Court Opinion

ID: 5250798
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:12:51.052668+00
Date Added: 2024-06-11T08:27:56.773899
License: Public Domain

Shearn, J. (dissenting):
The first cause of action is for rent of a telegraph wire between Omaha and San Francisco for the months of August, September and October, 1915, amounting to $16,861.26, pursuant to a written contract made August 1, 1912, under which contract the wire had been continuously operated until defendant’s refusal to pay the rental in suit. The defendant seeks *598to avoid its contract obligation by alleging that from August 1, 1915, to September 15, 1915, the plaintiff furnished similar telegraphic service to news agencies other than the defendant between points in different States at the rate of six dollars per mile per year as against this contract charge of twelve dollars per mile per year; that such service was rendered under substantially similar circumstances and conditions, and that the granting of such redúced rates to other news agencies, while endeavoring to exact such higher rates from the defendant, constituted an undue and unreasonable preference and an unlawful discrimination in violation of the Act to Regulate Commerce. No proof was introduced which established that the contract rate was unreasonable per se, or that the six-dollar rate was unreasonably low. The attack upon the contract is based solely, so far as the proof is concerned, upon the charge of discrimination and undue preference. To establish' the discrimination, the defendant introduced evidence showing that for a long time prior to the commencement of this action the plaintiff had furnished to the defendant and to other news agencies and to newspapers the exclusive use of certain telegraphic circuits between points in different parts of the United States for a charge or rental uniformly based upon a rate of a certain sum per year for each mile of telegraphic line or circuit so used, without regard to location of the circuit or the distance between the termini thereof; that the rate so charged regardless of location or distance for day service was twenty-four dollars per mile per year, and for night service was twelve dollars per mile per year, and upon a proportionate basis for less than twelve hours’ day or night service. It was further shown that about August 1, 1915, the plaintiff through its vice-president announced a reduction of its rates by notifying the plaintiff’s general superintendents by wire, and telling them to notify the newspapers, and the newspapers were notified by plaintiff’s operating department. The notification was not circularized. There were sections of the country to which the notices were not issued, and the reductions did not apply to the Pacific coast. On September 15, 1915, there was an announcement of a further reduction in rates to the press, including press associations and newspapers, such notification being made in *599the same manner as the first. The reductions affected only night service. The first reduction was from twelve dollars per mile to six dollars per mile, and the second to three dollars per mile to press associations and two dollars and fifty cents to newspapers. The defendant introduced no evidence to show that the conditions under which the wire service was furnished in the parts of the country where the lower rate prevailed were similar to the conditions under which the service was rendered between Omaha and San Francisco, where the former rate was maintained. Neither did the defendant show that the plaintiff had leased any wires whatsoever west of Denver at the reduced rate. The only basis for holding that, even prima facie, there was a similarity of conditions, and, therefore, an undue preference to those accorded a lower rate, was the fact that for thirty years or more the plaintiff’s leased wire rentals had been upon the basis of a charge per mile per hour irrespective of locality or of differing conditions in different localities. Doubtless this was sufficient, under the peculiar circumstances of the case, to cast upon the plaintiff the burden of coming forward with evidence to show the dissimilarity of conditions under which the service was rendered where the higher night rate prevailed, as compared with the parts of the country where the lower night rate prevailed. To meet this burden plaintiff showed that the portion of the country between Denver and San Francisco presents great physical difficulties in constructing and maintaining a telegraph line. It involves crossing the Rocky Mountains, the Great American Desert, and the Sierra Nevada Mountains, covered with forests, and in winter with snow, at times twenty-five to thirty feet deep, so that the lines are inaccessible, rendering it necessary to station men permanently in the mountains with sufficient supplies of food to carry them through the winter months. In addition, there are floods beyond the Sierra Nevada Mountains making it additionally difficult to maintain a reliable telegraph service, and making it more costly than any other part of the country. In stringing wires from Omaha to San Francisco it is necessary to traverse 1,500 miles of difficult country over which there is practically no local business excepting a small amount at Salt Lake City and Reno. Furthermore, west of the Mississippi there are *600few telegraph lines running north and south, and the lack of such fines imposes a burden on the service, involving interruptions which are serious because the interruption of a circuit involves a complete interruption of the service, as messages cannot be routed around the point of interruption. The wires from Omaha to San Francisco, which constitute part of the line from Chicago to San Francisco, are the most valuable wires the plaintiff has on account of the rate for commercial telegrams being one dollar, this charge being warranted because of the expense and difficulty in constructing and maintaining the line. Plaintiff further showed that, although it had had numerous applications from defendant’s competitors for night service to the Pacific coast at the reduced rental prevailing in other parts of the country, it had consistently refused to make any such contracts although its facilities were ample for handling the service. All of this evidence to show dissimilarity of conditions was uncontradicted. To my mind this evidence clearly establishes a substantial dissimilarity in conditions of service to the Pacific coast as compared with the portions of the country in the middle west and east of the Mississippi, where the lower night service prevailed. There is nothing opposed to this evidence except the inferences to be drawn from the custom of the plaintiff during a period of thirty years or more to make a uniform charge based upon wire mileage and hours of service. This Inference is not sufficient to overthrow the positive proof of dissimilarity of conditions. The earlier uniform rate may have been dictated by sound business policy, for, treating the business of the company as a whole, it may well have been that the greater profits in the less difficult territory, taking into consideration the relative volume of business, warranted the maintenance of a less profitable rate to the Pacific coast. Again, it may have been competition and a war of rates with a rival company that forced the 1915 reductions for service other than to the Pacific coast. The inferences to be drawn are too many and too uncertain to outweigh the positive proof of substantial dissimilarity in the conditions of the service.
In this situation the law is well settled. “ The principal objects of the Interstate Commerce Act were to secure just *601and reasonable charges for transportation; to prohibit unjust discriminations in the rendition of like services under similar circumstances and conditions; to prevent undue or unreasonable preferences to persons, corporations or localities; to inhibit greater compensation for a shorter than for a longer distance over the same line; and to abolish combinations for the pooling of freights. * * * It is not all discriminations or preferences that fall within the inhibition of the statute; only such as are unjust or unreasonable. * * * In short, the substance of all these decisions is that railway companies are only bound to give the same terms to all persons alike under the same conditions and circumstances, and that any fact which produces an inequality of condition and a change of circumstances justifies an inequality of charge.” Such is the language of Justice Brown in the leading case of Interstate Commerce Commission v. Baltimore & Ohio Railroad (145 U. S. 263, 276, 283). These principles have been restated many times in various cases arising under the Interstate Commerce Act and have been steadily adhered to. Many of the cases are referred to in Interstate Commerce Commission v. Chicago Great Western Ry. Co. (141 Fed. Rep. 1003). (See, also, Western Union Tel. Co. v. Call Pub. Co., 181 U. S. 92.) There can be no serious question but that facts which show a substantial inequality of conditions of service justify inequalities of charges. Such being the law and the condition of the proof with respect to the rentals between Omaha and San Francisco, no unlawful discrimination was established, and, there being no proof that the rate charged is unreasonably high, it seems to me that the defendant is bound to pay the rate contracted for.
In so holding there is no conflict with the decision of this, court (175 App. Div. 538) overruling plaintiff’s demurrer to certain of the defenses set up in the answer. The demurrer admitted the allegation of fact that the service rendered at the lower rate was under substantially similar conditions to those prevailing where the higher rate was charged, and in pointing this out Mr. Justice Smith in his opinion said: “ Whether or not the proof adduced upon the trial may show any justification for this discriminatory rate given to the defendant’s competitors, the pleading, we think, is sufficient *602as against the demurrer to present the issue for trial ” (p. 546).
As to the remaining causes of action, none of which involves service to the Pacific coast, the plaintiff produced no evidence showing substantial dissimilarity of conditions of service and, therefore, it seems to me that the previous decision of this court, above referred to, requires that the judgment rendered upon those causes of action should be affirmed.
The learned trial justice erred, in my opinion, in refusing to find material facts as requested by the plaintiff, evidence as to which was uncontradicted, namely, the fourth, eighth, ninth, eleventh, twelfth, thirteenth, nineteenth, twentieth, twenty-first, twenty-second, twenty-third, twenty-fourth, twenty-fifth, twenty-seventh, thirtieth, forty-fifth, forty-ninth, fifty-first, fifty-second and fifty-third requests to find. The findings should be modified accordingly, and the judgment modified by increasing the amount thereof so as to include the rental sued for under the first cause of action amounting to $16,861.26, with interest from October 5, 1915, and as modified affirmed, with costs to the appellant.
Judgment affirmed, with costs.