New York Central & Hudson River Railroad v. City of New York

Ingraham, P. J.:

The. plaintiff in this action has .been awarded an injunction restraining defendants from removing its tracks upon certain streets in the city of New York, and the principal question presented on this appeal depends upon the duration of the franchise granted to the Hudson Biver Bailroad Company by chapter 216 of the Laws of 1846 ; ‘ and the effect of chapter 917 of the Laws of .1869 under which the plaintiff was incorporated. The referee in a careful opinion has stated the facts in relation to the incorporation of the several railroad companies which under the act of 1869 were consolidated into the corporation then organized- and which is the present plaintiff. The real question presented on this appeal is whether the city of New York can remove the tracks of the plaintiff located in, certain public streets and avenues which was expressly authorized by the act of 1846, under which the Hudson Biver Bailroad Company was incorporated, and in which - streets and- avenues' the plaintiff lias maintained these tracks and operated its railroad under the franchise then granted.

In considering this question we must bear in mind that at the time these several acts were passed the State only could grant a franchise to operate a surface railroad in the streets of the city of New York; that its power to grant such a franchise and authorize such a use of the surface of the' streets was Uncontrolled by any constitutional provision; and that the municipal governmentof the city of New York had no power to grant such a franchise or permit the use of the streets of the city for such a purpose. (People v. Kerr, 27 N. Y. 188; Potter v. Collis, 156 id. 16; City of New York v. Bryan, 196 id. 158.) The Legislature thus possessing the absolute power to grant a franchise, by section 1 of chapter 216 of the Laws of 1846 created a body corporate by the name of the Hudson Biver Bailroad Company with power to construct a single, double or triple railroad or way between the-cities of New York and 'Albany, “ commencing in the city of New York, with the consent-of the'corporation of the ■ city of New York, and passing through the counties of Westchester, Putnam, Dutchess, Columbia, and, ending at some point on the Hudson river, in the county of Bensselaer, opposite the city of Albany, * * * with power to construct such branch or branches, for depot and station accommodations, as may be required for the business of said railroad ; and to transport, take or carry any property and persons upon the same, by the power and force of steam, of animals, or of any mechanical or other -power, or of any combination of them, for the term of fifty years from the passage of this act.”

Section 4 of the act provided that the directors named in the section should open books to receive subscriptions to the capital stock of .the corporation, and the stockholders should have power, when one-half of the capital stock to the amount of $3,000,000 should have been subscribed and five per cent thereof paid in, to exercise the powers and privileges conferred by the act; that thereupon the directors should cause to be made examinations, surveys and maps for the said railroad .as might be necessary to the selection by "them of the most advantageous line or lines, for the location of the road ; that the. directors should after such examinations and surveys have been made, select and, by certificates drawn on suitable maps under their hands and seals, designate the line, course or way which .they might deem most advantageous for the said railroad ; which certificates for lands lying in the county of New York should be filed in the office, of the register of the city of New York; which line, course or way so selected and certified shall be the line, course or way on which the said corporation shall construct, erect, build or make their railroad, with a single, double or triple track as therein mentioned; that “ the said directors may locate their railroad on any .of the streets or avenues of the city of New York, westerly of and including the Eighth avenue, and on or westerly of Hudson street, provided the assent of the corporation of said city be first obtained for such location.” By subsequent sections of the act the corporation was authorized to purchase, receive and hold in fee simple such real estate and other property as might be necessary to accomplish the purpose for which the franchise was granted. It was authorized to purchase the real estate entered upon by private sale, and in case an agreement could not be made between the said corporation and the owners of any property which might be required for the purposes mentioned, or which might be affected by any operation connected therewith, to acquire the land by the right of eminent domain, “ and the said corporation shall thereupon become seized in fee'of such land during the continuance of the corporation, by this or any subsequent act, and may take, hold and use the same for the purposes of said road.” (See §§ 9, 10.) Section 13 of the act provides : “ The said corporation is hereby authorized to construct, erect, build and make and use a single, double or treble railroad or ways, of suitable width and dimensions, to be determined by the said j corporation, on the line, course or way designated by the directors as aforesaid, as the line, course or way whereon to construct, build or make the same; and shall have power to regulate the time and manner in which goods and passengers shall be transported, taken and carried on the same, subject nevertheless to the control and ' direction of the Legislature, or of any officer appointed by it for that purpose; and shall have power to erect and maintain toll houses and other buildings, for the accommodation of their concerns, as they may deem suitable to their interests.” Section 22 of the act provided that the said corporation shall possess the general powers and' be subject to the general restrictions and liabilities prescribed by such parts of the 3d title of the 18th chapter of the 1st part of the Eevised Statutes as are not repealed.

This act was passed. May 12, 1846, and on May 6, 1847, the ■ mayor, aldermen and commonalty of the city of New York passed an ordinance whereby permission was granted to the Hudson Eiver Company to construct a double line of tracks, with suitable turnouts, along the line of the Hudson river, from Spuyten Duyvil creek to near Sixty-eighth street, occupying so much of Twelfth avenue as lies along the shore; thence winding from the shore' so as to intersect Eleventh ave,nue at or near Sixtieth street; thence through the middle of Eleventh avenue to about Thirty-second street; thence on a curvé across to Tenth- avenue, intersecting Tenth avenue at or near Thirtieth street; thence through the middle of Tenth avenue to West street, and thence through the middle of West street to Canal street; the railroad company to grade, regulate, pave and keep in repair a space twenty-five feet in width in and about the tracks in all the avenues and streets through which the said track or tracks shall be laid, whenever the common Connell shall deem the interest of ,the public to require such pavement to be done. The railroad company was also required to lay: such rails or tracks through the avenues and streets in conformity to such directions as to line and grade as should be given by'the ■ street commissioner and should conform their said railroad to ■ the grades of the avenues and streets through which it extended or crossed as should be from time to time established by the common council if the latter so required, and should lay their rails or tracks in the. streets and avenues in such manner as to cause no unnecessary impediment to’ the common and ordinary usé of the streets for all other purposes. The said company was also required within one year from the passage of the ordinance and before entering upon any contracts for, grading to file in the office of the street commissioner a map showing the location and intended grade of said railroad and permission was granted to the railroad company to' inn their locomotives as -far . south as Thirtieth street and no further, and the railroad company was required to execute an instrument in writing agreeing to stand to, abide by and perform all such con- ' ditions and requirements as were contained in the 2d and 3d sections of the ordinance. On or about August 12, 1847, the said corporation executed under its corporate seal an instrument in writing as provided for in the ordinance. On September '2, 1847,.the railroad company filed in the office of the register of _the city and county of New York its map exhibiting the routes of the railroad as located from Canal street to the northerly side of Spuyten Duyvil creek in the city and county of New York, and thereafter the common council passed a resolution authorizing the railroad company to ■ lay down a double" line of tracks with suitable curves from the northerly ■ line of Canal street at West street through Canal and Hudson streets to Chambers street.

In pursuance of the authority thus granted and the consent of the corporation of the city of New York the railroad company completed its line of railroad from New York city to a point on the Hudson river opposite the city of Albany, whereupon the common council of the city of New York on October 24, 1851, passed a resolution that the citizens of New York had great cause for congratulation for the construction of this railroad and the thanks of the municipal authorities of the city of New.York were eminently due and the same were tendered to the officers of the company.

At.the time of the construction of the railroad Twelfth avenue had not been opened north of Sixty-first street; Eleventh avenue had not been opened north of Forty-eighth- street; and the railroad company acquired title to the lands within; the bounds of those avenues necessary for the construction of its road along the route designated." Subsequently the corporation of the city of New York acquired the fee of the land in these avenues paying to the railroad company a nominal sum for acquiring title to the land which had been acquired by the railroad company. -The fee thus acquired was of course subject to the franchise granted by the State to the railroad company to occupy the streets for railroad purposes. The conditions imposed by the act of 1846 were complied with. The municipal corporation of the city of New'York had consented to-the construction of the road within the city of New York and had assented to the location of the railroad on certain of the streets and avenues of the city of New York and the railroad company had constructed its road and proceeded to maintain and operate it as provided for by the grant of' the franchise. It must be conceded, I think, that the Hudson River Railroad Company thereby acquired a franchise to construct, maintain and operate a railroad upon the course adopted by it within the city of New York which neither the corporation of the city of New York nor any power except the State of New York could interrupt or interfere with. The use of the franchise was not thereafter in any respect subject to the control of the city of New York and the railroad company continued in the enjoyment of the franchise down to the year 1869.

Prior to the year 1869 there existed a railroad extending from the city of. Albany to the city of Buffalo which had been operated by a corporation known as the New York Central Eailroad Company. This corporation had been organized by the consolidation of several railroads separately incorporated by the State and the rights and franchises of these several railroad companies had been merged into the New York Central Eailroad Company under the provisions of an act passed April 2, 1853, being chapter 76 of the laws of that year, and thereby the New York Central Eailroad Company acquired the franchises of the various railroad companies which by 'such consolidation vested in it for the corporate life of 500 years. The. New York Central Eailroad Company, organized under the provisions of this act, was subsequently merged with other corporations under the provisions of chapter 302 of the Laws of 1855, and continued in the maintenance of its railroad and the exercise' of its powers and franchises down to the year 1869.

By chapter 917 of the Laws of 1869 provision was made for the merging and consolidation of any railroad companies or corporations organized under the laws of this State, or of. this State and any other State, whenever tile two or more railroads of the companies or corporations so to be consolidated should or may form a continuous line of railroad with each other, or by means of any intervening rail’ -ad bridge or ferry. The terms and conditions upon which such consolidation should be carried out were provided for . by the act. Section 3 of the act provided that “ upon the making and perfecting such agreement and act of consolidation as herein-before provided, and filing the same or a copy thereof in the office of the Secretary of State as aforesaid, the said corporations,. parties thereto, shall be deemed and taken to be one corporation by the name provided in said agreement.” Section 4 provides: “ Upon the consummation of said act of consolidation as aforesaid, all and singular the rights,, privileges, exemptions and franchises of each of said corporations, parties to the same, and all the property, real, personal and mixed, and all the debts due on whatever account to eithei of said corporations, as well as all stock subscriptions and other things in action belonging to either of said corporations, shall be taken and. deemed to be transferred to and vested-in such new corporation, without further act or deed; and all clannsy demands, property, rights of way and every other interest' shall be as effectually the property of the new corporations as they were of the former corporations, parties to the said agreement and act; and the title to all real estate, taken by deed or otherwise, under the laws of this State, vested in either of such corporations, parties to said agreement and act, shall not be deemed to revert or be in any way impaired by reason of this act, or anything done by virtue thereof, but shall be vested in the new1 corporation by virtue of such act of consolidation.” And section 8 provided that all the provisions of the General Railroad Act of 1850 (Chap. 140) and of the several acts amendatory thereof and in addition thereto should be applicable to the new corporation so to be formed as aforesaid so far as the same are now applicable to the railroad companies of this State which may be consolidated with any other company or companies by virtue of this act.

In pursuance of the provisions of this act the New York Central Railroad Company and the Hudson River Railroad Company entered into an agreement of consolidation on the 15th of September in the year 1869, wherein it was provided that said corporation should continue for the term of 500 years, such consolidated railroad to be known as the New York Central and Hudson-River Railroad Company, and to be organized under the provision's of the General Railroad Act of 1850. By the incorporation of the new corporation by the merger of the New York Central Railroad Company and the Hudson River Railroad Company all and singular the rights, privileges, exemptions and franchises of each of said corporations, * * * and all the property, real, personal and mixed, and all the debts due on whatever account to either of said corporations, * * * shall be taken and deemed to be transferred to and vested in such new corporation, without further act or deed; and all claims, demands, property, rights of way and every other interest shall be as effectually the property of the new corporations as they were of the former corporations.”

The franchise that had vested in the New York Central Railroad Company before consolidation was for 500 years. The franchise that had been granted to the Hudson River Railroad Company was vested in it for 50 years from the year 1846. The Legislature then authorized these corporations to become consolidated by the formation of a new corporation with a life of 500 years and transferred. to the new corporation the franchise held by both consolidated corporations. The franchises thus transferred were not limited by the period of the original grant to the consolidating corporations but were granted to the new corporation during the period of its corporate existence. The. State created the new corporation to exist for a period of 500 years; and it provided that the franchises owned and operated by tire corporations.consolidated into' the new corporation should be by operation of law transferred to the- new corporation. To create a railroad corporation whose sole object of incorporation was to operate and manage a railroad necessarily involves the grant of a franchise not only to exist as a corporation, but to construct, maintain and operate a railroad in order to carry out-the objects of-its incorporation. It seems to me that the effect of the incorporation of the plaintiff for. a period of 500 years, with a transfer by operation of law of. the franchises controlled and operated by two consolidating' corporations, vested in the consolidated corporation the franchises of the consolidating corporations for the period for which the consolidated corporation was organized. Thus, on compliance with the provisions of the act of 1869, the plaintiff became vested with the franchise to exist as a corporation, and also the franchise, to construct, maintain and Operate the railroads of both consolidating corporations for the period of its corporate existence. The original .act of 1846 contemplated the extension of the teym of the franchise granted to the Hudson River Railroad Company, the extension of that franchise was accpmplished by the act of 1869, and the consolidation of the Hudson River Railroad Company with the New York Central Railroad Company under it in the plaintiff corporation. The grant of the. franchise to the Hudson River Railroad Company was one indivisible franchise from a point on the Hudson river opposite the city of Albany .to the termination, of the railroad in the city of New York, with a right to occupy certain of the streets of the city of New York after the municipal corporation had approved of the occupation by the railroad of the streets selected by it. The right to occupy this street was á part of this indivisible franchise, and neither the municipality of the city of New York nor any other corporation or individual could question its right to the franchise. This conclusion is, I think, sustained by Beal v. N. Y. C. & H. R. R. R. Co. (41 Hun, 172) and Miner v. N. Y. C. & H. R. R. R, Co. (123 N. Y, 242). ■

This action was brought to enjoin the city of New York from enforcing a resolution of the board of estimate and apportionment, directing the president of the borough of Manhattan to remove tile plaintiff’s tracks from the streets and avenues within the city. If this resolution was an invalid exercise of power by the municipality, .it conferred no authority upon the borough president to remove the tracks, and his threatened action would have been an illegal- act which the court was required to enjoin. The plaintiff, as before stated, was exercising a franchise granted by the State. It was conceded that a legal franchise had been granted, but it was claimed by the- city that that franchise had expired by limitation.- The State has not questioned the right of the plaintiff to exercise the franchise which was granted to the Hudson Eiver Eailroad Company, and which was concededly a legal franchise, and, as I understand the settled law of this State, it is the State only that can question the right of a corporation to exercise a franchise granted by the State. Thus, it was said in the case of City of New York v. Bryan (196 N. Y. 158): “ While the title to the streets in the borough of Manhattan is in the city, its title is not that of a private owner, but in trust for public purposes. The franchise of the defendants’ predecessor proceeded, as already shown, from the State. The constitutional requirement has been complied with, for the city has given its consent. It may well be that public convenience and advantage will be best subserved by allowing the defendants to complete and operate -that portion of their road which has been in process of construction. * * * However that may be, the legal status of that franchise and the rights of the defendants, or the company to which they succeeded, to the property and structures created in the execution of the franchise should be determined only in a litigation between the People of ’ the State, from whom the franchise sprang, and the defendants, wherein a determination will be binding and conclusive on everybody, and not in a suit between the defendants and third parties, unless it. is absolutely necessary so to do.” Here the plaintiff was exercising a franchise granted by the State and in the exercise of that franchise had maintained tracks in certain streets of the city of New York for many years. The use of these tracks was essential for the plaintiff in the exercise of its franchise. The city of New York claimed the right to remove these tracks from the public streets upon the ground that the franchise granted by the People of the State had expired and in the enforcement of that claim had threatened to forcibly remove the tracks. I think it was for the' State and the State alone to question the'right of the plaintiff to continue to use the franchise, that the State had granted .and that neither the municipal corporation nor any one else could by force prevent the exercise of that franchise so long as the State made, no objection.

The other questions presented in this case' are satisfactorily discussed in the opinion of the referee and nothing more, need be said.

It follows, therefore, that the judgment appealed from must be affirmed, with costs.

Clarke, Scott and Miller, JJ., concurred.