Ghee v. Northern Union Gas Co.

• Decision Date: 18 April 1898
• Citation: 53 N.E. 692,158 N.Y. 510
• Parties: GHEE v. NORTHERN UNION GAS CO. et al.
• Court: New York Court of Appeals Court of Appeals

158 N.Y. 510

53 N.E. 692

GHEE

v.NORTHERN UNION GAS CO. et al.

Court of Appeals of New York.

April 18, 1898.

Appeal from supreme court, appellate division, First department.

Action by John F. Ghee against the Northern Union Gas Company and others to restrain the laying of gas mains in certain streets in the city of New York. From an order affirming an order denying plaintiff's petition to continue a preliminary injunction, and vacating it (56 N. Y. Supp. 450), plaintiff appeals. Reversed.

Elihu Root and Henry G. Atwater, for appellant.

Thomas Allison, for respondents.

PARKER, C. J.

The question that the appellate division on the appeal herein allowed by it certifies should be reviewed by this court reads as follows: ‘Are the municipal authorities of the city of New York, whose consent is required to lay conductors for conducting gas through the streets of such city under the transportation corporations law, the heas of the department of public buildings, lighting, and supplies, and the head of the department of highways, under the powers conferred by the charter of the city of New York, or are the ‘municipal authorities' referred to in the said transportation corporations law the municipal assembly, or any other officer or body in the city of New York?’ Section 61 of the transportation corporations act (Laws 1892, vol. 2, p. 2150) provides, in substance, that, if a corporation be incorporated for the purpose of supplying gas for light in the city, town, or village where it is located, it must first obtain the consent of the municipal authorities thereof. Such provision is a re-enactment of section 18, c. 37, of the Laws of 1848, known as the ‘Gas Companies' Act,’ and has, therefore, been in force more than 50 years. During all that period of time, and until the enactment of the Greater New York charter by chapter 378 of the Laws of 1897, the common council of cities, having local and limited legislative authority, has been recognized and held to be the municipal authority whose consent is required by the statute we have refeffed to. Authorities might be cited in support of this assertion, but that is not needful, as it is unquestioned. Indeed, it is conceded in the very thoughtful opinion of the learned justice at the appellate division, that prior to the charter of 1897 the common council of the city of New York constituted the ‘municipal authorities,’ within the meaning of the statute, and that that has been too frequently decided to admit of question. After an examination of the charter of 1897, however, the conclusion was reached that the legislature had by it not only refrained from conferring the power upon the municipal assembly to give the consent provided for by the transportation corporations act, but had, by sections 573, 524, and 525 of the charter, expressly granted to the commissioner of public buildings, lighting, and supplies and the commissioner of highways the authority to grant such consents.

At the threshold of the consideration of these questions, it will be well to have in mind the legal effect of the consent which the municipal authorities are authorized to give by the transportation corporations act. It operates to create a franchise, by which is vested in the corporation receiving it a perpetual and indefeasible interest in the land constituting the streets of a municipality. It is true that the franchise comes from the state, but the act of the local authorities, who represent the state by its permission and for that purpose, constitutes the act upon which the law operates to create the franchise. The state might grant the franchise directly to the corporation without the consent of the local authorities, and has done so in many instances; but the tendency of later years, which is well grounded in reason, is for the state to confer upon the local municipal authorities the right to represent it in the matter of granting franchises to the extent that the final act necessary to the creation of franchises must be exercised by such authorities. The legal effect of the consent, therefore, is the same as if the local authorities in form granted the franchise and the interest in the land. People v. Deehan, 153 N. Y. 528, 47 N. E. 787. The court said, at page 532, 153 N. Y., and page 788, 47 N. E.: ‘The consent of the town authorities conferred upon the relator a franchise to carry on its business in the town, and to lay conductors in the streets and highways for the purpose of delivering gas. That such a franchise is property that cannot be destroyed, or taken from it, or rendered useless, by the arbitrary act of the village authorities in refusing the permit to place the conductors under the streets.’ If it be true that the legislature, by the charter of 1897, has taken away from the legislative branch of the city government, elected by the people, the power to confer franchises of this character, and transferred to two subordinate administrative officers authority to grant them, and alienate a portion of the title in the streets, which the city holds in trust, then it is apparent that a very important and seemingly unwise step has been taken from the path that had been followed for half a century. The use of the space in the streets of New York, whether on the surface or beneath it, has been steadily growing in importance and value, and will probably so continue for many years to come. The accumulation under ground, during the past few years, of sewers, electrical subways, cable and electrical railway conduits, pneumatic tubes, steam-heating, water, and gas pipes, seems to indicate that the day may come when there will be no more unoccupied space beneath the furface of the streets; and of this situation the legislature and the learned commissioners who drafted the charter undoubtedly had full knowledge. It is difficult to believe that, with such knowledge, they would attempt to take away from general and responsible representatives of the people the power to grant such important and valuable rights, and vest them in subordinate administrative officers; and a full understanding upon this important subject, of the views of the commissioners who drafted the charter, will help us in its examination. The committee on draft reported under the head of ‘Municipal Ownership,’ among other things, the following: ‘There is naturally a diversity of opinion in the committee upon this subject. From an original and ideal standpoint it is easy to see that the city would become the recipient of vast revenues by the ownership and operation of all franchises for lighting by gas or electricity and for tramways and other purposes necessary to the life and business of a metropolitan community, and exercised so largely by a use of the streets and avenues belonging to the people. * * * We have, however, provided for the future that all franchises operated principally by the use of the public streets should be granted by way of a lease for a period not exceeding twenty-five years. * * *’ Here we find unmistakable evidence that the committee fully appreciated that the right to use the streets for lighting by gas constituted a franchise, and, further, that it was regarded by them as a matter of serious importance, and entitled to be classed, for the purposes of consideration, with the use of the streets for tramways and other purposes necessary for the life and business of the community. The commission, in its report to the legislature, under the head ‘Of the Charter Scheme of the Municipal Assembly,’ said in part: ‘It is a marked feature of the charter now presented that it differentiates the powers relating to franchises, the creation of debt, the expenditure of money, the laying of taxes and assessments-these being the only powers liable to serious abuse-from the ordinary powers of the municipality embracing the countless subjects requiring municipal regulation. The former class of powers the commission has protected agaisnt abuse by special and appropriate safeguards,-safeguards which are in some respects unique, and will, in its judgment, prove effective. Thus, as to franchises, and their disposition, the charter proposed a radical change of the highest importance and value. The streets of the city belong of right to the whole people. Their use for the public benefit, and their control in the public interest, ought never to be permanently parted with in favor of any private interests whatever. The charter therefore declares that they are inalienable, and that no rights therein shall hereafter be granted by the municipal assembly except upon the approval of the board of estimate and apportionment, and then only for limited periods, and upon provision being made for periodical revaluations.’ We shall not stop to comment on this statement further than to call attention to the purpose avowed by the commissioners of preventing for the future an absolute alienation of an interest in the public streets in favor of private interests, and that, in order to accomplish that result, they regarded it necessary to prohibit the municipal assembly from granting any rights therein except for limited periods.

Before entering upon an examination of the provisions of the charter relating to the power of the municipal assembly, it should be stated that the respondent is correct in his assertion that the charter of 1897 does not contain any provision in terms authorizing the municipal assembly to give consent for the use of the streets for gaslighting purposes. But it is equally true that, prior to the charter of 1897, there was no statute expressly granting such power to the common council. Nevertheless, it is admitted that it has frequently been held that such power existed, and, indeed, it is conceded that, prior to the charter of 1897, the common council did have such power. Now, the foundation for these decisions and this concession is that the municipal authorities, within the meaning of the transportation...