Case Name: The New York Edison Company, Respondent, v. The City of New York (Borough of Manhattan), Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-07-13
Citations: 133 A.D. 728
Docket Number: 
Parties: The New York Edison Company, Respondent, v. The City of New York (Borough of Manhattan), Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 133
Pages: 728–731

Head Matter:
The New York Edison Company, Respondent, v. The City of New York (Borough of Manhattan), Appellant.
First Department,
July 13, 1909.
Discovery — cost of manufacturing electricity.
Where in an action by an electric light company against a city to recover the value of electricity furnished, the defendant denies that the electricity was furnished pursuant to a contract or that the price charged, was the reasonable or market value, so that if the plaintiff fails to establish a contract it can only recover the reasonable value, the defendant, in order to prepare for trial, is entitled to an inspection of all the books and papers of the plaintiff and of its plant, in so far as the same will tend to show the actual .cost of manufacturing and delivering the electricity during the period.'
ApReal by file defendant, The Oity of Hew York, from an order of the Supreme Court, made at the. Hew York Special Term and entered in the office of the- clerk of the. county of Hew York on the 7th day of April, 1909, denying the defendant’s motion for an inspection and discovery.
Austen O. Fox, for the- appellant.
Henry J. Hemmens,. for the respondent.

Opinion:
MoLaughlin, J.:
This action was brought to- recover from the city of Yew York the value of the electricity furnished to it for lighting purposes-during the year 1903. The theory of the plaintiff, as appears from the complaint, is that a contract, was entered into between it and the city by virtue of which the electricity was f urnished and that the price which the city agreed to- pay, and which it has been charged, is a fair and reasonable value and the market value of the same¿
The answer denies that the electricity furnished was in pursuance of a. contract and that the price charged was the reasonable value or the market value.
After issue had been joined, .the defendant, for the purpose of preparing for trial, applied to the court, by an order to show cause, for leave to- inspect, examine and take a copy of all the books,, documents- or records of the plaintiff and examine its plant so far as the same- will show, or tend to show the actual cost of the production and distribution of electricity during the time mentioned in the complaint. The motion was denied and the city appeals.
The motion was denied, as appears from the opinion of the learned justice- sitting at Special Term, principally upon the ground that the inspection and discovery sought would not aid the defendant; that the plant has been entirely changed since the electricity was furnished; that some or all .of the machinery has been worn out, discarded or changed, and that other and different methods are now used as to the manufacturé; that none of the facts sought to be ascertained can be- found in the books now kept; that the books- and records which were- kept at the time the electricity was furnished have been destroyed.
I am of the- opinion that the motion should have been granted. The plaintiff, in case it should turn out at the trial that it never-had a contract, can recover only the reasonable and fair market-value of the electricity furnished and it is quite- apparent that the-defendant, unless it can have an inspection and discovery, cannot. prepare its case for trial. How can it determine what is the- reasonable and fair market value unless it can ascertain what it actually cost the plaintiff to manufacture and deliver ? That the plaintiff has some information on the subject is apparent from one of the affidavits at least which was presented in opposition' to the motion. There the statement is made that the plaintiff can establish at the trial, in ease the same becoines an issue, that the price-charged the defendant is " the reasonable and fair and market value of the light and service furnished," and that such fair and market value consists of "the cost of service to the plaintiff,, plus a fair profit."
It is hardly credible that a corporation operating a plant as large as this plaintiff does — representing enormous investment , of capital — furnishing electricity- to hundreds of thousands of different customers, does not now have some record evidence as to what it cost it to furnish to the defendant the electricity for which a judgment is demanded.- It cannot be that the cost of such service rests entirely, on oral testimony. The court certainly is not bound-to accept as conclusively true the assertion of the officers of the plaintiff, or persons in its employ, to that effect. Unless the plaintiff has a contract made in accordance with the provisions of the charter, then it can only recover the reasonable value of the electricity furnished. This the plaintiff will have' to prove at the trial, and to enable the defendant to meet that proof an inspection should be permitted.. (Brigham v. Zaiss, 48 App. Div. 144.)
In Funger v. Brooklyn Bottle Stopper Co. (132 App. Div. 837) this court held, where a discharged employee sought to inspect all .the books and papers of the defendant for the purpose of ascertaining what sales were made by it on orders obtained by him upon which his compensation depended, that an order permitting him to do s.o was improper. The order was: reversed and the motion denied, for the reason, as clearly appears from the opinion of Mr. Justice Clarke, that the court was of the opinion that the plaintiff, should first ascertain by an examination of the appropriate officers of the defendant what particular books and papers contained the information which he desired. (Harbaugh v. Middlesex Securities Co., 110 App. Div. 633; Brewster v. Brewster Co., 127 id. 729.) But each of those cases is clearly distinguishablé from the present one. There, in each case, it appeared there was no necessity for an inspection of all the'books and papers, and for that reason the inspection was confined to such part of the books or papers as contained entries or statements affecting the subject-matter of the litigation. Here, the plaintiff's business is the manufacture and sale of electricity to thousands of customers and the reasonable cost thereof can only be determined by showing the amount of capital inyested, the actual cost to manufacture and deliver, including taxes and all disbursements for that purpose, and the depreciation of its plant, plus a fair return on the money invested. .This will necessitate an examination of its entire business, and for that reason the defendant, in order to prepare itself for trial, should have an inspection of all the books, papers and documents of the plaintiff and of ifs plant, in so far as the same will show or tend to show what it actually cost it to manufacture and deliver the electricity for which a recovery is sought.
The order appealed from, therefore, should be reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs, to the extent here indicated.
Ingraham, Laughlin, Clarke and Houghton, JJ., concurred:
Order reversed, with ten dollars costs and disbursements, and motion granted to the extent stated in opinion. Settle order on notice.