284 N.Y. 1 | NY | 1940
These are two cases in which the main question concerns the power of Special Term to award costs in an appraisal proceeding brought by dissenting stockholders to fix the value of their stock. (Stock Corporation Law [Cons. Laws, ch. 59], § 21.)
The Baker and the Cheney cases arise out of the consolidation of the Utica Gas and Electric Company and the Syracuse Lighting Company, Inc., respectively, together with other public utility companies, to form the respondent Central New York Power Corporation, hereafter referred to as the corporation. In the Baker proceeding, 123 separate petitions were made for the appointment of appraisers. All but three of the petitions were verified by one Grant as agent. Three of the petitions were verified by the stockholders themselves. The corporation interposed to each *6 petition verified by Grant, an answer which questioned the timeliness of the application, the ownership of the stock by petitioner, the authority of the agent, etc. Each answer requested that the petition be dismissed, with costs. After a hearing all applications were consolidated by the order which appointed the appraisers. In its opinion the court expressly reserved the question of costs until the conclusion of the entire proceeding; the order confirming the report of the appraisers also reserved the question of costs. Thereafter, by separate order, the court awarded costs as follows: $10 motion costs to each of the 123 petitioners (retaxed at $1,200); a single trial fee, including disbursements, of $101.40; an additional allowance of $2,000, pursuant to section 1513 of the Civil Practice Act.
Upon appeal by the corporation from the separate order awarding costs, the Appellate Division reversed upon the law, and certified to this court the question, "Is the order appealed from proper as matter of law?"
In the Cheney case thirty-three separate petitions were made for the appointment of appraisers, but no answers were interposed by the corporation. After appraisers were appointed, by separate orders in each of the thirty-three proceedings, the court, upon motion by the corporation, consolidated the proceedings, but made no award of costs at that time, nor reserved the question of costs. The report of the appraisers was confirmed by order of Special Term over the opposition of the corporation and costs were awarded by the same order as follows: $10 motion costs to each of the thirty-three petitioners ($330); a single trial fee and disbursements ($327.27); an additional allowance of $2,000 pursuant to section 1513 of the Civil Practice Act.
Upon appeal by the corporation, the Appellate Division modified the order of confirmation by striking the award of costs. Petitioners appeal to this court as of right from that part of the order of the Appellate Division which disallowed costs.
We shall consider first, whether statutory provision exists for the award of costs in proceedings brought under section *7 21 of the Stock Corporation Law, and second, whether the specific items of costs were properly awarded by Special Term.
First. Whether costs are allowable in a proceeding under section 21 of the Stock Corporation Law. Section 1492 of the Civil Practice Act provides that costs in a special proceeding are to be awarded in the discretion of the court at the same rates and in like manner as are allowed for similar services in an action. Thus, the court is given power in its discretion to award costs in a special proceeding. It is conceded by respondent corporation that a proceeding under section 21 of the Stock Corporation Law is a special proceeding and, therefore, the parties in the cases at bar may have costs in the discretion of the court. Even in the absence of such a concession, the conclusion is inevitable in view of the statutory definitions of a special proceeding (Civ. Prac. Act, §§ 4, 5; General Construction Law [Cons. Laws, ch. 22], §§ 11-a, 46-a) and the holding of this court that section 21 created a special proceeding. (Matter of Bickerton,
In analogous cases the court has held that the absence of cost provisions in a particular statute creating a special proceeding does not prevent the award of costs under the general practice provisions relative to costs in a special proceeding even though the particular statute contains a provision for the payment of the fees and expenses of commissioners. (Matter of Low,
Approaching the matter from the practical application of the result reached, we find that the purposes of the statute coincide with an award of costs to the successful party. As to dissenting minority stockholders, the purpose is apparent to protect them from any loss since this court has held that "In effect [they] are being ousted from the corporation." (Matter of Fulton,
Second. The particular items of costs. Trial fee anddisbursements. A single trial fee and disbursements was allowed in each of the two consolidated cases, and no objection is raised except upon the general ground that no costs may be awarded in these proceedings. For the reasons already discussed, this item was properly allowed by Special Term. These were proceedings instituted and carried on to enforce a right. Aid of counsel was required, and the statute should not be so interpreted as to provide that property rights may be disposed of other than in a judicial proceeding upon the testimony of witnesses and upon legal evidence duly taken. (Matter of Bickerton, supra.) The fact that the issue was the value of the stock does not change or detract from the prosecution character of the proceedings. These petitioners prosecuted rights given them by section 21 of the Stock Corporation Law to have their stocks appraised and thereafter paid for by the corporation at the value so found. These values as found were above the values contended for by respondent corporation. It is clear, therefore, that petitioners have prosecuted their rights and have prevailed in the proceedings. The award of a trial fee was, therefore, proper.
Motion costs. Section 1486 of the Civil Practice Act provides that "Costs upon a motion in an action * * * or to appoint an appraiser * * * may be awarded, either absolutely or to abide the event of the action, * * * in the discretion of the court or judge." Respondent corporation contends that no motion costs can be awarded because (1) the motions are in a special proceeding and not in an action, (2) the applications are not motions, and (3) the order granting the applications did not award costs *10
The contention that motion costs are not available because they are special proceedings and not actions is completely answered by the provisions of section 1492, wherein it is provided that costs in special proceedings may be awarded in the discretion of the court in the same manner as in actions.
Section 113 of the Civil Practice Act defines a motion as follows: "An application for an order is a motion." That the order granting the petitions and appointing appraisers is an order cannot be doubted. "A direction of a court or judge, made in an action or special proceeding, must be in writing * * *. Such a direction, unless it is contained in a judgment, is an order." (Civ. Prac. Act, § 127.) In Matter of Bickerton (supra) this court declared that "The appointment of appraisers * * * is in its nature an intermediate order * * *." (232 N.Y. at p. 6.)
However, motion costs are to be allowed in the discretion of the court rendering decision on the motion. (Civ. Prac. Act, § 1486.) In disposing of the motion the court may award costs either absolutely, or the question of costs may be reserved; but unless either one of these two alternatives is adopted, it follows that the court has decided not to exercise its discretion in favor of the party seeking costs. (Price v. Price, 61 Hun, 604; Nellis v. DeForrest, 6 How. Pr. 413; Chadwick v.Brother, 4 How. Pr. 283; Morrison v. Ide, 4 How. Pr. 304.) In the Baker proceedings the court, in granting the motions, reserved decision on the question of costs, and hence their allowance at the conclusion of the entire case was proper. But in the Cheney proceedings the court neither granted costs nor reserved decision, and, therefore, no motion costs could be awarded by the court in rendering the final order in the proceedings.
Additional allowance pursuant to section 1513 of the CivilPractice Act. Section 1513 of the Civil Practice Act provides that "in a difficult and extraordinary case, where a defense has been interposed * * *, the court, in its discretion, also may award to any party a further sum * * *." By the terms of the statute, three conditions *11
must be met before the court may exercise its discretion to award an additional allowance, (1) a defense must have been interposed, (2) the case must have been difficult, and (3) the case must have been extraordinary. In Standard Trust Co. v. N.Y.C. H.R.R.R.Co. (
In the Baker case the question certified to this court by the Appellate Division must be answered partly in the affirmative and partly in the negative, i.e., the allowance of motion costs and a single trial fee was proper as a matter of law, but the award of an additional allowance was improper as a matter of law, and the order of the Appellate Division is modified in accordance with this opinion, without costs in this court.
In the Cheney case the order of the Appellate Division is modified in accordance with this opinion and as modified, affirmed, without costs in this court.
The orders of the Appellate Division should be modified in accordance with this opinion and as so modified affirmed, without costs. The question certified in Matter of Baker should be answered as indicated in the opinion.
LOUGHRAN, J., concurs with FINCH, J.; RIPPEY and CONWAY, JJ., concur in result; LEHMAN, Ch. J., dissents and votes to affirm; SEARS and LEWIS, JJ., taking no part.
Ordered accordingly. *13