People ex rel. Empire City Trotting Club v. State Racing Commission

120 A.D. 484, 105 N.Y.S. 528, 1907 N.Y. App. Div. LEXIS 1225

Opinion

Woodward, J.:

The relator seeks a peremptory mandamus directing the State ' "Pacing-. Commission to issue a license to conduct running races' and steeplechases and steeplechase meetings for the year 1907, and the ■ learned court at Special Term has -denied the application on the ■ ground that under the provisions of chapter. 570 of the Laws of 1895,. commonly known as the “ Eacing Law,” the said State Eacing Commission is vested with'au absolute discretion in the matter of. granting or refusing a license to an association possessing the statutory qualifications to make it ■ competent to receive' such license. The appeal of the relator brings up this single question, as to' the proper construction of the statute, for the learned court at. Special. Term has fully disposed of all of the incidental questions in harmony with the relator’s contention.

We are persuaded, however, that the court has erred in its. construction of the statute; that the words of section 6 of the act, suggesting discretion in the commission, are not to be given the extensive meaning attributed to them. We might reach this conclusion from the broad fact that the Legislature may not be presumed to have enacted legislation of a general character in response to a public demand and then left it to the arbitrary determination of a commission, over which it has no control, to determine arbitrarily whether the law shall have, any active forcé. If the construction put upon it by the learned court at Special ■ Term is the correct one, then it is within the power of a commission with a five, years’ term of office for its members prevent all running or steeplechase races within tli.e State of New York during that period though millions of dollars have been expended in good faith upon the theory that the various racing associations had., what the statute says they shall have “ the power 'and right to hold one or more trotting or running race;meetings in each year, and to. hold, maintain and conduct trotting or .running races at such meetings.” (§3.

Footnotes

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.This provision of the .statute, it seems to us, is the dominating provision, the active force of the legislation. The avowed purpose of the legislation is “ An act for the incorporation of associations for the improvement of the breed of horses and to regulate the same; and to establish a State Eacing Commission,” and all of the provisions of the act, in so far as it relates to the improvement of the breed of horses, could have been attained' under the general corporation laws of this State, except in the matter of providing for races. Every intelligent man knows the purpose of this legis-' lation; its primary object .was.not to form associations for the improvement of the breed of horses in the sense that that term would be ordinarily employed, but was to permit of forming associations for the purpose of -conducting race meetings under the provisions of section 3 and those following it, it being assumed that the interest thus maintained in finely bred horses would produce the contemplated improvement in the breed of horses. It was not to organize breeding associations—these could have been formed under the general laws quite as well — but it was to promote the creation of racing associations, for the indirect encouragement of high breeding, andpt is not to be presumed that an act of legislation, exciting the discussion which this measure brought forth in the public press at the time, was designed to be inoperative at the caprice of three commissioners, or that it was intended to vest in such commissioners an arbitrary power to promote or ruin any of these creations of the State. It has never been the policy of this State, so far as we are. able to discover, to create corporations requiring large investments of capital, and then to leave such corporations to the mercy of a commission, owing no obligations to such corporations, and until such a purpose is clearly indicated by the Legislature itself, the courts ought not to give such powers by construction. It may be safely assumed that when the Legislature provided for the formation of such corporations, and . in its 3d section provided that “ Any corporation formed under the provisions of this act, if so claimed in its certificate of organization, and if it shall comply with all the provisions of this act, * •* * shall have the power and right to-hold one or more trotting or running race meetings in each-year, and to' hold, maintain and conduct trotting or running races at such meetings,” it intended to. give this right to the, corporation. When a- power and a right is specifically given to an individual or a corporation, everything incident to the enjoyment of that power and right must be granted by necessary implication, unless the act itself denies the same, for it is a rule of universal application that the greater contains the less. (Broom Leg. Max. [4th Am. ech] 141.) When we look into the act for any lessening of this power and right, where is it to he found ? The learned Special Term suggests that it is found in the provisions of section-6 of the act, but we do not find that the Legislature has taken away the power and the right. It has simply provided for a license, which always contemplates, not a denial of a right or power, but the regulation of such right or power. A license, such as is contemplated by the statute, is a permission to do something under regulations, and not a prohibition; The provisions of the section clearly indicate this. It is provided that- “ Any corporation or association desiring to obtain the benefits of the provL sions of section three of this act, if proposing to conduct a racecourse or race meeting for running races or steeplechases, may annually apply to the State Racing Commission for a license to conduct running races and race meetings or steeplechases and steeple-. chase meetings, as the case may be. If, in the judgment of such-commission, a proper case for the issuance of such license is shown, it may grant such license for a term of one year.” It is then provided that every such license shall contain a provision that the running races, etc., shall be subject to the reasonable rules and regulations of the Jockey Club, a corporation organized under the laws of this State, and that the steeplechase meetings shall be subject to the reasonable rules and regulations of the Rational Steeplechase Association, and it is likewise provided that any of these rules or regulations shall be liable to be abrogated or modified by the State Racing Commission, on giving the two corporations an opportunity to .be heard. It is entirely clear, therefore, that the licensing provision, was not intended to vest in the commission a power to prohibit the exercise of a power and right which was granted to the corporation, but a power to regulate the exercise of the power and right by means of the license brings; the -association within the control of the reasonable rules and regulations of the Jockey Club and. the Rational Steeplechase Association, with a right on the part of the commission to modify or abrogate such rules. The fact that there must be an annual application makes for the construction that the provision is of a visitorial or of a regulative character. . The discretion vested in the commissioners is not to take into consideration what powers and rights the corporation shall have — these are given by the statute itself, and vest upon- the organization of the corporation as provided — but to determine whether the corporation has complied with the provisions of the statute and thereby become vested with the power and right to -conduct the race meetings. • No- license is required- for the -trotting races*; it is only when running races or. steeplechases ■■ are to- be held that, the license is required, and -the primary ¡purpose . of'the license is to bring the- races within the rules of the two corporations mentioned; it is. to regulate the exercise of the power and - right which belongs to the corporation, and tlie only justification, for denying this license must be,found in the fact that the .applicant . has failed to' show a“ proper case for the issuance of such license,” ■ and .a'“proper case” does not inquire the applicant tó show that there are no. other races to be held within 200' miles of its tracks, or ' any of. .the various considerations which might, appeal to the reason, prejudices,, special interests, passions or other motives t of the individual members of the commission. Their judgment as to a-proper case is confined to the consideration of tlie questions involved in'the organization of the .-corporation as required by the. statute, and if the- applicant is shown- to have complied Avitli all of the conditions necessary-to vest in it the power and right to hold one or more trotting, or running race meetings in each year, and to hold, maintain and cónduet trotting or running • races at such meetings,” then it is the duty to issue the license necessary to-bring tlie corporation ■within the governing rules prescribed". This Ariew gives meaning to all. parts of the statute, carries out the legislative intent, and does equal justice between all corporations, organized under the laws of this. State,, and- which have naturally án equal right to all of -tlie privileges.

■ Nor Is. this Anew of tlie question, disturbed by the provisions of section- 7: . It is.one tiling to hold that a corporation, Arested with certain definite poAvers and rights, is entitled to a license when such license is-necessary to the enjoyment of those powers, and. rights, and quite another to suggest that the State lias not a right .to pror vide for the annulment of such' license, "whenever a. proper' state of ' facts, 'exist. In the first instance the. corporation is only obliged to sIioav that it .lias complied Avitli all the provisions of tlie law to entitle it to the'.poiver and right; "from that.moment it lias'the right to all incidental matters necessary to enable-it to' exercise ..those powers, for it cannot he presumed that a corporation, more- than an individual, will disobey the law or disregard the' reasonable rules and regulations prescribed by the license. Section 7 recognizes the right of the corporation to a license whenever it has complied with the law, but it provides for a case in which the corporation has violated the law, or done something inimical to the “ interests of legitimate racing,” and the power to revoke a license is carefully limited, and the statute clearly contemplates' a quasi-judicial trial, after a complaint on the part of the Jockey Club or" the Steeplechase Association, before the corporation may be deprived of its rights under section 3 of the act. Of course, if a corporation properly organized insists upon disregarding the law of its being, or violates the reasonable jiro visions of its license, or disregards the obligations of honesty and fair dealing with the public to which it caters in such a way as to defeat the purposes of the law, as suggested in the case. of Grannan v. Westchester Racing Assn. (153 N. Y. 449),- it would not only forfeit its rights under the license, but it would be entirely proper that the Legislature should provide, as it lias done, that it forfeit all rights under section 3 .of the act, but this is no reason why we should hold that the commissioners should presume that the corporation would do any of these things, and refuse in advance the license necessary to enable the corporation to serve the very purposes of its existence.-

If the construction was open to any possible question in the original act, it seems to us clear that this lias been put at rest by the Legislature by its enactment of chapter 257 of the Laws of Í902, section 1 of which provides, among other things, in amending section 1 of the original act, that “BTo certifícate of incorporation under this section wherein the right to conduct running or steeplechase race meetings is claimed, shall hereafter be filed without the approval of the State Eacing Commission endorsed thereon or annexed thereto, stating that, in its opinion, the purposes of. this act and the public interests will be promoted by such incorporation, and that such incorporation ■will be conducive to the interests of legitimate racing.” . If the commissioners- already had the potver to determine upon the right of a corporation organized under this act to have a license,-it was obviously unnecessary, to enact this provision. Blit the truth is the commission never had any discretionary powers in reference to a corporation properly organized; its judgment related purely to the sufficiency of the acts constituting the corporation, and not to con siderations of public or private policy, such as the commission urges in the matter now before ns.

The order appealed from should be reversed, and the prayer of the relator should be granted. , ■■

Jenks, Hooker and Milleb, JJ., concurred; Hibschbeeg, P. J., voted to affirm on the opinion of' Mr. Justice Mills at Special Term. (Reported in 103 N..Y. Supp. 955.)

Order reversed, with ten dollars costs and. disbursements, and motion granted, with costs. -

Amd: by Laws of 1897, chap. 446.— [Rep.

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See Laws of 1896, chap. 830, amdg. § $ of Statute.— [Rev.