New-York tribune., 1920-01-28
8O-Cent Rate
Upheld i'm Gas
Case Decision
Kings County Lighting Co.
Plea for Permanent In
junction Against Charge
Denied by Court Ruling
Not Too Low, Is Belief
Justice Creenbaum Sees
Quality of Illumination
as Bar to Relief Call

Justice Greenbaum in the Supreme
Court yesterday, after hearing that
occupied eighty-three court days, dened
the application of the Kings County
Lighting Company for a permanent in
junction restraining the Attorney Gen
eral, the Public Service Commission
and the City of New York from enforc-
ing the so-cent gas rate against the
company.
Justice Creenbaum held the COM
pany failed to show that the rate fixed
by the Legislature in 1916 was con-
hscatory. the ground on which the pro-
ceedlnng was brought. A temporary in
junction is now in effect under which
the Kings County Lighting Company is
charging IS cents a thousand cubic
feet.
fendlng the final termination of the
court proceeding, which has been going
on SINCE 1915. the company is using
the extra 16 cents charged above the
statutory rate, and has deposited a
bond with the Empire Trust Company
to guarantee a refund to gas con-
sumers in case the 80-cent rate is up
held. This fund is said to amount to
about 100000 at the present time.
said that his denial of the company's
application was without prejudice to
q renewal Of the proceeding after the
company has experimental with the
80-cent rate. An appeal to the Appel
late Division Is certain and the end
OF the litigation is certain unless the
company decides to test it's ability to
supply gas at the 80-cent rate and.
failing, renews its motion for an in
junction.
The Kings County Lighting Company,
nov, now supplying 34,681 consumers in the
30th and 31st wards of Brooklyn, is
successor Of the Kings County Gas and
Illuminating Company Justice Green
baum pointed out that the present
company in 1918 supplied gas that was
considerably under the legal standard
of candle power. The business of the
company undoubtedly would have been
larger, the court suggested, if the COM
pany had furnished gas of the standard
fixed by law.
I'm view of these facts" said Justice
Greenbaum, "and in the absence of any
explanation of this seemingly fragrant
seems to be inevitable that the plant
ifs violation of the law was deliber-
ate"
This failure Of the company to supply
standard quality of gas, said the JUS
tice, should be sufficient to deny it
equitable relief, as observance of the
law is a cardinal principle which is
obligatory upon him who seeks judg-
ment in equity"
Justice Greenbaum also commented
adversely upon the action of the COM
pany in issuing an additional 81 ,O00, 900
in stock upon taking over the former
company, which had $1,O00,00O out
standing. There was not the slightest
evidence adduced," said Justice Green
baum, which would show any warrant
for this increased capitalization and the
increased bonded indebtedness. In fact,
the transaction was an arbitrary new
book value Of the properties through
the medium of new corporation ap-
parently organized for that express
purpose"
In another portion of his decision.
Justice Greenbaum said "the unsatis-
factory character of so-called expert
opinion on the valuation of hypo-
thetcally reproduced plant at q given
time must be apparent to every one who
has had experience with that kind of
testimony. The court has therefore
taken into consideration in determin-
ing the present value of the plaintiffs
business both the original and esti-
mated reproduction cost of construc-
tion. 1t is thus clearly established that
since the inception of the plaintiff. it
has realized substantial income and
has been fully compensated for tho ex-
penses incurred in developing it's bust
ness and that it would therefore not
be entitled to now add anything for
going value"
The city's expert estimated the de-
preciation in the plant Of the Kings
County Company, excluding the land,
at s461,72S for seventeen years from
1900 to 1917. This represents de-
probation of Is per cent. The court
found that the earnings of the com
pany in fourteen years were S3,643 1854
and that its plant and land had rea-
sonable and fair value of s2,5O2,695.
Even with the increased cost of labor
the court held that the alleged confisca-
ton under the S0-cent rate was not
proved.