Stuyvesant v. Pearsall

Edwards, P. J. The complaint in this case states that the mayor, aldermen and commonalty of the city of New-York have granted to the defendants the permission to construct a railroad, commencing on the second avenue and thence running through other avenues and streets of said city. It further alleges that this grant was and is of great value; that it was obtained by the defendants without their paying any thing therefor to the [246] city; and that if the same had been offered for sale, or if the railroad had been made by the corporation, and maintained and used for the benefit of the city, it would by the sale of the right to construct it. or by the income of the road, have produced large profits and returns' to the corporation, to be expended and applied in the support and maintenance of the city government, and to the extent of many thousands of dollars. These allegations are not denied, and for the purposes of the present motion they must be assumed to be true. It is also an admitted fact that the plaintiffs are property-holders and tax-payers in the city to a. large amount. Upon this state of facts, I am of opinion, for the reasons which have been stated in the case of Milhau v. Sharp et al., that the corporation in making the grant in question, has been guilty of such a breach of trust as calls for the interposition of this court, and that an injunction should be issued against the defendants in pursuance of the,prayer of the complaint.- Roosevelt, J. The allegation of the great pecuniary value of the grant of the railroad in question, not being denied, is, in effect, admitted to be true, No corporation, whether moneyed or municipal, having stockholders or constituents, has a right, without their consent, to give away the property intrusted to its care. The exclusive privilege of laying a rail track and running cars, and receiving pecuniary emolument therefrom, like the franchise of a bridge or ferry, or other incorporeal hereditament, is as much a subject of property as the park or the city hall, or the moneyed contents of the city treasury. To grant such a privilege to a few favored individuals, without any public equivalent, is in principle the same as a resolution or ordinance of the common council directing a division of the funds of the city, raised by taxation, among the members themselves. Such acts, whether done or threatened, are all alike gross breaches of trust, and subject-as such, to the jurisdiction of the supreme court, sitting as a court of equity. It is the duty of the court, in such a case, as in the case of any other ti’ust, on the complaint of injured parties, who, in the present [247] instance, are the oppressed tax-payers, to restrain the commission of such acts, by injunction, and where the grants are already made, to declare them null and void. [New-York General Term, April 4, 1853. Edwards, Rqosevelt and Monis, Justices.] If it be true, (and such is admitted to be the fact,) that the franchise in question was of the value of, and might have been disposed of for “ many thousands dollars,” it follows as an inevitable consequence, that by giving it away the common council were in effect, taxing their constituents unlawfully, to the extent of as many thousands. Morris, J. dissented. Injunction granted.