Court Opinion

ID: 5224914
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:42:30.976708+00
Date Added: 2024-06-11T08:27:34.559620
License: Public Domain

Miller, J. (dissenting):
On the former appeal, this court held that the Public Service Commission erred in construing section 68 of the Public Service Commissions Law (Laws of 1907, chap. 429) as requiring the applicant, hereinafter referred to as the respondent, to obtain the permission and approval of the commission before beginning construction, irrespective of whether the secondary franchise of the respondent had been exercised. (137 App. Div. 810.) The commission had assumed, without formally finding the fact to be, that said franchise had been exercised, but that assumption of fact was unimportant in view of the said erroneous construction of the statute. The order of this court, dated April 27, 1910, directed that the application be referred back to the commission “ for consideration and action within the limits of its authority.” Said section 68 was amended by chapter 480 of the Laws of 1910 (Consol. Laws, chap. .48), which went into effect June 14, 1910, and revised the Public Service Commissions Law. Thereafter, the relator was allowed to intervene, additional evidence was taken on the question of the prior exercises of said franchise, and a majority of the commission, apparently considering that they were concluded by our decision, made the order now before us for review.
A preliminary question is raised as to the relator’s right to be heard. That depends on whether it is necessary for the respondent to obtain a certificate of public necessity and convenience, and that in turn depends upon the construction and effect of said amendment of 1910.
When the application herein was originally made, said section 68 read as follows: “No gas corporation or electrical *848corporation incorporated under the laws of this or any other State shall begin construction, or exercise any right or privilege under any franchise hereafter granted, or under any franchise heretofore granted but not heretofore actually exercised without first having obtained the permission and approval of the proper commission. ”
As amended, it reads as follows: “Ho gas .corporation or electrical corporation shall begin construction of a gas plant or electric plant without first having obtained the permission and approval of the commission of each district within which any part of the work of construction is to be performed. Ho such corporation shall exercise any right or privilege under any franchise hereafter granted, or under any franchise heretofore granted but not heretofore actually exercised, or the exercise of which shall have been suspended for more than one year, without first having obtained the permission and approval of the proper commission. * * * The commission within whose district such construction is to be made, or within whose district such right, privilege or franchise is to be exercised, shall have power to grant the permission and approval herein specified whenever it shall, after due hearing, determine that such construction or such exercise of the right, privilege, or franchise is necessary or convenient for the public service.”
It is urged that, perforce of sections 93, 94 and 95 of the General Construction Law (Consol. Laws, chap, 22; Laws of 1909, chap. 27), this proceeding is saved from the effect of the amendment of 1910, and that it would give the amendment a retroactive effect to apply it to this proceeding. The provisions of the General Construction Law, referred to, in terms relate to repealing acts. ■ The respondent cites a case in which it appears to have been assumed by the court that the said provisions apply to amendatory acts (Geneva & Waterloo R. Co. v. N. Y. C. & H. R. R. R. Co., 163 N. Y. 228); but what the Court of Appeals really decided in that case was that the correctness of the decision before it for review should be determined by the law in effect when it was made. Of course this application is strictly under section 69, but the steps required by section 68, before a corporation begins construction of the exercise of its secondary franchise, should be taken *849before consent is given to issue securities. The amendment of 1910 required additional steps to be taken, and we think that its application to the respondent is not affected by the fact that the latter had already filed an application for leave to issue securities. (Matter of Ludlow Street, 172 N. Y. 542; People ex rel. Binghamton L., H. & P. Co. v. Stevens, 143 App. Div. 789; reversed on another point, 203 N. Y. 7.)
It may be granted that the act of 1910 will not be given a retroactive effect, i. e., that it will not apply to a corporation which had lawfully begun construction and the exercise of its secondary franchise when it was passed. It is -undisputed that the respondent had not begun construction of its plant or the exercise of the secondary franchise acquired by it when the act of 1907 was passed. It appears to be assumed by both sides that, since that time, the respondent has begun construction and the exercise of the secondary franchise, and the evidence discloses that it has constructed what might be termed an embryo plant; that space in the subway ducts has been assigned to it; that subsidiary ducts or house connections have been made for it; that permission has been granted,by the municipal authorities to draw in its cables and that it is supplying electricity to at least one customer who occupies a building with it. If it be assumed that that constitutes the exercise of the secondary franchise, the question remains whether it was lawfully done, and that depends on whether the permission and approval of the commission was necessary under the act of 1907, which in turn depends on whether the secondary franchise had theretofore been exercised.
It is urged, however, that the effect of our order was to remit the proceedings to the commission, with instructions to determine the amount of securities to be authorized, and the conditions under which they were to be issued. We do not so construe the order. So far from restricting the authority of the commission on the rehearing, it expressly directed the commission to proceed, “within the limits of its authority,” which of course means the authority conferred by law.
The undisputed evidence on the first hearing before the commission tended to show that in 1889 and 1890 the American Electric Illuminating Company, the then owner of said fran*850chise, owned and maintained wires and poles in the streets of the city and manufactured electricity and transmitted it over said wires to a number of customers. The only witness who testified from personal knowledge on the subject was called on the rehearing and retracted his testimony, saying that he confused the American Electric Illuminating Company with the East River Electric Light Company. • The respondent in rebuttal called Mr. Townsend, to whom the franchise had been assigned by the American Electric Manufacturing Company, and who in turn assigned it to the American Electric Illuminating Company of which he was president. We shall accept his testimony on the subject. The franchise was assigned by him to the American Electric Illuminating Company on the 19th of April, 1889. At that time the East River Electric Light Company owned and operated an electric light plant and maintained wires and poles in the streets. Said two companies were owned and controlled by the same persons. The American Electric Illuminating Company, in addition tb its secondary franchise, acquired two dynamos and 100 lamps. ' The dynamos were installed in the building occupied by the East River Company. They were run by the power furnished by the latter company; electricity from them was transmitted over the wires of the latter company to a number of the latter’s former customers. Separate sets of books, however, were kept by each company. The American Electric Illuminating Company had its own sign, its own letter and bill heads, and the bills to customers .supplied with electricity generated by the two dynamos, owned by it, were rendered in its name. All of the employees, however, including collectors, were on the payroll of the East River Company. Collections, when, made, were turned Over to the latter and deposited in its bank account, but a bookkeeping entry was made on the books, crediting the Illuminating Company with the amount of the collections and charging against it the expense of operation. There was no written agreement between the two companies, not even a lease by the Illuminating Company of the wires and poles of the East River Company, and the only arrangement between them consisted of a direction given by the man who controlled both companies to Townsend to make the bookkeeping entries.
*851The franchise in question, granted by the board of aldermen on May 31, 1887, gave permission and authority “ to locate and erect poles and hang wires and fixtures thereon, and to place, construct, and use wires, conduits and conductors for electrical purposes, in the City of New York, in, .over and under the streets, avenues, wharves, piers and parks therein or adjacent thereto;' according to such plans as may be directed, approved or allowed by and subject to the powers of the Electrical Subway Commissioners, and to the provisions of Chapter 499 of the Laws of 1885, and under the supervision of the Commissioner of Public Works and of the Department of Public Parks, * * *.” Said chapter 499 provided for the appointment of a board of commissioners of electrical subways, made it the duty of said board to cause to be removed from the surface, wherever practicable, all electrical wires or cables, required the approval of said board to the construction of subway conduits and its permission to the construction of aerial lines, to be granted only “ when and where the public interests do not require the electrical conductors to be placed underground, or when and where it shall be deemed by the board itself to be impracticable to place and operate the conductors advantageously underground as aforesaid.” Said board was by chapter 716 of the Laws of 1887 constituted the board of electrical control. Said act made it unlawful, without permission of said board, to continue, construct, erect, maintain or string above ground in any part of the city, electrical conductors, poles or other fixtures or devices therefor, or any wires, and provided that the board of electrical control “ may establish, and from time to time may alter, add to or amend all proper and necessary rules, regulations and provisions for the manner of use and management of the electrical conductors, and of the conduits or subways therefor constructed or contemplated under the provisions of this act, or of any act herein mentioned. ” Among other rules adopted by said board was the following: “The companies or persons owning or controlling poles in any street or avenue shall allow the same to be used by other companies or persons operating conductors for a similar electrical service when authorized so to do by the board, on tender of proper compensation, to be determined by agreement between the parties interested.” It is not pretended *852that the said American Electric Illuminating Company ever obtained permission from the board of electrical control, or its predecessor, the board of commissioners of electrical subways, to lease the poles of the East Eiver Company, or to erect poles and string wires in the streets in which those poles were. Indeed, no permit in any way applicable to the pretended exercise of the franchise appears to have .been applied for or obtained.
It is difficult to understand how the privilege of constructing and using wires, conduits and conductors “according to such plans as may be directed, approved or allowed by and subject to the powers of the Electrical Subway Commissioners, ” could have been exercised without either constructing such wires, conduits or conductors, or even submitting plans therefor to said board for its approval. The purpose of keeping the books of the East Eiver Company and of the American Electric Illuminating Company in the manner described is patent. The owner of the said franchise thought that in that way he could establish the exercise of it and thus preserve it. It is said that a certain number of free lamps were furnished, the city, but there was nothing to apprise the latter that those were not the lamps of the East Eiver Company. The truth is that the business was conducted by the latter company. Its servants attended to every detail of operation, even to the collection of the bills. It paid all the expenses, and all of the collections went into its -.treasury. The other company did nothing except to keep a set of books; but the making of secret bookkeeping entries did not constitute the exercise of a franchise to place, construct or use wires, conduits and conductors for electrical purposes in the streets, according to plans approved by the board of electrical subway commissioners.
But even if the American Electric Illuminating Company had leased the wires and poles of the East Eiver Company, and had in fact transmitted electricity over said wires, the respond- • ent would' still be • far from showing the exercise of the said franchise. The right to have the wires and poles in the streets and to transmit electricity over the wires was exercised if at all under the franchise of the East Eiver Company. Two secondary franchises were not required for that purpose. The American Electric Illuminating Company could have made *853use of the franchise of the East Biver Company without a secondary franchise of its own, and it certainly could have done everything that the evidence in this case shows it did do without any franchise at all. The conclusion, therefore, seems irresistible that the secondary franchise in question was never exercised prior to 1907. It was, therefore, necessary for the respondent to obtain permission and authority of the commission before beginning construction. Wherefore its acts subsequent to 1907 were unlawful, and it. is now in the position of never having lawfully begun the construction of its plant or the exercise of its secondary franchise, and it is necessary for it to take the steps required by said section 68, as amended, before permission should he given it to issue securities.
The determination should he annulled and the proceedings remitted to the commission.
Ingraham, P. J., concurred.
Writ dismissed, with costs, and order affirmed.