Case Name: The Mayor &c. of the City of New York vs. The Second Avenue Rail Road Company
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1861-02-04
Citations: 34 Barb. 41
Docket Number: 
Parties: The Mayor &c. of the City of New York vs. The Second Avenue Rail Road Company.
Judges: 
Reporter: Barbour's Supreme Court Reports
Volume: 34
Pages: 41–54

Head Matter:
The Mayor &c. of the City of New York vs. The Second Avenue Rail Road Company.
Where the common council of the city of New York enters into a specific agreement with a rail road company, prescribing the regulations to which the latter shall be subject, requiring no further license, and reserving no right to require one, they are concluded by their contract from afterwards passing an ordinance requiring the taking out of a license and the payment of a fee by the company, as a condition precedent to the right to run its cars. Inqraham, J. dissented.
Such an agreement is neither more nor less than a license; and if it confers the right to run cars in a certain manner, through a specified portion of the city, no subsequent enactment can curtail that right.
ÁPPEAL from an order made at a special term, overruling a demurrer to the answer of the defendants.

Opinion:
Clerks, P. J.
This action is brought to recover from the defendants, as owners of a certain rail road car, a penalty of $50 for running it below 125th street without a certificate of license, according to an ordinance of the common council requiring every passenger rail road car, running below that street, to pay into the city treasury annually the sum of $50 " for a license or certificate of such payment to be procured from the mayor," under the penalty of $50 for every car run contrary to the regulation, to be recovered of the proprietors of the car by the corporation attorney as in case of other penalties.
The defendants set out at length the agreement between their assignors and the corporation, entered into on the 15th December, 1852, by which they were authorized to lay rails in certain streets and to run their cars thereon; and they allege that they have constructed their rail road in pursuance of said agreement; that they have, in all respects, complied with its terms and conditions, and claim that they -have full authority under the agreement to run their cars without paying $50 annually for a license. The agreement contains no stipulation on the part of the defendants, or their assignors, to pay any license for running their cars, nor does it require any additional action, or any farther assurance or authority, to enable them to do what this agreement, of itself, expressly and unconditionally permits; unless it may be considered that the resolution of the common council recited in the agreement and made a part of it, imports a liability to pay any sums which the common council may thereafter think proper to impose. This resolution requires that the parties shall, before the permission takes effect, enter into an agreement with the mayor &c. of the city of New York, binding themselves " to abide by and perform the stipulations and provisions therein contained, and also all such other regulations or ordinances as may be passed by the common council relating to the said rail road."
A demurrer to the answer, as not constituting a defense, was overruled at special term.
I. Without, at present, considering the effect of the reservation contained in the resolution above referred to, the first question which presents itself is, whether the corporation could, without such a reservation, require the defendants to take out and pay for a license, after the execution of the agreement.
If an agreement of this kind were entered into, on behalf of a sovereign state possessing the power of imposing imposts or taxes for the support of government, the mere permission to do a certain thing would not exempt the grantees from liability to any tax to which persons in a similar occupation were made liable, even after the permission were given. All citizens are liable to contribute to the support of the govern» ment which protects them; they cannot be exempted from this, except by a special provision of law; and it would be just as reasonable to suppose, because a state conveyed land in fee simple absolute, with full covenants, that it exempted the land from taxation, as to suppose that a permission, like that involved in the present case, exempts the defendants from the payment required, if it was imposed by an author» ity possessing the taxing power.
But no mimicipal corporation of the present age, at least in this country and in England, possesses any such power, The supreme legislature of the state could not constitution» ally delegate it, The common council has full authority, in» deed, by virtue of" the charters of James 2 and Queen Ann, to make laws, orders and ordinances for the good will, over» sight, correction and government of the city, and may impose and tax reasonable fines and amercements against arid upon all persons offending against such laws, orders and ordinances. It may, consequently, limit and prescribe the rate of speed, designate the stations or places where they should stop, and require them to adopt some method by which their approach may be made known to persons crossing the street ; and as it may be indispensable to the public safety and convenience that rail road cars should, like other vehicles, be subject to supervisory regulation, it may ordain that they shall be licensed, and if the company shall neglect to take out the license, that they shall be subject to a penalty. But if the common council enter into a specific agreement with a company, prescribing the regulations to which the latter shall be subject, requiring no further license and reserving no right to require one, I think they are concluded by their con tract from afterwards enacting that a license shall be a condition to entitle them to run their cars. This contract is u nothing more or less than a license. This does not m any respect gainsay the doctrine laid down in The Brick Presbyterian Ohurch v. The Mayor &c. of New York, (5 Cowen, 538,) and in Coates v. The Mayor &c. of New York, (7 id. 585.) I do not deny that no contract entered into by the corporation can curtail or supersede its action as a legislative body, within the sphere of its legislative powers. But I do deny that the right to establish ordinances &c. for the good rule and government of the city and to provide penalties for their breach, confers any right to impose a tax. ' In the language of a former counsel of the corporation, I may reiterate that the common council may provide that vehicles of a certain description shall be used, rates of speed may be limited, the particular places in which they shall stop may be designated, and penalties may be imposed for any breach of these regulations: This, however, is a very different power from that which provides that vehicles may be run, if a certain sum shall be paid; otherwise they shall not run. This is only a taxing power in the guise of establishing ordinances for good rule and government. Thus, as I have already said, the corporation may ordain that all public vehicles shall be licensed, and if their proprietors shall neglect to take out this license, that they shall be subject to a, .penalty. But if they ordain that the proprietors shall pay a license fee for the privilege of licensing, and not as a penalty for disobedience, it is an attempted exercise of the taxing power, which no subordinate legislative body under our institutions can possess. The license to run in the pres'ent instance had been granted by solemn agreement, and of course, in running pursuant to that license or agreement, the defendants violated no ordinance, so as to have made themselves liable to the imposition of a penalty.
II. Is any such right reserved in the agreement, under consideration, in the present case ? A resolution, as we have be fore noticed, was passed during the negotiation between the parties, that the assignors of the defendants should bind themselves to abide by and perform the stipulations and provisions contained in the agreement, and "also all such other regulations or ordinances as may be passed by the common council relating to the said road."
How if the agreement, of itself, confers the right to run in a certain manner through a specified portion of the city, no subsequent enactment can curtail this right. The agreement itself, I repeat, is a license. By this agreement the common council has thought proper to give the defendants liberty, or license, to run their cars. It could not, therefore, have been in the contemplation of either of the parties to the agreement that any further license should be necessary. The license, given by the agreement, was unqualified; and, therefore, the ordinance incorporated into that agreement, by which the defendants are bound to abide by all other regulations or ordinances which may be thereafter passed by the common council, could not have included a regulation or ordinance requiring any additional license. If this was intended, the requirement should be expressed in specific terms.
Preceding the introduction of this resolution, provisions were set forth relative to the- mode of laying the rails, keeping the streets in and about them in repair, confining the propelling power to horses, regulating the number of times the cars should be run during the day and between what hours, and providing that they should be run as much oftener as public convenience may require, "under such directions as the common council may from time to time prescribe, also prescribing limits to the rate of fare, and reserving to the corporation the right to regulate the fare for the whole length . of the road when completed to Harlem river." Immediately following this comes the resolution that the parties shall in all respects "comply with the directions of the street com.missioner and of the common council in the building of the road, and in other matters connected with the regulation of the road." This is "followed by the ordinance, on which I have, been commenting; and I have no doubt that the words "other regulations and ordinances," which it contains, meant such ordinances or regulations as the common council might afterwards think necessary for the regulation of the road, in regard to the public safety and convenience, It gives the common council the power, in certain respects, to make further necessary or expedient provisions for the regulation of the road • it by no means imports a right to nullify the license, which the agreement itself gives. It reserved the right, in short, to regulate the mode of running, not to nullify the privilege of running altogether. For this would be the effect of allowing the common council to impose a license fee upon the company; it would be allowing the plaintiffs to say we now order you no longer to run your cars, unless you pay us a heavy fine or penalty, although we have already promised that you should run without requiring the payment of any sum. If they have the right to impose the payment of $50 they have the right to impose any greater sum, which may be so oppressive as to make it no longer worth while to continue running the cars; and thus in effect rescinding the agreement, without any violation of it on the part of the defendants. The power to impose this fine, not being reserved in the agreement, and the common council not having the power to impose a tax, the claim of the plaintiffs is therefore not sustainable. The plaintiffs cannot object to the assignment of the agreement by the original parties, to the defendants. Since the date of the assignment, the defendants have constructed the said road, have in all respects complied with the terms and conditions of the agreement, and, during a period of several years, have been recognized and dealt with by the plaintiffs as the proprietors of the road and the assignees of the original parties.
The order of the special term should be affirmed with costs, and there should, be a judgment for the dismissal of the complaint.
Sutherland, J.
I look upon the question raised hy the demurrer in this case, as a question of property, of vested rights, resting on or secured by grant or contract.
The resolutions and agreement set up in the defendants' answer were in effect the grant of a valuable franchise or property. The agreement was not only in effect but in form a contract; and the franchise which is the subject of it is as much within the protection of the constitution, as any other property or right resting on, or derived from, contract. (Dartmouth College v. Woodward, 11 Wheat. 511.)
The question of the power of the common council, independent of the state legislature, to make this grant or contract, is not in this case: it is not raised by the demurrer. This action for the penalty of $50, under the ordinance of the 31st December, 1858, affirms, or at least assumes, the right of the defendants to run their cars, and to enjoy, or exercise, the franchise originally granted, by paying the license fees exacted by that ordinance.
The question of the right of the original grantees to assign to the defendants, is not in the case. This action affirms, or at least assumes, the right of the original grantees to assign, for it assumes the present right of the defendants to run their cars under the original grant or contract by paying the license fees and taking out the certificates of license.
The franchise granted is of course held by the defendants, and is to be enjoyed by them, upon the terms and conditions specified in the grant or contract; and I think the question in the case really is, whether, from the grant, contract, or agreement itself, it can fairly be inferred that the plaintiffs intended to reserve the right, thereafter at any time, and from time to time, to impose the payment of these license fees without limitation as to amount, and thus impair, if not' utterly destroy, the franchise granted.
But it is suggested that, irrespective of the terms and conditions of the contract, the plaintiffs had a right to impose the payment of these license fees; that the ordinance impos •ing them was and is an act of legislation; that-the plaintiffs cannot grant away their right of legislation ; that the grant to the assignors of the defendants of the franchise in question must he presumed to have been made subject to the right thereafter to impose the payment of these license fees as a legislative act; and the cases of The Brick Presbyterian Church v. The Mayor &c., (5 Cowen, 538,) and of Coates v. The Mayor &c., (7 id. 585.) are referred to as sustaining this principle.
I do not doubt that grants of property or of franchises, by the city corporation, must be deemed to be made and received subject to the right of future municipal police regulations, the same as if granted by an individual; and this is the principle established by the cases in 5th and 7th Cowen. In the case in 5th Cowen, the ordinance prohibiting the use of the premises as a cemetery was strictly a municipal law or police regulation, authorized by an act of the legislature. But suppose the ordinance, instead of prohibiting the use of the premises as a'cemetery, had imposed a license fee of $50 for each body thereafter to be interred in the premises, would the court-have held such an ordinance a repeal of the covenant for quiet enjoyment ? I think not. Ho one can fail to see, I think, that such a decision would have done violence to justice and the constitution, by destroying the contract between the parties.
Ho doubt the grant of a ferry franchise would be deemed to be made subject to such future municipal police regulations or laws as the public safety or health might require. And an ordinance absolutely prohibiting the use of the ferry during the prevalence of an infectious or contagious disease, might be justly held not at all to interfere with the covenant for quiet enjoyment in the lease or grant of the ferry. But - , would the city corporation, after leasing a ferry for a certain term at a certain rent, have a right to impose a license fee of $50 for each ferry boat used ? It is plain it would not, independent of the contract. And yet it appears to me that that is the precise question in this case, irrespective of the express terms and conditions of the contract. The distinction must be taken between a general municipal law-or ordinance for the public safety or good, and a law (if you choose to so call it) or ordinance for the pecuniary benefit of the city corporation as a legal entity or person capable of granting property, and entering into a contract with reference to it. No doubt the city corporation has power to impose a license fee for the use of public carriages; but the question is whether, after having licensed a public carriage for a certain feé, for a certain term, or for a certain term without the payment of any fee, it has a right during the term to impose the condition of the payment of an additional license fee in the former case, or of any license fee in the latter case, without having reserved such right? Plainly not, if the license is deemed to be a valid subsisting contract.
I presume public lands might in effect be granted by an act of congress or of the state legislature, without the formality of a patent or other instrument. Of course such lands after the grant would be taxable by general laws imposing taxes; but could congress or the state legislature, by a special law impose, as a condition of enjoying the lands so granted, the payment of a certain annual sum of money as rent, or as a tax for the use of the land ? I tliink not, although the act of congress or of the legislature would not be in the form of a grant or contract.
The question whether the plaintiffs, independent of the act of 1854 affirming the grant to the defendants' assignors, had a right to revoke the grant, is not in this case. The right to revoke the grant itself is one thing; the right to affirm it, or at least to assume its existence, and at the same time to impair or destroy its value, is another thing. I am free to say,, however, that I do not see upon what principle it could be. claimed that the grant could be revoked at the mere will of' the corporation.
If the plaintiffs have a right to impose a license fee of $50 for each car, they have a right to impose a license fee of $5000 for each car, and thus they could utterly destroy their own executed gift, if no consideration was paid for the grant. Or if a consideration, and a large one, was paid, they could thus, under the form of a license fee, exact such other and further consideration as they saw fit.
I presume that an executed gift can no more he revoked or repudiated than a bargain and sale. Besides, if the grant could originally have been called a gift, the defendants under it have built their road, it must be assumed, at large expense, and thus they have a large vested interest under the grant.
Upon the whole, on the grounds which have been above barely suggested, I am of the opinion that the plaintiffs' right to recover in this action must rest exclusively upon the terms and conditions of the written contract; and as I agree with Judge Clerke in his construction of the written contract, I also concur in the conclusion to which he has arrived, that the order of the special term should be affirmed, and the complaint dismissed with costs.