(188 N. Y.S.) be determined in the regular way, and with due consideration of the fact that in the appropriate litigation the burden of establishing the material facts will rest upon the association, and not upon the present relators as defendants in such litigation. This, by the way, illustrates further the injustice and general inadvisability of attempts to determine in summary administrative manner issues as to which the parties are entitled to the orderly adjudication of the courts. In some of the affidavits submitted on behalf of the intervener in this proceeding, and in one of those similarly submitted in the Duffy Case, the affiants advert to the great difficulty and inconvenience of effectively enforcing injunctions obtained against infringers. I am not unmindful of their embarrassment, but this condition is more or less inherent in many judicial remedies. It certainly affords no ground for abandoning our system of administration of justice and having recourse to arbitrary administrative measures not authorized by Constitution or statute. Were relators' case as presented to me no different from that embodied in the moving papers in the Duffy Case I should not hesitate, notwithstanding my own views of the limited function and duties of respondent, to yield to the authority of that decision. Since, however, the case here presented differs from the Duffy Case in the vital and determinative respect which I have pointed out, I am of opinion that the relators are entitled to a peremptory writ. Ordered accordingly. (115 Misc. Rep. 14) DUITZ v. KINGS COUNTY LIGHTING CO. (Supreme Court, Special Term, Kings County. March, 1921.) 1. Gas 14 (1)-Gas company may fix its own rates, where not established Where there is no valid rate for furnishing gas to private consumers, established by statute or by the Public Service Commission, a gas company may fix any rate deemed by it to be reasonably remunerative. 2. Gas 14 (1)—Evidence of changed conditions held to destroy presumption of reasonableness of rate determined five months previously. Where a special master in a federal action has determined that a certain gas rate would yield the gas company a fair return, the presumption, in a subsequent suit to enjoin the company from increasing its rates, that the reasonableness of the rate so determined would continue for five months, held to be destroyed by proof of changed conditions, consisting of expenditures for repairs and increased cost of its oil supply. 3. Gas 14 (1)-Gas company held entitled to presumption against fixing unreasonable rates. In a suit to enjoin a gas company from increasing its rates, the company is entitled to invoke the presumption that it has not violated the provisions of Public Service Commission Law, § 65, by fixing unreasonable rate. 4. Gas 14 (1)-Increased rates restrained during 30-day period on notice of change. In a consumer's suit to enjoin a gas company from increasing its rates, plaintiff held entitled to enjoin defendant from removing its meter from For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes plaintiff's house, and shutting off his supply of gas for failure to pay the increase made prior to the expiration of 30 days from the date of filing its schedule of increased rates. 5. Injunction 114 (4)-Held not entitled to intervene in suit to restrain increase of rates. In a suit to enjoin a public service company from increasing its rates, the Public Service Commission held not entitled to intervene, in view of decree in previous federal action expressly enjoining such Commission from interfering with the company and its rates. Action by Martin M. Duitz against the Kings County Lighting Company. Motion pendente lite refused, and motion of the Public Service Commission to intervene denied, and motion of the City of New York granted. Maxwell S. Harris, of New York City, for plaintiff. Ingraham Sheehan & Moran, of New York City (Samuel F. Moran and John D. Monroe, both of New York City, of counsel), for defendant. John P. O'Brien, Corp. Counsel, of New York City (Judson Hyatt, of New York City, of counsel), for City of New York. Terence Farley and William S. Jackson, both of New York City, for Public Service Commission. ASPINALL, J. It is alleged in this action that since about the year 1914, and until October, 1920, the defendant charged for gas furnished to private consumers at the rate of 95 cents per 1,000 cubic feet; that on or about the 23d day of October, 1920, the defendant increased said rate to $1.50, without giving and publishing the 30 days' notice of such change of rate as required by the Public Service Commissions Law (Consol. Laws, c. 48); and that the gas so furnished is inferior in quality and below the standard required by statute. The relief prayed for is a decree adjudging the present rate to be excessive, exorbitant, and beyond what is necessary to reasonably compensate defendant for its public service and a permanent injunction restraining the collection of any sum based on any other than a reasonable rate. The present motion is for a temporary injunction restraining the defendant during the pendency of the action from asking, demanding, or receiving any sum based on the $1.50 rate, or in excess of the previous 95 cent rate, and for certain other relief. In my opinion a brief reference to certain statutes and to prior litigation is necessary to a proper consideration of the motion. By chapter 125 of the Laws of 1906, the Legislature fixed a maximum rate, applicable to defendant, of $1 per 1,000 cubic feet. On or about July 1, 1914, the defendant reduced its rate to private consumers to 95 cents per 1,000 cubic feet. Although it does not clearly so appear from the papers before me I assume that such action by the defendant was taken pursuant to an order of the Public Service Commission to that effect. In any event that rate continued until increased to $1.50 as aforesaid. Chapter 604 of the Laws of 1916 purported to amend the act of 1906 by reducing the rate to 80 cents per 1,000 cubic feet. In For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes (188 N.Y.S.) May, 1920, the defendant herein brought an action in the United States District Court for the Southern District of New York against the Public Service Commission and others, with the result that on October 20, 1920, a decree was duly entered in that action (268 Fed. 143), adjudging that the said acts of 1906 and 1916, in so far as they limit the rate to be charged (by this defendant) for gas supplied by it, were confiscatory, and so unconstitutional, and restraining the enforcement of either of said statutes. Thereupon, and on October 22, 1920, the defendant filed with the Public Service Commission a schedule increasing its rate to $1.50 as aforesaid, and immediately began to charge its private consumers at that rate. Subsequently, and on December 30, 1920, the Public Service Commission moved to vacate the injunction granted in the federal action on the ground of failure to comply with the statute requiring 30 days' notice of a change of rate and on the further ground that the $1.50 rate was excessive. The motion was denied, and in his opinion denying the motion the District Judge stated that any profit represented in the $1.50 rate was not so "grossly inequitable as to shock the conscience." The ultimate fact in issue in this action, whether or not the $1.50 rate is excessive, cannot be determined upon affidavits; and I do not think the facts presented by the plaintiff on this motion point so clearly to his ultimate success as to justify an injunction pendente lite. Had the defendant fixed a rate in excess of a rate ordered by the Public Service Commission after a hearing pursuant to section 72 of the Public Service Commissions Law, the plaintiff would be entitled to the temporary relief sought. But the Commission has made no such order since the decree in the federal action. Also, if said rate exceeded the maximum rate prescribed by any state statute, this of itself would entitle plaintiff to injunctive relief pendente lite. But such is not the fact. The Legislature has not acted since the decree in the federal action adjudging the confiscatory character of the acts of 1906 and 1916. There is, therefore, no statutory rate obligatory upon the defendant at the present time; and the 95 cent rate established by the Commission in 1914 necessarily, it seems to me, became ineffective upon the entry of the decree in the federal action. It will be noted that the act of 1916 purports to amend the act of 1906. Nevertheless the decree in the federal action, by express reference thereto, adjudged the invalidity of the said act of 1906, irrespective of the amendatory act of 1916. Presumably the purpose was to avoid the contention that the invalidity of the amendatory act of 1916 revived the original act of 1906 and so re-established the maximum rate of $1 therein prescribed. Certain it is that the form of the decree in the federal action indicated the purpose of the court to declare the confiscatory character of the $1 rate prescribed by said act of 1906. If this be so, surely the 95 cent rate established by the Commission cannot be enforced as prima facie compensatory, when the $1 rate established by the Legislature itself has been adjudged confiscatory. There is, therefore, no valid rate established by statute or by the Public Service Commission. [1] Such being the situation, I am aware of no legal barrier which prevented the defendant fixing a rate deemed by it to be reasonably remunerative. The temporary failure in a given instance of the legislative plan for the regulation of public service corporations does not leave such corporations helpless, and divested of every right and power ordinarily incident to private ownership. Rather are they thereby reclothed with the powers necessary to effectuate their corporate purposes freed from the restrictions of a legislative plan that has for the moment failed. In such a situation, and until a valid rate is established pursuant to law, the defendant may determine its own rate. Either this, or a chaotic condition results, whereby each individual consumer becomes a law unto himself, to fix a rate beyond which he will not pay. The case of Morrell v. Brooklyn Borough Gas Co., 113 Misc. Rep. 65, 184 N. Y. Supp. 651, is distinguishable. The question there involved was the validity of a rate fixed by the Commission in excess of the statutory rate. It was held that the prior adjudication of the invalidity of the statute as to the defendant did not destroy the statute itself and that the Commission was without power to fix a rate in excess of the rate therein prescribed. Its action in so doing was prima facie invalid. Moreover, the enforcement of the $1.40 rate, considered as representing the independent action of the company, was properly enjoined, because in excess of the then existing rate of $1.15 established by the Commission, the validity of which was not attacked in that action. But the present case involves only the question of the validity of a rate established by the defendant itself in the absence of any rate prescribed either by the Legislature or by the Commission. [2, 3] Neither does a consideration of the facts presented by the plaintiff change my views. He emphasizes the finding of the special master in the federal action that a rate of approximately $1.17 would yield the defendant a fair return on its investment. This finding must be considered in light of the issue then pending. That issue was the confiscatory character of an 80 cent rate rather than the determination. of what would be a remunerative rate in the future, a determination which the court expressly refused to make or suggest. Several months have intervened since the entry of that decree. Plaintiff has added nothing to the force of that finding, and has offered no proof that the then status quo should be maintained. But the defendant has shown that since the entry of that decree it has contracted for its oil supply for 6 months at an increased cost of approximately 25 per cent., has expended upwards of $500,000 for repairs, and is confronted with an increased tax rate of about 1 per cent. These and other facts justify a rate in excess of any rate deemed reasonable at the date of the decree in the federal action. The presumption that the reasonableness of any rate then determined would continue for the limited period of 5 months is destroyed by proof of changed conditions. Defendant has negatived such presumption. Moreover the defendant is entitled to invoke the presumption that it has not violated the provisions of section 65 of the Public Service Commissions Law by fixing an unreasonable rate. (188 N.Y.S.) [4] However, in view of the decision in Public Service Commission, First Dist. v. Brooklyn Borough Gas Co., 189 App. Div. 62, 72, 178 N. Y. Supp. 93, I doubt if defendant's $1.50 rate could become effective, legally, until the expiration of 30 days from the date of the filing of its schedule. This would be on or about November 21, 1920. It fairly appears that, of the balance owed to the defendant by the plaintiff, $2 or thereabouts represents an increase caused by charging the plaintiff at the rate of $1.50 prior to November 21, 1920. Plaintiff may have an injunction to this extent, restraining the defendant from removing its meter from plaintiff's house or shutting off his supply of gas for failure to pay such increase made prior to said date, but in every other respect the motion for a temporary injunction is denied. [5] In my opinion the application of the Public Service Commission to intervene should be denied. The decree in the federal action expressly restrained and enjoined the Public Service Commission, among other things "from interfering with plaintiff [the defendant herein] forthwith and while this decree is in force, charging, billing, and collecting a rate or charge in excess of that fixed by said statutes or either of them for gas supplied to its consumers other than the city of New York." The direct purpose of this action is to prevent defendant from charging a rate in excess of that fixed by the said acts of 1906 and 1916. In my opinion this court should not sanction, either directly or indirectly, a violation of the decree of the federal court. The federal court should be requested to modify its said decree, to the extent of permitting such an application as this to be made, and until this be done, and such request granted the application of the Public Service Commission to intervene in this action should be denied, and I therefore deny the same. I am also of the opinion that the city of New York should be allowed to intervene in this action, under, the decision and authority of the Appellate Division in this department in the case of New York & Richmond Gas Co. v. Nixon, 192 App. Div. 923, 182 N. Y. Supp. 940. Motion of the city to intervene granted. Motion granted. W. R. COLLINS & CO., Inc., v. WACKER. Supreme Court, Appellate Term, First Department. April 21, 1921.) Infants 50-Liable on note given to party who advanced premium, on theory life policy a "necessary." Where defendant infant, taking out a life insurance policy, requested plaintiff to pay the premium for her, and gave her note to plaintiff therefor, she is liable on such note; the policy being treated as a "necessary." [Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Necessary.] Appeal from Municipal Court, Borough of Manhattan, First District. Action by W. R. Collins & Co., Incorporated, against Florence Wacker. From a judgment for defendant, after trial by a judge with For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes |