Crane v. Hahlo, 258 U.S. 142 (1922)
Case details
Citation
258 U.S. 142
Full caption
CRANE, ADMINISTRATRIX OF SAUER, v. HAHLO ET AL., CONSTITUTING THE BOARD OF REVISION OF ASSESSMENTS OF THE CITY OF NEW YORK, ET AL.
Country
United States
Jurisdiction
Federal
Court
Supreme Court of the United States
Decided
Feb. 27, 1922
Majority
Van Devanter (Justice)
Majority
Mc Reynolds (Justice)
CRANE, ADMINISTRATRIX OF SAUER, v. HAHLO ET AL., CONSTITUTING THE BOARD OF REVISION OF ASSESSMENTS OF THE CITY OF NEW YORK, ET AL.
ERROR TO THE SUPREME COURT, APPELLATE DIVISION, FIRST
JUDICIAL DEPARTMENT, OF THE STATE OF NEW YORK.
No. 107. Argued January 20, 23, 1922.—Decided February 27, 1922.
1. A purely statutory right of a landowner to recover damages resulting to his property from a change in the grade of a street upon which it abuts is not a right of contract within the meaning of the Contract Clause of the Constitution. P. 145.
2. In determining whether due process of law has been denied, the character of the proceeding involved and the practice at common law and in this country, in like cases, must be considered. P. 147. 3. The determination of the amount of damage to abutting property caused by changing the grade of a city street may be properly left to a board of assessors, and the property owner is not deprived of due process if, pending the proceeding, his right to a general review by a court is limited by an amendatory law making the award final as to amount but leaving it reviewable for lack of jurisdiction, fraud, or the wilful misconduct of the members of the board. P. 147.
4. Equal protection of the laws is not denied the claimant in such a case by vesting the final power to assess the amount of the damages in a board composed of officials of the city against which the claim is made, appointed by its mayor. P. 148.
228 N. Y. 309, affirmed.
Writ of error to review a judgment of the Supreme Court of New York, Appellate Division, entered on remittitur from the Court of Appeals of the State. The effect of the judgment was to dismiss for want of jurisdiction an application previously entertained by the Supreme Court of the State, and by the Appellate Division on appeal, where the plaintiff in error here sought a writ of certiorari to review an award made by the Board of Assessors of the City of New York and confirmed by the Board of Revision of Assessments, fixing the damages p. 143suffered by the plaintiff’s intestate as abutting property owner, due to a change of a street grade resulting from the construction of a viaduct by the city.
Mr. John M. Harrington, with whom Mr. Archibald R. Watson and Mr. Herbert H. Gibbs were on the brief, for plaintiff in error.
Mr. Charles J. Nehrbas, with whom Mr. John F. O’Brien was on the brief, for defendants in error.
Mr . Justi ce Clarke delivered the opinion of the court.
Pursuant to authority of an act of the legislature of the State, the City of New York, in 1890, began the construction of an elevated viaduct in 155th Street, which was completed in 1893. Before and during the construction of the viaduct George W. Sauer, the intestate of the plaintiff in error, was the owner of property fronting upon the part of the street improved and in due time instituted suit to recover damages, which he claimed he had suffered. After many vicissitudes, sufficiently indicated in Sauer v. City of New York, 206 U. S. 536, and People ex rel. Crane v. Ormond, 221 N. Y. 283, the litigation resulted in a decision by the Court of Appeals of New York in 1917, that the construction of the viaduct effected a change of grade in the street, that the administratrix of Sauer’s estate was entitled to recover such damages as had been caused to the property, and that the Board of Assessors of the City of New York had jurisdiction to make award of such damages. 221 N. Y. 283, supra.
With the right to damages thus established, the plaintiff in error in due time filed her claim with the Board of Assessors and was awarded a substantial sum as compensation. While her claim for damages was pending with the Board of Assessors “ The Greater New York Charter ” was amended in many respects affecting the powers and p. 144duties of the Board of Assessors and of the Board of Revision of Assessments (Laws of New York, 1918, c. 619). The Comptroller, Corporation Counsel and President of the Department of Taxes and Assessments of the City, had constituted the Board of Revision of Assessments since 1901, and as such were given power to review any award of damages made by the Board of Assessors, and the only essential change made by the amendment of 1918 consisted in the provision that:
“ The confirmation of any such award by the board of revision of assessments shall be final and conclusive upon all parties and persons whomsoever with respect to the amount of damage sustained.”
The plaintiff in error, not being satisfied with the amount of the award in her favor by the Board of Assessors, filed objections thereto, which were overruled, and thereupon, pursuant to law, the proposed award with the objections was presented to the Board of Revision of Assessments and was by it confirmed.
The plaintiff in error, continuing dissatisfied, thereupon appealed to the Supreme Court of New York for, and procured, a writ of certiorari to review the determination of the award by the Board of Assessors and the confirmation of it by the Board of Revision of Assessments. The ground of this application was that the quoted provision of the act of the New York Legislature of 1918, making the confirmation of the award by the Board of Revision of Assessments final and conclusive “ with respect to the amount of damage sustained,” was repugnant to the Constitution of the United States and void, and that the right to such review by certiorari, theretofore existing, was not affected by it.
A motion by the city to dismiss the writ on the ground that plaintiff in error’s right to it was cut off by the amendment to the statute was denied by the Supreme Court and by the Appellate Division of the Supreme p. 145Court, but this decision was reversed by the Court of Appeals in the judgment which is now under review.
It is conceded that at the time the viaduct was erected and until the Act of 1918, under the practice of New York, the plaintiff in error had the right to a general review in the Supreme Court, a court of general jurisdiction, of the proceedings before the Board of Assessors until 1901 and of the Board of Revision of Assessments until the amendment in 1918. The holding of the Court of Appeals in this case (228 N. Y. 309, 316) is that the provision of the act, making the confirmation of the award by the Board of Revision of Assessments final and conclusive, would not prevent “ the consideration on certiorari of questions of jurisdiction, fraud and willful misconduct on the part of the officials composing the boards”, but that it was conclusive against the right to a general review of questions relating to the subject of damages such as the plaintiff in error was presenting to it. Matter of Southern Boulevard R. R. Co., 143 N. Y. 253, 259, is cited as a precedent for this holding. ,
Thus the contention of the plaintiff in error, pursued through all the state courts and now presented in this court, is, that the modification by the Act of 1918 of the remedy available to her intestate when the viaduct was constructed and his right to damages became complete, offends: (1) Against the contract impairment clause (Art. I, § 10); (2) against the equal protection clause; and (3) against the due process of law clause of the Fourteenth Amendment to the Federal Constitution.
As to the first of these contentions.
While, under the holdings in People ex rel. Crane v. Ormond, 221 N. Y. 283, and Ettor v. City of Tacoma, 228 U. S. 148, the decedent of the plaintiff in error had a vested property right to compensation after the completion of the viaduct, very clearly this was not a contract right in a constitutional sense.
It has long been settled by decisions of this court that the word “ contracts ” in § 10 of Article I of the Constitution is used in its usual or popular sense as signifying an agreement of two or more minds, upon sufficient consideration, to do or not to do certain acts. “ Mutual assent ” [express or implied] “ to its terms is of its very essence.” State of Louisiana ex rel. Folsom v. Mayor and Administrators of New Orleans, 109 U. S. 285, 288; Freeland v. Williams, 131 U. S. 405, 414; Essex Public Road Board v. Skinkle, 140 U. S. 334, 340; Morley v. Lake Shore & Michigan Southern Ry. Co., 146 U. S. 162, 169; Garrison v. City of New York, 21 Wall. 196, 203.
The Court of Appeals held that at common law the intestate of the plaintiff in error did not have any right of action for the damage done to his property {Sauer n . City of New York, 180 N. Y. 27), and this court affirmed that judgment in 206 U. S. 536, supra. In the later case, 221 N. Y. 283, supra, by treating the construction of the viaduct as a change of grade of the street, a statute (not noticed in the earlier decision) was made applicable and from it was derived the right to recover asserted in this case. The origin of the right is thus wholly statutory, an act of grace by the legislature, as if “ consulting the interests of morality,” so that there is nothing in the nature of a contract in it, and therefore there is nothing in the case for the contract impairment clause of the Constitution to operate upon. The first contention of the plaintiff in error cannot be sustained.
The statement of the case shows that, stripped of non-essentials, the second contention of the plaintiff in error is that the cutting down by the amendment of 1918 of her remedy from a general review in the State Supreme Court to a review limited to “ questions of jurisdiction, fraud and willful misconduct on the part of the officials composing the boards,” deprived her of her property without due process of law.
In determining whether or not due process of law has been denied regard must always be had to the character of the proceeding involved for the purpose of determining what the practice at common law was and what the practice in this country has been in like cases. Twining v. New Jersey, 211 U. S. 78, 100.
The right of the plaintiff in error to damages having been established by the decision in 221 N. Y. 283, supra, there remained only the problem of determining the amount of the award which should be made and the manner of making it, and the reference of such a question, especially in eminent domain proceedings, to a commission, or board, or sheriff’s jury, or other non-judicial tribunal, was so common in England and in this country prior to the adoption of the Federal Constitution that it has been held repeatedly that it is a form of procedure within the power of the State to provide and that when opportunity to be heard is given it satisfies the requirements of due process of law, especially when, as in this case, a right of review in the courts is given. Custiss v. Georgetown & Alexandria Turnpike Co., 6 Cranch, 233; Backus v. Fort Street Union Depot Co., 169 U. S. 557, 569; United States v. Jones, 109 U. S. 513, 519; Long Island Water Supply Co. v. Brooklyn, 166 U. S. 685, 688; and Bauman v. Ross, 167 U. S. 548, 593.
No one has a vested right in any given mode of procedure (Railroad Co. v. Grant, 98 U. S. 398, 401; Gwin v. United States, 184 U. S. 669, 674) and so long as a substantial and efficient remedy remains or is provided due process of law is not denied by a legislative change. Oshkosh Waterworks Co. v. Oshkosh, 187 U. S. 437, 439.
The amendment of 1918, following an earlier amendment in 1901, gave to the plaintiff in error the right to have the award of the Board of Assessors reviewed by the Board of Revision of Assessments, which her intestate did not have when the viaduct was constructed, and while the
g544°—23------ 13
amendment of 1918 made the finding of the latter conclusive as to the “ amount of damage sustained,” it retained the right to review in the courts the entire finding, whenever lack of jurisdiction, or fraud, or wilful misconduct on the part of the members of the Board should be asserted. This afforded ample protection for the fundamental rights of the plaintiff in error, and the taking away of the right to have examined mere claims of honest error in the conduct of the proceeding by the Board did not invade any federal constitutional right. Even courts have been known to make rulings thought by counsel to be erroneous. McGovern v. City of New York, 229 U. S. 363.
The Court of Appeals declares that the theory of the amendment is well understood to be “ the policy that the greater good is sometimes served by making certain classes of decisions final and ending litigation, even though in a particular case the individual is prevented by review from correcting some error which has injured him. ”
It may not be an undiluted evil to the real parties in interest to this litigation, which has been pending in various forms for nearly thirty years, to have it brought to an end and to have the large award allowed in 1918 divided among them.
Plainly this second claim of the plaintiff in error must be denied.
The final contention is that the amendment of 1918 to the act denies to the plaintiff in error the equal protection of the laws.
It is argued, far from confidently, that this invasion of constitutional right arises from the fact that the Board of Revision of Assessments, having final jurisdiction over the amount of the damages suffered by the intestate of the plaintiff in error, is composed of three city officials, appointed by the mayor, with power to pass on claims against it and that this denies to her an impartial tribunal. This membership of the Board had existed since 1901.
142. Counsel for Parties.
The disposition of this contention by the Court of Appeals is quite sufficient, saying:
“ The officials who heard her claim were not disqualified because selected by the city. Her claim was not against the city but if allowed was collected by assessment. Officials acting really as an auditing board are not condemned because they have been selected by the municipality or other division against which the claim is made. If it were otherwise a great many bodies passing in a judicial capacity on claims from the Board, of Claims down, would be disqualified. ”
The judgment of the Supreme Court, Appellate Division, First Judicial Department of the State of New York, entered on remittitur from the Court of Appeals is
Affirmed.
STATE OF MINNESOTA v. STATE OF WISCONSIN.
IN EQUITY.
No. 11, Original. Motion for final decree submitted January 30, 1922.—Decree entered February 27, 1922.
Decree reciting report of commissioners heretofore appointed to run, locate and designate the boundary between Minnesota and Wisconsin involved in this case; confirming the report; establishing the boundary as set forth in said report and upon the maps accompanying the same; and allowing the expenses and compensation of said commissioners as part of the costs of the suit to be borne equally by the parties.
Mr. Clifford L. Hilton, Attorney General of the State of Minnesota, Mr. W. D. Bailey and Mr. H. B. Fryberger for complainant.
Mr. William J. Morgan, Attorney General of the State of Wisconsin, and Mr. Ralph M. Hoyt for defendant.
Final Decree. 258 U. 8.
By the Court :
The State of Minnesota having made a motion before the court for a final decree, confirming the report of the Commissioners appointed by the decree in this cause on the 11th day of October, A. D. 1920, to run, locate and designate the boundary line between the State of Minnesota and the State of Wisconsin, in and through Lower Saint Louis Bay, Upper Saint Louis Bay and the Saint Louis River, from Upper Saint Louis Bay to the falls in said river, which report is in words and figures, as follows:
“ To the Honorable Chief Justice and the Associate Justices of the Supreme Court of the United States:
We, Samuel S. Gannett, Washington, D. C.; William B. Patton, Duluth, Minn., and John G. D. Mack, Madison, Wisconsin, Commissioners appointed, under decree of the court rendered October 11th, 1920, 1 to run, locate and designate the boundary line between the State of Minnesota and the State of Wisconsin, in and through Lower St. Louis Bay, Upper St. Louis Bay and the St. Louis River, from Upper St. Louis Bay to the “ Falls ” in the said river,’ have the honor to submit the following report, with accompanying maps, which maps are marked Exhibit No. 1, entitled, Supreme Court of the United States, October Term, 1920, No. 13, Original, Tracing of Parts of Original Map of St. Louis Bay and St. Louis River, Made under Direction of Captain George G. Meade, T. E. 1861, Showing Boundary Line Between Minnesota and Wisconsin as Surveyed in Accordance with Terms of Above Decree in 1921, and Exhibit No. 2, entitled, Supreme Court of the United States, October Term, 1920, No. 13, Original, Map Showing Boundary Line Between Minnesota and Wisconsin Through St. Louis Bay and up St. Louis River to the Falls as Surveyed in Accordance with Terms of Above Decree in 1921.
Organization.
The Commissioners held their first meeting on October 29th, 1920, in suite 612, Palladio Building, in the City of Duluth, Minnesota, and organized by electing Samuel S. Gannett, Chairman.
Meade Chart.
In carrying out the decree of the court, that the ‘ boundary line must be ascertained upon a consideration of the situation existing in 1846, and accurately described by the Meade Chart,’ the Commission made a careful study of the Meade Chart, filed as Minnesota’s Exhibit No. 1, and found that the scale of said chart, 1: 32000, was too small for practical use in determining a line which could be laid out and properly monumented; and that the triangulation points of the original Meade survey, shown on the original Meade Map (the location of which was absolutely essential in transferring to the ground points determined on the map), were omitted from the chart.
Meade Map.
An attempt was then made to use the photographic copies of the original Meade map, being Wisconsin’s Exhibits Nos. 46C and 46D, but it was found that the process of production had caused unequal shrinkage in the several sheets composing the map, and that no accurate scalings could be made therefrom.
Under instructions of the Commission, Mr. S. S. Gannett went to the office of the U. S. Lake Survey, in the City of Detroit, Michigan, the repository of the original Meade map, and under his personal supervision, caused an accurate tracing to be made of so much of the said Meade map, and the soundings and triangulation points shown thereon, as pertains to the case under considera-
Final Decree. 258U.S.
tion. An accurate copy of this tracing, showing in addition the boundary line, as fixed on said map by the Commission, is filed herewith as Exhibit No. 1.
Triangulation Points.
The triangulation points, heretofore noted as being platted on the original Meade map by triangles, and shown in red ink on the aforesaid tracing, are located, in the records of the Lake Survey, by rectangular coordinates referred to the primary triangulation station of the U. S. Lake Survey, known as Minnesota Point North Base, drawn in red ink on aforesaid tracing, and described hereinafter in detail under the heading, ‘ Descriptions and Geographic Positions of Triangulation and Reference Points.’ Commissioner Gannett secured an accurate copy of said coordinates from the official records of the U. S. Lake Survey, and they are correctly given in Table No. 1, attached to this report.
The original Meade triangulation points have not been in existence for some years, but the Corps of Engineers, U. S. Army, in later surveys of the St. Louis Bays and River, has established new triangulation points and referred the same by rectangular coordinates to aforesaid 1 Minnesota Point North Base.’ An accurate copy of the official coordinates of these later triangulation points was also secured by Commissioner Gannett, and a true copy of same is hereto attached and marked Table No. 2.
With these coordinates, it is possible to accurately relocate the original Meade triangulation points, or to show the new ones on the Meade map in their true positions; and the last mentioned points are thus shown on Exhibit No. 1,'being marked by triangles in black ink.
Having the existing, or new, triangulation points platted in their true positions on the Meade map, it is possible to ‘ tie in ’ by scale any points or lines on said map to these triangulation points, and to transfer said points p. 153or lines to the ground by similar measurements from said triangulation points.
Office Procedure.
With this information at hand, the Commission laid down on the tracing of the original Meade map, Exhibit No. 1, the boundary line between the States of Minnesota and Wisconsin, in accordance with the decree of the court, namely: ‘From a point midway between Rice’s Point and Connor’s Point, through the middle of Lower St. Louis Bay, to and with the deep channel leading to Upper St. Louis Bay, and to a point therein immediately south of the southern extremity of Grassy Point, thence westward along the most direct course, through water not less than eight feet deep eastward of Fisherman’s Island, as indicated by the red trace A-B-C on Minnesota’s Exhibit No. 1, approximately one mile to the deep channel and immediately w’est of the bar therein, thence with such channel north and west of Big Island upstream to the “Falls.” ’
The center of the pivot pier of the Inter-State Bridge was found to be the point midway between Rice’s Point and Connor’s Point, and was designated by the Commission as Station No. 0. From this point, as a beginning, a series of straight lines was laid out to conform with the decree of the court, special care being taken to have the lines over water not less than eight feet deep as shown by the Meade map, and the angle points between said lines numbered consecutively.
From such of these angle points as were convenient, ‘ ties ’ were scaled to the best situated triangulation points on the map, and by means of rectangular coordinates from each angle point on the lines between the 1 ties,’ to triangulation points, the lengths and angles of deviation of the several lines were calculated, and closed polygons formed. These polygons were then checked as
Final Decree. 258 U. S.
to closure by the method of latitudes and departures, and any errors found were balanced so as to secure closure. By this means your Commissioners were enabled, with a close approach to accuracy, to determine the lengths and angles of deviation of the several lines composing the projected boundary line.
The lengths and angles thus determined and the ‘ ties ’ to the several triangulation points, were used as preliminary field notes by the surveying party employed to 1 run out the boundary line and to locate same by proper monuments, courses and distances.’
Boundary Line Above Fond Du Lac.
For that portion of the St. Louis River beyond Fond Du Lac, and extending to the ‘ Falls,’ and which is not shown on the Meade Chart or map, the Commission established the center line of the river, as a medial line between the shore lines, as surveyed by the Commission, and designated said medial line as the boundary line.
The Survey.
As the boundary line, except in a few instances, runs over water from 8 feet to over 20 feet in depth, the most convenient time for surveying it was after ice had formed to a safe thickness. The winter proved to be mild and the ice conditions unfavorable, adding greatly to the danger and difficulty of the work, and increasing the time necessary to finish it.
The surveying party was organized early in January, 1921, and the necessary equipment was rented or purchased. Starting at Station 0, heretofore described, the approximate position of the boundary line was laid out on the ice, in the bay and river, from the preliminary field notes, and the ‘ ties ’ to the triangulation points, measured. Such discrepancies, due to the curvature of the earth, or to errors in scaling from the map, as were p. 155shown by measuring the 1 ties/ were allowed for and distributed in the angles and distances of all the lines back to the preceding ‘ tie.’ If any important discrepancy was discovered^ the Unes involved were re-run before any adjustments were made. From the final field notes of the adjusted survey, a description of the boundary line by courses and distances was obtained, and is incorporated herein. This work was completed March 19, 1921.
Detailed Description of Boundary Line.
[Here follow lengthy and detailed descriptions of the boundary line, as determined, the monuments, and of triangulation and reference points, with geographic positions, which are omitted by the Reporter as not being of general interest. Persons interested in these may consult the original decree in the clerk’s office, obtain certified copies, or consult the copies forwarded to the Governors of the two States.]
Map of Boundary Line.
The Commission has prepared, and transmits herewith as Exhibit No. 2, a map of St. Louis Bays and River on the scale of 1: 24000, showing their present conditions, improvements along the harbor front, the U. S. Government Harbor Lines and channels, and the relative position of the boundary line. There are also shown as sub-maps, on larger scale, improved or partly improved properties which are crossed by the boundary line; also detailed drawings of the concrete monuments as constructed.
Tables.
The rectangular coordinates, referred to Minnesota Point North Base, of all monuments, reference point [s] and line points are shown in Tables Nos. 2, 4 and 5, hereto attached.
The geographic positions of the angle points in the boundary line are shown in Table No. 6.
Final Decree. 258U.S.
Instruments.
The instrument used in making the survey was a Transit Theodolite with 6V^-inch circle and reading to 10 seconds of arc. The measurements were made on the surface of the ice with a steel tape 300 feet in length, under a tension of twenty pounds, and corrected to temperature of 62° F.
Personnel.
The Commission employed as assistants the following named persons, namely:
Gordon F. Daggett, Madison, Wisconsin, Consulting Engineer.
Lyonel Ayres, Duluth, Minnesota, Consulting Engineer.
D. W. Van Vleck, Superior, Wisconsin, Consulting Engineer.
Paul Lillard, Madison, Wisconsin, Transit Man, in charge of field party.
Edwin 0. Anderson, Duluth, Minn., Chainman.
Frank Kieserling, Duluth, Minn., Chainman.
Frank Suech, Jr., Duluth, Minn., Rodman.
Robert Case, Duluth, Minn., Rodman.
Robert Sansted, Duluth, Minn., Rodman.
Ray Mapp, Duluth, Minn., Draughtsman.
Eusebe J. Blais, Duluth, Minn., Draughtsman.
Finances.
We return herewith a financial statement showing in detail the money actually expended in carrying out the terms of the decree of the court.
Record Books.
All field, computation and record books have been placed in the custody of the chairman of the Commission, p. 157and filed by him in the office of the Geological Survey, Interior Department, Washington, D. C.
Respectfully submitted.
Samuel S. Gannett , Will iam B. Patton , John G. D. Mack ,
Commissioners.”
June 25th, 1921.
The cause coming on to be heard upon said motion of the said State of Minnesota.
It is hereby ordered, adjudged and decreed, that said report of said Commission, filed in the office of the clerk of this court on August 5, 1921, is in all respects confirmed.
It is further ordered, adjudged and decreed that the line as delineated and set forth in said report and upon the two maps accompanying said report being marked respectively Exhibits 1 and 2 by said Commission and which line has been marked by permanent monuments as stated in said report, be and the same is hereby established, declared and decreed to be the true boundary line between the States of Minnesota and Wisconsin and said maps so marked as aforesaid as Exhibits 1 and 2 are directed to be filed as a part of this decree and it appearing that the expenses and compensation of the Commissioners attendant upon the discharge of their duties amounts to fifteen thousand six hundred twenty-six dollars and six cents ($15,626.06), it is ordered that the same be allowed and approved as a part of the costs of this suit, to be borne equally by the parties. And that the sum of two thousand five hundred sixty dollars ($2,560), the expense of printing the record in this case, and the sum of two hundred thirty ($230) dollars, the expense of printing the report of the Commissioners in this case, amounting in the aggregate to two thousand seven hundred ninety dollars ($2,790), are allowed and approved as a part of the costs
Syllabus. 258 U.S.
of this suit to be borne equally by the parties and if one of them has paid more than one-half of such sums, it shall be reimbursed by the other for such excess.
It is further ordered, that the clerk of this court do transmit to the respective governors of the States of Minnesota and Wisconsin copies of this decree, duly authenticated under the seal of this court, omitting from said copies the two maps filed with the report.
STATE OF TEXAS v. INTERSTATE COMMERCE COMMISSION AND RAILROAD LABOR BOARD.
IN EQUITY.
No. 24, Original. Argued on motions to dismiss December 7,8,1921.—Decided March 6, 1922.
1
Regarded as corporate entities created for governmental purposes, the Interstate Commerce Commission and the Railroad Labor Board are not citizens of any State. P. 160.
2
Abstract questions of the power of Congress to enact specified legislation do not present a case or controversy within the judicial power as defined by the Constitution. P. 162.
3
A suit by a State against the Railroad Labor Board and the Interstate Commerce Commission, seeking to annul action taken by them under the Transportation Act of 1920, as an unconstitutional invasion of the rights of the State, injurious to her citizens, held not to be entertained by this court in the exercise of its original jurisdiction where the decisions and orders complained of had been put in execution and their annulment would directly and unavoidably affect resulting interests of carriers and carrier employees who were not parties or represented in the litigation. P. 163.
4
That the citizenship of such necessary parties prevents their being joined will not justify proceeding in their absence. P. 163.
5
A suit by a State to set aside orders of the Interstate Commerce Commission must be brought in the District Court and the United • States must be made a defendant. P. 164. North Dakota v. Chicago & Northwestern Ry. Co., 257 U. S. 485. Bill dismissed.
On motions to dismiss an original bill in this court, brought by the State of Texas against the Interstate Commerce Commission and the Railroad Labor Board, and seeking to have declared unconstitutional certain portions of the Transportation Act of 1920, to annul all action taken thereunder by either defendant in respect of railroad carriers in Texas, and to restrain the defendants from taking any further action thereunder in respect of those carriers.
Mr. Tom L. Beauchamp, with whom Mr. C. M. Cureton, Attorney General of the State of Texas, Mr. W. A. Keeling, Mr. Walace Hawkins* and Mr. John E. Benton were on the brief, for complainant.
Mr. Solicitor General Beck, with whom Mr. Robert P. Reeder was on the brief, for the Railroad Labor Board.
Mr. P. J. Farrell for the Interstate Commerce Commission.
Mr. Alfred P. Thom, for the Association of Railway Executives, as amicus curiae, by special leave of court.
Mr. N. A. Stedman, Mr. E. B. Perkins and Mr. Daniel Upthegrove, by leave of court, filed a brief on behalf of the St. Louis Southwestern Railway Company, as amici curiae.
Mr . Justice Van Devanter delivered the opinion of the court.
This is a bill in equity brought in this court by the State of Texas against the Interstate Commerce Commission and the Railroad Labor Board. The relief sought is, first, a declaration that the main provisions1 of Titles III and IV of the Transportation Act of 1920, c. 91, 41 Stat. 456, 469, 474, are unconstitutional and void, p. 160secondly, an annulment of all action heretofore taken thereunder, by either defendant, in respect of railroad carriers in Texas, and, thirdly, an injunction restraining the defendants from taking any further action thereunder in respect of those carriers. The right of the State to bring the suit, our power to entertain it and the merits of the case made by the bill are all challenged by motions to dismiss.
1
Particularly §§ 300-316, subdivisions 18-22 of § 402, §§ 407 and 416, subdivison 1 of § 418, and §§ 422 and 439.
In the bill and supporting brief the defendants are spoken of as citizens of States other than Texas and this is treated as bringing the suit within our original jurisdiction. But both defendants are sued as corporate entities created by the United States for governmental purposes; and, if that be their status,2 they are not citizens of any State,3 but have the same relation to one State as to another. So, to entertain the suit we should have to find some ground of jurisdiction other than the one suggested. But we need not stop to consider the possible grounds whereon a State may invoke our original jurisdiction, because an examination of the bill discloses insuperable obstacles to our entertaining it on any ground.
The provisions of Titles III and IV which are drawn in question are all in terms confined to matters pertaining to railroad carriers engaged in interstate or foreign commerce, and evidently were enacted in what Congress regarded as an exercise of its power to regulate such commerce.
Those relating to the Railroad Labor Board—they are in Title III—may be summarized as clothing the Board with authority to entertain and decide disputes between carriers and their employees in respect of wages, grievances, rules or working conditions; as directing that all parties to such a dispute be accorded a hearing either in p. 161person or by counsel, and as requiring that the decisions be entered in an appropriate record and that they and all violations of them be given such publicity as the Board may indicate.
The provisions relating to the Interstate Commerce Commission—these are in Title IV—may be summarized as investing the Commission with a substantial measure of control or supervision over interstate rates and fares; over the removal of any undue or unreasonable advantage, preference or prejudice, as between persons or localities in intrastate commerce on the one hand and in interstate commerce on the other, arising from intrastate rates and fares; over the removal of any undue, unreasonable or unjust discrimination against interstate commerce caused by intrastate rates and fares; over the division of the carriers of the country into territorial groups for valuation and rate making purposes; over what shall be regarded as a fair return on the aggregate value of the property of the carriers in each group; over the maintenance and use of certain reserve and contingent funds to be set apart from any revenues in excess of such fair return; over the construction and acquisition of new lines and the extension and abandonment of old ones ; over the pooling of traffic or earnings; over the consolidation of carriers; over the issue of stocks, bonds and other securities by carriers, and over making the same person a director or officer of more than one carrier. These provisions contemplate and require in respect of most of the matters recited that the State wherein the carrier’s line lies shall be notified and accorded a hearing before a finding or order is made by the Commission.
Other statutes prescribe that orders of the Commission, other than for the payment of money as reparation, may be enforced in the district courts at the suit of the United States, or may be annulled, set aside or suspended in the district courts at the suit of any aggrieved party p. 162in interest, but that all suits of the latter class shall be brought against the United States as the principal defendant.
The bill is of unusual length, sixty-five printed pages. Much of it is devoted to the presentation of an abstract question of legislative power—whether the matters dealt with in several of the provisions of Titles III and IV fall within the field wherein Congress may speak with constitutional authority, or within the field reserved to the several States. The claim of the State, elaborately set forth, is that they fall within the latter field, and therefore that the congressional enactment is void. Obviously, this part of the bill does not present a case or controversy within the range of the judicial power as defined by the Constitution. It is only where rights, in themselves appropriate subjects of judicial cognizance, are being, or about to be, affected prejudicially by the application or enforcement of a statute that its validity may be called in question by a suitor and determined by an exertion of the judicial power. Georgia v. Stanton, 6 Wall. 50, 73, et seq.; Muskrat v. United States, 219 U. S. 346, 361; Steams v. Wood, 236 U. S. 75, 78.
The portion of the bill particularly directed against the action of the Railroad Labor Board alleges, in effect, that the Board, proceeding under Title III, has heard and decided divers disputes over working conditions and wages between carriers in Texas and their employees; that conformably to these decisions the working conditions have been changed and the wages of the employees materially raised; and that as a result the operating expense of the carriers has been greatly increased, necessity for a larger operating income has arisen, rates and fares have been raised accordingly, and producers, shippers and consumers have been and are being injuriously affected.
Even if these allegations, in connection with other parts of the bill, could be regarded as presenting a concrete
158. Opinion of the Court. .
controversy turning on the validity of Title III, this would not enable us to entertain the suit. The bill makes it plain that the carriers and employees have put the Board’s decisions into effect and have adjusted their relations on that basis. There are none to whom the controversy would be of such immediate concern as to them; and, should it be resolved against the validity of Title III and the Board’s action annulled, their interests would be directly and unavoidably affected. They are not parties to the bill; nor do any of those who are parties represent them. The Board does not claim to do so; and the attitude of the State is antagonistic to them. To take up and solve the controversy without their presence and without their being represented would be quite inadmissible, considering the exceptional nature of our original jurisdiction. California v. Southern Pacific Co., 157 U. S. 229, 257; Minnesota v. Northern Securities Co., 184 U. S. 199, 245. If their citizenship be such that they cannot be brought into the suit consistently with the limitations on our original jurisdiction, this does not justify us in proceeding in their absence. The cases just cited leave no doubt on this point.
The portion of the bill particularly directed against the action of the Interstate Commerce Commission charges, in substance, that the Commission, proceeding under Title IV, has placed the carriers of Texas in a territorial rate group with carriers of other States where railroad construction and operation are attended with greater cost, has approved a general increase in the interstate rates and fares of carriers in that group, has directed a corresponding increase in the intrastate rates and fares of carriers in Texas, has authorized the abandonment by certain carriers of their lines within the State, and has exercised a supervision over the issue of stocks, bonds and other securities by carriers chartered by the State;—all of which orders, it is alleged, impinge on the powers
$544°—23------ 14
reserved to the State and subject its citizens to unnecessary expense and great inconvenience.
If the State have a right to sue to annul these orders, a familiar rule requires that it shall proceed with due regard for the rights of the carriers who have put the orders into effect and are conforming to them. On the question whether the orders are invalid and should be annulled, or are valid and should be upheld, the carriers are entitled to be heard. Their interests are directly involved and will be necessarily affected by the outcome. They are not parties to the bill, and as to all but one the bill makes it clear that their citizenship is an obstacle to making them such. This, without more, would preclude us from awarding any relief on this portion of the bill. California v. Southern Pacific Co., supra; Minnesota v. Northern Securities Co., supra. Besides, there are statutory provisions, before notice^, which direct that all suits to set aside, annul or suspend orders of the Commission be brought in the District Courts and the United States made a defendant. Jud. Code, §§ 207, 208, 211; Act of October 22, 1913, c. 32, 38 Stat. 219-220. These provisions were recently considered by us in a related case and it was there held that the public policy which they reflect requires that a State aggrieved by such an order be remitted to the remedy which they afford—a suit in the District Court in which the United States is made a party. North Dakota v. Chicago &• Northwestern Ry. Co., 257 U. S. 485.
Some emphasis is laid on two statements in the bill—one that the State owns an intrastate railroad 33.55 miles in length and operates the same as a common carrier, and the other that it is a shipper of freight and user of passenger transportation over other lines in both interstate and intrastate commerce. Apparently the only purpose of these statements is to show that the State has such an interest as entitles it to call in question the orders of the Commission dealing with rates and fares. At all events,
158. Syllabus.
the bill does not connect them with any of the other questions sought to be presented or predicate any other claim to relief on them. They therefore are covered by the ruling that suits to set aside, annul or suspend the Commission’s orders should be brought in the District Courts where all proper parties, including the United States, may be made defendants and accorded an appropriate hearing.
What has been said suffices to show that we are not at liberty to entertain the bill in the exercise of our limited original jurisdiction.
In passing it should be observed that some of the provisions of the Transportation Act, assailed by the bill, have recently been upheld in other cases brought before us in regular course on appeal from decrees in the District Courts. Railroad Commission of Wisconsin v. Chicago, Burlington & Quincy R. R. Co., 257 U. S. 563; New York v. United States, 257 U. S. 591.
Bill dismissed.
NEWTON, ATTORNEY GENERAL OF THE STATE OF NEW YORK, ET AL. v. CONSOLIDATED GAS COMPANY OF NEW YORK.
CONSOLIDATED GAS COMPANY OF NEW YORK v. NEWTON, ATTORNEY GENERAL OF THE STATE OF NEW YORK, ET AL.
CONSOLIDATED GAS COMPANY OF NEW YORK v. NEWTON, ATTORNEY GENERAL OF THE STATE OF NEW YORK, ET AL.
APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.
Nos. 257, 258 and 288. Argued November 17, 18, 1921.—Decided March 6, 1922.
1
The copying into the record, contrary to Equity Rules 75 and 76, of voluminous stenographic reports of proceedings before a master, useless exhibits and other matter irrelevant to the appeal, is an 125 Laws of New York 1906 required it to sell gas with illuminating power of twenty-two candles, at no more than eighty cents per thousand cubic feet. A suit brought soon after this act became effective to enjoin its enforcement, because confiscatory, was finally dismissed without prejudice, Willcox v. Consolidated Gas Co., 212 U. S. 19, and for many years thereafter the Company supplied gas at the prescribed rate. January 16, 1919, it instituted the present proceeding against the Attorney General and other public officers. The bill alleges that the statutory rate is confiscatory—prevents and will continue to prevent a fair return on the property used—and prays for an injunction. A Master, appointed in May, 1919, heard testimony from day to day for eight months—about twenty thousand printed pages—and presented this to the court with his report and opinion, May 5, 1920. Having considered the results of actual operations during all of 1918 and the first eight months of 1919, and well known subsequent conditions, he concluded: “ On the basis of the prices, rates of pay, and costs prevailing during the eight months beginning January 1, 1919, the cost of making and distributing gas has been such as to allow a very small, if any return, on even the actual investment; and since September 1,1919, the cost of making and distributing gas has been increased in a number of respects so that the fair inference is that the complainant company now finds itself without any return upon the in-1 Equity Rule 75. . . . (b) The evidence to be included in the record shall not be set forth in full, but shall be stated in simple and condensed form, all parts not essential to the decision of the questions presented by the appeal being omitted and the testimony of witnesses being stated only in narrative form, save that if either party desires it, and the court or judge so directs, any part of the testimony shall be reproduced in the exact words of the witness. The duty of so condensing and stating the evidence shall rest primarily on the appellant, who shall prepare his statement thereof and lodge the same in the clerk’s office for the examination of the other parties at or before the time of filing his prcecipe under paragraph a of this rule. . . . Equity Rule 76. In preparing the transcript on an appeal, especial care shall be taken to avoid the inclusion of more than one copy of the same paper and to exclude the formal and immaterial parts of all exhibits, documents and other papers included therein; and for any infraction of this or any kindred rule the appellate court may withhold or impose costs as the circumstances of the case and the discouragement of like infractions in the future may require. Costs for such an infraction may be imposed upon offending solicitors as well as parties. . . .
Statement of the Case. 258 U. S.
indefensible practice which the court hereafter will feel at liberty to punish to the limit of its discretion—possibly by dismissing the appeal. P. 173.
2. Evidence held sufficient to support conclusions of the master and trial court that the eighty-cent gas rate fixed by New York Laws 1906, c. 125, and upheld in Willcox v. Consolidated Gas Co., 212 U. S. 19, had become confiscatory when this suit was begun and decided due to increased costs of labor and materials, and would so continue. P. 174.
3. There is a presumption that profits realized by a gas company while subject to supervision by a commission empowered to prohibit unreasonable rates were lawfully acquired. P. 175.
4. The public interest in the prpperty of a public service corporation dedicated to a public use, and the past success of its enterprise, will not support a demand that it operate indefinitely at a loss. P. 175.
5. The fact that a gas company may not have supplied gas of the candle power required by statute, will not debar it (as coming with unclean hands) from equitable relief from a confiscatory rate, when its conduct has been subject to official control and it has endeavored to meet its customers’ requirements; P. 175.
6. Books of a gas company, kept in ordinary course, under supervision of a public commission, and free from suspicion, held admissible as prima facie evidence of the confiscatory effect of a statutory gas rate. P. 176.
7. As a condition to an injunction against a gas rate found confiscatory, the court has discretionary power, which, however, should be . exercised very cautiously, to prescribe a maximum future rate for a specified period as a limitation in favor of consumers. P. 177.
8. But a requirement that future collections made by the gas company above the confiscatory rate shall be impounded for ultimate distribution in accordance with a rate to be fixed by state authority in the indefinite future is erroneous. P. 177.
9. The District Court has discretion to make orders pending appeal to preserve the status quo until decision by the appellate court. P. 177.
267 Fed. 231; 274 Fed. 986, modified and affirmed.
Appeals and cross appeals from decrees of the District Court in a suit to enjoin the enforcement of a statutory gas rate.
165. Argument for Newton, Attorney General.
Mr. John A. Garver and Mr. William L. Ransom, with whom Mr. Charles A. Vilas and Mr. Jacob H. Goetz.were on the briefs, for Consolidated Gas Company.
Mr. Wilber W. Chambers, with whom Mr. Charles D. Newton, Attorney General of the State of New York, Mr. Clarence R. Cummings and Mr. John Holley Clark, Jr., were on the briefs, for Newton, Attorney General.
Appellants have not had their day in court as is guaranteed them by the Constitution; and for this reason the case should be reversed and remanded for a new trial.
Respondent enjoyed an adequate return upon the fair value of its property from its inception to the end of the year 1917. The evidence showed that not only did it enjoy such a fair return but it made enormous profits throughout this entire period.
In the years of 1918 and 1919, on which the finding of confiscation was based by the court below, the respondent earned more than a fair return.
The period selected by respondent in its bill of complaint, viz, from the time the statute took effect in 1906 to 1918, inclusive, should be adopted in this case, and the statute should not be considered confiscatory merely upon the financial result obtained in one abnormal year (1918) and part of another (10 months of 1919).
The respondent has accumulated a fund amounting to $11,801,659.48 for “ contingencies ”. The statute should not be declared confiscatory until this fund is exhausted. Temporary losses due to abnormal conditions should be debited against it.
The statute in question should not be declared unconstitutional unless the court finds that the average rate of return has been less than 6% for a considerable period of time.
The sum of $7,781,000 allowed by the master and the court below for franchises should be excluded from the
Argument for Newton, Attorney General. 258 U. 8.
property upon which the respondent is entitled to a return.
The master and the court below have included in the property upon which respondent is entitled to a return, various properties which are not used and useful in respondent’s gas business, and should be excluded.
The Fifty-seventh street office building was not an adequate improvement upon the land upon which it was erected and should not be included in the rate base. Moreover, had respondent rented equivalent office space nearby, there would have been an annual saving of at least $36,000 which should be credited in this case to operating expenses.
Power to regulate gas rates is a sovereign power; one legislature may not bind a succeeding legislature, and any act of a corporation under a general or special law does not of itself establish a property or a contract right which limits the legislature’s power to regulate rates.
The master and the court below erred in failing to follow the rule laid down by this court that, in determining the fair value of respondent’s property, depreciation should be deducted.
Respondent has an unliquidated claim against the United States because the Government extracted light oils from its gas during a part of 1918. Until this has been decided there can be no safe basis for disposing of this case.
The master erred in refusing to admit any testimony showing the tests made by the City of New York concerning the quality of gas furnished by respondent to its consumers prior to 1916. Furthermore, there were many other errors committed by the master in the admission and exclusion of evidence relating to a compliance with the statute in regard to the quality of gas. The evidence allowed was sufficient to establish that respondent repeat-
165. Argument for Swann, District Attorney.
edly violated the statute in regard to candle power; and for this reason alone the bill of complaint should have been dismissed.
Reversible error was committed in the admission of respondent’s books.
The master erred repeatedly in admission and exclusion of evidence, which errors were not corrected in the court below.
Mr. John P. O’Brien, with whom Mr. James A. Donnelly, Mr. Harry Hertzoff and Mr. Ale% I. Hahn were on the briefs, for Swann, District Attorney.
The defendants have not had a fair trial.
The period found is altogether too brief.
The burden was upon the plaintiff of proving the statute unconstitutional.
The plaintiff’s books of accounts were not prima facie proof of their contents.
Distinguishing, Rowland v. St. Louis & San Francisco R. R. Co., 244 U. S. 106, 108; Boyle v. St. Louis & San Francisco R. R. Co., 222 Fed. 546, 547; Northern Pacific Ry. Co. v. Keyes, 91 Fed. 47, 58; Kings County Lighting Co. v. Nixon, 268 Fed. 143; Chesapeake & Ohio Ry. Co. v. Stojanowski, 191 Fed. 720; Parker v. United States, 203 Fed. 950; Wilson v. United States, 190 Fed. 430; American Surety Co. v. Pauly, 72 Fed. 470; Grace v. Brown, 86 Fed. 155; Bacon v. Conroy, 172 Fed. 532; Barber Co. v. Forty-second Street Ry. Co., 180 Fed. 648. Relying on: 17 Cyc. 394,395; Collins v. Collins, 102 App. Div. 204; Consolidated Safety Pin Co. n . Humbert, 128 N. Y. S. 710, 711; Mayor v. Second Avenue R. R. Co., 102 N. Y. 572; Blum v. Davis, 95 Mise. 140; Pneumatic Signal Co. v. Texas & Pacific R. R. Co., 216 N. Y. 374; The Norma, 68 Fed. 509; Wigmore on Evidence, § 1530; Wells Whip Co. v. Tanners Mutual Fire Ins. Co., 209 Pa. St.
Argument for Swann, District Attorney. 258 U. S.
488; Pelican Lumber Co. v. Johnson, 44 Tex. Civ. App. 206, 207; Reyburn v. Queen City Savings Bank Co., 171 Fed. 609, 615, 616; State n . Stephenson, 69 Kans. 405; San Pedro Lumber Co. v. Reynolds, 121 Cal. 74; Meyer v. Brown, 130 Mich. 449; Stolz v. Scott, 28 Idaho, 417; Stuart v. Camp Carson Mining Co., 84 Ore. 702.
The plaintiff’s proof of the cost of manufacturing its gas is defective.
There was no competent proof of plaintiff’s distribution expenses; nor proof that the amounts alleged to be paid for oil were reasonable, and they should not be allowed.
Franchises should not be included in the rate base. Willcox v. Consolidated Gas Co., 212 U. S. 19, 43; Cumberland Tel. Co. v. Louisville, 187 Fed. 637, 647; Lincoln Gas Co. v. Lincoln, 182 Fed. 928; Public Service Gas Co. v. Utility Commissioners, 84 N. J. L. 463; Duluth Street Ry. Co. v. Railroad Commission, 161 Wise. 245; Spring Valley Waterworks v. San Francisco, 192 Fed. 137; Home Telephone Co. v. Carthage, 235 Mo. 644; Bronx Gas Co. v. Public Service Commission, 190 App. Div. 13, 25.
The court erred in fixing the value of the plaintiff’s property.
The statute is not unconstitutional Unless the plaintiff is unable to earn a return which is security for its investment. San Diego Land Co. v. National City, 174 U. S. 739, 754; San Diego Land Co. v. Jasper, 189 U. S. 439; Southern Pacific Co. v. Bartine, 170 Fed. 725; Lincoln Gas Co. v. Lincoln, 250 U. S. 256.
The production cost found was based on an erroneous conception of the evidence.
The plaintiff should have adopted the coke-oven system.
Even on the District Judge’s findings, the statute should not be held confiscatory.
Mr . Justice Mc Reynolds delivered the opinion of the court.
The Consolidated Gas Company was organized in 1884 by consolidation of six corporations then manufacturing, distributing and selling gas in New York City and has continued to carry on the business, making additions and extensions as required by the increasing demand. Chapter p. 172vestment. The conditions found by me have existed for more than a year last past, and to a lesser degree for at least a year before that time, and will continue for at least a considerable period of time, the end of which cannot now be forecast. Upon such a situation and such a prospect, I think that the complainant company has shown itself, clearly and beyond all reasonable doubt, entitled to relief from the statutory limitation on its rates, but that its rate of return should be calculated, not upon the present high reproduction cost of its property, with or without the deduction of observed or actual depreciation, in whatever manner computed, but upon the actual, reasonable investment in the property devoted to the service of the complainant’s consumers. ”
In a carefully prepared opinion, while disagreeing with the Master concerning some valuations and resolving all doubts against the Company, the court held the prescribed rate had been confiscatory since January 1, 1918, and would continue so to be. 267 Fed. 231; 274 Fed. 986.
An amended decree—entered August 11, 1920—enjoined enforcement of the act upon condition “ that until March 1, 1921, or until the earlier promulgation of a gas-rate applicable to the plaintiff by some competent authority of the State of New York, the plaintiff shall neither charge nor collect for the sale of gas in the City of New York more than the sum of one dollar and twenty cents per thousand cubic feet.” And also upon the further condition that it should impound, or adequately secure, collections above eighty cents per thousand cubic feet, for ultimate distribution in accordance with any rate so established.
A broad appeal was allowed in No. 257, September 9, 1920. In No. 258 an appeal, allowed November 10, 1920, brings up those parts of the August decree which imposed conditions upon continuation of the injunction.
February 28, 1921, the trial court undertook to modify the August decree by directing that the excess derived from sales above eighty cents per thousand feet should be impounded until three months after determination of the appeal here or until a rate should be fixed by competent state authority; and further, that such sums should be subject to ultimate distribution “ as nearly as may equitably be done ” in accordance with that rate and the approved principles and findings relative thereto. The appeal from this order is No. 288.
Equity Rules 75 and 761 direct that records on appeal shall not set forth the evidence fully but in simple condensed form and require omission of non-essentials and mere formal parts of documents. Without apparent attempt to comply with these rules and with assent of appellee’s counsel, appellants in No. 257 have filed a record p. 174of 21 volumes—twenty thousand printed pages—made up largely of stenographic reports of proceedings before the Master with hundreds of useless exhibits and many thousand pages of matter without present value. This is indefensible practice which we shall hereafter feel at liberty to punish to the limit of our discretion—possibly by dismissal of the appeal. These rules were intended to protect the courts against useless, burdensome records and litigants from unnecessary costs and delay. Counsel ought to comply with them, and trial courts should enforce performance of this plain duty.
The fundamental question presented for determination was whether the eighty-cent rate had been confiscatory under conditions existing during 1918 and 1919 and probably would continue so to be. Considering the rulings here in Willcox v. Consolidated Gas Co. and other cases, the answer required little more than an appreciation of facts not very difficult to ascertain. The Master’s report and opinion disclosed careful and intelligent consideration of the whole matter. “ Resolving all doubts against the plaintiff ” and using valuations “ pared down unsparingly,” the trial court agreed with the Master’s ultimate findings and ruled that to enforce the statute would result in confiscation. Since March 30, 1921, the Public Service Commission has had power to prescribe rates for appellee unrestricted by the maximum specified in the Act of 1906; but no such action has been taken. It did, however, authorize a rate of one dollar and forty cents, instead of eighty cents, for another company operating in New York City, effective after August 1, 1920, and has thus indicated its informed judgment. See Morrell v. Brooklyn Borough Gas Co., 231 N. Y. 398. We are, of course, aware of the enormous increase in cost of labor and materials since this court declared that appellee might possibly earn six per centum under the eighty-cent rate. In view of all these things, only very cogent reasons would p. 175justify complete reversal of the challenged decYee. The points relied upon by appellants in No. 257 and their supporting arguments have been considered, and we think no such reasons are shown. To discuss all of these would subserve no sufficient purpose—only a few present questions of general interest.
Appellants earnestly insist that they were denied fair and impartial trial both by the Master and the court. So far as it relates to the court, we dismiss the suggestion as frivolous. Undoubtedly during the many months devoted to hearings the Master talked too much and often unwisely; but, manifestly, appellants’ counsel made the situation unnecessarily difficult and failed to support the Master’si earnest efforts promptly to ascertain the essential facts. Looking at all the circumstances we are unable to conclude that any substantial right was denied. The size of the record, eight months of almost daily hearings and the Master’s reiterated offers to hear properly prepared and helpful evidence show that abundant opportunity was given for presentation of appellants’ cause. The Master wisely sought to exclude ill-advised cross examinations and other unimportant matter.
Since 1907 the Gas Company has been subject to supervision by a Commission empowered to prohibit unreasonable rates and the presumption is that any profits from its business were lawfully acquired. Municipal Gas Co. v. Public Service Commission, 225 N. Y. 89, 99. Mere past success could not support a demand that it continue to operate indefinitely at a loss. The public has no such right in respect of private property although dedicated to public use. When it became clear that the prescribed rate had yielded no fair return for more than a year and that this condition would almost certainly continue for many months the Company was clearly entitled to relief.
The claim that appellee had failed to supply gas of the prescribed candle power and therefore came into court p. 176with unclean hands and should not be heard, is without merit. The Company was subject to official control; the facts as to candle power of the gas actually furnished are in dispute; the calorific quality had become more important to most consumers than the illuminating one; the Master reached the conclusion that the statutory standard had been substantially complied with; it had earnestly tried under very difficult circumstances to meet its customers’ requirements. It sought relief from an unlawful burden—the fundamental wrong arose from the statute—and we find nothing which could justify refusal to consider its demand.
Complaint is also made because the Master admitted appellee’s books in evidence. These books were kept in the ordinary course under general supervision of the Commission, appeared free from suspioion of dishonesty, were submitted to appellants’ experts and were the only readily available sources of detailed information concerning the Company’s affairs. In the circumstances we think no harm resulted from admitting them as prima facie evidence. Rowland v. St. Louis & San Francisco R. R. Co., 244 U. S. 106, 108.
The general doctrine applicable when rates are alleged to be confiscatory has been so often stated that present discussion of it is unnecessary. Knoxville v. Knoxville Water Co., 212 U. S. 1; Willcox v. Consolidated Gas Co., 212 U. S. 19; Des Moines Gas Co. v. Des Moines, 238 U. S. 153; Rowland v. St. Louis & San Francisco R. R. Co., 244 U. S. 106; Denver v. Denver Union Water Co., 246 U. S. 178; Lincoln Gas & Electric Light Co. v. Lincoln, 250 U. S. 256.
In No. 258 the Gas Company complains of the limit of one dollar and twenty cents per thousand cubic feet up to March 1, 1921, as a condition to continuation of the injunction, and also because sums above eighty cents per thousand were impounded for ultimate distribution in p. 177accordance with any rate which might be fixed thereafter by competent state authority.
It was within the court’s discretion to grant the injunction upon terms and we cannot now say that the limitation upon charges amounted to abuse. But grave injustice may result from action of this kind and the power should be very cautiously exercised. See Morrell v. Brooklyn Borough Gas Co., 231 N. Y. 398, It was error to direct ultimate distribution of the impounded funds in accordance with any subsequently approved rate. Rate making is no function of the courts and should not be attempted either directly or indirectly. After declaring the eighty-cent rate confiscatory, the court should not have attempted, in effect, to subject the Company for an indefinite period to some unknown rate to be proclaimed in the future upon consideration of conditions then prevailing.
The amendatory decree of February was obtained long after appeals from the August decree had been granted and when the court had very limited power over the litigation. “ One general rule in all cases (subject, however, to some qualifications) is that an appeal suspends the power of the court below to proceed further in the cause.” Undoubtedly, after appeal the trial court may, if the purposes of justice require, preserve the status quo until decision by the appellate court. Hovey v. McDonald, 109 U. S. 150, 157. But it may not finally adjudicate substantial rights directly involved in the appeal. Merrimack River Savings Bank v. Clay Center, 219 U. S. 527, 534. See First National Bank v. State National Bank, 131 Fed. 430. The precise result of the February decree is somewhat doubtful, but we may treat it as an attempt to preserve the status quo in order that this court might finally and completely dispose of the whole matter. Thus interpreted the decree (No. 288) was within the court’s
Statement of the Case. 258 U. S.
discretion and as there was no abuse of this discretion it must be affirmed.
All impounded funds should be promptly released to the Gas Company subject only to deductions for such costs as are clearly assessable to the prevailing party. Costs of appeal No. 257 will be taxed to appellants; in No. 258 to the appellees. Modified as here indicated the decree below is affirmed. The cause will be remanded for further proceedings in conformity with this opinion.
It seems proper to add that we do not intend by anything said herein to intimate what would have been a reasonable rate for the sale of gas under the circumstances disclosed. The eighty-cent rate was confiscatory; the one dollar and twenty-cent maximum imposed by the court during a specified period as a condition to the injunction was a limitation in favor of the consumers.
Modified and Affirmed.
Mr . Justi ce Clarke concurs in the result.