City of New York v. New York Central Railroad

9 N.E.2d 931, 275 N.Y. 287, 1937 N.Y. LEXIS 1430

• Court: New York Court of Appeals
• Decided: July 13, 1937
• Status: Published

Opinions

Rippey, J.

Plaintiff asserts that this is an action to compel defendants specifically to perform an alleged contract by which, it is said, defendants agreed (1) to construct a station in the vicinity of East) One Hundred and Forty-ninth street and Park avenue in the borough of the Bronx according to plans proposed by defendants and approved by the Board of Estimate and Apportionment of the City of New York, and (2) to reimburse plaintiff in the sum of $55,000 for moneys advanced by plaintiff in 1919 for the construction of certain underground passageways in that vicinity and referred to in those plans and completed by the city on April 30, 1921, in the event that it should be determined that the defendants were obligated to construct such passageways at their own expense. Defendants admit the making of the contract and that plaintiff has duly performed, but deny that they agreed to construct a station. They put in issue the question of their obligation to pay the $55,000, plead the six, ten and twenty-year Statutes of Limitation as bars to the maintenance of the action and set up a fourth separate defense, to which later reference will be made. The latter defense was stricken out by the Special Term on motion by plaintiff. Upon appeal, the Appellate Division affirmed by a divided court and certified to us the question as to whether the defense is sufficient in law.

By chapter 558 of the Laws of 1909 (in effect May 28, 1909), the Legislature of the State of New York authorized and empowered the city of New York to grant to defendants, by suitable instruments in writing, the right to occupy and use for the purpose of theirJncorporation and during their corporate existence certain underground areas for track and station_facilities in the neighborhood of One Hundred and Forty-ninth street and Park avenue in the city of New York upon such consideration as the city, acting by its Board of Estimate and Apportionment, might arrange, and imposed upon the New York Central and Hudson River Railroad Company the duty of submitting to the Board of Estimate and Apportionment of the city plans and profiles showing the proposed location of its tracks and structures and all proposed alterations or changes or modifications of grade in such lands or streets; approval of any such plans was required to be made by the Board of Estimate and Apportionment, to be evidenced by a resolution of the Board duly certified by the Mayor and Comptroller of the city of New York and, when so approved, they were to be deemed duly authorized and the street maps to be changed accordingly. The act was purely permissive and did not expressly determine that public convenience and necessity required the changes contemplated or the erection of a station at or in the vicinity of One Hundred and Forty-ninth street in New York city. Under the authority of the act, the defendants submitted plans and the Board of Estimate and Apportionment approved and agreements were entered into. The four written instruments out of which the alleged contract in suit arose were dated respectively June 8, 1911; November 6, 1916; and February 15, 1917, and July 26, 1917. By the terms of the contract it was agreed that defendants should pay to the city the sum of $55,000 in case of a final adjudication in favor of the city upon an agreed statement of fact, which reads as follows: “ Whether the Central Company (as successor of the New York Central and Hudson River Railroad Company) is obligated to the City under the agreement of 1911 to construct at its own expense, the portion of the passageway shown on the plans of 1911, between the easterly line of Spencer Place and the east limits of the present Mott Avenue Station platforms as shown on the plans of 1911, even if the Central Company should not desire the construction of such passageway? ”

There is no allegation in the complaint that any such question has ever been submitted to any court or that any such adjudication has been had. There is no express agreement by the defendants to erect any station. Whether there is any implied agreement so to do cannot be decided until all the facts are before the court.

The plaintiff is a municipal corporation and as such has no power to determine whether public convenience and necessity require erection of a station by defendants or to compel the erection of the station if public convenience and necessity so require. That is a legislative function and has been delegated generally to the Public Service Commission. Plaintiff does not allege that the Legislature delegated that function to the city to perform. It may be claimed by the city that the Legislature determined by the 1909 act that public convenience and necessity then required the construction of a station and made the city its agent to carry through the detail. Whether such a claim could be sustained, if made, we do not decide. In any event, there is nothing in the act of 1909 which delegated to the city the duty or power to enforce on behalf of the State the erection of the station at One Hundred and Forty-ninth street.

Any contract here sought to be enforced was complete in all its terms not later than 1917. So far as any action to compel defendants to perform is concerned, it has been a dead letter for at least twenty years. The court may take judicial notice of the fact that traffic conditions and means of handling traffic in the city of New York have radically changed in the past twenty years. It is alleged by defendants in the fourth separate and distinct defense that since the completion of the contract an act has been passed by Congress that has changed the conditions under which any financing may be undertaken and approved and that it will now require the defendants to secure the approval of the Interstate Commerce Commission before they can issue the necessary securities for financing a new station. Section 20 (a) of the Transportation Act, enacted February 28, 1920 (41 IT. S. Stat. 494; U. S. Code, tit. 49, § 20a), does not render the contract illegal. At most it renders the contract unenforceable -until permission should be given to issue and sell securities to obtain funds with which to erect the station. This, standing alone, would not be a sufficient or complete defense to the action for specific performance, but it is a material fact on the question of change of conditions and the manner in which the court should exercise its discretion in the event it should decree performance. It is alleged that operating conditions now render it impossible for defendants to stop trains at One Hundred and Forty-ninth street and that erection of the station and the stoppage of trains at that point would now be a public detriment, even though it might have been of public convenience and necessity between 1909 and 1917. Had an order been made in 1917 by the Public Service Commission, even with the consent of the defendants, and permitted to lie dormant for eighteen years and then revived, that body would now be required to take and consider new proofs submitted by defendants on all matters alleged in the defense before it could require enforcement of its ancient order. It might appear that conditions had so changed in the interval as to render performance unduly burdensome or impossible or that public convenience and necessity no longer demanded compliance. If the city may claim that it is acting in behalf of the public, defendants should be permitted to submit the facts alleged in this defense to the court on the question of whether the contract, if any, should be enforced.

But in this action, so far as enforcement is concerned, the city is not authorized to act as agent of the State. It is acting, or pretending to act, in its private capacity for the enforcement of private rights, and the rules applicable in actions for specific performance may be deemed to be those applicable as if the action were between private individuals. The action is to specifically enforce the contract to which reference has been made. The defendants agree that that is the nature of the action. The agreement which it is sought to enforce was complete, in all its terms, as above stated, not later than July 26,1917. If the city were not then in a position to compel performance of the contract by suit, it surely was entitled to bring its action on April 30, 1921, which was the date when it asserts it had completely performed all of the conditions on its part to be performed. Even though a contract fixes no time for performance, if not void for uncertainty, an agreement is implied that the act shall be done within a reasonable time. (Horner v. Clark, 27 Ind. App. 6; Williams v. Hart, 116 Mass. 513.) Suit was not instituted until May 6, 1935.

It is a cardinal rule that in an action to specifically enforce a contract the one seeking enforcement must act promptly. (Delavan v. Duncan, 49 N. Y. 485, 488.) Unexplained delay is evidence of waiver and acquiescence in non-performance. (McLaurie v. Barnes, 72 Ill. 73, 77.) Even though the delay should not be held to be sufficient to amount to an abandonment, the situation of the parties may have radically changed during the period between the time that the right to enforce arose and the time of bringing of the suit. That hardship and injustice to defendant through change of circumstances would result may be sufficient ground, especially when accompanied by unreasonable delay, to require a court of equity to refuse to decree specific performance, and this may be the result even though the action is brought before the time arrives when the Statutes of Limitation pleaded as defenses may bar the suit. (Peters v. Delaplaine, 49 N. Y. 362, 367.) As said by Chief Judge Church in that case: “ The granting or withholding specific performance is within the discretion of the court, and it will not be granted when it would be against conscience and justice to do so. * * * The question * * * must be decided in each action, although brought within the statutory limit as to time, whether under the peculiar circumstances equity and good conscience require that the contract shall be specifically performed or whether the party should be left to his remedy at law for the non-performance.” The circumstances in the case at bar are out of the ordinary and are without precedent. Plaintiff seeks to require specific performance of two separate parts of the contract only. One of those affects public rights, but plaintiff proceeds as though it were a private right to be enforced. The defendants allege that the circumstances have so changed since the contract was executed that public convenience and necessity do not require the erection of a station at One Hundred and Forty-ninth street, that the stoppage of trains at such a station would be impossible without serious interference with the proper and efficient operation of defendants’ railroads, that to erect a station there would now work injury to the public interests, that specific performance would injure both parties and benefit neither, and, in any event, legislation enacted subsequent to the contract renders it unenforceable. If those facts are established on the trial, the court might properly withhold relief from plaintiff or grant it upon conditions in accord with the requirements of justice and equity.

The question of whether the facts set up in the fourth separate defense must be pleaded to be available to defendant might be answered in the negative if this were an ordinary action for specific performance and damages might be substituted for the breach of the contract (Miles v. Dover Furnace Iron Co., 125 N. Y. 294, 298), or if plaintiff were seeking to get property back which was transferred to defendants as consideration for their erecting a station. But this is not such a case. The facts alleged are not a defense to the action to recover the item of $55,000. We think they may be held to be a complete defense against the requirement to erect the station under the peculiar situation existing in this case and should be pleaded to be available to defendants.

The orders should be reversed and the motion denied, with costs in all courts, and the question certified answered in the affirmative.