On September 24, 1931, John C. McMahon, who then owned and operated a natural gas production, distribution and sale plant in the towns of North Collins, Collins and Brant and in the village of North Collins, Erie county, agreed to sell the same to the Iroquois Gas Corporation. The purchase price was $130,000 and the agreement was made subject to the approval of the Public Service Commission. After the execution of this agreement the joint petition of the Iroquois Gas Corporation and John C. McMahon was presented to the Public Service Commission asking for its consent to this transfer. Attached to this petition were schedules showing the financial condition of the Iroquois Gas Corporation *185and of John C. McMahon. A hearing was held and as a result the Commission found that the purchase price of $130,000 was at least $30,000 in excess of the property’s reproduction cost new and that the fixed capital, plus materials and supplies, less accrued depreciation, being transferred, was of the value of $86,205.28, or about $44,000 less than the purchase price. The Commission also found that the transfer was in the public interest.
Upon this testimony and the proof then before it, the Commission made an order dated March 2, 1932, granting its consent to the transfer. This consent was given upon certain conditions. All but two of these conditions are accepted by the relator. The two which are in dispute here are as follows:
“ (a) That of the purchase price, $130,000, the amount of $40,000 shall be charged on the books and records of the Iroquois Gas Corporation to surplus.”
“5. That the transfer of this gas plant and franchises and the exercise of any rights under this order shall, in all future proceedings, judicial as well as administrative, to which the Iroquois Gas Corporation may be a party, be deemed and taken as conclusive evidence of its acceptance of and agreement to abide by the conditions hereinbefore set forth in this order.”
A petition for a rehearing was presented on March 21, 1932, and a rehearing was granted. As a result the Commission affirmed its order of March 2, 1932.
The relator, Iroquois Gas Corporation, complains of the two provisions in the order of March 2,1932, and urges that the Commission is' without power to require it to charge $40,000 to surplus on its books and is without power to compel it to accept and agree to abide by the conditions of this order.
The actual value of the property transferred is something less than $90,000. The Commission’s findings as to value are not capricious or arbitrary and, therefore, should be affirmed. The finding that the transfer is in the public interest is not disputed.
We are now met with the question as to whether the Commission has the right to attach any conditions to its consent. Section 70 of the Public Service Law provides that no such transfer shall be made without the written consent of the Commission. The fact that consent is required carries with it the right to impose reasonable terms as conditions upon which such consent is granted. (Matter of Quinby v. Public Service Commission, 223 N. Y. 244.)
The primal requisite of bookkeeping is that it truly reflect the transaction of which it is a record. The particular accounts in which these transactions should be entered are those which correctly *186portray the transactions. The Public Service Commission has jurisdiction not only to set up a proper system of accounting, but “ to prescribe by order the accounts in which particular outlays and receipts shall be entered, charged or credited.” (Pub. Serv. Law, § 66, subd. 9.) This grants authority to order that the entries of completed transactions shall be correctly recorded. Therefore, an expenditure which is not wholly a capital investment should not be entirely entered as such, but should be so recorded as to truly represent its exact nature.
There is no need at this time to discuss at length the purposes for which the books of account of a public service corporation may be used, such as the fixing of rates, issuing of securities and inducing investors to purchase the same. A fundamental requirement is that those records should be true and correct.
The determination of the Public Service Commission should be confirmed.
Rhodes and Crapser, JJ., concur; Hill, P. J., dissents, with a memorandum in which Heffernan, J., concurs.