Court Opinion

ID: 3588937
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:38:06.860605+00
Date Added: 2024-06-11T07:42:00.647146
License: Public Domain

I agree with Judge PECKHAM that the defendant should be held to the obligation of paying into the *Page 43 
city treasury five per cent of the net income from the operation of that portion of its railroad, which is commonly called the Ninth Avenue line. That obligation is certainly enforcible upon the theory expressed in his opinion. I think it perfectly clear that the subsequent acquiescence by the West Side, etc., Railroad Company and of its successor, the New York Elevated Railroad Company, in the directions for payment, contained in the act of 1868, was equivalent to a consent that they should become part of the compact with the state, which regulated its corporate life, and that they should constitute the rule in making the statutory payments. However grave the objections to the act of 1868, upon constitutional grounds, the provisions of its second section related merely to the manner of paying the fixed percentage. The burden of payment was already imposed by the act of 1867, which left for future legislation a matter of detail, as to the manner and times of making the payments. When, subsequently to the passage of the act of 1868, the predecessors of the Manhattan Railway Company made payments of percentages, at stated times, into the city treasury; in legal effect, there was an adoption of the directions of that act, as a regulation of the discharge of the corporate obligation; and the charter then stood as containing as complete an obligation, with respect to such payments, as though the act of 1867 had, in terms, fixed their manner and times.
But I cannot agree with the conclusion that, as to its so-called Third Avenue line, the defendant and its predecessor, the New York Elevated Railroad Company, were exempted from this general charter obligation. I consider that the condition of liability being once established, with respect to the original route, it inevitably and logically follows that that condition continued with respect to all extensions, or connecting routes built by the New York Company, unless and until relieved by competent and certain legislative action. Any other view of the question seems without any justification upon legal grounds, and must be influenced by some quite unwarrantable notion, or sentiment, of injustice to the defendant. *Page 44 
After the many years of acquiescence by the defendant and its predecessor in the understanding that the obligation to pay the percentage, imposed by the original act of incorporation, continued with equal force as to new routes, extending their railway, built through the permission given by the Rapid Transit Act of 1875, I think it is altogether too late to indulge in sympathy, or to rest the discussion of the case upon any notion of injustice. It never occurred to the defendant that it was suffering from any unjust and illegal burden, until after the lapse of some twelve years from the construction of the Third Avenue line; and, in fact, a careful and candid consideration of the statutes and of the facts should dispel any doubt as to the justice of holding it to an obligation imposed by law and most willingly assumed. It will conduce to a clearer understanding of a question, which is of very great importance to the city of New York, if we consider what was the general situation at the time of the passage of chapter 606 of the Laws of 1875, or, as it is usually referred to, the "Rapid Transit Act." When that act was passed, the New York Elevated Railroad Company had acquired by purchase, upon foreclosure and upon sales, the property and franchises of the West Side and Yonkers Patent Railroad Company, and was operating its elevated railroad from the Battery, through Greenwich street, to and through Ninth avenue to Thirtieth street, and solely by virtue of the franchises so acquired. It was the only elevated steam railway in actual operation in the city, and, but a day before the passage of the Rapid Transit Act, the legislature had passed chapter 595 of the Session Laws, which confirmed it in its possession of the rights and franchises acquired; authorized and required it to continue and complete elevated railroads, and regulated the construction, operation and management thereof. There was one other corporation in existence at that time, formed under an act passed in 1872, for the purpose of operating an elevated railway, and that was the Gilbert Elevated Railroad Company. Its charter gave it the right to build a tubular elevated railway upon and southerly from Sixth avenue; but it had done *Page 45 
little, if anything, in the direction of carrying out the chartered project. Amendments to the Constitution of the state, which went into force on January 1, 1875, stood in the way of any legislative action, looking to the extension of the New York Elevated Company's Ninth Avenue line beyond the routes fixed for it on the west side of the city. In that condition of affairs the Rapid Transit Act was passed — in form a general law, or scheme, authorizing elevated steam railways in the city, upon routes and under articles for the incorporation of companies, to be determined and framed by commissioners appointed by the mayor. Being, for the generality of its application, saved from the constitutional inhibition, the act, nevertheless, was, plainly enough, in the interest of the existing New York and Gilbert Elevated Companies, and its thirty-sixth section was inserted to cover the case of each. That section provided, in the first place, for any existing corporation, the routes of which coincided with the routes laid out by the mayor's commissioners, and empowered it to construct and operate its railway as a corporation specially formed under the act. That met the case of the Gilbert Company, and it availed itself of the privileges granted, and changed into an open steam railway, upon the routes determined by the mayor's commissioners coincident with its routes. It subsequently became the Metropolitan Elevated Railroad Company. The intended application of the first part of this thirty-sixth section to the Gilbert Company, as the only one having coincident routes, is not disputed by Judge PECKHAM, and was so assumed by CHURCH, Ch. J., in his opinion in the matter of that company. (70 N.Y. at page 368.)
In the second place, that section provided that the mayor's commissioners might fix the routes by which any elevated steam railway, then in actual operation, might connect with other steam railways, or their depots, or with steam ferries, and concluded in this language: "And when any connecting route or routes shall be so designated, such elevated railway company may construct such connection, with all the rights and with like effect as though the same had *Page 46 
been a part of the original route of such railway." This second provision of the section, as plainly, applied to the case of the New York Elevated Railroad Company; for that was the only "elevated steam railway in actual operation." That company made immediate application and, within two years, received final authority, through an order of the court, to proceed and construct the extension of its route from the Battery, by the south end of the city, through various streets to and through the populous thoroughfare of the Third avenue; all which rights it obtained upon the pretext and theory that, by such an extension of its route, it was enabled to connect with the various ferries and railway depots on the east side of the city. It cannot very reasonably be doubted but that the Rapid Transit Act was promoted by these two companies; which, under cover of an apparently general act, through this brief thirty-sixth section, were enabled to do that which they could not have gained authority to do through a special legislative enactment. The question, then, is whether, having gained this valuable and practically exclusive privilege, there was also secured the additional grant to the New York Elevated Company of an exemption from the obligation, imposed by previous legislation, of paying a percentage to the city as a consideration for the use of the streets. If it did, where is the language of exemption, and what shall we do with the apparently stringent language with which section 36 concludes? An argument is sought to be founded upon supposed effects upon the corporation, coming in under the provision of the section, of conditions, requirements and processes mentioned in the act — effects which are dwelt upon in Judge PECKHAM'S opinion. It is suggested that the effect upon the New York Elevated Company, of having passed through the machinery of the Rapid Transit Act, was to make it, as to its new powers, and their exercise in the construction and operation of the new routes, independent and to relieve it from the legal obligation attaching to the operation of its original route. But any such proposition spends its force against the stubborn resistance of the facts and of the language, with which the legislature *Page 47 
concludes its grant of power to the applicant, under the section; which is couched in the form of a limitation and which differentiates it from a corporation formed under the act itself. That the legislature meant something when providing that it "may construct * * * with like effect as though the same had been a part of the original route of such railway," we may not deny. What was the "original route" of the New York Elevated Company, and what were its duties and obligations, the legislature well knew; for the previous day had witnessed the passage of chapter 595 of the Laws of 1875, which had confirmed the company in the possession of the properties, franchises and rights acquired from the West Side Company, "as they were granted" to that company. If we hold that the New York Company and its successor, the Manhattan Company, came under the obligation imposed by the act of 1867 upon the West Side Company, and, if, under section 36 of the Rapid Transit Act, the new connecting routes were to be constructed "with like effect," as though "a part of the original route," how can we escape, by sensible processes of reasoning, the conclusion that the legislature meant to provide that whatever, by the law regulating its existence, was imposed upon and required of the company, with respect to the city, whose streets were to be used, in the operation of its original route, should still be a condition of its right to exercise its new power to construct the connections or extensions of that route? The New York Company so understood the matter; as we see evidenced by its continuing to pay the five per cent for the many years after it had constructed the new, or Third Avenue route.
The Rapid Transit Act, in its bearing upon the New York Company, was but an enabling act. These connections of the New York Company, under which description it was enabled to build its present Third Avenue line, are in fact parts of its original route. Had the legislature, by mere amendment of the acts, under which the New York Company became authorized to operate its Ninth Avenue line, further empowered it to build and operate these connections, would any doubt *Page 48 
have existed as to the continuance of the obligation to pay the percentage to the city ? Certainly not. Then how has the section of the Rapid Transit Act in question created any such doubt? It is very evident that Judge PECKHAM'S consideration of the question was influenced by the belief that, though the right to build connecting routes is derived solely from the thirty-sixth section, its language could not mean that the burden imposed under the old statutes continued, "because," he says, "the act * * * contained within itself provisions for the imposition of conditions and burdens. The power to impose them lay with the commissioners," etc. But that is altogether a mistaken reading of the act. The New York Company was not compelled to forego, or to change, any of its corporate environments of powers and privileges, in order to come in under the act and to avail itself of the further privilege extended to it. Though the power to construct these connections with the original route flowed from the provisions of the Rapid Transit Act, the right to avail itself of the privilege resided in an existing corporation, whose powers and obligations were already defined and regulated. The act conferred no power upon the mayor's commissioners to impose any conditions upon it whatever. That power they did have with respect to the other class of companies, referred to in the section; such as the Gilbert Company. With respect to them, their power to construct and operate an elevated railway was made to depend "upon fulfillment of the requirements and conditions imposed by said commissioners;" but, with respect to the class of elevated roads in actual operation, of which the New York Company was the sole representative, the only power conferred upon the commissioners to impose requirements or conditions was "under section 4 of the act;" and they were such "as are necessary to be fulfilled in such cases under section 18 of article 3 of the Constitution of the state." Reference to section 4 of the Rapid Transit Act shows that no power is there conferred upon the commissioners to impose any conditions, which were not already imposed by the Constitution. *Page 49 
That section (4) simply provides that the mayor's commissioners shall, if they find such railways necessary, within a certain time after organization, determine upon and locate routes for the railways through the streets, etc.; except Broadway and Fifth avenue below Fifty-ninth street, and Fourth avenue above Forty-second street, and except such portions of streets, etc., as are legally occupied by any elevated or underground railroad in actual operation; provided the consents of property owners and of the local authorities be first obtained, or, in lieu thereof, the determination of commissioners appointed by the Supreme Court, etc.
Section 18 of article 3 of the Constitution, referred to in the thirty-sixth section, simply inhibits the legislature from authorizing the construction of street railroads, without the consents or determination of commissioners described in section 4; which has simply embodied the constitutional language. This is all the force of the reference in the language of that section of the act, which permitted connections to be constructed by elevated steam railways in actual operation "upon fulfillment * * * of such of the requirements and conditions, imposed by said commissioners under section 4 of this act as are necessary in such cases, under section 18 of article 3 of the Constitution of this state." Can it, with any semblance of reason, be asserted that, by force of that reference in section 36, the commissioners were given any power to impose requirements or conditions upon the New York Elevated Company, except as to matters already provided for in the Constitution? And, yet, that is the only language in the act, applicable to the case of the New York Company, which refers to the existence of a power in the commissioners to impose conditions. Compare the provisions as to the class of elevated railways in actual operation, desiring to make connections, with the previously described class, of which the Gilbert elevated was the representative, and a discrimination is evident; for in its case the commissioners were empowered to impose such conditions and requirements as *Page 50 
they could in the case of a corporation specially formed under the act.
The Rapid Transit board of commissioners were distinctly advised by their counsel, in an opinion which is printed in this record, that they could only deal with the existing corporation in actual operation, by fixing connecting routes, and that section 36 made a sharply drawn distinction between the case of the special companies by that section contemplated and the new companies in terms provided for. The commissioners, however, were in a position where they might refuse to act harmoniously in fixing connecting routes, and they could request, as a condition of their acting upon the application of the company, that it should agree to some things. The company was, however, under no obligation to submit to any conditions the commissioners might dictate. Though the act, as we readily appreciate, was passed for its benefit, it was free to decline taking any action under it to make connections, if too exacting demands were made by the commissioners or by the city officers. But the company had a clear conception of the situation and was perfectly willing, if not anxious, in order to obtain the necessary official action of the commissioners, to make concessions.
The Rapid Transit Act was passed June 18, 1875. At a meeting of the board of directors of the New York Company, which must have been held very soon afterwards (before September), resolutions were passed to the effect that, in consideration of the fixing by the Rapid Transit commissioners of routes for connections with depots, etc., as heretofore applied for and designated by the company, or such as the company would accept in lieu thereof, the company would agree to construct certain specified portions of these routes, before or by specified dates; to charge fares at specified rates upon such connections; to run "commission" trains; to construct a single, double or treble track road, according to certain localities, and to pay a reasonable proportion of the expenses of the commissioners. This was its voluntary agreement, conditioned upon an acceptance of its previous designation *Page 51 
of the routes it wished to construct upon. At a meeting of the commissioners, on September 2, 1875, these resolutions were offered, and the board, thereupon, "in consideration of the stipulations, agreements, etc., of the New York Elevated Company," proceeded to fix and determine the routes for that company, as applied for. On September 7, 1875, the common council of the city, acting upon the full report of the above proceedings, passed a resolution consenting to the routes reported upon by the rapid transit board. It is very remarkable that, with all the particularity with which the company framed its resolutions and with which they were acted upon, there should be nothing said upon the subject of its release from the payment of this percentage.
But if the commissioners were without power to impose any conditions, other than such as the Constitution contained; or to require anything, other than the company might by voluntary agreement assent to, and if the language of the section (36), under which the privilege was extended to the New York Company to extend its original route by connections, etc., is to be construed as without direction upon the subject of the liability to pay percentage, the question again presents itself; how did the company gain an exemption from that burden? Its independence was not affected by the act and what it received under its provisions was a mere enlargement of the right to construct railways in the streets of the city. The commissioners stood there, not with any power to impose conditions, but simply with power to determine upon connecting routes and to require from the company the formal expression of its assent to the constitutional requirements, referred to in section 4. That was the extent of their power over the applicant; though, of course, they could negotiate any agreement between the city authorities and the company, as a condition of an exercise of their limited powers. It is sought to explain away the force of the words, with which the grant of power to construct connecting routes concludes, by treating them as words of further assurance as to the authority to build, and by regarding them as, in reality, unnecessary and superfluous. But the objections to these views are too grave. *Page 52 
The grant to the corporation of the powers conferred by section 26 of the act was not necessary, simply to enable it to construct and operate an elevated railway; but it was deemed necessary, or wise, that every doubt should be removed as to its right to operate an elevated steam railway. In the original act the motor power was to be by a propelling cable, and the change in the motor power, authorized by the subsequent act, was made dependent upon the approval of the commissioners; who, under those acts, were appointees of the governor. By force of the grant in the thirty-sixth section of the powers conferred by section 26, the New York Company was relieved of any question upon the subject of its right to operate an elevated steam railway. It needed no reference to the powers in section 26 to enable it to construct and operate the proposed connecting routes. That right was expressly granted in section 36 and all other requisite corporate powers were already possessed under the General Railroad Act of 1850, or by virtue of its purchase, etc.; with the possible exception, or doubt, as to the power to use steam as a motor, without having first obtained the consent of the governor's commissioners. I think, unless we construe the language, in which this grant of power to construct connections is couched, as working a discrimination against the company, that its existence in the section is reduced to an absurdity. If it is read as continuing the existing legal obligation and as making it co-extensive with the corporate rights of the company in its added field of operation, it receives a sensible and forceful meaning. In empowering the company to construct a connection "with all the rights and with like effect as though the same had been a part of the original route," the language is confirmatory of the existing obligation of the company, and of those corporate rights which were necessary to be possessed for the construction and operation of an elevated railway.
If we regard the exact situation, we cannot fail to see the fallaciousness of the idea that any transformation was occasioned, or that any change in the corporate obligation of the New York Company resulted, when, in consequence of its *Page 53 
application, certain connecting routes were fixed by the commissioners. Any confusion of ideas on that head must be occasioned by the supposition that, through the proceedings, which resulted in the connecting routes being accorded and fixed, the New York Company was so affected, through the imposition of conditions and of requirements under the act, as to give to it a separate set of rights, and that it must have been the intention of the legislature, because thereof, to sever the obligation affixed to the operation of the original route. But, as it has been shown, the permission to build connecting routes came from the legislature, unaccompanied by the imposition of a single condition not already in the fundamental or general law. The whole right to build further was conferred solely by section 36 and that section neither affixed, nor authorized the affixing of, one requirement beyond the necessity of obtaining the consents mentioned in the Constitution, and did not subtract any burden imposed by the charter of the existing corporation. In a court of law we are bound to give effect to the words of the statute, and, if they are susceptible of a reasonable application, we cannot say that they are meaningless, nor dismiss them as superfluous. These words had a place and they had a mission to perform. If we say they do not subject the corporation, in this material respect, as it was subject before, then I think we utterly disregard the evident purpose of their insertion. What other reasonable construction can we give to this legislative enactment, than as a provision authorizing the company to build the connecting routes, when and as fixed by the mayor's commissioners, as though they had been named as a part of its route in the previous legislation? It did not come in under the act as one of the companies it was designed for creating and it was not subjected to the imposition of any of those requirements or conditions at the hands of the commissioners, to which the other mentioned companies were. It simply availed itself of the permission extended by a provision of the act to extend its original route and whatever requirements, whether by the commissioners or by the city authorities, it came under, was *Page 54 
the result of its express consent thereto, and, in no conceivable sense, the result of any condition in the provision of the act.
The constitutional amendments then in force prevented such a grant of power by way of an amendment to the charter and the difficulty was overcome in the legislature by adding section 36 to the Rapid Transit Act; which, being considered as a law general in its application to existing companies, was held not to be in conflict with the Constitution. (Matter of N.Y. ElevatedR.R. Co., 70 N.Y. 327.) In the case cited, it was suggested of section 36 that its purpose and effect were to bring existing railroad corporations within the general scheme devised by a general law, and it was very forcibly intimated that the enactment of the section was a way adopted by the legislature "to circumvent the constitutional provision without violating it." (P. 353.) In that and the succeeding case of The GilbertElevated R.R. Co. (70 N.Y. 367), it was, evidently, considered as to the two existing companies, which availed themselves of the provisions of the Rapid Transit Act, that that act simply recognized and regulated the right already possessed to build and to operate an elevated railway.
It is said that the act placed existing companies on a footing of equality with new companies, to be formed under its provisions, and the Matter of N.Y. El. R.R. Co. (supra), is cited as authority for this view. But the remark was made, in that case, with respect to the equal right of the New York Company, with the companies to be formed under the act, to apply for connecting routes and to meet the argument that section 36 was violative of the Constitution, as being, with respect to that company, a grant of an exclusive privilege, etc. (See pp. 347, 348, 351-353.) No other inference from the remark is fair or warrantable. That the existing company, availing itself of its provisions to make extensions of its route to connect with other railways, or with ferries, was intended to be relieved of any legal obligation connected with the franchise, of the nature of the one in question, is distinctly negatived, in my judgment, by the absence of appropriate *Page 55 
language to accomplish that result. Any possible inferences that equality of burdens was intended to be conferred become impossible in the presence of the last clause of the thirty-sixth section.
But, it is argued, if the thirty-sixth section operates to impose this percentage burden upon the defendant, it rests upon it without the grant of the use of the streets; for which use the payment formed the consideration under the original act. The argument refers to the change of conditions worked by the amendment to the Constitution, which prohibited the use of the streets without the consent of the city authorities. I cannot see much point in that argument. While, previously, the consent of the legislature was necessary to be obtained to use the streets; by the adoption of the constitutional amendment, it became necessary to obtain the consent of the city authorities. But, in either case, the reason for the payment of a percentage was the same. It was the consideration for the proposed use of the streets, as determined upon by the legislature, and was obligatory at all times. There is no injustice, (and none such was ever imagined by the company), in construing section 36 as continuing the burden of the percentage, although the legislature could not grant the use of the streets. The right to consent to the use of its streets was in the city; but the consideration for that use remained, as to the New York Company, as it had been imposed by the legislature, for all time, or until competently exempted. I fail to perceive any force in the argument based upon the injustice of implying a continuation of the obligation. It is not necessary for us to imply. The obligation was removed, or it continued, and the language is plain enough to read in it the continuation of the obligation. Ample reasons existed for it. It was the only elevated steam railway in actual operation in the city, and, through the provision of the section, the company became enabled to extend the operation of its railways through the more populous and busy portions of the south and east sides of the city and to get the immense passenger traffic, offered by the East river ferries and the great railroad *Page 56 
depots. It was not so unjust a discrimination for the legislature to make against a railroad company, standing equipped and designing to enter upon that profitable territory at once. If a previously existing burden seemed to be expressly continued by the legislative provision, the company dealt with the commissioners and the city authorities with full knowledge. The company plainly enough understood that the obligation continued and was most willing to accept the few new conditions demanded. It evidently did not see any of that inconsistency in the city's holding it to its obligation, which is now commented upon. It did not consider the burden an unequal one to bear, or an unjust or illegal one; for it hastened to construct under the power given, and, upon completion, commenced and continued to pay the percentage upon income for upwards of twelve years afterwards. The conduct of the company in paying this percentage to the city, subsequently, is a feature of the case of too serious an importance, as a practical construction placed upon the section by the parties, to be disregarded. It might not avail, if there was no foundation in the statute for a liability, to create one; but it proves, in a debatable case, what the parties understood to be the nature of their legal relations, and that the burdened party deemed itself under, and was willing to accept of, the burden. It is plain that the present contention is a theory, devised in after years to defeat this obligation to the city. Shall we refine away by logical subtlety what was the practical view taken by the parties of the agreement and of their contractual relations? If we do that, will we feel any confidence that we have taken the correct and just view of their engagements? It seems to me that we should put away impressions. We should accept the co-temporaneous construction as given by the parties and which is directly antagonistic to the present claim. It seems to me undeniable that in so doing we shall accomplish that exact justice, which is demanded and expected of this court, and which it has aimed always to mete out.
I am unable to see the force of the argument of an unfair *Page 57 
discrimination. The only other company is the Gilbert, or Metropolitan, and, as between it and the New York Company, a legislative discrimination existed always. The former company, when incorporated in 1872 (five years after the West Side, etc., Company), had no percentage burden imposed upon it. It is no answer to say that there is a discrimination worked by continuing the burden, when it is plain, upon the face of the act, that the New York Company was intended to be discriminated against, in respects to which I have alluded.
For the reasons thus generally stated, I think the judgment below was right and should be affirmed, with costs.