Court Opinion

ID: 5509057
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:28:59.675811+00
Date Added: 2024-06-11T08:34:07.339580
License: Public Domain

DYKMAN, J. (concurring).
Municipal corporations are creatures of law, and clothed with powers and functions to be exercised for public welfare. In the extent of their powers and liabilities they differ materially from counties, towns, and other quasi corporations which are created for governmental purposes alone. The officers of such corporations are viewed as trustees of the state residing'within the territorial limits of the city. In respect to the public and governmental functions with which such corporations are clothed, they are vested and are to be exercised for public purposes. They are sovereign powers, to be exerted in the interests of the entire public. It would be a very narrow view of the powers and duties of municipal officers that would confine their exercise to the aggrandizement of the local treasury. Financial considerations are not alone to control in granting permission to prosecute the various enterprises conducted by individuals and private corporations within the municipality. In all such cases the welfare of the public must be considered, and in *1079the exercise of its governmental functions the municipal authority is required to determine the questions by the exercise of judgment and discretion in the interest of the whole community. So far as a discharge of the duties devolved upon municipal authorities requires the exercise of judgment and discretion, they must be to a great extent final and conclusive when free from fraud and corruption. It would be quite destructive of local self-government if all the acts of city and village authorities within their jurisdiction were subject to judicial review and control. Mistakes and errors of judgment may occur in the performance of such duties, but it is not in accordance with our system of government to apply to the courts for their correction. Prior to the enactment of several statutes which authorized an action in favor of taxpayers to prevent waste or injury to public property, funds, or estate, judicial interference with the action of public bodies within their powers was never invoked. Those statutes came before the court of appeals for consideration and application in the case of Talcott v. City of Buffalo, 125 N. Y. 286, 26 N. E. 263, and it was there said:
“The terms ‘waste’ and ‘injury,’ used in this statute, comprehended only illegal, wrongful, or dishonest official acts, and were not intended to subject the official action of boards, officers, or municipal bodies acting within the limits of their jurisdiction and discretion, but which some taxpayer might conceive to be unwise, improvident, or based on errors of judgment, to the supervision of the judicial tribunals. It is believed that no action was ever maintained under this statute with the sanction of this court, without some proof or allegation that the official act or proceeding complained of was without power, or was tainted by corruption or fraud.”
The decision was that the provision of Code Civ. Proc. § 1925, authorizing an action by a taxpayer to prevent waste or injury to the property of a municipality, as supplemented by the subsequent statutes on the same subject, is confined to cases where the acts complained of are without power, or where corruption and power and bad faith amounting to fraud is charged. The word “waste” includes only illegal, wrongful, or dishonest illegal action. The constitution and the laws have delegated to the local authorities the control over the streets in the cities with authority to consent to their use for a surface railroad. The performance of their duties in that regard requires the exercise of judgment and discretion, and the presumption always is that their action has been prompted by correct motives. Municipal officers are not the agents of the city. They are public officers, clothed with certain powers for convenience of government; and interference with their action by the courts would be an invasion of their province, and amount only to a substitution of the judgment of the judges for that of the officers. The foregoing principles will aid us in our further progress in the examination of this appeal.
Turning now to the case before us, we find it to be a taxpayer’s suit under the several statutes mentioned. The defendants are two railroad companies to which franchises have been granted by the city of Brooklyn to construct and operate surface railroads over certain streets named in the petition. The city of Brooklyn and the mayor and aldermen of that city are also made parties defendant After *1080stating the application for leave to construct the railroads, and the action of the common council thereon, the complaint continues as follows: “That by the aforesaid illegal and wasteful acts of the individual defendants the defendant railroad companies' claim nevertheless to have acquired the valid consent of the city of Brooklyn to the construction and operation in conjunction with a railroad over the streets and avenues mentioned in paragraph fourteen of this complaint, and are about to proceed so to do,” and then prays for judgment declaring the grants to the defendant companies illegal, and wrongful to the estate and funds of the city. There is no charge of fraud or corruption in the complaint. The only allegation of malfeasance is that the members of the common council wrongfully and willfully and in violation of their official duties to the said city, taxpayers, freeholders, and electors thereof, and illegally and in waste of the property, funds, effects, and estate of said city, and solely in order to favor the defendant railroad company, and the persons managing such companies and interested therein-, and colluding with such persons with intent to prevent said city from getting fair and adequate and the largest compensation for such streets, granted to said companies the right to construct and operate railroads on the route specified. There is no averment of want of power in the common council to perform the acts of which the plaintiff complains, or that such acts were not within the jurisdiction of the municipal authorities, and there is no complaint of any irregularity in the proceedings. The averments in the complaint amount at most to a charge of mismanagement or improper administration of public affairs, and, as we have already seen, it requires much more to justify the interference of a court of equity to supervise or correct the action of municipal authorities. The law affords no appeal to the courts from their action. Judge Brown said upon the application for a preliminary injunction in this action:
“Very much must be conceded by the courts, in a case of this character, to the judgment and discretion of the municipal authorities; and their action cannot be nullified simply upon the ground that the court thinks they should have afforded more opportunity to other companies to bid for their consent, or to give greater or more favorable consideratin to real bidders. The law does not afford an appeal from their decision;- In the absence of illegal or corrupt action, bad faith will justify interference by the courts only in a case where it amounts to fraudulent action; and in such cases the fraud must be shown to be productive of waste or injury to city property.”
When Judge Cullen heard the case before him on demurrer to the complaint, he said:
“The local authorities might deem that a road of a particular character would so much better subserve public interest than one of another character, that it would be wiser to grant consent to the first without compensation than to the second for compensation. I think, therefore, that the whole subject is within the power and discretion of the local authorities, if that power be exercised without fraud, to determine whether a consent shall be given to a particular company, and the reasons and considerations that shall dictate their course.”
The proof fails to bring the case up to the charge in the complaint.
On the 22d day of May, 1893, the two defendant railroad companies, which were associated together and with the Coney Island, *1081Ft. Hamilton & Brooklyn Railroad Company, so as to be substantially one concern, applied to the common council of the city of Brooklyn for consent to lay down railroad tracks in certain streets of that city. On the same day the Brooklyn City Railroad Company applied for a consent covering the most, but not all, of the same streets, and also covering other streets. On the same day the Union Street-Railroad Company applied for a consent in respect to the streets covered by the application of the Brooklyn City Company,but omitting, as the latter company had' done, a part of the streets applied for by the defendant companies, and including many streets for which the latter companies did not apply. The Brooklyn City Company offered to pay to the city $150,000 for a consent to build on the streets according to its application and that of the defendant companies; the Union Street-Railroad Company offered to pay the city various sums per mile, amounting to between $250,000 and $260,000. The defendant companies made no specific offer, but expressed a willingness to make such compensation as the common council might deem proper. All the provisions of the railroad law as to notice of hearing and consideration of defendants’ application were duly complied with. On the 19th day of June, 1893, the board adopted resolutions granting to the defendant companies the consents for which they applied, and granting to the Brooklyn City Railroad Company a consent for a portion of the streets for which it applied. The consents which were granted imposed, by way of condition, the payment to the city of Brooklyn of the following percentages of gross receipts of the railroads to be constructed, namely 1 per cent., when the receipts were $20,000 or less per mile, 2 per cent, when the receipts were more than $20,000 and less than $40,000 per mile, and 3 per cent, when the receipts exceeded $40,000 per mile. The application of the Union Street-Railroad Company was refused, for the reason stated in the report of the committee, to which it was referred, and which was substantially as follows:
“There is before the common council an application of the Union Street Railroad Company for its consent to the construction of a street-surface railroad upon the same routes as those covered by the application of the Nassau Electric Railroad Company. These roads are understood to be proposed extensions of the main route of the Union Street Railroad Company’s road, designated in its certificate of incorporation as covering Union Street from Hamilton Ferry to Prospect Park Plaza. The routes of the Union Street Railroad Company do not extend beyond the city line, and in that respect do not afford the facilities for travel presented by the Nassau Electric Railroad Company. It is deemed worthy of mention that by far the greater part of the Union Street Railroad Company’s route consists in extensions of the road described in its articles of association, upon no part of which as yet a road has been built. Your committee is advised that there is grave doubt of the power of a railroad company to apply for or take a grant of a right to extend the route of an unconstructed railroad, and before an application for extension can effectually be made there must be an existing railroad to which such extensions will apply. If such be the law, a grant to the Union Street Railroad Company would be entirely inoperative, and the public would not realize from it any of the increased facilities for travel of which it stands in need. Upon the question of compensation for franchises, your committee-, after mature deliberation, has reached the conclusion that a graded percentage upon gross receipts is in harmony with the spirit of the statute relating to the subject, and will produce the largest revenue to the city and is favorable to the latter *1082as a continuing source of incom.e, and, so far as concerns the railroad company, should not be regarded as burdensome, because the payment thus imposed would be measured by the earnings of the company.”
The report of the committee, and the resolution proposed by it and- adopted by the board, manifests a thorough and careful examination and acquaintance with the subject, and-.a proper consideration and regard for the interests of the city and the welfare ,of the public. This lengthy extract is made from the report to show that the whole subject was thoroughly considered, and also to manifest the reasons which actuated the aldermen in their action in respect to the bestowment of the franchises to the defendant companies, and refusing the request of the Union Company. We are not concerned with the refusal to grant the request of the Union' Company beyond its reflection upon the motives of the aldermen and the interests of the city, because no relief is sought in that respect. In regard to the motives of the aldermen, the doubt expressed respecting the validity of the grant to the Union Company for an extension of its route anterior to the construction of any portion of its road, and the fact that the route of the Union Company is covered by the other lines, and does not extend beyond the city limits, are proof of their sincerity and correctness. The very term “extension” implies the existence of something to be extended, such as a street or a field. Such were the views of Judge Earle, expressed in the case of People v. Railroad Co., 126 N. Y. 39, 26 N. E. 961, where he said:
“It cannot be properly said that a road is extended unless it is then existing to be extended. The very language implies that the road was to be built, and then, after the opening of the avenue mentioned, extended.”
But there are reasons why such a grant for extension would be nugatory beyond the mere signification of the term “extension.” The effect of filing an extension certificate, if valid, is to give the railroad company the same corporate capacity with reference to the extension to construct, maintain, and operate a railroad as that which it acquires by filing its articles with reference to its original route. Inasmuch, therefore, as the filing of the original articles does not give any corporate capacity whatever, unless certain conditions are performed in respect to the amount of the capital stock per mile, and the payment of at least 10 per cent, of the minimum capital, and evidence of a bona fide intent to build and operate the railroad, and the payment of one-eighth of 1 per cent, of the amount of stqck to the state, the statute authorizing the extension ought to be so construed as not to make it subversive to the general-policy of the railroad law, and as not to enable companies to accomplish indirectly what they could not accomplish directly otherwise than by compliance with the conditions prescribed by the statute. Moreover, as the route of the Union Company did not extend beyond the bounds of the city, its facilities for accommodating the public were limited, and less extensive than those of the other companies. Again, it is to be observed that the income, based upon the percentage of gross receipts, will be perpetual, and therefore more advantageous to the city than the sum offered by the Union Company. As there *1083is no cause for the interference of the court upon the ground of frauds, so we find no reason for interference by reason of waste or injury to the funds or property of the city, even according to the most technical definition of those terms. In the sense in which they are employed in the statute they include only wrongful or dishonest illegal action, as we have already seen. The general view is that the permission of the defendant companies could have been granted without compensation, but, if such grants are to be considered as property, the city is to receive compensation, and so no waste has been committed. When it is claimed that the aldermen could and should have made a more rigid bargain, the answer is that the subject rested in their discretion. Tested by the application of both reason and authority according to the principles laid down in the commencement of this opinion, the record before us discloses no case for the interference of the court. There are many details which cannot be stated within the reasonable length of an opinion, but we have examined the entire case with care, and we have reached the conclusion that the judgment is erroneous. It invades the jurisdiction of a governing body which is as independent within its sphere as the judiciary is in its. In the dissenting opinion of Judge Peckham in the Talcott Case, he said:
“Under the statute as it noxv reads, I think the court has jurisdiction to enjoin the performance of an act by a public officer of the kind mentioned therein, if it be of such a character as to necessarily result in a plain, bald, useless waste of the property or funds of the public. The act must be such that there can be no fair question in the judgment of reasonable men as to its character." It must be plainly and beyond all fair controversy wasteful, a mere squandering of public funds.”
The proofs in this case leave it far below that requirement. The case has attracted much public attention, chiefly because it arose at a time when there was considerable excitement in the public mind. But the courts are beyond the voice of clamor, and must decide the law with serenity and independent of external strife or opinion.
The judgment should be reversed, with costs.