People v. Consolidated Gas Co.

130 A.D. 626, 115 N.Y.S. 393, 1909 N.Y. App. Div. LEXIS 270
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMarch 5, 1909
StatusPublished
Cited by2 cases

This text of 130 A.D. 626 (People v. Consolidated Gas Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People v. Consolidated Gas Co., 130 A.D. 626, 115 N.Y.S. 393, 1909 N.Y. App. Div. LEXIS 270 (N.Y. Ct. App. 1909).

Opinion

Laughlin, J.:

This is an action brought by the Attorney-General in the name of the People of the State to have it adjudged that certain consents [627]*627or grants to lay and maintain pipes in certain streets for the distribution of gas, alleged to have been franchises, giveil or made by the local authorities of the city of blew York to the defendant and the constituent companies whose rights it has acquired by merger and otherwise, have ceased, terminated and expired by reason of the expiration of the period for which the same were given, and enjoining the defendant from the further exercise of any rights thereunder, and from further using the mains and gas pipes laid in the streets pursuant to such consents or grants.

The only authority claimed for the action is section 1948 of the Code of Civil Procedure, which, so far as material to the question now presented, provides as follows :

“ The Attorney-General may maintain an action, upon his own information, or upon the complaint of a private person, in either of the following cases:

“ 1. Against a person who usurps, intrudes into, or unlawfully holds or exercises, within the State, a franchise, or a public office^ civil or military, or an office in a domestic corporation.”

Subdivision 2 of this section is concededly not in point, for it relates to the forfeiture of a public office. It has been authoritatively ad judicated that subdivision 3 of this section relates only to individuals and does not embrace a corporation (People v. Equity Gas Light Co., 141 N. Y. 232), and subdivision 4, by its express terms, relates only to foreign corporations.

A very serious question is presented at the outset as to whether the provisions of subdivision 1 of section 1948 of the Code of Civil Procedure, hereinabove quoted, apply to a corporation. It is contended by the learned • counsel for the respondent that this action cannot be maintained upon any theory. The provisions of article 4 of title 2 of chapter 15 of the Code of Civil Procedure, being sections 1797 to 1803, inclusive, authorize an action by the Attorney-General by direction of the' Legislature or by leave of the court, for the annulment of the charter of a corporation on the ground, among others, that it has exercised a privilege or franchise not conferred upon it by law.” The learned counsel for the People urges that in an action for annulment of a charter pursuant to the provisions of the Code last cited, the court is limited to granting or withholding judgment for the dissolution of the corporation, and that it is man[628]*628ifest that there may be many instances where a corporation should be ousted from exercising a particular franchise or privilege not authorized, when the public interest would not require the dissolution of the corporation; and the original and succeeding statutes from which these provisions were taken, as well as those from which section 1948 was taken, are referred to as tending to .sustain this view; but it is claimed that in an action brought to annul a corporation, the court may grant a judgment of ouster from a special franchise without annulling the corporate existence, and the case of People v. Broadway R. R. Co. of Brooklyn (56 Hun, 45, 54) is cited as authority for that contention. On the other hand, in article 1 of title 1 of chapter 16 of the Code of Civil Procedure, which embraces section 1948 and is entitled “ Action against the Usurper of an Office or Franchise;” no provision is found for a judgment giving injunctive relief in an action authorized by Subdivision 1 of section 1948, herein quoted, and it is somewhat significant that express provisions are contained in that article with respect to the judgment against individuals and for the forfeiture of offices, and that injunctive relief is authorized by section 1955 where the action is based on subdivision 3 or 4 of section 1948. Ho controlling authority is cited on this point, but decisions dealing with quite similar Code provisions in Wisconsin and California, tendt ing to sustain the theory of the appellant, have been drawn to our attention; (See State ex rel. Atty. Gen. v. Portage City Water Co., 107 Wis. 441; People v. Sutter St. R. Co., 117 Cal. 604.) In the view we take of the case, however, we deem it unuecessary to decide whether an action may be maintained by the People against a corporation under the provisions of subdivision 1 of section 1948 of the Code, for assuming, without deciding, that such an action would lie, we are of opinion that the acts of which complaint is here made do not show that the defends ant unlawfidly hold's or exercises a franchise within the fair intent and meaning of those terms as employed in that subdivision. Strictly speaking, the franchise of a corporation consists of the rights, powers and privileges given by the act of the Legislature incorporating' it, or the certificate of incorporation creating its existence pursuant to statutory authority. Municipal grants and consents are sometimes referred to in judicial writings as franchises. [629]*629Strictly speaking, they are not franchises, but in the nature of the consent of property owners and those having the management and control of property, and are somewhat similar to the consent of a private property owner for the use of his property by a corporation in the fulfillment of its functions. Certain corporations, such as street railways, gas, electric light and telephone companies, obtain their franchises from the Legislature, including the .right to use the public streets, subject generally to the consent of the local authorities having jurisdiction and control over the streets, which impliedly authorizes such local authorities to. impose conditions and restrictions in the interest' of the public. Ordinarily the routes of steam railroads are, in the main, laid out over private property, and before entering upon the private property and constructing the railroad it is necessary that the consent of the owner be obtained either' by private negotiations or under the provisions of the law for compulsory consent on the making of due compensation. Such consents, no' matter in what form expressed, whether by deed, grant or otherwise, are not franchises, and we apprehend that it would not be a matter of public concern whether they entered upon possession of private land without the consent of the owner, and no court would hold'that an action might be brought by the Attorney-General to enjoin a railroad corporation from constructing its railroad over a farm upon the theory that it was exercising a franchise without authority, merely because it had not obtained the consent of the owner.

The so-called franchises which the plaintiff claims the defendant is unlawfully exercising are mere grants and consents given by the local authorities pursuant to authority conferred by the Legislature to authorize the defendant and the other corporations to whose rights it has succeeded to lay and maintain their gas mains and lateral pipes in certain streets of the city for supplying the public and the occupants of private property with gas, pursuant to authority, conferred by the Legislature, subject only to obtaining such consents. The Legislature, in incorporating the companies and authorizing them to use the streets for these purposes, subject to obtaining the consent of the local authorities, decided that the functions which they were to perform warranted the incorporation, and that it was proper and necessary that they should have the right to use the [630]*630public

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Related

Blanshard v. City of New York
141 Misc. 609 (New York Supreme Court, 1931)
People v. Bleecker Street & Fulton Ferry Railroad
140 A.D. 611 (Appellate Division of the Supreme Court of New York, 1910)

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Bluebook (online)
130 A.D. 626, 115 N.Y.S. 393, 1909 N.Y. App. Div. LEXIS 270, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-v-consolidated-gas-co-nyappdiv-1909.