Newton v. Consolidated Gas Co of New York

• Decision Date: 12 May 1924
• Docket Number: No. 565,565
• Citation: 68 L.Ed. 909,44 S.Ct. 481,265 U.S. 78
• Parties: NEWTON, Atty. Gen., et al. v. CONSOLIDATED GAS CO. OF NEW YORK
• Court: U.S. Supreme Court

265 U.S. 78

44 S.Ct. 481

68 L.Ed. 909

NEWTON, Atty. Gen., et al.

v CONSOLIDATED GAS CO. OF NEW YORK.

No. 565.

Decided May 12, 1924.

[Argument of Counsel from pages 78-80 intentionally omitted] Mr. Chief Justice TAFT delivered the opinion of the Court.

This was an equitable action to enjoin the continued enforcement of chapter 125 of the Laws of New York of 1906, which fixed at 80 cents a thousand feet the price at which gas was to be furnished to private consumers in the various boroughs in the city of New York, on the ground that the rate was confiscatory and violated the rights of the company under the due process clause of the Fourteenth Amendment of the federal Constitution.

The main controversy was settled in favor of the company by this court in March, 1922. 258 U. S. 165, 42 Sup. Ct. 264, 66 L. Ed. 538. Upon another appeal, we directed a reduction of the master's fees by $28,750. 259 U. S. 101, 42 Sup. Ct. 438, 66 L. Ed. 844. When the case reached the District Court (consolidated Gas Co. of New York v. Newton, 291 Fed. 704) for further proceedings, the defendants made a motion to retax costs, objecting to half a dozen items charged. The court allowed certain exceptions, but overruled others. The only one overruled, and here insisted on, is for $76,086.50 for premiums paid by the company to surety companies for bonds securing the repayment of a large amount of money impounded with the special master.

When the District Court found that a rate of 80 cents was confiscatory, it granted an injunction to prevent the Attorney General of the state, the district attorney of New York county, and the Public Service Commission from enforcing such a rate, but as a condition of such injunction it required the company to impound with a special master all sums charged for gas to consumers over and above the 80-cent rate until the issue could be finally settled in this court. This court, although it found error in certain other limitations of the order, held that so much of it was within the court's discretion. 258 U. S. 165, 42 Sup. Ct. 264, 66 L. Ed. 538. The plaintiff, after the order of impounding was made, secured leave from the court to substitute the surety bonds in lieu of cash. Consolidated Gas Co. of New York v. Newton, 267 Fed. 231. In granting this leave, the District Judge said:

'The plaintiff urges with force, I think, that to impound all the moneys over 80 cents for a period perhaps of a year will cause loss both to itself and to the consumers. It suggests that it have the right to substitute adequate securities. The best that the special master can get on the deposits is probably 3 1/4 per cent.; the plaintiff, if required to finance its temporary requirements, must pay much more—it says 14 per cent. In any case it will sustain a loss which will profit no one but the banks, so far as appears. I see no advantage in insisting upon impounding the moneys, if adequate security can be otherwise provided.'

The bonds were required to secure, not only the cash for which they were substituted, but interest at 7 per cent. to become part of the fund. The court continued:

'I have required a substantial rate of interest, because the plaintiff will be in effect using the consumers' money. On the one hand, the consumer profits by getting more than he could from the banks; on the other, the plaintiff profits by being relieved from high rates of interest. The rate at which the plaintiff has sold its bonds is 7 per cent. and on short financing the rates are much higher. I think that 7 per cent. should be the rate, even though the plaintiff must pay a premium to get the bond; it will recover back all that the consumers are not eventually entitled to.'

From the final decree of the District Court, fixing the costs, an appeal was taken to this court. To that appeal the Public Service Commission of New York, as defendant in the suit, was not made a party, and no summons and severance was issued against it. 264 U. S. 571, 44 Sup. Ct. 401, 68 L. Ed. ——. Accordingly the appeal was dismissed in the following per curiam:

'Dismissed for want of jurisdiction, upon authority of Masterson v. Herndon, 10 Wall. 416; Hardee v. Wilson, 146 U. S. 179, 180; Sipperley v. Smith, 155 U. S. 86, 89; Maytin v. Vela, 216 U. S. 598, 601.'

Upon a petition for rehearing the appellants bring to the knowledge of this court that by chapter 134 of the Laws of 1921 the Public Service Commission for the First District, which was here concerned, was abolished, and that therefore the appellants were not required by summons and severance to exclude from the future capacity to appeal, a defunct state board originally joined with them as a codefendant. Mercantile Trust Co. v. Kanawha & Ohio Ry. Co., 58 Fed. 6, 14, 7 C. C. A. 3. We think the abolition of the Public Service Commission made it unnecessary to make it a party to this appeal, and that the dismissal heretofore entered for lack of service of a summons and severance upon it should be set aside.

The appellee insists that the appeal must be dismissed, first, because it is not from a final decree; and, second, because no appeal lies from a decree for costs alone.

First. If the subject-matter is appealable at all, there would seem to be no doubt that the decree has all the characteristics of finality. An execution can issue at once to collect the costs as taxed, including the item here complained of. Trustees v. Greenough, 105 U. S. 527, 26 L. Ed. 1157; Farmers' Loan & Trust Co., Petitioner, 129 U. S. 206, 9 Sup. Ct. 265, 3 L. Ed. 656; In re Michigan Central R. Co., 124 Fed. 727, 731, 59 C. C. A. 643.

Second. Is the order of the District Court for this controverted item appealable? There is no doubt that, as a general rule, an appeal does not lie from a decree solely for costs, and, if an appeal on the merits be taken and affirmed, it will not be reversed on a question of costs. Canter v. American Insurance Co., 3 Pet. 307, 319, 7 L. Ed. 688; Elastic Fabrics Co. v. Smith, 100 U. S. 110, 112, 25 L. Ed. 547; Paper Bag Cases, 105 U. S. 766, 772, 26 L. Ed. 959; City Bank of Fort Worth v. Hunter, 152 U. S. 512, 516, 14 Sup. Ct. 675, 38 L. Ed. 534; Stuart v. Boulware, 133 U. S. 78, 10 Sup. Ct. 242, 33 L. Ed. 568; Du Bois v. Kirk, 158 U. S. 58, 67, 15 Sup. Ct. 729, 39 L. Ed. 895; Citizens' Bank v. Cannon, 164 U. S. 319, 323, 17 Sup. Ct. 89, 41 L. Ed. 451; Wingert v. First National Bank, 223 U. S. 670, 672, 32 Sup. Ct. 391, 56 L. Ed. 605.

Questions of costs in admiralty and equity are discretionary, and the action of the court is presumptively correct. United States v. Brig Malek Adhel, 2 How. 210, 237, 11 L. Ed. 239; The Scottland, 118 U. S. 507, 519, 6 Sup. Ct. 1174, 30 L. Ed. 153. The allowance of costs in the federal courts rests, not upon express statutory enactment by Congress, but upon usage long continued and confirmed by implication from provisions in many statutes. Ex parte Peterson, 253 U. S. 300, 316, 40 Sup. Ct. 543, 64 L. Ed. 919. And see Pennsylvania v. Wheeling & B. Bridge Co., 18 How. 460, 15 L. Ed. 449.

The rule forbidding appeals from decrees for costs only is easily deducible from the discretion vested in the trial court in fixing them and the better opportunity of that court to exercise that discretion from its greater intimacy with details of the pleadings, hearings, and orders in the case. When the power of the court to assess costs against either party is not in dispute, or the mere amount to be fixed is in issue, appeals on such questions alone are not allowed. But the rule is not absolute, and should not be enforced when the trial court assumes the power to assess as costs against a fund or a party expenditures of a class not legally assessable as such. Where a question of this kind is made, appeals have been allowed. Thus in Trustees v. Greenough, 105 U. S. 527, 26 L. Ed. 1157, an appeal was allowed from a decree in equity solely for costs, when the question was whether they could be properly paid out of a fund in the control of the court. So in Re Michigan Central Railroad Co., 124 Fed. 727, 59 C. C. A. 643, an intervener was allowed to appeal from a decree of a trial court, allowing costs in favor of the clerk, when it was objected that neither by statute nor general law could...