalo, and Others, Respondents.
Fourth Department,
November 21, 1906.
Municipal corporations — extension of street railways in the city of Buffalo — competitive bids not necessary — constitutional law — legislative ratification of “ Milburn agreement ” not unconstitutional.
By the so-called “ Milburn agreement,” made between the city of Buffalo and certain local street railways for the purpose of settling controversies between the city and said railways, it was not intended that a party to the agreement in order to extend its lines must enter into competitive bids with other corporations, if the municipal authorities do not deem the competition necessary to the best-interests of the city. The local authorities are not required by such agreement to grant permission for the extension of lines without competitive bids, but they may do so.
As said agreement is expressly excepted from the operation of section 93 of the •Railroad Law, requiring competitive bids for franchises to build street railways in cities of the first class,, the authorities of the city of Buffalo may grant a party to said agreement the right to. extend its lines without entering into competitive bids if the municipal authorities act in good faith.
Chapter lot of the Laws of 1892, ratifying said “Milburn agreement,”, is not in violation of section 18 of article 3 of the State Constitution forbidding private or local bills granting the right to lay down railroad tracks.
Appeal by the plaintiff, Charles Kuhn, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Erie on the llth day of June, 1906,-upon the decision of the court, rendered after a trial at the Erie Special Term, dismissing the complaint upon -the merits.
The action was commenced on the 29th day of December, 1905, for the purpose of having it adjudge'd that a certain resolution or grant, passed by the common council of the city of Buffalo, which purported to give permission to the' defendant, the International Railway Company to construct, extend and. operate an electric railroad in' certain streets of the city, is void; also to enjoin the defendant railway company from exercising any of the privileges given by said resolution. It was' also sought to restrain the city of Buffalo, its commissioner of public works and the park commissioners of said city, from doing or permitting any act in furtherance of or which would give effect to such resolution or grant.
William Burnet Wright, Jr., and Frank C. Ferguson, for the appellant.
'Porter Norton and Charles B. Sears for the respondent railway company.
Samuel F. Moran and Louis E. Desbecker, for the respondents city of Buffalo and others.

Opinion:
McLennan, B. J.:
Upon the merits this case involves a determination of the question.: May the city of Buffalo by action of its local authorities, grant a franchise or permission to the defendant railway company to extend its-lines and for that purpose to construct, maintain and operate a^street surface railroad in certain streets of said -city without requiring or providing that such franchise, grant or permission be sold at public auction to the highest bidder in accordance with the provisions of section 93 of the Railroad Law ?
The question must be answered in the negative unless' the provisions of the "Mil'burn Agreement," so called,-rendered such sale unnecessary, and also unless such agreement was legally ratified by the Legislature. Section 93 of the Railroad Law (Laws of 1890, chap. 565, as amd. by Laws of 1901, chap. 494) must be construed to mean that in all cities of the' first class, of which the city of Buffalo is one? such franchises or grants must -be sold at publiq auction to the highest bidder regardless of the population of such cities, and that such requirement applies to the city of Buffalo, unless the " Milburn Agreement " permits an exception to be made in a case like the one at bar. -Section 93 of the -Railroad Law (as amd. supra) provides in substance that in all cities of the first class the consent given by the local authorities for a franchise to operate a street surfacp railroad in any street, avenue, park or public place must require the same to be sold at public auction to the highest bidder, except that in the section.it is provided: "But nothing herein contained-shall be construed as superseding, repealing or modifying any provision or affecting the terms of a certain contract bearing date January first, eighteen hundred and ninety-two, entered into by and between the city of Buffalo and the various street surface railroad corporations therein named in such contract, except that the provisions of this act as amended, which continue and confirm the consents of local authorities shall apply to street surface railroads in the city of Buffalo, as well as in other cities of the first class."
The contract referred to in such act concededly was the " Milburn Agreement."
Did the " Milburn Agreement," so called, relieve the local authorities of the city of Buffalo from the obligation of selling the franchise in question at public auction and to the highest bidder?
The conditions which led to the making of the "Milburn Agreement " should be understood in order that its true meaning may he ascertained. This could be no more concisely stated than in the preamble to such agreement. Practically it was recited that the conditions in the street car service had become intolerable in the city of Buffalo; that certain corporations had been given franchises without restriction as to the charge which might be exacted for the carriage of passengers; and that as to all no obligation had been imposed as to the transfer of passengers from one line to the other ; that some of such corporations had paid nothing and were under no obligation to pay anything for their franchises; that others of -them were under obligation to pay more than their net earnings; that the street surface railroad business was in confusion, to the serious detriment of the public, as well as of the interests of the railroad companies. The result was the " Milburn Agreement," So far fis important' to note for the purposes of this appeal, it provided for •the settlement of all existing controversies between' the city of Buffalo and-the several street railroad companies mentioned therein. It canceled, all bids and agreements which had theretofore been made as the purchase price of franchises and provided that in lieu thereof . certain fixed percentages should be paid upon the gross earnings of the railroad companies parties to such agreement, and in addition and among other things provided, that all should carry passengers • over any and all of their lines for one fare. The contract then provided : " This contract shall bind the successors and assigns of the parties thereto, and is to be confined in it's operation to the street . railroads owned by said companies now built: or authorized • to be built, excepting that its operation and its terms and provisions may be extended to any future extensions thereof by the mutual consent of the parties hereto, expressed in the form of a resolution of the Common Council approved by the Mayor as to any particular extension and a written consent of the companies filed with the City Clerk."
The learned trial court has found, and we. think the" evidence fairly, justified the conclusion, that the franchise in question consti-. tutes an extension of the railroad owned and operated by the defendant company, resulting from the consolidation of two of the companies parties to the " Milburn Agreement." At all events, there being no certificate to the effect that the case contains all the evidence, we are bound to presume that the finding was supported by sufficient evfdénce.
By the express terms of the " Milburn Agreement " it was provided that by the mutual consent of • the parties thereto " its terms and provisions may be extended to any future extensions." That provision of the agreement must be deemed reasonable, and, therefore, within the contemplation of the parties.. Otherwise, a proposed extension of a line of one of the contracting parties could be practically prevented by a corporation which might bid a sum largely in excess of the value of the franchise, and without regard to the efficiency of the railroad system as á whole. WA think the parties to the "Milburn Agreement" did not intend that if the line or lines of any one of the railroad, companies which were parties to it were to be extended, that such company, would .be compelled to enter into competition with another Corporation for the right to make such extension, especially when the local authorities did not deem such competition necessary in order to serve the best interests of the city. The language of the agreement is not to the effect that the local authorities must grant such extension, but that they may. Rot that they must grant a franchise without the requirement of sale at public auction, but that they may; and if they do so, presumably it is because the interests of the city may be better served by the imposition of other conditions assumed by the grantees of such franchise.
We conclude that under the provisions of the " Milburn Agreement," if duly approved by the Legislature, the local authorities of the city of Buffalo were permitted to grant an extension of the lines owned by any of the companies parties to such agreement, and to permit such companies or their successors to construct, maintain and operate their railroads in streets constituting such extension without selling such grant or franchise at public auction to the highest bidder, where the good faith of such authorities in such action is not in question.
Presumably the city authorities in granting the franchise in' question acted for the best interests of the city, and their action in the premises not being challenged on the ground of fraud or because of faithlessness in the performance of their duty, this court ^ ought hot to be in the attitude of seeking means to thwart their purpose and intention.
The Legislature assumed to ratify and approve the "Milburn Agreement " by chapter 151 of the Laws of 1892, which is as follows : " The contract bearing date January first, eighteen hundred and -ninety-two, and executed on the nineteenth day of January, eighteen hundred and ninety-two, made and entered into by the city of Buffalo with the Buffalo Railway Company, the Crosstown Street Railway Company-of Buffalo, and the West Side Street Railway Company, which adjusts the differences previously existing between said city and said companies, is hereby in all things ratified and confirmed, and all the provisions of said contract are hereby declared to he of full force and binding effect; and the railway companies named as aforesaid are relieved from the payment to the city of Buffalo of all percentages of their gross receipts per annum, except those provided for and reserved in and by such contract,"
It is contended that such act is void because violative of section 18 of article 3 of the Constitution of the State of Kew York, in that it was a local bill and granted the right to certain railroad corporations to lay down, maintain and operate their tracks in the streets of a particular municipality.
The Milburir Agreement," which the'act in question assumes to ratify, did not authorize any railroad company or companies to lay tracks or maintain and operate a railroad in any of the streets of the city of Buffalo. The act, so far as applicable to the. questions involved in this case, simply said: Such railroad companies may lay down tracks in such streets and maintain and operate a railroad, thereon, provided the. local authorities of the city of Buffalo shall consent thereto. We-think it was within, the province of the Legislature to have conferred such power, upon the local authorities of the city of Buffalo.
We conclude that the grant, franchise and permission given by the local authorities of the city of Buffalo to the defendant railway company to extend, maintain and operate its railroad upon the streets, avenues and parks of said city, mentioned in the resolution of the common council referred to, was within the power of such authorities to grant, and that there being no question of fraud raised, or as to their good faith in the premises, their determination Should be regarded as final.
The conclusion reached upon the merits renders it unnecessary to consider the. many other questions raised, by the appellant upon this appeal.
We conclude that the judgment appealed from should he affirmed, with costs.
" All concurred.
judgment affirmed, with costs.