181 A.D. 687 | N.Y. App. Div. | 1918
This is an appeal from a judgment dismissing the complaint in an action brought to secure, among other things, an injunction restraining the defendants from interfering with the plaintiff in the operation of its alleged franchise rights, and also restraining the city of New York and its official representatives from demanding or collecting any sums of money from plaintiff as a condition of granting a further or additional franchise, or for the operation of its present alleged franchises, or for permission to extend its present lines. It was also sought to enjoin the Empire City Subway Company, Ltd., from refusing plaintiff space in and access to its subways for the operation of its business, and to enjoin the defendant Williams and his successors from interfering with the plaintiff’s business, and to obtain a mandatory injunction requiring him to issue to plaintiff such permits as might be necessary in the conduct of its business and the use of the city streets. Judgment was also prayed that plaintiff at the time of its incorporation in 1883 had, and ever since has had, and now has, a good and valid franchise and vested right to erect, construct and operate electric telegraph lines, wires and conductors in, over and upon and under the streets and highways of the city of New York. There is practically no dispute as to the facts in the case.
In 1872 Edwin Holmes instituted the central office system of burglar alarms, which involved the connecting of the premises to be protected with a central station by means of low tension electric wires which, in case of unauthorized or accidental interference, automatically registered an alarm at the central office. Incidentally thereto watchmen were-employed to patrol and inspect the protected premises and the apparatus connected therewith. In 1874 Holmes caused to be incorporated the Holmes Burglar Alarm Telegraph Company under the provisions of the General Manufacturing Act of 1848 (Laws of 1848, chap. 40), to which he transferred his then existing business, which did not include any receipt of messages or communications between individuals nor their transmission from place to place.
Chapter 265 of the Laws of 1848 provided certain requirements for the articles of association of those who sought to be -incorporated thereunder, including the general route of the line of telegraph,. designating the points to be connected, and provided (§ 5) that corporations organized thereunder were authorized to construct lines of telegraph along and upon any of the public roads and highways, or across any of the waters within the limits of the State, by the erection of the necessary fixtures, including posts, piers or
Upon its incorporation, plaintiff, pursuant to an agreement made some four days before between the Holmes Burglar Alarm Telegraph Company and the American District Telegraph Company, took over the central office system of electrical burglar alarm protection and the private patrol and night watch signal business of both companies, with their patents, good will and plant, and thereafter conducted both businesses in its own name and as one enterprise. Before the passage of the first Subway Act (Laws of 1884, chap. 534), the plaintiff owned and operated numerous overhead electrical lines and wires in the city of New York extending from its central offices and crossing the streets and highways to premises protected by its service, and in January, 1883, it was furnishing protective service to 927 subscribers, and in January, 1884, to 997 subscribers. This business has since grown so that at the present time plaintiff is operating nearly 4,500 miles of wire in the entire city of New York, whereof 4,404 miles are in the borough of Manhattan serving 2,520 subscribers. It has expended for construction since 1883 more than $1,500,000, and the value of the property employed in its business at the time of the trial was over $1,000,000. Under the agreement made between the Holmes Burglar Alarm Telegraph Company and the American District Telegraph Company there was no provision made for the sale of any franchise belonging by the latter to the former.
Plaintiff’s business since incorporation has been furnishing protection from burglary to banks, commercial establish-
Down to the year 1910 plaintiff’s franchise was never questioned either by the State or by the city of New York, and it continued to carry on its business without interference from either, and its existence was recognized not only by the compulsion exercised upon it to put its wires in the said subways and pay for the space therein, but also by special franchise taxes levied upon it amounting in sixteen years to over $57,000 by the State Comptroller collecting from it its share of the expenses of the maintenance of the subway commissioners, and by the city of New York making contracts with it for its burglar alarm service. As the result of doubts raised as to the validity of plaintiff’s franchise, in 1910 plaintiff was required to file a verified petition with the board of estimate and apportionment for a franchise before a day fixed, with which plaintiff, without waiving its legal rights, complied but stated it did so provided the permission were granted upon terms that would not prejudice, impair or limit any of the rights heretofore acquired and now owned or possessed by the company to use the streets of the city of New York. No action having been taken upon this petition, the present suit
Plaintiff claims that when it obtained its certificate of incorporation from the State in 1883 and was organized, under the provisions of the acts of 1848 and 1853, as a telegraph company, the State conferred upon it, in common with all other corporations organized under said act, the right to use the streets of.New York for its overhead wires, without the need of local or municipal consent; that as the subway acts operated to convert plaintiff’s overhead franchise into an underground franchise and to ratify and confirm its rights in the streets, those rights were also not subject to question or attack by the city but were effectual without the city’s consent. Plaintiff also claims that if it should be held that its franchise in the streets was not conferred upon it by reason of its incorporation, such franchise had become vested in plaintiff by the use, occupation and expenditure of time and money in good faith on the strength thereof long prior to the present controversy, and the validity thereof is established by acquiescence; and that the city of New York is estopped to deny the same and forbidden by law to destroy or impair it.
The learned trial court has found against plaintiff upon both these propositions. As to the first, it has held that plaintiff’s assumption of the corporate powers and franchise of a telegraph company, so far as its business was concerned, was wholly unauthorized. In so determining it held that the word “ telegraph ” as used in the acts of 1848 and 1853 applied only to corporations whose business it was to receive messages or communications between individuals and others and to
While this question is- an interesting one, I do not think it is properly raised in this case, nor that it can be determined as between the parties.now before this court. The certificate of incorporation of the plaintiff upon its face complied with the requirements of the acts under which incorporation was sought. The State of New York created plaintiff a corporation pursuant to the terms of those acts, and it thereby became incorporated as a telegraph company. If the plaintiff has exceeded its lawful' corporate powers, if it has forfeited its right to exercise its corporate powers or any part thereof by reason of nonuser, or if the validity of the incorporation itself is subject to any attack, those questions must be raised by the State of New York under whose authority the corporation was formed, and. plaintiff’s corporate existence or powers cannot be collaterally attacked. It is quite true that the complaint asks for relief by way of an adjudication that plaintiff at the time of its incorporation in 1883 had, and ever since has had, and now has, a good and valid franchise and vested right to erect, construct and operate electric telegraph lines, wires and conductors in, over, upon and under the streets and highways of the city of New York. But this is only the legal conclusion which is deduced from plaintiff’s incorporation by the State, and the plaintiff has not voluntarily tendered any issue as to the validity of incorporation^ but
Assuming that the plaintiff was lawfully incorporated as a telegraph company under the statutes in question, did it acquire thereby any special franchise' to operate wires over or under the streets of the city of New York without the permission of the appropriate municipal authorities? In other words, beside' the corporate franchise which plaintiff received from the State of New York, was it also required before it could use the city streets to obtain from the city authorities a special (or so-called secondary) franchise? Plaintiff stands upon the proposition that its certificate of incorporation gave it, under the language of chapter 265 of the Laws of 1848 (§ 5) and chapter 471 of the Laws of 1853 (§ 2),
Upon appeal to the Court of Appeals the order was affirmed, upon the opinion of Mr. Justice Clarke in this court (200 N. Y. 527). That the legislative department of the municipal government was originally the sole source of the grant of a secondary franchise (as distinguished from any administrative department) had been decided in Ghee v. Northern Union Gas Co. (158 N. Y. 510) and People ex rel. West Side Electric Co. v. Consolidated Telegraph & Electrical Subway Co. (187 id. 58). That the mere fact of incorporation under the telegraph acts did not confer a franchise to use the city streets without the consent of the appropriate local authorities necessarily follows as well from the decision of the Court of Appeals in Matter of New York Electric Lines Co. (201 N. Y. 321) and the reasoning followed in the opinion of Judge Haight therein (affd., sub nom. New York Electric Lines v. Empire City Subway, 235 U. S. 179). The decision in Matter of Long Acre Electric Light & Power Co. (188 N. Y. 361) is in no way inconsistent with these holdings, for there the municipal authorities, as the opinion shows, had as far back as 1887 granted a secondary franchise to one of the company’s predecessors in title. It follows that when the plaintiff was incorporated, its franchise from the State gave it no right (in view of the provisions of chapter 483 of the Laws of 1881) to construct and lay underground any lines of electric conductors in New York city without the consent of the appropriate local authorities (constituting the so-called secondary franchise) and that consent it never received until the action of the board of estimate and apportionment in September, 1914,
There is no proof that any of plaintiff’s overhead wires, placed in position before June 14, 1884 (when the first act requiring the placing of wires underground took effect), are still maintained in the same position, or follow the same routes. The same is true as to the period ending January 1, 1898, when the Greater New York charter (Laws of 1897, chap. 378) took effect. After the latter date, no perpetual franchise to use the city streets could be granted (§ 73, as amd. by
The judgment appealed from is affirmed, but solely upon the ground of plaintiff's failure to procure at any time before the commencement the consent of the municipal authorities, constituting the special (or secondary) franchise, and not because plaintiff was improperly incorporated under the telegraph act. The appropriate changes in the findings of fact and conclusions of law to conform to this opinion will be made, the order to be settled on notice, and the judgment appealed from will thereupon be affirmed, with costs to respondents.
Clarke, P. J., Laughlin, Smith and Page, JJ., concurred.
Judgment affirmed, with costs. Order to be settled on notice.