City of Buffalo v. Buffalo Gas Co. , 80 N.Y.S. 1093 ( 1903 )

Hiscock, J.:

■ The defendant, as its name implies, is a corporation in the city of Buffalo engaged in manufacturing and supplying gas. This action was brought against it to recover a penalty for its alleged violation of section 69 of the Transportation Corporations Law (Laws of 1890, chap. 566) which provides.that.“no gas-light corporation in this State shall charge or collect rent on its gas meters, either in a direct or indirect manner.” The trial court found that it had violated such law and hence the judgment against it.

The questions presented for our consideration upon this appeal are whether, first, the evidence fairly warranted the trial court in finding as it did, and, second, whether if it did so'warrant it, the law (§ 69, supra) providing the penalty for such act is constitutional.

Our.conclusions lead us to an affirmative answer to each question.

The defendant was created through the merger of three gas companies formerly existing in Buffalo. These former companies had bound themselves by contract with the municipality to supply gas to individual consumers at a fixed rate. The defendant during the years of its existence before this action was brought observed these same rates. It was engaged in supplying gas generally throughout the city of Buffalo, and within the limitations fixed by law was bound to accommodate any person who desired it. It is urged that many persons took gas in such small quantities as to make their patronage unprofitable. About July 1,1901, the defendant adopted a rule, which was- made public through publication in the newspapers and through service of copies upon customers, which, in substance, provided that thereafter to cover cases of the character above indicated it would render a “ minimum gas or service bill ” for each meter on its books that showed no consumption during the month or consumption less than a specified amount. As indicated by the evidence, this meant that in case of consumers who did not use up to a certain limit of gas per month a charge would be made outside of that fixed for the gas itself. Thereafter and during the month of September the defendant committed the acts which are especially made the basis of this action. It presented and collected of one Smith a bill of fifty cents, of which only twenty-four cents was for gas, and this extra charge the. trial court finds constituted a violation such as is alleged in the complaint.

The distinct, specific issue decisive of the general question upon this branch of the case is whether such extra charge was directly or indirectly for rental of the .meter, or whether, as claimed by the learned counsel for the appellant, it was a charge -absolutely independent of meter rental and designed to cover the general expense of the company in carrying the customer on its books, collecting bills, reading his meter, etc.

Assuming simply for the sake of the argument, but not deciding, that the appellant might make such a charge for general cost of conducting business with a customer who did not take sufficient gas to pay his share of such expense, we think as indicated that the evidence authorized the court to find against this' theory and in favor of the one advanced by the plaintiff.

The charge in question having been collected after • and in accordance with the rule adopted by appellant above referred to, the form and wording of the latter is very material upon this question. Commencing with the statement that it will render a service bill for certain meters, it then sets forth a schedule of the charges to be made and which shows that sajd charges varied in proportion to the size of the meter. For a three, five or ten-light meter the charge was to be sixty cents gross, and this sum increased with the size of the meter until in the case of one for 300 lights it reached the price of seven dollars and twenty cents gross. The services included in the cost of conducting business and for which it is insisted this charge might be properly made, would be the same for a small meter as for a large one. It would cost no more to carry a customer upon the books or read his gas consumption or present his bill in the case of a large meter than in the case of a small one, and we can see no reason why, upon that basis, the variation in question should occur. It appears, however, from the evidence of one of defendant’s officials that while one of the smallest meters would cost about five dollars and twenty-five cents, the cost for larger ones would run “ up into the thousands,” and this at once suggests a reason why, in the absence of some law to the contrary, the defendant should charge a larger price for a large meter than for a small one. The -usual rule is that the rent of anything shall be somewhat in proportion to its cost or value, and we think that the trial court, invested with the jurisdiction to draw inferences from the facts, had the right to find that this schedule of charges fixed by defendant, proportioned to the size of meters, had relation to their value and cost and was intended to cover the use thereof. If this were so, there was established a violation of the act in question.

Passing • to the second question, it is too well established to require a citation of .authorities that the court should not lightly?, and without plain. reason therefor, hold an act of the Legislature unconstitutional.

An examination of not only the section of the statute immediately involved, but of others to be read in connection therewith, discloses a well-defined theory and purpose upon the part of the Legislature in their enactment.

A company engaged in manufacturing and' supplying gas is engaged in a business of public interest. Its customers are the people at large, and, in return for the privileges which are granted to the corporation, the former are entitled, within reasonable and proper limits, to protection and safeguards. Ho method has been devised of measuring the quantity of gas used by a consumer as efficient as the meter. Hot only is the consumer entitled to be protected against imposition by some safe method of measuring the quantity which he uses, blit it is essential and necessary for the gas company itself that such measurement and test should be accurate. Having in mind these facts, the law in question) in effect, provides that the consumer shall be supplied with a meter, and that the same shall not only be furnished by the company without charge, but that it shall be inspected by officials designated for that purpose.

The object of these provisions is very plain. They contemplate that the gas company desiring to engage in such business shall not take advantage of its customers either by supplying an untrue meter or by making them pay for the ordinary method of determining what has been consumed.

We think such provisions are clearly within the power conferred upon the Legislature to enact those laws for the public and general welfare which are ordinarily known as police regulations. (People v. Budd, 117 N. Y. 1; Spring Valley Water Works v. Schottler, 110 U. S. 353; Cotting v. Kansas City S. Y. Co., 183 id. 85; Munn v. Illinois, 94 id. 113.)

In other States the right of the Legislature to legislate upon the precise lines involved here has been sustained. (Louisville Gas Co. v. Dulaney & Alexander, 100 Ky. 405; State ex rel. Attorney-General v. Columbus Gas, etc., Co., 34 Ohio St. 579.)

It may be conceded, as argued by the learned counsel for the appellant, that where the Legislature under the improper exercise of the powers in question passes laws which .amount to a- confiscation of property the courts will enjoin the penalties, provided. We do not, however, think that the facts presented to us in this case at all warrant the view that it comes within the principle thus invoked.

While the law within certain limits compels the defendant to furnish gas to a would-be customer, it is not urged here that the Legislature has fixed the price at which defendant must furnish such gas. The compensation which defendant received for furnishing this commodity to the public was voluntarily fixed by agreement with the common council by defendant or its predecessors. A uniform rate was adopted. It could not have been forgotten when this was done that, as now claimed, some people would take se small a quantity of gas as to make their business, standing by itself, undesirable and unprofitable. Presumably, as a condition of secure i'ng from the municipality certain rights and privileges, a schedule of rates was adopted which, taking into account the entire business, would yield adequate returns in the way of profits. The business of defendant in the respect under consideration is not materially different from any other large one. There is probably no large manufacturing or'mercantile-institution which does not transact items of business so small in amount as to afford profits insufficient to meet the general expenses properly chargeable thereto. A merchant who sells an article of trivial value, delivers it, charges it upon his books and collects the bill, has the same experience which is complained of by defendant. His profits, if at all, come through the entire volume of business charged with the entire cost of conducting.it. The rules founded upon such common experience fortify our judgment and opinion that the record in this case does not disclose any such injustice or invasion of the rights of property as to warrant us in holding that the law which stands over this action is unconstitutional and void.

The judgment appealed from should be affirmed, with costs.

Spring and Williams, JJ., concurred; Nash, J., dissented in an opinion in which McLennan, J., concurred.