New York Electric Lines Co. v. Gaynor

167 A.D. 314, 153 N.Y.S. 244, 1915 N.Y. App. Div. LEXIS 9689
Appellate Division of the Supreme Court of the State of New York·Decided May 7, 1915·Published·Cited by 5 cases

Opinion

Hotchkiss, J.:

The plaintiff was incorporated in the year 1882, under chapter 265 of the Laws of 1848, as amended by chapter 471 of the [315]*315Laws of 1853, and other acts, for the purpose among other things of “ owning, constructing, using, maintaining and leasing lines of telegraph wires or other electric conductors for telegraphic and telephonic communication and for electric illumination, to he placed under the pavements of the streets * * * of the cities of New York and Brooklyn,” and “for the purpose of owning franchises for laying and operating the said lines of electric conductors.” By chapter 483 of the Laws of 1881 (amdg. Laws of 1879, chap. 397) any company so incorporated was authorized “to construct and lay lines of electrical conductors under ground in any city,” provided that it “ first obtain from the common council ” of such city “ permission to use the streets” for the purposes set forth. On April 10, 1883, the common council of the city of New York passed a resolution, the substantial portion of which was as follows: “Resolved, that permission he and hereby is granted to the New York Electric Lines Company, to lay wires or other conductors of electricity in and through the streets, avenues and highways of New York City, and to make connections of such wires or conductors underground by means of the necessary vaults, test boxes and distributing conduits and thence above ground with points of electric illumination of or telegraphic or telephonic signals in accordance wfith the provisions of an ordinance * * * approved * * * December 14, 1878.” On April 24,1883, the plaintiff presented to the common council and the latter spread upon its minutes what the plaintiff claims to have been a formal acceptance by the plaintiff of the terms of the aforesaid resolution. On May 11, 1906, the board of estimate and apportionment, the successor of the board of aldermen in the premises, passed a resolution by which after reciting that under the resolution of the board of aldermen of April 10, 1883, the New York Electric Lines Company (this plaintiff) claimed to have received permission to open the streets of the city, etc.; that said company had failed and neglected for upwards of twenty-three years to exercise the privileges granted by said resolution of April 10, 1883, and had forfeited all its rights and privileges thereunder, in consideration of all of which it was resolved that all rights of the said company, if any, arising from the said resolution [316]*316of April 10, 1883, “be and hereby are revoked and terminated and the resolution of the Board of Aldermen adopted on such date is hereby in all respects repealed and revoked.”

It would serve no useful purpose to recite at length and in detail the subsequent history of the plaintiff or of its numerous attempts to enforce what it has so often asserted to be its rights arising from the foregoing resolution and its acceptance thereof. They are fully recited in the opinion of Mr. Justice Hughes (November 30, 1914) in the action of this plaintiff against the Empire City Subway Company, Ltd., which reached the Supreme Court of the United States (New York Electric Lines v. Empire City Subway, 235 U. S. 179) on a writ of error to review the decision of the Court of Appeals in the matter of the application of this plaintiff for a writ of mandamus against the said Empire City Subway Company, Ltd. (Matter of New York Electric Lines Co., 201 N. Y. 321.) In the case of People ex rel. New York Electric Lines Co. v. Ellison (188 N. Y. 523) it was decided that what, if any, rights this plaintiff had to lay its electrical conductors under the streets of New York were subject to the provisions of certain statutes and to contracts and proceedings thereunder, giving to the board of commissioners of electrical subways and its successors certain powers, rights and duties to all of which it was held that the plaintiff in this action must conform. Thereafter this plaintiff sought a peremptory writ of mandamus to compel the Empire City Subway Company, Ltd. (which had by contract made in pursuance of the statutes above referred to, been given certain rights in and about underground conduits in this city, with authority to lease space in the same for the use of other corporations having lawful power to operate telegraphic or telephonic conductors in any street or avenue of New York city) to admit to and assign space in its conduits for the wires of this plaintiff. The plaintiff’s application for such mandamus was denied in the first instance (See 140 App. Div. 934), which denial was affirmed by the Court of Appeals (201 N. Y. 321), and this decision was upheld by the Supreme Court of the United States on the writ of error to which I have referred. The decision of the Court of Appeals last referred to proceeds upon two grounds: First, [317]*317that the resolution of the board of aldermen of April 10, 1883, granting this plaintiff permission to use the streets as herein-before set forth was a license merely, revocable at the pleasure of the city unless it has been accepted and some substantial part of the work contemplated by the permission, and sufficient to create a right of property and thus form a consideration for the contract, had been performed; and second, that although there may have been on the part of the plaintiff a bare acceptance of said resolution, plaintiff had failed to show such substantial compliance therewith as to constitute an actual acceptance or to create any right of property in the plaintiff, and that the board of estimate and apportionment had power to and did revoke the permit granted to this plaintiff under said resolution of April 10, 1883. In reviewing this decision, the Supreme Court of the United States seems not to have lent its approval to the theory that the resolution in question constituted a mere revocable license, but to have held that “ Grants like the one under consideration are not nude pacts, but rest upon obligations expressly or impliedly assumed to carry on the undertaking to which they relate. * * * They are made and received with the understanding that the recipient is protected by a contractual right from the moment the grant is accepted and during the course of performance as contemplated, as well as after that performance.” But, the court said: “But, while the grant becomes effective when made and accepted in accordance with the statute and the grantee is thus protected in starting the enterprise, it has always been recognized that, as the franchise is given in order that it may be exercised for the public benefit, the failure to exercise it as contemplated is ground for revocation or withdrawal. * * * It is a tacit condition annexed to grants of franchises that they may be lost by misuser or nonuser. * * * The same principle is applicable when a municipality under legislative authority gives the permission which brings the franchise into being; there is necessarily implied the condition of user. * * * It follows that where the franchise has not been exercised within a reasonable time in accordance with the condition which inheres in the nature of the grant, its revocation upon this ground cannot be regarded as an impairment of contractual [318]*318obligation. The privileges conferred may be withdrawn by such methods of procedure as are consistent with established legal principles.

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New York Electric Lines Co. v. Gaynor, 167 A.D. 314, 153 N.Y.S. 244, 1915 N.Y. App. Div. LEXIS 9689 (N.Y. Ct. App. 1915).

167 A.D. 314 (New York Electric Lines Co. v. Gaynor) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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