New York Taxicab Co. v. Hawk & Wetherbee and William H. Seaich Co.

On October 22, 1907, the plaintiff, which is engaged in the business of operating motor cabs in the city of Hew York, and the defendant Hawk & Wetherbee, a corporation which conducts the Hotel Manhattan in that city, entered into a written contract by which the hotel company gave to the plaintiff, so far as it could do so, “ the exclusive right, license and privilege, for a period of five years from Hovember, 1907, to maintain, conduct and operate a motor cab service station, to be known as The Hotel Manhattan Station, in the streets adjacent to the Hotel Manhattan, as a day and night stand for motor vehicles (horse drawn vehicles excepted), to conduct the transportation and .carrying of the permanent or transient guests of said hotel and such other persons as may desire to use vehicles of the Taxicab Company from or to said station.” The plaintiff undertook to provide adequate service during the period mentioned arid “ to pay to the Hotel Manhattan * * * a sum equal to ten per cent, of the fares which shall be collected by it during said five years from permanent or transient guests of said hotel and from such other persons (not guests) who shall enter cabs at said Hotel Manhattan Station.”

On August 1, 1908, the hotel company notified plaintiff that it desired to terminate the arrangement on September first. Ho reason was assigned for this attempted rescission of the contract, but it is now proven that plaintiff’s service was inadequate to the needs of the hotel. In explanation, plaintiff shows that after the contract had been executed it obtained a city license to station not more than three cabs in front of the hotel, and that it would frequently happen that, after all three had been engaged and driven away, hotel guests.would call for others before plaintiff could move *557them up from its garage or other of its stands. Its application for a license to maintain more than three cabs at that stand was refused by the city for the assigned reason that the increased number would interfere with police traffic regulations. In the meantime and during June, July and August, 1908, motor cabs of the defendant William Seaich Company frequently drew up at the hotel entrance and received passengers, whereupon plaintiff, claiming under its contract the exclusive privilege of maintaining a motor cab stand at that point, brought this action to restrain both defendants from conducting or maintaining a motor cab service or stand at the entrance of the hotel, except that maintained by the plaintiff, and to restrain the hotel company from applying to the city of Hew York for a revocation of plaintiff’s license.

By a clause in the contract of October 22, 1907, it was provided that an interruption or reduction of plaintiff’s service by governmental interference should not be deemed a breach of contract. The inability of plaintiff to obtain a license for a stand for more than three cabs was neither interruption nor reduction of its service, nor did it make the contract impossible of performance. For all that appears to the contrary, plaintiff might have engaged private premises in the near vicinity on which to keep additional cabs, so that at least one could always be found at the stand. That would have imposed an additional burden on plaintiff, but inadequate service was not thereby justified. Baker v. Johnson, 42 N. Y. 126. There is another reason why this complaint should be dismissed. The contract on which it is founded is illegal. Section 317 of the revised ordinances of the city of Hew York provides for specially licensed cabs “ to use temporarily a portion of the street in front of said premises as a stand and shall be confined to carrying passengers from said premises.” Section 318 provides that specially licensed cabs “ shall not solicit nor take any passenger or passengers on the streets, but shall confine themselves solely to and for the use of the guests of said hotel or hotels.” These ordinances are valid and within the power of the municipal legislature. City of Hew York *558v. Reesing, 38 Misc. Rep. 129; affd., 77 App. Div. 417. The contract, in contemplating that the hotel company should consent to a special license to plaintiff and for payment by plaintiff to the hotel company of a commission on fares received from passengers not "guests of the hotel, provides for carrying on a business" in violation of the ordinances. In effect, it is a lease by the hotel company of a part of the public street at a rental, as shown by the proof, of over two hundred dollars a month. Contracts in violation of the ordinances are invalid. Burger v. Koelsch, 77 Hun, 44. The contract in suit cannot be enforced in equity.

A decree should be entered accordingly.