127 N.E. 256 | NY | 1920
In August, 1912, the Postal Telegraph-Cable Company made a contract to furnish to the Associated Press the use of two private wires between Omaha, Nebraska, and San Francisco, California, for five years from November 1, 1912, one wire to be used day and night, except between the hours of 5 A.M. and 8 A.M., and the other to be used at night from 6 P.M. to 11 P.M., at the yearly rate for each wire of $24 per mile for service by day, and $12 per mile for service by night. On December 29, 1912, there was a like contract for two private wires between Chicago and Omaha. On January 1, 1915, there was a contract at the same rates, but for the term of one year, for a private wire between Lincoln and Omaha, Nebraska, and Sioux City, Iowa. On March 14, 1915, there was a contract of indefinite duration, but at the same rates, for a private wire between Omaha and Sioux City. In September, 1915, the telegraph company established new rates for night service upon private wires used by press associations and newspapers. Rates for press associations or news agencies were reduced on September 1, 1915, from $12 to $6, and on September 15, 1915, from $6 to $3. Rates for newspapers were reduced from $10 to $5, and from $5 to $2.50. The benefit of these reductions was refused by the telegraph company to the news agency conducted by the defendant under the name of the Associated Press. This action is brought to recover compensation, at the rates fixed in the contracts, for the *374 use by the defendant of private wires in August, September, and October, 1915. The judgment of the Trial Term, affirmed by the Appellate Division, limits the recovery during the months of September and October to the then prevailing rates. The plaintiff, complaining of the limitation, appeals to this court.
The act of Congress regulating interstate commerce imposes upon the plaintiff, an interstate telegraph line, the duty of fairness and equality in the treatment of its customers (Interstate Commerce Act, sec. 1, subd. 3, and secs. 2 and 3). It must serve them at reasonable rates and without unjust discrimination (Western Union Tel. Co. v. Call Co.,
I think the plaintiff cannot justify discrimination among customers by dividing contracts into new and old, and applying a different rate to each. The law says that under like conditions of service, charges shall be equal. The customer who covenants to pay in accordance with a schedule does not put himself outside of the protection of the statute, and give license to the carrier to show favor to his rivals. His covenant is made in contemplation of the carrier's duty so to operate a public business that discrimination will be avoided and equality maintained. I do not mean, of course, that equality must be absolute. By express permission of the statute, messages may be divided "into day, night, repeated, unrepeated, letter, commercial, press, Government, and such other classes as may be just and reasonable," and different rates may *375
be charged for the different classes (Interstate Commerce Act, sec. 1, subd. 3; Matter of Private Wire Contracts, 50 I.C.C. Rep. 731). But classes are not "just and reasonable" when the only principle of classification is one of order in time, with a resulting division between old customers and new. Favoritism would be unchecked if such a classification were accepted. Authority, which the statute gives, to distinguish between press messages and others, is not authority to distinguish between the press of to-day and the press of to-morrow, any more than between the press of here and the press of there. Division into classes is not the same thing as division into strata. No one would assert that a contract for a term of years would permit a carrier to discriminate in favor of old customers to the prejudice of new. Congress did not mean that it should be used as an excuse for discriminating in favor of new customers to the prejudice of old. A schedule that cannot be maintained against a revision of rates upwards, will not be interpreted as intended to survive a revision of rates downwards. The obligation of the law qualifies, and, in case of conflict, overrides, the obligation of the contract. For this conclusion, I think, the authorities are ample (Union Dry Goods Co. v. Georgia Public Service Corp.,
The question remains whether discrimination has been excused by proof of dissimilar conditions. No such excuse is put forward as applicable to the contracts for service between Chicago and Omaha, and between Omaha and Sioux City. The excuse, if good, is confined in its application to the contract for service between Omaha and *376 San Francisco. The argument is that between those points no new agency other than the defendant has received from the plaintiff a private wire on any terms. Other agencies have private wires at reduced rates from Chicago to Denver, and from Chicago to Des Moines, but no farther. Between Denver and San Francisco, the line traverses the great desert and the mountains of the West. There is evidence of a high cost of maintenance in that region as compared with the cost elsewhere, though no attempt is made to state the difference in figures. For these reasons, the defendant, it is argued, enjoys a special privilege over the route from Denver to the coast, and should pay a special rate.
I think it was a question of fact whether these dissimilar conditions did constitute the true grounds of the discrimination between the defendant and its competitors, or were put forward as afterthoughts, following the event, to sustain a discrimination which in origin and purpose was invidious and hostile. In choosing between these alternative views, the trier of the facts would have to note that for many years before the reductions of September, 1915, rates for private wires had been fixed upon a mileage basis and no other; that the uniform charge was $24 per mile for day service and $12 for night service irrespective of the territory traversed; that the plaintiff made no extra charge when it gave the defendant a wire between Omaha and San Francisco, but maintained the existing rates; that the successive reductions in September, 1915, were announced to the press as reductions of fifty per cent in the rates for night service, without limitation of territory, or abandonment of the test of mileage; that new contracts under the reduced rates were made for service as far west as Denver; that the line of demarcation between the regions of high and of low rates was placed by the plaintiff's witness indefinitely, first at the Mississippi, and then at Denver, and then more vaguely at the Pacific coast; that day rates have remained constant *377 at $24 a mile from the Atlantic to the Pacific; and finally that the plaintiff, in its dealings with the defendant, drew no distinction between territory to the east of Denver and territory to the west, but discriminated in one district as in another, between Chicago and Omaha, and between Omaha and Sioux City, as between Omaha and the coast. I cannot say as a matter of law that a discrimination, invidious and hostile east of the Mississippi, became purified and innocent as it crossed the river to the west. No doubt there was evidence of circumstances which the trier of the facts might interpret as tending to exculpate. Other news agencies applied between September, 1915, and September, 1916, for private wires between Denver and the Pacific coast. The applications were rejected, those for day service and those for night service alike, because commercial messages in that region had then become so profitable that the plaintiff was no longer willing on any terms to give private wires to any one. The date of these applications is only vaguely stated, and we do not know whether they preceded by any substantial interval the cancellation of the defendant's contracts in September, 1916, which followed the plaintiff's announcement that the wires were then needed for the service of the public. The significance of these happenings in their bearing upon a discrimination practiced in September, 1915, cannot be disposed of as an inference of law, but was something to be weighed and estimated by the court which passed upon the facts. Other circumstances, much emphasized by the plaintiff, must be held, I think, to have a significance equally equivocal. The plaintiff had to string a new wire from Denver to San Francisco to give the defendant service upon two private wires as promised. We do not know whether this necessity was something unusual in filling a private contract. We do not know the cost per mile, or its approximate relation to the burden put upon the defendant in the maintenance of the higher rate. We *378 do know that whatever the cost, the plaintiff made its lease for this district as elsewhere upon the basis of the mileage covered. Stress is laid upon other provisions of the contracts. The defendant had the right to a pro rata abatement of the rental when there was interruption of service for one day or more. The contracts at the reduced rates, so far as they are in evidence, provide for rentals without abatement. These minor differences do not justify discrimination without limit. At the utmost they permit a cancellation of allowances, to equalize the rates for every one. I cannot find that there has been any deduction for interruptions in measuring the award under the four contested contracts.
In the end, with all these competing arguments struggling for the mastery, the problem that confronts us remains a problem of fact (Western Union Tel. Co. v. Call Pub. Co.,
We have yet to determine the effect of this injustice upon the rates payable by the customer. The defendant is not suing (under sec. 8 of the statute) to recover damages for a tort. It is not suing for the recovery of payments already made. It is defending against an attempt to charge it with something in excess of the established rates. What it resists is not merely a discrimination, but an overcharge. Every overcharge, when exacted of one to the exclusion of others, is, indeed, a discrimination. Not every discrimination is an overcharge. This case does not require us to hold that a customer, sued for the established and prevailing rate, may cut the payment down by proof, without more, that some favored individual, by force of illicit rebates, has obtained services for less. Whether the remedy is then in tort for the recovery of damages, which may be more than the rebate or less, and *380
often merely nominal (Penn. R.R. Co. v. Int. Coal M. Co.,
I am not aware of any principle or precedent which puts a duty of that kind upon us. We will not stir a step in furtherance of an illegal scheme (Carrier v. Carrier,
In all that I have written, I have gone on the assumption that the plaintiff, when it made contracts for private wires, was acting as a common carrier within the definition of the act of Congress, and was subject to the duties inhering in that relation. The plaintiff in the argument at our bar invited us to decide the case on that assumption, and expressly disclaimed any contention to the contrary. A ruling of the interstate commerce commission is in accord with the concession (Matter of PrivateWire Contracts, 50 I.C.C. Rep. 731, 757, 759). Private wires have become an important branch of the telegraph business. They are given, not only to the press, but to bankers and *383
brokers and many others (50 I.C.C. Rep. 731, at p. 738). They must be offered to those who need them with even-handed impartiality. A public service corporation is not at liberty to grant extraordinary facilities to one man, and arbitrarily refuse them to another. It need not depart from the beaten track at all. If it does, it must not govern the deviation by prejudice or favor. What it grants to one, it must, in like conditions, when detriment would follow preference, grant impartially to all, within the limits of capacity (Chicago Alton R.R. Co. v.Kirby,
The judgment should be affirmed with costs.
HISCOCK, Ch. J., CHASE, COLLIN, POUND, CRANE and ANDREWS, JJ., concur.
Judgment affirmed.