People ex rel. Delaware & Hudson Co. v. Board of Railroad Commissioners

Majority

p. 492

The People of the State of New York ex rel. The Delaware and Hudson Company and The Ulster and Delaware Railroad Company, Relators, v. The Board of Railroad Commissioners of the State of New York and George W. Aldridge and Others, Members of and Constituting Said Board, and Schenectady and Margaretville Railroad Company, Respondents.

Third Department,

May 6, 1908.

Headnote

Railroad — public convenience — §§ 59, 60, Railroad Law — crossings.

A proposed railroad which for one-third its length runs through a region where public necessity calls for a road, will not be denied a certificate of public convenience and necessity because there are several existing roads each of which parallels its route for a part of the distance.

That the proposed road would give another outlet for coal into the eastern States and give the public the advantage of competition in its transportation, is a point in favor of the issuance of a certificate, especially where it appears that the existing roads are unable to handle the freight offered for transport.

The final determination as to whether crossings shall be at, above or below grade is to be made in a proceeding subsequent to the proceeding for the issuance of a certificate of public convenience and necessity.

It seems, that it is not the policy of the State, in regulating rates and facilities of railroads, through the Public Service Commission, to do away entirely with public benefits arising from competition.

Cebtioeabi issued out of the Supreme Court and attested on the 11th day of April, 1907, directed to the Board of Eailroad Commissioners of the State of Hew York and others, commanding them to certify and return to the office of the clerk of the county of Albany all and singular their proceedings had in relation to the granting to the Schenectady and Margaretville Eailroad Company a certificate of public convenience and necessity under section 59 of the Eailroad Law (Laws of 1890, chap. 565, added by Laws of 1892, chap. 676, and amd. by Laws of 1895, chap. 545.)

Lewis E. Carr, for the relators.

Edward J. Welch and John W. Griggs, for the respondent Schenectady and Margaretville Eailroad Company.

The Schenectady and Margaret ville Railroad Company has been made a party to this writ and is here responding. The writ was issued upon the application of the Delaware and Hudson Company and the Ulster and Delaware Railroad Company.

The respondent company is incorporated to build a road from Margaretville in the county of Delaware to the city of Schenectady, a distance of about ninety miles. From Grand Gorge to Margaret-ville for about nineteen miles, the road parallels the Ulster and Delaware Railroad Company. But this will not result in taking traffic from that company, as there are no places of any substantial size within this distance, and the parallelism is rendered necessary by the contour of the country, as both roads follow a valley between high hills. The northern part of the road from Middleburg to Schenectady parallels several roads at a greater or less distance therefrom, including the Schoharie and Middleburg road, the Schoharie Valley railroad and the Delaware and Hudson railroad. From Middleburg to Grand Gorge, a distance of about thirty miles, there is no existing road, and for the convenience of the inhabitants of this region it is here conceded by the relators that public convenience and necessity calls for a road. It is admitted, however, that a road between those two points would not be a paying enterprise. It must have some larger destination or. connection. In order to give the convenience of a railroad through this thirty miles of territory, which is without railroad accommodation, it is necessary, therefore, to make connections with Schenectady. These other roads, therefore, each of which is parallel for part of the distance, should not be allowed for that reason to defeat the claims of this large territory which is without railroad accommodation. We have examined the evidence and it is overwhelmingly in favor of the conclusion arrived at by the Board of Railroad Commissioners.

But this proposition is of' larger scope than is indicated by the facts above stated. It is boldly asserted that this road is contemplated as part of a through line from Schenectady in the State of Hew York, to Willcesbarre in the State of Pennsylvania, thus entering the heart of the anthracite region, and furnishing another outlet for coal from that region. The Delaware and Eastern railroad is a road already existing in the county of Delaware and run

p. 494

ning southerly from Margaretville. The road contemplated is ip fact an extension of this road northerly to Schenectady. There is also contemplated an. extension of the road from the southern terminus to the State line near Hancock; this southerly extension being the Hancock and East Branch railroad, to which a certificate has already been granted, and the granting of which certificate is also before us for review at this term. This through line between Wilkesbarre and Schenectady would be a competitor with the Delaware and Hudson Railroad Company in transporting coal and merchandise to the north and northeast. That would give to the public the additional advantage of competition in transportation. Both the advantage to those along the line of this new road, who are not now supplied with facilities for the procurement of coal, and also the advantage to 'consumers in the Eastern States, who would be reached through connection with the Hew York Central and Boston and Maine railroads at Schenectady. This factor would seem in itself sufficient to warrant the issuance of this certificate. The counsel for the relator, the Delaware and Hudson Railroad Company, insists that the court will not authorize a new road to compete with an existing road and render its securities of less value. If this be so, which is not here conceded, it is answered by the evidence of the witness Lincoln. This witness, until fifteen months prior to the hearing, was a division superintendent upon the Delaware and Hudson road. He swore to the effect that the facilities of that road were not sufficient to transport the coal and the merchandise offered for transportation without long delays, and that by reason of the inability of that road to take care of the tonnage offered it for shipment, in his judgment there was a public necessity for the road in question. It is a significant fact that the relators put on a witness who swore to improvements that had been made, but no witness who attempted to swear that the road was able to handle the tonnage that was offered it for transportation over its road with any degree of expedition.

It is further strenuously insisted that under the policy of this State and of the United States, rates as well as the facilities for transacting its business are under the direction of State and Interstate Commissions, and that with this condition existing, the policy of the law should be to require the Delaware and Hudson to

p. 495

enlarge its facilities rather than allow competing roads to come in and take part of its business. But this determination in the first place was made prior to the creation of the Public Service Commission in this State, and this examination here is under the rules governing a common-law writ of certiorari, and must stand or fall upon the question whether there was sufficient evidence to sustain it. (People ex rel. Depew R. Co. v. Commissioners, 4 App. Div. 259 .) If we assume for the argument, however, that this new policy of our State were to enter into the determination of this question, the Commission might well have decided that with the tremendous increase of business in this country and the tremendous increase of tonnage that is constantly offered for transportation,- the public could be better served with two lines of railroad between Wilkes-barre and Schenectady than with one, and that the business of the Delaware and Hudson would not suffer materially from such competition. I do not apprehend, however, that the adoption of the new policy in the State and nation is intended to do away entirely with the benefit to the public arising from competition between railroads. Railroads might be so multiplied between points that the competition would be ruinous, while competition to that extent would be of little benefit to the communities. Such, however, is not the case here presented. It is not possible either for the State Commission or the Interstate Commission to ascertain and enforce a reasonable rate either for passengers or freight in the way that can be ascertained by the establishment of competition. Such competition to a limited extent is, therefore, still an important factor in the enforcement of legal duties owing by public service corporations to the public, notwithstanding the supervision of these commissions.

One further objection is urged by the relators to the granting of this certificate. It seems that upon this road are specified seventy-seven highway crossings, of which forty-nine are grade crossings. It is urged that the Board of Railroad Commissioners made no determination whether these crossings shall be at grade or above or below grade, and that such determination must necessarily be made' at the same time with the issuance of this certificate. This objection is based upon the reading of section 60 of the Railroad Law (added by Laws of 1897, chap. 754). This section provides in the

p. 496

first place that steam surface roads thereafter built must be so constructed “ as to avoid all public crossings at grade, whenever practicable so to do.” It then provides that whenever application is made under section 59 tliére shall be filed with the hoard a map showing the streets, avenues and highways proposed to be crossed, and that the said board “shall determine whether such crossings shall be under or over the proposed railroad, except where said board shall determine such method of crossing to be impracticable.” The section then reads: “ Whenever an application is made under this section to determine the manner of crossing, the said board shall designate a time and place when and where a hearing will be given to such railroa-d company, and shall notify the municipal corporation having jurisdiction over such streets, avenues or highways proposed to be crossed by the new railroad. The said board shall also give public notice of such hearing in at least two newspapers, published in the locality affected by the application, and all persons owning land in the vicinity of the proposed crossings shall have the right to be heard. The decision of the said hoard rendered in any proceedings under this section shall be communicated, within twenty days after final hearing, to all parties to whom notice of the hearing in said proceedings was given, or who appeared at said hearing by counsel or in person.” The first part of this section read alone would seem to make plausible the contention of the relator, that the determination as to the manner of crossing the highways must he made at the time that the certificate of public convenience and necessity is granted. The latter part of the section, however, would seem to make clear that such procedure was not intended, and that the nature of the crossing is to be determined in some subsequent proceeding. That subsequent proceeding is provided for in the section itself; to whom notice shall be given, and what notice; when the decision shall be rendered and who shall be notified thereof. If the necessity for a subsequent application were not clearly indicated in the section itself, the court should not, unless imperatively required, construe the statute to require the determination as to the manner of crossing in the same proceeding as the determination of the question of public convenience and necessity. A joint proceeding would be multifarious. The practicability of an overhead or under crossing of the highway depends upon the situation at that

p. 497

particular crossing. The facts bearing upon the practicability of such under or over passage are irrelevant to the inquiry as to the nature of any other crossing. The municipal authorities required to be notified are interested in no other crossings than those within their municipalities. Moreover, before the question can arise as to the manner of crossing, the main question must be first determined whether public convenience and necessity require the building of the road. The procedure, therefore, claimed to be necessary by the relator would be cumbrous, illogical and impracticable. The statute has never been so construed, either by the Bailroad Commission or by the courts, and such a course of procedure has never been adopted by the Bailroad Commission. The relator’s objection, therefore, is, in our judgment, not well taken.

We are not holding, however, that the question of grade crossings is not a matter to be considered. The question of how many grade crossings are necessary upon the road is a matter not without influence in determination of the question as to the public convenience and necessity of the road. We are simply holding that the final determination of that question, as contemplated by section 60 of the Bailroad Law, is to be made in a proceeding subsequent to the proceeding for the issuance of a certificate of public convenience and necessity. For the reasons stated, therefore, we are of opinion that the determination of the Board of Bailroad Commissioners should be confirmed.

Determination confirmed, with fifty dollars costs and disbursements.

Determination unanimously confirmed, with fifty dollars costs and disbursements.