People ex rel. New York v. Public Service Commission

Laughlin, J.: I am of opinion that the Commission had jurisdiction by virtue of the provisions of sections 29 and 49 of the Public Service Commissions Law (as amd. by Laws of 1911, chap. 546; Laws of 1914, chap. 240, and Laws of 1917, chap. 805) to authorize the relator to charge a higher rate of fare than that prescribed by the ordinance provided the rate so prescribed was found by the Commission to be insufficient to give to the relator reasonable compensation for the service rendered and that the Commission was authorized to fix a just and reasonable rate of fare to be charged by the relator. The relator is a railroad corporation organized under the General Railroad Law of the State, which authorized it to acquire a private right of way by purchase or condemnation and to construct and operate its railroad thereon; and to construct its road across, along or upon public highways (See section 8 of the Railroad Law, being chapter 49 of the Consolidated Laws [Laws of 1910, chap. 481, as amd. by Laws of 1918, chap. 166], which is a re-enactment of section 4 of the Railroad Law of 1890, as amended by chapter 676 of the Laws of 1892 and by section 1 of chapter 504 of the Laws of 1902, which re-enacted section 28 of chapter 140 of the Laws of 1850, as amended by chapter 724 of the Laws of 1887), subject only to its obtaining a certificate of convenience and necessity from the Public Service Commission acting for the Legislature (Section 9 of the Railroad Law, formerly section 59 of the Railroad Law of 1890, added by chapter 676 of the Laws of 1892 and amended by section 1 of chapter 545 of the Laws of 1895) and subject to its obtaining the assent of a city where its road is to be constructed in, upon or across any street "of the city (Section 21 of the Railroad Law, formerly section 11 of the Railroad Law' of 1890 and theretofore subdivision 5 of section 28 of chapter 140 of the Laws of 1850, as amended by chapter 724 of the Laws of 1887) and subject also to its obtaining the permission and approval of the proper Public Service Commission to the construction of its railroad, or any extension thereof, and the exercise of its franchise (Section 53 of the Public Service Commissions Law, formerly section 53 of the Public Service Commissions Law of 1907). With respect to such a railroad the Legislature itself — 452 — prescribed the rate of fare to be charged- depending upon the length of the line. (Section 57 of the Railroad Law, formerly section 37 of the Railroad Law of 1890, as amended by chapter 676 of the Laws of 1892. See, also, section 28, subdivision 9, of chapter 140 of the Laws of 1850, as amended by chapter 724 of the Laws of 1887.) The public roads and highways throughout the State, no matter by whom acquired under authority derived from the Legislature, are held for the use and benefit of the public and there being no constitutional limitation on the power of the Legislature to authorize the incorporation, construction and operation of raihoads, other than street raihoads (State Const, art. 3, § 18), except that they must be authorized by general laws, it was competent for the Legislature, if it saw fit so to do, to authorize a raihoad, other than a street raihoad, to be constructed upon, along or across any public highway or street in the State without obtaining the consent of the local authorities therefor. (Delaware, L. & W. R. R. Co. v. City of Buffalo, 65 Hun, 464; People v. Delaware & Hudson Co., 213 N. Y. 202; People ex rel. Simon v. Bradley, 207 id. 592; Beekman v. Third Ave. R. R. Co., 153 id. 144, 152; People v. Kerr, 27 id. 188; Worster v. Forty-second Street, etc., R. R. Co., 50 id. 205; Dillon Mun. Corp. § 1222. See, also, Ghee v. Northern Union Gas Co., 158 N. Y. 510; Potter v. Collis, 19 App. Div. 392.) Having fixed a rate of fare to be charged by such raihoads and having authorized such use" of the public streets by them, subject only to the consent of the local authorities, it is a reasonable inference that the Legislature in giving cities authority to pass upon applications for such consents did not intend to authorize them, as a condition of granting their- consent, to revise or change -the -fares prescribed by the Legislature with respect to. raihoads organized under the General Raihoad Law, as is the relator. It is quite clear, I think, that the Legislature merely intended to authorize the local authorities, in consenting to the construction of such raihoads across streets by crossings above or below the grade of the street, to regulate the crossing with respect to the convenience and safety of ‘ those lawfully using the streets, which would involve the ..nature and elevation of the construction overhead or under — 453 — neath the surface of the street (Delaware, L. & W. R. R. Co. v. City of Buffalo, 65 Hun, 464; S. C., 4 App. Div. 562; affd., 158 N. Y. 266), and where such railroads are permitted to cross the street at grade the safety of the public requires the regulation of the speed (City of Buffalo v. N. Y., L. E. & W. R. R. Co., 152 N. Y. 276) and involves the form and manner of the construction of the crossing with respect to the safety and convenience of persons, vehicles and animals, and may justify requiring the use of gates and flagmen, and the giving of particular warnings and signals. It would not seem, however, on any theory, that the Legislature by requiring such consent intended to authorize the local authorities to impose conditions with respect to the rates of fares to be charged for the transportation of passengers which the Legislature itself had prescribed and regulated. (People ex rel. South Shore T. Co. v. Willcox, 196 N. Y. 212; People ex rel. Village of S. Glens Falls v. P. S. Comm., 225 id. 216; People ex rel. Bridge Operating Co. v. Pub. Serve. Comm., 153 App. Div. 129.) The relator might have contested that point by mandamus proceeding to compel the board of aldermen to eliminate from its consent the attempt to regulate fares. (People ex rel. Parkway Co. v. Kennedy, 97 App. Div. 103; People ex rel. South Shore T. Co. v. Willcox, supra. See, also, People ex rel. Frontier Electric R. Co. v. North Tonawanda, 70 Misc. Rep. 91; affd., 143 App. Div. 955.) But this the relator did not do. On the contrary it formally accepted all the terms and conditions of the ordinance, and down to the present time has acquiesced therein, and doubtless it should not now be heard, in its own right, to question the validity of the provisions of the ordinance as binding it until it is relieved therefrom. (Rochester Telephone Co. v. Ross, 125 App. Div. 76; affd., 195 N. Y. 429; Pond v. New Rochelle Water Co., 183 id. 330; City of Buffalo v. Frontier Telephone Co., 203 id. 589.) It does not follow, however, that the Legislature could not itself change the rate of fare so prescribed by the ordinance or could not authorize the Public Service Commission, acting for it, so to do. (People ex rel. Village of S. Glens Falls v. P. S. Comm., supra, 223, 226, 227.) If, as we must assume, it is of importance to the public that this service be maintained, the point presented is not whether the relator can be heard to question the provisions of the — 454 — grant but whether they are beyond the control of the Legislature with respect to the rate of fare. With respect to such conditions imposed by the municipal authorities in the exercise of their right conferred by section 18 of article 3 of the State Constitution to grant or withhold the consent to the construction and operation of a street railroad for the construction of which the consent of the owners of one-half in value of the property bounded on the street or highway is also required, the power and authority of the Legislature effectively to increase the rate of fare without the consent of the municipal authorities so that there may be no forfeiture of the grant by the latter, has down to the present been left in doubt. (Matter of Quinby v. Pub. Serv. Comm., 223 N. Y. 244; People ex rel. Village of S. Glens Falls v. P. S. Comm., 225 id. 216; Matter of International R. Co. v. Pub. Serv. Comm., 226 id. 474; People ex rel. City of New York v. Nixon, 190 App. Div. 612. See, also, People ex rel. New York & N. S. T. Co. v. Pub. Serv. Comm., 175 App. Div. 869.) The relator, however, is in no sense a street railroad corporation. (See Matter of Koehn v. Pub. Serv. Comm., 107 Misc. Rep. 151.) It was not organized nor was either of its predecessors organized under the Street Railroad Law of the State (Laws of 1884, chap. 252, as amd.; Railroad Law of 1890, art. 4, as amd.; Railroad Law of 1910, art. 5, as amd.), but under the General Railroad Law, the same as the New York Central and other general railroad corporations. It uses no part of the surface of any street or highway. It does not take on or discharge passengers on streets or at street crossings but only at its own stations on its private right of way. The city authorities, therefore, in enacting the ordinance giving their consent to the relator to cross the streets, were not exercising any power or authority derived from the Constitution or with respect to matters concerning which the municipality had any absolute right, but were exercising part of the police power of the State, delegated by the Legislature, over which the Legislature had full control and, therefore, although the grant when thus accepted became in a sense a contract, the police power of the State in the premises and particularly with respect to regulating fares, did not irrevocably pass and the contract thus evidenced did not become a contract within the protection of subdivision 1 of section 10 of article 1 of the Federal — 455 — Constitution, but remained subject to the police power of the State under which the exercise of the grant might be regulated from time to time as required in the interest of the public. (People ex rel. Village of S. Glens Falls v. P. S. Comm., supra; Matter of Quinby v. Pub. Serv. Comm., supra; People ex rel. New York & N. S. T. Co. v. Pub. Serv. Comm., 175 App. Div. 869; People ex rel. Bridge Operating Co. v. Pub. Serv. Comm., 153 id. 129; People ex rel. South Shore T. Co. v. Willcox, 196 N. Y. 212; Milwaukee Electric Railway v. Wisconsin R. R. Comm., 238 U. S. 174; Louisville & Nashville R. R. v. Mottley, 219 id. 467; Matter of Koehn v. Pub. Serv. Comm., 107 Misc. Rep. 151.) The provisions of the charter of the city under which it is claimed the city acted in granting its consent, which was so required by the General Bailroad Law, were sections 72-74 of the Greater New York charter, as amended and revised by chapter 466 of the Laws of 1901. Said section - 72 provides that every grant of or relating to a franchise of any character must, unless otherwise provided in the act, be by ordinance. Section 73, in so far as here material, provided that after the approval of the act, no franchise or right to use the streets or highways should be granted by the board of aldermen to any person or corporation for a longer period than twenty-five years, except as therein-after provided, but that such grant might at the option of the city provide for giving to such grantee the right on a fair revaluation or revaluations to renewals not exceeding in the aggregate twenty-five years. It then provided that at the termination of the franchise, all rights or property of the grantee in the streets should cease without compensation and that it might be provided in the grant that upon the termination of the franchise, the plant of the grantee and appurtenances should be and become the property of the city without compensation or on payment of the fair valuation thereof. The section further provided as follows: “ Every grant shall make adequate provision by way of forfeiture of the grant, or otherwise, to secure efficiency of public service at reasonable rates and the maintenance of the property in good condition throughout the full term of the grant.” Section 74 provided that the proposed specific grant should be embodied in an ordinance with all of the terms and conditions including the provisions — 456 — as to rates, fares and charges and provided for the publication thereof and for a reference to the board of estimate and apportionment to inquire with respect to the money value of the franchise and the adequacy of the compensation proposed to be paid therefor. (See, also, Greater New York Charter, §§ 72-74, as amd. by Laws of 1905, chaps. 629, 630. See, also, Laws of 1914, chap. 467, adding to Greater New York Charter, § 74.) The grant in question was for a period of twenty-five years with a provision for an extension for a like period and the grantee was limited to charging not more than five-cent fares during the first period and it was provided that it might be so limited during the extended period. The learned counsel for the relator forcibly contends that if these statutory provisions were applicable the duty was imposed by the Legislature upon the board of aldermen so to frame the provisions of the grant as to secure efficiency of the public service at reasonable rates and the maintenance of the property in good condition throughout the term and any renewal thereof and that if it has failed so to do, its action was not a proper exercise of the power delegated by the Legislature and was not binding on the Legislature. On the facts presented, it is evident that the contemplated public service cannot be rendered at the rate of fare prescribed in the ordinance. If, therefore, there were any doubt on the point as to whether the Legislature has delegated all of its power in the premises irrevocably, it is quite clear that in the circumstances of this case it cannot be so held, for if these provisions of the Greater New York charter were applicable to a consent to the crossing of streets by such a railroad company the authority conferred has not been exercised as authorized and, therefore, it remained competent for the Legislature to take such action as might be necessary with respect to the rate of fare to be charged to secure the efficiency of the public service contemplated by the grant at reasonable rates. The case, as I view it, falls directly within the decision of the Court of Appeals in People ex rel. Village of S. Glens Falls v. P. S. Comm,, (supra) wherein it was held that, notwithstanding the fact that the Legislature had made it a condition of the right of the gas company to use the public streets that the consent of the local authorities be obtained therefor and the local — 457 — authorities in granting such consent prescribe the rate to be charged to consumers, it was still within the power of the Legislature to increase such rates and that it had delegated authority in that respect to the Public Service Commission. Assuming that I ám right in reaching the conclusion that the Legislature has jurisdiction in the premises to increase the rate of fare, it is quite clear, I think, that it has delegated its authority in the premises to the Public Service Commission by virtue of the provisions of said sections 29 and 49 of the Public Service Commissions Law. (People ex rel. Ulster & Delaware R. R. Co. v. Pub. Serv. Comm., 171 App. Div. 607; affd., 218 N. Y. 643; Matter of International ,R. Co. v. Pub. Serv. Comm., supra.) It follows, therefore, that the determination of the Public Service Commission should be annulled, with fifty dollars costs and disbursements, and that the matter should be referred back to the Commission to determine the reasonableness of. the fare of seven cents proposed to be charged by the relator by the schedule of passenger rates so filed by it. Clarke, P. J., Dowling, Page and Merrell, JJ., concur. Writ sustained and determination annulled, with fifty dollars costs and disbursements, and the matter referred back to the Commission to determine the reasonableness of the fare proposed to be charged by the relator by the schedule filed by it. Settle order on notice.