Case Name: The People of the State of New York ex rel. The New York, New Haven and Hartford Railroad Company, Relator, v. The Board of Railroad Commissioners of the State of New York, and Ashley W. Cole and Others, Members of and Comprising the said Board, and the New York and Port Chester Railroad Company, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1903-03
Citations: 81 A.D. 242
Docket Number: 
Parties: The People of the State of New York ex rel. The New York, New Haven and Hartford Railroad Company, Relator, v. The Board of Railroad Commissioners of the State of New York, and Ashley W. Cole and Others, Members of and Comprising the said Board, and the New York and Port Chester Railroad Company, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 81
Pages: 242–249

Head Matter:
The People of the State of New York ex rel. The New York, New Haven and Hartford Railroad Company, Relator, v. The Board of Railroad Commissioners of the State of New York, and Ashley W. Cole and Others, Members of and Comprising the said Board, and the New York and Port Chester Railroad Company, Respondents.
Railroad — construction of, in New York city—decision of the Railroad Commissioners as to public convenience and necesssity — an amended certificate of incorporation regarded as an original where the certificate first filed is void because of non-payment for stock.
Since the- enactment of chapter 10 of the Laws of 1860, which provides, “It shall not be lawful hereafter to lay, construct or operate any railroad in, upon or along any or either of the streets or avenues of the city of New York, ' wherever such railroad may commence or end, except under the authority and subject to the regulations and restrictions which the Legislature may hereafter grant and provide,” and up to the time of the passage of the General Railroad Law (Laws of 1890, chap. 565) the only railroads which could be built in the city of New York were street railroads; the latter statute authorizes the construction in the city of New York of other railroads than street railroads.
The Rapid Transit Act (Laws of 1891, chap. 4, as amd.) was intended to apply only to those railroads which are built exclusively for New York city and within its limits, and was not intended to exclude the application of the Railroad Law of 1890 therefrom.
It is the settled practice of the court to give great weight to the conclusion reached by the Board of Railroad Commissioners upon an application for a certificate under section 59 of the Railroad Law that public convenience and necessity require the construction of a proposed railroad.
April 2, 1901, during the course of the preparations for the incorporation of the New York and Port Chester Railroad Company with a capital stock of §250 000, one Gotshall, who was neither a director nor a subscriber for the stock of the corporation, drew a check on his individual bank account payable to his own order, indorsed it “Por deposit to the credit of the account of the New York and Port Chester Railroad Company or C. O. Mailloux,” and delivered it toMailloux who was a director of the corporation. Gotshall had sufficient funds, in the bank to meet the check, but such check was not certified, nor were any arrangements made by which the fund against which it was drawn was appropriated solely to its payment. The check was intended as the cash payment-of ten per cent of the capital stock which is required by section 2 of the statute. The certificate of incorporation was filed April 3, 1901, and recited that ten per cent of the capital stock had been paid in cash. The check was not presented until April 11, 1901, when it was paid and the amount placed to. the credit of the corporation.
August 20, 1901, the corporation filed what purported to be an amended certificate of incorporation for the purpose, as recited by it, of correcting informalities existing in the original certificate. The so-called amended certificate contained all the matters which are required to be stated in an original certificate.
Held, that the delivery of the check for §25,000 could not be deemed a payment in cash and that, for this reason, the original certificate of incorporation was void;
That the original certificate being void, it was incapable of being amended, but that the court could, and would, treat the so-called amended certificate as an original certificate.
Certiorari issued out of the Supreme Court and attested on the 24th day of - May, 1902, directed to the Board of Railroad Commissioners of the State of New York and Ashley W. Cole and others, members of and comprising said board, requiring them tó certify and return to the office of the clerk of the county of Albany their proceedings had in granting to the New York and Port Chester Bailroad Company a certificate under section 59 of the Bailroad Law.
Henry W. Taft and Edward H. Warren, for the relator.
William C. Trull, Judson S. Landon and Frank Sullivan Smith, for the respondent railroad company.

Opinion:
Parker, P. J.:
The New York and Port Chester Bailroad Company, on the 12th of September, 1901, presented a petition to the Board of Bailroad Commissioners for a certificate, under section 59 of the Railroad Law (Laws of 1890, chap. 565, as amd. by Laws of 1895, chap. 545), that public convenience and necessity required the construction of the railroad proposed in its articles of association, and that all the requirements.of such section had been complied with. The relator above named opposed this application, claiming that the proposed road paralleled their own road, as well as others, and that it was not a public necessity. It also urged before the board certain irregularities and matters of law why such certificate should not be granted. An extended hearing was had, and much evidence taken before the board, and on or about April 8, 1902, the certificate applied for was granted.
The matter now comes np for review before this court, upon a certiorari issued on the petition of said relator.
The objections will be examined in the order in which they were presented upon the argument of this appeal. •
. The relator claims tliat since chapter 10 of the Laws of 1860 was enacted, there has been no law under which a railroad such as the applicant seeks to construct could be organized for operation in New York city.
That act provides as follows: " It shall not be lawful hereafter to lay, construct or operate any railroad in, upon or along any or either of the streets or avenues of the city of New York, wherever such railroad may commence or end, except under the authority and subject to the regulations and restrictions which the Legislature may hereafter grant and provide."
After' such enactment it became the accepted conclusion that no railroad could be constructed in New York city except pursuant to legislation had subsequent thereto. From that date, up to the enactment of chapter 565 of the Laws of 1890, which is the " Eailroad Law" now in force, three general acts were passed under which railroads could be built in such city, and each one of them, so far as it was applicable to the city, had reference to a road the purpose of which was to utilize the streets or public places of the city as and for its right of way. During that time no railroad organized under the general act of 1850 (Chap. 140) could be built in the city, and, therefore, the situation was practically this, that only street railroads could be built in such city.
In 1890 most of the provisions of the general act of 1850 and the three several acts above referred to, viz., chapter 606 of the Laws of 1875, chapter 582 of the Laws of 1880, and chapter 252 of the Laws of 1884, were merged into one act (Chap. 565). In such act one method of organizing a railroad company is provided, viz., the general provisions contained in article 1. In instances where the purpose is to construct a road that shall utilize the streets of a city as its right of way, special provisions and limitations are provided in separate articles devoted to that subject (Arts. 4, 5); and the three acts above referred to, so far as applicable hereto, are repealed (§ 180). To illustrate : Prior to 1890 the act of 1884 permitted the organization of a street surface railroad company in New York city, and contained regulations for its operation and.management. In 1890, that act having been repealed, there would be no act under which such a railroad could be built in Hew York city, were it not that the act of 1890 took its place; and it took its place, not by incorporating within itself all of the provisions of the act of 1884 which provided for the organization of a company for that express purpose, but by providing a general method of organisation for all railroad companies, applicable alike to cities and other localities, and in article 4 of such act imposing upon a company formed to operate a street surface railroad in a city, such regulations and restrictions before its construction as were formerly required by the act of 1884.
The scheme existing before 1890 seems to have been changed, and instead of excluding Hew York city from the application of the General Railroad Law, articles and provisions have been inserted into that general law securing to the city protection which seemed to be lacking in the general law of 1850.
The claim of the relator, therefore, that this general act of 1890 is not a new enactment, but a mere codification of prior laws, is not quite accurate. The general provisions for organization contained in article 1 are not a mere continuation of the provisions of the act of 1850. Hecessarily they are a part of a new scheme whereby the organization of a railroad designed to operate in Hew York city may be had, and hence under them may be done what could not have been done under the act of 1850. Therefore, the general provisions of the act of 1890, under which the applicant herein is concededly organized, are broader in their operation than was the act of 1850, and it is not as if such applicant had been organized under the act of 1850.
The act of 1890 is, in effect, a new scheme and a new enactment, the general provisions of which concerning the organization of railroad companies are applicable to Hew York city.
It is not surprising that when the railroad laws were codified such a change should have been made by the Legislature. The language of the act of 1860 is directed against a railroad "in, upon or along any or either of the streets or avenues of the city," and it is as to such roads "authority " for and "regulations and restrictions" are to be thereafter granted and provided by the Legislature.
Although the courts held that such language applied to a road that merely crossed a street in New York city, as well as to those that sought to utilize a street as a right of way (People's Rapid Transit Co. v. Dash, 125 N. Y. 93), yet it was not altogether clear that such was the legislative intent. It was vigorously urged that the intent of that act was not to exclude the city entirely from the operation of the General Railroad Act of 1850, but to prevent merely the building of a street surface road in the city under the provisions of such general act. In 1890 the Legislature seem to have adopted this view. They, by the act then passed, provide, by its general provisions, for the organizing of companies to operate in the city, and supply, by special provisions in the same'act, that protection, when the road is to invade the streets, that was lacking in the act of 1850. •
It is further claimed that because the applicant has not, and cannot, comply with the provision's of the Rapid Transit Act of 1891 (chap. 4 as amd.), it is not entitled to the certificate for which it asks.
I am of the opinion that such act was not intended to prevent all future railroads terminating at New York city from entering into, and having their stations within its limits, unless they comply with its provisions. It is intended to apply only to those roads that are to be built exclusively for the city and within its limits, and is not intended to exclude the application of the " Railroad Law " of 1890 therefrom.
I conclude, therefore, that the act of 1890 furnishes authority for the organization of a company to operate a railroad- in New York city, such as the applicant herein designs to operate.
It is further urged that because $25,000, being ten per cent of the minimum amount of the capital stock of the company, had not been paid in cash at the time the certificate of incorporation was filed, such filing was void under the provisions of section, 2 of the General Railroad Law (as amd. by Laws of 1892, chap. 676), and hence that the applicant has no lawful organization. Such certificate was filed on April 3, 1901, and it is clear from the evidence taken before the commissioners that at that time none of the stock subscribed for had been paid for in cash. The names of every subscriber for stock, and the amount taken by each, are set forth in the certificate filed, from which it appears that the requisite ten per cent had been subscribed for, and there is ah affidavit annexed to the certificate, made by three of the directors, that it had all been paid for in cash. But, as a matter of fact, not one of such subscribers had paid anything. One Gotshall, who was neither a director nor a subscriber for stock, had,' on the second day of April, drawn his check on the Garfield National Bank against his own individual account for the sum of $25,000, payable to his own order and by him indorsed as follows: " For deposit to the credit of the account of the New York and Port Chester Railroad Company, or C. O. Mailloux." Such check he delivered to Mailloux, who was a director of the company, and undoubtedly he had sufficient funds in bank to meet it, and also intended it as the payment to the company required by such section 2. Mailloux held such check until April eleventh, when it was presented to the Garfield National Bank, and, upon being cashed, the amount was passed to the credit of the railroad company in such bank. Such check was not certified, and very clearly no arrangement had been made with the bank, or in any manner, by force of which the fund against which it was drawn was appropriated solely to its payment. At any time before its presentment, the fund in bank was subject to Gotshall's order, and absolute and final control of it had not been given to the company. Hence, within the decisions, I am of the opinion that such check cannot be deemed a payment in cash. (Matter of Kings, Queens & Suffolk Railroad Co., 6 App. Div. 241; Durant v. Abendroth, 69 N. Y. 148.)
The distinction as to when a check may, and when it may not, be deemed cash is made apparent by the following language used in White v. Eiseman (134 N. Y. 101, 107), to wit: " We think that where the money is actually in the bank to the credit of the special partner, and he gimes absolute cmd final control of it to the general partner, it should be regarded as a payment in cash. The delivery of a certified check to the payee has this effect."
But there is a further fact appearing in the ease, which it is claimed sustains the organization of the applicant.
On the twentieth of August following, an amended certificate of organization was filed with the Secretary of State. It commences with a preamble stating that it is filed for the purpose of correcting informalities existing in the original certificate of April third, and that it is made under the provisions of section 7 of the General Corporation Law (Laws of 1892, chap. 687). It then proceeds and' in form contains all that an original certificate is required to contain, changes, however, being made from the original certificate as to the kind of road to be built, the termini, etc.', and certain portions thereof being entirely omitted. It is signed by the same corporators, the names of the subscribers to stock and the amount taken by each are the same, and the same three, as directors, make an affidavit as to the amount subscribed and paid for in cash, in precisely the same words as were' annexed to the original certificate.. Such last affidavit, however, is sworn to on August 17, 1901.
This application was made to the Board of Eailroad Commissioners after this amended certificate was, so filed, and the applicant now claims, that, if it failed in perfecting a legal organization by the filing of the original certificate of April third, the one filed on August twentieth, may be considered as an original one, and that clearly the $25,000 had been subscribed and paid in' cash prior to that date.
Of course a void certificate could not be cured by amendment, such as was attempted by the applicant, but if we assume, as we must, that the certificate filed on April third was in fact void and of no effect, then all proceedings prior to August twentieth were in fact preliminary to the organization of the company. Until that date, the situation was as if no certificate had been filed, and. I see no reason why, if prior thereto all proceedings required by the statute had actually been taken,, and the certificate then filed contained all that the statute required it to contain, it may not be deemed an original certificate, and operative to effect the organization of the company, even though it was then called an amended certificate by those who filed it. Plainly its purpose was to complete the organization of the Hew York and Port Chester Eailroad Company, and it was not, as a matter of fact, an amended certificate, because there was, as yet, no certificate to amend. Undoubtedly on April eleventh, $25,000 in cash was paid to the directors named in the certificate, as payment for the stock stated therein to have been subscribed for. It was then paid by the bank, upon presentment of Gotshall's check. It was properly paid to such directors, because the statute so requires. And thus the affidavit "annexed to the certificate of August twentieth, and which was verified on the seventeenth,- was in all things correct and true. In my opinion, such payment was sufficient, and the organization of the company was not defective in this respect.
" As to the other objection, taken upon the argument, that public necessity and convenience do not in fact require the construction of the road, it is so peculiarly a question of fact, and depends upon such a variety of considerations, that the determination of the board should not be interfered with by this court. It is the settled practice of this court to give great weight to the conclusion of the board upon such question ; and this is peculiarly a case where their experience, technical knowledge and means of ascertainment should control. (Matter of Amsterdam, J. & G. R. R. Co., 86 Hun, 578; People ex rel. Terminal Railway v. Railroad Comrs., 53 App. Div. 61.)
I conclude that the determination of the Board of Railroad Commissioners should be affirmed, with costs.
Determination of the Board of Railroad Commissioners unanimously confirmed, with fifty dollars costs and disbursements against the relator to the respondent.