13 Colo. 181 | Colo. | 1889
The question presented for consideration in this case arises upon the judgment of the court below sustaining a demurrer to the complaint.
The grounds of demurrer were, in substance, (1) that the complaint did not state facts sufficient to constitute a cause of action; (2) that the contract sought to be enforced was void as against public policy; (3) that there was a defect of parties defendant.
To discuss the.case intelligently a careful analysis of the contract and the allegations of the complaint is necessary.
The contract is set out in hæc verba, and is as follows:
“This agreement, made this 20th day of March, A. D. 1878, by and between B. H. Bayles, of Denver, Colorado, party of the first part, and S. R. Ainsley, general agent of and representing the Kansas Pacific Railway Co., party of the second part, witnésseth, that the said party of the first part hereby agrees to ship all merchandise bought by him, and shipped from eastern cities, by the Kansas Pacific Railway Co., in consideration of which the said party, on behalf of and representing the Kansas Pacific Railway Co., agrees to transport all merchandise consigned to said party of the first part from (1) New York to Denver, Colorado, $1 per hundred pounds, regardless of classification; (2) Chicago, Ill., to Denver, Colo., $110 per carload, and eighty cents per hundred pounds on less than car-load shipments; (3) St. Louis, Missouri, to Denver, Colo., eighty cents per hundred pounds on less than car-load shipments, and $110 per car-load lots; (4) Kansas City, Mo., and Leavenworth, Kan. (proper), $.90 per car-load, and sixty cents per hundred pounds on less than car-load shipments.
*183 “It is agreed that the above rates shall be and remain in force until January 1, 1889. And it is further agreed that the said party of the second part shall rectify and correct all overcharges, and protect the said party of the first part in the above-named rates, in Denver, Colo. And it is further agreed that when merchandise shipped to the care of the Kansas Pacific Railway Co. shall be diverted to other roads, and be delivered by other than the Kansas Pacific Railway Co., it shall in no way work a forfeiture of this contract. (Signed) B. H. Bayles. S. R. Ainsley, Agt. K. P. R’y.”
It is then alleged that prior to the date of said contract, by order and decree of the circuit court of the United States for the district of Kansas, in a certain suit wherein John A. Stewart and others were plaintiffs, and the Kansas Pacific Railway Company was defendant, one S. T. Smith had been appointed and had duly qualified as receiver, and had taken possession of the said railway for its entire length, from Kansas City, Mo., to the city of Denver, and from that time until June 14, 1819, had managed said railway, and that all transportation of-freight was contracted for and controlled by him as such receiver.
This allegation is followed by the statement that S. R. Ainsley, at the time the contract was made, and during .all of his term of office, was thé general agent of the said receiver at the city of Denver, and authorized to execute, on his behalf, agreements for the transportation of freight, including the contract above set forth; that by mutual mistake in the form of the agreement the contract was executed by said Ainsley as representative of the said railway company, rather than said receiver.
It is then alleged that the contract was adopted, and partially performed, by the said receiver, and that freight of plaintiff was transported under such contract by him, through his agents and employees, and all money paid by plaintiff was received by his agents, and used by him in
It is then stated that the railway remained in the possession and under the control of the receiver until June 4, 1879, when the circuit court decreed that it should be delivered to and- retained by the railway company, which order was complied with by the receiver, who, on the 14th day of the same month, turned over to the railway company all moneys in his hands, amounting to the sum of $265,791.20, and took a receipt therefor, by which it was stipulated and agreed by the rail-way company that ‘ ‘ any other claims against the receiver should be assumed and paid by the said rail-way company,” which said adjustment was afterwards approved by a final decree, rendered October 17, 1884.
It is then stated that at the time the money was so paid to defendant by the receiver the indebtedness sought to be recovered in this action was a valid claim against the receiver, and one of the debts which the railway company assumed and agreed to pay.
It is then alleged that under the provisions of the contract, plaintiff, in performance thereof, shipped all merchandise bought by him in eastern cities over the Kansas Pacific Railway to Denver, and that the total freight on s,uch merchandise aggregated the sum of $10,619.69, which sum he from time to time paid to the agents of the receiver in full; that under the contract he was entitled to a rebate on the amounts paid for freight in the sum of $2,565.91; that of that sum the agent of the receiver, with his full knowledge and consent, paid to the plaintiff at various times, and in different amounts, the sum of $1,353.53, leaving a balance still unpaid on March 3,1879, of $1,211.39; that the railway company refused to pay the balance remaining unpaid; that plaintiff paid the full freight rates on merchandise shipped by him as aforesaid, and by the terms of the contract was entitled to a return of said sum of $2,565.91, “which sum was the
The second cause of action need not be stated.
Judgment is prayed for the reformation of the contract, so that the same shall conform in its execution to the real intention of the parties, and for the sum of $1,211.39 upon the first cause of action, and for the sum of $2,000 upon the second cause of action, and for costs.
The demurrer was sustained upon the sole ground that the contract sought to be enforced was void as against public policy.
The court in effect held that, under the contract, the plaintiff secured rates for the transportation of merchandise which were less than the published schedule rates of defendant; that such charges amounted to an unjust discrimination within the meaning of the law and the constitution of this state, of which the court could take cognizance upon demurrer, without proof of any of the facts, circumstances, conditions or surroundings .under which the contract was made, and which may have existed while the same was being performed by the plaintiff. This decision, and the principles which are invoked to sustain it, will now be discussed.
The naked facts of the case are simply that upon the day named a contract was made, by the terms of which plaintiff, for a certain period, was to have a special rate upon the merchandise purchased by him in eastern cities, in consideration of his undertaking to consign such merchandise from Kansas City via Kansas Pacific Railway.. This rate applied only to shipments made at the eastern terminus ■ of the railway, or which were shipped from eastern cities consigned to appellee. Whether the rate was either different or less than that given to other shippers residing in Denver, under like conditions and under the same circumstances, does, not appear.
Upon all the facts, therefore, if effect be given not only to the language of the contract itself, but to every allegation of the complaint, it is clear that the purpose of the contract was to give appellant a special rate, and nothing-more. This contract was performed by him, and partially performed by the railway company. The ultimate conclusion to be drawn from the entire record is that appellant secured a rate which was less than the regular schedule rates in force at the time; that there was some inequality in charges made by the appellee, but nothing kushow that such inequality in charges was practiced towards those who shipped property under, like circumstances and conditions.
Do these facts, standing alone, warrant the conclusion that, within the meaning of the law and of the constitution, an unjust discrimination was intended, which rendered the contract void as against public policy?
It is a well-settled elementary principle of the law of 11common carriers that mere inequality in charges does not amount to unjust discrimination. The requirement of the law is that the charge made shall be reasonable. A claim against a common carrier cannot be predicated
These principles of the common law remain in full force in practically eveiy state. In this state they are made a part of the organic law, from which neither the courts nor the legislature can depart.
Attention is here called to a few of the authorities bearing upon these principles. “Railroad companies may lawfully make contracts to refund to a shipper a certain portion of the stipulated or established freight, by the name of ‘drawbacks’ or ‘rebates;’ but an agreement not to allow the same drawback to others is against public policy and void. But if such objectionable part of the contract is severable, it will not affect the validity of the entire contract.” 2 Ror. R. R. 1375.
In the case of McNees v. Railway Co. 22 Mo. App. 224, the action was brought to recover rebates upon a contract practically the same as that stated in the' complaint in the case at bar. A demurrer was interposed to the complaint, upon the ground that it did not state facts sufficient to constitute a cause of action, and the question argued and decided was whether the contract
The sections of the statute cited by the court need not be quoted here. 'The statute was enacted to prevent unjust discrimination.
In the case of Christie v. Railway Co. 32 Am. & Eng. R. R. Cases, 569, it is held that “a common carrier has the right to contract to ship-freight at a lower rate than the published tariff rate if he choose to do so; and such a contract is not against public policy, unless the privilege to ship at such rate is granted exclusively to the shipper with whom it is made, or is denied to other shippers. It is the exclusiveness of the privilege granted to one and denied to another which makes the discrimination, and renders the contract void as against public pol
The cases cited clearly establish the proposition that mere inequality between the rate charged a shipper and the published tariff rates does not constitute unjust discrimination within the meaning of the law.
The court below decided this case upon the authority of Scofield v. Railway Co. 43 Ohio St. 571. The case is well considered, and contains a most exhaustive and instructive discussion of the question of discrimination, but nowhere in all the fifty pages occupied by the discussion can there be found a syllable upon which the conclusion that the contract in the case at bar was void as against public policy can be predicated. The principle decided, briefly stated, is as follows: “Where a lower rate is given by such corporation to a favored shipper, which is intended to give, and necessarily gives, an ex-elusive monopoly to the favored shipper, affecting the business and destroying the trade of other shippers, the
Messenger v. Railroad Co. 36 N. J. Law, 407, is cited in support of the judgment. The principle in that case is precisely the same as that decided in the Ohio case, and is stated in the syllabus in the following language: “ An agreement by a railroad company to carry goods for certain persons at a cheaper rate than they will carry under the same conditions for others is void, as creating an illegal preference.” The same case was reviewed a second time, and is reported in 37 N. J. Law, at page 531. The doctrine of these two cases is unquestionably sustained both by reason and authority.
Nevertheless, in the same state, in the case of Stewart v. Railroad Co. 38 N. J. Law, 505, it was expressly held that “ a covenant by the Morris Canal & Banking Company not to allow to others a drawback from established rates on' the transportation of merchandise over its canal, which it agreed to allow to the covenantee, is against public policy and void. Such a covenant does not, however, invalidate the entire contract in which it exists, and from the remainder of which it is severable. The agreement to allow the drawback to the covenantee is valid and enforceable, and others are entitled to equally reasonable terms.”
In the case of Hays v. Pennsylvania Co. 12 Fed. Rep. 309, Baxter, J., in discussing the question of discrimination, says: “It is enough for present purposes to say that the defendant has no right to make unreasonable and unjust discriminations. But what are such discriminations? No rule can be formulated with sufficient flexibility to apply to every case that may arise. It may, however, be said that it is only when the discrimination inures to the undue advantage of one man, in consequence of some injustice inflicted on another, that the law intervenes for the protection of the latter.”
In the light of these authorities, attention is now called to
It is clear that the contract set forth in the complaint, unless supplemented by proof of facts tending to establish an exclusive privilege or an unlawful preference, is not void within the meaning of this section. There is no presumption that the contract is void; and in this as in
In this connection attention is called to the case of Railroad Co. v. Ervin, 118 Ill. 250, which has been cited as authority in support of the judgment. In the syllabus of that case it is stated that “ a contract between a railroad company and a shipper that the latter shall pay the regular and established rates of freight, the same as all other shippers, and that the company shall pay back to him, by way of rebate, a certain portion of the freight so charged, whereby such shipper will pay a less rate for transportation than that paid by others and the public generally for like services, under similar circumstances and for like distances, is void as being against public policy at the common law, and in violation of the statute against unjust discriminations.” An examination of this case will clearly show: First, that the doctrine above stated is not sustained by the opinion; and second, that the decision is based upon a statute of which the constitutional provision of this state is in no sense a counterpart.
The case suggests an examination and discussion of the course of legislative enactment and judicial decision in Illinois. The suit was brought to recover drawbacks or rebates. The railroad company, by special plea, set up the contract, under which the plaintiff claimed. A demurrer to the special plea was sustained. Upon the trial, under the general issue, the railway company offered to prove that the arrangement by which the rebates were agreed to be paid was a secret arrangement; “that the rates, as given to the plaintiff, were private, and not
Discriminating rates were not made conclusive evidence of unjust discrimination under that statute. Indeed, the legislature of that state could not have lawfully enacted such a principle, under the constitution, as will be hereafter seen. The enactment of this statute resulted from a former decision of the supreme court construing a prior act. Railroad Co. v. People, 67 Ill. 11.
The act in force prior to 1873 prohibited any discrimination whatever in charges, and was intended to give effect to a constitutional provision, which reads as follows: “The general assembly shall pass laws t0' correct
And finally: “The opinion of the courtis that, while the legislature has an unquestionable power to prohibit unjust discrimination in railway freights, no prosecution can be maintained under the existing act, until amended, because it does not prohibit unjust discrimination merely, but discrimination of any character, and because it does not allow the companies to explain the reason of the discrimination, but forfeits their franchise upon an arbitrary and conclusive presumption of guilt, to be drawn from the proof of an act that might be shown to be perfectly innocent. In these particulars the existing act violates the spirit of the constitution.” This decision was made at the January term, 1873. The act construed in Railroad Co. v. Ervin, 118 Ill. 250, was approved May 2, 1873, and went into force in July of the same year.
The above discussion of the constitution and statutes of Illinois renders it clear that the case of Railroad Co. v. Ervin, supra, can have no weight in this state. The legislature of Illinois has laid down a new rule of evidence, under which the burden of justifying such a contract is upon the party who seeks to enforce it. At common law its invalidity must be shown by the party who attacks it. In this state the common law prevails.
The contract sought to be enforced in this case was, therefore, presumptively a lawful contract. The complaint, as an entirety, expressly shows that the appellant secured special rates, and by inference that such rates were less than schedule rates. For this reason alone the court below declared that the contract was against public policy. This was error. The demurrer should have been overruled, and the defendant required to answer. If defendant had answered that the contract was against public policy, because an unjust discrimination was intended, and the answer had been sustained by proof, the plaintiff could not have recovered.
The contention that the receiver was without power to make the contract is without merit. It is expressly alleged, and in effect admitted by the demurrer, that the receiver managed and controlled the business of the company; that he operated the railway. It cannot be assumed that the contract was in violation of his authority until his authority in the premises is shown.
Upon the assumption that the contract was valid, other questions suggested by appellee’s counsel will be briefly discussed.
The first general ground of demurrer stated is that the complaint does not state facts sufficient to constitute a cause of action. The rule is well established in this state that if there are facts well pleaded, sufficient to entitle a party to any relief, a demurrer will not be sustained upon this ground. In Herfort v. Cramer, 7 Colo. 483, it is held that “the pleading, to be subject to demurrer, ‘ must present defects so substantial in their nature and so fatal in their character as to authorize the court to say, taking all the facts to be admitted, that they furnish no cause of action whatever.’ ” If the complaint is tested by this principle, ca.n it be said that, upon all the facts alleged, no cause of action whatever can be predicated? It appears that at the time the contract was made Ainsley was the agent of the receiver of appellee; that he made the contract as such agent; that by it he intended to bind the receiver; that the contract was adopted by the receiver as his own; that at the time the contract was made, and during all its life, he was operating the railway, and that he performed it in part by paying rebates according to its terms; that he received the moneys paid for freight by plaintiff, and used the same in the operation of the road; that -he accounted for and paid over such moneys when discharged from his office; that he took a receipt from the railway company, by the terms of which that company
If the complaint fails to show that the plaintiff is entitled to the relief asked, it is not, for that reason, demurrable, because it does not state facts sufficient to constitute a cause of action. White v. Lyons, 42 Cal. 279; Canty v. Latterner, 31 Minn. 239; Hewitt v. Powers, 84 Ind. 295; Bayless v. Glenn, 72 Ind. 5; Moritz v. Splitt, 55 Wis. 241; Tewksbury v. Schulenberg, 41 Wis. 584.
It is further contended that the complaint is demurrable for defect of parties defendant; that S. T. Smith should have been made a party, for the reason that, as a part of the relief asked, a reformation, of the contract was prayed for. It appears that Smith was discharged from his receivership. long prior to the commencement of this action. It is well-settled principle that a receiver is not personally liable upon a contract or covenant made officially. It has already been said that it affirmatively appears in the complaint that this was the contract of the receiver, and not of Smith as an individual. This being so, it would be idle to make him a party, as no relief could be had against him. He was neither a necessary nor a proper party to the action. High, Rec. §§ 272, 273; Arnold v. Bank, 27 Barb. 425; Livingston v. Pettigrew, 7 Lans. 405; Trust Co. v. Rail
The judgment should be reversed and the cause remanded, with leave to appellee to answer.
Richmond, 0., concurs. Reed, 0., dissents.
For the reasons stated in the foregoing opinion the judgment is reversed and the cause remanded to the district court of Arapahoe county as successor under the law to the said superior court.
Reversed.