Case Name: In re BOARD OF RAPID TRANSIT RAILROAD COM'RS.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896-05-22
Citations: 39 N.Y.S. 750
Docket Number: 
Parties: In re BOARD OF RAPID TRANSIT RAILROAD COM’RS.
Judges: 
Reporter: West's New York Supplement
Volume: 39
Pages: 750–763

Head Matter:
(5 App. Div. 290.)
In re BOARD OF RAPID TRANSIT RAILROAD COM’RS.
(Supreme Court, Appellate Division, First Department.
May 22, 1896.)
1. Rapid Transit Commissioners — Confirmation of Report — Cost of Con-
struction.
On a6motion to confirm the report of the commissioners appointed under the rapid transit act (Laws 1891, c. 4, and the several amendments) to-adopt a route and general plan of a railway in New York Oity to be constructed at the expense of said city, the court will consider the probable-cost of the road; and, unless such cost has been ascertained by the commissioners, the report will not be confirmed.
2. Same—Uights of Abutting Owners.
The owners of property abutting on the route selected by the commissioners have an interest in the determination of the question as to the cost of constructing the road, as they would be damaged if the work should be-indefinitely protracted for want of funds, or should be abandoned after-partial construction.
3. Same—Increase in Value of Property Affected.
In determining whether the cost of construction will be within the limits of the indebtedness which may be incurred by the city, the court cannot consider the increase in the value of property which will result from, the construction of the road, as such increase will be a matter of time, while the liabilities of the city must be incurred forthwith.
Application by the board of rapid transit railroad commissioners of the city of New York for the appointment of commissioners to determine and report .whether a rapid transit railway, for the convenience of transportation of persons and property, as determined by said board, ought to be constructed and operated. The commissioners were appointed as provided by the rapid transit act (Laws-1891, c. 4, and the several amendments thereof), and the board moves-to confirm their report.
Denied.
Argued before VAN BRUNT, P. J., and BARRETT, RUMSEY,. WILLIAMS, and INGRAHAM, JJ.
A. B. Boardman and E. M. Shepard, for the motion.
Elihu Boot, Franklin Bartlett, George Zabriskie, G. G. De Witt, J. A. Murray, and Ezra A. Tuttle, opposed.

Opinion:
VAN BRUNT, P. J.
The board of rapid transit commissioners-having adopted a route and general plan, and having failed to obtain the consent of the property owners along the line of the proposed railways, made application to the general term for the appointment of commissioners as provided for in the rapid transit act; and on the 15th of November, 1895, the general term appointed three commissioners, to determine and report, after due hearing, whether the railway determined upon by the said board, and mentioned in their petition, ought to be constructed and operated. These commissioners, having proceeded with the hearing of the matters referred-to them, on the 6th of March, 1895, reported to this court that they were of the opinion, and thereby determined and reported, that the route proposed by the board of rapid transit commissioners ought to-be adopted, and that the railway determined upon by said board ought to be constructed and operated.
The commissioners, after spending months in the taking of testimony in regard to the question of the cost, and the manner of building and operating the railroad in question, and having frankly stated, in their report, that any conclusion which they could arrive at in respect to the probable cost would be mere conjecture, seem to have-cut the Gordian knot by setting aside entirely the question of cost, and looking upon the questions referred to them solely as engineering problems. It is the first time, we think, in the history of any great enterprise, that the question of practicability did not include the consideration of cost. More than 1,800 years ago it was said:
"For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, saying, 'This man began to build, and was not able to finish.' "
If the question of cost was not to be considered by these commissioners, it is difficult to see what question was before them. The legislature and the people had both spoken very emphatically upon the question of the desirability of rapid transit, and it is well known that there is no problem which engineering science cannot solve, provided there are dollars enough behind it to meet the expense. But it is urged, upon the part of the movers of this scheme, that the property owners cannot raise the objection as to cost, because they have no interest in the determination of that question. It is apparent that this is a fallacy. The only justification which can probably be urged, to sustain the interference with the use and access of abutting owners to their property which the construction of this railroad will necessarily involve, is that it can and will be completed within a reasonable time after its commencement. If there is a probability that financial difficulties will be met, and the construction of this road will drag its weary length along for a time which no man can compute, and possibly its construction be absolutely abandoned because of the wreck of the city's finances and the intervention of constitutional prohibitions, it is manifest that great injury will result to the property of abutting owners for which they can never be compensated.
In reaching the conclusion arrived at, the commissioners appointed by this court seek to justify themselves by reference to the language of the general term when a former scheme of rapid transit was before it. In so doing they seem to have lost sight of the fact that the plan now seeking our sanction differs in every feature from the one which was then before the court. In the case formerly before the general term, all that it was necessary for the commissioners to do, to protect the city and the abutting owners, was to take such security as would enable the city to fill up the hole made in the course of the work in case the contractor failed to comply with his contract. The court was of the opinion that the question was simply a financial one, and that it might safely assume that the commissioners would take sufficient security, at least, to put the street in its then present condition, in case of the failure of the contractor to complete the work, and that, if capitalists would at their own risk undertake the enterprise, they should be allowed to do so. In the case at bar, however, the problem is absolutely different. It is the city's money which is to be spent; and it is to be observed that, in view of the obligations already incurred by the city for work in progress, it is difficult to see how money can be provided to meet even the engineers' estimates of the cost of this work, in consequence of the constitutional prohibition against the creation of debt; and, if the work was commenced, it would be impossible for the city to raise funds necessary for its completion, and the work must cease, although incomplete and absolutely useless.
It may be said, and it is said, that it is to be presumed that the commissioners will take sufficient security from the party contracting with the city to construct this railway upon its behalf. But, if our commissioners cannot tell whether this railroad can be constructed for $50,000,000 or $90,000,000, after spending months in investigating this subject, as they have reported, upon what basis are the rapid transit commissioners to fix the security? It has been also suggested that the increase in the value of property will give an enlarged opportunity to create a debt; but this increase will be a matter of time, and the contracts for construction must be made now, the obligation must be entered into now, and it cannot be done in sections. Consequently, the now debt limits can only be considered.
It is to be observed that the moneys for this enterprise must be furnished by the city, and the risk is really that of the city; and it would seem, having in view the other obligations of the city, unless the road can be built for a substantially less amount than the engineers' estimates, the work must stop, and the city would not have the right to borrow money enough to put the streets in the condition in which they were before it had sunk its fifty-odd .millions of dollars in a vain attempt to carry out this scheme of rapid transit. If our commissioners are unable to ascertain within $40,000,000 what this enterprise is to cost, would it not be the height of folly to enter upon this construction, knowing as we do that, without any exception, the cost of every great public work has far exceeded the estimate of the engineers? We have, for example, the Brooklyn Bridge, estimated cost $8,000,000, actual cost, $16,000,000; the New Aqueduct, estimated cost $14,000,000, actual cost $24,000,000, with from $6,000,000 to $8,000,000 more of claims which the aqueduct commissioners had incurred, but which the city escaped the payment of only because of the prohibitory character of the legislation on that subject. We have no reason to assume .that the rapid transit commissioners will be more careful of the public interest than were the Croton Aqueduct commissioners.
In a great work, like the one proposed, it is impossible to foresee all contingencies; and, as the rapid transit commissioners have averred their intention to go as far as the debt limit will allow in the making of their building contract, there will be no question but that the boundary will be overstepped, because of the very nature of the enterprise. Besides, by the terms of the act, the city is bound to indemnify the contractor against many and divers things as to the expense of which no estimate can be given. The act provides that the city shall secure and assure to the contractor the right to construct and operate, free of all rights, claims, or other interference, whether by injunction, suit for damages, or otherwise, on the part of any owner, abutting owner, or other person,—a condition absolutely impossible of fulfillment. How is the city to prevent interference with the work by injunction? That question lies with the courts, and not with the courts of this state alone; for there are cases, without doubt, in which the courts of the United States would have jurisdiction to act, and when such jurisdiction exists they have not hitherto shown much reluctance in acting. The rapid transit commissioners have no power to fetter the action of the courts, and they have no right to deprive the contractor of this provision of the law by any restrictions in the contract. That legal proceedings will be undertaken which will, to some extent, at least, interfere with the progress of this work seems to be inevitable; and, if delayed by these, which the city cannot prevent, the contractor might be relieved from his contract with the work half performed, and the city have no recourse against his sureties. There is no restriction upon the rapid transit commissioners as to the amount they can render the city liable for,—a power never before given to any board or body, —and they may involve the city in an amount of obligation which would absolutely ruin and destroy its credit, and bring about as great a disaster as was occasioned by the collapse of the Panama Canal, and all other public improvements would necessarily be stopped.
It has been suggested that, under the provisions of section 34 of the rapid transit act, the board of rapid transit commissioners is empowered to contract for the construction of the whole road, or all the roads provided for by their plans, in a single contract, or may by separate contracts, executed from time to time, provide for the construction of parts of said road or roads, or for the construction at first of two or more tracks over a part of such road or roads, and afterwards of one or more additional tracks over a part or parts of such road or roads, as the necessities of said city or the increase of its population may in the judgment of said board require; and that, under this power, the commissioners may delay the construction of sections of the road until the assessed valuation of the real estate of the city shall increase to such a sum as would allow the incurring of additional indebtedness upon the part of the city over and above that which is now permitted by the constitution. In respect to this suggestion, it would seem to be sufficient to say that the subsequent provisions of the section in question appear to be inconsistent with the right to make entirely separate contracts, because they require that the contract of construction should also provide that the person, firm, or corporation so contracting to construct said road or roads shall, at his or its own cost or expense, equip, maintain, and operate said road or roads for a term of years to be specified in said contract. Hence, if the road is to be constructed in sections, there must be sectional provisions in regard to operation, and the system would be anything but uniform, and uniformity is an absolute necessity. This necessity is contemplated by the provision subsequent to that first quoted, in which it is said that the board may also, in a contract for a part of such road, insert a provision that, at a future time, upon the requirement of the board, the contractor shall construct the remainder, or any part of the remainder, of said road, as the growth of population or the interests pf the city may, in the judgment of the board, require, and may, in such contract, insert a provision of a method for fixing and ascertaining, at such future time, the amount to be paid to the contractor for such additional construction, and, to the end of such ascertainment, may provide for arbitration, or for determination by a court of the amount of such compensation, or of any other details of construction, which shall not be prescribed in the contract, but which shall be deemed necessary or convenient by said board. If this power is resorted to, the obligation is created at the time of the original contract, the ascertainment of its amount only being deferred, and hence it comes within the present prohibition of the constitution.
It is to be further observed that the sectional plan assumes that the board of rapid transit shall mortgage for a considerable period of years in the future the debt-creating capacity of the city. Under this scheme it would be impossible for the city to provide for the purchase of land for the building of public schools, the improvement of docks, the furnishing of additional water supply, and the establishment of additional parks,—all improvements of a permanent character, payment for which may properly be provided for by bonds to be payable in the future,—and the city would lie helpless, bound hand and foot by this octopus of debt created by the rapid transit contracts. It will undoubtedly be claimed that this is an exaggerated picture of the situation, but the disposition seems to be to enter upon this enterprise regardless of and in utter ignorance of the cost, trusting to the distant future to help the enterprise out of the difficulties by which it is admittedly surrounded. This blind confidence we are unable to indorse, in face of the adverse finding of our commissioners as to what we think is the crucial fact governing the disposition of this case. They say, after examining the question of cost, that any estimate they could make would be very like conjecture.
With these facts staring us in the face,—these results almost certain to ensue,—how can it be said that this enterprise ought to be commenced? The probabilities indicate that, after sinking $51,000,-000 in it, without being able to complete it, the enterprise would have to be abandoned, since no legislation could afford any relief. "All that behold it would begin to mock, saying, 'This city began to build, and was not able to finish V "
The motion should be denied. All concur.