87 N.Y.S. 412 | N.Y. App. Div. | 1904
The evidence very conclusively establishes that th¿ conditions under which the plaintiffs were compelled to operate their elevator, the Kellogg, during the year 1900, were less favorable for the successful conduct of such business than those which pertained to the other rail elevators, so called, at the port of Buffalo, although for all practical purposes the Kellogg was as conveniently located and equipped as any of the others; that thereby the plaintiffs were unable to earn as much as they would have done had such conditions been uniform. If such result was occasioned by the unlawful acts of the defendants, done pursuant to an illegal combination on their part, or because of an unlawful discrimination enforced against the plaintiffs, they are entitled to recover any damages thus occasioned, no matter under. what form of agreement the defendants may have acted, or what method of procedure they adopted. What the plaintiffs or defendants may have done or omitted to do in .previous years is unimportant, except as such acts or omissions may throw light upon the situation of the partías as it existed during the year 19.00, or tend to explain the intent and purpose of the acts of the parties in the premises. This action relates solely to what occurred in the year 1900, the claim
Upon an appeal from an interlocutory judgment in this case, overruling a demurrer to the complaint, the judgment was affirmed, and this court unanimously decided that the complaint stated a cause of action. (Kellogg v. Lehigh Valley R. R. Co., 61 App. Div. 35.) Therefore, upon this appeal it is only necessary to determine whether or not the plaintiffs introduced any evidence which fairly tended to establish the allegations of the complaint.
.The defendant the Western Elevating Association was a joint stock association organized in the spring of 1900, “ for a term beginning with April 23rd, 1900, and ending March 31st, 1901,” by all the owners or representatives (about twenty in number), with the exception of the plaintiffs, of rail elevators, so called because connected with railroads, in the city of Buffalo, including the defendant railroad companies, “ for the convenience of their business, and in order that they may render better service to the public.” The elevators owned or controlled by the defendant railroad companies were located adjacent to their respective tracks; the others or most of them, including the Kellogg, plaintiffs’ elevator, were located upon or connected with the Buffalo Greek railroad, which in turn was connected with each of the railroads of the defendant companies, and such road afforded the only railroad facilities available to such elevators. All were accessible to steamers or vessels from the lakes, and their cargoes of grain were discharged directly into such elevators, but they were all dependent upon the defendant companies for the transshipment of such grain by rail. Ho grain or other freight was delivered to the Buffalo Greek railroad except for transfer to connecting railroads; it had no cars or other neces-sary operating equipment, except engines, with which it conveyed cars from the other roads to shippers upon its line, and returned such cars to them when loaded. That was its only business, and
The situation of the plaintiffs in the spring of 1900 was that they •owned the Kellogg elevator, with a capacity to elevate about 20,000,000 bushels of grain in a season, located on the Buffalo Greek railroad, precisely as were many of its competitors, accessible to the lake craft for the delivery of grain into it, but absolutely dependent upon the defendant companies for getting such grain nut of it if it was to be shipped by rail.
In the early part of the year 1900 negotiations began between the ■owners or representatives of all rail elevators at the port of Buffalo, including the defendant railroad companies, looking to the formation of the defendant association. Its real purpose was to establish •and maintain uniform elevator charges, and undoubtedly with that „ accomplished the business could be done with greater convenience to the railroad companies, more expeditiously and satisfactorily and with greater profit to the owners of elevators as a whole. The plan proposed was, in effect, to form an elevator pool or trust,, by which the net receipts for elevating all grain corning into the port of Buffalo for delivery to any one of the rail, elevators should be distributed according to a schedule of percentages, to be agreed upon between the owners of all such elevators, such proceedings not ■depending entirely upon the amount of grain actually elevated by ■any elevator, but to some extent upon its estimated capacity, equipment, value, etc., so that in some cases an elevator might do little or no business during the year and yet receive a substantial percentage •of the profits earned by the other elevators belonging to the association. Earnest and strenuous efforts were made by the other •owners of rail elevators, including the defendant companies, to induce the plaintiffs to join such association and to accept a certain percentage of its net receipts. It was proposed that the elevating charges for a year should be one-half cent per bushel (less than the elevator charges authorized by law). The plaintiffs, apparently, were not averse to the proposed plan of doing business, but insisted that they should receive a larger percentage of the net receipts of the association than was offered, and demanded a bonus in addition, which demand was considered unfair and unreasonable by the own
For the purposes of this appeal we may assume that the proposed arrangement by the elevator owners, and the formation of the association to give effect to the same, was not illegal. It was, in effect, that all the owners of rail elevators at the port of Buffalo should devote their respective properties to the purposes of the association; that it should agree to properly elevate all grain consigned to any of such elevators, at a price less than they were authorized by law
Simultaneously with the organization of such association a contract was entered into between it and each of the defendant railroad companies, which provided in substance that such railroad company
We may assume that the plaintiffs are not entitled to complain because of the organization of the defendant association, or on account of the contracts entered into between it and the defendant companies, provided the acts of the defendants, doné under or in pursuance thereof, were not such as to unjustly prejudice the plaintiffs’ legal rights in the premises, among which was the right tO' operate their elevator upon equal terms with their competitors, its location, equipment, management and all other conditions being as; favorable for the transaction of its business, and the right to have grain which was elevated by it carried to its destination by any of the defendant companies upon the same terms as grain handled by the competing elevators was carried.
When the defendants commenced operations under the contracts referred to precisely what was to be expected happened. The natural and logical result followed, to wit, the defendant companies sought to reimburse themselves for the one-half cent a bushel which they agreed to pay to the defendant association on grain carried by ¡ them, even if elevated by the Kellogg elevator, and which such association had in no manner earned.
The evidence clearly establishes that under the agreements entered into between the defendants, and the method adopted for carrying out such agreements, the result was that if the plaintiffs received one-half cent a bushel for grain elevated by them in the Kellogg elevator, such grain, if carried by the defendant companies, was obliged to pay one cent a bushel as elevator charges, whereas, there was a charge of only one-half a cent per bushel for all grain passing through the other rail elevators at the port of Buffalo during the year 1900. The evidence also very clearly shows that because of such conditions shippers of grain were deterred from using the Kellogg elevator in the spring of 1900 ; in fact, no other result could be expected than that the Kellogg elevator would be substantially put out of business. Shippers of grain would not pay one cent a bushel elevator charges, for. the sake of sending their grain to the Kellogg elevator, when they could obtain equally as good elevator service for one-half a cent a bushel through its competitors.
It is not seriously contended in the exhaustive briefs presented by
An examination of the whole evidence leads us to the conclusion that it tends to prove that the defendant railroad companies combined and conspired with the defendant association, a competitor of the Kellogg elevator, to injure the plaintiffs’ business, and to prevent competition in elevating grain at the port of Buffalo during the season of 1900, and that for the purpose of carrying out such conspiracy the association was organized and the contracts referred to were made; that in pursuance thereof' the defendant companies refused to carry grain from the Kellogg elevator upon as favorable terms as. from its competitors, and that, in consequence of such agreements and the acts done thereunder, the plaintiffs sustained substantial damage.
If we have correctly interpreted the evidence it cannot be doubted that the plaintiffs are entitled to recover the damages thus occasioned. It is unimportant that the organization of the defendant association, and the agreement between its members as elevator owners was not illegal; that the full performance o.f all its provisions would not have afforded the plaintiffs legal ground for complaint!, even if they sustained damage thereby'. Unquestionably, any number of elevator owners have the right to adopt a plan of -co-operation, to protect their common interests, and to prevent .a hostile and unprofitable competition for business between themselves, and to that end may agree to place their earnings in a com
In this case the plaintiffs do not complain because of the agreement entered into between the owners of elevators, as such, members of the defendant association, but because such agreement was one of the instruments which was employed in conjunction with the contracts executed by the several defendant companies to destroy the plaintiffs’ business, and because of the acts done by all of the defendants acting in concert, and with the common purpose of bringing about such result. The contracts which made the plan effective were those executed by the defendant companies as common carriers, and not as owners of elevators, and, as we have seen, the evidence tends to show that the defendant association was organized for the purpose of enabling such contracts to be made by the defendant common carriers. Such companies could not protect their interests as elevator owners by entering into contracts as common carriers, which, as such, they were by law prohibited from making.
It must, therefore, be determined whether or not the purpose of the defendants, and the means employed by them to prevent the Kellogg elevator from doing business under as favorable conditions, as its competitor (the defendant association) were unlawful, for if not the plaintiffs cannot complain, no matter how serious the consequences to them.
At the foundation of every tort must lie some violation of a legal duty, and, therefore, some unlawful act or omission, Whatever or however numerous or formidable may be the allegations of conspiracy, of malice, of oppression, of vindictive purpose, they are of no avail; they merely heap up epithets, unless the purpose intended or the means by which it was to be accomplished are shown to be unlawful. (Rich v. N. Y. C. & H. R. R. R. Co., 87 N. Y. 382, 394.)
Was the defendants’ purpose respecting the business of the Kel
--We think it was unlawful for the defendant companies, to refuse to carry grain from the plaintiffs’ elevator upon the same terms, as it carried grain from the elevators of the defendant association.
Vincent v. C. & A. R. R. Co. (49 Ill. 33) was an action brought to restrain the defendant from refusing to deliver cars to plaintiffs’ elevator upon the same terms as it delivered cars to other elevators similarly situated. It-was held that the plaintiffs were entitled to an injunction. The court said : “ * * *- It need only be said that a railway company, although permitted to establish its rates of transportation, must do so without injurious discrimination as to individuals. It must deal fairly by the public, and this it would not be doing if allowed so tb discriminate as to build up the business of one person to the injury of another in the same trade.’’ (Chicago & North Western Railway Co. v. People ex rel. Hempstead, 56 Ill. 365.)
In the case of Coe v. Louisville & Nashville R. R. Co. (3 Fed. Rep. 775). the whole question is discussed by Circuit Judge Baxter in a very exhaustive opinion, and the conclusion is reached that it is not permissible for a common carrier to discriminate in the handling of freight of the same character offered by two individuals, and similarly situated. The Vincent Case (supra) is cited with approval, and in the course of the opinion it is said: “ Impartiality in serving their patrons is an imperative obligation of all railroad companies; equality of accommodations in the use of railroads is
We conclude that the acts of the defendant companies in refusing to handle grain from the Kellogg elevator upon the samé terms that they handled grain from the other elevators was unlawful, and such refusal being the natural result, and that contemplated by the defendant association when it entered into the contracts referred to with said companies, the defendant association became a party to such unlawful acts, and equally liable with the other defendants therefor.
It is not important that the plaintiffs may have had a right of action against the defendant association for any moneys paid to it by the railroad companies, and received by them for the elevation of grain by the plaintiffs at the Kellogg elevator. Under the plan adopted by the defendants the elevator charges were collected by the railroad companies, and such charges belonged and should be paid to the owners of the elevators through which the grain passed, unless such owners otherwise' agreed, and, therefore, payment to any one else was improper and can be recovered from those malting it. Neither is it important that the plaintiffs’ elevator was located upon the Buffalo Creek railroad, and that the grain was • delivered to the defendant companiés by means of. that road. As we have seen, it was simply a branch road or a switch, accessible to all the railroads, and existed solély for the purpose of delivering freight to them from shippers located upon its line, the charge for such service being uniform. The defendants, under the circumstances, were not at liberty to discriminate against the plaintiffs because of those conditions. Undoubtedly, they might have refused to send their cars over said road for the convenience of any shipper, but having adopted the plan oí doing so they had no right to make an exception as against the plaintiffs. ( Wight v. United States, 167 U. S. 512.)
It follows that- the plaintiffs are entitled to recover in this, action
The plaintiffs’ exceptions should be sustained and the motion for a new trial granted, with costs, to the plaintiffs to abide event.
All concurred; Hiscock, J., not sitting.
Plaintiffs’ exceptions sustained and motion for new trial granted, with costs to the plaintiffs to abide event.
See Laws of 1896, chap. 376, § 33.— [Rep.