Court Opinion

ID: 5180889
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:41:58.968871+00
Date Added: 2024-06-11T08:26:34.193958
License: Public Domain

Ingbaham, J. (dissenting):
The question presented on this appeal is whether chapter 752 of the Laws of 1894 and chapter 519 of the Laws of 1895, whereby provision is made for the issue of bonds by the city of New York to pay for the construction of railroads in the city of New York, are in violation of the Constitution. A majority of the court has determined that it is constitutional for the Legislature to require the city of New York to incur an indebtedness to be repaid by taxation, the proceeds to be used to construct a railway. I dissent from this proposition, and shall endeavor, as briefly as possible, to state the grounds upon which, in my opinion, this legislation violates the express prohibitions of the Constitution provided to protect the owners of property subject to taxation from being taxed for the construction of public works, other than those which relate to ordinary municipal purposes.
In deciding this question I have not lost sight of the importance of proper and convenient rapid transit, realizing fully the desirability of additional means of communication between the different parts of the city, and how necessary it is for the convenience of a large proportion of our citizens that additional facilities should be provided to enable them to pass from their homes to their places of business; but the question presented to us is not in the nature of a legislative and administrative question, judging the advantages or disadvantages of a plan proposed. Upon us devolves the duty of determining whether a new departure in the legislative history of the State is in violation of the fundamental law of the State which has limited the use to which money raised by taxation or by obligations which are to be paid from taxation, may be applied. That this legislation is an absolutely new departure in the political history of this State none will deny. While certain cities and towns were, *258under legislative authority, prior to 1874, allowed to loan their money to corporations or others who have built railroads to provide transportation for passengers and freight from one town or city to another, this is the first time within my knowledge, when private enterprise and private capital having failed to construct a railroad, ardently desired by a considerable portion of a community, the Legislature has attempted to impose upon a municipal corporation the obligation to issue its bonds, the proceeds of which are to be ;paid to contractors to build such a railroad. For the first time the ¡State has authorized a municipal corporation to build a railroad with the public money; and, to accomplish that, it has appointed cornmis¡sioners to make contracts to build the road, giving such commission■ers p>ower to lease the road in perpetuity to the contractors who are 'to build it, and provided that the amount, which such commissioners ¡shall determine, is to be paid to such contractors as the cost of such Toad, and shall be prnid by a municipal corporation by the issue of its bonds, which bonds are to be piaid by taxation.
A short examination of just what is to be accomplished by this new scheme will be useful when we come to consider the pn-ovisions of the Constitution which it is claimed are violated.
The Rapid Transit Act was originally passed in the year 1891. It was entitled, “An act to provide for rapid transit railways in cities of over one million inhabitants.” As originally passed, it did not appoint a board of rapid transit commissioners, but provided that, in case a board had been appointed under the provisions of a previous act, it should be its duty to devise a means of rapid transit throughout the city for which it had been appointed, and, upon the completion of the plans for that purpose, to pout up at public auction a franchise to build a rapid transit railway, and to superintend the building and to some extent the operation of it after the franchise had been disposed of. The act further provided for the organization of a corporation to take the franchise and build and operate the railway, and contained further provisions limiting and regulating the operation of the road, not necessary to be further considered here.
Under that act the board of rapid transit commissioners was organized in the city of New York, which was and is the only city now within the provision of the act. The board proceeded to devise *259plans for a rapid transit railway through the city, and the franchise was put up at auction as provided for by the act, but it was found impossible to find any purchaser to bid for the franchise, or' to undertake the construction of the road. When it was ascertained that the road could not be built by private enterprise, the Legislature, in the year 1894, made many important amendments to the act of 1891, which was still further amended in 1895.
Section 1 of the act was amended so that, instead of allowing for the appointment of the board of rapid transit commissioners by the mayor of the city to which the act applied, the Legislature itself named a board, not a separate board for each city, but five commissioners were named who, together with the mayor of the city, the comptroller or other chief financial officer of such city, and the president of the Chamber of Commerce of the city of New York, were to constitute the board of rapid transit railway commissioners in and for each city in the State having over 1,000,000 inhabitants. Six of the eight commissioners were designated by the Legislature without any relation to the .particular city in which they were to act; and in each city having the required number of inhabitants these six commissioners were to constitute, with the mayor and chief financial officer of the particular city over which their jurisdiction extended, this board of rapid transit commissioners. These •officers were not to be local city or municipal officers, and the commission was not a local or municipal commission, but a commission appointed by the State, having no relation to the particular city over the territory of which its jurisdiction extended, receiving no power or authority from the municipality, but acting directly under the general power of the Legislature of the State. Vacancies were filled by a majority vote of the remaining members of the . State board, and the board thus constituted was by the act “ to have and exercise the specific authority and powers hereinafter conferred, and also such other and necessary powers as may be requisite to the efficient performance of the duties imposed upon said board by this act.” Where this board purported to act on behalf of the city, it did so, not by virtue of any authority vested in it by the municipal corporation, but by virtue of the power conferred upon it by the lawmaking power of the State, over which the municipality or its regularly constituted officers had no control. It was essentially a *260State board, composed of State officers, and given large and undefined powers before vested in the Legislature of the State. These jiowers were essentially legislative, locating railroads and granting franchises for operating them, with all the power requisite to the proficient performance of the duties imposed upon them, and were to be exercised, not by officers of municipal corporations, not by officers created to do one specific piece of work which was to vest in the municipal corporation when completed, and which was to be then in their possession and under their absolute control, but by officers appointed to act as rapid transit commissioners in all the cities of the State coming within the purview of the act.
The amendments also provided, among other things, that the question whether the rapid transit railway devised by the commissioners should be built by the city should be submitted to its people at a general election, and if the vote was in favor of the city undertaking the enterprise, the act proceeded to regulate the manner in which the railway should be constructed and to state how it should be operated and controlled. In general terms the provisions of the act were that, after the plans and specifications had been prepared and the necessary consents obtained in the .manner provided by the statute, the board of rapid transit commissioners should contract with some person, individual or corporation to build the road for a compensation, to be paid by the city and in the manner prescribed by the commissioners. The board were at liberty to make a contract with such person as in their judgment should be best qualified to carry it out, for such price and on such terms and conditions as they should think to be best for the public interest.
The statute further prescribed that the contract for construction should also provide that the corporation constructing the road should, at its own cost and expense, equip, maintain and operate it for a term of not less than thirty-five nor more than fifty years, upon such terms as to rates of fare to be charged and the character of the service to be furnished, as the board shall deem best suited 'to the public interest.
The statute further required the board to provide in the contract that the city should secure and assure to the contractor the right to construct and operate the road, free of all right, claim or other interference, whether by injunction, suit for damage, or otherwise, on *261tlio part of any owner, abutting owner or other person. It provided for the rent to be fixed at not less than a minimum, sum specified in the statute, and provided for a renewal of the lease upon such terms and conditions as to the board might seem just.
Further provisions were contained in the statute with regard to' a default of the corporation in paying the rental, or performing the conditions of its contract, which it is not necessary here to particularly specify.
The act further provided for the raising of the necessary money by the city, and required the city to issue the necessary bonds for that purpose.
The effect of the act was to give to the corporation which constructed the railroad, and agreed to operate it, full power and authority to take exclusive possession of it under its lease, and to to run and operate it as a railroad during the term of its lease, and practically required the city to covenant with the corporation that it should have quiet and peaceable possession of the road during the term of the lease.
The intent of this act is apparent. Under its provisions a board of rapid transit railroad commissioners, appointed by the Legislature, are authorized to construct in each city of the State containing more than 1,000,000 inhabitants, a railroad, upon a majority of the electors of such city voting in favor of such construction, and with the consent of certain local authorities. That vote and the consent of the local authorities having been once given, the nature of the railroad, its extent, its cost, the terms of the contract under which it shall be constructed, and the particular contractors who shall be employed, are to be determined by the said board, over whom the municipal authorities have no control. As part of the contract for construction, the board must make a lease of the railway, when completed, to the contractor for a period of at least thirty-five years. As to the terms of that lease, and the rent to be paid, the city has no control; and during the continuance of that lease, by no possibility can the city acquire the possession, use, occupation of, or any power or authority ovey the road. In case the contractor shall fail to pay the rent or fulfill the conditions of the contract, it is the board of rapid transit commissioners who take possession of the road, and either operate it themselves or lease it to others to operate, with no *262power in the city to regulate the conditions or terms, or rent to be received. In such case the power of the board of rapid transit is unlimited, as in case of such failure on behalf of the contractors, the rapid transit commissioners may either operate the road or lease it to others for such ¡Drice as they may fix in their discretion. And by the express terms of the statute this contract may provide for renewal or renewals of such lease, so that the lease may be a substantial perpetuity, with no right of the city to obtain any control over, or possession of the property, or any right of any kind over it except to receive the rent that the rapid transit commissioners may deem best to impose upon the contractors. No officer of the city, nor the municipal corporation itself, under such a lease, would ever acquire the possession or control of the property;' nor would the city have the right to have any voice in fixing the rate of fare to be charged. That also is to be provided for in the contract at such an amount as the rapid transit commissioners shall fix. After that contract is made, neither the city nor the State could alter the rates of fare which these rapid transit commissioners shall fix as the fare to be charged by such contractors. All that the city can do and what the city is bound to do is, to pay the sum fixed by the rapid transit commissioners as the price to be paid to its contractor that they may select, regardless of the amount of his bid, and all such further sums as shall be necessary to acquire such property as the rapid transit commissioners shall certify to be necessary for the proper construction, Operation or maintenance of the road and such further sums as will be sufficient to pay all damages sustained by any one in consequence of such construction, operation and maintenance of the road. The statute itself, while contemplating the payment of many millions of dollars by the city, provides no safeguards for the prevention of claims by the contractors or others for payments outside of the contract, but in the broadest way imposes upon the city liability for damages that the construction or operation will entail, with no provision for the repayment of such damages by any one, leating the city thus absolutely at the mercy of the contractors or others who sustain damages „by reason of the construction or operation of the railroad. And even this is not all, for, by the provisions of the statute, the rapid transit commissioners, with the consent of the contractor and his surety, may modify the *263contract in any respect, and thus, without the consent of the city, impose additional burdens upon it. It is only necessary to read the remarks of Peckham, J., in delivering the opinion of the court in O'Brien v. The Mayor (139 N. Y. 543) to appreciate the possible effect o± this omission upon the city of New York.
But no matter what the defects of this act may be, no matter what liability it may inflict upon the city of New York, no matter how grievous the burden the city will have to bear if it is enforced, if this act is not in conflict with- an express provision of the Constitution, this court has no power to interfere with it or to declare it. void. I fully recognize the rule that the courts do not sit in review of the discretion of the Legislature or determine upon the expediency, wisdom or propriety of legislative action in matters within the power of the Legislature. Every intendment is in favor of the validity of statutes, and no motive, purpose or intent can be imputed to the Legislature in the enactment of a law other than such as are apparent upon the face and to be gathered from the terms of the law itself. But “ a written Constitution must be interpreted and effect given to it as the paramount law of the land, equally obligatory upon the Legislature as upon other departments of government and individual citizens, according to its spirit and the intent of its framers, as indicated by its terms. An act violating the true intent and meaning of the instrument, although not within the letter, is as much within the purview and effect of a prohibition, as if within the strict letter ; and an act in evasion of the terms of the Constitution as properly interpreted and understood, and frustrating its general and clearly expressed or necessarily implied purpose, is as clearly void as if in express terms forbidden.” (People ex rel. Bolton v. Albertson, 55 N. Y. 55.)
We have thus to determine whether this act, providing that the money and credit of the city of New York shall be applied to the construction of a railroad under these conditions, violates any of the provisions of the Constitution which restrict the power of the Legislature.
In the year 1874 there was adopted by the people of this State a provision of the Constitution which has continued in force from that time down, and which was readopted in the year 1894. This provision was made section 11 of article S of the Constitution in 1874» *264It is therein provided : “No county, city, town or village shall hereafter give any money or property, or loan its money or credit to' or in aid of any individual, association or corporation, or become, directly or indirectly, the owner of stock in or bonds of any association or corporation, nor shall any such county, city, town or village be allowed to incur any indebtedness except for county, city, town or village purposes.”
To appreciate the force of this prohibition, it should, I think, be taken as a whole and not considered as if it related to separate sub- • jects. What was it that this provision intended to prevent ? An acquaintance with the judicial history of the State will show that, prior to this time, many towns and cities had issued bonds to aid in the construction of railroads under legislative authority, and it had been discovered that towns and cities had thus incurred large obligations which were extremely onerous and which returned to such towns and cities but small benefits in comparison with the burdens. So far as is known, it had not then been suggested that any city would engage in the building and owning of railroads itself, but railroad corporations had been able to obtain from cities and towns, in exchange for stock or bonds of the railway companies, city and town bonds, the proceeds of which had been applied to the purposes of the railway corporations. It was this condition that confronted the framers of this constitutional provision, and it seems to me that its obvious intent was to prevent the cities and towns of the State from investing their money in such enterprises. The provisions are broad. “ No county, city, town or village ” could give or loan its money or credit to aid an individual or corporation. Neither could it become directly or indirectly the owner of stock in or bonds of any association or corporation. “ Nor shall any such county, city, town or village be allowed to incur any indebtedness, except for county, city, town or village purposes.” Thus, the city was prevented from giving or loaning its money to any individual, association or corporation, prevented from becoming interested in any way in the stock or bonds of such association or corporation, and further, from incurring any indebtedness for any purpose other than a city, county, town or village purpose.
The general nature of this prohibition is exceedingly plain. It can mean but one thing, viz., that the money of a municipal corpo*265ration, raised by taxation, shall never be diverted from its purely municipal use. The money that the municipal corporation is alio wed. to collect by taxation is to be used for governmental purposes, including within that term the acquisition of such property as is necessary and convenient for the performance of the proper governmental functions. And within those functions are included the preservation of the public peace, the preservation of the public health, the opening of necessary streets and the building of bridges, the maintenance of docks upon land owned by the city or acquired for that purpose as necessary for the public commerce of a seaport, the maintenance, lighting and repairs of roads and highways. All of these are proper city purposes, and have been recognized as such for centuries by the common law of England and of this State. But we are here asked to extend a city purpose, from that of building a highway or street for the use of the whole people, to the building of a railway to be given to a particular individual, to be operated by him for his profit, and over which the city can have no control, and the use of which it cannot regulate in any way.
The term “ city,” in connection with “ county, town and village,” evidently applies to the municipal corporation as an entirety, incorporated by the State, and charged with certain governmental functions. Its existence is recognized as a means adopted for local governmental purposes. Its money is not to be loaned or given, and the city shall not be allowed to incur any indebtedness, except for city purposes.
Can it bé a city purpose to acquire property which is to be used by an individual or corporation for profit, over which neither the city nor its citizens can have control, the use of which they cannot regulate, and where they can have no authority to impose the terms upon which it is to be used by others ? Can it be a city purpose to invest $55,000,000 in property which, by a very possible contingency, may be operated or leased so that no return at all shall be paid to the city for its use, the city or its citizens being powerless to obtain possession of or in any way control or use it, and from which, by means of a contract uncontrolled by the municipal corporation, the person in possession can exclude every one of the citizens of the city except upon payment to him of a fee, the amount of which *266neither the city nor its citizens can control ? Ye are here dealing with a city purpose, a purpose for which the municipal corporation was organized, and not with a public use, as that, term is applied. This railroad, when finished, would be clearly a public use, as are all other railroads, waterways and turnpikes of the State. And while the Legislature could clearly authorize, as it-has authorized in the past, and as this act, as originally passed, intended to authorize in the future, a corporation created for such purpose, to construct, operate and maintain a railroad in the city of New York, and while such a railroad, when constructed under such authority, would be a public use, and would be authorized as such to acquire the property of private citizens by the right of eminent domain, it is perfectly clear that such a railroad, so constructed, maintained and operated by a private individual for a private gain, would not be for a city use or purpose. Is it not equally clear that any attempt by the Legislature to grant to such a corporation so organized the money or credit of a municipal corporation would be clearly within the prohibition of this provision of the Constitution which we are considering? Would the fact that the act authorizing such a contribution provided that the corporation should pay to the city of New York either such sum as it should fix, or as the city itself should fix, for the use of the money that it advanced to such association or corporation, prevent it being clearly within the prohibition of this provision of the Constitution ? What more than that does this act do ?' It appoints the commissioners who are to build the road, who are to fix the amount that the city is to receive for the use of the road when built, and it requires the city to issue to the individual named as the contractor its money or credit, to enable him to build the road under a contract by which, while the bare legal fee remains in the city, the perpetual use and occupation of the premises is to remain with the contractor. Does it avoid the prohibition to say that the legal title vests in the city of New York when the beneficial use and profits of the property are vested in another perpetually ? Under this contract, who is to get the benefit if this road becomes a profitable undertaking, where large profits will be made by the operation of the road ? Not the city. It never can receive more than the rent reserved to it by the contract between the rapid transit commissioners and the contractors. Who is to *267bear the burden if the undertaking prove a failure ? Clearly the city, except so far as it is protected by the giving of a bond, the amount of which is entirely within the discretion of the rapid transit commissioners. And all through this act it is clear that the Legislature was not thinking of the welfare of the city, was not thinking of this as a city purpose or city use, but as a public use. The commissioners are again and again directed by the statute that they are to determine questions submitted to them, as the public interests require, and not the interests of the city of New York or its citizens or taxpayers, whose money is to be used to construct this railroad.
In two cases there has been presented to the Court of Appeals the question as to the construction to be given to this phrase, “ city purpose,” in the Constitution, and it seems to me that if we are to apply the principles there adopted in determining just what is a city purpose, then building a railroad under these conditions is within the condemnation of this provision of the Constitution. The first case is The People ex rel. Murphy v. Kelly (76 N. Y. 475). The court had to determine in that case whether or not building a bridge between New York and Brooklyn was a city purpose for the city of New York. The act under consideration in that case allowed the city of New York to obtain the stock of the corporation which had been organized to build a bridge between New York and Brooklyn either by voluntary purchase or by condemnation proceedings. Upon obtaining that stock the bridge company was to be dissolved, and upon the dissolution of the bridge company the bridge and all its appurtenances should vest absolutely in and belong to the two cities of New York and Brooklyn. The two cities were then authorized to finish the bridge, each city contributing a certain proportion of the cost. It was held in that case that it could not be said that the indebtedness authorized to be incurred by the cities for the construction of the bridge was not for a city purpose. The court, in laying down the principles which were to govern in determining what was and is a city purpose, said: “ It is impossible to define in a general way with entire accuracy what a city purpose is, within the meaning of the Constitution. Each case must largely depend upon its own facts, and the meaning of these words must be evolved by a process of exclusion and inclusion in judicial construction. It would not be a city purpose for the city of New *268York to build a railroad from that city to Philadelphia, or to improve the navigation of the Hudson river generally between that city and Albany, although incidental benefits might flow to the city. Such works have never been regarded as within the legitimate scope of municipal government. On the contrary, it would be a city purpose to purchase a supply of water outside of the city, and convey it into the city, and for such a purpose a city debt could be created. So lands for a park for the health and. comfort of the inhabitants of a city could be purchased outside of the city limits, and yet conveniently near thereto. Such improvements are for the common and general benefit of all the citizens, and have always been regarded as within the scope of municipal government; and so, too, highways or streets leading into a city or village may be improved, provided the improvements be confined within such limits that they may be regarded as for the common benefit and enjoyment of all the citizens. It cannot, therefore, well be held, as claimed by the learned counsel for the appellants, that what is meant by a city purpose is some work or expenditure within the city limits. There could be no good reason for such a limitation. It could be no worse for a city to incur debt for a city purpose outside of the city limits than for one within such limits, and there is just as much reason for allowing it to be incurred in the one case as in the other. The cities of New York and Brooklyn are intimately connected in many ways, by business, social and commercial ties. Thousands who do business in the one city do business in the other. * * * To bridge such a water separating two such cities must be a city purpose of each city. The bridge will be for the common benefit of all the citizens of both cities, and each citizen will have the same right to use it as every other citizen. It would have been a city purpose if either city had been authorized to build the whole of the bridge, and it is no less so that both are to unite in building it.”
Applying this process of exclusion and inclusion we find it would not be a city purpose to build a railroad from New York to Philar delphia, and as clearly not a city purpose to build a railroad from New York to Poughkeepsie. It would be a city purpose to improve highways or streets leading into a city, provided the improvements be confined within such limits that they may be regarded as for the *269common benefit and enjoyment of all the citizens. It not being a city purpose to construct a railroad to another city, not because it would not be entirely within the limits of the city attempting to construct it, but because such a work has never been regarded as within the legitimate scope of municipal government, what then can be said to bring the construction of a railroad wholly located within a city, or extending from one end of the city to the other within such scope ? Not the fact that it is wholly within the city limits, because that is not the test. The test is that such improvements, as are for the common and general benefit of all the citizens and are within the scope of municipal government, are city purposes. Others are not. A railroad is constructed to the city limits from another city; the city is asked to continue the road from the city limits to the middle of the city, and after such construction to turn it over to the corporation or individual who has constructed the road to the city limits for its own use. Is it not clear, applying the test above stated, that the construction of such a continuance of the road would be no more a city purpose than the construction of the road beyond the city limits ? Such a road would be for the use of the citizens as would the railroad to be built under this act, viz., those of the citizens who could or would pay for the facilities furnished. Evidently it might be of much benefit to the city, but it would not be a city purpose, because it would not be for the common and general benefit of all the citizens and not within the legitimate scope of municipal government.'
The question was again presented to the Court of Appeals in Matter of the Application of the Mayor, etc., of New York (99 N. Y. 585), when the question was as to the power of the city of New York to acquire lands just outside of its border for a public park. In that case it was stated to have been conceded that the acquisition and maintenance of public parks, securing pure air and healthful rest and recreation to the people is a city purpose when executed within the corporate limits; but it was claimed in that case that it ceased to be a city purpose when to any degree or to any extent it moved outside of those boundaries. The case of People ex rel. Murphy v. Kelly (supra) was followed, and it was held that the test was not as to the location of the property sought to be acquired, but it was argued that “ if the city may go three miles from its nearest bound*270ary, and with the connecting ribbon of ‘ a parkway ’ take Pelham Bay and Hunter’s Island, why it is asked, may it not take the Falls of Niagara or a mountain of the Adirondacks or land in Dutchess county, and building a road hither, claim it to be for a ‘ city purpose ? ’ ” And as to that argument the court say: “ The inquiry as to a park at Niagara or in the Adirondacks remains unanswered. Beyond question, neither would be a city purpose, and when we have determined why, we should have approached as near to what is the true test as the nature of the subject will permit. While, as was said in one of the cases cited, it is impossible to formulate a perfect definition of what is meant by a city purpose, yet two characteristics it must have. The purpose must be primarily the benefit, use or convenience of the city, as distinguished from that of the public outside of it, although they may be incidentally benefited and the work be of such a character as to show plainly the predominance of that purpose. And then the thing to be done must be within the ordinary range of municipal action.” We have here again the test. The improvement must be primarily for the use or convenience of the city, as ‘distinguished from that of the public generally, and then the thing to be done must be within the “ ordinary range of municipal action.”
Is the building of this railway a thing which is within the ordinary range of municipal action? Never before has a municipality attempted such an undertaking within our knowledge. And then again the avowed purpose of this act, to which attention has been before called, is that this property is not to be acquired by the city as an absolute owner so that it would be entitled to the possession, control or use of the property as for a city purpose, for the common benefit of all its citizens, but it is to be turned over to the contractors who are to use it, control it and manage it, subject to no city control, and under such conditions that the city may never receive any consideration for its use, for its own benefit and profit. In both of these cases cited the property when acquired was to vest absolutely in the city, and be subject to its control, and to be for the free and uncontrolled benefit and use of all the citizens of the city.
The case of Hequembourg v. City of Dunkirk (49 Hun, 550) is relied upon by the learned counsel for the respondents. That *271was a case where the construction of an electric light plant by the city to furnish light for its own streets, and also for its inhabitants, was upheld, but the learned judge in writing the opinion expressly placed it upon the ground that the lighting of the streets and public places is one of the duties devolving upon the municipal government, and is a city purpose within the provisions of the Constitution ; that the lighting of streets and public places is based upon the same principle that has upheld the municipal action in obtaining pure and wholesome water for the use of the city. It was there expressly held that furnishing light for private dwellings is a use more of a private nature, and not a duty of the municipality.
The case of Walker v. City of Cincinnati (21 Ohio St. 11) and the several cases which follow it, 'are not in point. The Constitution of the State of Ohio forbade any city to become a stockholder in any corporation, or to raise money for or loan its credit to or in aid of any corporation. The Legislature had empowed any city of the first class to build a railroad from that city to any other terminus in the State, or in any other State. The Supreme Court of Ohio held that the act was not within the constitutional prohibition above quoted, which was clearly correct. It went on further to hold that such an enterprise was a city purpose, which is contrary to the opinion of the Court of Appeals in the cases above cited But it held nothing which at all applies to the case at bar.
Again, we must clearly call to mind the distinction between a public use and a city purpose, and this distinction is emphasized when we consider the difference in the language used prohibiting the State from giving or loaning its money or credit and that used in relation to cities.
Article 8, section 10, of the Constitution was adopted at the same time as the provision now in question, and it was therein provided: “ Neither the credit nor the money of the State shall be given or loaned to or in aid of any association, corporation or private undertaking.” This provision might not preclude the State from building a railroad which would be clearly a public use; but when the prohibition relates to the subdivisions into which the State is divided for the purpose of local government, the language used is different and the prohibition is much broader. That prohibition is, not that the credit of a city shall not be used for a private undertaking, but that *272it shall not be used for any purpose except a city purpose. But the construction and operation of a railroad is not the only business that has been recognized by the law as being of public interest, or as having more or less of a public character. Thus, the establishment of an elevator for the purpose of loading vessels with grain has been so considered. (People v. Budd, 117 N. Y. 1.) Also the operation and maintenance of a theatre. (See Peoples. King, 110 N. Y. 418.) And the power of the Legislature to control the keepers of hotels or inns has been frequently applied, on the ground that this use of their property was “ affected with a public interest; ” and if the public character of the business, or use to which the property is put controls, I can see no reason why the city of New York should not be compelled to erect hotels to be used for the accommodation of guests, theatres to be used for the amusement of its citizens, elevators to be used by the railroads for loading grain from their cars, stage or cab lines for the carrying of passengers, or for almost any use or purpose which is required for the convenience or amusement of the people. It is solely a. question of power, and it seems to me that it is just such a use of public money and public credit that this constitutional prohibition was intended to prevent.
I have laid stress upon the fact that these rapid transit commissioners were appointed by the Legislature and were State officers whose duties were not confined to the city of New York alone, but extended over the whole State, applicable to each city of the State containing over 1,000,000 inhabitants. It is not intended to intimate a doubt as to the power of the Legislature to create or appoint its officers who shall act for the city; but, in determining whether or not a use to which the city’s money is to be applied is a city purpose, it is certainly important to determine whether or not property which is to be acquired with such money is to become the substantial property of the city in such a sense that the city retains over it the usual control that one has of property which he owns: and when such officers are appointed to acquire property on behalf of the city, for which the city has to pay, but of which all the beneficial use, management and control is continued indefinitely under the control of such State officers or persons with whom they make contracts, and when the clear and avowed object of the act is to compel the city to pay for the property which it can never use and *273never control, but which is to be used for the profits of a private individual or corporation, and which the citizens of the municipality can use only in connection with all the other citizens of the State or county, or the public generally, upon paying such compensation as shall be fixed by agreement between such State officers and the individual or corporation who is to have the use of the property, it seems to me that the essential elements of a city use or purpose are absent, and that the acquisition of such property is. not a city purpose.
“ The Legislature when legislating in view of this constitutional limitation, must determine in the first instance what is a municipal purpose. Its decision is not, however, final. When its act is. challenged as in conflict with this constitutional limitation, the courts must determine whether debt is authorized to be incurred fora purpose not municipal.” (People ex rel. Murphy v. Kelly, supra.)
But this provision of the Constitution under consideration also expressly prohibits municipal corporations from loaning their money or credit to, or in aid of, any individual association or coiqioration and does not this scheme directly violate this constitutional prohibition ? If the Legislature had provided that this board of rapid transit railway commissioners should make a contract with a named railroad company to build a railway in the city of New York,, at the contract price as fixed between the commissioners and the railroad company, to be paid by the city of New York, and upon the completion of the road the railroad company was to have the exclusive-use of the road upon paying to the city a sum of money, would not. that be a direct loan of its money or credit by the city of New York in aid of the railroad company? And yet in what essential particular does tliis act differ from that suggested, except that instead of the Legislature designating the corporation or individual who is to receive the money to build the road, and after the road was built to receive the right to occupy, maintain and operate it, the determination of the individual is left to the officers appointed for that purpose ? It certainly is not essential that the Legislature itself should name the individuals, association or corporation to whom the money or credit of the city is to be given or loaned. It left the determination of that question to the officers whom it has appointed ; and. *274when, these rapid transit commissioners select the individual who is to make the contract, and make the contract with such individual or corporation to build the road, the city is then bound to issue its bonds for the purpose of enabling that contractor to carry out his contract to build a road, the operation and control of which he is to have for his own profit.
Even before the adoption of this constitutional amendment of 1874, the power to make such a disposition of public money would have been a matter of serious doubt. In the case of People ex rel. McLean v. Flagg (46 N. Y. 401) the act provided that the town bonds should be issued for the improvement authorized by the act to be made, and the objection there taken was that the Legislature had no power to compel the town to incur a debt for such an improvement; but the court held that as to the question of power there was no restriction in the Constitution, and that when power is conceded the court had no right to inquire into the motives or reasons for doing the particular act. The court then continued: “ The legislation in question is ojien to serious criticism. It comjiels a large, if not extravagant, exjienditure of money, and imposes onerous burdens upon the whole people without their consent. If the object of the exjienditure was private, or if the money to be raised was directed to be. paid to a jirivate corporation who were authorized to use the improvements for jirivate gain, the question, in my judgment, would be quite different; and in this resjiect there is a limit, beyond which legislative power cannot légitimately be exercised.”
Is not the money to be raised here directed to be jiaid to a private corporation or individual, viz., the contractors who were authorized to use the railroad for jirivate gain ? And when we have, in addition to the restrictions contained in the Constitution as it existed when this view was expressed, the further restrictions adopted by this amendment of 1874, much further limiting the uses to which city money or credit can be ajijilied, is it not ajijiarent that the whole spirit and intent of this limitation upon the power of the Legislature'to dispose of money raised by taxation is violated, as well as the express terms of the Constitution ?
I can come to no other conclusion, having given to the determinar tion of this question the utmost care and thought, than that this *275whole scheme of the building by the city of a railway, to be used by private individuals or corporations for their own benefit, is not a city purpose and was beyond the power of the Legislature to authorize. I am, therefore, constrained to the opinion that this judgment should be reversed.