People ex rel. Delaware & H. Co. v. Stevens
| Citation | 90 N.E. 60,197 N.Y. 1 |
| Parties | PEOPLE ex rel. DELAWARE & H. CO. v. STEVENS et al., Public Service Commission. |
| Decision Date | 07 December 1909 |
| Court | New York Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from Supreme Court, Appellate Division, Third Department.
Certiorari by the People, on the relation of the Delaware & Hudson Company, against Frank W. Stevens and others, constituting the Public Service Commission of the Second District of the State of New York, and the Public Service Commission of such district, to review the refusal of the Commission's consent to relator issuing bonds. From an order of the Appellate Division (118 N. Y. Supp. 969) annulling the determination in part and remitting the matter to the commission for further consideration, defendants appeal. Affirmed.F. W. Stevens and Ledyard P. Hale, for appellants.
Morgan J. O'Brien and Lewis E. Carr, for respondent.
The Delaware & Hudson Company, a domestic railroad corporation, in June, 1908, applied to the Public Service Commission for its consent to mortgage its railroad property, rights, and franchises pursuant to subdivision 10 of section 4 of the railroad law (added to Laws 1890, p. 1082, c. 565, by Laws 1892, p. 1384, c. 676, and amended by Laws 1902, p. 1193, c. 504), to secure an issue of $50,000,000 of its first and refunding mortgage gold bonds maturing the 1st day of May, 1943, and that the company may be permitted to then issue $26,500,000 of its 4 per cent. bonds secured by such mortgage for the purpose of refunding or paying $19,132,500 of its outstanding note obligations and to execute and reserve $6,500,000 of such bonds to pay an equal amount of prior lien bonds secured upon its railroad properties. The commission, after hearing had, on the 7th day of July, 1908, made an order authorizing the company to execute its mortgage and to set aside $6,500,000 of its 4 per cent. bonds secured by the mortgage for the purpose of retiring an equal amount of its bonds secured by prior liens upon the mortgaged property, and that it might issue and sell $13,309,000 of its bonds to be used in paying off outstanding note obligations of the company maturing within 12 months from the date thereof, and that no further issue of bonds be made except upon the consent of the commission upon further application. Thereupon the mortgage was executed, and the bonds authorized by the order were issued thereunder, and subsequently a further application was made by the company for leave to issue the remaining amount of the bonds asked for in its former petition for the purpose of paying the notes of the company issued for the purchase of the properties of the Troy & New England Company and Hudson Valley Company and a tract of coal lands in Pennsylvania. The hearing upon this application resulted in the commission's granting a permit to issue bonds to pay the Troy & New England Company notes; but it refused the application of the company to issue bonds for the purpose of paying the Hudson Valley notes and the coal land notes. Thereupon the relator, upon its application, was allowed a writ of certiorari, which brings up for review the proceedings of the commission in rejecting the application of the relator for leave to issue bonds to pay the outstanding obligations of the company upon the acquisition of the properties. The facts with reference to them are substantially as follows:
The Delaware & Hudson Company advanced to the Northern New York Development Company the sum of $4,665,295.85, with which that company purchased the stock, bonds, and debentures outstanding of the Hudson Valley Railway Company, an electric railroad. This stock and securities were transferred by it to the United Traction Company, which operates electric lines in Albany, Troy, Cohoes, and other places, at a fixed price therefor of $7,500,000. In making this sale the development company agreed to secure certain other securities of the Hudson Valley Railway Company, which was assumed would bring the cost of the Hudson Valley securities up to the sum of $5,000,000. Previous to this the Delaware & Hudson Company purchased 50,000 shares, the total capital stock of the United Traction Company, and paid therefor $150 per share, which was $50 per share above par. It was then determined by the Delaware & Hudson Company that this premium amounting to $2,500,000 should be repaid to it in new United Traction Company stock, and that the United Traction Company should also issue $5,000,000 of stock on account of the Hudson Valley purchase from the development company. To do this it became necessary for the United Traction Company to apply to the board of railroad commissioners for consent to increase its capital stock by the amount of 75,000 shares and from $5,000,000 to $12,500,000 face value. Such application was, accordingly, made and granted by the board of railroad commissioners, and thereupon the United Traction Company transferred the stock so increased to the Delaware & Hudson Company: The effect of this increase of stock of the traction company was to place the stock which the Delaware & Hudson Company had purchased at $150 per share on a par with that purchased by the development company of the Hudson Valley Company, thus making the stock of the traction company and of the Hudson Valley Company acquired by this transaction $100 per share; that being the amount that had been actually paid therefor by the Delaware & Hudson Company. At that time the Delaward & Hudson Company was the owner of all of the stock of the Northern New York Development Company and of the United Traction Company with the exception of a few shares which had been transferred to individuals in order to qualify them to act as directors. The Delaware & Hudson Company, however, has not as yet paid out the sum of $5,000,000. It has only paid the sum of $4,665,295.85. The balance, so far as the record shows, is still retained by it presumably for the payment of the remaining outstanding securities of the Hudson Valley Railway Company which it, through the development company, has undertaken to acquire and pay for. The payment, so far as made, was by the issuing of its notes for not exceeding 12 months and the renewal thereof at the expiration of the year at 5 and 6 per cent. interest. It is these notes now outstanding which the company seeks to have discharged by the issuing of the bonds prayed for in the application.
The Delaware & Hudson Company was originally incorporated under the name of the President, Managers and Company of the Delaware & Hudson Canal Company by an act of the Legislature passed in 1823 (Laws 1823, p. 305, c. 238), for the purpose of transporting to market coal from the region in which it was found in the state of Pennsylvania. It was authorized by a statute of Pennsylvania to purchase and to own coal lands, to mine coal, and transport the same to market. It thereupon constructed a canal from the Delaware river to the Hudson river and operated the same until it was discontinued by act of the Legislature of New York in 1899. By chapter 841, p. 2106, of the Laws of 1867, it was authorized to construct, lease, own, and operate railroads, and all the rights, powers, and privileges of railroad corporations were conferred upon it, and like authority was given to it in the state of Pennsylvania. Under the authority thus granted, it has constructed and acquired and operated a railroad system from Wilkesbarre, in the state of Pennsylvania, to Rouse's Point, in the northern border of the state of New York. Upon its original incorporation it acquired a large tract of coal lands in the northern part of the anthracite coal regions of the state of Pennsylvania, and the mining and transporting of coal to the markets for many years was its chief source of income, and up to the present time has continued to be one of its important industries and sources of revenue. In 1905 the company, believing that coal in the lands owned by it would within another generation become exhausted, purchased another tract of land, which, upon such information as was then obtainable, contained upwards of 400,000,000 tons of coal, upon paying the sum of $5,687,260.53. The money to make such...
To continue reading
Request your trial
-
Capital Telephone Co., Inc. v. New York Telephone Co.
...Sec. 101-a. Moreover, the PSC is charged with conducting its activities in the public interest. State ex rel. Delaware & Hudson Co. v. Stevens, 197 N.Y. 1, 9, 90 N.E. 60 (1909); State ex rel. New York Tel. Co. v. Public Service Comm'n, 157 A.D. 156, 163, 141 N.Y.S. 1018, 1023 (1913) See als......
-
State of Missouri Southwestern Bell Telephone Co v. Public Service Commission of Missouri
...Milwaukee & St. Paul Railroad Co. v. Wisconsin, 238 U. S. 491, 35 Sup. Ct. 869, 59 L. Ed. 1423, L. R. A. 1916A, 1133; People ex rel. v. Stevens, 197 N. Y. 1, 90 N. E. 60. Mr. Justice BRANDEIS, with whom Mr. Justice HOLMES concurs. I concur in the judgment of reversal. But I do so on the gro......
-
Mich. Pub. Utilities Comm'n v. Mich. State Tel. Co.
...v. Chicago Great Western Ry. Co., 209 U. S. 108;Chicago, Milwaukee & St. Paul R. R. Co. v. Wisconsin, 238 U. S. 491;People ex rel. v. Stevens, 197 N. Y. 1.' The contract was also sustained in Houston v. Southwestern Telephone Co., 259 U. S. 318, 42 S. Ct. 486, 66 L. Ed. 961, decided May 29,......
-
Rochester Gas and Elec. Corp. v. Public Service Com'n of State of N.Y.
...has thus become "clothed with a public interest" ( see, Munn v. Illinois, 94 U.S. (4 Otto) 113, 126, 24 L.Ed. 77; People ex rel. Delaware & Hudson Co. v. Stevens, 197 N.Y. 1, 9, 25 S.Ct. 302, 305, 49 L.Ed. 639; see also, Wolff Co. v. Industrial Ct., 262 U.S. 522, 535-536, 43 S.Ct. 630, 632-......