Blanshard v. City of New York

• Decision Date: 23 May 1933
• Citation: 186 N.E. 29,262 N.Y. 5
• Parties: BLANSHARD v. CITY OF NEW YORK et al.
• Court: New York Court of Appeals Court of Appeals

262 N.Y. 5

186 N.E. 29

BLANSHARD

v.CITY OF NEW YORK et al.

Court of Appeals of New York.

May 23, 1933.

Action by Paul Blanshard against the City of New York and others. From an order of the Appellate Division, First Department (236 App. Div. 663, 257 N. Y. S. 973), affirming an order of the Special Term (141 Misc. 609, 253 N. Y. S. 419), denying motion of the defendants for judgment on the pleadings and for dismissal of the complaint, the defendants appeal. The Appellate Division certified certain questions.

Order affirmed, and certified questions answered in accordance with opinion.

The following questions were certified:

‘1. Is this action maintainable by the plaintiff under section 51 of the General Municipal Law?

‘2. Does the complaint state a cause of action under such law?

‘3. Has plaintiff an adequate remedy at law?

‘4. Are defendants entitled to judgment on the pleadings?’Appeal from Supreme Court, Appellate Division, First Department.

Arthur J. W. Hilly, Corp. Counsel, of New York City (William E. C. Mayer and J. Joseph Lilly, both of New York City, of counsel), for appellant City of New York.

Clarence J. Shearn, of New York City, and Sigourney B. Olney and George D. Yeomans, both of Brooklyn, for appellant Brooklyn Bus Corporation.

Louis Waldman, of New York City, for respondent.

CRANE, Judge.

The Appellate Division has certified four questions to this court, all of which relate to the sufficiency of the complaint. As we have said in other cases of this nature, the allegations pleaded are assumed to be true, whereas, upon a trial, the plaintiff's proof may fall far short of establishing them as facts. The main point argued and briefed is the right of a taxpayer, under section 51 of the General Municipal Law (Consol. Laws, c. 24), to maintain an action to restrain the use of the streets of the city of New York by the Brooklyn Bus Corporation, which is attempting to operate under a void or illegal franchise, granted by a resolution of the board of estimate and apportionment of that city.

The Brooklyn Bus Corporation is a domestic corporation organized and existing under and by virtue of, the Transportation Corporations Law (Consol. Laws, c. 63). No attack in this action is made upon its corporate franchise. It had no rights in the streets of the city of New York because of its incorporation. Before it could operate its proposed bus line, it was necessary to obtain a permit or secondary franchise, pursuant to sections 74 and 1458 of the Greater New York Charter (Laws of 1901, c. 466, as amended, Laws 1914, c. 467, Local Law 1925, No. 5). The complaint alleges that these provisions of the charter have not been complied with, and, if this be so, the action by the plaintiff is maintainable.

The Legislature of the state grants the corporate franchise. To dissolve the corporation or take away its corporate franchise, the action must be brought in the name of the people by the Attorney General. This is separate and distinct from the property right which a railroad or a bus line may have to operate in the streets of a city. While these rights are called ‘franchises' or ‘secondary franchises,’ they are really rights, kept and maintained on certain conditions. See the distinction in People v. O'Brien, 111 N. Y. 1, 18 N. E. 692, 2 L. R. A. 255, 7 Am. St. Rep. 684; also Ghee v. Northern Union Gas Co., 158 N. Y. 510, 53 N. E. 692.

Section 18 of article 3 of the Constitution provides that the Legislature cannot authorize any railroad to operate in a particular street of a city. The city must give its consent as well as the property owners. To this consent the city may annex such terms and conditions as it pleases. Matter of Quinby v. Public Service Commission, 223 N. Y. 244, 119 N. E. 433, 3 A. L. R. 685;People ex rel. South Shore Traction Co. v. Willcox, 133 App. Div. 556, 118 N. Y. S. 248, affirmed, 196 N. Y. 212, 89 N. E. 459.

This consent is not such a franchise as calls for action by the people through the Attorney General whenever it has been granted contrary to law.

We said in Beekman v. Third Avenue R. Co., 153 N. Y. 144, 152,47 N. E. 277, 278: ‘The use or occupation of the streets for such purposes, without the grant or permission of the state through the legislature, constitutes a nuisance, which may be restrained by individuals injuriously affected thereby. (Fanning v. Osborne, 102 N. Y. 441 .) The city authorities have no power to grant the right except in so far as they may be authorized by the legislature, and then only in the manner and upon the conditions prescribed by the statute. (Davis v. Mayer, etc., 14 N. Y. 506 ;Milhau v. Sharp, 27 N. Y. 611 ;People v. Kerr, 27 N. Y. 188.) * * *

‘The legislature, however, in virtue of its general power over municipalities, may regulate the mode and manner in which such consent shall be given by the authorities having the control of the street, and may prescribe the conditions upon which it may be given, and all these matters have been regulated by statute. (Laws 1892, chs. 306, 676; Laws 1893, ch. 434.) The questions certified to us by the court below call for a construction of this statute or certain important provisions thereof which affect the validity of the franchise granted to the defendant. In conferring the franchise upon the defendant to operate a railroad in the streets designated, the common council did not act in the exercise of any natural or inherent power pertaining to the city, but under delegated powers, to be used and exercised for public purposes, and, in order to vest the defendant with the right claimed, it must appear that there was a substantial compliance with the provisions of the statute.’

Section 74 of the Greater New York Charter (as amended by Laws 1914, c. 467) provides what the city of New York must do to give consent to the operation of a railroad or bus line in its streets. Nothing in the Constitution prevents the Legislature from adding these restrictions and limitations to the granting of consents. Matter of Thirty-fourth Street R. Co., 102 N. Y. 343, 7 N. E. 172. The city may impose others. Thus, section 74 is not challenged. What is challenged by the complaint is the action of the board of estimate in failing to comply with Unless a consent be granted, in accordance with section 74, the railroad or bus line has no right in the street. It is a trespasser, and any person may bring action as a taxpayer to enjoin its operation. The same thing holds true when the consents of property owners have not been obtained. Suppose neither the city nor the property owners had consented, would there be no remedy except by action of the Attorney General? The consent is alleged to be void; there is no consent unless section 74 of the charter has been complied with, and the complaint alleges facts showing that the requisites are lacking.

The Greater New York Charter, § 74, provides that, before and grant of a ‘franchise or right’ to use any street shall be made by the board of estimate and apportionment, the following things shall be done: (1) A public hearing shall be held upon the petition therefor; (2) the board of estimate and apportionment shall make inquiry as to the money value of the franchise; (3) the board shall make inquiry as to the adequacy of the compensation proposed to be paid therefor; (4) the board shall embody the result of such inquiry in a form of contract; (5) the board shall hold a public hearing on the proposed contract after public notice.

The complaint alleges that the board of estimate and apportionment of the city of New York on the 29th day of May, 1931, passed a resolution awarding a franchise to the defendant the Brooklyn Bus Corporation to operate twenty certain routes in the city, setting forth the form of the proposed contract, and that thereafter, on the 4th day of June, 1931, pursuant to said resolution, the mayor of the city of New York signed such proposed contract.

The pleader then sets forth that the resolution and contract were illegal and void for failure, among other things, to comply with the requirements of section 74 of the charter. The following omissions are alleged: (1) That ‘the public hearings contemplated and required by law for such purposes were not held’; (2) that the board of estimate and apportionment failed to make any inquiry as to the money value of the franchise or rights proposed to be granted upon the petition of the Brooklyn Bus Corporation; (3) that the board of estimate and apportionment failed to make inquiry as to the adequacy of the compensation.

If it be true-and we must assume in discussing the sufficiency of a pleading that the allegations are true-if it be true that these formalities and requirements were not met by the board of estimate and apportionment, then the alleged grant of the rights in the streets was void and illegal. The purpose of these charter provisions is apparent on their face. The city should procure the most advantageous return, all things considered, for the right to operate busses or railroads in its streets and protect the public against favoritism and unfair dealing. Notice must be given of hearings upon the petition. The proposed contract must be published and a...