In re Davies

• Decision Date: 01 October 1901
• Citation: 61 N.E. 118,168 N.Y. 89
• Parties: In re DAVIES, Atty. Gen.
• Court: New York Court of Appeals Court of Appeals

168 N.Y. 89

61 N.E. 118

In re DAVIES, Atty. Gen.

Court of Appeals of New York.

Oct. 1, 1901.

Appeal from supreme court, appellate division, Third department.

In the matter of the petition of John C. Davies, attorney general, for an order directing Charles W. Morse and others to appear before a referee for examination. From an order of the appellate division (67 N. Y. Supp. 492) reversing an order of the special term denying a motion to vacate and set aside an order directing said Morse and others to appear and be examined under Laws 1899, c. 690, and which vacated such order, the attorney general appeals. Reversed, and order of special term affirmed.

An application by the attorney general for an order to examine witnesses, pursuant to chapter 690 of the Laws of 1899, resulted in an ex parte order, made on the 28th day of May, 1900, by a justice of the supreme court, at chambers, appointing a referee, and requiring the witnesses named to appear before him for examination. A motion to vacate the same, made at special term, was denied by an order which was silent as to the reasons for making it. The order last named was reversed by the appellate division, and the motion to vacate the order made at chambers was granted, but the order of reversal stated no ground upon which the court proceeded. Subsequently, upon motion of the attorney general, an appeal was allowed, and the following questions were certified by the appellate division to have arisen, which, in its opinion, ought to be reviewed by the court of appeals: ‘First. Are the duties which the statute (chapter 690 of the Laws of 1899) imposes upon the justices of the supreme court nonjudicial duties, and, if so, is it for that reason unconstitutional and inoperative? Second. In granting the order of May 28, 1900, was Justice Chase performing a judicial function? Third. Has the legislature constitutional power to confer upon the referee appointed in the matter provided by such statute the authority to take testimony, and punish for contempt in the manner and to the extent therein provided? Fourth. Do the facts set forth in the petition of the attorney general show that any action authorized by section 3 of chapter 690 of the Laws of 1899 could be maintained? Fifth. Does chapter 690 of the Laws of 1899 require Charles W. Morse, under the order of Justice Chase of May 28, 1900, to give evidence of matters which might subject him to penalties or criminal prosecution under any federal statute in violation of his rights under the state or federal constitution?’ Pursuant to the leave granted by the appellate division, an appeal was taken to this court, which the respondents now move to dismiss.

Bartlett and O'Brien, JJ., dissenting.

John C. Davies, Atty . Gen.

(J. Newton Fiero and Henry B. Coman, of counsel), for appellant.

David Willcox, William Rand, Jr., and Robert G. Scherer, for respondents.

VANN, J. (after stating the facts).

In support support of the motion to dismiss the appeal it is urged that, so far as the record discloses, the order of reversal may have been made in the exercise of discretion, and hence that it is not reviewable in this court. In re Attorney General, 155 N. Y. 441, 445,50 N. E. 57. We think, however, that the motion to dismiss should be denied, for the reason that, where the appellate division allows an appeal, and certifies a question of law for us to review, the presumption is that its determination was made upon the merits, unless it expressly appears by the record that it was made in the exercise of discretion. The statute which gives rise to this controversy is entitled ‘An act to prevent monopolies in articles or commodities of common use, and to prohibit restraints of trade and commerce, providing penalties for violations of the provisions of this act, and procedure to enable the attorney-general to secure testimony in relation thereto.’ Laws 1899, c. 690. It is a continuation, with some changes, of a similar act, with the same title, passed in 1897, which was the subject of consideration in Re Attorney General, 32 Misc. Rep. 1,66 N. Y. Supp. 129;Id., 22 App. Div. 285,47 N. Y. Supp. 883;Id., 155 N. Y. 441, 50 N. E. 57. Laws 1897, c. 383. The act now in force declares every contract or combination to be against public policy, illegal, and void whereby a monopoly in this state of any commodity in common use is or may be created, established, or maintained, or whereby competition in this state in the supply or price of any such commodity is or may be restrained or prevented, or whereby, in order to create or maintain a monopoly within this state, the free pursuit in this state of any lawful business is or may be restricted or prevented. Section 1. It provides for the punishment of every person or corporation who shall make or attempt to make any such contract or combination, or do any act pursuant thereto, ‘or in, toward or for the consummation thereof.’ Section 2. It authorizes the attorney general to bring an action in the name of the people against any corporation, foreign or domestic, its officers or agents, or against any person, ‘to restrain and prevent the doing in this state of any act herein declared to be illegal, or any act, in, toward or for the making or consummation; of any prohibited contract or combination, wherever the same may have been made. Section 3. It declares that ‘whenever the attorney general has determined to commence an action’ under the act, before beginning the same he may present to any justice of the supreme court an application in writing for an order directing the persons mentioned therein to appear before such justice ‘or a referee designated in such order, and answer such questions as may be put to them, * * * and produce such papers, documents and books concerning any alleged illegal contract’ or combination in violation of the act. Said application ‘may simply show upon’ the ‘information and belief’ of the attorney general ‘that the testimony of such person or persons is material and necessary.’ It is made the duty of the justice to grant the application, with such preliminary injunction as may appear to him to be proper and expedient, and of the witness to attend at the time and place designated. ‘The testimony of each witness must be subscribed by him, and all must be filed in the office of the clerk of the county in which such order for examination is filed.’ The provisions of the Code of Civil Procedure relating to the examination of witnesses before the commencement of an action ‘shall not apply except as herein prescribed.’ Section 4. The order must be signed by the justice making it, and the attorney general may indorse upon the same ‘a clause requiring such person to produce on such examination all books, papers and documents in his possession, or under his control, relating to the subject of such examination.’ Section 5. No person is ‘excused from answering any questions or from producing any books' because the evidence, documentary or otherwise, may tend to incriminate him, but he is protected from criminal prosecution and from any penalty or forfeiture ‘on account of any transaction, matter or thing concerning which he may testify, or produce’ documentary evidence. Section 6. The referee so appointed is given ‘all the powers and is subject to all the duties of a referee appointed under section 1018 of the Code of Civil Procedure, so far as practicable, and may punish for contempt a witness duly served as prescribed in this act for non-attendance or refusal to be sworn or to testify, or to produce books,’ documents, etc., ‘in the same manner, and to the same extent as a referee appointed to hear, try and determine an issue of fact or of law.’ Section 7.

Pursuant to this act the attorney general presented to a justice of the supreme court, at chambers, his petition, verified upon information and belief, in which he stated that ‘as such officer’ he had determined to commence an action under said statute in the name of the people against the American Ice Company, a foreign corporation engaged in business in the state of New York, and against its officers and directors, to restrain them ‘from doing in this state any act in, towards, or for the making or consummation of’ a certain contract or combination, ‘and from doing business in the state of New York, and to vacate, annul, and set aside the certificate procured from the secretary of state, pursuant to section 15 of the general corporation law, authorizing said company to do business in the state of New York.’ He further alleged that the two available sources for the supply of ice to the inhabitants of the city of New York are the Hudson river valley and the Kennebec and Penobscot rivers in the state of Maine; that prior to March 11, 1899, more than 80 per cent. of the ice available from said sources was owned or controlled by two corporations organized under the laws of that state, known as the Knickerbocker Ice Company and the Consolidated Ice Company; that the latter, prior to said date, controlled about 90 per cent. of the wholesale and retail ice business in the city of New York, and the former about 80 per cent. in the cities of Philadelphia, Baltimore, and Washington; that these two corporations had a virtual monopoly of the ice supply available to the inhabitants of the city of New York, and, acting together, had it in their power to arbitrarily fix the price of ice; that prior to said date they agreed to combine their interests,and thus control by one company and one management the entire ice-producing territory for the purpose of creating a monopoly of the ice business in various cities, and particularly in the city of New York; that on the 11th of March, 1899, pursuant to such agreement, a third corporation, known as the American Ice Company, was organized under the laws of the state of New Jersey, with an authorized capital of $60,000,000, and immediately thereafter it acquired title to more than 90...