Court Opinion

ID: 5205879
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:02:19.252197+00
Date Added: 2024-06-11T08:27:17.108707
License: Public Domain

Laughlin, J. (dissenting):
I agree with the majority of the court that the continuance of the use of the gas mains and lateral house connections in .the streets of ¡New York city, after the period specified in the grants made by or consents given by the local authorities, affords no ground for a forfeiture of the franchises which the Consolidated Gas Company received from the State, for, in my opinion, such consents or grants are not franchises within the fair intent and meaning of the provisions of the Code of Civil Procedure (§ 1798 et seq.) with respect to annulling the charter, of a corporation, but are, more in the. nature of contracts between the gas companies and the city, and questions arising with respect thereto are to be adjusted between them and the city without the intervention of the State.
I am of opinion, however, that the learned Attorney-General, in charging and showing that the Consolidated Gas Company purchased a controlling interest in other gas companies and in electric light companies supplying gas or electricity for light, heat or power in the borough of Manhattan or The ¡Bronx for the purpose of obtaining a monopoly in the manufacture and sale .of gas or in.gen^ erating and furnishing electricity for light, heat or power, which are commodities in common use, and with a view to stifling competition in the manufacture or generation or sale, thereof, presénts a question of law as to whether the Consolidated Gas Company has not violated the provisions of section 1 of chapter 690 of the Laws of -1899, being the Anti-Trust Act, so called, and of section 7 of *410the Stock Corporation Law (Laws of 1890, chap. 564, as amd. by Laws of 1892, chap. 688, and Laws of 1897, chap. 884) and of section 168 of the Penal Code, for which its charter may be annulled.
The case of Rafferty v. Buffalo City Gas Co. (37 App. Div. 618) is not, I think, decisive of these questions, and Judge Holt in the United States Circuit Court, Southern District of Néw York, in Burrows v. Interborough Metropolitan Company (156 Fed. Rep. 389), recently, held with the contention of the Attorney-General that section 40 of the Stock Corporation Law (as amd. by Laws of 1892, chap. 688, and Laws .Of 1902, chap. 601), which authorizes one stock corporation to purchase and- hold -stock in certain other stock corporations engaged in a similar business, is limited and qualified by Hie provisions of section 7 of the same act (as amd. supra). ■ I refrain at this time from agreeing or disagreeing with Judge Holt’s construction, because the question is not presented for decision on the merits now, but I think that the questions áre of sufficient ' public importance to require that they shall be decided by the Court of Appeals, which can only be done, as matter of right, by permitting the Attorney-General to bring an action.. If such leave be not granted, then I think that this court should either modify the order of the Special Term denying the Attorney-General’s motion for leave to sue, by reciting that the denial is not in tlie' exercise of the discretion of the court, but upon the ground that the facts presented do not show a cause of ■ action, or else certify to' the Court of Appeals the question as to whether section 40 of the Stock Corporation Law is modified or qualified by section 7' thereof or by section 1 of the Anti-Trust Law, so called, in either of which cases I think •the Court of Appeals would decide the question upon the merits. (See Hewlett v. Wood, 67 N. Y. 394; People ex rel. Lehmaier v. Interurban R. Co., 177 id. 296; Matter of Thurber, 162 id. 244; Schneider v. City of Rochester, 155 id. 619; Birge v. B. I. B. Co., 133 id. 477, and cases cited; Matter of Davies, 168 id. 89.)
If the corporation has violated either of these statutes its charter ought to be annulled, and I think that the Legislature did not intend to authorize the court to refuse leave to bring the action when the court is of opinion that the action ought not to be brought, assum*411ing that it could be successfully maintained. I am of opinion that the Legislature intended to vest the Attorney-General with authority to determine, in his discretion, whether or not an action for the annulment of a charter' of a corporation should be brought where a cause of action for annulment exists, and it only requires leave , of the court to the end that the court might determine whether a cause of action exists for the annulment of the charter so that the corporation might not be put to the trouble and expense of a litigation unless the facts presented by the Attorney-General show prima facie a cause of action, or present a question of' such gravity as to render it proper that it be decided upon a. trial, rather than upon the motion, and this construction is emphasized by the practice of limiting the leave, by the order, to the prosecution of the cause of action arising on the facts presented on the application for leave to sue. (Matter of Attorney-General, 81 Hun, 541; Matter of Attorney-General, 50 id. 511; People v. Boston, H. T. & W. R. Co., 27 id. 528; People ex rel. Gould v. Mutual Union Telegraph Co., 2 Civ. Proc. Rep. [McCarty’s] 295.) If section 7 of the Stock Corpora-. t-ion Law or section 1 of the Anti-Trust Law, so called {supra), be applicable to the defendant, I do not agree with the majority of the court that the petition of the Attorney-General does not show that they have been violated, and on the contrary, I am. of opinion that the facts stated in the petition present a prima facie case of a violation of both statutes, assuming them to be applicable to the . defendant, that is to say, it appears presumptively that the controlling interest in the other corporations was purchased for the purpose of creating a monopoly and restraining competition in the business in which the corporations are engaged.
I, therefore, vote for reversal of the order and for granting leave to bring the action.
Order affirmed, with ten dollars costs and disbursements.