Case Name: Armstrong v. Grant, Mayor, et al.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1890-03-28
Citations: 9 N.Y.S. 388
Docket Number: 
Parties: Armstrong v. Grant, Mayor, et al.
Judges: 
Reporter: West's New York Supplement
Volume: 9
Pages: 388–392

Head Matter:
Armstrong v. Grant, Mayor, et al.
(Supreme Court, General Term, First Department.
March 28, 1890.)
Public Oeeicees—Injunction—Board oe Electrical Control—Waste.
A proposed contract between the board of electrical control of New York city and the Standard Electric Subway Company omitted all reference to a resolution previously adopted by the board designating the streets and avenues on which, and limiting the time within which, subways for the accommodation of electric wires were to be constructed by the company. The proposed contract provides that all disputes as to the use of the subways shall be referred to the board of control, while Laws N. Y. 1887, c. 716, from which the board derives its authority, provides for the settlement of such disputes by the justices of the supreme court or the judges of the court of common pleas or superior court. The proposed contract also gives the city the option to purchase the subways, subject to all incumbrances placed thereon by the company, without limitation as to the amount, while the act declares that the incumbrances at the time of the purchase of the subways by the city shall not exceed 50 per cent, of their cost. Held, that the execution of the proposed contract by the board should be enjoined at a tax-payer’s suit, as it is illegal and wasteful within the meaning of Laws N. Y. 1887, c. 673, which authorizes the prosecution of an action by a tax-payer against the officers or commissioners of any municipal corporation “to prevent any illegal official act on their part, or to prevent any waste or injury ” to the property or funds of the corporation.
Appeal from special term, New York county.
Action by George E. Armstrong for an injunction against Hugh J. Grant, mayor of the city of New York, Jacob Hess, and Theodore Moss, constituting the board of electrical control in and for the city and county of New York. Plaintiff appeals from an order denying a motion to continue a preliminary injunction.
Argued before Van Brunt, P. J., and Brady and Daniels, JJ.
Elihu Root and Delaney Nicoll, for appellant. W. H. Peckham, W. N. Cohen, and D. J. Dean, for respondent.

Opinion:
Per Curiam.
This action has been brought by the plaintiff, who is a taxpayer of the city of Hew York, upon property assessed for an amount exceeding the sum of $1,000. The object of it is to prohibit and enjoin the making and execution of a contract proposed to be made between the Standard Electric Subway Company and the board of electrical control in and for the city of Hew York, created and authorized to act under chapter 716 of the Laws of 1887. The plaintiff placed his right to maintain the action upon the authority created by chapter 673 of the Laws of 1887. This act authorizes any person, or number of persons whose assessments for the payment of taxes upon their property shall exceed $1,000, upon giving the security therein mentioned, to prosecute and maintain an action against all officers, agents, commissioners, and other persons, acting for or on behalf of any county, town, village, or municipal corporation in this state, and each and every of them, to prevent any illegal official act on their part, or to prevent any waste or injury to, or to restore and make good any of, the property, funds, or estate of such county, town, village, or municipal corporation. The act as it has been in this manner adopted is-very broad and comprehensive in its provisions. Its object seems to have been to vest the tax-payer with the authority of restraining not only municipal corporations in the state, but their officers from violating the obligations- and duties of their trusts, by any illegal official act, or any act which would) cause waste or injury to the funds, property, or estate of the municipality. And if the contract which is proposed to be made between the board of electrical control and the Standard Electric Subway Company would be either illegal, or produce waste or injury to the property of the municipality, then the plaintiff, as a tax-payer, is invested with the right to maintain and prosecute the action.
The objection has been taken that other parties should have been brought into the action to enable the plaintiff to maintain it under the authority of this statute. But if this objection should be held to be well founded it would be no answer to the right to maintain the action, for by section 452 of the Code of Civil Procedure ample provision has been made to supply any defect which may be found in the action in this respect. It has been there declared that where a complete determination of the controversy cannot be had without the presence of other parties the court must direct them to be brought in. But, as no vested rights have been acquired, there would seem to be no ground for this objection.
The case, accordingly, is not one on this account for the dismissal of the complaint or the denial of such relief as will prevent the consummation of the illegal acts which the statute has intended to avoid. The members of the board of electrical control have been made parties to the action, whose object is to prevent them from doing that which may be found to be intended to be done without lawful authority, and if a case has been presented from which it can be seen that such an illegal and wasteful act is contemplated or intended by the members of this board they may be prevented from consummating it by an injunction; that board having no general authority to act, but deriving all their authority from the provisions of the statute. The object of the legislation concerning the action of this board has been to provide the means for placing the electric and telegraphic wires used in the city in subways to be constructed and maintained under the surface of the streets of the city. This legislation, so far as it is required to be considered in this action, is contained in chapter 499 of the Laws of 1885, chapter 503 of the Laws of 1886, and chapter 716 of the Laws of 1887. The latter act has defined and declared more particularly the manner in which this object shall be attained through the action and authority of the members of the board of electrical control. In the year 1886 they entered into a contract with the Consolidated Telegraph & Electric Subway Company, for the construction and maintenance of the subways mentioned and referred to in it. A further agreement was also entered into, modifying and changing this contract in respects not necessary to be considered in the disposition of this appeal, which contracts were validated except as to a few or their features by the act of 1887. This company proceeded in the construction of the subways mentioned in this contract; but they have not been completed, and the company has announced that in their opinion the subways cannot be completed in less than two years. It has not refused to proceed with the work, but in consequence of an arrangement or understanding entered into with the Standard Electric Subway Company it proposes to surrender and assign all its rights and interests in certain portions of these contracts and the work it has already performed to the latter company, and to carry this arrangement or understanding into effect a contract has been proposed by the Standard Electric Subway Company, and sanctioned by the counsel for the city of Hew York, and whether this contract, in this manner excepted, is one which the acts already mentioned will allow to be executed and carried into effect is the more important part of the controversy now before the court. Previous to the time when the form of the contract was determined, and on or about the 19th of February, 1890, a resolution was adopted by the board of electric control containing a statement of the streets and avenues, in which it was intended that these subways should be constructed, and by this resolution it was stated that they should be built within the current year of 1890. This was the obvious as well as the expressed purpose of the board as to the time. It was designed that the work should be done witii the greatest possible expedition, and the streets mentioned in the resolution thereby provided with an adequate system of lights by corporations or individuals who might be authorized to use the subways. But this resolution has been made no part of the contract which it is proposed shall be entered into. It has, it is true, been generally referred to therein, but nowhere has it been made a part of this contract; neither has the party with whom it is proposed to make the contract been in any manner obligated by its terms or its necessary implications either to construct the subways within the current year or in the streets and avenues mentioned in the resolution. What this part of the contract as recited is that it is deemed reasonable, advisable, and proper, for the purpose of carrying into effect the provisions and intent of the act of 1887, that the contract should be made, and that act certainly contemplates the construction of the ^subways with all possible dispatch, and the removal of the poles and wires from the streets and the placing and operating of these wires in the subways. The immediate object of the board was that the subways should be made to include the streets and avenues mentioned in the resolution, and be completed within the current year. But that object the contract as it has been drawn and is proposed to be executed in no manner secures to be accomplished. Certain recitals are contained in the preceding part of the proposed contract, but none are so expressed as to include the the construction and maintenance of subways in the streets or avenues within the time mentioned in the resolution. Its recitals refer to the fact that a contract had been entered into with the Consolidated Subway Company for the building of subways, and that certain subways had been built by that company, and that the company had conveyed to the Standard Subway Company all the subways, conduits, and ducts it had built except those appropriated to the use of the Edison Electric Illuminating Company, and that the Consolidated Company had applied to the board for such a modification of its own contract as would relieve it from the obligation to manage and maintain and operate the subways, and from the further obligation to build subways for electric light and power conductors; and that the members of the board had modified the contract of the Consolidated Company by an instrument of even date; and that the Standard Subway Company were desirous to enter into a contract for building, etc., of such further subways. What these further subways were which the latter company was to enter into a contract to build is not mentioned in the recitals, or anywhere in the proposed contract. But by the references afterwards made these further subways have been generally referred to without the addition of any language so far extending them as to include the subways mentioned in the resolution. The contract then proceeds with the covenant that the party of the second part (the Standard Company) agrees to provide, build, equip, maintain, and operate, as herein provided, the subways in this contract mentioned and referred to. What these subways were intended to be was here no further expressed than that they were those mentioned and referred to in the contract, and the contract had mentioned and referred to no more than "further subways;" and the language of the contract in its subsequent provisions has been confined and applied in the same manner.
By article 2 of the proposed contract it has been declared that the subways aforesaid, as the Standard Company shall be directed by the party of the first part to build, shall be built in accordance with the plans and specifications theretofore furnished or to be furnished by the board; but no language has been employed in this part of the contract, or, indeed, in any other, by which this company agreed that it would build such subways as the board should direct it to build. Power to make modifications and changes which might be reasonably necessary has been reserved to the board, but that power extends only to the said subways, or their mode of construction. The next division of the contract uses the language in the same way of "said subways," and so does the paragraph immediately following, with the additional right to the board in case such subways shall not be sufficient for the companies or corporations applying to use them that then additional subways sufficient therefor should be constructed and laid. But this does not extend the streets or avenues in which the additional subways should be placed. It merely provides for making the additions where those already constructed shall prove to be insufficient for the corporations applying to use them. The board then reserve to themselves the right to permit any other company or corporation to build the subways not previously ordered to be built by the Standard Subway Company. It further proceeds in its reference to the subways to use the same language of "said subways," in no manner enlarging the work to be constructed, so as to include any or either of the avenues and streets mentioned in the resolution. In this respect the proposed contract is radically defective, and not within the limits imposed upon the board by its own resolution adopted, defining and declaring the territory over which the subways should be built and maintained. A similar defect is found in the contract as to the entire want of any specification concerning the time within which the subways are to be laid. By the resolution which was adopted the contract to be entered into should limit this to the period of the current year. But there is absolutely no provision in the contract subjecting it to this limitation. By section 7 of the act of 1887 the power to hear and settle disputes as to the use of the subways has been conferred upon the justices of the supreme court, any judge of the court of common pleas, or of the superior court of the city of Hew York, or upon the courts themselves. When any difference may arise as to the terms upon which that use should be granted, this act requires the difference to be settled under its provisions, while by subdivision 10 of the proposed contract it has been provided that in case any dispute shall arise between the party of the second part (which is the Standard Company) and any company occupying, or desiring or requiring to occupy, said subways the same should be referred to the members of the board or their successors for settlement, whose decision should be final. This part of the contract was inserted without authority, for the only power which the board has over the subject is that defined and delegated by these different acts. The eighth section of the act has conferred upon the commissioners of the sinking fund the power to purchase the subways by making the payments mentioned in the section. This provision has been in no way complied with in the contract now under consideration. By section 15 of the contract the city at any time after January I, 1897, would have the right to buy the subways which had been theretofore constructed under the contract; subject, however, to all leases, mortgages, or contracts theretofore lawfully made within the limits imposed by section 12 of the contract. Section 12 imposes no limitation as to the amount of mortgages or incumbrances which might be placed by the company upon the subways constructed by it. The limitations therein contained apply only to the case when the city should take possession of the subways by reason of the failure of the contracting company to comply with the terms of the contract. The result would be that the Standard Company might mortgage to any amount that they pleased as long as they did not fail to comply with the terms of their contract so as to make themselves liable to the forfeiture contained in the twelfth paragraph of the contract. The city, if it desired to become the purchaser, would by the terms of the contract be required to assume this mortgage, no matter how large it might be, which is in direct conflict with section 8 of the act, which declares that such mortgages, at the time of the purchase, shall not exceed 50 per cent, of the cost, and the company by the terms of the contract, would be enabled, by the placing of excessive mortgages upon the property, to prevent the city from becoming a purchaser. It has also been declared in the proposed contract that the rights of the Standard Company shall be subject to any liability subsequently enacted by the legislature, and no qualification of that description, was included in the resolution or any action taken by the board. It is true that some of these defects are not so fundamental as to justify, if they stood alone, the prohibition of the court that this contract should not be entered into, but there are others of so radical a nature as to involve an entire want of authority in the action authorized to be taken by the board. These attributes consist mainly of the omission to bind the Standard Company to the construction of the subways mentioned in the resolution, and to do that within the period of one year, which in the judgment of the board would be sufficient for that purpose, and sections 10 and 15 of the contract which are in direct hostility to the provisions of sections 7 and 8 of the act of 1887. Experience has demonstrated the necessity of requiring corporations in their contracts with municipal bodies or their officers to clearly and explicitly define their obligations, and leave as little as possible to future uncertainties, for after the agreements or privileges may be obtained the exacting disposition of the parties contracting with these bodies is such as to exclude all possible concessions or understanding which may be essential to promote and protect the interests of the public. .These contracts cannot be made in language too plain or concise to prevent the possibility of future disputes and controversies, and while the granting of an injunction against the execution of a contract such as the one proposed will be attended with some delay in securing the accomplishment of the object intended to be produced by the action of the board, it will in the end be much more advantageous to the public that its interests shall be clearly and expressly limited here than to permit the contract now proposed to be entered into to be executed, which could not fail to engender disputes, and would leave it to the volition of the Standard Company to construct subways or not as it might afterwards determine to be most expedient for its own interests. The plaintiff is in a position, as a tax-payer, to prevent this illegal contract from being subscribed and completed, certainly until it shall be made entirely definite and clear that the rights of the public will be subserved and effectually secured. We expressed no opinion as to whether or not, as the facts appear in this case, such a condition of affairs exists as authorizes the board of electrical control to enter into new contracts for the construction and maintenance of subways, because, in case it should hereafter be finally determined that such authority did not exist, the Standard Company would be the only party which would be injured, having expended its money in structures under the streets of New York to which they had acquired no title. As to any loss which the Standard Company may incur the court cannot be concerned in the disposition of the case. It is with those that inhere in the public, and which, by the act first referred to, are designed to be protected, that the court is now called upon to deal. Neither of these Objections, except that as to the time for the completeness of the work, seems to have been brought to the attention of the court at special term, and they were singularly omitted in the points of the counsel on the argument of the appeal. The' order will be reversed, with $10 costs and disbursements, and an injunction issued in the form to be fixed at the time of the settlement of the order.