West Side Electric Co. v. Consolidated Telegraph & Electrical Subway Co.

Patterson, J.: The matter in contest between the ■ parties to this record is brought before the court by two appeals,, one from a judgment in ah action ih which the relief was sought oí a perpetual injunction against the defendant to restrain it from interfering with or. obstructing the plaintiff in the maintenance of certain cables and electrical conductors located in subways or ducts in the city of New York, and the other from a final order dismissing and quashing an alternative, writ of mandamus, which had- been directed to the defendant, to enforce a right claimed by the appellant to lay or place other cables for electric lighting purposes in subways' in the city of New York. • ■ The single question involved in both the action and' the special proceeding relates to the existence of a right on the part of the appellant to use the subways as -claimed by it. It is conceded that it has what may be called an- apparent authority (to use those subways ; that is to say,, it" lias.,-received the consent and authority of the board of electrical control of the city of New-York, and it. insists that under the law that, consent and authority is all that -is required to enable it lawfully to lay, construct and maintain wirés and other appropriate appliances for conducting and' distributing electricity in subways under the streets, avenues and public places in - -the City of New York. The-defendant and respondent insists that the apparent consent and authority referred to is inadequate and insufficient to confer, upon the appellant the right it asserts, but, on the contrary* that the power to grant the .necessary consent and authority resided only in the board of aldermen of the city of New York. - . The. situation, so far as the appellant is concerned, may be stated ' in a few words: It is an electrical company,, organized in October, 1896, under the Transportation Corporations "Law, which became operative on May 1, 1891.* Its corporate purposes are to manufacture and use electricity for lighting, heating or furnishing power and in lighting streets, avenues, public parks and places and public and private.buildings in tjie city and county of New York. By subdivision 2 of Section 61, of article 6 of the Transportation Corporations Law (Laws of' 1890, chap, 566), it is provided that,if a — 173 — company is incorporated “ for the purpose of using electricity for light, heat or power,” it shall have power “ to carry on the business of lighting by electricity or using it for heat or power in cities, towns and villages within this State, and the streets, avenues, public parks and places thereof, and public and private buildings therein; and for the purposes of such business to generate and supply electricity; and to make, sell or lease all machines, instruments, apparatus and other equipments therefor, and today, erect and construct suitable wires or other conductors, with the necessary poles, pipes or other fixtures in, on, over and under the streets, avenues, public parks and places of such cities, towns or villages, for conducting and distributing electricity, with the-consent of the municipal authorities thereof, and in such manner and under such reasonable regulations as they may prescribe.” The appellant, on October 30, 1896, procured from the board of electrical control of the city of Hew York an authority, permit or certificate which recited that the appellant had petitioned the board of electrical control for afranchise to do business in the city of Hew York and had filed a certificate of its incorporation with that board and it was, therefore, resolved, “ that the West Side Electrical Company having filed the necessary certificate with the Secretary of the State of Hew York and the Clerk of the City and County of Hew York permitting it to do business, be and it hereby is authorized and empowered to lay and construct suitable wires or other conductors in subways under streets, avenues, public parks and places in the City of Hew York for conducting and distributing electricity under the direction of the Board of Electrical Control, subject to all existing rules applicable thereto and to all regulations which the Board may hereafter impose by resolution or otherwise, provided always, and this consent is given on that express condition and not otherwise, that until the further order and resolution of this Board, the electrical conductors of said company shall be laid or constructed by the Consolidated Telegraph and Electrical Subway Company, under and in pursuance of .the statutes of the State of Hew York' and under the supervision of this Board.” Acting under the authority thus conferred, or sought to be conferred, the appellant procured permits to open the streets and to introducé its wires or cables in subway ducts. — 174 — The respondent, the Consolidated Telegraph and Electrical Subway Company was incorporated in December, 1885, under the Telegraph Act (Laws of 1853, chap. 471)-, but such ■ powers as it possesses as ;a subway companyt-are derived from two agreements, - one of July,. 1886, and the other of April, 1887, confirmed by -section 6 of the Subway Act of 1887 (Laws of 1887, chap. 716). As is well stated by counsel for the appellant, “ the general nature pf the obligation of the subway company under said' contracts and statute, is: to supply ducts to all corporations duly authorized to install and operate electrical conductors hi .the streets of the city, giving equal facilities to all and receiving equal rentals from all.” After the appellant received the permit or certificate from the' board of electrical control, the respondent permitted it to open the streets-and lay cables in the. ducts, and for some timé the appellant used those cables and ducts and paid rent therefor, and the right of the, appellant seems to have passed without challenge until June 15, 1903, when it was notified by the respondent, through its secretary -and general superintendent, that it had been advised that the appellant was. a-company not having lawful power to operate electrical conductors in any street of the city of New York, and that the respondent was not, therefore, authorized to lease 'its sxibways . and ducts to or permit the Use by the appellant. Reasons in -the ' nature of excuses for the respondent delaying action in the premises •are then set forth in the notice (which reasons it is not now necessary to consider) ; but the distinct requirement was made that the appel-" lant'forthwith remove and withdraw al! its cables from the subways and ducts of the company “ on the ground that you :are not a company having lawful power to operate electrical conductors in the ' City of New York, or any part thereof.” Counsel' for the appellant calls attention to the history -of the ■ legislation respecting electric lighting, in the State of New York, and points out thai the first statute concerning that sxtbject was chapter 512 of the Laws of 1879, subsequently amended by chapter 73 of the Laws-of 1882, whereby the formation of corporations was authorized to carry on the business of'lighting by electricity ; and section 2'of'the act provided that such a corporation should have -power-tojay, erect and construct suitable wires, etc., in cities, towns or villages, “ with the consent of the municipal authorities thereof, and under such reasonable regulations — 175 — as they may prescribe.” It is conceded that at the time of the passage of the act of 1879 the common council of the city of Hew York was the municipal authority vested with the power to grant consents on behalf of the city, and it is also admitted that that power remained in the common council until the year 1887. In 1884 and 1885 a new body to be known as the board of commissioners of electrical subways in the. city of Hew York, was created by the , Legislature, and" to that new board was Confided the duty of regulating and controlling the use of the streets of the city of H ew York for electrical wires or conductors. In 1887 the Legislature passed an act (Chap. 716) relating to electrical conductors in the "city of Hew York, and by that act was constituted the board of electrical control in and for the city of Hew York. By section 1 of that act it was provided that “ all the powers and ^duties conferred or imposed by the said act chapter four hundred and ninety-nine of the laws of eighteen hundred and eighty-five, upon the commissioners appointed thereunder in and for the city of Hew York, and all the powers and duties heretofore by any law conferred or imposed upon the local authorities of said city, or any of them, in respect to or affecting the placing, erecting, construction, suspension, maintenance, use, regulation or control of electrical conductors or conduits or subways for electrical conductors in said city are hereby transferred to and conferred and imposed upon, and shall hereafter be exclusively exercised and performed by the said board of electrical control, constituted as provided in this act, and its successors as hereinafter provided.” That is the board from' which.the appellant received the consent upon which it relies. What has been heretofore stated is sufficient to indicate the general aspect in which the controversy .now comes before us, and it will be seen that the real issue is whether the appellant acquired a franchise to do business in the city of Hew York under the provisions of the" Transportation Corporations Law. The court below determined that it had not, and we are coihpelled by authority to acquiesce in that determination. It is evident that the appellant and the respondent and the board of electrical control were all of opinion that the municipal authority referred to in subdivision 2 of section 61 of the Transportation Corporations Law was the last-mentioned board, a view which, would be now adopted by us were — 176 — it not for a' contrary expression of opinion by the Court of Appeals, úthich we deem to be controlling. Subdivision 1 of section 6Í of the Transportation Corporations Law relates to gas companies. . Tlie powers conferred are “ to manufacture, sell arid furnish such quantities óf gas as may be required in .the city, town or village where thexsame shall be located, or said two or, more villages or towns, not over five miles distant from each other * * * and to lay conductors for conducting gas through the .streets, lanes, • alleys, squares and highways,, in such city, villages or towns, with the ■ consent of the municipal authorities, thereof, and under su.ch. reasonable regulations as they may prescribe,” etc. In Ghee v. Northern Union Gas Co. (34 App. Div. 551) a taxpayer brought an action under chapter'531 of the Laws of 1881, as amended.by chapter' 301 of tlie Laws of 1892, to restrain the laying of gas mains in certain streets of. the city óf New York, upon the ground that that company had no franchise or right to do so, and that certain officials of the city, the commissioner of . highways . and the ¡deputy commissioner of highways of the borough of The Bronx, had illegally granted a permit for the laying of such-mains.' The Northern Union Gas Company was organized in 1897 under the Transportation Corporations Act for the purpose of manufactur- ' ing arid supplying gas and electricity to public and private buildings in the city of Hew York. The question arose in the case as to the power of the commissioners to issue the permit or grant the authority which was given' to the gas company. Upon a consideration "of the whole subject, it was determined by this court that the ' proper “ municipal authorities,” under the provisions of the Greater ‘ Hew York charter of -1897,* to grant the consent were the department of public buildings, lighting and supplies and the department of highways and' not the municipal assembly of the ..city of Hew Yprk, .and we remarked in that case that “ it is difficult, to avoid the.conclusion that the municipal authorities ’ whose consent is. necessary for the laying- of gas mains in the streets are the department of public buildings, lighting and supplies and the department ■ of highways. This is an undoubted' departure from- the plan or '•-scheme under which the old government of the city was conducted, - for therein the local authorities to which reference is made in nearly — 177 — all prior legislative acts were the municipal council or board of aldermen.” On appeal to the Court of Appeals our decision was reversed (158 N. Y. 510), and it was held that in the city, of New York, the “municipal authorities” within the meaning of that term as used in section 61 of the Transportation Corporations Law whose consent was required to lay conductors for conducting gas through the streets of the city were the municipal assembly. That determination of the Court of Appeals is announced as a general proposition, not confined to a pase arising under the provisions of the Greater New York charter, and the reasoning of the opinion is, in our judgment, decisive of the present case. Were it not for that, it might well be claimed that a franchise to; carry on the business of generating and supplying electricity, or of making, selling or leasing apparatus or other equipment, is granted directly from the State without any consent of the municipal authorities required by the statute; and that such consent, if so required, relates to the exercise administratively of a granted franchise to lay, erect and construct suitable wires or other conductors in, on, over or under the avenues, streets, public parks and places of the cities, towns or villages within this State ; or, in other words, that the authority was only that of an administrative authority as to the methods and manner in which particular things pertaining to the exercise of the franchise once granted should be done. But, in the Ghee case, the Court of Appeals has gone much farther, and has declared that a part of the franchise is the distinct specific right which the appellant claims as against the respondent and that that right was not complete and a franchise was not duly conferred until the municipality gave a supplementary consent to the general power which the appellant sought to acquire under its certificate of incorporation. If it be true that the right to the use of the streets is a part of the franchise of the appellant, then it results from the Ghee case that the bqard of aldermen was the legislative body having the power to grant a franchise '.to use the streets. In the case cited, it was held in effect that, previous to 1897, the board of aldermen of the city of New York, the legislative branch of the city government, was the body which had the power to confer franchises to use the streets. Therein it is said that “ the accumula — 178 — tion underground, during the past few years, of sewers, electrical subways, cable and electrical rail way conduits, pneumatic tubes, steam-heating,. water and gas pipes, seems", to indicate that, the day may come when there will be no more ■ unoccupied space beneath the surface, of the streets, and of this situation the Legislature and the learned commissioners who drafted the charter undoubtedly had full knowledge. It is difficult to believe that- with such knowledge they would attempt to take away from general and responsible representatives of the people, the power to grant such important and valuable rights and vest them in subordinate administrative officers,” etc. Those words are significant with respect, to the intent of the Legislature in passing the act of 1887, conferring powers on the board of electrical control, and, although nothing is definitely decided on that subject, the question is left fairly open for consideration when it is presented in a proper case. 'We'are unable to see that the language of the act of 1887 con-' fers upon the. board .of electrical control any different power than was conferred upon the department of buildings, lighting and supplies and the department of highways by the tiharter of 1897. The points decided in the Ghee case, in ■ a few, words,. are these: That the, right and power to use the streets under the provisions of the Transportation Corporations Law is part of a franchise; the consent of the municipal authorities is necessary to the full acquisition of that franchise; it can be given only by municipal authority and that municipal authority is the body legislating for the city. There are some inaccuracies in the opinion of the Court of Appeals in the Ghee case concerning the history of the granting of consents to gas companies to lay gas pipes and mains in the city of New York. The power to grant consents was not always -exercised by the com- • mon council of the city of New'York, but express, legislative authority was at one time given to a board to grant -such consents. In 1886 (Chap. 321, § 15) an act was passed to authorize the formation of gas companies in the city of New York and to regulate the powers and duties of the same. By section 15 it was provided that < - any company’ subject to this act - may lay its mains or pipes and supply its gas through the same' without any further proceedings, '■ conditions or authority than those herein contained, save the consent thereto of -the mayor, comptroller and president of the department — 179 — of taxes and assessments of the city of New York.” The reference to this subject made in the opinion of the Court of Appeals proceeds upon a concession which was seemingly made by all the parties to that case. The inaccuracy is not material if we correctly apprehend the full force and effect of the opinion. In the light of that decision the provisions of the act of 1887 relating to the board of electrical control and the powers and duties conferred upon the local authorities in respect to or affecting the “ placing, erecting, construction, suspension, maintenance, use, regulation or control of electrical conductors or conduits or subways for electrical conductors in said city are hereby transferred to and conferred and imposed upon and shall hereafter be exclusively exercised and performed by the said board of electrical control,” do not relate to, granting a consent which in and of itself would operate as a completion of a franchise. Notwithstanding the very elaborate and learned argument of the counsel for the appellant, we feel constrained by the authority of the Ghee case to affirm the judgment and order appealed from. The judgment and order should' be affirmed, with costs. O’Brien, P. J., and McLaughlin, J., concurred; Laughlin, J., concurred in result; Ingraham, J., dissented. Footnotes [*] See Laws .of 1890, chap. 566, § 163.— [Rep. [*] Laws of 1897, chap. 378.— [Rep,