Court Opinion

ID: 5206548
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:03:43.21384+00
Date Added: 2024-06-11T08:27:17.944616
License: Public Domain

Chester, J. (dissenting):
The only question brought up for our consideration is whether an individual can lawfully bid in a franchise to operate a surface railway in the streets of the city. At the time of making his bid in this case .Powers stated that it was made by him as an individual, and he did not claim to represent any corporation authorized by law to construct and operate street surface railways.
The statute under which the franchise was put up for sale is section 19 of chapter 182 of the Laws of 1898 (as aind. by Laws of 1906, chap. 52), known as the Act for the Government of Cities of the Second Class, which provides that an ordinance authorizing the sale of a franchise must provide for its disposition at public auction, after public notice of at least three weeks, to the “ highest bidder,” and that such sale shall not be valid or take effect unless subsequently approved by resolution of the board of estimate and apportionment.
Both parties agree that under the statutes the operation of street surface railways is confined to corporations, and even before a corporation may construct such a railroad it must have, first, the consent of the Public Service Commission (formerly the Board of . Railroad Commissioners) under section 59 of the Railroad Law (Laws of 1890, chap. 565, added by Laws of 1892, chap. 676, and amd. by Laws of 1895, chap. 545) * ; second, it must procure a franchise from the municipality having control of the streets proposed to be occupied, and, third, it must have the consent of the property owners on the streets to be used. So that even if an individual was entitled to bid for the franchise upon a public sale thereof, it would avail him nothing, for the reason that he could not lawfully get the consent of either the Public Service Commission of of the property owners abutting on the streets, for neither of these consents would have any force if given to an individual, as he could never lawfully construct or operate the road. This is a question, too, in which the public have an interest as well as the corporation or the individual concerned, for when the municipal authorities grant a franchise for the operation of a railway in the streets, it is presumed that it is done for the purpose of having such a railway constructed therein, and it would be an idle ceremony to grant or sell the fran*368ckise to one who could not lawfully build the road. Therefore, the public desires and needs would not be met or fulfilled. If an individual can lawfully take a franchise on a public sale thereof it would at once become private property in his hands, and so long as he held it as such it would be removed from public control and would be merchandise in his hands for private gain instead of for public weal.
It seems to me clear that when a public franchise is authorized to be sold to the “ highest bidder ” it means to the highest qualified bidder; that is, to a bidder qualified by law to exercise the franchise offered for sale, otherwise the public interests and the railway corporation involved must inevitably suffer whenever an individual sees that by becoming a bidder on such a sale a personal advantage can be gained for himself.
It was said in Kent v. Common Council (94 App. Div. 529) by Chase, J.: “ Where a franchise is granted to build a railroad, it imposes upon the company to which it is granted an obligation to build the road.” It would be useless to grant a franchise to an -individual for the simple reason that under the law he could not fulfill the obligation to build. This would seem to indicate that only a corporation authorized to build could properly bid upon a franchise.
It is said that in each of the cities of the second class there is but a single trolley company, so that if an individual cannot bid there would be practically no competition in the case of the sales of public franchises. This, however, is not of much moment, in view of the fact that the municipal authorities under the law have the right to make such proper regulations for the protection of the city as the common council may impose, and no bid is effective unless subsequently approved by a resolution of the board of estimate and apportionment. (Charter Second Class Cities, § 19, supra.) This provision, I think, was inserted for a purpose, and enables the municipality to protect itself from the monopoly or greed of any corporation as it apparently did in the case in question where there was a provision inserted in the terms of sale that no bid less than $7,500, besides the cost of advertising, would be received.
I can conceive of no benefit to accrue to the public from the construction given to the statute in the prevailing opinion. Whatever *369benefit may come from any increased competition afforded by such r construction will be more than offset, in case of the building of the new road by another company, by the requirement from the public of a double fare for riding over the lines of two companies instead of a single fare for covering the same distance in the cars of a single company. Experience has demonstrated that the public is much better and more cheaply served where a single company operates all the railways in a city than where two companies occupy the field, for the reason that in the one case a liberal use of transfers is compelled by law, which cannot be required in the other.
The views here expressed find support in Village of Phoenix v. Gannon (123 App. Div. 93), where it was held that a grant of a franchise by a village to an individual to operate a street surface railroad upon its streets was void.
I think the judgment and order should be affirmed, with costs.
Sewell, J., concurred.
Interlocutory judgment and order reversed, with costs to appellant, and judgment ordered for the plaintiff as per opinion, with costs, with leave to defendants within twenty days to withdraw demurrer and answer on payment of such costs.

 See Public Service Commissions Law (Laws of 1907, chap 429), §§ 2, 53, 54, 80, 86, 89.— [Ebb.