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App. Div.]

private or corporate. In the exercise of the first of these powers the village or city is invested with the powers of sovereignty, while in the exercise of the second it occupies the same relation to the individual that any other corporate body does. (Eddy v. Village of Ellicottville, 35 App. Div. 256, 258, 259, and authorities there cited.) It is upon this distinction between public and private functions that in the State of New York municipal corporations are held to be liable in damages for injuries resulting from defective highways (Conrad v. Trustees of the Village of Ithaca, 16 N. Y. 158, and note at p. 161), while in Massachusetts and other New England States it is held that liability only attaches in the case of a statute giving a right of action. (Hill v. Boston, 122 Mass. 344, discussing fully the New England doctrine and its limitations.)

The 1st section of the 1st article of our State Constitution provides that "no member of this State shall be disfranchised, or deprived of any of the rights or privileges secured to any citizen. thereof, unless by the law of the land or the judgment of his peers." This language and the spirit of this section contemplates that equal protection of the laws which is guaranteed by section 1 of the 14th amendment to the Constitution of the United States, and, as has been said, "These provisions are universal in their application to all persons within the territorial jurisdiction, without regard to any differences of race, of color or of nationality, and the equal protection of the laws is a pledge of the protection of equal laws." (Yick Wo v. Hopkins, 118 U. S. 356, 369.) And in Cotting v. Kansas City Stock Yards Co. (183 id. 79) a Kansas statute was declared unconstitutional and void because it did not operate equally as between the Kansas City Stock Yards Company and other companies or corporations engaged in the same line of business, thus recognizing the equal rights of corporations with individuals and companies, and the same authority cites approvingly State v. Haun (61 Kan. 146, 153, 154) to the effect that "equal protection of the laws means equal exemption with others of the same class from all charges and burdens of every kind." If, therefore, the Legislature may create an artificial person and exempt such person from the obligation of responding in damages for the breach of a duty owed to third persons, why may it not pick out a favorite person and exempt him from such liabilities? Why may it not say that the New York,

SECOND DEPARTMENT, JULY, 1904.

[Vol. 97. Lake Erie and Western Railroad Company shall not be liable in damages for its negligence in the control of highways (for railroads are public highways — Cherokee Nation v. Kansas Railway Co., 135 U. S. 641, 657), at the same time leaving the New York Central and Hudson River Railroad Company subject to the common-law liability? Where is the distinction between a quasi-public corporation, like a railroad company, and a municipal corporation, in so far as it relates to the obligation of either to respond in damages for a neglect of duty by which a third party suffers injury? They are both private corporations in their relation to the duty to maintain highways in a reasonably safe condition. (People ex rel. Dunkirk, Warren & Pittsburgh R. R. Co. v. Batchellor, 53 N. Y. 128, 139 et seq.; Conrad v. Trustees of the Village of Ithaca, supra, and note.) No good reason suggests itself why the Legislature might create the municipal corporation known as The Village of Port Chester, and exempt it from liability for a breach of its duty to third persons in its private character, while denying a like exemption to a railroad corporation or a private individual. Both corporations accept their charters for the accomplishment of private ends, and such acceptance raises an implied contract on their part to perform the duties which their charters require, and this contract inures to the benefit of every individual interested in its performance. (Conrad v. Trustees of the Village of Ithaca, supra, and note at p. 173; Missano v. Mayor, 160 N. Y. 123, 127, and authorities there cited.) This duty on the part of municipal corporations is to care for the streets and highways within the corporation. (See Missano v. Mayor, supra.)

The above-quoted provision of the State Constitution, coupled with the provision of section 6 of article 1, that no person shall "be deprived of life, liberty or property without due process of law," and that it "has been more than once said judicially that one of the principles upon which this government was founded is that of equality of right" (Cotting v. Kansas City Stock Yards Co., supra, 110), shows the spirit of our fundamental law and affords the cue to the true interpretation of all of its provisions. We are to read the entire instrument and interpret it for the purpose of preserving our freedom; for the purpose of accomplishing equal and exact justice between all the members of the State, whether natural or artificial

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App. Div.]

persons; for the purpose of preserving the right to life, liberty and property, except as the same may be taken from us by due process of law-due process of law being process due according to the law of the land (Walker v. Sauvinet, 92 U. S. 90) - which we will hereafter consider. What, then, are we to understand by the language used in section 3 of article 8 of the State Constitution, when it declares that "the term corporations as used in this article shall be construed to include all associations and joint-stock companies having any of the powers or privileges of corporations not possessed by individuals or partnerships. And all corporations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons?" Can there be any question that it was the intention of this provision that the artificial citizens to be created by the Legislature should, in so far as their civil rights were concerned, be placed upon an equal, not a better, footing than natural born citizens? Could the language have any other purpose than to read into every statute creating a corporation for private purposes, as distinguished from a mere agency of the State, a provision that it should enjoy the equal privileges of citizens in our courts? This is the idea naturally suggested by the language; it is the right of these artificial citizens under the provisions of section 1 of the 14th amendment to the Federal Constitution, guaranteeing the equal protection of the laws, and it is the only construction which is in harmony with the provisions of our constitutional system in its letter and spirit. No one would seriously contend that the Legislature could take away from a municipal corporation, in its private capacity, the power to sue an individual who had negligently injured its highways, or other property rights, and this power on the part of the municipality to sue the individual carries with it the reciprocal obligation to be sued in a like case the obligation to respond to the same rules and principles of law which govern the natural citizen; and while it may be true that the Legislature might create a municipal corporation, excluding from its control the highways within such municipality, and in this way take away the right of action entirely as against the city, in which event the plaintiff's right of action would be against the officer specially charged with the duty of maintaining such highways (Bennett v. Whitney, 94 N. Y. 302, 306, and authority there cited), we are clearly of opinion that under the pro

SECOND DEPARTMENT, JULY, 1904.

[Vol. 97. vision of the State Constitution last above cited, the Legislature cannot create a municipal corporation, giving it control over its highways for the benefit of the municipality as a private corporation, and at the same time deny to the individual injured through the neglect of the corporation a right of action where an individual, charged with the same duty, would be liable. To hold otherwise is to assert the doctrine that the Legislature, created by the sovereign people of the State, may create a citizenship with civil privileges and immunities higher than those possessed by the creators, a logical absurdity, which can find no justification in the letter or spirit of our institutions.

We are aware that this conclusion is not in harmony with the language held in the case of Gray v. City of Brooklyn (50 Barb. 365, 375; affd., 2 Abb. Ct. App. Dec. 267, 273), but this case has been so often discredited as an authority that we feel free to consider the question of the true construction as open for this court, particularly as it has been very recently asserted by the Court of Appeals that "a corporation is a legal entity with the unlimited right to sue and be sued within the lines of its charter powers" (Stoddard v. Lum, 159 N. Y. 265, 272), which is exactly the doctrine for which we are contending. In the Gray Case (supra) it was said: "This clause is not a restriction on the legislative power to determine what shall be and what shall not be, a cause of action against a corporation. It provides only that where there is a cause of action in favor of, or against a corporation, it shall be enforced in the same way as if the same cause of action existed in favor of or against a natural person." This to a certain extent is true, but we are unable to agree with the proposition that the Legislature could create a city, charge it with certain duties and obligations, and then exempt it from civil liability for neglect to discharge such duties by which a third person sustained injuries. The Gray case dealt with a provision of the charter of the city of Brooklyn, which was construed to relieve the city of liability for any non-feasance or misfeasance of the common council or any officer of the city or appointee of the common council, etc. The doctrine of the case as above cited was approved in Gray v. City of Brooklyn (2 Abb. Ct. App. Dec. 267, 273) where it was said that "it was no part of the intention of that provision to render corporations liable upon all causes of action the

App. Div.]

SECOND DEPARTMENT, JULY, 1904.

same as natural persons were, but merely to provide that actions might be maintained against them the same as they could against natural persons, provided the legal causes for doing so were found to exist. It was to confer the capacity of being sued, not to define the cases in which suits might be maintained against them." But this is obviously a mistaken view of the question, for the capacity to sue and be sued has always been an incident of corporate existence. (7 Am. & Eng. Ency. of Law [2d ed.], 684, and authorities there cited in note.) The real purpose of this provision of section 3 of article 8 of the State Constitution was to make the law uniform in its operation upon corporations, associations, joint-stock companies and individuals in so far as they came under the same circumstances and conditions. This doctrine has been so far applied that the result of the modern cases is that a corporation is liable civiliter for torts committed by its servants or agents precisely as a natural person, and that it is liable as a natural person for the acts of its agents done by its authority, express or implied, though there be neither a written appointment under seal nor a vote of the corporation constituting the agency or authorizing the act. (Denver & Rio Grande Railway v. Ilarris, 122 U. S. 597, 608, and authorities there cited.)

In Fitzpatrick v. Slocum (89 N. Y. 359) EARL, J., who subsequently wrote in Curry v. City of Buffalo (135 id. 365, 366), had under consideration substantially the same statute as that involved in the Gray Case (supra), and he says: "We are of opinion that the exemption created by this section is not so broad as claimed. There must be a remedy in such a case where one is injured without fault of his own by a defect in one of the streets or bridges of the city either against the city or some one of its officers." In considering the Gray Case (supra) he says: "It does not appear very clearly upon what ground that case was decided. It was a sufficient defense to the action that there was no negligence proven which was chargeable to the city, but if more than that was decided in order to exempt the city from liability it was merely that where a plain duty was devolved upon certain officers any one injured by a non-performance or imperfect performance of that duty should take his remedy against the officers and not against the city. It was not APP. DIV.-VOL. XCVII. 7