| N.Y. Sup. Ct. | Jul 15, 1916
The test for determining whether or not an agreement between a common carrier and a shipper or passenger fixing a rate lower than the ordinary rate was a legal agreement under the common law seems to have been fairly well settled by the decisions in this state and in the United States courts. The test, as I understand it, was substantially this: If on competent and sufficient evidence the trial court found as a fact that the general and ordinary rate, the highest rate charged the general public, was a fair and reasonable rate, contracts for a lower rate made with a “ particular customer or class of customers in isolated cases for special reasons and upon special conditions ” were not void as a matter of law. The inquiry was- whether or not the general rate was a fair, -just and reasonable
Under the common law the contract in question wag a legal contract and could be enforced in this action. I have no hesitancy in finding as a fact that the contract gave no undue advantage to the club members through undue disadvantage to the other patrons of the defendant’s road; that the discrimination was not unjust or unreasonable; that the contract was made upon a sufficient consideration with a reasonable basis therefor; that it has operated to the advantage of the defendant’s road by insuring a permanent increase in its business; and that it has worked no injustice to any other patrons of the road.
If it were not for the Public Service Commissions Law of this state there would be no trouble in granting to the plaintiff the relief prayed for in the complaint. The commón-law rule, stated above, for determining the validity of contracts for a rate lower than the ordinary rate was the subject of severe criticism. It was argued that the test of validity should not be whether or not the general rate was a reasonable one and only fair compensation for the services rendered, but that the test should be whether or not all received the same rate for the same services—that any preference to any person or class, whereby that person or class received a lower rate than all other persons or classes for a like service, should be unlawful. It was in response to public opinion created by such arguments
At the time the contract in question was entered into the one way fare from Syracuse to plaintiff’s club house was fifteen cents and the round trip fare was twenty-five cents; the contract provided for a round trip fare to the club members of fifteen cents. The regular fare to the club house charged by defendant at the time of the commencement of the action was the same as when the contract was made. The schedule of fares had been duly posted and approved by the public service commission.
It is the contention' of defendant that the Public Service Commissions Law prevents the defendant from carrying the members of the club at any lower rate, even though it made a contract to do so before the passage of said law, and though the contract was perfectly legal and binding when made and could be enforced in this action were it nor for such statute. If defendant is correct in such contention this action must fail.
It must be conceded that if the contract in question had been entered into after the Public Service Commissions Law (Laws of 1910, chap. 480, being Cons. Laws, chap. 48) went into effect, the contract would be illegal and in violation of said act. Section 31 of said act provides that no common carrier shall charge or receive, any greater or less compensation from one than it charges or receives from another for like and contemporaneous service under the same circumstances and conditions. This statute clearly changes the common-law rule for determining whether or not a contract for a reduced rate is legal. Under this act a contract is illegal if it provides for a lower or different rate to one person than to another, without regard to
The legislature could legally enact the Public Service Commissions Law and require railroads to file schedules of rates and charge all patrons the rates as fixed. The legislature may control and regulate the fare to be charged by railroads under the so-called police power. That power of the legislature cannot be limited by a contract between a railroad company and one of its patrons. Where the legislature has passed a statute which makes a prior contract between a common carrier and a patron illegal, the carrier cannot be compelled to fulfill its covenant under such contract. Buffalo East Side R. R. Co. v. Buffalo St. R. R. Co., 111 N.Y. 132" court="NY" date_filed="1888-11-27" href="https://app.midpage.ai/document/besrr-co-v--bsrr-co-3625259?utm_source=webapp" opinion_id="3625259">111 N. Y. 132; People v. Budd, 117 id. 1; Louisville & N. R. R. Co. v. Mottley, 219 U.S. 467" court="SCOTUS" date_filed="1911-02-20" href="https://app.midpage.ai/document/louisville--nashville-railroad-v-mottley-97363?utm_source=webapp" opinion_id="97363">219 U. S. 467. See note to Armour Packing Co. v. United States, 52 U. S. (Law ed.) 681.
It would seem, therefore, that, although the contract in question was valid in its inception, it became unenforceable upon the enactment of the Public Service Commissions Law and that it cannot now be enforced in a court of equity.
Plaintiff’s counsel earnestly argued upon the submission of the case and in the brief filed that the defendant, by its own act in fixing the general rate and filing
Judgment is, therefore, ordered for the defendant, with costs.
Judgment for defendant, with costs.