Southern Boulevard Railroad v. People's Traction Co.

There are two appeals brought before us in this action. The-complaint was dismissed at Special Term, and from the judgment entered upon that decision the plaintiff appeals. The defendant,, the North New York City Traction Company, answered the complaint, and in its answer claimed certain affirmative relief which was-of such a character as would have necessitated, if it were to be-awarded, a final adjudication in its favor against one of its co-defendants, the People’s Traction Company. There is nothing properly before the court presented by this appeal of the North New York City Traction Company. It does not appear that its answer was-served upon the People’s Traction Company, as is required by law,, in order to enable the court to adjudicate any matters in controversy between those companies and involved in the general subject-matter of this suit. It is not claimed by the North New York City Traction Company that there was error in dismissing the complaint and dissolving the’temporary injunction as to it, but only that the action should have been retained in court in order that a final judgment, might be made in its favor against the People’s Traction Company. Its appeal, therefore, requires no further consideration and must be-dismissed.

The action was brought to restrain a sale by the comptroller of the city of New York of a certain franchise for constructing and *332operating a surface railroad upon certain streets and highways in the city of New York, particularly mentioned in the complaint, which sale had been duly advertised by the comptroller, who attempted to make it on the 9th day of October, 1895. All the necessary requirements of law preliminary to offering the franchise for sale were complied with by the authorities of the city of New York, and three qualified bidders alone appeared to bid for that franchise. They were the Southern Boulevard Railroad Company (the plaintiff), the People’s Traction Company and the North New York City Traction Company. On the 9th day of October, 1895, the comptroller of the city of New York attended at the time and place named in the advertisement of sale and offered, through an auctioneer, the franchise for sale. It was announced before the bidding began that the franchise would be disposed of to the bidder who should agree to give the largest percentage of its gross receipts to the city as required by article 4 of the Railroad Law, and should also furnish a bond or undertaking in such an amount and form as might be required and approved by the comptroller for the performance by the successful bidder of the terms of his bid and for the commencement and completion of the railroad within the time designated by law, and certain other provisions. It was also announced at the sale by the comptroller that, in addition to the percentage of gross receipts referred to, the successful bidder would be liable to pay annually into the city treasury for the first five years three per cent and thereafter five per cent of its gross receipts as required by section 95 of the General Railroad Law (Laws of 1890, chap. 565), and that no bid would be accepted unless it should be for a percentage additional to that provided by such law. After the announcements were made the bidding was opened by the representative of the People’s Traction Company, the offer being one-eighth of one per cent of gross receipts in addition to the percentages required by law. Advances were made in the bids in fractions of one per cent until a bid of three and one-half per cent was offered by the plaintiff, the Southern Boulevard Railroad Company, after making which bid that company made no further offer. Thereafter the bidding was confined to the representatives of the People’s Traction •Company and the North New York City Traction Company. The latter company offered thirty-nine and twelve-sixteenths per cent, where*333upon the People’s Traction Company offered ninety-seven per cent' for the first five years and ninety-five per cent thereafter, which was explained and understood to be a bid in excess of and in addition to the three per cent for the first five years and five per cent thereafter, as hereinbefore mentioned ; whereupon the representative of the North New York City Traction Company bid ninety-seven and one-half per cent for the first five years and ninety-five thereafter, which was followed by the representative of the People’s Traction Company bidding one hundred per cent of the gross receipts of the company, and the North New York City Traction Company representatives withdrew its bid and also bid one hundred per cent. After this point was reached, the bidding became wild and seemingly extravagant, and by leaps went from one hundred to one thousand per cent; thence to nearly seven thousand per cent on gross receipts. The sale was then adjourned until the following day. In the interim and before the sale could be resumed, this action was brought and an injunction restraining further proceedings by the comptroller in the sale of the franchise was applied for and granted.

The right to relief claimed by the plaintiff is based upon the assertion that it is entitled to the franchise as the legitimate purchaser thereof at the sale, and that its bid of three and one-half percent of the gross receipts was the highest valid and lawful bid made, and that all bids subsequent to that, were put in in bad faith and without the intention to abide by them, and that the facts with reference to the condition and situation of the other competitors for the franchise were such as to indicate that they neither hacl the intention nor tlie ability to comply with the terms of their bids, or to become actual purchasers in good faith of the franchise; and the plaintiff prayed for an injunction restraining the comptroller from proceeding with the sale, and enjoining the two other competing corporations from further bidding at such sale, and also praying that the comptroller be directed and required to award the franchise to the plaintiff upon its bid of three and one-half per cent, or, in the alternative, that the sale be adjudged null and void throughout, and that it be discontinued and abandoned, and that the comptroller be directed to advertise anew the sale of the franchise, or for other relief. The answer of the People’s Traction Company put in issue the allegations of the complaint respecting *334its situation and condition and tlie bona fieles of its bid, and set forth that its bids were legitimate and made with tlie intention to acquire the franchise upon the terms of bidding, at least in so far as the offer of its gross receipts was concerned. It is not necessary to refer to other averments of the answer.

Upon these pleadings and upon the proofs as they appeared at the trial at Special Term, the issue between tlie parties was a very narrow one, and it would subserve no useful purpose to widen it here, or to decide anything more than the particular question which .arises concerning the plaintiff’s right to relief under the undisputed facts appearing in the papers. The only ground upon which the plaintiff can claim in this particular action the right to the interference of the court is, that it has established that it was entitled to the .award of the franchise by reason of its having been the highest bidder making a bona fide bid on the day that the franchise was offered for sale. It appears incontestably that it made no higher bid than three and one-half jier cent of its gross receipts in addition to the annual percentages required by law. In the face of that fact, it became necessary for it to show that every advance in the bidding, beyond three and one-half per cent, was not a legitimate and binding offer. It did not again compete after this bid of three and one-half per cent was increased by another bidder. The record states, “ the bidding proceeded between these three companies until a bid of three and one-half per cent was offered by the Southern Boulevard Railroad Company, and from this point on, it was confined to the two other companies. A bid of the North New York City Traction Company of thirty-nine and twelve-sixteenths had been offered and received.” We have examined the record to find some evidence of any of the intermediate bids between three and onelialf per cent and thirty-nine and twelve-sixteenths per cent having been fraudulent or irregular, but we have failed to discover anything to impeach them, and this consideration is sufficient to dispose of the plaintiff’s appeal and to lead to the affirmance of the judgment based as it is upon the decision of the court that the plaintiff ■offered to pay only the amount of its bid of three and one-half per ■cent and the additional statutory percentages, after which offer •other and larger percentages were bid and agreed to be paid by the •competing defendant corporations, which bids were made in good *335faith. "We think it is too clear for argument that the plaintiff upon its own showing had no standing in court to assert any right in this action.

Our attention has been called to certain matters contained in the opinion of the learned judge at Special Term relating to the legal effect of the bidding after it had reached thirty-nine and one-half per cent of the whole amount of the gross receipts. These matters are important, but a consideration of the character and effect of that bidding was not necessary to the decision of the court, regard being had to the real ground upon which the conclusion it arrived at concerning the right of the plaintiff to maintain the suit was based. As it was unnecessary to the decision by the court below so also is it unnecessary that we should take that subject into consideration, and what was said by the learned judge at Special Term concerning it in his opinion, is not to be regarded as anything more than the expression of his personal views, the correctness of which we refrain from passing upon.

The judgment of the court below in dismissing the complaint was right and is affirmed, with costs..

Barrett, Rumsey, Williams and O’Brien, JJ., concurred.

Judgment affirmed, with costs. Appeal of North New York City Traction Company dismissed.