Court Opinion

ID: 3612304
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:56:06.268192+00
Date Added: 2024-06-11T13:50:52.670527
License: Public Domain

Plaintiff was incorporated on the 29th day of January, 1883, "for the purpose of doing a general telegraph and electric protection business" under the provisions of chapter 265 of the Laws of 1848, entitled, "An act to provide for the incorporation and regulation of telegraph companies" and acts amendatory thereof and supplemental thereto, which provide that persons may associate themselves for the purpose of "constructing a line of wires of telegraph." The act provides (§ 5) that telegraph companies may "construct lines of telegraph along and upon any of the public roads and highways," and (§ 6) take private lands therefor on making compensation. The general route of the "telegraph and protective line or lines" of plaintiff was stated in the certificate of incorporation as follows:
"From a main office in the vicinity of the Stock Exchange in the City of New York, State of New York, to and with points in said city where branch offices of the said Association may be established, and from such *Page 426 
offices along, across, over and under streets and avenues, and over buildings in said city and to and into buildings therein, so as to connect such buildings with the offices of the Association and to connect all such offices with each other. And also from said office to a main office in the city of Jersey City, New Jersey, and other cities and towns in the State of New York, New Jersey and in other of the United States, or from such main office in such other cities and towns to other points in said cities and towns so as to connect buildings with said offices of the association in each of said cities and towns for the purpose of protecting said buildings, together with their contents, against burglary and fire and for doing a general telegraphic business."
From the time of its incorporation in 1883 down to the present time the plaintiff has been and is engaged in the business of furnishing protection from burglary to banks, banking institutions, mercantile establishments, stores, residences and other buildings and premises occupied by plaintiff's customers or subscribers in the boroughs of Manhattan and Brooklyn of the city of New York. Such service was and is performed principally by means of electric signals, devices and appliances, operated by electric wires and conductors extending and radiating from various stations and central offices located in different parts of the said boroughs. Such wires and conductors originally were overhead wires and conductors crossing the streets in both boroughs from roof to roof, and the operation of such overhead wires continued until the year 1891, when they began gradually to be replaced by underground or subway wires laid in subways under the streets of the borough of Manhattan in pursuance of the subway statutes hereinafter referred to. At the time of the beginning of this action the greater part of the plaintiff's wires and conductors in Manhattan had been placed and were being operated underground, in such subways. In the borough *Page 427 
of Brooklyn the plaintiff has been leasing and using the subway wires of the New York Telephone Company since the installation of the subway system in said borough.
Plaintiff does not receive and transmit dispatches for the public generally, nor between different offices. It operates an alarm system for its customers, to protect them from burglary, by communicating, automatically, signals to a central office when doors or windows are opened by intruders. It has a system of private patrol and night watch business in connection with the burglar alarm. When an alarm comes in, plaintiff sends its watchman to the premises. Without the watchmen, the alarm would be useless. The telegraphic signals are means to an end.
Plaintiff succeeds the Holmes Burglar Alarm Telegraph Company and the American District Telegraph Company. It has about 4,500 miles of wire in the city of New York and serves about 2,500 subscribers. Its property is worth about $1,000,000. Neither it nor either of its predecessors has any special franchises from the city of New York to operate its lines in the city, or to place its wires underground.
The defendants are the city of New York and certain of its agencies having charge of the streets and having the power to grant franchises in such streets, and also the Empire City Subway Company, Limited, which controls the telephone and telegraph subways in the borough of Manhattan. The plaintiff contends that by virtue of its incorporation as a telegraph company it has a franchise from the state which authorizes it to use the city streets and subways for electrical conductors without interference from the local authorities. (L. 1853, ch. 471, § 2.) The defendants contend that the plaintiff is not a telegraph company which is organized for public purposes; that it is engaged in a private business, and that, as such private company, has no right to occupy the city streets without the consent of the city. *Page 428 
The plaintiff asks judgment to the effect that it has a valid franchise to construct, maintain and operate its electrical conductors in the streets of the city and that the city be enjoined from interfering with such rights, and from exacting any sum as a condition for granting a special franchise.
From a judgment of the Trial Term, dismissing its complaint, affirmed by the Appellate Division, it appeals with permission granted by this court.
The subway laws applicable to the city of New York (L. 1884, ch. 534; L. 1885, ch. 499; L. 1887, ch. 716; L. 1891, ch. 231) provide for placing underground the electrical conductors which were previously strung on poles in the streets and elsewhere, and require all "duly authorized" companies operating such conductors in the streets of the city to place their electrical wires and cables underground. Laws of 1892, ch. 263, and the Greater New York charter make it unlawful for companies to place their electrical conductors underground without authority from the city. Before plaintiff placed its wires in the subway, it ran them over housetops and over and along private property and made no material use of the streets, except as streets were crossed by wires running from housetop to housetop.
The trial court decided that the business of the plaintiff was not that of a telegraph company because it did not receive messages or communications between individuals or others and transmit them from one place to another as is usually done by companies doing a general telegraph business, and, for that reason, it had not a valid franchise to use the city streets. The Appellate Division held that the plaintiff was a telegraph company; that its rights to exercise its state franchise to occupy the city streets could not be questioned in this case because the People of the State of New York are not a party hereto, but that it was not entitled to maintain its action because it had no special or secondary franchise from the city of New York. *Page 429 
Assuming, as we safely may, for the purposes of this controversy, that the plaintiff was duly incorporated, did it, by such incorporation, acquire a franchise to operate its wires over or under the streets of the city of New York without the permission of the municipal authorities? The answer depends primarily on its ability to establish its status as a public service corporation. Herein it encounters no small difficulty, by reason of the vague resemblance which it bears to telegraph companies doing a general telegraphic business. Such companies form one of a great class of public callings. They transmit messages from place to place through the medium of an electric current passing over extended wires. They receive dispatches from or for any individual and transmit the same with impartiality in the order in which they are received. (Transportation Corporations Law, § 103.) They "put a girdle about the earth" with their connections. They are, like railroads, termed a "powerful agency of commerce" and as such protected by the power of Congress from hostile state legislation when they cross state lines. "No state legislation shall prevent the occupation of post roads for telegraph purposes by such corporations as are willing to avail themselves" of the act of Congress. (Pensacola Tel.Co. v. Western Union Tel. Co., 96 U.S. 1, 11.) The state of New York has given them (L. 1848, ch. 265, § 5) the right to construct and maintain their lines over all public roads, streets or highways when the fee is in the municipality and to construct their lines over any other highways or lands, subject to the right of the owner to compensation. This right comes directly from the state and not from or through the local authorities. (Eels v. Am. T.  T. Co., 143 N.Y. 133; Village of Carthage
v. Central New York Telephone  Tel. Co., 185 N.Y. 448.) The grant of authority to occupy public streets and public highways, included in the act of incorporation, constitutes a special franchise grant, direct from the state to the corporation *Page 430 
with which the locality may not interfere. (People ex rel.Postal Tel.-Cable Co. v. State Board of Tax Comrs., 224 N.Y. 167. ) Such is their primary franchise under the Transportation Corporations Law and the prior statutes, but other, different or greater rights in the construction, maintenance and operation of their lines may be, and often are, sought and obtained by such companies from the political subdivisions of the state. (Rochester Telephone Co. v. Ross, 195 N.Y. 429.)
When the question of placing wires underground first arose, it seems to have been assumed that a telegraph company had no right to open the streets for that purpose. (Missouri ex rel. LacledeGas Light Co. v. Murphy, 170 U.S. 78, 99.) The state legislature, when it specifically authorized and permitted the companies to put their electrical conductors under the surface, taking notice of the inconvenience that would result from unrestrained action, free from supervision by the localities, required that the consent of the local authorities be first obtained. (L. 1881, ch. 483, amending L. 1878, ch. 397, § 1.) It was held in Matter of New York Independent Telephone Co. (133 App. Div. 635; affirmed on opinion of CLARKE, J., below, 200 N.Y. 527) that the consent of the local authorities was necessary in order to authorize that company to lay its wires underground in the city. The Independent Telephone Company case has been misunderstood because the statement in the opinion, in connection with L. 1881, ch. 483 (supra), that the statute required all telegraph and telephone companies to have the consent of the local authorities when they sought to occupy the streets under the surface, is coupled with the inadvertent suggestion that the decision in the Carthage Case (supra) might have been different if the provisions of that statute had been brought to the attention of the court. The cases were wholly dissimilar. The village of Carthage unsuccessfully sought to compel the Central New York Telephone Company to put its wires underground. It was *Page 431 
held that the state had not delegated the requisite power to the village. The Independent Telephone Company sought the right to use the city streets without a franchise. It was held that a secondary franchise was essential. The company had acquired no operating rights from its own incorporation in 1905, because it was organized subsequent to the enactment of sections 71-73 of the city charter (L. 1897, ch. 378, as amended), which required a special and limited franchise from the city for the use of the streets. The decision in the Carthage case could not have been affected in the slightest degree if the act of 1881, above referred to, had been brought to the attention of the court, for the statute had no bearing on the question of the power of the village to compel the company to put its wires underground. The state at all times may impose additional burdens upon new companies as conditions of incorporation; burdens from which the older companies have been exempt; but it cannot thereby take the property of such older companies from them. (People v.O'Brien, 111 N.Y. 1.) It may tell the latter where in the streets to place their wires, but it may not put them off the streets entirely, without compensation for the right appropriated, after it has once validly granted the right and the right has been exercised in reliance on the franchise. (City ofLos Angeles v. Los Angeles Gas  Electric Corp., 251 U.S. 32.) If a general telegraph company had been in lawful occupation of the streets of the city of New York before the passage of the subway acts and the sections of the city charter referred to, the state could regulate the exercise of its franchise, and in the public interest could require it to remove its wires from one portion of the street to another, and require it to remove its wires from overhead to underground (N.Y. Telephone Co. v.State of New York, 169 App. Div. 310; affirmed, 218 N.Y. 738), but it could not be compelled to obtain a special franchise from the city of New York in order to place its wires underground, merely because the state required *Page 432 
that overhead wires should be taken out of the streets. The right is one thing, the regulation of the right is another. If plaintiff, of its own initiative, had sought the privilege of placing its wires underground, the consent of the local authorities to open the streets would have been necessary, but when the state intervened and required the companies to place their wires underground, it did not, and indeed could not, interfere with existing franchise rights, or impair the franchise contract which it had made.
The constitutional guaranty against the impairment of contracts by state legislation is not violated by the exercise of the police power providing for underground wires. (People ex rel.N Y Electric Lines Co. v. Squire, 145 U.S. 175.) The subway acts merely provided an agency by which the supervising power of the state was to be exercised. They repealed no valid existing franchise, nor did they delegate to the city the power to withhold its consent from any company previously having and exercising the right to occupy the streets, to put its wires in the subway. "The scheme of these statutes was not to annul or destroy the contract rights of such companies, but to regulate and control their exercise. They did not purport to deny them any privileges theretofore granted." (People ex rel. N.Y. ElectricLines Co. v. Squire, 107 N.Y. 593, 604.) Given a duly incorporated telegraph company, incorporated for public purposes and serving the public in commercial and personal transactions and governmental business, having lawful power to operate electrical conductors in the streets and exercising such power, the state becomes supreme and the localities are not permitted to interfere, except so far as the state itself authorizes the regulation of such companies in the exercise of their state franchises or the localities grant additional privileges to them. The case before us is to be considered, not as one where the plaintiff, of its own volition, seeks the privilege of placing its wires underground and so must obtain the *Page 433 
consent of the local authorities in order to do so, but as a case where the state itself, in the exercise of its police power to regulate its own franchise, requires the companies, lawfully occupying the streets with their overhead wires, to take them off the streets and place them underground.
Such being the rights, generally speaking, of telegraph companies following a public calling, then if plaintiff is such a company and has acted upon such a franchise, it has a right to its place in the subways, without municipal consent or interference (People ex rel. N.Y. Electric Lines Co. v.Ellison, 188 N.Y. 523) except by the way of reasonable regulations, duly authorized.
But it is the duty of the court to inquire into the nature of plaintiff's business and its claims for consideration as a public service corporation. If plaintiff is not a public service corporation, the state has granted it no rights to interfere with the primary purposes of the highway by erecting poles and stringing wires in city streets. Its presently asserted right to place its wires in the electrical subways rests upon its right thus to occupy the streets. The question of a direct and limited grant of subsurface rights only is not involved in this decision.
The reason why such sweeping powers are given to the telegraph companies is that they are not private enterprises, but are engaged in an undertaking which justifies the state in conferring upon them, as public service corporations, the right of eminent domain and the right to occupy the public highways of the state without the consent of the local authorities. A telegraph company, public in the nature of its duties, a common carrier of intelligence, receiving, transmitting and delivering messages from and to points far and near, is compelled to serve the public without discrimination in return for the unusual powers conferred upon it by the state. *Page 434 
The city cannot be denied the right to question the authority of the plaintiff to occupy its streets merely because the state does not challenge the exercise of such authority. That is settled by Matter of Niagara Falls  Whirlpool Ry. Co. (108 N.Y. 375, 384), where it was held that a company incorporated under the General Railroad Law, seeking to take property of DeVeaux College in invitum for the purpose of its railroad, which was a scenic railroad but not a public highway in the sense that it transported persons or property over a road between certain termini, must show not only a legislative warrant, but also that the business which it was organized to carry on was public and that the taking of private property for its purposes was a taking for a public use; that the question as to whether the uses were in fact public so as to justify such taking is a judicial one to be determined by the courts on the objection of the landowner whose property it seeks to condemn. Although it contemplated the building of a railroad upon which all who desired might ride, ANDREWS, J., said: "The inquiry is not precluded because the petitioner has organized itself under the General Railroad Act and has assumed in its articles of association the character of an ordinary railroad corporation." In Bradley v. Degnon Contracting Co. (224 N.Y. 60) it was again held that the question whether a particular use of a public highway is a public use is for the ultimate decision of the courts. The question arose in that case between lot owners on Seventy-ninth street and a contractor who constructed a railroad or tramway in the street to be operated in connection with its subway building contract, under the Rapid Transit Act and with the consent of the public service commission and the municipal authorities. It was held that the construction and operation of the tramway was not a public use.
Plaintiff, in objecting to a special franchise tax assessed against it, has not maintained that it is a public service *Page 435 
corporation. It stated in its report to the state board of tax commissioners that it did not operate any telegraph or telephone wires or lines; did not perform any public service; did not receive nor transmit messages, persons or property, or anything else for hire; is not a common carrier or a public service corporation; that its business is the furnishing of protection to those special persons with whom it may make contracts, and in each case it makes a special contract with the persons or corporations whose property it undertakes to protect. While this statement is not conclusive, it is at least pertinent.
The conclusion that plaintiff is not a public service corporation flows naturally from the facts found. If it has the right to occupy the public streets, it also has the right of eminent domain. (L. 1848, ch. 265, as amended.) These two great rights are conjoined. They are intended to accompany one another. If it can be said that, as originally organized, it was authorized in part to do "a general telegraphic business," it does not assert such rights and may not enjoy the concomitant privileges. A corporation carrying on a private business cannot exercise the privileges of one organized for a public purpose when it does not perform the duty of serving the public, which "goes hand in hand with the privilege of exercising a special franchise * * * by the occupation of the public highways." (People ex rel. Cayuga Power Corp. v. Public Service Comm.,226 N.Y. 527, 532.) This burglar alarm company, transmitting signals by electricity from its customers to it and sending out its watchmen in response; organized for private gain only and serving the interests of its stockholders and customers only, may not assert that it is a corporation exercising the high and unusual privileges of a general telegraph company — the right of eminent domain and the right to occupy the public highways. Can it be presumed to have been the legislative intent to permit *Page 436 
as many private companies as saw fit to organize under the General Telegraph Act to take private property by condemnation proceedings and to occupy the city streets with their overhead wires without limit as to number, so long as some principle of the electric telegraph was utilized by them in transmitting calls or signals? (City of Toledo v. W.U. Tel. Co.,
107 Fed. Rep. 10, 14.) We are not compelled so to construe the statute, nor should we, except when the legislative intent is unequivocal.
The ruling of this court which permitted telephone companies to organize under the Telegraph Act, although when the act was passed telephonic communication was unknown (Hudson R. Tel. Co. v. W.T.  R. Co., 135 N.Y. 393), and although, in a strict sense, telephone companies do not receive, transmit and deliver messages for others, is inconsistent with so liberal a construction of plaintiff's articles of incorporation as is here claimed. A telephone line is a public utility. Telephones are "public vehicles of intelligence and they who own or control them can no more refuse to perform impartially the functions which they have assumed to discharge than a railroad company, as a common carrier, can rightfully refuse to perform its duty to the public." (Chesapeake  P. Tel. Co. v. Balt.  O. Tel. Co.,66 Md. 399, 414.) Judge VANN, in N.Y. Tel. Co. v. Siegel-CooperCo. (202 N.Y. 502) groups telephone companies with "common carriers and others engaged in serving the public," and says that the same principles apply to all public service corporations as to common carriers only. Telegraph and telephone lines and railroads are the great public utilities of the land, but not every telegraph or telephone or railroad system is a public utility. They become such only as they undertake to execute a public purpose like that of the common carrier, and even the telephone companies could not take advantage of the Post Roads Act of Congress because the privilege was extended only to telegraph companies which transmitted written messages, *Page 437 
and thus rendered a service "closely analogous to the United States mail service." (Richmond v. Southern Bell Tel.  Tel.Co., 174 U.S. 761, 775.)
Plaintiff is organized under chapter 265 of the Laws of 1848, and has a legal existence, as a de facto corporation, at least, until the state directly questions its corporate existence or its corporate purpose. But, as a company organized under the Railroad Law which declares in its certificate of incorporation a purpose which is essentially private in its character, cannot claim that because it is organized under the Railroad Law it may exercise the power of eminent domain (Matter of Niagara Falls  WhirlpoolR. Co., supra) so plaintiff's attempted assertion of powers adverse to the public may be questioned by any one against whom it may seek to exercise them.
It is urged that plaintiff has acquired from the state the right to occupy the streets for its purposes, even though they are not public purposes. Plaintiff, as we have said, acquired no subsurface rights by its incorporation (Missouri ex. rel.Laclede Gas Light Co. v. Murphy, 170 U.S. 78, 99). Its existing subsurface rights, if any, grew out of such rights as it thereby obtained to obstruct the surface of the city streets with its poles and wires. The right to occupy the public streets for a private business, not inconsistent with the public use, while not favored and often condemned even when expressly authorized, is sometimes recognized. (Hatfield v. Straus, 189 N.Y. 208, 222;Fifth Avenue Coach Co. v. City of New York, 194 N.Y. 19.) But a privilege seriously to obstruct the streets for such a purpose will never be upheld. The number of poles and wires erected in the streets by public service companies, increased to such an extent that, although lawful for a time, they became a public and private nuisance (People ex rel. N.Y. Electric Lines Co. v.Ellison, 188 N.Y. 523, 528), and the state ordered the wires underground in order to promote the public safety and convenience. It should not be *Page 438 
assumed that the legislature intended to grant to private companies even a street use which would thus interfere with general business and the operation of the fire department and other departments of the city. No implication of such a grant to plaintiff necessarily arises from section 105 of the Transportation Corporations Law which authorizes the appointment of special policemen "who may be designated by any corporation operating a system of signaling by telegraph to a central office for police assistance." The intention of the legislature to grant the use of city streets to private companies like plaintiff should be definitely expressed and not sought in vague and ambiguous language. The section cited may well be said to sanction the organization of plaintiff under the Telegraph Act of 1848, but it still remains for this court to say whether it thereby acquired or could acquire the privilege of obstructing the streets of the cities of the state with its poles and wires, without the consent of the local authorities.
It is urged that the act of the commissioners of electrical control requiring plaintiff to place its wires underground amounts to a grant of authority from the state which cannot be questioned by the city. This contention cannot consistently prevail. The commissioners had no power to compel any company to put its wires underground which did not have authority to occupy the streets. They had no power to determine whether plaintiff's use of the streets was for a public purpose. They had no power to grant the use of the streets for other than public purposes. Property rights are not thus vested in individuals or corporations by the unauthorized acts of public officials. When the first subway law went into effect on June 14, 1884, plaintiff had exercised no street franchise, except as its wires may have crossed a street, from housetop to housetop. In fact it had no street franchise and had claimed none. No officer or board having power to grant a franchise has ever acted *Page 439 
so as to induce plaintiff to assume that it had obtained such a franchise. Because plaintiff has asserted rights which have not been inquired into by the proper local authorities; because it has been ordered into the subway; because it has been assessed by the state board of tax commissioners on a special franchise and has paid taxes of which the city has had the benefit, it may not take advantage of an unwarranted assumption of power and rely upon the acquiescence of the state and city authorities. The question is not a technical one depending on unimportant forms. It is a matter of substantial right asserted against the public by a private corporation. Shall plaintiff obtain a state or local street franchise through inadvertence? The thing is impossible. Neither the performance of conditions nor the payment of taxes by plaintiff will give validity to the unauthorized acts of the public officials with which it dealt. (Matter of Rhinehart v.Redfield, 93 App. Div. 410; affirmed, 179 N.Y. 569, on opinion of WOODWARD, J., below.) To put its wires in the streets on the surface would have been an unlawful act. The right now asserted to put the wires in the subway is, as we have seen, ancillary to the alleged right to string them on poles in the streets. A municipal corporation, under exceptional circumstances, may be deemed to have waived its rights or estopped itself from asserting that a consent which it might give had actually been given where it had been given informally as against a corporation to which such a franchise or consent might have been formally granted. (Town of Essex v. N.E. Tel. Co. of Mass.,239 U.S. 313, 321.) But plaintiff is bound by the limitations of its corporate franchise. It cannot gain the corporate power to receive a franchise, as against the city, by unlawfully asserting such power, and the city has no power to grant it the right to occupy the streets unless unmistakably authorized thereto by the legislature. (Beekman v. Third Ave. R.R. Co., 153 N.Y. 144,152, People ex rel. City of New York v. *Page 440 N.Y. Railways Co., 217 N.Y. 310.) It follows that it may not recover in this action.
What rights other companies, organized under the same act to perform other duties, may possess may not be determined on this record. Distinctions may exist which should not be anticipated. The court decides the particular issue without attempting to classify all the corporations organized under the Telegraph Act, either with the Western Union Telegraph Company on the one hand or with the plaintiff on the other.
The judgment appealed from should be affirmed, with costs.