Court Opinion

ID: 5207186
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:04:54.12071+00
Date Added: 2024-06-11T08:27:18.621907
License: Public Domain

Gaynor, J. (dissenting):
The plaintiff found that he had been charged a higher rate for the electric current furnished by the defendant to him to light his store than the defendant charged for such current to the similar stores of his near neighbors on the same street.. For instance, he was charged 10 cents the kilowatt hour (which is the quantity and not the time unit of current measurement), viz., $87 for 870 kilowatt hours for a month, while another was charged only $63.83 for 954 kilowatt hours, and another $61.43 for 750 kilowatt hours, during the same time; and in this way, month by month, the difference, i. e., the total overcharge against him for which he has recovered, was made up.
The defendant showed that the discrimination against the plaintiff resulted from the fact that it had contracts with his said neighbors by which they agreed to pay for not less than 750 kilowatt hours the month, whether used or not, and for as much more as they should use; and that the reduced price was given to them on account of this guarantee. Such reduced price was 10 cents the said quantity unit for the first two units, 7|- cents for the next two and 5 cents for the excess, based on and applied to the average daily use.
The defendant did not communicate to the plaintiff that such reduced terms were given or open to any one, and he knew nothing of them. This in and of itself made out a case of illegal discrimination, for the plaintiff was in the same case as his neighbors in respect of the supplying of electric current to him by the defendant. There was nothing to distinguish his case from the general case of all. The defendant could not, at all events, lawfully allow them such discriminating contracts without offering the same to the *379plaintiff. The evidence shows that such contracts were not confined to the two or three neighbors who were proved to hold them, but were extensively given by the defendant.
Nor” am I willing to assent to the proposition, under however plausible a guise it may be put, that a public service corporation, i. e., a corporation enfranchised by government to perform what is properly called in Western Union Tel. Co. v. Call Pub. Co. (181 U. S. 100) and other cases a “ public service ”, such as the management and running of a public highway, or the furnishing of water and light to the community, may apply the rule that 'thosee who ship more freight or take more water or light, shall pay at a less rate than those who ship or take less. In the transportation of freight, parcels may and probably should be charged for at a higher relative rate by weight or size than is charged for large or wholesale quantities, because the former are obviously a class of themselves, and the relative cost of carrying and handling them is greater. But the distinction ends there. No discrimination may be made in respect of parcels as against parcels of the same kind, and none may be made in respect of freight in bulk as against other freight in bulk of the same kind. If the freight in a given case belongs to the class of freight in bulk (and not to parcels or retail quantities), as wheat, for instance, or sugar, or hay, that the quantity is less than that of another shipper of the same commodity in bulk does not permit of a larger rate being charged against the former than against the latter. If the rule were the contrary it would allow the large manufacturers or producers to destroy the smaller, for if the former may have their commodities carried on the railroad highways at a lower rate than their smaller rivals, they are thereby enabled to undersell such rivals that much in the markets, and gradually, or, if the discrimination be large enough, all at once, undermine and destroy them, and acquire a monopoly in that line of business. It is time that judicial utterances here and there asserting as a general principle that he who ships or takes more should pay less should be treated as inadvertent. The saying that to him who hath shall be given, but from him who hath not shall be taken away even that which he hath, should have no sway in the administration of justice, however true it may come in the general greed of the world.
*380Hot can the rule applicable to common carriers generally in the respect under consideration wholly apply in respect of public service corporations. They have obligations which the ordinary common carrier has not. It needs no argument to show that a corporation which is given the control and management of a public highway stands in a very different position toward individuals, the community and government in respect of rates than ordinary common carriers who are mere users of the public highways, earth, water or rail, like the rest of us. Such decisions as that in Lough v. Outerbridge (143 N. Y. 271) are therefore not fully applicable to the case of public service corporations.
In the case of a public service corporation to furnish electric current or gas for light, or the like, it is questionable whether they should be allowed to discriminate at all on the basis of the quantity taken by different consumers in the same locality or district, i. e., a locality or district of consumers all in the same case or condition in respect of being supplied. It may be possible that the use of light for household purposes and for business may be properly classified separately, and a different rate established for each, but in each of the said two classes no discrimination should be permitted. There is no sound reason for such discrimination, and it cannot be put on a safe or just basis. The infinite varieties of freight make an almost equal variety of rates, viz., a rate for each kind, in transportation; but that does not apply to the case of this defendant. It has only one commodity to deal with. It has to manufacture a gross amount of current for its customers generally, or in given districts, if districts have to be resorted to in localizing and associating those in the same case for the fixing of price. The cur-rent taken by a large house or by twenty houses, costs the same the unit in the production as that taken by a small house or one house ; and the same is true in respect of a large business establishment as compared with a small one or several compared with one. If the former gets current at cost, or nearer to cost than the latter, the reduction given to the former has to be charged to the latter; or at best prevents to that extent a deduction of price to the latter, for the company must pay its expenses arid also make a profit, and for that purpose collect in rates the necessary gross amount. It has the right to make a fair profit out of the community, after paying all *381of its expenses, and allowing to the full for annual wear and tear, depreciation from age and use. To do this, if it gives a reduced price to some it must make up the difference out of the others.
It is argued for the defendant that if contracts like that questioned here are made, the company can, by taking them all together, be informed in advance of the extent of the demands upon it in the future for current, and in that way be enabled to prepare for it seasonably by enlarging or improving its plant accordingly, and to supply every one better and cheaper. This is not even specious. The company by noting the growth of consumption is informed of future consumption just as thoroughly as though such future consumption, or a considerable portion of it, were actually contracted for in advance. The argument that such contracts encourage and create a larger consumption, and thereby tend to lower the cost of production, and hence the price to all the consumers, including those who do not make such contracts, is also an economic fallacy. Consumers do not use more because of the contract, but make the contract because they need more, and use more because the price is cheaper ; and if the cost of production and therefore the price to the consumer grow less with the growth in production to meet the growing need, the lowest price will be automatically reached with the highest production without resorting to the contracts or to other artificial expedients, which, as experience has abundantly demonstrated, by interfering with the operation of- the natural laws of trade, retard its progress. The only difference such contracts make is that the benefit of the growing economy of an increasing production and distribution is given to a comparatively few instead of to all as justice requires. It is not possible in the nature of things to leave such companies to get up schemes for discrimination in prices without leading to favoritism, abuse and injustice, if not corruption also. And if anything is plain, and has been demonstrated by experience, it is that the mere right of each consumer to bring an action to prevent discrimination against him will not prevent the general evil of discrimination. Most people will suffer almost anything sooner than resort to an expensive, difficult and protracted lawsuit. The sound, just and safe rule, and the one which will preclude the possibility of favoritism, is that all consumers in the same district and case be treated alike. It seems that this company connects its mains with *382the premises of consumers, and furnishes lamps. If the expense of these things varies, then let each consumer pay his own.
An examination of all of the decisions, especially in the light of the development of sound economic thought during the last ten or fifteen years on the question of the status of public service corpora-^ tions, discloses that nothing is yet settled contrary to the foregoing. In Silkman v. Water Commissioners (152 N. Y. 327) the statute under which the water was furnished authorized the discrimination complained of. The off-hand remark of Judge Martin, “ Surely, it cannot be said to be unreasonable to provide less rates where a large amount of water is used than where a small quantity is consumed ”, was therefore his dictum and not the judgment of the court. The proposition does not by any means seem as certain as the learned judge thought it was eleven years ago, at all events if it was meant as a general rule applicable to the consumers individually and not to them by classes, such as householders and those carrying on business. The law is a progressive science ; otherwise it would often curse when it ought to bless. The unanimous decision in Western Union Tel. Co. v. Call Pub. Co. (181 U. S. 92) supports the foregoing views. It permits of no difference in charges unless it grows out of a difference in service. After laying down that every one has “equal rights” both in respect to service and charges, it says: “ Of coursp, such equality of right does not prevent differences in the modes and kinds of service and different charges based thereon. There is no cast iron line of uniformity which prevents a charge from being above or below a particular sum, or requires that the service shall be exactly along the same lines. But that principle of equality does forbid any difference in charge which is not based upon difference in service, and even when based upon difference of service must have some reasonable relation to the amount of difference, and cannot be so great as to produce an unjust discrimination.”
Instead of pointing out any “ difference in service ” in the present case, upon which alone a difference in rates may be lawfully based, the defendant only points out a difference between the contract it has with the plaintiff and that it has with those who are charged less than he is.
It may well be that there are districts or localities of the city in *383which the cost of supplying current (i. e., the producing current to the consumer) is greater than in the plaintiff’s district, and it would not be unlawful to charge more for it than the plaintiff and people - in his district pay, and other instances might be mentioned; but we have no such case — no case of difference in service, or in cost of service — here.
The judgment should be affirmed.
Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.