Court Opinion

ID: 3606122
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:51:31.39085+00
Date Added: 2024-06-11T14:07:28.729855
License: Public Domain

I dissent. The Grade Crossing Eliminations Act (L. 1928, ch. 677, as amd. by L. 1939, ch. 289) and the State Constitution (art. VII, § 14) do not limit or restrict the original jurisdiction of the Supreme Court (art. VI, § 1). In the absence of express language, they do not constitute an authority for the proposition that a railroad in the performance of elimination work is an agency of the State so as to deprive the Supreme Court of original jurisdiction to hear and determine disputes between private parties, arising out of the performance of the elimination work, and confer jurisdiction thereof on the Court of Claims.
While the Court of Claims Act (§ 8) contemplates a general waiver of immunity by the State, it is not tantamount to saying that every time a private railroad corporation performs elimination work, which must conform to plans and specifications approved by the State before it can receive reimbursement out of State monies, it thereby becomes a State agency. To hold that it does is to deprive the plaintiff of its right to proceed against its privy and is contrary to the interpretation heretofore given to the immunity statutes; for instance, in Pantess v. SaratogaSprings Authority (255 App. Div. 426) involving an independent agency, it was held that the suit was properly brought in the Supreme Court; this was also the ruling in Remo EngineeringCorp. v. City of New York (260 App. Div. 587, affd. 286 N.Y. 657) ; while in Breen v. Mortgage Commission *Page 513 
(285 N.Y. 425) involving an administrative body designated a State agency by statute, the Court of Claims was held to have jurisdiction. Nor does Seglin Construction Co., Inc., v. Stateof New York (249 App. Div. 476, affd. 275 N.Y. 527) in which subcontractors' claims were considered in the Court of Claims in connection with the whole claim, change the rule, as such jurisdiction was specifically conferred by the Enabling Act, Laws of 1931, chapter 692, which was held to be an enlargement of the Court of Claims' jurisdiction and was in no respect treated as a diminution of the jurisdiction of the Supreme Court.
Here the railroad has defaulted in payment and is attempting to excuse its breach by referring to the provisions in the contract that "the company shall be under no obligation to make payments until three days shall have elapsed after the receipt by it * * * of the monies" and that under the statute the expense of grade crossing eliminations "shall be paid by the State in the first instance". While withholding of preliminary payment by the State may be available to the railroad as a defense or as a postponement of action until payments are received, default by the railroad in performing the routine administrative acts preliminary to reimbursement payment by the State should not be blessed by giving it the dignity of an exculpatory act and thereby permitting the railroad to cancel out its covenant to pay the contractor for its work and by such default transform itself into a State agency so as to deprive the Supreme Court of jurisdiction of a dispute between it and its privy. The amended Grade Crossing Elimination Act never contemplated such a result.
While this court has not previously passed on the narrow point presented in the case at bar, it has only recently indicated the method of payment in connection with a dispute involving the phrases, "shall be paid by the State in the first instance" (N Y Const., 1939, art VII, § 14) and "shall be paid in the first instance out of the State treasury * * *" (L. 1939, ch. 289, § 4), when it directed the City of Buffalo to provide funds to pay the salary of an engineering department employee in the Buffalo Transit Commission. In directing it to provide the funds for the payment of the salary the court pointed out that the question debated in the Constitutional Convention in 1938 was "whether the railroads should pay something or the *Page 514 
State should pay all", and that no change in the method of administration was considered, and that, in amending the Laws of 1928, chapter 677, by enactment of Laws of 1939, chapter 289, the Legislature intended: "a continuance of the method of payment for elimination construction work done after January 1, 1939, in the same manner as for work done prior thereto". (Matter of Kolb v.Holling, 285 N.Y. 104, 110.)
There is nothing in the contract at bar whereby the State undertook to pay the contractor. Its obligation was to reimburse the railroad for the whole cost upon its performance of the elimination work in accordance with the plans and specifications. Mere approval of the contract, plans and specifications as to form by the Attorney-General, and as to availability of funds for reimbursement by the Comptroller, does not make the State liable as a party. At most such acts are only the exercise of an administrative routine designed to constitute a warranty of validity, that the proposed work is within the scope of the statute and that money paid in reimbursement thereof will be lawfully expended.
The holding about to be made by a majority of this court will deny to this contractor the use of a tribunal in which to plead its cause for there is no specific authority permitting this private corporation to sue in the Court of Claims since we can not say the State is a party to the contract. It is dismissing the instant complaint on the jurisdictional ground that the railroad is an agent of the State, completely disregarding the allegations in the complaint that the action is for breach of a contract between private corporations. Such a dismissal should be based only on a holding that as a matter of law the complaint itself is directed against the railroad company, not in its corporate capacity, but in its official status as an agent of the State (see Adler, Inc., v. Noyes, 285 N.Y. 34). There is nothing to that effect in the complaint. Everything in the contract indicates that the railroad had no such thought in mind when it executed the contract, and this is borne out by the provisions relating to the default of the contractor. It was the railroad which exacted the performance bond, and, in the event of default, it would be the railroad and not the State that would exact the penalty. *Page 515 
If it is desired, the Legislature in an appropriate case could appoint the Long Island Railroad, or any other railroad corporation for that matter, its agent in the elimination of railroad crossings, but we are convinced it would undertake such a course with great reluctance for reasons so obvious as to render recital unnecessary. Why, then, should we read into this situation something that is not there? Payment in the first instance is a financial relation. The framers of the Constitution and the members of the Legislature never intended to change the long-established administrative practice in referring to grade crossing elimination through the medium of an independent agency. It did intend to pay the full cost, but, before advancing the money, the State retained to itself the right to examine the plans, inspect the materials used for functional quality, supervise the pay and working conditions of the labor employed and inspect the work so that the finished job for which the taxpayers were footing the bill would conform to the requirements of the statute. This is a far cry from creating the railroad its agent by implication.
It is for these reasons that I feel the Supreme Court has jurisdiction to hear and determine the rights of the parties to this contract in the first instance, and to deprive the contractor of the use of this constitutional tribunal is, in effect, depriving him of his cause of action for there is no other in which he can be heard.
The judgment of the Appellate Division should be reversed and that of the Special Term affirmed.