Farnsworth v. Boro Oil & Gas Co. , 155 A.D. 79 ( 1913 )

Pound, J. :

The rights of the defendant in the highways of the town of Collins were conferred by the provisions of chapter 422 of the Laws of 1889 which reads as follows:

“ Section 1. It shall be lawful for any corporation organized under chapter six hundred and eleven of the laws of one thousand eight hundred and seventy-five [Business Corporations Law], and acts amendatory thereto, for the purpose of boring, drilling, digging or mining for natural gas, and conveying and distributing the same in pipes, and vending said gas to the consumers thereof; to purchase, lease, secure and convey such real estate, and such only, as may be necessary for the convenient transaction of their business, and to effectually carry on the operations of such corporation.

“§ 2. Such corporation is authorized to dig and trench for, and lay their pipes along or under any of the public roads or highways, or through or under any of the waters within the limits of this State: provided the same shall not be so done as to incommode the public use of said highways, or interrupt the navigation of said waters. Provided, however, that no pipeline for the purpose aforesaid shall be constructed across, along, or upon any public highway, without the consent of the commissioners of highways of the town in which such highway is located, upon such terms as may be agreed upon with such commissioners. ”

The defendant, mistakenly assuming that the town board, rather than the commissioner of highways, was the proper authority to which to apply for consent to construct its pipe line in certain of the public highways of the town, applied to it for such consent in the year 1901, whereupon the town board granted such consent on condition that said “ company ór its assigns shall not charge the inhabitants of said town using gas for fuel or lights or both a sum exceeding twenty-five cents per thousand cubic feet.”

In 1908 defendant applied to the town board for an extension of the consent to other highways, and said consent was granted on the same terms and conditions. The defendant accepted and has acted upon such consents.

In 1911 defendant applied to the town board for leave to raise its rate to thirty cents per 1,000 cubic feet. This application was denied. It does not appear that the defendant has any express consent from the highway commissioner to place its pipe line in the highway.

The town board consists of the supervisor, town clerk and justices of the peace.

Defendant now repudiates the terms imposed by the town board as a condition of granting its consent, so far as they fix rates for gas, and raises its rate to thirty cents per 1,000 cubic feet, claiming that the town board was without authority to grant such consent, and, therefore, without power to regulate rates.

Plaintiff is an inhabitant of said town taking gas from defendant, and he brings this action to restrain the defendant from charging the increased rate. He is a proper party to maintain the same.

It is true that the only limitation placed by law upon the right of the defendant to lay its pipe lines in the public highway is that contained in the act of 1889, viz., that the consent of the commissioners of highways be obtained on such terms as the commissioners may see fit to impose.

It is also true that defendant obtained no additional rights and privileges from the town board.

I think, however, that the law of the case is established by the authority of Rochester Telephone Co. v. Ross (125 App. Div. 76).

Justice Kruse, writing the opinion, says: “The telephone company voluntarily entered into a contract with the city; it recognized the right of the city to make the same and grant to it certain rights and .privileges which it now uses and enjoys; and I think it is now estopped from questioning the right of the city to grant the same and repudiating that part of its agreement limiting its telephone rates as is provided in the contract. * * * Under the principles of estoppel, it should not now be heard to question the authority of the city to make the agreement and grant the rights, as the city has assumed to do, taken advantage of by the telephone company. ”

When that case was affirmed by the Court of Appeals (195 N. Y. 429), the affirmance was based solely on the ground that the city’s grant gave. the company greater rights than' it had from the general law of the State, and that, therefore, there was a sufficient consideration to uphold the covenant of the company not to charge the subscribers in excess of the contract rate.

The opinion contains no suggestion of approval or disapproval of the theory of estoppel as enunciated by the Appellate Division; but I cannot find that the views of Justice Kruse have been disapproved.

Furthermore, the lapse of time since the consent of the town board was given to and accepted by the defendant in 1901, permits the inference that the commissioner of highways has acquiesced in and adopted the unauthorized act of the town board. I doubt exceedingly if the commissioner of highways could now exclude the company from the highways of the town; and if the consent of the town board is enough to give the company its rights in the highways, it is enough to limit those rights.