Case Name: Gerald Morrell, Respondent, v. Brooklyn Borough Gas Company, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1921-01-07
Citations: 195 A.D. 1
Docket Number: Appeal No. 1
Parties: Gerald Morrell, Respondent, v. Brooklyn Borough Gas Company, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 195
Pages: 1–11

Head Matter:
Gerald Morrell, Respondent, v. Brooklyn Borough Gas Company, Appellant.
(Appeal No. 1.)
Second Department,
January 7, 1921.
Gras and electricity — suit to restrain gas company from enforcing increased rates imposed without authority of Public Service Commission— order granting injunction pendente lite affirmed and parties left to trial.
In a suit by a customer to restrain a gas company from enforcing rates claimed by said company to have been fixed by it, independent of the Public Service Commission after the statutory rate had been adjudged confiscatory, and to have such rates declared to be unreasonably compensatory and void, held, that an order of the Special Term granting an injunction pendence lite should be affirmed so that the issues arising between the parties may be determined by trial and not on affidavits.
Blackmar, J., and Junks, P. J., dissent, with opinion.
Appeal by the defendant, Brooklyn Borough Gas Company, from an order of the Supreme Court, made at the Kings Special Term and entered in the office of the clerk of the county of Kings on the 27th day of September, 1920, granting an injunction pendente lite.
Defendant manufactures and sells gas in the thirty-first ward of the borough of Brooklyn. The complaint charged that notwithstanding the provisions of chapter 48 of the Consolidated Laws regarding gas rates, the Public Service Commission of the State of New York for the First District, on July 2, 1920, had made and issued an order to defendant in the following terms:
“ I. That the maximum price to be charged by the Brooklyn Borough Gas Company for gas shall be as follows:
“(a) On and after the date of this order, to and including July 31, 1920, $1.15 per thousand cubic feet of gas sold and delivered consumers.
“ (b) On and after August 1, 1920, to and including July 31, 1921, $1.40 per thousand cubic feet of gas sold and delivered to consumers, except as hereinafter provided.
“ II. That said Brooklyn Borough Gas Company be and it hereby is authorized and required not later than October 1, 1920, to change its standard from its present 22 candle power standard to the British Thermal Unit (B. T. U.) standard, the number of heating units to be furnished to be not less than 525 B. T. U.’s per thousand cubic feet of gas manufactured, distributed and sold, which British Thermal Unit standard is hereby fixed by the Commission.”
The complaint set forth that such order was beyond the power of said Commission, in that it could not fix a rate in excess of the maximum allowed by statute, and that the one dollar and forty cent rate is unreasonable, excessive and exorbitant, and further that after such advance in rate it had no power to change the standard of quality fixed by the statute (Laws of 1906, chap. 125) to a British thermal unit standard of 525 heat units per 1,000 cubic feet.
It further alleged: “ That the plaintiff is informed and verily believes that the said defendant threatens and is about to enter the plaintiff’s premises to change the meter to conform to the rate of $1.40 per thousand cubic feet. That should the plaintiff resist the officers and agents of the said defendant in so doing, and in any way endeavor to prevent the said trespass by physical force the said plaintiff will, under Section 66 of the Transportation Corporations Law of this State become liable to the payment of a heavy fine, besides suffering indignities to his person and damage to his property.”
Also that unless said order be declared invalid and nugatory, consumers of defendant’s gas would institute a multiplicity of actions.'
There were also submitted affidavits of seven other consumers of gas furnished by defendant, who, uniting in plaintiff’s prayer for injunction, asked plaintiff to sue for the benefit of each and all of them, under section 448 of the Code of Civil Procedure, to which plaintiff had assented, and thereupon he prayed that relief be granted also on behalf of such other persons.'
The opposing affidavit sworn to August 2, 1920, by defendant’s acting manager, referred to various proceedings in defendant’s suit against the Public Service Commission, including a judgment entered on the report of former Justice Hughes as referee on August 13,1918, and further considered by this court in Public Service Commission v. Brooklyn Borough Gas Co. (189 App. Div. 62). After setting out the increasing cost of oil, the affiant concluded: ■“ The rate of $1,40 allowed by the Commission is less than a reasonable and compensatory rate under the new oil contract. The reasonable and compensatory rate would be at least $1.55. Deponent attended all the public hearings held by the Commission preceding the order allowing $1.40 maximum. The plaintiff was not present at any time and neither was any other consumer present.”
Defendant’s brief states that the argument was had on August fourth. At the final submission on August tenth, the acting manager presented a second affidavit verified on that day, which stated that “ Defendant fixed a rate of $1.40 for itself entirely independently of the permission to do so granted by the Commission order. On July 20, 1920, defendant, on its own authority, promulgated, fixed, made and established a rate of $1.40 per 1000 cubic feet for all private consumers, to be charged and enforced on and after August 1st, 1920.”
It stated that defendant had filed with the Commission schedules showing such rate, upon which “ the Commission allowed the change of rate from $1.15 to $1.40 on August 1st, 1920, without requiring thirty days’ notice and publication as also provided in said subdivision of said section.”
An injunction (conditional on plaintiff’s filing a bond for $500 to pay any judgment against him) was granted, restraining defendant and its servants from entering plaintiff’s premises to change the meter so as to increase the rate over that measured before August 1, 1920, also that defendant refrain from collecting from plaintiff any rate in excess of one dollar and fifteen cents per 1,000 cubic feet. (Reported Morrell v. Brooklyn Borough Gas Co., 113 Mise. Rep. 65.) Defendant appealed to this court. When this motion for injunction was submitted, the defendant had not answered, but before it was granted defendant demurred to the complaint, which demurrer is the subject of the appeal in Morrell v. Brooklyn Borough Gas Co., No. S (195 App. Div. 899).
Edward M. Bassett [Wilson W. Thompson with him on the brief], for the appellant.
Judson Hyatt [John P. O’Brien, Corporation Counsel, and Gerald Morrell with him on the brief], for the respondent.
Sic. See § 64.— [Rep.
See Public Service Commissions Law, § 66, subd. 12, as amd. by Laws of 1920, chap. 542.— [Rep.

Opinion:
Putnam, J.:
Ordinarily this court does not review the discretion of the Special Term in granting or refusing an injunction pendente lite, on appeal from the order, but will leave the parties to the trial. (Smith & Sons Carpet Co. v. Ball, 137 App. Div. 100; Duryea v. Auerbach, 164 id. 44; Ginsburg v. Woolworth Co., 176 id. 882.) Here, however, are questions of law that seem to make an exception to the ordinary rule upon such appeals.
The powers of the Public Service Commission to sanction an increase of rate beyond that authorized by statute have always been restricted to the statutory rates. The original Public Service Commissions Law (Laws of 1907, chap. 429, § 72) conferred the rate-making power to fix the maximum price for gas by the words " within lawful limits." In the present act the matter was stated more clearly by an amendment inserting the term " not exceeding that fixed by statute to be charged by such corporation or person, for the service to be furnished." (Consol. Laws, chap. 48 [Laws of 1910, chap. 480], § 72, as amd. by Laws of 1920, chap. 542.) In 1910, the date of the present law, improvements in gas production pointed to lower rates, and as said by Collin, J.: " The Legislature evidently intended to retain unto itself the power of fixing rates exceeding those fixed as the greatest by statutes." (People ex rel. Municipal Gas Co. v. P. S. Comm., 224 N. Y. 156, 166.) Last year Mr. Justice Page declared: " Experience has shown that the forecast of the future was at fault; that it would have been wiser and more in keeping with the purposes of the act as originally enacted if the power of the Public Service Commissions had not been thus limited." (Bronx Gas & Electric Co. v. Public Service Comm., 190 App. Div. 13, 22.) Writing on December 19, 1919, possibly with an eye to the approaching legislative session, he added: " This court, therefore, expresses the hope that such limitation may be removed to the end that such flexibility be given to the operation of the statute that the Commissions may be open to the determination and adjustment of conflicting claims of consumers and the companies as to what are reasonable rates, fair both to the companies and to the public, at all times and under all circumstances, as was originally intended." (p. 22.) Although that court took the view that the Commission could authorize a gas rate above the statute maximum, the contrary has been decided in this department. (Public Service Comm. v. Brooklyn Borough Gas Co., 106 Misc. Rep. 549; affd., 188 App. Div. 935. See, also, 189 App. Div. 62, 67, 74.)
After the judgment entered on the Hughes report, the statute commanding the eighty-cent rate is unenforceable as to this particular defendant. (See Laws of 1906, chap. 125, as amd. by Laws of 1916, chaps. 604, 612, and. Laws of 1917, chap. 666.) Yet such findings and the judgment thereon did not destroy the statute, which still exists as a restraint upon the Commission. And this rests on a sound distinction. To hold a rate confiscatory is merely a finding that as to a particular manufacturing plant the enforcement of a fixed rate with the conditions of gas production and distribution, would deprive the company of property without due process of law. (See U. S. Const. 14th Amdt. § 1; State Const, art. 1, § 6.) Such conditions are not merely those of operating cost and adequate return, but proof of such a fair and continued practical trial of the working of the existing rate that proves upon experiment its inadequacy. •
But there is no similar way to enlarge the delegation of this rate-making power. The Legislature alone can do that. Courts cannot supply that which the Legislature has withheld. (Matter of Quinby v. Public Service Comm., 223 N. Y. 244, 264.) Doubtless this was the view that led to the defendant's second affi'dayit in which it took a final stand wholly independent of the Commission.
Had it been otherwise, and this advance been regularly made under section 72 of the Public Service Commissions Law, the proper remedy would be by certiorari, and not by this form of equity suit. But the rate of one dollar and forty cents is now acknowledged as an independent increase. Such advance deserves that full investigation that can only be had through a trial. We cannot say that it was any error of discretion to preserve the status quo, where the defendant is fully protected by security. Even if plaintiff sued entirely alone, he would have a standing to contest the exaction of rates which are unfair or discriminatory. (Armour Packing Co. v. Edison El. Illuminating Co., 115 App. Div. 51; Richman v. Consolidated Gas Co., 114 id. 216.) We, therefore, do not depart from the ordinary practice to leave the parties to a trial, rather than to dispose of these doubtful questions upon affidavits.
The order, therefore, should be affirmed, with ten dollars costs and disbursements.
Mills, J., concurs; Blackmar, J., reads for reversal, with whom Jenks, P. J., concurs.