corporate existence and powers ceased on January 1, 1907; and that its New York city franchises also expired at the same time.

In passing upon the claim of the city Mr. Justice Davis of the Supreme Court, in an opinion rendered December 9, 1907, said:

"The failure of the defendant to comply with the Railroad Law as to completion and operation of the railroad was ipso facto an extinction of the corporation, and it does not require the bringing of an action to dissolve the corporation. Matter of Brooklyn, Winfield & Newtown Ry., 72 N. Y. 245. And the so-called franchises mentioned in the complaint were immediately extinguished. See Brooklyn, Q. Co. & Sub. R. R., 185 N. Y. 185.

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It thus appears from the complaint that the action is brought against a defendant that has no existence. The defendant being dead in the sense referred to above there can be no pleading to the complaint on behalf of that defendant. -*- * *

"I do not agree with the demurrant's view that the property rights and franchises mentioned in the complaint survive the extinction of the defendant's corporate existence and pass to the directors as trustees for the benefit of those concerned, and that these trustees are the proper parties defendant. If this were so the trustees might take their own time to build the road and thus defeat the very purpose of the statute to insure a speedy completion of the work for public uses. Matter of Brooklyn, Q. Co. & Sub. R. R., 185 N. Y. 171, 185. * My conclusion is that the demurrer

*
*

is not properly interposed and has no standing in the case. The demurrer really admits that there is no defendant here. As a matter of fact there is no action pending, nor was there at the time the demurrer was served. Submit decision and judgment in accordance with these views."

An appeal in one of the actions between the city and the company is now on the calendar of the Court of Appeals and may be argued within the next two months. The entire litigation on behalf of the city is in the hands of the corporation counsel.

More detailed information in relation to this tunnel and to the matters in controversy will be found in the report herewith transmitted, entitled "The Steinway Tunnel."

If the New York and Long Island Railroad Company has forfeited its corporate rights and franchises, the Commission is without present power to compel the operation of the tunnel, and pending the final determination of the rights of the parties to the litigation any attempt to do so would be premature and improper.

Respectfully yours,

W. R. WILLCOX,

Chairman.

THE STEINWAY TUNNEL.

The tunnel extending from Manhattan to Queens along the line of Forty-second street, commonly called the "Steinway Tunnel," has been constructed by a private company and is not a part of the rapid transit system laid out by the Public Service Commission or its predecessors. No application has been made to the Commission, under any section of the Public Service Commissions Law, by the owners of the tunnel and no proposition looking toward the granting of a franchise to operate has been presented to the Commission for consideration. But the present situation is so peculiar and so many inquiries have been made at the office of the Commission that a statement of the facts up to December 31, 1907, may be of interest and value.

Origin of Company. The tunnel was originally begun by The New York and Long Island Railroad Company, which was incorporated July 30, 1887, under chapter 140 of the Laws of 1850, known as the General Railroad Act, and the amendments thereto. The articles of association provided that the company was to continue in existence for ninety

nine (99) years; that the capital stock was to be $100,000, consisting of 1,000 shares at $100 each, and that a railroad was to be constructed and operated about five miles in length extending from a point near Borden avenue, Queens, one mile from the East river, thence under the river and under certain streets and lands in Manhattan to a connection with the New York Central and Hudson River Railroad at or near the intersection of Ninth avenue and Thirtieth street, New York city, with a branch northerly to connect with the New York Central and Hudson River Railroad near the Grand Central Depot, and a branch southerly to connect with the Hudson river tunnel in the vicinity of Washington square.

The General Railroad Act of 1850 was amended by chapter 775 of the Laws of 1867, which provided, among other things, that if any corporation organized under the Act of 1850,

shall not, within five years after its articles of association are filed and recorded in the office of the Secretary of State, begin the construction of its road, and expend thereon ten per cent. on the amount of its capital, or shall not finish its road and put it in operation in ten years from the time of filing its articles of association, as aforesaid, its corporate existence and powers shall cease."

Work Not Completed. It, therefore, became incumbent upon the N. Y. & L. I. R. R. Co. to have begun construction of the tunnel and to have expended there on $10,000 by July 30, 1892, and to have finished it and put it in operation by July 30, 1897, under penalty of forfeiture of its corporate existence and powers.

The company's contractor started work in May, 1892, and it is claimed that up to July 30 of that year the sum of $11,718.33 had been expended. Work continued down to December, 1892, when an explosion occurred, and for nearly thirteen years nothing further was accomplished. In resuming operations in 1905, eight years after the charter would have expired under the Law of 1867, above quoted, the company relied upon a series of acts, the last of which,

adopted in 1903, is claimed to have extended until January 1, 1907, the time within which the road should have been finished and put in operation. As a matter of fact the tunnel was not finished and put in operation by this date.

Franchise Grants.- Incorporation did not of itself confer upon the company the right to begin work. Consents had still to be obtained from the local authorities and from the State of New York, which are as follows:

"(1) Resolution of the Board of Aldermen of the old City of New York, approved December 31, 1890. "(2) Patent issued by the State of New York, January 5, 1891.

"(3) Resolution of the Board of Aldermen of Long Island City, approved October 27, 1891."

By the first resolution the city assented

"to the construction of a double track railroad by the New York and Long Island Railroad Company, in, by and through a tunnel beneath the surface of 42nd Street, from its easterly end, to a point therein between Tenth and Eleventh Avenues, in said City, which such connections, branches, turnouts, sidings and switches, as may be requisite and necessary, in accordance with the plans and profiles of such railroad heretofore deposited with this Board, or such modification thereof as shall be approved by the Commissioner of Public Works of said City."

For compensation to the city of New York, the ordinance provided that the company should

"pay annually to the City of New York three per centum of its gross earnings or receipts from transpor tation of persons and property on its railroad within said city; and such payment to be exclusive of all taxes levied by and payable to The City of New York on the real or personal property, capital stock or income of said company, and the books of said company showing

the amount of its said gross earnings or receipts shall, at all reasonable times and hours, be open to the inspection of the Comptroller of the City of New York (or to his duly authorized agents) for the purpose of verifying the returns thereof of said company."

The consent of the State of New York was granted by the following patent:

"The People of the State of New York, by the Grace of God, Free and Independent: To all to whom these Presents shall come, Greeting:

"Know Ye, That pursuant to Chapter 140, Laws of 1850, as amended by Chapter 601, Laws of 1886, and a resolution of the Commissioners of the Land Office adopted November 25, 1890, we have given and granted, and by these Presents do give and grant unto The New York and Long Island Railroad Company, its successors and assigns, a right of way ninety-nine feet in width and fifty feet in heighth within which to construct a tunnel for the use and operation of the abovenamed grantees' railroad beneath the waters of the East River upon and along the route of said railroad between the City of New York and Hunter's Point in Long Island City, as shown in plan and profile, upon the charts filed in the office of our Secretary of State, with the water grant papers of the month of January, 1891.

"Together with all and singular the rights, heriditaments and appurtenances to the same belonging, or in any wise appertaining; to have and to hold the above described premises unto the said The New York and Long Island Railroad Company, its successors and assigns forever."

Long Island City, by the last resolution referred to, assented to the construction of a double track railroad upon and along the following lines and routes:

"Route One-Beginning at a point under the ground at or near the westerly end of Fifth Street and in the