Brush Electric Illuminating Co. v. Consolidated Telegraph & Electrical Sub-Way Co.

Tlie plaintiff in this action, together with the plaintiffs in the other actions argued herewith, were duly incorporated for the purpose of the manufacture, use and transmission of electricity for the production of heat, light and power in the city of New York, and for a long period of time maintained poles and wires and other conductors in the streets of the city by which their currents were transmitted and distributed. Prior to the year 1887 overhead wires were exclusively used by these corporations.

In 1884 the Legislature passed an act which provided that all telegraphic, telephonic and electric-light wires and cables used in any incorporated city- of this State, having a population of 500,000 or over, should thereafter be placed under the surface of the streets, lanes and avenues of the city.

In 1885 an act was passed by which in cities having a population exceeding a million, the mayor, comptroller and commissioner of public works of such city were authorized and directed to appoint three disinterested persons who were to be a board of commissioners of electrical sub-ways, which board was charged with the responsibility of enforcing the provisions of the act of 1884, hereinbefore mentioned, and of causing to be removed from the surface and to be maintained and operated underground wherever practicable, all electric wires and cablés used or to be used in the business in any such city. Under this act it was contemplated that the electric-light companies should build the sub-ways according to plans to be submitted to the said board of commissioners; and in case of the failure of said companies to propose or put in use a suitable plan, the commissioners were directed to devise and make a general plan such as would meet the requirements of the acts of the Legislature. In 1886 the act in question was amended in some immaterial particulars. In the said year the board of commissioners of sub-ways which had been duly appointed pursuant to the act of 1885 for the purpose of carrying into effect the duties imposed upon them by that act, entered into a contract with the Consolidated Telegraph and Electrical Sub-way Company (the respondent) for the construction of the sub-ways into which the overhead electric wires were to be put. In April, 1887, the said commissioners entered into another contract with said respondent, whereby they agreed to provide,

The fifth paragraph of said contract reads as follows: “ The party of the second part (the respondent) may fix a fair scale of rent to be charged according to the kind of conductors and the amount of space required therefor, which shall be at the same rate to all occupants making a like use of said sub-ways; but the scale of rentals or any charges fixed or made by the party of the second part (the respondent) shall at all times be subject to the control, modification and revision of the parties of the first part (the commissioners of sub-ways), or their successors ; and no contract shall be made between the party of the second part and any company or corporation on any terms which shall not require the payment by such other company or corporation of rents at the rates so fixed.”

The tenth paragraph of said contract reads as follows: “ In case any dispute shall arise between the party of the second part (the respondent) and any company occupying or desiring or requiring to occupy said sub-ways, the same shall be referred to the parties of the first part, or their successors, for settlement, whose decision shall be final.”

In June. 1887, the legislature passed an act by which the agreement made between the commissioners of sub-ways for the city of New York and the Consolidated Telegraph and Electrical Sub-way Company, under date of July 26, 1886, as amended and modified by a second and further contract or agreement between said parties, dated the 7th of April, 1887, was ratified and confirmed, subject, however, to the provisions of that act.

Section 7 of the act reads as follows:

§ 7. In case and whenever it shall be made to appear to the satisfaction of any of the justices of the Supreme Court, or any judge of the Court of Common Pleas in and for the city and county of New York, or any judge of the Superior Court of the city of New York, or to the satisfaction of either of said courts, that the said board constituted by this act, or its successors, or any officer or agent of said board, or its successors, or the said The Consolidated Telegraph and Electrical Sub-way Company, or any corporation or persons

The defendant, having completed a large number of miles of subways in 1888, announced a tariff which would be charged the electric-light companies for the use of the sub-ways, and, in 1889, applications were made by various of the electric-light companies for space in the sub-ways for the period of one year, some of which applications contained the rental inserted therein, and in others the rental was left blank; but all the electric-light companies making this application knew the scale of rent which the defendant had adopted for the use of the sub-ways constructed by them. These .applications having been granted by the defendant, and space assigned in the sub-ways to these various electric-light companies) they proceeded to put their wires therein and use the same for the purposes of their business. It further appears that these companies protested against the rates which were charged by the defendant for the use of its sub-ways, upon the ground that they were unjust, unreasonable and not fair; and negotiations were had between the defendant and some of these electric-light companies for a reduction of these rentals, such negotiations, however, being predicated upon

The plaintiff, claiming that the rental charged by the defendant is unjust and unreasonable, has brought this action to have a fair .scale of rentals determined by the court, all action upon the part of the defendant towards the collection of any rent whatever to be ■enjoined, pending the investigation of this question.

The plaintiff invokes the jurisdiction of the court upon the ground that the contracts hereinbefore mentioned provide that the defendant may fix a fair scale of rents, and upon the claim that section 7 of the act of 1887, above cited, provides that the electric-light companies may occupy ducts in these sub-ways upon terms that to the court may appear just and reasonable.

It seems to be clear, under the elementary principles which determine whether contractual relations have been entered into between parties, that the a]3plication of these electric-light companies for space in the sub-ways, with knowledge of the rental which- was claimed to be charged, the granting of these applications and the occupation of the sub-ways constituted a contract between the companies and the defendant to pay such rentals, unless there is something which is peculiar in the situation of the parties which takes .their action out of the ordinary rules governing■ the conduct of

But it is said that the electric-light companies, the plaintiffs in these actions, are not governed by this rule, because they were compelled to get out of the streets and go into the sub-ways. This is undoubtedly true. This court knows from the previous struggles of these electric-light companies which have come before it, to keep-out of the sub-ways and to conduct. their business (notwithstanding that it had become a public nuisance) by the use of overhead wires, that it was not until they were threatened with the destruction of their business if they continued to maintain a nuisance-in the streets that they consented to occupy any portion of the sub-ways which have been prepared for them. And it is also true that a very large part of that reluctance arose from the fact that it would necessarily be more expensive to use an artificial envelope for their conductors than to allow them to be surrounded by the open air. Having resisted the law to the very last moment it may be that they were compelled to enter these sub-ways rather precipitously. But for this the defendant was not responsible, and if any harsh or unfair contract was insisted upon, under the circumstances, by the defendant, the .plaintiffs had their appeal, because the scale of rents or any charge fixed or made by the defendant was at all times subject to the control, modification and revision of the Board of Electrical Control or their successors, and if the terms of the contract which had been entered into between the defendant and the electric-light companies were of such a character as required modification, an appeal was given to the Board of Electrical Control, and with but one exception, as far as we can see from the papers, no such rights were ever exercised.

But these parties, without paying or offering to pay any rental whatever, have come into a court of equity to have this rental fixed, upon the ground that it is unreasonable, without any resort whatever to the tribunal which had the power to modify the terms of the contract entered into between them and the defendant.

It is a familiar principle that, at least until all measures which the

But it is urged that under section 7 of the act of 1887, to which reference has already been had, notwithstanding this provision of the contract, jurisdiction has been conferred upon the courts to determine and fix what is a fair and reasonable rental or to grant such relief as may be proper in case such jurisdiction is invoked.

An examination of the section, however, will show that the' court us a court of equity, has no jurisdiction conferred upon it. The whole jurisdiction conferred by that section is conferred upon a justice of the Supreme Court or a judge of the Court of Common Pleas or Superior Court, or upon either of those courts, to enforce, in a particular way, the provisions of the various acts and the various agreements under said acts, and to compel the granting of such facilities and the granting of such relief as might lie proper in the premises; and this way pointed out is, by proper proceedings, in the nature of a writ of mandamus or by mandamus, and no other jurisdiction whatever is conferred.

It is apparent that no general equity jurisdiction was intended to be conferred, because the jurisdiction conferred by this act may be exercised by a justice or a judge, and need not be by the court at all. It is true that the court may act, but the court has no power to do anything more than a judge would have the right to ■do out of court under the provisions of this act. And that this is the true interpretation placed upon this act is apparent from the last clause thereof, which is as follows: “ And the said board or •its successors, or the mayor, aldermen and commonalty of the city of New York, or any person, company or corporation aggrieved by any such violation or failure as aforesaid, shall be entitled to institute and maintain such proceedings as are Tyy this section authorized.” As has been before seen, the only proceedings authorized by this section are proceedings in the nature of a writ of mandamus. Even though, therefore, a judge or a court might, where proceed

Again, even if a court of equity had jurisdiction, yet it could not intervene in an action of this character because of the position of the plaintiff. It alleges that the rental is unfair, but it has entered into a contract to pay this rental, and it is clear that no matter what the jurisdiction of the court may be as to rentals accruing subsequent to the filing of a bill, it would have no power to relieve the company from a debt which it has incurred prior to the initiation of these proceedings. It was bound to pay what was due before it co.uld come into a court of equity 1 and ask to be relieved from subsequent payment, even if the court had 'jurisdiction to entertain such an application, which we do not think it has. But in the case at bar it offers to pay nothing; it brings no money into court and is seeking to be relieved from a debt ’which it owes to this defendant, by the intervention of this court, upon the theory that it made a contract which it was improvident for it to make; and that, being compelled by the force of circumstances and the fear that its business might be destroyed, to make this contract, it ought not to be held to it.. We know of no rule of equity jurisprudence which justifies a court in intervening under such circumstances. But it is claimed that even if there had been a valid agreement upon the part of the plaintiff to pay rentals at the rate charged, its failure to pay would not justify the defendant in its threatened conduct.

It is conceded that the letting of these sub-ways is not leasing an interest in real estate, and, therefore, under no circumstances could a possessory action to recover possession of the space occupied by these electric-light companies as real estate be maintained. And it is clear that a possessory action for the recovery of personal property will not lie, as replevin could not be had to recover a hole in the ground.

The nature of the rights conferred upon this plaintiff by the contract which it entered into with the defendant is peculiar, because of the situation of the parties and the thing leased and the purpose for which it is rented. The fact, however, that the thing rented can neither be considered real estate nor personal estate cannot deprive the defendant of the protection of the law in the

As has already been stated, under these circumstances equity will not intervene, because the proposed action of the defendant would, at most, be a trespass, the damages for which might be easily ascertained. As far as the interruption of the business of the plaintiff is concerned, that could not be considered, because it has no right in equity to continue its business at the expense of the defendant.

The position taken by the counsel for the appellant, upon the argument of this appeal, was, that the only remedy of the defendant was to sue for the amount of these rents, and in case the occupants of the sub-ways failed and the amount could not be collected upon execution, in the case of a corporation, to have the corporation dissolved, and to have a receiver occupy the sub-ways during the pendency of the dissolution proceedings, with the right of the purchaser from the receiver to continue the occupation, and so on ad infl/rvittmi without a cent of rent being paid. Such a result never could receive the sanction of law, and unless the court is pointed to some plain, well-established principle which necessarily brings about such a result, it would hesitate before it interfered under such circumstances.

It might well be claimed that the rights of this defendant, in reference to the occupation of its sub-ways by the plaintiff, is similar to the right of a passenger to occupy a place in the train of a common carrier. It is well established, both at common law and by statute, that a common carrier has the right to eject a passenger who refuses to pay his fare. And, for the same reason, it would seem that when the plaintiff refuses to pay the compensation which it agreed to pay for the occupation of these sub-ways, the defendant would have a right to eject it from the vehicles in which it had been allowed to place its wires for the purpose of the conduct of its business. The position of the plaintiff in the conduct of its business by means of these sub-ways, by and with the consent of the defendant, seems to be like that of a licensee. It is permitted to conduct its business through this space over which the defendant has control, upon a promise to pay a certain remuneration. Failing to comply with its contract upon which the permit depended, the

We are of opinion, therefore, that a court of equity could not intervene, certainly until this plaintiff has paid what was due before the commencement of these proceedings, and that probably the sole jurisdiction of the court is controlled by section 7 of the act of 1887, and can be invoked only in the form of the proceedings therein prescribed in a proper case.

The order should be affirmed, with costs.

While unreservedly concurring in the result arrived at by the presiding justice in this case, and in the other cases presented at the same time, I prefer to state briefly the conclusions at which I have arrived. These actions proceed upon the theory that the plaintiffs obtained access to certain allotted ducts in the defendant’s ■sub-way without having made any valid or binding contract as to rent, and they ask the court to determine what would be a just and reasonable rent. In the meantime they ask us to enjoin the defendant from disturbing them, and in the end to enjoin the defendant from, collecting any greater sum as rental than the sum finally adjudged in these actions to be just and reasonable. Thus, without alleging what would be a just and reasonable rent, without furnishing a particle of proof upon that head, without giving any reason for the absence of either such allegation or proof, and without tendering or even offering to bring into court any given sum deemed by them to be just and reasonable, the plaintiffs ask us to grant an injunction which will permit their continued occupancy of the allotted duets, without one penny of immediate compensation to the defendant. What, in fact, do they offer pending this litigation ? Nothing whatever but a phrase.. They say in their complaints that they “ have always been ready and willing to pay to the defendant a fair and just and reasonable rental for these ducts.” In plain terms, therefore, the plaintiffs, in the name of equity, invoke a positive abuse of judicial power. Having secured possession of the ducts without any contract as to rent, they boldly ask us to keep them there pendente lite in the full and complete enjoyment of all

If, however, the companies deemed such scale to be unfair or unreasonable, an arbiter between them and the defendant was provided, namely, the Board of Electrical Control. That board had full revisory power with regard to such rentals, and in the absence of fraud or bad faith its decision was final and binding upon both parties. It is entirely clear that the plaintiffs were bound in the first instance to appeal to this board in case the rates fixed by the defendant were deemed unreasonable. It is equally clear that the court could not revise or reverse the honest judgment of that board, and that the companies could not appeal to the court, even after an unsuccessful appeal to the board, without averring fraud or bad faith. In case, however, the board should refuse or neglect to act promptly upon the companies’ appeal, a summary remedy was provided by section 7 of the act of 1887. The object of the provisions of this latter section was to secure the granting of just and equal facilities, upon fair and reasonable terms, to all applicants alike. The plaintiffs, however, neither appealed to the

With regard to the question as to whether the defendant can, under any circumstances, resort to the remedy of eviction, I think the plaintiffs must be held to the position assumed in their compfiaints. They do not admit the tenancy under a completed lease, but simply claim that they are in possession under an implied agreement to give them a lease upon fair and reasonable terms to be judicially ascertained. Thus their attitude in the interim, as we have already seen, is necessarily that of licensees. They are in possession, they say, without a contract, under the right, however, which the law gives them, and the duty which the law imposes xrpon them, to place their conductors in the sub-way. Still, they are there as mere licensees until a- contract, such as the law authorizes and even compels the defendant to impose, is entered into. Upon

I think, therefore, that payment of the agreed or fixed rentals is an essential and reasonable condition to the use of the allotted «pace, and that the defendant should not be interfered with in resuming possession of such space, and again offering it for electrical purposes, except in a case of real oppression and injustice. No such case has here been made out. On the contrary, an injunction under the circumstances disclosed would plainly he both unjust and oppressive.

I concur, therefore, for these reasons, in the affirmance of the orders appealed from.

I have but little to add to the opinion of the presiding justice which covers the material points discussed on the argument of this appeal. The several plaintiffs entered into the occupation of space in the conduits of the defendant under an absolute obligation to pay for their use. That they were compelled to do so by law cannot affect that obligation, for such compulsion resulted from a necessity connected with the public safety; their business, as theretofore conducted, being dangerous to the community. At the time they entered into the occupation of the space referred to -they knew not only that they were required to pay, but also the rates established. Under such circumstances an implied contract arose to pay that rent unless a different one were fixed by the tribunal created by the law to regulate rentals, which, as I read the statute and the contracts, is, in the first instance, the Board of Electrical Control. Even assuming that this court or a justice thereof, or the judges of the Court of Common Pleas or of the Superior Court, have, under the seventh section of the act of 1887, a right to fix rents under any circumstances, I do not think that provision can be construed as being retroactive or as relating to anything more than the fixing of rents after the jurisdiction has been invoked; for it is not to be assumed that the court can control or administer this property of the defendant, or interfere with past relations between it and the plaintiffs as to an adjustment of rents, any more than it could

I agree with the presiding justice that whatever power the court may have over the subject is limited by the statute, but if general equity rules are applicable, the plaintiffs must put themselves in a position to show they are entitled to the consideration of a court of equity. That can be done only by securing to the defendant, either by a deposit iof money or by a sufficient bond, the amount of rent which they knew was charged at the time they entered into occupation, which was either $1,000 a mile as fixed by the defendant, or $900 a mile, which seems to have been considered by the Board of Electrical Control a proper sum. ' Nothing whatever has been done by either of the plaintiffs in that direction, and the court will not now make any order concerning it, for the case must be determined on the facts as they are presented in the record, and were submitted to the judge in the court below.

We are not called upon to interfere with the course of the defendant, nor to point out to either party what is the remedy for the nonpayment of this rent. It is sufficient that no case has been made for the interference of the court by in junction, and if the defendant transcends its legal right in preventing the use of the sub-ways by the plaintiffs, the latter have their adequate remedy at law.

Order affirmed with costs.