Richman v. Consolidated Gas Co.

114 A.D. 216, 100 N.Y.S. 81, 1906 N.Y. App. Div. LEXIS 2065
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 20, 1906
StatusPublished
Cited by15 cases

This text of 114 A.D. 216 (Richman v. Consolidated Gas Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Richman v. Consolidated Gas Co., 114 A.D. 216, 100 N.Y.S. 81, 1906 N.Y. App. Div. LEXIS 2065 (N.Y. Ct. App. 1906).

Opinions

Laughlin, J.:

The defendant is a corporation organized and existing under the laws of the State of New York, and is engaged in the business of manufacturing gas and conducting and supjilying the same through mains and lateral pipes to consumers in the city of New York, for hire. The plaintiff conducts a coffee and lunch room in the building known as No. 484 Sixth avenue in said city, and for the successful conduct of his business requires light, heat and fuel. The defendant has a main in the avenue which is connected with the premises occupied by the plaintiff, and it has for a long period of time supplied him with gas, which he has used for light, heat and fuel, and he is wholly dependent upon the defendant therefor. " Prior to the 1st day of May, 1906, the maximum price which the defendant was authorized to charge its consumers, excepting the city of New York, for gas supplied to them was fixed at one dollar per 1,000 cubic feet by chapter 385 of the Laws of 1897, which provided that that rate should take effect on and after the expiration of the year 1900, the rate prior thereto having been higher, but having been gradually reduced pursuant to the provisions of said statute.

The Legislature, at its annual session in 1905, through a committee, investigated the quality of gas furnished by the defendant to its consumers and the reasonableness of the price charged therefor, and as a result of such legislative investigation and after the failure of an attempt to enact a bill reducing the maximum price to be charged for gas, it enacted chapter 737 of the laws of that year, which created a State Commission of Gas and Electricity and authorized such Commission, among other things, upon complaint being made as to the price of gas as therein provided* to investigate the same by public hearings and to fix the maximum price to be charged, for gas within the limits prescribed by law for the term of three years next ensuing. The act provided, among other things, that the [219]*219order of the Commission in fixing the price of gas might be enforced by mandara us, and that a person or corporation aggrieved by the action of the Commission in fixing the price of gas might have a review by an appeal to the Appellate Division. Section 21 of the act provided that if it should be alleged and established, in an action brought for the collection of any charge for gas, that a price had been demanded in excess of that fixed by the commission or by statute in the municipality wherein the cause of action arose, such fact should be a complete defense to the action and no recovery could be had therein. The Commissioners of Gas and Electricity were duly appointed, and they duly qualified and organized under the act. Thereafter complaint was made to the Commission of the price of gas charged by the defendant, which gave it jurisdiction under the act, assuming it to be valid, to investigate the complaint, and notice was accordingly given the defendant on the 8th day of November, 1905, of a ¡niblic hearing on the question. After public hearings and inquiry concerning all the material facts the Commission on the 23d day of February, 1906, made an order providing that on.and after the 1st day of May, 1906, the maximum price for gas to be charged by the defendant, excepting to the city of New York, should be eighty cents per 1,000 cubic feet. 'By the provisions of chapter 125 of the Laws of 1906, which became a law on the third day of April and took effect on the 1st day of May, 1906, the Legislature prescribed, among other things, that a corporation manufacturing, furnishing or selling illuminating gas in the borough of Manhattan, city of New York, should not charge or receive for gas manufactured, furnished or sold therein more than eighty cents per 1,000 cubic feet. This is an independent act and contains no reference to the action of the Commission of Gas and Electricity in prescribing the same rate to take effect at the same time.

Notwithstanding the action of the State Commission of Gas and Electricity and of the Legislature in reducing the price of gas tu eighty cents per 1,000 cubic feet on and after the 1st day of May, 1906, the defendant has rendered a bill to the plaintiff for gas supplied after May 1, 1906, and has expressly charged him therein at the rate of one dollar per 1,000 cubic feet. The defendant has refused to accept payment duly offered in legal tender at the rate of eighty cents per 1,000 cubic feet, and has threatened to discontinue [220]*220supplying the plaintiff with gas and to cutoff his supply and remove the meter unless he pays the bill as presented at the old rate. The plaintiff has deposited with the defendant ten dollars, the amount required by it pursuant to the provisions of section 66 of the Transportation Corporations Law (Laws of 1890, chap. 566) as security for the payment of his gas bills, and has paid for all gas consumed prior to May 1, 1906, and has complied with all rules and regulations of the defendant excepting its demand for one dollar per 1,000 cubic feet of gas supplied after said date.

It is the duty of the defendant, by virtue of the provisions of section 65 of the Transportation Corporations Law, to supply gas to the plaintiff, provided it is not justified in exacting one dollar per 1,000 cubic feet for gas furnished after May 1, 1906./The defendant is exercising public franchises conferred by the People of the State through their Legislature, and is enjoying special privileges of using the public streets to serve the public, but for private gain. In thus exercising public franchises and special privileges it owes a duty to the public to furnish gas to its consumers at reasonable rates, which the Legislature may regulate and the courts may enforce. It is competent for the Legislature to regulate the price that the defendant may charge consumers, provided it does not require.it to supply gas at a rate that will not admit of a reasonable profit to the stockholders upon the actual value of the plant and property of the company.^/ (San Diego Land & Town Co. v. Jasper, 189 U. S. 442.) The corporation may at any time have recourse to the State or Federal courts to test the validity of any enactment of the Legislature prescribing br regulating the rate to be charged for gas, upon the ground that it .is so low that it will deprive the stockholders of the right to such reasonable profit, and if after a judicial investigation the complaint should be sustained, it would be the duty of the court to declare the law unconstitutional and void as impairing the right of contract and taking property without due process of law, in violation of subdivision 1 of section 10 of article 1 of the Federal Constitution and section 1 of the 14th amendment thereto. This is one of the few cases in which the courts may examine facts dehors the record and annul the action of the Legislature upon a finding that the rate .prescribed impairs the constitutional right of the stockholders of the corporation to earn a [221]*221reasonable profit on the value of the property employed in the business. Of course, if the statute itself should contain a recital that the Legislature had found on investigation that the actual cost to the company of supplying gas was greater than the price which it was permitted to charge consumers therefor, the invalidity of the law would appear upon its face without talcing evidence. A statute, however, is presumed to be valid until its invalidity is adjudged by a court of competent jurisdiction.

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Cite This Page — Counsel Stack

Bluebook (online)
114 A.D. 216, 100 N.Y.S. 81, 1906 N.Y. App. Div. LEXIS 2065, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richman-v-consolidated-gas-co-nyappdiv-1906.