10 F.(2d) 167 10. In order to carry into effect the plan of the said transaction, and pursuant to the provisions of the Business Corporations Law of the state of New York, constituting chapter 41 of the General Laws of the state of New York, as then existing, by an agreement in writing dated June 24, 1901, and filed in the office of the secretary of state of the state of New York on July 13, 1901, and in the office of the clerk of the county of Richmond on the same day, the said Richmond County Gaslight Company and the said New York & Richmond Gas Company consolidated with the consent of the directors and stockholders of each of said corporations, which said consolidated corporation so formed was known as "New York & Richmond Gas Company," for the period of fifty years. 11. The said New York & Richmond Gas Company, so formed by said consolidation agreement, is the plaintiff corporation in this action. 12. The plaintiff, by virtue of the purchase of the capital stock and the merger with it, of the Richmond County Gaslight Company, acquired all of the property and succeeded to the rights, privileges, and franchises of the said Richmond County Gaslight Company, and has been continuously furnishing gas under said franchises from 1901 to the present time. 13. The principal office and place of business of the plaintiff is located at Stapleton, in the Second ward of the borough of Richmond, city and state of New York, and the plaintiff is, and since the time of its incorporation as aforesaid has been, engaged in manufacturing and distributing gas for light, heat, and power, in the First, Second, Third, and Fourth wards of the borough of Richmond, within which territory it has, maintains, and operates a system of mains, pipes and conductors in the public streets, highways, and places. 14. In pursuance of the said agreement of June 21, 1901, there was issued by the plaintiff to the vendors $1,450,000 par value of its capital stock, $50,000 par value of such stock being reserved to exchange for $25,000 par value of capital stock of the Richmond County Gaslight Company, and thereafter the last-mentioned stock was acquired by the plaintiff, which issued therefor the $50,000 par value of the capital stock of the plaintiff. There is now issued and outstanding capital stock of the plaintiff of the par value of $1,500,000, and such stock has been dealt in by the public since its issue, and until at least the year 1916. Bonds of the par value of $1,000,000 were issued in part payment for the plant, property, franchises, stock, and effects so acquired by it, and $500,000 of the said bonds were issued from time to time, the proceeds of the sale of which were used for improvements and betterments of the plant and property of the plaintiff. All of said bonds were dealt in by the public, and were generally distributed among numerous holders, until they were discharged or refunded. By an order made by the Public Service Commission of the state of New York, for the First district, on or about April 23, 1921, the said commission authorized the issuance by the plaintiff of $1,956,000 of bonds, including $1,500,000 of such bonds for discharging or refunding the principal of the bonds of the plaintiff to the aggregate amount of $1,500,000, which had been issued by it as aforesaid, and which had matured on May 1, 1921. 15. The defendants William A. Prendergast, William R. Pooley, Charles Van Voorhis, Oliver C. Semple, and George R. Van Namee, or the successor in office of any of them, whose term may have expired since the commencement of this action, constitute the Public Service Commission of the state of New York, and are now acting as such commission, having been duly appointed under and by virtue of the provisions of chapter 480 of the Laws of 1910 of the state of New York, known as chapter 48 of the Consolidated Laws of the state of New York, as amended and supplemented by several acts, including chapter 134 of the Laws of 1921, prescribing their powers and providing for the regulation of certain public service corporations, including the plaintiff. The defendants are citizens of, and reside in, the state of New York, and at least one of the defendants at the time of the commencement of this action resided in the borough of Brooklyn, city of New York, in the Eastern district of New York. George R. Van Namee, as public service commissioner of the state of New York, was substituted as such defendant in the place and stead of James A. Parsons, named as an original defendant in this action, by an order dated January 9, 1925, and made and entered in this action. 16. The defendant Albert Ottinger, as Attorney General of the state of New York, is a citizen of the state of New York, and resides in the city of New York and state of New York, and was substituted as defendant in this action in place and stead of Carl Sherman, as Attorney General of the state of New York, named as an original defendant in this action, by the said order dated January 9, 1925. 17. Prior to and since June 1, 1923, the plaintiff has been the owner and in the possession of a parcel of land at Clifton, in the borough and county of Richmond, located upon the northerly side of Willow aveenue and the westerly side of Bay street, having a frontage of approximately 539 feet on Willow avenue, 92 feet on Bay street, and abutting on the right of way of the Staten Island Rapid Transit Railway Company for a distance of approximately 727 feet. 18. Prior to and since June 1, 1923, the plaintiff has been the owner and in possession of another parcel of land at Clifton, on the southerly side of Willow avenue, having a frontage of approximately 150 feet, and a depth of about 145 feet. 19. Prior to and since June 1, 1923, the plaintiff has been also the owner and in the possession of another parcel of land, located at West New Brighton, in the borough and county of Richmond, city and state of New York, at the southwest corner of Post avenue and Clove road, and having a frontage of approximately 118 feet on Clove road, and 490 feet on Post avenue. 20. Upon the parcel of land on the northerly side of Willow avenue (excepting for part of the time the westerly portion thereof acquired by the plaintiff in 1922), the plaintiff since July 15, 1901, has owned and used, and still owns and uses, a plant for the man ufacture and distribution of carbureted water gas. Additions and improvements have been made to the said plant and property so acquired, and renewals and replacements have have been made from time to time. As of June 1, 1923, the plaintiff's gas manufacturing plant, exclusive of the extensions in progress, consisted primarily of four modern Lowe type water gas generator sets, one set being 6 feet in diameter, two sets being 7 feet 6 inches in diameter, and one set being 9 feet in diameter, which provided a total rated generating capacity of 4,500,000 cubic feet of gas per day, and a normal working and dependable capacity for the entire plant of 2,500,000 cubic feet of gas per day. Subsequent to June 1, 1923, in order to meet the reasonable requirements of its con sumers, plaintiff has made various additions, extensions and improvements in its plant, including the erection of an additional water gas generator set, 11 feet in diameter, and accessory equipment, increasing the total rated generating capacity to 8,000,000 cubic feet of gas per day, and the normal working and dependable capacity for the entire plant to 3,500,000 cubic feet of gas per day. 21. Upon the said parcel of land, the plaintiff owned and used as of June 1, 1923, and since then has owned and used various buildings constructed of brick and other permanent material, and owns, has, and uses, various other machinery, boilers, and other apparatus and appliances. 22. Upon the parcel of land on the northerly side of Willow avenue, the plaintiff owned and used as of June 1, 1923, a storage gas holder in a steel tank having a capacity of 1,000,000 cubic feet, and also a 100,000 cubic foot capacity relief holder. Upon the parcel of land on the southerly side of Willow avenue, the plaintiff owned in a brick tank, having a capacity of 200,000 and used as of June 1, 1923, a storage holder cubic feet, which has since been converted in to a relief holder. Upon the parcel of land at the corner of Clove road and Post avenue, the plaintiff owned and used as of June 1, 1923, a storage gas holder in a brick tank, having a capacity of about 180,000 cubic feet of gas. Subsequently to June 1, 1923, the plaintiff acquired a parcel of land located at Washington and Van Name and Simonson avenues, Mariners' Harbor, Staten Island, upon which the plaintiff has erected and now uses a gas storage holder of 1,000,000 cubic foot gas capacity. 23. As of June 1, 1923, and prior thereto, plaintiff also necessarily kept, under lease, and used in the conduct of its business, an office and show room at 691 Bay street, Stapleton, in the borough and county of Richmond, for the use and accommodation of its general office, bookkeeping staff, and commercial department, and a display room for the exhibition and sale of domestic industrial gas appliances. Subsequent to June 1, 1923, the plaintiff acquired the said office building and land upon which the same is located. 24. The plaintiff owned and used, as of June 1, 1923, in the First, Second, Third and Fourth wards of the borough of Richmond, mains and services of various sizes as follows: 10 F.(2d) 167 Mains. Services. Feet. .118,284 425 per cent. preferred capital stock, $416,780.35. Quantity of Mains, of current obligations, and $424,402.87 of surplus and reserves, or a total of $4,825,21,346 583.22. 17,700 26. Subsequently to January 1, 1909, the 50,047 books of account of the plaintiff company, .130,712 as well as of all other gas companies in the .276,470 72,783 city of New York, have been required to be 13,647 kept in accordance with the rules and regu2,640 lations of the defendant Public Service Com1,321 mission of the state of New York, or its 15,252 predecessor the Public Service Commission 15,611 for the First district, which commissions 3,427 have had certain jurisdiction over said companies pursuant to the provisions of the Publie Service Commission Law (formerly the 26.800 Public Service Commissions Law) of the 32,142 state of New York, and I find that the books, 1,850 33,735 accounts, and records of the plaintiff company have been kept in conformity with such rules and regulations so prescribed by authority of the state of New York; that such books, accounts, and records have been kept 359 572 under the continuing supervision of the duly .8,650 authorized representatives of the Legislature of the state of New York; and that such books, accounts and records accurately set forth the receipts, outlays and other facts therein undertaken to be shown. Number. 4 .5,908 25. As of June 1, 1923, the plaintiff had outstanding $1,500,000, par value, of common capital stock, consisting of 15,000 shares, par value, of $100 each, and $2,125,000, par value, of 6 per cent. first mortgage lien bonds; it also had other invested resources consisting of current obligations of $201,501.19 and surplus and reserves of $405,775.49, or a total investment in its gas business of $4,232,276.68. As of December 31, 1922, the outstanding capitalization and other invested resources of the gas business of the plaintiff consisted of $1,500,000, par value, of common capital stock, $2,125,000, par value, of 6 per cent. first mortgage lien bonds, $272,141.79 of current obligations, and $350,806.38 of surplus and reserves, or a total of $4,247,948.17. As of December 31, 1923, the outstanding capitalization and other invested resources of the gas business of the plaintiff consisted of $1,500,000, par value, of common capital stock, $2,125,000, par value, of first mortgage lien bonds, $120,000, par value, of 7 per cent. preferred capital stock, $370,122.66 of current obligations, and $351,589.91 of surplus and reserves, or a total of $4,466,712.57. As of July 31, 1924, the outstanding capitalization and other invested resources of the plaintiff consisted of $1,500,000 of common capital stock, $2,125,000 of 6 per cent. first mortgage lien bonds, $25,000 of purchasemoney mortgage, $334,400, par value, of 7 27. By subdivision 5 of section 66 of chapter 480 of the Laws of 1910, as supplemented and amended by several acts, including chapter 134 of the Laws of 1921, known as the "Public Service Commission Law," it is provided that, whenever the said commission shall be of opinion, after a hearing had upon its own motion or upon complaint, that the rates, charges, or classifications or the acts or regulations of any gas corporation, the definition of which includes the plaintiff, are unjust, unreasonable, unjustly discriminatory, or unduly preferential or in any wise in violation of any provision of law, the said commission shall determine and prescribe, in the manner provided by and subject to the provisions of section 72 of the said chapter, the just and reasonable rates, charges, and classifications thereafter to be in force for the service to be furnished, notwithstanding that a higher or lower rate or charge has theretofore been prescribed by general or special statute, contract, grant, franchise condition, consent, or other agreement, and the just and reasonable acts and regulations to be done and observed. 28. By subdivision 3 of section 66 of the said chapter, as supplemented and amended, it is provided that the said commission shall have power by order to fix and change, from time to time, standards of the purity, illuminating power, and heating power, and standards for the measurement thereof, of gas to be manufactured, distributed, or sold by persons, corporations, or municipalities for lighting, heating, or power purposes, notwithstanding that other standards of the purity, illuminating power, and heating power of gas and standards for the measurement thereof may have been fixed by general or special statute, and by order to require the gas so manufactured, distributed or sold to equal the standards so fixed by it, and to prescribe, from time to time, the reasonable minimum and maximum pressure at which gas shall be delivered by such persons, corporations, or municipalities. 29. By section 72 of the said chapter, as so supplemented and amended, relating to complaints as to the quality and price of gas, it is provided that, after a hearing and after such an investigation as shall have been made by the said commission or its officers, agents, examiners, or inspectors, the said commission may, by order, fix just and reasonable prices, rates, and charges for gas to be charged by a gas corporation, for the service to be furnished, notwithstanding that a higher or lower price has been theretofore prescribed by general or special statute, contract, grant, franchise condition, consent, or other agreement, and may order such improvement in the manufacture, distribution, or supply of gas, or in the methods employed by a gas corporation, as will in its judgment be adequate, just, and reasonable, and that any such change in price shall be upon such terms, conditions, or safeguards as the said commission may prescribe. By section 72 of the said chapter, it is further provided that the price fixed by the said commission under the said section 72, or under the said subdivision 5 of section 66, shall be the maximum price to be charged by such gas corporation for gas for the service to be furnished within the territory and for a period to be fixed by the said commission in the order, not exceeding three years, except in the case of a sliding scale, and thereafter until the commission shall, upon its own motion or upon complaint of any corporation, person, or municipality interested, fix a higher or lower maximum price of gas to be thereafter charged. 30. By subdivision 1 of section 23 of the said chapter, as so supplemented and amended, it is provided that, within a time specified in the order of the commission, every person and corporation upon whom it is served must, if so required in the order, notify the commission whether the terms of the order are accepted and will be obeyed, and that every order of a commission shall take effect at a time therein specified, and shall continue in force either for a period which may be designated therein, or until changed or abrogated by the commission, unless such order be unauthorized by the said chapter or any other act or be in violation of a provision of the Constitution of the state or of the United States. 31. Prior to the amendment of said chapter 480 of the Laws of 1910 by chapter 134 of the Laws of 1921, the plaintiff was advised by counsel and believed that, under the construction placed by the courts of the state of New York upon the said chapter 480 of the Laws of 1910, before it was so amended, the Public Service Commission of the state of New York for the First district, as then constituted, had no power to permit the plaintiff to increase the rate which it might charge for gas supplied, in excess of the maximum rate of $1 per 1,000 cubic feet prescribed by chapter 125 of the Laws of 1906 of the state of New York. 32. On or about the 27th day of January, 1920, the plaintiff commenced an action in the Supreme Court of the state of New York, in and for the county of Richmond, against Lewis Nixon, as and constituting the Public Service Commission of the state of New York, for the First district, Charles D. Newton, as Attorney General of the state of New York, and Joseph Maloy, as district attorney of the county of Richmond, wherein and whereby the plaintiff sought to have chapter 125 of the Laws of the state of New York, passed in the year 1906, in so far as it prohibited the plaintiff from charging or receiving for gas manufactured or sold by it in the borough of Richmond, a sum per 1,000 cubic feet in excess of $1 per 1,000 cubic feet, declared illegal and void, because in contravention of section 10, art. 1, of, and of the Fourteenth Amendment to, the Constitution of the United States, and of section 6, art. 1, of the Constitution of the state of New York; and the plaintiff further prayed that it be granted a permanent injunction against the defendants and each of them restraining and enjoining them and each of them from enforcing or attempting to enforce the provisions of said act of 1906 against the plaintiff, and for other and further relief as in said complaint is more fully set forth. 33. Thereafter and on or about May 21, 1920, the Supreme Court of the state of New York, at the Appellate Division thereof for 10 F.(2d) 167 the Second Department, by order, allowed the city of New York to intervene as a party defendant therein. 34. The defendants named in the said complaint in the action mentioned in the finding numbered 32 hereof were duly served with the summons therein, and duly appeared and respectively filed answers in the said action. Thereafter, and on May 26, 1920, the said cause was duly referred to Hon. Albert H. Sewell, official referee, to hear, try, and determine the same and all the issues therein. The issues in the said action were duly tried before the said referee, and the proofs and allegations of the respective parties duly heard and considered, and thereafter such proceedings were had and taken in the said cause that the said referee duly made his findings of fact and conclusions of law dated January 10, 1921, wherein and whereby the said referee found, among other things, that the total reasonable cost of gas delivered to its consumers by the plaintiff in cents per 1,000 cubic feet of gas sold was, aside from any return upon any of the property owned by the plaintiff and used by it in the service of its consumers, 92.82 cents during the year 1918, 97.559 cents during the year 1919, 95.894 cents during the first seven months of the year 1920, and $1.22365 for the month of August, 1920, and wherein and whereby the said referee further found that the amount invested in the plant and property of the plaintiff, used and useful in its gas business as of January 1, 1920, was at least the sum of $2,560,000, and wherein and whereby the said referee further found that the plant, machinery and equipment used in the gas business of the plaintiff had been and then were maintained in excellent operating condition, proper repairs, renewals, and replacements had been made as and when needed, and the same were then in as high a state of efficiency as if new; that the reasonable and proper rate of return upon the capital invested in the plant, distributing system, and other properties owned by the plaintiff and used and useful in its gas business was not less than 8 per cent. per annum, and that the requirements of chapter 125 of the Laws of 1906, as amended, as to the candle power of the gas manufactured and sold by the plaintiff, under its operating conditions, and by the use of the materials it was and had been able to procure with reasonable diligence, were and for two years last past had been unreasonable, confiscatory, impossible of performance, and invalid, and wherein and whereby the said referee found, as a conclusion of 10 F. (2d)-13 law, that chapter 125 of the Laws of 1906 of the state of New York, as amended by chapter 604 of the Laws of 1916, in so far as it provided that the plaintiff should not charge or receive for gas manufactured, furnished, or sold by it a sum per 1,000 cubic feet in excess of a rate of $1, had been since January, 1918, and then was, confiscatory and deprived the plaintiff of its property without due process of law, in violation of the Constitution of the state of New York, and of the Fourteenth Amendment of the Constitution of the United States, and that the plaintiff should have the other and further relief against the defendants in that suit which was asked for in the complaint therein. 35. Thereafter, and on the 11th day of January, 1921, a judgment, final in its character, was duly made and entered upon the said findings of fact and conclusions of law of said referee, which adjudged that chapter 125 of the Laws of 1906 of the state of New York, in so far as it prohibited the plaintiff from charging or receiving more than the rate of $1 per 1,000 cubic feet for the sale of gas in the borough of Richmond, had been since January 1, 1918, and then was, confiscatory, and deprived the plaintiff of its property without due process of law, in contravention of the Constitution of the state of New York, and of the Fourteenth Amendment to the Constitution of the United States, and that said statute had been since January 1, 1918, and then was, invalid, as violative of said provisions of the Constitution of the state of New York and of the United States, and adjudged and decreed that the plaintiff was entitled to the relief prayed for, and granted the permanent injunction prayed for in the said complaint. In and by the said judgment, it was further adjudged and decreed that, at any time while the injunction therein before granted remained in force, any party thereto, or his or its successors or assigns, might apply, upon notice, at the foot thereof, to vacate or modify the injunction, if it could be shown that by changed conditions the statutory rate was no longer confiscatory in effect under such new conditions. 36. Thereafter an appeal from the said final judgment was duly taken by the said defendants to the Appellate Division of the Supreme Court of the state of New York, in and for the Second Judicial Department; and on October 6, 1922, the said Appellate Division duly dismissed the appeals of all of the said defendants, except the appeal of the defendant the city of New York, and |
