Starin v. Mayor of New York — 4 N.Y. St. Rep. 588

Majority

p. 588

John H. Starin, App’lt, v. Mayor, etc., of New York et al., Resp’ts.^[1]

(Supreme Court, General Term, First Department,

Filed December 30, 1886.)

Headnote

1. Ferry franchises—Hew York city—Consolidation act—Wharves and piers—Legality of sale by commissioners of sinking fund— Laws 1882, chap. 410.

An action was brought by S. the plaintiff, as a taxpayer, under chapter 531, Laws 1881, to restrain the completion of the execution and to. set.

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aside a contract for a lease of a wliarf and ferry franchises in the city of New York. The wharf and bulkhead was situated at the foot of Whitehall street (which was not a uistriet appropriated by the department of docks to special comme; cial inte ests/, and one of the ferry routes extended from that street to Staten Island, the other from ihe same point to Bay Ridge on Long Island. The franchises were advertised to be let to the highest bidder for a certain term from June 1, lt84. The rental of the wharf property was pieviously fixed and mentioned in the notice ;.t the sum of $10,u00, and the ferry franchises were to be offered atan upset price of five per cent of their gross receipts. The sale took place as it was advertised, and the S. I. R. T. Railroad Company purchased tli; term and franchise for which a lease was to be executed and delivered to it. Before the sale was made, objections were presented to the right of the sink ng fund commissioners to make it in this manner. Bids were refused at the sale proposing a higher rental for the wharf and an advance over the upset price for the ferry franchise, it being determined at the ti ne of the sale that the rental had been fixed for which the lease of the wharf was to be made. Held, that the consolidation act (Laws 1882 chap. 410, § 716) required that the lease of the wharves be sold to the highest bidder. That the determination of the rent by the commissioners was in violation of the statute and their proceedings were illegal, and that they should be restrained from carrying them into effect, and so far as they may have been consummated they should be vacated and annulled.

S. Same—Who may acquire ferry franchise—What ferry franchises MAY BE ACQUIRED BY STATEN ISLAND RAPID TRANSIT R. R. COMPANY— Laws 1884, chap. 193.

The S. I. R. T. Railroad Company was incorporated under the general railroad law of this state to construct and operate a railway between certain points on Staten Island. Held, that it was no part of its organization to acquire a ferry right or to run or operate a ferry from the terminus of its road to the city of New York. That while Laws 1884, chapter 193, was sufficiently broad to entitle said road to acquire the right to do this, it does not confer upon the company the power to lease another distinct ferry to be operated fro n. the city of New York to Bay Ridge.

3. Same—Party plaintiff—When taxpayer may bring action to set aside lease of city property—Laws 1881, chap. 531.

S. was a bidder at the sale and was interested in the use of the wharf and the ferry franchise previous to the time of the making of the sale. Held, there was nothing in these facts disabling S. from maintaining the action under Laws 1881, chapter 531.

Appeal from a judgment recovered at the special term dismissing the plaintiff’s complaint.

James McNamee, forappl’t; Stewart & Boardman and D. J. Dean, for resp’ts.

The action was brought by the plaintiff as a tax-payer under chapter 531 of the Laws of 1881, to restrain the completion of the execution, and to set aside a contract for a lease of a wharf and ferry franchises in the city of New York. The wharf and bulkhead is situated at the foot of Whitehall street, and one of the ferry routes extended from that street to Staten Island, the other from the same point to Bay Ridge in the town of New Utrecht on Long Island. The franchises were advertised in the City Record, to be let to the highest bidder for the term of eight years and eleven months from June 1, 1884. The rental of the wharf property was previously fixed and mentioned

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in the notice, at the sum of $10,000, and the ferry franchises were to be offered at an upset ¡Drice of five per cent of their gross receipts. The sale took place as it was advertised and the defendant, The Staten Island Rapid Transit Railroad Company, purchased the term, and franchises, for which a lease was to be executed and delivered to it. Before the sale was made, objections were presented to the right of the Sinking Fund Commissioners to make it in this manner. It was urged that each ferry route should be separately sold, and that the rental for the wharf property should be fixed alone by the price for which the purchaser would be willing to take it at an auction sale. These objections were disregarded and bids were refused at the sale proposing a higher rental for the wharf, and an advance over the upset price for the ferry franchises, it being determined at the time of the sale that the rental had been fixed for which the lease of the wharf was to be made. The plaintiff deeming this to have been an unlawful disposition of the leasehold interest in the wharf and of the ferry franchises sold with it, as one of the tax-payers of the city brought this action to restrain and prevent the completion of the sale, by the execution and delivery of the lease, and to vacate and annul the sale itself. He was a bidder at the sale, and was interested in the use of the wharf and the ferry franchises previous to. the time of the making of the sale. And because of his interest, the objections made by him to the authority of the Sinking Fund commissioners to make the sale in the manner in which it took place, it has been urged, should not be considered and that this action cannot be maintained by him. But, the law contains nothing disabling a tax-payer, who may have been desirous of obtaining the leasehold interest, or who bid at the sale, or previously owned a leasehold term - in the same property, from maintaining such amaction as this.. What it requires is that the plaintiff- shall be :-a: tax-payer ■ assessed for property to the amount, at least, of'$1,000,,. and that the requisite bond'ShalF’b'e executed ’ ahd*delivered,’‘ as that" has been directed by the law. And that the plaintiff was such a tax payer, and. this bond has been executed and filed, appears as facts in the case. And that distinguishes this case from Hull v. Ely, ( 2 Abb., N. C., 440 ). Under the provision of the statute, he was a person authorized to maintain the action, if upon the facts appearing the disposition proposed to be made of the property and ferry franchises, was illegal. The object of'this statute is to secure the protection of public property, and to subordinate the acts of officials in its disposition, or appropriation, to the restraints of the law. And it requires to- be liberally construed and applied to carry this object into effect, Ayers v. Lawrence ( 59 N. Y.,

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192 ), and under its provisions, actions in part the same as this have been sustained and approved by the courts. Bird v. Mayor, etc, 33 Hun, 396 ; Warrin v. Baldwin, 35 Hun, 334 .

By a resolution adopted by the common council of the city of New York, and approved by the mayor on the 3d of November, 1875, a ferry was established to run from the bulkhead at the foot of Whitehall street in the city of New York to Staten Island, the franchise of which was directed to be sold at auction to the highest bidder. By another resolution adopted by the common council, and approved' by the mayor, on the 1th of June, 1877, another ferry was established from the foot of Whitehall street to Bay Ridge, the franchise of which was also directed to be sold at auction to the highest bidder. This was also the mode provided by section 176 of chapter 410, of the Laws of 1882, for the sale and disposition of city property, including franchises. It was thereby declared that the board of commissioners of the sinking fund should “exceptas in this act otherwise especially provided, have power to sell, or lease, for the highest marketable price, or rental, at public auction, or by sealed bids, and always after public advertisement and appraisal, under the direction of such board, any city property, except wharfs, or piers, but not for a longer term than ten years, nor for a renewal for a longer term than ten years.” The same commissioners, by section 180, of this act, were further empowered to lease along with ferry franchises, within the city “ such wharf property, including wharves, piers, bulkheads and structures thereon, and slips, docks and water fronts adjacent thereto,- used or required for the purpose of such ferry, now owned or possessed, or which may hereafter be owned, or acquired by said city. ” This authority so far qualified the exception contained in, section 170, of the same act, as to empower the commissioners to lease with the ferry franchises, the wharves, piers,. bulkheads, and structures, adjacent thereto, -and required for the purposes of. the ferry. ■ ?But thetéxercise of .,the..autho.rity in this manner conferred upon the commissioners of the sinking fund was restrained by the provision, that , such wharves, piers, bulkheads, or structures, should be leased in the manner provided by law. That is the express language of the section itself, and it contemplates the existence of a restraint upon this power of leasing the wharves, piers, bulkheads and structures thereon. And this restraint seems to be no other than that contained in section 716, of the same act, which provided that “said department may in the name, and for the benefit of the corporation of said city, lease any or all of such property for a. term not exceeding ten years, and covenant for renewal or renewals, at advanced rent of such leases for terms of ten years each; but not exceeding

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in the aggregate fifty years. All leases, other than for districts appropriated by said department to special commercial interests, shall be made at public auction to the highest bidder.” This section is contained in that part of the act as relates to the department of docks. But by the provision contained in section 180, of the act, that the lease shall be made in the manner provided by law, it appears to have been the object and design of the legislature to apply these directions contained in section 716 to leases made by the commissioners of the sinking fund, for the use of wharves, piers, bulkheads, and structures thereon, required for the purposes of a ferry. The intention of the statute appears to be, that in the disposition of this property, the sales, or leases, if it should be made through the intervention of an auction or sealed proposal, after public notice properly advertising it. It was to give the public the advantage of competition in which interested parties should be brought together, and the highest possible price obtained for the property to be sold, or leased. And no reason can be perceived why the dock commissioners should be expressly restrained in this manner, and the commissions of the sinking fund should be at liberty to disregard this restraint. The act on the contrary discountenances any such distinction, for it requires the commissioners of the sinking fund, in leasing wharves, for ferry'purposes, to proceed in the manner provided by law, and that manner of proceeding by section 716, is to put the property, up at auction.

This direction of the law was disregarded in the notice published for the lease of this wharf property, which was not in a district appropriated to any special commercial interest, and the auction itself also proceeded in violation of this direction, for the leasehold property was put up at a fixed price of $10,000 rental, and no change in that amount was permitted to be made, and no bid contemplating any change was received at the time when the sale took place. This was a violation of the direction given in the consolidation act for the leasing of this description of property. The law did not permit the rent to be determined by the commissioners, but that was to be done when not fixed, by sealed proposals by the persons attending at the sale and by the highest bid offered for the lease. That it might not be a perfectly easy matter to comply with this direction of the law for the disposition of the wharf will not justify the proceeding which was taken, for the language of the statute is imperative that the rental to be paid shall be fixed in the manner in which the prescribed sale is required to take place. But in reality the difficulty in thé way of making the sale in compliance with the direction of the statute is more imaginary than real, for by

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putting the ferry franchise or franchises together with the lease of wharf, the bidders could very intelligently bid for both by indicating the rental to be paid for the wharf and the percentage on the earnings of the ferry to be paid for its franchise. No serious obstacle would stand in the way of carrying the law into execution in this manner and complying literally with its directions. That was not done at the auction which took place; through which the railroad company claims to have acquired the right to the use of the wharf and the franchise of each of these ferries.

The railroad company was incorporated under the general railroad laws of this state to construct and operate a railway from a point on the shore of the lower bay of New York, at or near New Deap Lane, to, or near the foot of the Church road in the village of Port Richmond. It was no part of its organization to acquire a ferry right or to run or operate a ferry from the terminus of its road to the city of New York. And whatever right or authority it has since obtained for this purpose, was acquired by it under chapter 193 of the Laws of 1884. This act provides that “Any steam railroad company incorporated under the laws of this state, with a terminus in the harbor of New York, is hereby authorized and empowered to purchase or lease boats propelled by steam, or otherwise, and operate the same as a ferry or otherwise over the waters of the harbor of New York to any point distant not more than ten miles from said terminus.” And while this act is sufficiently broad to entitle the railroad company to acquire the necessary boats and franchises and to operate a ferry from the terminus of its road to the city of New York, it does not appear to confer upon the company the power to lease another distinct ferry, as it is now proposed it shall do, to be operated from the city of New York to Bay Ridge on Long Island. What the statute intended was that any railroad company having a road with a terminus at the harbor of New York should be empowered to reach this city by maintaining a ferry from that terminus, to any other point not more than ten miles distant from this terminus. But the ferry route extending from the foot of Whitehall street to Bay Ridge has no connection whatever with the terminus of the railroad company. It is on the other hand, distinct and independent from the terminus of the railroad having terminal points of its own, in which the railroad company is in no way concerned. And if it could acquire under the authority of this statute, the lease of such a ferry route, it may acquire with equal propriety a lease of any route extending from any portion of the city of New York, either to Long Island, or the Jersey shore. And to confer

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such power upon the railroad company very clearly seems not to have been the design of this act. And if it was not, then the lease proposed to be made to the railroad company for the Whitehall and Bay Ridge route, would be an illegal disposition of the property and franchises of the city, and liable to restraint and prevention under the act of 1881. This subject was considered in Latham v. Richards ( 12 Hun, 360 ), and an unauthorized disposition of public property was in that action restrained. And there is good reason why it should be, for if the railroad company had no power to purchase or accept the lease of this ferry franchise, and the right to use the wharf so far as it should be necessary for that purpose, it might hereafter refuse to be bound by the lease, and abandon it as unauthorized to the city. And the commissioners of the sinking fund have not been empowered to place the public property under a contingency of that description. The sale was made, so far as the wharf was included in it, for a distinct price incapable of being-separated or apportioned to the different ferry franchises. And if it was unauthorized in part because of the inability of the railroad company to acquire the Bay Ridge route, it seems to follow that it must be held to be wholly unauthorized. But whether it be so held or not, as long as the commissioners disposed of the leasehold term for the wharf in violation of the provisions of the statute, their proceedings were illegal, and they should be restrained and prevented from carrying them into effect, and so far as they may have been consummated they should be vacated and annulled. The judgment therefore, should be reversed, and as the facts are already found by the court in its decision a judgment in conformity with these views should be entered in the action. And as this will dispose of the allowances, no specific attention is required to be devoted to them.

Brady, J., concurs; Davis, P. J., taking no part in the decision,__