Purdy v. Erie R. Co.

• Decision Date: 27 February 1900
• Citation: 162 N.Y. 42,56 N.E. 508
• Parties: PURDY v. ERIE R. CO.
• Court: New York Court of Appeals Court of Appeals

162 N.Y. 42

56 N.E. 508

PURDY

v.ERIE R. CO.

Court of Appeals of New York.

Feb. 27, 1900.

Appeal from supreme court, appellate division, Fourth department.

Action by Albert L. Purdy against the Erie Railroad Company. From a judgment for plaintiff, affirmed by the appellate division (54 N. Y. Supp. 1114) defendant appeals. Affirmed.

Adelbert Moot, for appellant.

Clarence A. Farnum, for respondent.

CULLEN, J.

This action, similar in character to that of Beardsley v. Railroad Co., 15 App. Div. 251,44 N. Y. Supp. 175, is brought to recover penalties for the refusal of the defendant to issue mileage books, as prescribed by chapter 1027 of the Laws of 1895, as amended by chapter 835 of the Laws of 1896. The record in this case, however, differs materially from that in the Beardsley Case, both in its facts and in the objections taken by the counsel to the right to the plaintiff to recover. The complaints (there were originally several actions, which were subsequently consolidated into one) allege that the defendant is a railroad corporation organized under the laws of this state, and then set forth the various matters necessary to bring the defendant within the terms of the statute, and the details of the plaintiff's applications for mileage books, and the defendant's refusal to issue them. They do not state when the defendant was incorporated. The answers to the several causes of action admitted the incorporation of the defendant, and certain other allegations of the plaintiff in reference to the mileage of road operated by the defendant, and its rates of fare, and put in issue the other averments of the complaint. They further set up that the defendant owned and operated a railroad extending through several states, and charge that the statute of 1896 ‘is unconstitutional and void, because it is in violation of the provision of the constitution of the United States, which commits to congress the sole power to regulate commerce between the several states; and that it is unconstitutional and void, because it is in violation of various other provisions of the constitution of the United States and of the constitution of the state of New York.’ On the trial of the action the plaintiff put in evidence the certificate of the defendant's incorporation, of which the record contains only the following: ‘Certificate referred to shows that the Erie Railroad corporation, defendant, was duly organized and incorporated November 14, 1895, under the general laws of the state of New York for the incorporation of railroads.’ The earliest refusal to issue a mileage book for which it is sought to recover the penalty occurred on June 26, 1896. The defendant put in evidence a map showing the various lines of the Erie Railroad, extending through this state and others, and, ‘to make the description of the lines of the defendant more certain,’ as was stated by the counsel in offering them, two deeds,-one from Arthur H. Masten, special master, to Charles Caster and others; and the other from Caster and others to the defendant. All the record states of these deeds is that they were ‘of the New York, Lake Erie & Western lines,’ and that they were delivered and recorded in November, 1895. This is all that appears concerning the original title to defendant's road. There is nothing to show the defendant has succeeded to the rights or franchises of any company antedating the enactment of the statute of 1895. While our personal knowledge may inform us of the history of the railroad lines operated by the defendant, to that we cannot appeal, and we can indulge in no presumption as to the existence of facts not appearing in the record. As the case stands before us, we have a railroad company created after the statute of 1895, and whose franchises and property rights must be assumed to have accrued subsequently to that time. The question, therefore, is whether the statute of 1895, though void as to existing railroad companies, is not constitutional and valid as to companies organized and acquiring property and franchises in the future. That a statute, which is unconstitutional so far as it purports to operate retrospectively, may be upheld as to future cases, is settled by authority. People v. O'Neil, 109 N. Y. 251, 16 N. E. 68; Cooley, Const. Lim. 180. We do not assent, however, to the broad claim of the learned counsel for the respondent that a corporation cannot object to the constitutionality of any statute enacted by the state prior to the time of its organization. Whether the proposition contended for is true or false depends on the ground on which the validity of the statute is assailed or its invalidity declared. If the state should require or enact that railroad companies thereafter organized must subject the management and conduct of any interstate transportation and business they may carry on to state control, such a statute would be void, as in contravention of the constitution of the United States, which commits to congress the regulation of interstate commerce. It is probable that there are provisions of the state constitution, such as those regulating the administration of justice, and ordained for the security of persons and property, which the legislature could not require even future corporations to waive as a condition of their charters. But the ground on which the supreme court of the United States in the case of Railroad Co. v. Smith, 173 U. S. 684, 19 Sup. Ct. 565, 43 L. Ed. 858, held the mileage book act unconstitutional, was that it was an invasion of the property rights of the railroad company, in that it required the company to transport persons willing and able to purchase 1,000-mile books at a less sum than the general or maximum rate allowed by law; in other words, that it compelled the company to surrender, as to such persons, the difference between the special rate of fare and the regular rate. This exaction was illegal, because it was without due process of law. We know of no reason, however, why a railroad company may not agree, upon sufficient consideration,to surrender or transfer any specific pecuniary right. The right to contract as to property is one of the inherent rights of a citizen, of which he cannot be deprived, except as to that class of contracts which are condemned in the exercise of the police power; such as usury and the like. People v. Gillson, 109 N. Y. 389, 17 N. E. 343. The same liberty of contract exists in the grant of charters by the legislature. Therefore a regulation as to the price of transportation, which would be an illegal exaction when sought to be imposed on existing corporations solely by legislative fiat, may, in the case of future corporations, be the mere performance of the obligation of a contract. The authority to construct and operate a railroad is not the natural right of a citizen, but a franchise proceeding from the favor or grant of the state. As a condition of such grant, the legislature might require the...