Economic Power & Construction Co. v. City of Buffalo

This action is brought by the Economic Power & Construction Company against the city of Buffalo and its officials to restrain the defendants from interfering with the plaintiff’s entry upon the streets of Buffalo and excavating trenches therein for the purpose of laying its steam mains and electric conduits, through which it proposes to furnish steam heating and electricity for lighting and power purposes to the city and its inhabitants.

The company claims the right to use the streets of the city and all other cities and the highways of the state, generally, without the consent of the local authorities, pursuant to a direct franchise and right so to do obtained from the Legislature, under its special act of incorporation (chapter 459, p. 949, Laws 1893). Under this act, George H. Thacher, William G. Rice, and Augustus P. Smith were created a corporation under the name of “Economic Power & Construction Company,” which was given large powers, including the right to create, transmit, and utilize power between any points selected from time to time within the state, for any purpose except railway business, or the transmission of mail matter or parcels. Sections 1, 2. The original capital stock was fixed at $50,000, with power to increase the same and with power to borrow money and to issue its obligations therefor, and to secure the payment of the same by mortgaging its properties and franchises (section-2), the capital stock to be issued for money, property, or services (section 4): The company is then empowered, “without other or further authority of law or ordinance,” to acquire power stations and machinery, to construct tubes for the utilization and transmission of the power to be supplied, and for such purposes, to enter upon and use the ground under any street, public place, or high

Considerable evidence was offered on behalf of the plaintiff to show that the company has from its creation to the present time been engaged in various enterprises and operations, involving the creation, transmission, and utilization of various kinds and forms of power in different municipalities of the state, and that numerous large financial transactions have resulted therefrom, under which the company and other corporations have acquired vested rights, and under and by reason of which heavy financial obligations have been created and assumed which are outstanding. The facts in the case were indeed entirely undisputed, and presented only questions of law. The complaint and proof showed that in January, 1907, the plaintiff sent a communication to the commissioner of public works of the city of Buffalo, stating its intention to lay steam mains in trenches in certain streets of the city, for the transmission of steam power for heating purposes in residences, places of business, and manufacturing establishments, and in the same trenches to lay conduits for the transmission of electric power for general lighting and power purposes, to be generated by the same steam which was to be used for heating purposes, and the plaintiff in connection with said communication filed plans and specifications of its proposed structures. The commissioner submitted this communication and the plans to the common council, and the board of aldermen referred the matter to its committee on streets, which held public meetings during the spring of 1907, but never made any report on the matter. The plaintiff also presented to the committee on streets various regulations and conditions, recognizing the police power of the city, under which it was willing to build its structures and to furnish its products to the citizens, and the company appears generally to have adopted a conciliatory policy towards the city, and to have sought its good will and co-operation in its enterprise, but without encouragement or response from the city authorities. After waiting some months, the company in the fall of 1907 sent a further communication to the commissioner of public works and to.the common council, reciting its previous proceedings and the failure of the city to act upon its prior communications, and announcing definitely that it now proposed to enter upon certain streets in the city and to begin the construction of its structures and to raise funds therefor and to incur liabilities in connection therewith, and the company further stated that, in the performance of its work, it proposed to observe certain regulations which it likewise communicated to' the city authorities and which appear to be in accordance with precedent and to be reasonable. Thereupon and early in October, 1907, the common council adopted

The answer contained certain formal denials of some of the allegations of the complaint which allegations were, however, proved to the satisfaction of the court, and it may be broadly stated that all the facts of the complaint were proved by uncontroverted and satisfactory evidence. The answer also contained two affirmative defenses—one to the effect that the plaintiff had not commenced the transaction of its business or undertaken the discharge of its corporate duties within two years from its incorporation, and the other that the plaintiff did not obtain from the public service commission permission to build its structures. Neither of these contentions, however, was discussed by the defendants in the brief submitted by them, but the principal defense urged by defendants against plaintiff’s rights to proceed with its work was that the act of incorporation of the plaintiff, “An act to incorporate the Economic Power & Construction Company,” was unconstitutional, in that it violated section 16 of article 3 of the Constitution of this state, which provides that no private or local bill passed by the Legislature shall embrace more than one subject, which shall be expressed in the title. After the case had been submitted, defendant’s counsel was permitted to reopen it to introduce evidence showing that the fee of some of the streets of the city of Buffalo was in the city and that of others, not in the city, but in the abutting owners, and it was claimed that the city had the right to prevent the plaintiff from entering upon those streets the fee to which remained in the abutting owners. These two propositions will be considered separately, and I shall first take up the question of the constitutionality of the act and the claim of the defendants in regard thereto. I have come to the conclusion that the act in question is a private bill, within the meaning of the constitutional provision referred to and have so treated it, although the act specifically states that the powers thereby conferred are expressly declared to be a public purpose and their use by the corporation a public use (section 5).

“Every presumption is in favor of the validity of legislative acts, and they are to be upheld unless there is a substantial departure from the organic law. Courts have no concern with the propriety or wisdom of legislation. That power has been committed by the Constitution to the legislative department of the government, and with its exercise courts cannot interfere. They can only determine whether in a given case the Legislature has exceeded its authority or violated any provision of the Constitution, and, when this point is decided, their duty is performed.”

The same principle is recognized in Village of Carthage v. Central N. Y. Telephone Company, 185 N. Y. 448 , 453, 78 N. E. 165 , 166, 113 Am. St. Rep. 932 , where the right of the telephone company to go over or under a street, under its direct franchise from the state, free from municipal interference, was recognized; the village having asserted the right to compel the telephone company to place its wires underground. The court, in denying this power, said:

“As the law now stands, the company is at liberty to decide whether it will go on, over, or under a street, subject to the right of the state to revoke its license. Opinions may differ as to which policy should prevail, in view of the rapid increase of telephone companies and the disfigurement of streets by the erection of a large number of poles, each company placing its own. Be this as it may, it is clear that no such power as is claimed by the respondent is at present vested in villages of the state.”

So, in Rochester & L. O. W. Co. v. City of Rochester, 176 N. Y. 36 , 44, 68 N. E. 117 , the wisdom of the statute allowing water companies to lay pipes through city streets without local consent was vigorously assailed, but the court held squarely that it had no power to review such legislative discretion.

In other words, the question here presented for determination is whether the Legislature creating this corporation as evidenced by the act under discussion exercised its power within the limits which the people of the state themselves established and expressed in the Constitution. If it did, the court should not embarrass or restrict the Legislature and defeat the will of the people, as expressed by their representatives at the time of the passage of the act, nor should it attempt

“No motive, purpose, or interest can be imputed to the Legislature, in the enactment of a law, other than such as is apparent upon its face and to be gathered from the terms of the law itself.”

Having these general principles in mind and applying them to the pure question of law presented, I have been led to the conclusion, after careful deliberation, that the act in question does not violate the constitutional provision under consideration. In reaching this determination, another provision of the Constitution—section 1 of article 8 is to be borne in mind, to the effect that corporations may be formed under general laws, but shall not be created by special act, except,' in cases where, in the judgment of the Legislature, the objects of the corporation cannot be attained under general laws. This latter provision of the Constitution has been construed as re'posing in the absolute discretion of the Legislature the determination of the question whether a special act of incorporation in a given case is necessary or not, and that the action of the Legislature in this respect is never reviewable by the courts. Matter of Union Ferry Co., 98 N. Y. 150 . It is thus to be conclusively presumed that in the judgment of the Legislature the objects of the Economic Power & Construction Company could not be attained under general laws, and that for this reason, the special act in question was passed. It must follow from the fact that this corporation was created by special act that it would have features and powers of a special, or unusual, or extraordinary character, and during the pendency of this act in the Legislature and before its approval by the Governor all persons interested in knowing these exceptional features and powers were apprised that such features and powers would be found in the act from the very fact that it was a special act of incorporation, as shown by its title. Any other interpretation of the constitutional provision requiring the subject of a private bill to be expressed in the title would lead to much uncertainty and confusion, and if carried to an extreme, would result in the requirement that the title of such a,bill should be, in effect, an index or digest of its contents, whereas, it has been expressly held that this is not necessary. Matter of Application of Mayor of City of New York, 99 N. Y. 576 , 2 N. E. 642 .

The constitutional provision in question is found generally in the Constitutions of the various states, and has received consideration in a multitude of decisions, most of which throw little light on its present

“The subject of the act is the creation of a body corporate * * * for the purposes and having the powers specified in the act. This subject of necessity embraces a number and variety of details, all of greater or less moment to the organization of the body corporate, and proper, if not essential to be expressed in the act. They relate to * * * the extent and character of the business which the corporation may carry on, and the powers and authority which it may use for that purpose. All these details and as many more of like character, as the act embraces, are objects of the corporation, the creation of which is the subject of the legislative act; and, so long as those objects are limited by the act to one body corporate, they constitute in mass the single subject which the act must contain and which the title may express in the form adopted in this case under the provisions of the constitution above recited. To hold otherwise is to hold that the title of the act must contain all these details and set forth every power, duty, and obligation of the body corporate.”

A learned and convincing discussion of this subject by the late distinguished Chief Justice Bleckley, of Georgia, will be found in Goldsmith v. Rome R. R. Co., 62 Ga. 473 , in which the validity of an act entitled “An act to incorporate the Rome Railroad Company” was questioned on the same grounds. The court analyzed the purposes of the constitutional provision and the principles which should govern its application, and held that in an act incorporating a body there could be contained such attributes, powers and privileges as well as such duties and liabilities as in the judgment of the Legislature should be necessary or proper for such enterprise; that all grants of powers and privileges are to be deemed a part of the work of incorporation, and, when the Legislature is engaged in doing these things for a, company, it is incorporating it and not doing something different from an act of incorporation. Stress was also laid upon the fact that it had been the practice of the government during its history so to entitle special acts of incorporation, thus giving a practical construction to the constitutional provision which was entitled to weight. See, also, Atwell v. Parker, 93 Minn. 462 , 101 N. W. 946 ; Diana Club v. Lamoreux, 114 Wis. 44 , 89 N. W. 880 , 91 Am. St. Rep. 898 ; State v. Board, 85 Minn. 165 , 88 N. W. 533 ; City v. Missouri Co., 70 Kan. 441 , 78 Pac. 886 ; Detroit v. Detroit Ry. Co., 184 U. S. 368 , 22 Sup. Ct. 410 , 46 L. Ed. 592 ; Blair v. City, 201 U. S. 400 , 26 Sup. Ct. 427 , 50 L. Ed. 801 ; Montclair v. Ramsdell, 107 U. S. 147 , 2 Sup. Ct. 391 , 27 L. Ed. 431 ; Mahomet v. Quackenbush, 117 U. S. 508 , 6 Sup. Ct. 858 , 29 L. Ed. 982 ; Sweet v. City, 129 N. Y. 316 , 27 N. E. 1081 , 29 N. E. 289 ; Matter of Clinton Avenue, 57 App. Div. 166 , 68 N. Y. Supp. 196 ; N. Y. Board v. Whipple, 2 App. Div. 361 , 37 N. Y. Supp. 712 . In this connection the words of Emott, J., in People v. Lawrence, 36 Barb. 192 , and emphasized in other cases, are appropriate:

“It must not be overlooked that the title of an act shall express the subject, not the object, of the act. * * * It is no constitutional objection to a

statute that its .title is vague and unmeaning as to its purposes, if it be suffi- - ciently plain as to the matters to which it refers”—quoted with approval ini Freeman v. Panama R. R. Co., supra.

Having these principles in mind, it seems clear that the act in question does not embrace more than one subject, and that this subject is-fairly expressed in the title. An examination of the act shows that it provides in detail, for the organization of the corporation, contains a statement of the various matters required by law to be set forth in the certificate of any incorporation provided for in the business corporations law; that the name of the proposed corporation is mentioned, the objects for which it is formed are enumerated, the amount and description of its capital stock specified, together with the number of shares of which it shall consist; that the location of its principal business-office is designated, and the names of its directors for the first year are given; that it describes certain powers and privileges which are granted to the corporation, and also certain liabilities imposed upon the stockholders; and that, in short, all of the provisions of the act relate directly to the particular corporation thereby created and its organization, purposes, and powers, and nothing contained in the act can reasonably be said to be extraneous matter, and not pertinent to the main act of incorporation.

I have given careful consideration to the ingenious argument of the counsel for the defendants that the act of incorporation of the Econoic Company confers two franchises—one, the general franchise to exist as a corporation, and the other a special franchise to use the streets and highways throughout the state, and.that the act in question, therefore, either has two subjects which could not be embraced in a single private law, or, if the granting of these two franchises can properly be regarded as relating to one subject, the special franchise should have been mentioned in the title. It does not seem to me, however, that the fact that the act confers these two so-called franchises leads to either conclusion contended for by the defendants’ counsel. The distinction between the two franchises is pointed out in People ex rel. Metropolitan Ry. Co. v. State Board, 174 N. Y. 417 , 67 N. E. 69 , 63 L. R. A. 884 , 105 Am. St. Rep. 674 , where the newly enacted special franchise tax act was under consideration, which provided that the right to construct, maintain, or operate structures for public use in public streets, highways, or places constituted a special franchise which was made real estate for purposes of taxation. Probably not even such a special franchise could be taxed until it was actually used, and then only to the extent to and in the place in which it was used. In other words, the inchoate special franchise is not the subject of taxation. But, however that may be, it seems to me that it cannot possibly be a constitutional objection to a private act of incorporation by the Legislature that it includes in one special act the general franchise to exist as a corporation, which would of itself be quite useless, and the powers which it is to possess and which may include what is now called, for special taxing purposes, a special franchise to occupy the streets and highways of the state and its municipalities, or that the so-called special franchise is not mentioned in the title of the act. The special franchise

Coming now to the question of the ownership of the fee of the streets, I have likewise come to the conclusion that this affords no ground for interference by the city to the use of the streets by the Economic Company, whether the fee to such streets be owned by the city or by the abutting owners. As to those of the city streets to which the city itself has the fee, it is well settled that the city holds such fee in trust for the public use of all of the people of the state, and not as corporate or municipal property, and that the municipal corporation is merely the machinery or agency of the state, and possesses no inherent or independent authority over the streets. People v. Kerr, 27 N. Y. 188 ; Matter of Rhinehart, 93 App. Div. 410 , 87 N. Y. Supp. 789 , affirmed, 179 N. Y. 569 , 72 N. E. 1150 . These authorities and many others hold that the power to use and to regulate the use of city streets and to grant rights to use the same is vested in the Legislature absolutely, which may or may not delegate that power to a municipal corporation. Potter v. Collis, 156 N. Y. 16 , 30, 50 N. E. 413 ; Village of Carthage v. Central N. Y. Telephone Co., 185 N. Y. 448 , 78 N. E. 165 , 113 Am. St. Rep. 932 ; Rochester & L. O. W. Co. v. City of Rochester, 176 N. Y. 36 , 50, 68 N. E. 117 ; City v. Elm Co., 69 Kan. 97 , 76 Pac. 448 . As the Legislature, has seen fit to grant directly to the Economic

The only question that then remains is whether the city has any right to interfere with the use of the streets by the Economic Company on behalf of the abutting owners, who still own the fee in front of their premises, and I do not think any authority can be found justifying or authorizing such interference, on behalf of strictly private interests, by the city. Such a procedure would involve the city in unending litigation on behalf of private parties, who might not wish to litigate at all. It is, moreover, extremely doubtful whether any abutting owner, owning the fee in front of his premises, could interfere with the particular structures which the Economic Company proposes to construct, as these are all underground; and, as they are to be for the conveyance of steam heat and electric lighting and power, it is not at all certain that they would be considered an added burden upon the fee of such streets. This principle was recognized in a case in this department, with reference to underground conduits for telephone wires. Castle v. Bell Telephone Co., 49 App. Div. 437 , 63 N. Y. Supp. 482 . But where additional burdens have been imposed upon streets, the fee of which remains in abutting owners, the interference with the rights of such abutting owners has always been regarded as an invasion of private rights, for which the owners themselves could seek redress, if they saw fit. This is illustrated in the recent case of Osborne v. Auburn Telephone Company, 189 N. Y. 393 , 82 N. E. 428 , in which it was held that the owner of the fee of land to the center of the street, subject to the public easement for the purposes of a street, was entitled to an injunction restraining the telephone company, which had not obtained his consent, from entering upon the streets and erecting pol'es therein. It seems clear that injunctions for the violation of the same right are not to be favored in behalf of both the abutting owner and the city on his behalf. In other words, if the abutting owner does not wish to prevent or sue for an interference of his private rights, it is no concern of the city to do so in his behalf, as the city is in no sense a trustee for him as regards the enforcement of his private rights.

This principle was clearly recognized in the case of the Rochester & L. O. W. Co. v. City of Rochester, 176 N. Y. 36 , 52, 68 N. E. 117 , where the pipes of the water company ran through the city of Rochester, principally over private lands of the New York Central Railroad Company, and incidentally across public streets of the city. The point was raised that the city could enjoin the water company, not only from laying its pipes in or across its streets, but upon the land of the railroad company, both of which contentions were overruled—the first,

“The New York Central & Hudson River Railroad Company is not here opposing this judgment. The city of Rochester is not interested in the question as to whether the plaintiff has obtained from the railroad company a valid right of way along the company’s land. It therefore is not in a position to call upon the courts to determine the validity of such title.”

The conclusion thus seems irresistible that neither the city nor its police, nor its public authorities, had any right to interfere with the Economic Company in laying its mains and conduits in the public streets of the city, either in the streets owned by the city or in those in which the fee is still held by the abutting owners. In the case of the Economic Company charter the Legislature has seen fit to exercise its undoubted and absolute right to grant to this company the right to use the streets and highways of the state and its municipalities as it had previously and has since done in other cases; and it has not seen fit to make such right dependent on local municipal consent. The municipalities, however, would undoubtedly be recognized ,as having a general police power over the manner of the exercise of such right, but not to the extent of preventing the exercise of the right' itself. And this the plaintiff has recognized by submitting to the city authorities certain regulations under which it proposes to do its work in the city of Buffalo, which, however, have not been acted upon by the city authorities,- nor any others suggested. As this is an equitable action, however, in which the plaintiff seeks injunctive relief, the court undoubtedly has a discretion, which it may exercise for the protection of the city, in granting to the plaintiff the relief it asks. This was done in the final judgment granted in the case of Rochester & L. O. Water Co. v. City of Rochester, above cited, where the court prescribed certain regulations under which the water company should be allowed to lay its pipes in the city of Rochester, which regulations were substantially the same as those offered by the Economic Company to the city, and these should be embodied in the judgment to be rendered herein, substantially as follows: The structures shall be constructed in accordance with the plans and specifications filed by plaintiff with the commissioner of public works. All excavations shall be made so as not to disturb any water or gas pipes, sewers, or conduits. A free passage for teams and foot passengers shall be kept open. Trenches-shall be guarded day and night. Steam mains and electric conduits shall be laid a proper distance below the pavement. Pavements that may be disturbed shall be restored. Guarantors thereof indemnified. Plaintiff shall give notice to the commissioner of public works before beginning work in a given street, and shall pay reasonable expenses of inspection of the company’s work by inspectors appointed by the commissioner of public works, and shall observe other reasonable regulations prescribed by him. With these regulations, the city’s interests will be as fully and reasonably protected as can be asked, in view of the fact that the Legislature has granted no power to the city in connection with the use of its streets by the Economic Company, but has given

It may be mentioned that since this case was tried the Economic Pow■er & Construction Company has been successful in a preliminary legal •contest in the Supreme Court in Ontario county in an action brought against it by the Geneva-Seneca Electric Company of Geneva, a rival ■electric corporation, which obtained a temporary injunction restraining the Economic Company from laying electric wires in the public •conduits of Geneva. The Economic Company is also furnishing steam heat to the citizens of Geneva, as the successor of the local Geneva Steam Heating Company. The matter came up before Mr. Justice Benton, who, after hearing full arguments, in which all of the grounds •of objection, constitutional and otherwise, to the Economic Company •charter and proceedings were urged, dissolved the injunction, whereupon the company resumed its work in Geneva. This precedent, by a co-ordinate court, naturally confirms me in the conclusions that I "have reached.

I have therefore determined that the plaintiff is entitled to the relief asked by the complaint, under the regulations above indicated, and findings and conclusions in accordance with the views herein expressed •will be prepared.