§ 173. Condition upon which consent shall be given; sale of franchise
at public auction. The consent of the local authorities in any city
having a population of three hundred thousand or more must contain the
condition that the right, franchise and privilege of using any street,
road, highway, avenue, park or public place shall be sold at public
auction to the bidder who will agree to give the city the largest
percentage per annum of the gross receipts of such corporation, with a
bond or undertaking in such form and amount and with such conditions and
sureties as may be required and approved by the comptroller or other
chief fiscal officer of the city, for the fulfillment of such agreement
and for the commencement and completion of its railroad within the time
designated by law and for the performance of such additional conditions
as the local authorities in their discretion may prescribe. Whenever
such consent shall provide for the sale at public auction of the right
to construct and operate a branch or extension of an existing railroad,
such consent shall provide that but one fare shall be exacted for
passage over such branch or extension and over the line of road which
shall have applied therefor; and further, that if such right shall be
purchased by any corporation other than the applicant, the gross
receipts from joint business shall be divided in the proportion that the
length of such extension or branch so sold shall bear to the entire
length of the road whether owned or leased which shall have applied
therefor and of such branch or extension, and that if such right shall
be purchased by the applicant, the percentage to be paid shall be
calculated on such portion of its gross receipts as shall bear the same
proportion to the whole value thereof as the length of such extension or
branch shall bear to the entire length of its road, whether owned or
leased. The bidder to which such right, franchise and privilege may be
sold must be a duly incorporated railroad corporation of this state,
organized to construct, maintain and operate a street railroad in the
city for which such consent may be given; but no such corporation shall
be entitled to bid at such sale unless at least five days prior to the
day fixed for such sale, or five days prior to the day to which such
sale shall have been duly adjourned, the corporation shall have filed
with the comptroller or other chief fiscal officer of the city, a bond
in writing and under seal, with sufficient sureties, to be approved by
such comptroller or officer, conditioned that if such right, franchise
and privilege shall be sold to such corporation, to pay to the city
where such railroad is situated the sum of fifty thousand dollars as
liquidated damages and not by way of penalty in the event of the failure
of such bidder to fulfill the terms of sale, comply with the provisions
of this article pertinent thereto, and complete and operate its railroad
according to the plan or plans and upon the route or routes fixed for
its construction within the time hereinafter designated for the
construction and completion of its railroad, and also conditioned to pay
to the corporation first applying for the consent, if it shall not be
the successful bidder, the necessary expenses incurred by such
corporation prior to the sale pursuant to the requirements and direction
of the local authorities, within twenty days after such sale and upon
the certificate of the comptroller or other officer conducting the same
as to the sum or amount to be paid. Notice of the time, place and terms
of sale, and of the route or routes to be sold, and the conditions upon
which the consent of the local authorities to the construction,
operation and extension of such street railroad will be given, must be
published by such local authorities for a least three successive weeks,
at least three times a week in two daily newspapers of the city to be
designated by the mayor. The comptroller or other chief fiscal officer
of the city shall attend and conduct such sale and may adjourn the same
from time to time, but not more than four weeks in all, unless further
adjournments should, in his discretion, be necessary by reason of the
pendency of legal proceedings, and shall cancel any bid if in excess of
the gross receipts, leaving in force the highest bid not in excess, or
if the bidder shall not have furnished adequate security entitling such
bidder to bid, or shall otherwise fail to comply with the terms and
conditions of sale, and shall resell the consent and license in the same
manner as hereinbefore provided for the first sale. The bidder who may
build and operate such railroad shall at all times keep accurate books
of account of the business and earnings of such railroad, which books
shall at all times be subject to the inspection of the local
authorities. In the event of the failure or refusal of the corporation
operating or using such railroad to pay the rental or percentages of
gross earnings agreed upon, and after notice of not less than sixty days
to pay the same, the local authorities interested therein may apply to
any court having jurisdiction upon at least twenty days' notice to such
corporation, and after it shall have had an opportunity to be heard in
its defense, for judgment declaring the consent and right to operate and
use such railroad forfeited and authorizing the sale again of the same
in the manner hereinbefore prescribed, provided, however, that no such
resale of any such consent and right heretofore granted shall be
authorized except upon the condition that the same shall be subject to
all liens and incumbrances existing on said railroads at the time such
forfeiture may have been declared. All consents hereafter given by the
local authorities, unless it be otherwise provided in such consent or in
some renewal thereof, may be forfeited at the expiration of two years
thereafter. The board of sinking fund commissioners of any city shall
have power to reduce, compromise or release any obligation or liability
to the mayor, aldermen and commonalty of such city under the provisions
of chapter six hundred and forty-two of the laws of eighteen hundred and
eighty-six, or of this chapter, whenever, in the opinion of such board,
such release or compromise shall be just or equitable, or for the public
interest, the reason for any such release or compromise to be stated in
the recorded proceedings of such board. No lease by any company
organized under section five of this chapter and owning a right,
privilege or franchise of using any street, avenue, highway or public
place for railroad purposes, which was sold prior to May nineteenth,
nineteen hundred and eight, under the provisions of this section, made
after said date to any street surface railroad company which is not
subject to the payment of any percentage pursuant to this section, and
which is not organized for the purpose of operating a railroad in a city
having a population of three hundred thousand or more, shall be valid
until the lessee company shall have filed in the office of the
department of state and in the office of the clerk of the county where
its certificate of incorporation is filed, its acceptance in writing and
under its corporate seal of the provisions of this section as now
amended; and upon such acceptance being filed, the total percentage
amount thereafter to be paid annually under this section and under
section one hundred and seventy-five of this chapter, shall be at the
rate of five per centum of the gross receipts derived from the operation
of the roads of the lessor and lessee companies considered as one
system. The lessee company, at the time of filing its acceptance
aforesaid, shall also file in the same offices a bond to the people of
the state, executed in duplicate by it and a surety company authorized
by law to act as surety on bonds and undertakings, in the penal sum of
fifty thousand dollars, and conditioned for the faithful payment
annually of the total percentage aforesaid, and such bond shall be
deemed to be a full compliance with the condition for a bond or
undertaking required by this section to be provided for in the
conditions of the consent of the local authorities and shall supersede
any such bond or undertaking theretofore given. Whenever it shall be
desired to unite two street surface railroad routes at some point not
over one-half mile from such respective lines or routes, and establish
by the construction of such connection a new route for public travel,
and the corporation or corporations owning or using such railroads shall
consent to operate such connection as a part of a continuous route for
one fare, and it shall appear to the local authorities that such
connection cannot be operated as an independent railroad without
inconvenience to the public, but that it is to the public advantage that
the same should be operated as a continuous line or route, with existing
railroads, or whenever for the purpose of connecting with any ferry or
railroad depot, it shall be desired to construct an extension or branch
not more than one-half mile in length, of any street surface railroad
corporation, no sale of such franchise shall be made as provided in this
section, but any consent of the local authorities for the construction
and operation of such connection, extension or branch shall provide that
the corporation or corporations operating such connection, extension or
branch shall pay into the treasury of said city annually the percentage
provided for extensions or branches in section one hundred and
seventy-five of this chapter, for the purposes, at the times, in the
manner and upon the conditions set forth in such section. Nothing herein
contained shall be construed as superseding, repealing or modifying any
provision of the charter of any city, village or town, nor as modifying
or affecting the terms of a certain contract bearing date January first,
eighteen hundred and ninety-two, entered into by and between the city of
Buffalo and the various street surface railroad corporations therein
named in said contract, nor as modifying or affecting the terms of a
certain contract bearing date the twenty-fifth day of February, eighteen
hundred and ninety, entered into by and between the city of Rochester
and the street surface railroad corporation therein named, nor as
modifying or affecting any contract heretofore entered into between a
street surface railroad corporation and any city having a population of
less than fifty thousand, town or village regulating the payment of
percentages or paving of streets, and any such city, town or village, is
hereby authorized to enter into any such form of contract with any
street surface railroad corporation, and any such contract entered into
before said date is hereby ratified and confirmed. The local authorities
may, in their discretion, make their consent to depend upon any further
conditions respecting other or further security, or deposit, suitable to
secure the construction, completion and operation of the railroad within
any time not exceeding the period prescribed in this article and
respecting the character, quality or motive power of the road to be
completed and respecting the grouping of streets, avenues and highways
into one route, or into several routes, for the purpose of a single sale
of the franchise, right or privilege for all the routes collectively, or
of the separate sale for each route or street, as said local authorities
may think expedient, and respecting the payment of the percentage agreed
to be paid at the sale upon all the lines operated by the successful
bidder within the city and respecting any matter involved in or
affecting the computation of percentage payments and respecting the use
of the railroads to be constructed under the consent by any other
company and respecting the interchange of traffic and division of fares
between the company operating such railroads and any other company, and
respecting the application of any provision herein contained as to
carriage of passengers for single fare and the division of gross
receipts and the payment of percentages to the line leased or operated
under contract by the applicant for an extension, and also respecting
any other matter concerning which, in their judgment, further conditions
would be for the public interest. Nothing herein contained shall apply
to, or affect any grant hereafter made under the provisions of title
one, chapter three of chapter three hundred and seventy-eight of the
laws of eighteen hundred and ninety-seven and the amendments thereto
known as the Greater New York charter.