Source: https://supreme.justia.com/cases/federal/us/265/78/
Timestamp: 2019-04-25 14:04:49+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 265 › Newton v. Consolidated Gas Co.
1. Where a New York commission, made a defendant in the district court, was later abolished by c. 134, New York Laws 1921, held that its joinder, or exclusion by summons and severance, was not necessary to sustain an appeal by its codefendants from an order taxing costs. P. 265 U. S. 81.
2. An order of the district court taxing costs in an equity suit otherwise ended has the finality requisite for review by appeal. P. 265 U. S. 82.
3. The rule of the federal courts forbidding appeals from decrees for costs only does not apply when the power of the court to assess the items in question, and not merely the exercise of its discretion, is in issue. Id.
4. The district court, finding a statutory gas rate confiscatory, enjoined public officials from enforcing it, but, as a condition, required the plaintiff gas company to impound with a special master all sums collected from consumers in excess of the rate, pending determination of the case on appeal, and, later, for the protection of the plaintiff and to benefit consumers, permitted the plaintiff to withdraw the fund so accumulated by substituting surety bonds, conditioned for its return with substantial interest should the rate be upheld. The injunction having been affirmed, held that the premiums paid for the bonds were taxable, and rightly taxed, against the defendants as costs in conformity with a usage of that district. P. 265 U. S. 84.
Appeal from a decree of the district court taxing costs. For other phases of the suit, see 258 U. S. 258 U.S. 165, 259 U. S. 259 U.S. 101, and 264 U.S. 571.
This was an equitable action to enjoin the continued enforcement of chapter 125 of the Laws of New York of 1906, which fixed at 80 cents a thousand feet the price at which gas was to be furnished to private consumers in the various boroughs in the City of New York on the ground that the rate was confiscatory, and violated the rights of the company under the due process clause of the Fourteenth Amendment of the federal Constitution.
The main controversy was settled in favor of the company by this Court in March, 1922. 258 U. S. 258 U.S. 165. Upon another appeal, we directed a reduction of the master's fees by $28,750. 259 U. S. 259 U.S. 101. When the case reached the district court for further proceedings, the defendants made a motion to retax costs, objecting to half a dozen items charged. The court allowed certain exceptions, but overruled others. The only one overruled, and here insisted on, is for $76,086.50 for premiums paid by the company to surety companies for bonds securing the repayment of a large amount of money impounded with the special master.
"The plaintiff urges, with force, I think, that to impound all the moneys over 80 cents for a period perhaps of a year will cause loss both to itself and to the consumers. It suggests that it have the right to substitute adequate securities. The best that the special master can get on the deposits is probably 3 1/4 percent; the plaintiff, if required to finance its temporary requirements, must pay much more -- it says 14 percent. In any case, it will sustain a loss which will profit no one but the banks, so far as appears. I see no advantage in insisting upon impounding the moneys, if adequate security can be otherwise provided."
"I have required a substantial rate of interest because the plaintiff will be, in effect, using the consumers' money. On the one hand, the consumer profits by getting more than he could from the banks; on the other, the plaintiff profits by being relieved from high rates of interest. The rate at which the plaintiff has sold its bonds is 7 percent, and, on short financing, the rates are much higher. I think that 7 percent should be the rate, even though the plaintiff must pay a premium to get the bond; it will recover back all that the consumers are not eventually entitled to."
"Dismissed for want of jurisdiction, upon authority of Masterson v. Herndon, 10 Wall. 416; Hardee v. Wilson, 146 U. S. 179, 146 U. S. 180; Sipperley v. Smith, 155 U. S. 86, 155 U. S. 89; Maytin v. Vela, 216 U. S. 598, 216 U. S. 601."
Upon a petition for rehearing, the appellants bring to the knowledge of this Court that, by c. 134 of the Laws of 1921, the Public Service Commission for the First District, which was here concerned, was abolished, and that therefore the appellants were not required by summons and severance to exclude from the future capacity to appeal, a defunct state board originally joined with them as a codefendant. Mercantile Trust Co. v. Kanawha & Ohio Ry. Co., 58 F. 6, 14. We think the abolition of the Public Service Commission made it unnecessary to make it a party to this appeal, and that the dismissal heretofore entered for lack of service of a summons and severance upon it should be set aside.
The appellee insists that the appeal must be dismissed, first, because it is not from a final decree, and second because no appeal lies from a decree for costs alone.
First. If the subject matter is appealable at all, there would seem to be no doubt that the decree has all the characteristics of finality. An execution can issue at once to collect the costs as taxed, including the item here complained of. Trustees v. Greenough, 105 U. S. 527; Farmers' Loan & Trust Co., Petitioner, 129 U. S. 206; In re Michigan Central R. Co., 124 F. 727, 731.
Cases, 105 U. S. 766, 105 U. S. 772; City Bank of Fort Worth v. Hunter, 152 U. S. 512, 152 U. S. 516; Stuart v. Boulware, 133 U. S. 78; Du Bois v. Kirk, 158 U. S. 58, 158 U. S. 67; Citizens' Bank v. Cannon, 164 U. S. 319, 164 U. S. 323; Wingert v. First National Bank, 223 U. S. 670, 223 U. S. 672.
Questions of costs in admiralty and equity are discretionary, and the action of the court is presumptively correct. United States v. Brig Malek Adhel, 2 How. 210, 43 U. S. 237; The Scottland, 118 U. S. 507, 118 U. S. 519. The allowance of costs in the federal courts rests not upon express statutory enactment by Congress, but upon usage long continued and confirmed by implication from provisions in many statutes. Ex parte Peterson, 253 U. S. 300, 253 U. S. 316. And see 59 U. S. Wheeling & Belmont Bridge Co., 18 How. 460.
allowed by the court in favor of the clerk. The question is fully considered by the Certiorari of the Sixth Circuit in an opinion by Judge Lurton, afterwards Mr. Justice Lurton, of this Court. The many cases cited in which appeals from decrees for costs had been denied were distinguished as involving a question, not of positive law, but of discretion. We think the distinction made in that case a sound one, and that, as the question is here presented, the appeal is a proper one.
"But we may also say that we think such a rule or practice has become so desirable that we feel confident the court below will take an early opportunity to conform its procedure in this respect to the custom prevailing in other districts."
The district judge, in passing on the issue, said that it had been the custom in the Second Circuit to allow as costs premiums on stipulations given to release vessels from arrest, citing The Volund, supra; The Hurstedale, supra; The John D. Dailey, supra; that Judge Lacombe, in Edison v. Mutoscope Co., supra, had allowed as costs premiums upon a supersedeas bond in an equity case, and that there had been a uniform usage for the 14 years during which he had sat in that district to allow such items.
had been unjustly burdened. It may be that, in a circuit and district where no usage or rule of court exists, such costs may not be taxed. We are not called upon to decide that. It is enough, that we may decide this appeal, to hold that it was not an abuse of discretion or a violation of law for the district court in the Second Circuit to allow the item.
By the Act of August 13, 1894, c. 282, 28 Stat. 279, Congress has made elaborate provision for the safe use of surety companies as security upon bonds required in court and other proceedings, and, while it does not exclude individual sureties, it offers a most convenient and stable means of obtaining indemnity against the default of parties. This is much to be preferred to individual sureties, because a properly conducted surety company makes it its business promptly to investigate and to meet its liabilities. Acceptance of the service of such companies is, of course, upon the basis of a regular rate of compensation, and, where a party litigant has, because of the claim of the opposing party, been compelled to furnish such security, and it turns out that it was wrongly required, a rule of court or usage which imposes the expense of the security on the defeated party is not unreasonable.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.