Eclipse Towboat Co. v. Pontchartrain Railroad

Howe, J. The plaintiffs alleged themselves to he the owners of the steamboat Creole, a vessel built for the Mobile and lake trade. They charged that the defendants had “entered into an alleged combination with one Charles Morgan to deprive the public, generally of the benefits of said railroad, with the view of conferring on the said Morgan a monopoly of the freight and passengers transported over the said railroad, making an unjust and illegal discrimination in his favor in the price charged by tire railroad for tlie transportation of freight and passengers. Further, that said combination was also intended to confer upon the said Morgan a monopoly of the carrying of freight and passengers by means of the navigation of the waters by vessels running between New Orleans and Mobile, and the various ■places situated on the shores of the lakes.” That an undue and unlawful preference was made in favor of Morgan, and that by reason of this and the other facts and figures recited in their petition, they have suffered damages in the sum of $100,000. The defendants answered by a general denial; by a special denial of any unduo preference or monopoly; that the arrangement complained of was made to secure at all seasons the services of an efficient and reliable line of steamers in connection with their terminus on the lake, and was made in good faith and for the promotion of the interest of the public, as well as of themselves. They denied any notice of plaintiffs’ desire to put the Creole into ■the Mobile trade, any exclusion of her from a connection with the [11] railroad, or any refusal to carry freight for her, and averred that the withdrawal of the Creole from the trade, prior to the commencement of the suit, was a voluntary and prudent retirement from a losing trade during the winter season, and was not productive of any loss or damage to the plaintiffs. The plaintiffs prayed for a jury of merchants, and the trial before •such jury resulted in a verdict in their favor for the nominal sum of $100, and plaintiffs alone appealed. There is no proof of any of plaintiffs’ allegations in regard to carriage of passengers, and that branch of their complaint may be ■dismissed. As to the carriage of freight, it appears that on the seventeenth April, 1866, Morgan entered into a contract with the railroad, by which it was stipulated that he “or his agent shall, during the said term” (i. e., five years), “have the right to charge such prices for carrying freights between New Orleans and Mobile or intermediate ports as they may deem best for the mutual interests of the parties; and the Pontchartrain Railroad Company, for its services thus performed, shall be entitled to charge and collect from the said Charles Morgan or his agent, instead of detailed freight charged by the tariff ns heretofore, one-quarter of the total amount of freight moneys which the said steamers may charge for freights thus mutually carried by the parties hereto.” No complaint is made of this agreement. The plaintiffs made the .same for their boat, the Creole, and the same was entered into with the steamer Camelia. The defendants, however, found that this arrangement did not work well for them. The price of freight charged by the Creole, for example, in April, 1866, was fifty cents a barrel, of which the railroad received twelve and one-half cents. During the summer she put her price down to fifteen cents, as did the other steamers, and the railroad got bub three and three-foiu’ths cents. They therefore made a new arrangement, and about the first November, 1867, agreed with Morgan that lie should loan them $250,000, for the purpose of extending their road up the levee and building new depots, and they in turn would continue the arrangement for dividing through freight only with him; charging other steamers the regular tariff rates, as charged to the rest of the public. This stipulation was embodied in the act of mortgage to secure the loan, as follows: “And the said appearers further declared that it has been and is hereby agreed and stipulated between them, that although the company may hereafter receive and deliver at the proposed new depot on the levee the whole or a part of the freight shipped to or brought by Mr. Morgan’s lake steamers, yet the company’s proportion of the [12] freight earnings of said steamers shall be unchanged during the continuance of the contract entered into between him and the company on the seventeenth day of April, 1866. The company is to charge all outside boats, running to and from the lake end (except those running to and from the north Louisiana shore) present tariff rates.” On the second of November, 1867, the defendants notified the agent of the Creole that on and after the fifteenth of that month all freight for her would be charged tariff rates. On the tenth of November, 1867, the Creole was laid up, and on the twelfth February following this suit,.with its enormous claim for damages, was begun. The Creole was sixteen years old at this time. Her cost to plaintiffs was $35,000; her tonnage 396 tons. Morgan placed on the route three steamers; aggregate tonnage, 2800 tons, and cost $585,000. We do not find that the defendants have joined in the appeal, and the judgment must, therefore, stand unless the plaintiffs are entitled to»have its amount increased in accordance with the claims they make in their petition and the views of the law they have urged in their argument. • The plaintiffs sue, of course, in enforcement of some supposed legal obligation, and the question at once presents itself whether any such obligation exists. It is not pretended that it springs from any contract or quasi contract or from the operation of the law. It must, therefore, result, if any existence it have, from some offense or quasi offense committed by the defendants — from some injury or neglect on their part. But as neglect is evidently out of the question, we must conclude that the alleged obligation springs from a supposed offense and that the plaintiffs claim under that general principle expressed in article 2315 Eev. C. C., that “ every act whatever of man that causes damage to another obliges him by whose fault it happened to repair it.” There is no room for doubt at the present time as to the meaning of this language. It is copied literally from the Code Napoleon and has been the subject of numerous decisions and abundant commentary. The phrase “every act” is controlled by the word “fault,” and it results that the party bound must be in fault; that is to say Ms conduct must be, in the general sense of the word, unlawful. No one can be held liable for the regular and prudent exercise of a legal right that belongs to him. He does not commit a fault by making use of a right. Wullus videtur dolo f acere qui suo jure utitur. L. 55, ff. de reg. jur. And ho alone causes a legal inquiry who does what he has not a right to do. Hemo damnum facit, nisi qui id facit quod facers jus non habet. L. 151, ff. de reg. jur. These principles are elementary, and wo merely paraphrase the language of the jurists from G-aius and Paulus down to the latest commentator. [13] And these principles are especially applicable to the competitions of modern commerce. “ To him that hath shall be given, and from him that hath not shall be taken away even that he hath.” One man by rare powers of combination acquires capital, and by its use builds up a business which dwarfs and finally kills the trade of his less fortunate neighbor. We may pity the weaker merchant, but we can not mulct the stronger one in damages. The great law of “ natural selection ” is something we can not repeal, and “ the fittest survive,” and al ways will. Tho case is narrowed, then, to the inquiry whether there was anything unlawful and legally injurious to plaintiffs in the agreement made by the Pontchartrain Railroad Company with Charles Morgan, by which, in the language of their trade, they “prorated” the through freight with him to and from New Orleans and Mobile, and declined to further pro rate with plaintiffs. We can not perceive anything illicit in this agreement. Tho plaintiffs do not pretend that tho railroad charged them, or the public generally, too much, but that it charged Morgan too little. What law did they violate in so doing? No statute of Louisiana has been infringed; none is quoted by appellants except the charter of the company, and that is silent on the subject. No rule of jurisprudence has been violated, so far as we can perceive. The company is a juridical person; its special business is to make contracts in regard to freight, and what is there to prevent it from making an agreement by which a large loan is secured to enable it to extend its road and build its depots, and by which a daily line of fine steamers is secured to connect its short route with the great highways to the East and North? And what is there to prevent its declining to “pro rate” with the Creole and Camelia, when it found that the effect of prorating with several lines was to enable them to engage in the game of competition at the railroad’s expense ? The plaintiffs never offered to loan the railroad a quarter of a million of dollars, or any other sum; the plaintiffs never offered to establish a daily line of large swift steamers; they call their own vessel the “ poor little Creole.” Why should they complain, then, if the company chooses to avail itself of the great advantages offered by Morgan? But above, all, why should they complain if the railroad refuses to “ pro rate” with them when it is not bound to pro rate with any one? Tho plaintiffs cite, as in their favor, a number of cases recently decided in the English courts, and particularly those collected in the note 15 to page 70 of volume 2, Redfield on Railways. But these decisions were made under the stringent provisions of railway traffic acts of Parliament, and, as has been remarked by the Supreme Court of Massachusetts, (12 Gray, 398,) “ throw very little light upon questions concerning the general rights and duties of common carriers.” Yet even with the peculiar and stringent provisions of the English [14] legislation on the subject, it lias been there decided that “it is competent to a railroad company to enter into special agreements whereby advantages may be secured to individuals in the carriage of goods, where it is made clearly to appear that in entering into such agreements the company have only the interest of the proprietors and the legitimate increase of the profits of the company in view, and that the consideration given to the company in return for the advantages afforded is adequate, and the company are willing to afford the same facilities to all others upon the same terms.” Redfield on Railways, volume 2, pages 74, 75, citing Nicholson v. G. W. Railway, 5 Com. Bench, N. S. 366. The better opinion seems to be, that in the absence of special statutes a railway corporation is in the matter of freight contracts governed by the general law of common carriers. Redfield on Railways, volume 2, page 117; Sewell v. Allen, 6 Wend. 335 ; Citizens’ Banff v. Nantucket Steamboat Company, 2 Story 16; Fitchburg Railroad Company v. Gage, 12 Gray, 393. In the last case, which is directly in point, the Supreme Court of Massachusetts. said of the common law in regard to carriers: “The principle derived from that source is very plain and simple. It requires equal justice to all. But the equality which is to be observed in relation to the public and to every individual consists in the restricted right to charge in each particular case of service a reasonable compensation, and no more. If the carrier confines himself to this, no wrong can be done, and no cause afforded for complaint. If for special reasons, in isolated cases, the carrier sees fit’to stipulate for the carriage of goods or merchandise of any 'class for individuals for a certain time, or in certain quantities, for less compensation than what is the usual, necessary and reasonable rate, he may undoubtedly do so, without thereby entitling all other persons and parties to the'same advantage and relief.” On the whole, we see no reason to increase the judgment in this case. Judgment affirmed.