Court Opinion

ID: 5273038
Source: CourtListenerOpinion
Date Created: 2022-01-06 21:29:56.794619+00
Date Added: 2024-06-11T08:28:15.953236
License: Public Domain

Hinman, J. (dissenting):
I think there is a clear element of distinction between this case and the Quinby case and the other cases in the Court of Appeals which have followed the Quinby decision. In each of those cases there was involved the question of the rate of fare within the limits of the complaining municipality. Here we have the question of interference by an outside municipality with reference to a proposed increase of rate in another municipality where the latter has consented to the increase and the rights of the complaining municipality are only incidentally involved. This presents the new element of. whether a franchise agreement, binding between the parties thereto, is likewise so binding upon another municipality, not a party to the agreement, as to prevent that municipality from entering into a similar contract for the benefit of its inhabitants and involving only rates within its own borders. The Court of Appeals has not laid down any such rule and to so hold seems unreasonable.
The franchise agreement with the village of Mamaroneck was executed in 1899. Prior to the granting of this franchise the Legislature had passed the General Railroad Law of 1890. (Gen. Laws, chap. 39; Laws of 1890, chap. 565.) Section 101 of the law fixed a rate of fare at five cents and further provided: “The Legislature expressly reserves the right to regulate and reduce the rate of fare on any railroad constructed and operated wholly or in part under such chapter [Laws of T884, chap. 252] or under the provisions of this article.” (Art. 4 [now art. 5] on Street Surface Railroads.) This section 101 of the Railroad Law of 1890 (as amd. by Laws of 1892, chap. 676, and Laws of 1897, chap. 688), re-enacting the foregoing provisions,- became section 181 of the revised Railroad Law of 1910 (Consol. Laws, chap. 49; Laws of 1910, chap. 481) with the following added provision: “And the Public Service Commission shall possess the same power, to be exercised as prescribed in the Public Service Commissions Law.” By section 49 of the Public Service Commissions Law of 1910 (Consol. Laws, chap. 48; Laws of 1910, chap. 480), which revised section 49 of the former Public Service Commissions Law of 1907 (Laws of 1907, chap. 429), the Commission was given the right to determine just and reasonable rates. Said section 49 has been amended and the short title of the statute changed to Public Service Commission Law. (See Laws of 1911, chap. 546; Laws of 1921, chaps. 134, 335; Laws of 1922, chap. 153; Laws of 1923, chap. 891.) The consent given by the village of Mamaroneck in 1899 involved, by implication of the statute of 1890, the regulatory power of the State to fix the rate whenever the State, acting for itself or through another, should see fit to exercise the right which it had expressly reserved in the General Railroad Law of 1890. *342The Public Service Commission has only the powers delegated to it. In the Quinby case the Court of Appeals refused to consider the language of the Public Service Commissions Law broad enough to include the power to regulate the rate fixed by the local franchise agreement involved in that case. It is to be remembered, however, that the local franchise agreement involved in the Quinby case fixed a rate only within the city of Rochester and in the later cases passed upon by the Court of Appeals the rates involved were purely urban rates confined to the limits of the city granting the consent. The rights of another municipality were not involved. Three judges of the Court of Appeals have already gone on record as holding that consents granted subsequent to 1890 are now subject to the Public Service Commission. (People ex rel. Garrison v. Nixon, 229 N. Y. 575, 577; Matter of City of Niagara Falls v. Pub. Serv. Comm., Id. 333, 341.) A majority of the court have agreed that all franchises granted since the passage of the Public Service Commissions Law in 1907 are subject to the jurisdiction of the Commission. (People ex rel. Garrison v. Nixon, supra.) In one of the later cases explaining and circumscribing the scope of previous decisions, Judge Cardozo says: “We have held, in view of the constitutional provisions requiring the consent of municipalities to the construction and operation of railroads in their streets, that the statutes ought not to be interpreted as permitting the Public Service Commission in such circumstances to nullify existing contracts. We are now asked to hold that the municipalities by their contracts may nullify existing statutes. We will not go so far.” (People ex rel. City of New York v. Nixon, 229 N. Y. 356, 362.)
This brings us to the particular case before us.' A new situation is presented. The railway company in applying to the Commission in this case does not directly attack the franchise agreement with the village of Mamaroneck but presents a new franchise agreement made with the village of Larchmont, the effect of which, however, is to modify the agreement with the village of Mamaroneck so far as that agreement affects the rights of the village of Larchmont. The modification involved does not change the rates within the village of Mamaroneck but only the rates within the limits of the present consenting municipality. The village of Mamaroneck in 1899 consented upon condition that the company should not charge more than five cents not only within that village but between certain fixed points outside of that village which included the company’s fines within the village of Larchmont. The village of Larchmont now finds it necessary to pave one of its streets, a portion of the cost of which must be borne by the railway company. The representatives of that village have satisfied themselves that *343justice to the railway company requires them to give financial assistance to the railway company by granting a six-cent fare on one of its lines and a ten-cent fare on another line, such increased fares to be charged only within the limits of that village. On March 26,1923, the village of Larchmont granted its consent to this increase. The railway company immediately presented the matter to the Public Service Commission by an application to be permitted to put the agreement into effect on short notice as allowed by law. (See Pub. Serv. Comm. Law, § 29, as amd. by Laws of 1921, chap. 134; Id. § 49, subd. 1, as amd. by Laws of 1921, chaps. 134, 335, and Laws of 1922, chap. 153.) The village of Mamaroneck applied for an order of prohibition against the Commission, which was denied. A stay was granted pending appeal from the denial of that motion. Since then the Legislature, by chapter 891 of the Laws of 1923 (amdg. Pub. Serv. Comm. Law, § 49, subd. 1), has repealed so much of the law as had been added in 1921 and under which the Public Service Commission had been given express authority to regulate rates established by such local consents.
Assuming that the jurisdiction of the Public Service Commission over this case must be determined without reference to the amendment of 1921, we still have a situation which seems to be novel. We find a franchise granted by the village of Larchmont in 1923. If is this franchise which is directly involved. The Court of Appeals has said that franchises granted since 1907 are subject to the jurisdiction of the Commission. The consent of the village of Mamaroneck is incidentally involved, however, and that village now claims that the Commission is consequently prohibited from taking jurisdiction. This contention does not seem reasonable. It denies to the village of Larchmont a similar right to administer its own affairs for the benefit of its own inhabitants. It involves the rights of another municipality over which the village of Mamaroneck has no control. The rights of one municipality should not be thus restricted by the agreement of another in the absence of clear authority of law. Under these circumstances the Commission, if denied jurisdiction, must be denied it on the ground that if it exercised its power to determine the reasonableness of the rates fixed by agreement with the village of Larchmont, it may exercise a power not granted to it by modifying pro tanto the rate fixed by agreement with the village of Mamaroneck. .
There are two objections to conceding such a limitation of the Commission’s power. One is that the reasons which actuated the Court of Appeals to say that it would not interpret the statute prior to the 1921 amendment to permit the Public Service Commission to nullify existing contracts, do not apply with the same *344force where the court is asked to hold that a municipality by its contract may nullify the right of another municipality to enter into a similar contract for the benefit of its inhabitants. The Court of Appeals has not laid down any such rule and to so hold seems unreasonable. The proposition involves the rights of the public generally as distinguished from those of a particular community and to that extent involves a clear element of distinction. The other reason is that we have no right to assume that the village of Mamaroneck will elect to revoke its consent given to the railway company to operate upon its streets if the Public Service Commission grants an increase of rates within the village of Larchmont. The village of Mamaroneck has provided in its franchise agreement that after thirty days’ notice that any condition is being violated, if there shall occur any such violation, the franchise shall cease, determine and be void. Unless it serves the notice, the franchise remains intact. If it serves notice, the railway company has thirty days within which to determine whether it will withdraw its objectionable rates or to make some satisfactory adjustment of the matter. And the Public Service Commission may provide in advance for this situation because it has the right to order the change in rate upon such terms and conditions as it may prescribe. (Pub. Serv. Comm. Law, § 49, subd. 1, as amd. supra.) While the Court of Appeals refused in Public Service Comm. v. Westchester Street R. R. Co. (206 N. Y. 209) to declare that the remedy of the municipality was by forfeiture of the franchise, I think that in a case involving the rights of another municipality, as in this case, the Court of Appeals would hold to the contrary. Why should the village of Mamaroneck by refusing to declare a forfeiture reserved to it in its agreement, stand in the way of the exercise by the village of Larchmont of its proper rights? If the courts are to enforce franchise agreements by prohibition proceedings, or some other high prerogative, why should' we not enforce the Larchmont agreement as well as the Mamaroneck agreement? The case of Public Service Comm. v. Westchester Street R. R. Co. (206 N. Y. 209) has no application here. That case did not involve an application to the Public Service Commission for leave to increase its rate of fare. The company in that case attempted to act without the consent of the Commission and the Commission sought by injunction to restrain the company from thus increasing its fares. In the present case the village of Larchmont wishes to improve its streets. Without an increase in local fares its street railway service may be impoverished or destroyed if the railway company is to pay its share of the street improvement as required by law. (See Bail-road Law, § 178, as amd. by Laws of 1912, chap. 368, and Laws of *3451921, chap. 433.) The alternatives presented seem to be that Larchmont shall go without its street improvements in order that the citizens of Mamaroneck may enforce a right to cheap transportation while traveling in or through Larchmont, or that Larchmont shall have its street improvement at the risk of destroying the street railway which serves both of these villages and other municipalities through which it passes. Under these circumstances the village of Mamaroneck should be put to its remedy reserved to it in its franchise agreement to revoke its consent, if it wishes cheap transportation or nothing, or to waive its right to revoke, if so advised, after unsuccessful efforts to persuade the Public Service Commission that the proposed rates are unjust and unreasonable.
Therefore, even assuming that this case must be determined with reference to the law as it existed prior to the 1921 amendment, which amendment of 1921 clearly gave to the Commission jurisdiction over rates fixed by local agreements, I think we should hold that the Commission has jurisdiction to consider the proposed Larchmont agreement of 1923 and to make an order thereon subject to such terms and conditions as the Commission may prescribe.
In any event I do not see how we can reverse the order appealed from. At the time the order was made by Mr. Justice Howard the amendment of 1921 was in force and the Commission clearly had jurisdiction. Application was made for an order of prohibition against the Commission. This is clearly a “ proceeding ” within the meaning of section 94 of the General Construction Law. The statute of 1923, which repealed the provision expressly granting power to the Commission to regulate rates fixed by franchise agreements, did not specially provide by law that it should have retroactive effect so as to cover a pending proceeding. The repealing act must, therefore, be read in the light of section 94 of the General Construction Law. We are, therefore, compelled to approve the order of Mr. Justice Howard even though we should say that the Commission is now powerless to act in the premises. The question of costs is at least involved. Moreover, it is to be noted that section 94 of the General Construction Law refers to “ proceedings.” It does not refer to “ special proceedings,” which is the term defined in section 46-a of the General Construction Law (as added by Laws of 1920, chap. 917, revising Code Civ. Proc. § 3334), to which Mr. Justice McCann refers. A “ special proceeding,” as defined by section 46-a, refers only to a prosecution by a party against another party in a court of justice. The word “ proceedings ” may be given a broader signification so as to include a statutory proceeding instituted before the Public Service Commission. While this is not a “ special proceeding ” because not prosecuted in *346a court of justice, it is nevertheless a “ proceeding ” authorized by statute and in the absence of a definition of the word “ proceedings,” I see no reason why we should not give to the word its ordinary and usual meaning. I, therefore, favor the affirmance of this order upon the further ground that the order denying prohibition was rightly granted at the time and that the statutory proceeding before the Commission was pending at the time of the passage of the statute of 1923 and was, therefore, unaffected thereby since the statute of 1923 did not otherwise specially provide and must be so interpreted under the provisions of section 94 of the General Construction Law.
Order reversed on the law, with costs, and motion granted, without costs.