Case ID: ny-st-rep_33/html/0907-01.html
Source: Caselaw Access Project
Author: {"author": "Daniels, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Andrew Langdon et al., Appl’ts, v. The New York, Lake Erie & Western R. R. Co., Resp’t.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed October 24, 1890.)
    
    Jurisdiction—Action for penalty under foreign statute.
    This action was brought to recover for undue discriminations in the transportation of freight. The complaint alleged that these discriminations were under and in violation of a statute of Pennsylvania, which made them unlawful and made the carrier liable to the party injured for damages treble the injury suffered, and demanded treble damages. Held, that such statute was a penal one, and that as the action was based on such statute and brought to recover the penalty created thereby, the courts of this state had no jurisdiction thereof.
    Appeal from interlocutory judgment sustaining a demurrer to the complaint.
    
      Benjamin S. Harmon, for app’lts; Benj. II. Bristow and Chas. Steele, for resp’t.
   Daniels, J.

It appears from the complaint that the plaintiffs, as copartners, were miners, shippers and dealers in coal, from the 1st of May, 1885, until September, 1889, when this action was commenced. The mines from which their coal was obtained were located in the region of the Carbondale, Lackawanna and Wyoming anthracite coal fields in the state of Pennsylvania. During the same time it is also alleged the defendant was and continues to be a corporation created under the laws of the state of New York, and engaged as a common carrier in the transportation of passengers and freight over its different lines and those controlled by it, including a maiii line from Jersey City in the state of New Jersey to Buffalo and Dunkirk in the state of New York, and a branch line from Carbondale in the state of Pennsylvania, to a junction with the main line at Susquehannah, in that state.

It is also alleged that the plaintiffs’ business in part consisted in shipping their coal for sale to the markets, northeast and west, reached by the defendant’s lines, and that the defendant’s lines of railway and its connections supplied the only means of shipment for the plaintiffs’ coal to these markets. It is then stated that the Delaware & Hudson Canal Company and the Hillside Coal & Iron Company, two other corporations, were mining coal in the same region during the same time, and shipping it to the same general markets and by the same route as that employed and those reached by the plaintiffs; and that the Delaware & Hudson Canal Company mined and carried coal from its own collieries, in the same region, and shipped the same over the lines of road under its ownership and control and as a common carrier, and that the other company was a nominal organization, devised and maintained by the defendant to provide the means without detection of exercising unjust and unlawful discriminations against the plaintiffs and other individual coal operators.

The plaintiffs then aver that during this period of time they mined, or bought at the mines in the region which has been mentioned, 778,753 tons, more or less, of anthracite coal and shipped it over the lines of the defendant from Carbondale to the markets, northeast and west, reached by the defendant’s lines and connections previously mentioned. That during these times the defendant directly, or indirectly, allowed to these other companies certain concessions and drawbacks upon the public rates, or prices fixed by it, for the transportation of anthracite coal over its lines which it failed and refused to allow to the plaintiffs, and by reason thereof the rates and sums demanded and received by the defendant from the plaintiffs for the transportation of their coal exceeded the rates or sums charged, demanded and received by it from these other companies for 'the like service, from the same-place, upon like conditions, and under similar circumstances, to the amount of sixty cents a ton upon all the anthracite coal shipped over the defendant’s lines during the time which has been mentioned, whereby they have been injured and damaged in the sum of $506,189.45.

It is then added that these discriminations were made under, controlled by, and in violation of, an act of the state of Pennsylvania, approved on the 4tli of June, 1883, providing as follows:

“ Section 1. That any undue or unreasonable discrimination by any railroad company or other common carrier, or any officer, superintendent, manager or agent thereof, in charges for or in facilities for transportation of freight within this state, or coming from or going to any other state, is hereby declared to be unlawful.

“ Section 2. No railroad company or other common carrier engaged in the transportation of property shall charge, demand or receive from any person, company or corporation, for the transportation of property or for any other service, a greater sum than it shall charge or receive from any other person, company or corporation, for a like service, from the same place, upon like conditions and under similar circumstances, and all concessions in rates and drawbacks shall be allowed to all persons, companies or corporations alike, for such transportation and service upon like conditions and under similar circumstances and during the same period of time. Nor shall any such railroad company or common carrier make any undue or unreasonable discrimination between individuals and transportation companies, or the furnishing of facilities for transportation. Any violation of this provision shall make the offending company or common carrier liable to the party injured for damages treble the amount of injury suffered.”

And concluding that by reason of the premises the defendant had become liable to the plaintiffs for damages treble the amount of the injuries suffered by them, being $1,518,588.35.

The second cause of action is alleged to have arisen under the same attendant facts, by furnishing box and stock cars for the shipment of the plaintiffs’ coal, which they were obliged at their own expense to furnish lumber for, and do work in fitting and cleaning and putting them in a suitable condition to carry their coal, while the defendant furnished the cars to these other companies and shippers without expense to them in the condition suitable for receiving their coal, and thereby discriminated to the extent of one dollar for each car, amounting to 26.381, against the plaintiffs. The allegations before made concerning the statute of Pennsylvania are then repeated, followed by the • averment that the defendant by this discrimination liad become liable to the plaintiffs for damages treble the amount of the injuries suffered, and being the sum of $79,143.

A third cause of action is presented by a reiteration of the same introductory facts, caused by a violation of the defendant’s duty in the apportionment of its cars between the plaintiffs and these other shippers, when its cars were deficient in number to take all the coal offered for transportation by themselves and these two other shippers, and by giving the preference to the latter. By this discrimination it is alleged that the plaintiffs were obliged to close their mines or run them on reduced time, thereby increasing the cost of the production of their coal to the extent of twenty cents a ton upon all the anthracite coal mined at the collieries and shipped over the defendant’s lines, and causing inj ury and damage to the plaintiffs amounting to $155,750.60. The same references are then made to the statute and the same liability for treble damages repeated, which are stated at the sum for this cause of $467,251.80.

Like causes of action are in the same form set forth and alleged to have accrued to the plaintiff Andrew Langdon between the 1st of August, 1883, and the 1st of May, 1885, for which treble damages are stated to have accrued in his favor, and to have been assigned by him to the plaintiffs. And for all the damages at this rate accruing the judgment has been demanded.

The defendant demurred to this complaint, assigning as causes of demurrer the failure to state facts presenting a cause of action, and the absence of jurisdiction of this court over the action.

The object of the complaint throughout has been to place the case made within the statute of the state of Pennsylvania. That intention is disclosed by closely following the v'erbiage of the act, in stating the obligations created and the wrongs suffered from ■the acts of the defendant by the plaintiffs and their assignor. Important facts, it is true, are alleged which would form material grounds for an action at common law for withholding from the plaintiffs and the assignor that equality of right which they were entitled to enjoy with these other patrons of the defendant. But these facts have,not been set forth to present any cause of action for damages suffered by the violation of that common law equality, but as essential, and only so far as they are essential, to place the case within the restraints and remedies of this statute.

The concessions and rebates which were given to the other shippers, and denied to the plaintiffs and the assignor, the obligation to clean the cars, and the work of putting them in a suitable condition for the carriage of coal before they could be used, and the omission and failure to allot to them their fair proportion of cars, when the supply was deficient, are all brought forward in such language as to directly apply the statute, and to entitle the plaintiffs to its own express measure of relief. Mot only that, but the express averment has been made as to each cause of complaint, that it arose from an undue and unreasonable discrimination made under and controlled bjq and in violation of, this statute of the state of Pennsylvania. FTo plainer or more distinct effort could be made than has been in this instance to place the right of recovery wholly within and upon the statute. And that has led to the omission of other and different averments of facts required for the creation of a right of action at common law.

That causes of action within the statute have been alleged, is reasonably "free from all ground of controversy. But that alone, while it would maintain the action in the state of Pennsylvania, will not entitle the plaintiffs to succeed in the courts of this state, if the redress prescribed by the statute must be held to be penal in its nature. For the principle seems to be quite well settled that the courts of one state will not enforce the penal laws of another state. Upon the existence of this principle there is no disagreement in the authorities. But numerous disagreements have arisen in the definition of what are to be regarded, or held, to be penalties.

In this state the liability created by statute for the payment of a debt not owing by the defendant, but for the omission of an act, or report, required from him as a corporate officer, has uniformly been held to be a penalty. Merchants Bk. v. Bliss, 35 N. Y., 412; Rector v. Vanderbilt, 98 id., 170 ; Gadsden v. Woodward, 103 id., 242; 3 N. Y. State Rep., 102; Whitaker v. Masterton, 106 N. Y., 277; 8 N. Y. State Rep., 888; Roediger v. Simmons, 14 Abb., N. S., 256. And this construction of the law has also been maintained in other states. Bank v. Karmany, 98 Pa., 65, 75; Halsey v. McLean, 12 Allen, 438 ; Breitung v. Lindauer, 37 Mich., 217; Steam, etc., Co. v. Hubbard, 101 U. S., 188.

As to this being the effect of the law, the decided cases are quite uniform. But not so -much so upon the question of the enforcement of the liability in the courts of another state than that by whose laws it has been created.- The propriety of the rule, so far as it has been adopted, has been partially, at least, conceded, owing to the circumstance that no preceding liability existed in these cases against the defendant for the debt, or demand itself. But that which the statute declared was wholly by way of punishment for the violation, or neglect of a statutory duty. But while this has been a fundamental fact in that class of cases, the same principle has also been applied to the redress of an injury to the rights of the party entitled to recover enhanced damages or amounts on account of a wrong suffered by himself. In Blaine v. Curtis, 59 Vermont, 120, the principle was applied to an action for the recovery of three times the excess of usurious interest reserved and taken, in the state of ÍTew Hampshire, in violation of a statute of that state, and which was held incapable of being maintained in the state of Vermont. In Newcomb v. Butterfield, 8 Johns., 343, it was held to include treble damages for a trespass on public lands. And in Strong v. Stebbins, 5 Cow., 210, affirmed id., 678, to be applicable to a person assisting in the removal of a tenant’s property from demised premises, depriving the landlord. of his distress for nonpayment of rent. And Cohn v. Neeves, 40 Wis., 393, conforms to this rule.

Copious references have been made in the brief of the plaint-ills’ counsel to other cases bearing on this part of the present controversy. They are far from being uniform in the application of the principle, as will be seen from United Stales v. Chouteau, 102 U. S., 603 ; Reed v. Northfield, 13 Pick., 94; LeForest v. Tolman, 117 Mass., 109; Quimby v. Carter, 20 Maine, 218; Stockwell v. United States, 13 Wall., 531.

In this diversity of judgment the only safe and sure criterion is that of the scope and language of the statute itself. If it has been so enacted as to provide a punishment, as distinguished from an indemnity, then it should certainly be held to impose a penalty. This statute has been so framed as to regulate the entire subject included in the action. It has declared the acts complained of to be unlawful, and the consequence which will follow their performance. It has not provided for any recovery of mere damages for its violation, but a gross sum has been prescribed as the amount of the recovery. It is indivisible, except in ascertaining the amount, which is "to be treble the sum of the actual injury or damage. The utmost extent to which the courts have gone in distinguishing between an indemnity and a punishment fails to include this act; for its object is to prescribe punishment for the violation of its provisions. And it is no less a punishment by reason of the fact that the amounts which are payable are'ko be recovered by the injured party. By the complaint a case has been stated requiring this punishment to be imposed, and nothing less than that has been demanded by the plaintiffs. It is the penalty, and that alone, which is designed to be enforced. That is the entire theory of the action, and it has in each subdivision of the complaint been prominently set forth, as well as in the final demand made; and in this manner the action has been unmistakably defined as one for the recovery of the penalties created by the statute. To hold it to be otherwise would be a direct departure from the action as it has been framed and presented. And the cases of Conaughty v. Nichols, 42 N. Y., 83, and Williams v. Freeman, 12 Civ. Pro., 334, do not sanction such a departure; but those of Kelly v. Downing, 42 N. Y., 71, requiring special stress to be placed on the demand for judgment when a demurrer to the complaint has been served, and Arnold v. Angell, 62 N. Y., 508; Hollister v. Englehart, 11 Hun, 446, and Grover v. Morris, 73 N. Y., 473, 479, maintain the principle that the theory of the action as the pleadings disclose it should ordinarily be followed.

The plaintiffs themselves have given their action the restricted nature which it has, as a suit for penalties. As such this court cannot entertain it, for the reason that it is to carry into effect the penal law of another state. Wisconsin v. Pelican Ins. Co., 127 U. S., 265; Western Transportation Co. v. Kilderhouse, 87 N. Y., 435. Indeed this proposition has been practically conceded by the plaintiffs. That they have been seriously injured by the discriminations of the defendant, and are entitled to redress, is free from doubt as the facts now appear. But that redress must be sought through the courts of the state whose laws in this manner have been violated.

The judgment should be affirmed, with costs, but as the complaint may yet be amended so as to present causes of action at common law, the plaintiffs should be allowed to amend in twenty days on payment of the costs of the demurrer.

Yan Brunt, P. J., and Brady, J., concur.