Kuhn v. Knight

• Decision Date: 20 December 1907
• Citation: 190 N.Y. 339,83 N.E. 293
• Parties: KUHN v. KNIGHT, Mayor of City of Buffalo, et al.
• Court: New York Court of Appeals Court of Appeals

190 N.Y. 339

83 N.E. 293

KUHN

v.KNIGHT, Mayor of City of Buffalo, et al.

Court of Appeals of New York.

Dec. 20, 1907.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by Charles Kuhn against Erastus C. Knight, as mayor of the city of Buffalo, and others. From a judgment of the Appellate Division (115 App. Div. 837,101 N. Y. Supp. 1) affirming a judgment for defendants, plaintiff appeals. Affirmed.

Frank C. Rerguson, for appellant.

Louis E. Desbecker, Corp. Counsel (Samuel F. Moran, of counsel), for city of Buffalo.

Porter Norton, for respondent, the International Railway Company.

WILLARD BARTLETT, J.

This is a taxpayer's suit attacking the validity of consents given by the common council and the board of park commissioners of the city of Buffalo to the construction of certain street railroad extensions by the International Railway Company in the city of Buffalo. These consents are alleged to have been unlawful (1) because they did not contain a condition that the right, privilege, and franchise to use the streets to which they referred for the purpose of constructing a street railway therein be sold at public auction to the bidder who will agree to give to the city the largest percentage per annum of the gross receipts of the corporation to whom the consent is given; (2) because the railroad, the construction of which the consents purported to authorize, will be a new and distinct railroad, and not an extension; (3) because the consent of the board of park commissioners of the city of Buffalo purports to grant the franchise for a term of 25 years which is in excess of the authority of said board; and (4) because there is a variance between the terms of the consent granted by the common council and the terms of the consent granted by the board of park commissioners, these bodies together constituting the local authorities who must unite on the terms of a common consent in order to make it lawful.

The contention of the appellant that no consent of the local authorities to the occupation of a street for railroad purposes in the city of Buffalo is valid unless it provides for a sale of the franchise at public auction to the highest bidder is based upon the provisions of section 93 of the railroad law. Laws 1890, p. 1109, c. 565. That section, as amended by chapter 494, p. 1229, Laws 1901, does provide at the beginning thereof that such a condition must be contained in such consent of the local authorities ‘in cities containing twelve hundred and fifty thousand inhabitants or more according to the last federal census or city enumeration.’ If this were all, it plainly could not apply to the city of Buffalo; but it is supposed to have been rendered applicable by other words which appear toward the end of the section, and which were added by the amendment of 1901. These words are as follows: ‘The provisions of this section as now amended shall apply to all cities of the first class.’ The Appellate Division held, in accordance with the present contention of counsel for the appellant and counsel for the city of Buffalo, that, in view of this language, the requirement of section 93 of the railroad law as amended in 1901 to the effect that street railroad franchises must be sold at public auction, although be the first part of the section applicable only to cities having a population of 1,250,000 inhabitants or more was extended by the latter portion of the section which I have quoted to all cities of the first class, and therefore included Buffalo. Notwithstanding this construction of section 93, it has been held both at the Special Term and the Appellate Division that the local authorities could grant the franchise in question here without insisting upon the requirement that it be offered at public auction because of the effect of a contract known as the Milburn agreement, entered into between certain city railroad companies and the city of Buffalo on January 1, 1892, and ratified by the Legislature in the same year. Laws 1892, p. 311, c. 151. That contract is set forth in full in the appeal book (pages 55 to 70). The parties to it were the city of Buffalo of the first part, and three corporations, the Buffalo Railway Company, the West Side Street Railway Company, and the Crosstown Street Railway Company of Buffalo, of the second part. Its chief purpose was to provide for a general transfer system between these street railway companies which occupied the various portions of the city of Buffalo with their lines, and to establish a just and uniform rate of compensation which they should pay to the city for the enjoyment of their franchises. There is not a word in the contract which expressly refers to the question presented by this appeal; that is to say, to any future right on the part of the city to insist that the franchises for future extensions should be put up at public auction or any obligation on the part of the railroad companies to submit to such a condition. At the end of the agreement, however, we find the following provision: ‘Eleventh. This contract shall bind the successors and assigns of the parties thereto, and is to be confined in its operation to the street railroads owned by said companies now built or authorized to be built, excepting that its operation and its terms and provisions may be extended to any future extensions thereof by the mutual consent of the parties hereto expressed in the form of a resolution of the common council approved by the mayor as to any particular extension and a written consent of the companies filed with the city clerk.’

The International Railway Company is the successor in interest of those corporations which were parties to the Milburn agreement, except the Crosstown Street Railway Company of Buffalo. The trial court held that the lines of railroad referred to in the consents which are attacked in this suit are extensions of the railroads of these companies to whose rights the International Railway Company has succeeded. This, I think, is a finding of fact, and it is sustained by the unanimous affirmance by the Appellate Division. Construing the eleventh article of the Milburn agreement which has been quoted, the Appellate Division held that it operated to except the extensions in question here from the general requirements of section 93 of the railroad law, to the effect that such franchises must be the subject of competition at public auction. The Milburn agreement is not only ratified by the Legislature by the special act passed in 1892, to which I have referred, but is also recognized as valid in section 93 of the railroad law itself; for in that section it is provided that nothing therein contained shall be construed as ‘modifying or affecting the terms of a certain contract bearing the date of January 1, 1892, entered into by and between the city of Buffalo and the various street surface railroad corporations therein named in such contract.’ Presiding Justice McLennan, writing for the Appellate Division, says that under any other construction a proposed extension of a line of one of the contracting parties could be practically prevented by a corporation which might bid a sum largely in excess of the value of the franchise and without regard to the efficiency of the railroad system as a whole.

The appellant insists that, if the eleventh subdivision of the Milburn agreement be construed as giving the railroad companies which were parties thereto the sole right to obtain a franchise to construct extensions of their lines in the city of Buffalo, the act of the Legislature ratifying that contract would be unconstitutional as being a private or local bill branting to a corporation the right to lay down railroad tracks in violation of section 18 of article 3 of the Constitution. The Appellate Division answers this by saying that the Milburn agreement conferred no authority upon any railroad company in this respect, but simply empowered the local authorities of the city of Buffalo to consent, if they saw fit to do so, to the extension of...