170 Misc. 243 | N.Y. Sup. Ct. | 1939
These two actions, for the same relief and based on the same fundamental facts, were consolidated for trial. Both plaintiffs seek to restrain the defendants from making or enforcing a regulation proposed by the defendant police commissioner which if effective would permit only south-bound traffic on Eighth avenue from Fifty-seventh street to Bethune street, and only north-bound traffic on Ninth avenue from Fourteenth to Fifty-ninth street and on Columbus avenue from Fifty-ninth street to Sixty-fourth street.
The plaintiff coach corporation predicates its right to permanent injunctive relief upon the terms of the franchise set forth in its contract with the city dated October 18, 1935, pursuant to which it has since been and now is operating omnibuses for the traveling public northerly and southerly on Eighth and Ninth avenues. The proposed regulation would materially interfere with the operation of this plaintiff’s public transit facilities, and, it asserts, would greatly decrease its revenues and the value of its franchise.
The plaintiff McCarthy sues as a taxpayer, alleging that enforcement of the police regulation would result in waste of the city’s money, inconvenience to the traveling public and damage and loss to property owners, merchants and other business people in the affected areas. The claim of waste is predicated on the danger of recovery from the city of substantial damages by the coach corporation if the proposed one-way traffic order is enforced, as well as upon loss of revenues to the city.
Motions made in each action for temporary injunctions restraining defendants from enforcing the regulations during the pendency of this suit were denied at Special Term, the justice there presiding stating in a brief opinion that the franchise was subject to regulations made by the police department; that the regulations complained of were “ neither arbitrary nor so clearly unreasonable as to justify the granting at this time of the relief sought by plaintiff.” The opinion directed that a trial be had on the first Monday of June, “ thus affording an interim period of observation and experiment which should be productive of additional facts bearing on the practicability and efficacy of the new regulations for presentation to the trial court.”
The order made in the taxpayer’s action was affirmed because, as stated by the Appellate Division, an injunction having been granted by that court in the coach corporation action, no necessity existed for duplicating the relief.
By reason of the temporary injunction granted by the Appellate Division, the enforcement of the police regulation has been stayed, and there has been no opportunity for the interim period of observation and experiment from which facts could be presented to the court bearing on the practicability and efficacy of the new regulation. Upon the trial opinion evidence predicated upon such data as could be secured from all available sources has been adduced in lieu of proof of actual results of one-way traffic. This is not said in criticism of the temporary injunction, but in explanation of the wide latitude granted upon the trial in an effort to obtain all possible light upon the controverted issues.
It will be helpful in determining such issues to state as definitely as need be the routes over which the coach corporation is authorized to operate, and the nature and terms of the police regulation sought to be enjoined in so far as it affects such routes. For brevity, the coach corporation will hereinafter be referred to as the plaintiff.
Plaintiff’s franchise to operate buses on Eighth and Ninth avenues was granted by the terms of a contract entered into by it with the city on October 16, 1935, as thereafter formally modified by contract dated August 11, 1937, which merely extended its route two-tenths of a mile southerly from Vesey street to Cortlandt street. It consists of two routes, the Eighth avenue route, designated as M-41 and the Ninth avenue route, designated as M-42. Each route is wholly separate and independent of the other and one does not intersect the other at any point. They are both distinctly uptown and downtown lines, there being no crosstown operation at any point save only that at certain points buses are required to travel east or west for one or two blocks, but never between the two separate routes. Two-way operation on each route was con
On March 16, 1938, the defendant police commissioner sent plaintiffs a letter stating: “ Official notice is hereby given that beginning at 8:00 A. m. April 4th, 1938, the following thoroughfares will be designated for one-way traffic only, as indicated: One-Way Northbound — 'Hudson Street — from Abingdon Square to 14th Street. Ninth Avenue — from 14th Street to 59th Street. Columbus Avenue — from 59th Street to 64th Street. One Way Southbound —• Eighth Avenue — from 57th Street to Hudson Street.” The letter stated that from the time these regulations became effective no vehicles would be permitted to proceed contrary to the traffic directions of the thoroughfares named and notified plaintiff that “ pursuant to the terms of the Contract which you obtained from the Board of Estimate it will be necessary for your corporation to apply to that Board for approval of the following routes to be taken by your buses on and after April 4th, 1938.” Then followed detailed instructions rerouting plaintiff’s bus line by discontinuing two-way traffic and substituting north-bound traffic only on Hudson street, Ninth avenue and Columbus avenue from Bank street to Sixty-fourth street and south-bound traffic only on Eighth avenue from Columbus circle to Abingdon square, with cross-overs on streets connecting Eighth and Ninth avenues at both ends of the affected area.
However, as pointed out in the opinion at Special Term on the motion for a temporary injunction, under the provisions of the city. charter empowering the police department to regulate vehicular traffic, no regulation made by the commissioner shall become effective until filed with the city clerk and published in the City Record. The letter of March 16, 1938, thus had no force as a police regulation. On March 26, 1938, the police commissioner caused to be published in the City Record a notice signed by him dated March
It is to enjoin the enforcement of this proposed resolution that these actions were instituted and the general broad question involved in the coach corporation’s suit is whether its franchise can be thus informally and arbitrarily modified by the police commissioner under the guise of a resolution regulating vehicular traffic. The charter vests the power to formulate and enforce traffic regulations in the police department. With the wisdom of the proposed regulations this court is not concerned. It is not to substitute its judgment in such matters for that of the duly constituted authorities in whom the power is lodged. The court will merely pass upon the legal rights of the interested parties to these actions, and will first consider those involved in the coach corporation’s action. The questions there presented involve the nature of the plaintiff’s rights under its contract or franchise; the effect of the proposed regulation upon the operation of the bus lines, and finally, whether the franchise, in terms or by implication reserved to the city or its officials the power to alter the privileges thereby granted to plaintiff,
For fifty years prior to the granting of plaintiff’s franchise street railways had been operated on Eighth and Ninth avenues, running north and south on each avenue. In 1934 the city, acting through its corporation counsel, borough president and board of estimate, and with the aid and co-operation of the police department, was seeking to work out some solution of the transportation problem created by the insolvency of the company operating these street railways. Plaintiff, on February 5, 1935, submitted an offer to operate buses along these avenues, specifying the routes and tendering a cash payment of $475,000 plus monthly payments of three per cent of the gross recelpffrfor' aT ten-year franchise. Bids submitted by other parties were considered by the board of estimate, but after comparisons, plaintiff’s was deemed to be most advantageous to the city, and public hearings on its application were duly held. A proposed form of franchise was prepared and hearings held thereon, following which the board of estimate unanimously
By its contract the city of New York granted to plaintiff “ the franchise, right and consent to maintain and operate omnibuses for the transportation of persons for hire on routes in, upon, along and over the streets and avenues (hereinafter referred to as ‘ franchise, right and consent,’ or 1 franchise ’) in the Borough of Manhattan, in the City of New York,” which routes are therein described in detail. The term is for a period of ten years, subject to earlier termination by the city in the event the city shall have purchased the property and equipment of two other bus companies. By its terms the contract may not be leased, mortgaged, assigned or transferred. It requires the plaintiff to supply and operate sufficient new buses to serve the needs of the traveling public; fixes the rate of fare; requires the giving and honoring of transfers, and obligates the plaintiff to keep the route free from ice and snow. It imposes many conditions upon the coach corporation, for the failure to observe any of which the contract may be terminated by the city, and a $30,000 security fund deposited with the city forfeited.
The contract is clearly a franchise for a term of ten years, termi4 nable prior to 1945 only by reason of plaintiff’s default or the acquisi-f tion by the city of other bus lines. Neither event has occurred and the contract is in full force and effect, subject to all the terms and conditions mentioned as well as certain provisos and reservations to be hereafter noted.
Franchises such as have been granted to plaintiff constitute property. (People v. O’Brien, 111 N. Y. 1, 40.) When granted they cannot be taken away, save by the terms therein prescribed, or by due process of law. (City of Los Angeles v. Los Angeles Gas & Electric Corp., 251 U. S. 32, 39; Delaware, Lack. & W. R. R. Co. v. Morristown, 276 id. 182, 193; Coney Island, F. H. & B. R. R. Co. v. Kennedy, 15 App. Div. 588, 593; New York & Queens El. L. & P. Co. v. City of New York, 221 id. 544.)
These cases are sufficient authority for the proposition that a franchise is a species of property that cannot be taken in whole
The evidence clearly shows that enforcement of the regulation will require one-way operation over approximately two and one-half miles of each route. In the case of the Ninth avenue line, buses will be restricted to north-bound operation, whereas on Eighth avenue operation between Fifty-seventh street and Bethune street will be south-bound only, but is permitted in both directions above and below these points. Plaintiff offered considerable proof tending to show the impracticability of profitable operation of its lines under these conditions. This evidence tended to show that the section from Fifty-ninth street south to Fourteenth street, along Eighth and Ninth avenues, represents the most heavily traveled portion of plaintiff’s routes. While such proof of necessity was based on counts which may not be wholly accurate, and on opinion evidence, it supports the logical assumption that one-way operation in a busy section of this city will be bound to result in reduction of revenues. A person desiring to ride north on Eighth avenue within the affected area cannot be expected to walk a block (900 feet) to Ninth avenue and then walk back the same distance upon arriving at the cross street nearest his destination. The same holds true of a southbound passenger on Ninth avenue. From the physical layout of the territory, which is not in dispute, and from evidence which is controverted, enough has been shown to warrant a finding that restricting plaintiff to one-way traffic between the points specified will result in a very substantial loss in passengers and revenue. It is difficult if not impossible to fix the amount of such loss to a mathematical certainty. What is certain is that plaintiff’s operating income will be impaired without a corresponding decrease in operating expenses.
Defendants, urge that plaintiff’s proofs on this point are legally incompetent and factually inaccurate and unreliable. The proof offered consisted first, of testimony of company operators who took actual counts of passengers riding in the affected area and recorded
It follows that the proposed regulation would destroy a substantial portion of the valuable property right belonging to plaintiff. Among other conditions imposed upon it by the franchise is the obligation “ to place in full operation all of the authorized routes ” therein required, on penalty of forfeiture of all franchise rights. It was obligated to and has supplied “ an adequate amount of safe and efficient omnibuses and equipment on the authorized routes to serve the needs of the traveling public.” Should the routes left available to plaintiff under the one-way traffic regulation
All this, however, does not help plaintiff if, as asserted by defendants, the contract itself contains provisions whereby the right is reserved to the city to alter the franchise by ordinances, police regulations or similar action. In support of this contention defendants point to various clauses in the contract. The first of these appears in section 1, containing the grant of the franchise. Following the detailed enumeration of the streets and avenues to be traversed is a provision that plaintiff “ shall have the right to cross such other streets and avenues, named and unnamed, as may be encountered in traversing said routes, with the right to operate omnibuses in either direction over any street and avenue described in the foregoing routes, except that said operation shall at no time be in a direction contrary to police regulations.” Subdivision seven-teenth of section 2 provides: “ The Company shall be subject to all the laws and ordinances affecting or which may be applicable to the operation of omnibuses and all traffic regulations applicable thereto now in force or which may be in force during the term of this {-contract. The Company shall also comply with and enforce the carrying out of any lawful orders or regulations designed for the protection and safety of persons or property or for the comfort, health, and convenience of the public, which may be issued by the Board or official having jurisdiction over such matters, and the Company shall also comply with and enforce the carrying out of such specific orders or directions with respect to the operation of omnibuses hereunder as may be issued by the Police Department of the City and which are designed to govern the movements of omnibuses in the streets.” Subdivision twentieth of the same section provides: “ The Company shall operate, pursuant to this contract, the routes as herein described or any portion of the same which shall best serve the convenience of the public, but the Company shall operate only upon the streets and avenues herein described. If vehicular traffic be diverted from any of the streets or avenues forming a
Do these provisions empower the defendant police commissioner to promulgate and enforce a traffic regulation which will destroy a substantial portion of the franchise without compensation or adequate substitution of routes? The answer depends upon the construction to be placed upon the quoted provisions, and that in turn requires the ascertainment of the intent of the parties as evidenced by the contract and the transactions leading up to its execution. The portions quoted cannot be interpreted without taking into consideration the contract as a whole.
It is conceded that two-way operation over these longitudinal thoroughfares was intended by both parties to the contract. The city was seeking to replace the defunct railways which had for half a century operated uptown and downtown lines on both avenues. Plaintiff offered omnibus operation as a substitute for the transportation about to be discontinued. As required by law, the board of estimate, before granting the franchise, made inquiry as to the money value thereof and fixed the payment to be made by the plaintiff on the basis of two-way operation. This clearly appears from the contract itself. The franchise describes the Eighth avenue route from Vesey street to One Hundred and Fifty-ninth street (including cross streets) as nine and six-tenths miles in length, and the Ninth avenue route from Gansevoort street to One Hundred and Twenty-sixth street as six miles. The total of
The second provision relied upon by defendants is subdivision seventeenth of section 2. This section of the contract provides that “ the grant of this franchise is subject to the following conditions, provisions, requirements and hmitations contained in the following subdivisions:'' Then follow thirty-five subdivisions covering such matters as the term of the franchise; compensation to be paid by the grantee; restrictions upon alienation of the grant; securing of certificate of necessity by the grantee from the transit commission; obligation of the grantee to furnish omnibuses and detailed specifications of such buses; fares permitted to be charged, exchange of transfers; keeping streets clear of snow and ice; keeping of records and inspection by the city; assumption of liability for damage suits and deposit of security, etc. Subdivision seventeenth, above quoted in full, consists of two paragraphs, the first of which subjects the company to all laws and ordinances and to all traffic regulations applicable to omnibus operation in force during the contract term. As in the case of the clause just above construed, it follows that if this paragraph requires the plaintiff, in operating its buses north and south on Eighth avenue' and north and south ,on Ninth and Columbus avenues, to comply with all laws, ordinances and traffic regulations applicable to such operation, the paragraph in question is reasonable and in conformity with the general
The second paragraph of subdivision seventeenth falls within the same category. It requires the company to obey and enforce lawful orders designed for the comfort, health and safety of the public. This is not pertinent to the subject at hand. It also requires plaintiff to comply with specific orders issued by the police department with respect to the operation of buses and designed to "govern their movements in the streets. Such a provision in a franchise granting the right to operate north and south on each i avenue can relate only to the regulation of the movements of buses While being so operated. It does not include the right to refuse to permit the operation contracted for.
"" All the provisions thus far relate solely to the right to regulate the movements of buses while being operated as contemplated by the franchise, namely, in both directions along each of the avenues. In subdivision twentieth we find for the first time provision for operation in the event any portion of the specified routes is closed to traffic for any of the reasons there specified. The subdivision requires the company to operate the routes as described in the franchise, or any portion of the same which shall best serve the convenience of the public, but only upon the streets and avenues named. (Elsewhere in the franchise the company is obligated, under penalty of forfeiture of all rights, to place in full operation all of the authorized routes. § 2, subd. fifth.) It then provides that if vehicular traffic be diverted from any of the streets or avenues “ because of fires, parades, traffic congestion or any other event closing any such streets temporarily or permanently to vehicular traffic the Company may, during such closing,” use such other streets as may be necessary, or as may be specified by the police department, to continue the operation of its routes. If, however, such streets shall remain closed longer than forty-eight hours, or traffic regulations shall require a continued diversion of all or part of the operation, the company shall apply to the board of estimate, which may authorize the use of such other streets for the remaining period during which the streets are closed. The main purpose of this subsection is to provide for temporary diversion when necessitated by emergencies beyond the control of either party. The temporary character of the provisions is not altered
It may be observed that the proposed police regulation specifies that it is “ for a temporary period of 30 days.” Concededly, however, this period is intended as a trial preliminary to a permanent regulation of like effect, or at least for the duration of the World’s Fair. Thirty days would entail a financial loss to plaintiff only in a lesser degree than a permanent regulation. It would disrupt its service and presumably cause a loss of patronage it could not regain if at some future time the police commissioner decided to restore two-way traffic.
The only other provisions of the franchise pointed out upon the trial or in the briefs as justifying the proposed action or prohibiting plaintiff from objecting thereto are those found in the thirty-second subdivision. On examination this clause is found to contain an agreement by plaintiff that it will abide by all the conditions and limitations of the contract and will not assert that they are unreasonable or void. No such contention is being made herein by the coach corporation.
Construing the contract as a whole, in the light of the intent of the parties to provide public transportation facilities in both directions along Eighth and Ninth avenues, it is clear that the foregoing provisions were not intended to and actually do not permit the city or its officials to curtail the operations contemplated
Defendants’ counsel lays great stress upon the decision of the Court of Appeals in Jones Beach Boulevard Estate, Inc., v. Moses (268 N. Y. 362). In that case the plaintiff, an abutting owner, attempted to restrain the parkway commission from enforcing an ordinance prohibiting turns across the parkway except at designated points. Plaintiff had conveyed strips of land to the commission, reserving to itself the right of access to the paved portions of the parkway. There was no difficulty in reaching the parkway from plaintiff’s premises, but once there, a vehicle desiring to proceed westerly was required by the ordinance or regulation to first proceed easterly a matter of several miles before reaching a point where it could make the turn to proceed to its desired destination. In upholding the validity of the regulation the Court of Appeals pointed out that the plaintiff reserved to itself only such rights as the traveling public possessed. There was no grant of any right by the parkway commission. In the case at bar we are dealing with contract obligations wherein specific rights were granted. Neither~~fKe"facts in the Jones Beach case nor the principle upon which it was decided are relevant here.
It is impossible, even in an opinion of such inordinate length as this has proven to be, to note each and every argument and reason urged upon the trial, the oral arguments and in the numerous briefs submitted to me. It is with great reluctance that I reach a deci
Nor do I wish to be understood as holding that plaintiff’s contract rights of necessity prevent the proposed change in traffic regulations prior to the expiration of the franchise. Like any other species of property or rights it may be acquired or extinguished in a proper proceeding which provides compensation for what is taken. I merely hold that the result sought cannot be accomplished by the summary method here presented. For that reason, the proof before me justifies judgment against the police commissioner alone, there being no evidence that the city, its mayor or its board of estimate have taken or are threatening to take any steps to curtail plaintiff’s rights. They should be and are left free to discharge their official duties without judicial interference. Plaintiff coach corporation is entitled to judgment restraining the police commissioner from enforcing the proposed ordinance published in the City Record on March 26, 1938, or any ordinance of similar terms affecting the avenues therein specified, so long as plaintiff’s present franchise remains in force and effect, with permission to the police commissioner to apply at the foot of the judgment herein at any time for relief from the terms of such judgment in the event changes of conditions and circumstances render inapplicable anything herein decided.
The taxpayer’s action stands on a wholly different basis. To recover, he must show illegality and waste. (Campbell v. City of
As stated in the Campbell case (supra), “ courts do not sit in judgment upon questions of legislative policy or administrative discretion. The taxpayer must point to illegality or fraud.” (244 N. Y. at p. 328.) There is no fraud here, and the only illegality shown is the threatened acts in violation of the coach corporation’s contract rights. If my decision in the companion action is upheld, there will be no waste and no violation of the rights of the coach corporation nor of any claimed rights of the abutting owners, merchants or the traveling public. If the appellate courts hold that the police regulation is valid, enforcible and not in violation of the coach corporation’s rights, there will be no waste, for the corporation would not be legally damaged under such a decision.
The evidence introduced by plaintiffs tended to establish that making Eighth and Ninth avenues one-way thoroughfares would so increase the traffic loads as to create a condition dangerous to the public; increase the hazards of pedestrians crossing the streets and the dangers of collision between cars making turns into the avenues and into the side streets; decrease the number of passengers using the buses and thereby diminish the financial returns of both the city and the plaintiff; cause great inconvenience to prospective passengers by requiring them to travel a greater distance to board a bus traveling in the desired the direction; and reduce the income of storekeepers on the avenue and the rental values of the abutting property.
The city’s evidence was to the effect that the one-way regulation would increase the flow of traffic and at the same time reduce the cause of accidents; that the danger of head-on collisions would be abolished and accidents caused by right and left turns would be minimized; abolish the danger of glaring headlights and enable the city to introduce a progressive lighting traffic signal system.
• Between these conflicting claims the court need not decide. The taxpayer is obligated to show a clear right of recovery wholly independent of any contract rights. He must establish the illegality of acts complained of, and the resultant damage to the municipality, His proof tends to establish inconvenience to the traveling public,
For the reasons herein set forth, judgment is granted in favor of the plaintiff coach corporation against the defendant police commissioner to the extent above stated, and in favor of all defendants against the plaintiff taxpayer. Submit decisions and judgments in accordance herewith.