Rothschild v. Wabash Railroad

Lewis, P. J., delivered the opinion of the court. The petition states that the plaintiff, a dealer in cattle, shipped by the defendant’s railway line, between the first day of August, 1877, and the first day of January, 1878, two hundred and forty-seven car loads of cattle from East St. Louis to Jersey City, for which he was compelled to pay $130 per car. That, at the same time, Nelson Morris, Samuel W. Allerton, and Timothy Eastman were also shippers of cattle over the same line, from and to the same points. That the defendant entered into a secret arrangement with the said three namedpersons, by which they were to pay a much less rate than was required and. collected of the plaintiff, and less than the defendant would accept for the same service from the plaintiff or any other person. That, by reason of this unjust discrimination, plaintiff is damaged in the sum of $16,800, for which he prays judgment. The court heard the testimony, and declared the law thus : — “The court declares the law to be, that a railroad company is bound to receive and carry without discrimination in its charges for the same services, and that if the evidence shows that the defendant (or the ‘Wabash,’ which is the predecessor of the defendant ), charged plaintiff more for carrying his cattle from East St. Louis to Jersey City, than he charged S. W. Allerton, Nelson Morris, or T. G-. Eastman for a similar service, then the plaintiff is entitled to recover the excess or overcharge so paid by him.” The court found upon the issues for the defendant. We do not perceive that this finding fails to harmonize with the facts of the case, and the law as declared by the court. It is not to be doubted, that in so far as the policy of the law forbids a direct discrimination between the common patrons of a public carrier, in the matter of charges for transportation, it equally denounces any attainment of the same result by indirect .means, in the shape of rebates, drawbacks, or discounts. But none of these things appear in the present case. The arrangement of which the plain [244] tiff complains was nothing more than a provision for compensating services undertaken and actually rendered by the three persons named. It appears from the testimony, that in June, 1875, a meeting was held of representatives of the three great trunk lines of railway from the West, leading into the city of New York, to wit, the Pennsylvania Central, the Erie, and the New York Central, with the object of a uniform adjustment of rates on live stock. It was considered essential to such an adjustment, that each of the three roads should do a certain percentage, then agreed upon, of the entire carrying trade under consideration. In order to effect this, an arrangement was agreed upon between the companies and Messrs Morris, Eastman, and Allerton, whereby those gentlemen were to secure such a division of the shipments of live stock from the West, as would give to each of the roads its proper share of the entire trade. It was in contemplation that, in order to a performance of their ¡jart in the agreement, it might be necessary, from time to time, for these “ eveners,” as they were called, to make special purchases and shipments of stock, so as to make up any deficiencies that might appear in the proportionate amount of business done by either one of the roads. By way of compensation for their services and undertakings, they were to be paid a certain percentage upon all the stock shipments made over all three of the roads, whether by themselves, or by other persons. The compensation thus agreed upon amounted, at first, to about $20 per ear, but it was after-wards reduced to about $10 per car. The “eveners” were also engaged in the business of purchasing and shipping cattle, and paid the same amounts for freights that were charged against other persons, including the plaintiff. It is the plaintiff’s theory, that the commissions thus allowed to the “eveners” reduced by so much the expenses of their freightage, aud thus operated an unjust [245] discrimination against the plaintiff, who enjoyed no such reduction. The principle which forbids certain discriminations between persons who avail themselves of railway transportation depends -upon a consideration of the common carrier’s obligations to the whole public, and to everybody constituting a part of that public. Every such constituent is entitled to an equal and impartial participation in the facilities for which the corporation was created. Hence, in Hays v. Penn. Co. (12 Fed. Rep. 309), it was held that discriminations in the rates of freight charged by a railroad company to shippers, based solely on the amount of freight shipped, without reference to any conditions tending to decrease the cost of transportation, are discrimination in favor of capital, and contrary to sound public policy. “If one man engaged in mining coal, and dependent on the same railroad for transportation to the same market, can obtain transportation thereof at from twenty-five to fifty cents per ton less than another competing with him in business, solely on the ground- that he is able to furnish and does furnish the larger quantity for shipment, the small operator will sooner or later be forced to abandon the unequal contest and surrender to his more opulent rival.” But nothing in the principle here involved has anything to do with the case of a consideration rendered, whether in services or otherwise, by the shipper, for special rates not extended to others, even where such discrimination is expressly annexed to the charges for transportation. Thus, in Nicholson v. G. W. R. Co. (4 C. B. (n. s.) 366), the railway company gave lower rates to the Ruabon Coal Company, in a contract whereby the coal company undertook' to ship, for a period of ten years, as much coal for a distance of at least one hundred miles over the railroad, as would produce an annual gross revenue of forty thousand pounds to the railroad company, in fully loaded [246] trains, at the rate of seven trains per week. It was held that the undertaking and guaranty of the coal company were promotive of the interest of the railroad company, and furnished an adequate consideration for the reduction of rates. The reduced rates were therefore not an unjust or unlawful discrimination against other shippers. The test whereby to indentify a lawful or unlawful discrimination seems to be simple enough. 'A railway company may, from considerations deemed sufficient for its interest, or in the cause of benevolence, or of the public welfare, carry a passenger or his freight free of charge, without injustice to those who deal with it upon a purely commercial basis. But such transactions are far apart from a mere favoritism shown to capital, or to a particular, business interest, at the expense of other interests which approach the company on a general commercial footing. The case of Hays v. Penn. Co. (supra), furnishes an illustration of the latter. So, also, a case where different rates are charged upon goods destined to different warehouses in the same city. Vincent v. C. & A. R. Co., 49 Ill 33. And so, generally, whenever a railroad company agrees to carry goods for certain persons at a cheaper rate than it will for others, under the same conditions. Messenger v. Penn. Co., 36 N. J. L. 407. It is reasonable to suppose that the company’s losses in such gratuities to the favored ones will be recovered, directly or indirectly, in its dealing with the disfavored./ Nothing in these cases suggested a parallel with the one before us. Suppose a railway company, instead of paying its conductor a salary, should choose to compensate his services by a percentage of the receipts from passengers' traveling on his train. Suppose the conductor to pufchase tickets > at regular rates, for the use of members of his family, as passengers on his train. He claims and receives his percentage on such tickets, as upon all others. Would it not be [247] strangely absurd to allege that, by reason of this percentage, there is an unjust discrimination in the conductor’s favor, reducing the cost of transportation to him, below what others are compelled to pay for the same facilities ? The principle involved would be exactly the same that appears in the present case. Neither reason nor precedent find any injustice or unfairness in either application of it. It is sometimes a matter of judicial inquiry, whether the consideration rendered by the shipper is fairly adequate, and not comparatively valueless, except as a mere device to cover' up the intended favoritism of the company. But no such question is raised in the present case. For aught that appears, the undertaking and services of the “ eveners ” were a fair equivalent for the percentage paid them. The judgment is affirmed, with the concurrence of all the judges.