Holmes Electric Protective Co. v. . Williams

127 N.E. 315, 228 N.Y. 407, 1920 N.Y. LEXIS 949

• Court: New York Court of Appeals
• Decided: April 13, 1920
• Status: Published

Opinions

Crane, J.

The plaintiff was incorporated about January 29th, 1883, under the “ Telegraph Act,” chapter 265 of the Laws of 1848 and the various acts amendatory thereof. Immediately upon its incorporation it purchased the existing systems of overhead wires operated by the Holmes Burglar Alarm Telegraph Company and the American District Telegraph Company, which companies had theretofore conducted telegraph systems for the detection of burglary in the city of New York. The Holmes Burglar Alarm Telegraph Company had been a corporation formed under the “ Manufacturing Act ” (chapter 40, Laws of 1848) and the American District Telegraph Company was a corporation formed in 1871 under the provisions of the “ Telegraph Act.”

Previous to the year 1872 one Edward Holmes was conducting a business which consisted of the manufacture and sale of electrical alarm devices. He instituted the “ Central Office System of Burglar Alarm.” This system involved ’the connecting of premises to be protected with a signal station by means of electrical wires, which would register an alarm at the central office when interfered with. These wires were run over housetops and over and along private property and across the public streets. As an incident to this system watchmen were employed to patrol and inspect the protected premises and the apparatus connected therewith. The basis of the system was the electrical telegraph. A message was sent from the house, unlawfully opened, to a central office notifying it of the fact. A mere signal was registered by electricity, but this signal was interpreted to mean that a door or window was opened without authority. All telegraph messages are but electric signals having well-understood meanings. A burglar telegraphed his entrance. He sent his message over a wire. That his act was involuntary and unconscious made it none the less a telegraph message.

In 1874 Edward Holmes incorporated under chapter 40 of the Laws of 1848 (known as the General Manufacturing Act) the Holmes Burglar Alarm Telegraph Company and transferred to it the central office system of electrical protection, patrol and the business of furnishing night watchmen.

The American District Telegraph was incorporated October 4th, 1871, under the “ Telegraph Act ” and thereafter engaged in part in a similar business to that of the Holmes Burglar Alarm Telegraph Company.

This plaintiff, as before stated incorporated in January of 1883, took over the business of the Holmes Burglar Alarm Telegraph Company and the burglar alarm business of the American District Telegraph Company.

The business conducted by the plaintiff under its charter consists in maintaining a number of so-called central offices in the boroughs of Manhattan and Brooklyn which are connected by wires with a number of business houses and residences in the vicinity of the central "office. The protected premises are so arranged that if entry be made therein a telegraph message is recorded by the central station. In case of an authorized entry a code telegraph signal is used so that the central office is advised that the person entering the premises is not an intruder, but in the absence of sucti code signal the company assumes that every such message is caused by an intruder. The company maintains watchmen who reply to such signals and render special services.

In January of 1883 the plaintiff in taking over the above systems was furnishing its protective services to nine hundred and twenty-seven subscribers or customers and in January of 1884 the business had increased to nine hundred and ninety-seven subscribers or customers. The business thereafter continued to grow and increase, new hues, conductors and stations were added as required and at the time of this trial the plaintiff was operating about 4,500 miles of wire in the city of New York and serving upwards of 2,520 subscribers or customers.

Until 1891 the plaintiff maintained its wires overhead. In that year, pursuant to the requirements of the board of electrical control and the city of New York under the Electrical Subway Acts (chapter 534 of the Laws of 1884, as amended by chapter 429 of the Laws of 1885), the wires were put underground and have been there ever since.

Beginning with 1910 the city has questioned the right of the plaintiff to maintain its wires in the streets of New York or in the electrical subway conduits, insisting that it has no franchise so to do. .The city having threatened to remove the wires, this action was brought to restrain such interference. It has resulted thus far in the city’s favor, the courts below holding that the plaintiff not having obtained from the city of New York a consent or franchise to use the streets or electric subways for its wires has no authority for the continuance of its business by this' means except under the contract which it was forced to make with the city pending this litigation.

The sole question presented by this appeal is whether the plaintiff having incorporated under the “ Telegraph Act ” received thereby a franchise or authority from the state to maintain its wires and carry on its burglar alarm system as above described. •

The act of 1848, chapter 265, as amended by chapter 471 of the Laws of 1853, provided that any number of persons might associate for the purpose of constructing a line of wires or telegraphs.through the state or from or to any point in the state. The certificate of incorporation was to state the general route of the line of telegraph, designating the points to be connected.

Section 2 of chapter 471 of the Laws of 1853 read as follows: “ Such association is authorized to erect and construct, from time to time, the necessary fixtures for such lines of telegraph, upon, over or under any of the • public roads, streets, and highways; and through, across or under any of the waters within the limits of this state, * * * and also to erect and construct such fixtures upon, through or over any other land, subject to the right of the owner of owners thereof to full compensation for the same.”

If agreement could not be made with the owners for compensation five commissioners were authorized to fix the amount.

The certificate of incorporation filed by the plaintiff stated its object to be to construct and maintain lines of electric telegraph within and partly without the limits of the state of New York.

The route of its lines was stated to be from a main office in the vicinity of the Stock Exchange in the city of New York, to and with points in said city where branch offices of the said association may be established and from such offices along, across, over and under streets and avenues, and over buildings in said city and to and into buildings therein so as to connect such buildings with the offices of the association and to connect all such offices with each other. All this was for the purpose of protecting said buildings together with their contents against burglary and fire.

Read strictly the “ Telegraph Act ” of 1848 might seem to apply solely to telegraph companies as understood at the present time, but such has not been the interpretation given by the courts or the public officers and departments dealing with companies and associations incorporated under the act. It certainly could not have applied to telephone companies as such were not known or in existence in 1848. And yet when the telephone was perfected so as to transmit the human voice and companies were formed to enable persons at distances to talk with each other, the “ Telegraph Act ” was held to be the authority for such incorporation. (Hudson River Telephone Co. v. Watervliet Turnpike & Railway Co., 135 N. Y. 393; People v. Metropolitan Telephone & Telegraph Co., 31 Hun, 596.) District messenger companies requiring wires for calling officers or messengers were recognized by the courts as corporations organized under this law of 1848. (Hirsch v. American District Telegraph Co., 112 App. Div. 265; American District Telegraph Co. v. Woodbury, 127 App. Div. 455.) Auxiliary fire alarm companies supplementing the fire alarm telegraph system in cities by connecting the subscribers’ buildings with central stations so that telegraphic communications respect ing fires could be transmitted from the building itself to the central office have been recognized and specifically referred to by section 729 of the Greater New York charter. Companies to transmit stock quotations by telegraph and incorporated as telegraph companies have been before the courts unquestioned as to their powers. (Tucker v. Western Union Telegraph Co., 95 Misc. Rep. 287; affd., 156 N. Y. Supp. 1148; Smith v. Gold & Stock Telegraph Co., 42 Hun, 454.)

The provisions of the act of 1848 and its amendments have found their way into article IX of the Transportation Corporations Law. (Cons. Laws, ch. 63.) Section 105 of that law indicates that the legislature recognized that burglar alarm companies like the plaintiff were not only performing a public service but were existing as legalized corporations maintaining wires and electrical systems for signaling. This section provides that the police department may appoint a number of persons, not exceeding two hundred, who may be designated by any corporation operating a system of signaling by telegraph to a central office for police assistance to act as special patrolmen in connection with such telegraphic system.

While this later enactment of the legislature and the .above cases may not be conclusive of an intention on the part of the legislature of 1848 to include such companies as the plaintiff in the category of telegraph companies, yet such recognition and treatment on the part of officers of the government are of considerable weight in interpreting a general act such as that here in question. (Matter of Washington Street Asylum & Park Railroad Company, 115 N. Y. 442.)

The city itself has recognized the plaintiff’s existence; at various times its officers and departments have contracted with the plaintiff for burglar alarm devices of the character herein described. For twenty-seven years the plaintiff has operated in New York city its burglar alarm system and at great expense removed its overhead wires to the underground conduits under the direction and control of the authorities.

During the period from and including the year 1900 there have been levied against the plaintiff under the New York statute, each year, special franchise assessments for large sums, based upon the value of its supposed franchise, for the use of the streets and highways of said city "of New York, including therein the value of the plaintiff’s property in, upon, under and above the streets and the right to use said streets and highways for the purposes of its business, which special franchise taxes have been regularly paid annually by the plaintiff to the proper authorities of the city of New York, amounting in all to $57,225.00.

By the Electrical Subway statute of 1885 it was provided that the amount of the salaries of the subway commissioners and their expenses .should be by the state comptroller assessed upon and collected from the several companies operating electrical conductors, which under the provisions of said act should be required to place and operate any of then conductors underground, ratably, according to the number of miles of such wires, the amount thus assessed to be paid by the company assessed, and the plaintiff paid and said state comptroller collected from plaintiff for each of the seven years from 1891 to 1897 inclusive, and during each of the years 1892 to 1898 inclusive various sums, amounting in all to the sum of $2,507.83 for the territory included in the borough of Manhattan and the sum of $40.40 for the territory included in the borough of Brooklyn as and for its share of said salaries and expenses.

Permits were constantly issued to the plaintiff by the city department in control to open the streets and subways to insert its wires.

These acts establish no estoppel as against the city, but they do indicate that a practical interpretation has been given to the “ Telegraph Act ” and to the incorporation of this plaintiff under it and that the rights of the plaintiff in the streets derived from that act have been assumed, recognized and acted upon. General incorporation acts have usually been given a sufficiently broad interpretation to meet progressive inventions in the enterprises mentioned. (De Grauw v. Long Island Electric Railway Co., 43 App. Div. 502; affd., 163 N. Y. 597; Matter of Washington Street Asylum & Park Railroad Co., supra.)

The Special Term found that the plaintiff was not a telegraph company or properly incorporated under the “ Telegraph Act.” This finding was reversed by the Appellate Division which determined that the plaintiff was a telegraph company but that it required a secondary franchise from the city of New York.

It seems quite evident that in view of the interpretation and construction heretofore given to the act of 1848, as amended, the plaintiff was duly incorporated under that act and obtained all its privileges and assumed all its responsibilities. Among these privileges was the right to maintain its signal lines over the streets in the city of New York according to the routes mentioned in its charter and that this privilege or franchise was not dependent upon the consent of the city authorities. We must not read the act of 1848 in the light of the experiences of the next half century. No doubt upon its face it is very liberal in affording rights in the city streets, but the scientific development of that day and civic conditions were such that the privileges were used to a very limited extent and resulted in little or no abuse before restricted and modified by subsequent laws. The state had full control over the streets of the city of New York and could grant the plaintiff without the consent of the municipality such rights as here are claimed. (Village of Carthage v. Central N. Y. Tel. & Tel. Co., 185 N. Y. 448; Rochester & L. O. W. Co. v. City of Rochester, 176 N. Y. 36.)

We are convinced that the Appellate Division was right in its conclusion that the plaintiff is a telegraph company and had a franchise from the state of New York pursuant to the act of its incorporation, but we cannot follow the Appellate Division to the extent of holding that a secondary franchise from the city was also requisite. It was thought that chapter 397 of the Laws of 1879, as amended by chapter 483 of the Laws of 1881, in existence at the time of the plaintiff’s incorporation, required it to obtain the consent of the city authorities to the removal of its lines to the underground conduits. These laws authorized companies such as the plaintiff to construct and lay lines of electrical conductors underground in any city provided the permission of the designated local authorities be first obtained. . These acts were permissive and not compulsory. The plaintiff never exercised the right or asked permission to go underground.

Chapter 534 of the Laws of 1884, as amended by chapter 529 of the Laws of 1885, was the first compulsory law requiring overhead lines to be put underground in cities of over 500,000 inhabitants.

In pursuance of said statutes boards of commissioners of electrical subways were duly appointed and organized in the year 1885 and adopted plans for a complete system of electrical subways in the borough of Manhattan. These were constructed and put into operation and are now in use throughout the said borough maintained and operated by the defendant Empire City Subway Company, Limited. The said commissioners of electrical subways were afterwards replaced and superseded by boards of electrical control which were in turn replaced and superseded by the commissioner of public buildings, lighting and supplies. The last official was in 1901 replaced and superseded in control and supervision of the subways by the commissioner of water supply, gas and electricity which office is now held by the defendant, William Williams.

Pursuant to the authority conferred upon the commissioners of electrical subways and their successors the plaintiff has been required to place certain of its wires underground, in the electrical subways and to remove its overhead wires and appurtenances for that purpose. The plaintiff has complied with all these orders at a considerable expense. Its acts were not voluntary but in obedience to the statutes and authorities established thereunder.

The consent of the city authorities was not necessary to do that which the law commanded.

If the plaintiff’s wires are now in the subway conduits it is by the direction of the municiapl authorities or of boards established by the legislature in the exercise of its regulatory powers over streets and highways. (People ex rel. N. Y. Elec. Lines Co. v. Squire, 107 N. Y. 593; affd., 145 U. S. 175.)

The position of the plaintiff is dependent upon its incorporation and the exercise of corporate powers under the “ Telegraph Act ” and prior to the requirements of the electrical subway acts beginning in 1884. Any company incorporated after 1884 would, of course, be obliged to comply with the subway act provisions, obtain the consent of the municipality and, since the adoption of the charter of the city of New York, comply with sections 73 and 74 thereof. It is upon this view of the law that Matter of New York Independent Telephone Co. (133 App. Div. 635; affd., 200 N. Y. 527) was decided. That company and its predecessor, the Mercantile Safe Deposit Company, were incorporated after the passage of the subway acts. No overhead wires could be hung at the time of incorporation. The Independent Telephone Company had no rights in the streets prior to 1884 and necessarily was obliged to obtain the consent of the local authorities to the placing of its wires underground. But such ruling would not apply to companies owning and exercising overhead franchises prior to 1884 and complying with the positive direction of the legislature to place the wires underground.

Whatever may have been the claim of the plaintiff as to the nature of its franchise in the streets when questioned in tax proceedings it must necessarily admit by reason of its present claim and position that its business is of a public nature; that if it has the right to a franchise in the streets by reason of the Telegraph Acts it is not solely for private purposes, and that while it may make special contracts with its customers and patrons in the absence of legislative regulation yet its business like that of other service corporations is subject to legislative control.

For reasons here expressed the judgment appealed from should be reversed and a new trial granted, with costs to abide the event.