It is no proper business of a railway company as common carrier
to foster particular enterprises or to build up new industries,
but, deriving its franchises from the legislature and depending
upon the will of the people for its very existence, it is bound to
deal fairly with the public, to extend them reasonable facilities
for the transportation of their persons and property, and to put
all its patrons upon an absolute equality.
It is no defense to an action against a railway company under
the statute of Colorado of 1880 to recover triple damages for an
unjust discrimination in freights, to set up a contract for a
rebate in case of furnishing a certain amount for transportation
without also alleging and showing that such an amount was
furnished.
An unexplained, indefinite, and unadjusted claim for damages
arising from a tort, which, though put forward, had never been
pressed, is no defense in such an action.
Sundry objections to testimony are held to be without merit.
This was an action at law by the firm of Goodridge &
Marfell, coal merchants, carrying on the business of mining coal at
Erie, Colorado, and of selling same at Denver, against the Union
Pacific Railway Company, to recover triple damages under a statute
of Colorado for an alleged unjust discrimination in freights upon
coal from Erie to Denver.
The statute which was the basis of this action, together with a
corresponding clause of the state constitution of Colorado, so far
as the same are material to this case, are set forth in the margin.
*
Page 149 U. S. 681
The amended complaint alleged the defendant to be a common
carrier, chartered by an act of Congress, and operating a line of
railroad from Erie and Marshall at both of which were located
certain coal mines, about thirty-five miles, to Denver; that if
there were any difference in distance, it was in favor of Erie, by
about two miles, and that the published
Page 149 U. S. 682
schedule of freights for coal was the same, namely, one dollar
per ton from each place; that plaintiffs, while operating their
coal mines from Erie, between October 31, 1885, and August 12,
1887, shipped to Denver 12,960 tons and 1,625 pounds of coal, for
which they paid defendant $12,960 and a fraction, being at the rate
of one dollar a ton, believing that such was the regular schedule
rate charged the general public and all parties similarly situated
for such service, there being no difference or discrimination
between such rates as between Erie and Marshall to Denver; that the
Marshall Consolidated Coal Mining Company at the same time operated
coal mines at Marshall, and was engaged in shipping coal over
defendant's road to Denver under the same circumstances as the
plaintiffs, except as to rates, and was a competitor with the
plaintiffs; that the amount of such shipments was about 145,833
tons, the defendant charging such company sixty cents per ton, and
allowing a rebate of forty cents from its schedule rates; that
plaintiffs are informed such rebates amounted to upwards of
$58,000, and that the defendant in this manner, without the
approval of the railroad commissioner, demanded and received from
the plaintiffs the sum of $5,184.30 more than it received from the
Marshall Consolidated Coal Mining Company (hereinafter called the
Marshall Company) for like services, upon like conditions and under
similar circumstances, without the knowledge or consent of the
plaintiffs; that the defendant in this manner, and to this extent,
allowed the Marshall Company drawbacks or rebates for carrying its
coal, which were not open to and allowed all companies and
corporations alike at the same rate per ton per mile; that these
rebates were made secretly and clandestinely in favor of the
Marshall Company, with the design to deceive and mislead the
plaintiffs, and fraudulently conceal from them the facts relating
to such rebates, and did so conceal them until about August 12,
1887; and that the plaintiffs were misled and deceived by these
devices and practices, and remained in ignorance of the same until
such data.
The plaintiffs further alleged that defendant had granted other
parties, similarly situated, the same rebates for the
Page 149 U. S. 683
carrying of coal over its road from Marshall, and further
charged that all the coal shipped by the plaintiffs and the
Marshall Company was about the same quality, and cost the defendant
the same amount to handle and ship over its lines, and that the
charges made by the defendant were unreasonable, unjust, and
extortionate; that plaintiffs had demanded of defendant
reimbursement of the overcharges, which had been refused, by reason
of which they asked judgment in the sum of $15,552.90, being three
times the amount alleged to have been extorted at the rate of forty
cents per ton on all coal shipped by them.
The answer set up a general denial of each and every material
allegation in the complaint, and special denials that defendant had
allowed the Marshall Company a rebate of forty cents per ton, or
that it had charged plaintiffs more than it had charged the
Marshall Company for like services. For a second defense, the
defendant alleged that in January, 1880, the Denver, Western &
Pacific Railway Company, a Colorado corporation, was engaged in
building a railroad from Denver to Boulder, and in so doing passed
over certain coal lands belonging to one Langford and others, known
as the "Marshall Coal Mine;" that in constructing its line, it
negligently broke into the mine, in consequence of which it was
claimed the mine took fire, and destroyed large amounts of coal,
and continued to burn for several months, to recover which damages
suits were instituted by the owners of the mine against the
railroad company, which were litigated for several years; that in
addition to such damages, the company had failed to obtain a right
of way across the mining lands; that in January, 1882, a judgment
was also obtained against the company, in the sum of $64,000, upon
a mechanic's lien, of which judgment the Union Pacific subsequently
became the owner, as well as of a large number of the bonds of the
said company; that the road was subsequently sold, and came into
the hands of the Union Pacific, and in 1885 a corporation was
formed under the name of Denver, Marshall and Boulder Railway
Company, which was owned and controlled by the Union Pacific, and
which proceeded to construct its road from
Page 149 U. S. 684
Denver to Boulder, and that the claim against the Denver,
Western and Pacific had become, and still remained, a lien upon the
property in the hands of the Denver, Marshall and Boulder Company;
that in 1885, the said Langford and others sold the Marshall coal
mine to the Marshall Company, which thus became the owner of the
mine, and also, by assignment, the owner of the claim for damages
done to it by the Denver, Western and Pacific Railway Company; that
in 1885, the Union Pacific was the owner of a certain coal mine at
or near Louisville, Boulder County; that in addition to the liens
above stated, there was also a bonded indebtedness of about
$1,000,000 upon the Denver, Western and Pacific, secured by a
mortgage, which was foreclosed in 1883, and upon such foreclosure
the owners of the Marshall coal mine answered, setting up their
claim for damages to the extent of $81,000; that the property was
subsequently put up and sold at master's sale under decree of
foreclosure, the rights of Langford and others not being
adjudicated at that time, and that upon such sale, the title was
acquired by parties acting in behalf of the Union Pacific, which
had become the owner of a large number of the mortgage bonds; that
for some time prior to October 13, 1885, defendant was receiving
coal for its locomotives from the Union Coal Mining Company, which
was the owner or lessee of certain coal mines at Erie and at
Louisville, and had been engaged in working the mines, and
furnishing the defendant with coal; that about the same time, the
Marshall Company had become the owner of the coal lands formerly
owned by Langford and others, and that on account of complaints
that had been made by the owners of other mines, the defendant
concluded that it was for its best interest to discontinue its
connection with the Union Coal Company, and for that purpose it
entered into negotiations with the Marshall Company for the purpose
of inducing this company to take off its hands the mines of the
Union Coal Company; that it was further induced to enter into this
contract by the fact that the Marshall Company had succeeded to the
rights of the former owners of the Marshall coal mines, and to
their claim for damages against the Denver,
Page 149 U. S. 685
Western and Pacific, and for the purpose of getting rid of the
operation of the Union coal mines, and of settling this claim for
damages, it entered into a contract with the Marshall Company on
the 13th day of October, 1885, in which it was recited that, it
being for the interest of the Union Pacific to discontinue the
working of the Union coal mine and to contract with the Marshall
Company for all the coal needed for its own consumption on its road
and branches, not to exceed fifty thousand tons for the first year
and one hundred thousand tons for every year thereafter, therefore
in consideration of the Union Coal Company's going out of the coal
business and the purchase from the Marshall Company by the
defendant of the coal used for its own consumption at the rate
mentioned therein, and in consideration of the rates for the
transportation of coal therein agreed upon, the coal company agreed
to furnish from the Marshall mine all coal ordered by the railway
company for its own use and consumption, and the use of its
branches, not exceeding fifty thousand tons the first year and one
hundred thousand tons per annum thereafter, and to deliver all coal
on board of the cars of the Union Pacific at the mouth of the mine
at a price not to exceed $1.25 per ton, delivered and loaded on the
cars, and, if such cost was less than $1.25 per ton, then at actual
cost.
It was further agreed that the defendant should give to the
Marshall Company for the transportation of its coal the regular
tariff rate, not exceeding one dollar per ton, unless two hundred
thousand tons should be mined and furnished for transportation
yearly, in which case a rate of sixty cents cents per ton should be
paid for all coal transported over defendant's line to Denver, and,
if the rate were reduced below one dollar, then the sixty-cent rate
should be reduced in the same proportion. It was also provided that
if the railway company should order coal in excess of the amounts
of fifty thousand and one hundred thousand tons per annum, then the
railroad company should pay the cost of mining and putting such
coal on the cars plus fifty cents per ton, except that in no case
should the price for mining and loading such coal exceed $1.40 per
ton, and it was further agreed that, as
Page 149 U. S. 686
part consideration of the contract, the majority of the capital
stock of such coal company should for two years be held, in case
the company desired to sell it, and should first be offered to the
Union Pacific in preference to any other purchaser. This contract
was to remain in force for five years.
It was further alleged that from the fact that Mr. Adams, the
president of the defendant company, was not intimately acquainted
with the claim for damages made by the former owners of the
Marshall mines, the contract failed to mention anything about the
settlement of said claim, but that the contract was sent to the
general attorney of the defendant, with instructions to look it
over, and if anything further was needed to settle the controversy
that might grow out of anything theretofore existing it should be
provided for in a separate instrument, and thereupon the attorney
prepared a bond of indemnity for execution by the coal company,
reciting the claim for damages against the Denver, Western and
Pacific, and agreeing to indemnify the railway company against any
damages which might accrue to it by reason of such claim, and upon
the execution of such bond, and as part of the transaction, the
contract was delivered to the Marshall Company, and afterwards the
former owners of said Marshall mines executed and delivered a
receipt in full, discharging the defendant from all suits and
causes of action existing by reason of any matter or thing
pertaining to the construction of the Denver, Western and Pacific
Railway Company. The answer further alleged that the defendant was
informed and believed that it cost the Marshall Company, and would
have cost the defendant if it had continued to operate through the
Union Coal Company, at least $1.60 per ton to mine their coal, and
that on account of the settlement of the aforesaid claims, and of
the coal necessarily used by it, the Marshall Company has paid the
defendant a higher rate, as a matter of fact, than one dollar per
ton, although it was not intended that the rate should exceed the
schedule price.
To this second defense, which was elaborately set forth in the
answer, a demurrer was interposed by the plaintiffs
Page 149 U. S. 687
and sustained by the court, 37 F. 182, to which the defendant
duly excepted. Defendant thereupon, for a third defense, pleaded
the statute of limitations, plaintiffs replied, and the case went
to trial before a jury, which returned a verdict for the plaintiffs
in the sum of $5,184.30, for which amount judgment was entered, and
defendant sued out this writ of error.
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
This case involves the construction of an act of the Legislature
of Colorado passed in 1885, prohibiting railroads from charging one
person or corporation a greater sum than it charges any other for a
like service upon like conditions and under similar circumstances.
The statute is of the same nature as the Interstate Commerce Act,
and, like that, was designed to prevent unjust discrimination and
extortion in rates for the carriage of persons and property.
1. The first assignment of error is taken to the ruling of the
court sustaining the demurrer to the second answer of the
defendant, in which it set up certain contracts with the Marshall
Consolidated Coal Company, which were claimed to justify the rebate
of forty cents per ton allowed to that company from the regular
schedule rates, which the plaintiffs were compelled to pay. This
defense set forth a very complicated series of facts, which,
however, are susceptible of a condensed statement. It seems that
the defendant, the Union
Page 149 U. S. 688
Pacific, was the owner of a large part of the capital stock of
the Union Coal Company, and had been for some time receiving from
it coal for consumption upon its locomotives, when, on account of
certain complaints made by the owners of other mines, it concluded
that it was for its best interests to discontinue its connection
with this company and to enter into negotiations with the Marshall
Company for its supply of coal. These negotiations resulted in the
contract of October 13, 1885, wherein the coal company agreed, on
its part
first, to furnish the railroad with all coal
needed for its consumption, not exceeding fifty thousand tons the
first year and one hundred thousand tons yearly thereafter, and to
deliver the same on its cars at the mouth of the mine at cost, but
in no case to exceed $1.25 per ton;
second, that in case
the railroad should order in excess of the above amount, the same
should be furnished at cost, plus fifty cents per ton, but in no
case should such cost exceed $1.40 per ton;
third, that
the railroad company should have the option for two years of taking
a majority of the capital stock of the coal company, in preference
to any other purchaser, should the coal company desire to sell the
same.
The railway company, upon its part, agreed to go out of the
business of mining coal, and to give the coal company the regular
tariff rate to Denver of one dollar per ton,
unless two hundred
thousand tons were furnished for transportation each year, in
which case a rebate of forty cents should be given, with a
corresponding reduction in case the regular tariff was reduced
below one dollar.
There were other subordinate covenants upon both sides, but they
are not material to the consideration of this case. This contract
was to remain in force for five years.
It is a sufficient reply to the whole defense set up in this
part of the answer to say that the coal company was only to be
allowed a rebate of forty cents per ton in case it furnished the
railroad company two hundred thousand tons per year for
transportation, and there is no allegation in the answer that it
ever did furnish this amount or ever became entitled to the rebate.
The want of such allegation is fatal to the contract
Page 149 U. S. 689
as a defense, and the court, for this reason, if for no other,
was right in sustaining the demurrer.
But we think the answer must be held insufficient for another
reason. It is further stated that an additional consideration
existed for this rebate in certain unliquidated claims for damages
which the former owners of the Marshall mines had against the
Denver, Western and Pacific Railway Company, the original
constructors of the road, by reason of their negligently breaking
into the mine during the construction of the road, setting it on
fire, and thereby consuming a large amount of coal and personal
property, for which claim suits were instituted against the railway
company, and litigated at great expense for several years, and were
still undetermined. There was also another claim for a right of way
for one mile across their lands. These claims, Langford and others,
who then owned the mine, sold and assigned to the Marshall Company
with the property. The Denver, Western and Pacific Railway, which
had done the injury for which the damages were claimed, was itself
sold under foreclosure of its mortgage, and bought in by parties
acting in the interest of the Union Pacific, who organized a new
corporation, called the Denver, Marshall and Boulder Railway,
leaving the claim of the Marshall Coal Company unadjusted and
unpaid, and a lien upon the property. How this claim for
unliquidated damages for the negligence of the railroad company
became a lien upon the property of the company, and how such lien
took precedence of the mortgage, and survived the foreclosure and
sale of the property, and became a lien upon the road in the hands
of the Denver, Marshall and Boulder Company, does not clearly
appear, but admitting it to be still valid and outstanding, as
alleged in the answer, the question still remains whether the
defendant company can set up an unliquidated claim of this kind in
defense of a rebate of forty cents per ton allowed the coal company
over every other shipper on its road.
It will be observed in this connection that not only was the
amount of the damages suffered by the coal company never fixed,
agreed upon, or adjusted, but the amount of coal which
Page 149 U. S. 690
the Marshall Company was at liberty to deliver to the railroad
company for transportation was left equally indefinite, save only
that it must exceed two hundred thousand tons per year to entitle
it to the rebate. This contract was to remain in force five years,
but, upon the theory of the defendant, there was nothing to prevent
it being continued indefinitely, provided the defendant company was
willing to accede to any amount of damages which the coal company
might see fit to claim. While we do not undertake to say that a
railroad company may not justify a fixed rebate in favor of a
particular shipper by showing a liquidated indebtedness to such
shipper, which the allowance of the rebate was intended to settle,
it would practically emasculate the law of its most healthful
feature to permit an unexplained, indefinite, and unadjusted claim
for damages arising from a tort, which, though litigated for some
time, never seems to have been prosecuted to a final determination
in the courts, to be put forward as an excuse for a clear
discrimination in rates. This act was intended to apply to
intrastate traffic the same wholesome rules and regulations which
Congress two years thereafter applied to commerce between the
states, and to cut up by the roots the entire system of rebates and
discriminations in favor of particular localities, special
enterprises, or favored corporations, and to put all shippers on an
absolute equality, saving only a power, not in the railroad company
itself, but in the railroad commissioner, to except "special cases,
designed to promote the development of the resources of this
state," and not to prevent the railroad company
"from making a lower rate per ton per mile, in carload lots,
than shall govern shipments in less quantities than carload lots,
and from making lower rates for lots of less than five car loads
than for single carload lots."
The statute recognizes the fact that it is no proper business of
a common carrier to foster particular enterprises or to build up
new industries, but, deriving its franchise from the legislature
and depending upon the will of the people for its very existence,
it is bound to deal fairly with the public, to extend them
reasonable facilities for the transportation of their persons and
property, and to put all its
Page 149 U. S. 691
patrons upon an absolute equality.
Scofield v. Railway,
43 Ohio St. 571;
Sandford v. Railroad, 24 Penn.St. 378;
Messenger v. Pennsylvania Railroad, 36 N.J.Law 407;
McDuffie v. Portland &c. Railroad, 52 N.H. 430. So
opposed is the policy of the act to secret rebates of this
description that it requires a printed copy of the classification
and schedule of rates to be posted conspicuously in each passenger
station for the use of the patrons of the road, that everyone may
be appraised not only of what the company will exact of him for a
particular service, but what it exacts of everyone else for the
same service, so that in fixing his own prices, he may know
precisely with what he has to compete. To hold a defense thus
pleaded to be valid would open the door to the grossest frauds upon
the law and practically enable the railroad company to avail itself
of any consideration for a rebate which it considers sufficient,
and to agree with the favored customer upon some fabricated claim
for damages, which it would be difficult, if not impossible, to
disprove. For instance, under the defense made by this company,
there is nothing to prevent a customer of the road who has received
a personal injury from making a claim against the road for any
amount he chooses, and in consideration thereof, and of shipping
all his goods by that road, receiving a rebate for all goods he may
ship over the road for an indefinite time in the future. It is
almost needless to say that such a contract could not be
supported.
There is no doubt of the general proposition that the release of
an unliquidated claim for damages is a good consideration for a
promise, as between the parties, and if no one else were interested
in the transaction, that rule might apply here; but the
legislature, upon grounds of public policy and for the protection
of third parties, has made certain requirements with regard to
equality of rates which in their practical application would be
rendered nugatory if this rule were given full effect. For this
reason, we think the railroad company is in error in its assumption
that
"if, in the honest judgment of the officers of the defendant
company who made the contract, the considerations which entered
into it, and upon which alone it was
Page 149 U. S. 692
made, were sufficient to warrant the company to pay back to the
Marshall Company forty cents per ton for each ton it shipped for
five years, that is enough."
This is but a restatement, in different language, of a comment
made by the court below in its opinion that
"the whole answer amounts only to this: that the Marshall
Company is allowed less rates than other shippers are required to
pay, upon considerations which are satisfactory to defendant, and
it is obvious that this is no answer to a complaint of unlawful
discrimination."
If reasons of public policy dictate that the schedule rates
shall be posted conspicuously in each railway station, it is no
less important that the customers of the road should have the means
of ascertaining whether any departure from such rates in favor of a
particular shipper is justified by the facts. Such a method is
contemplated by the act in providing that no discrimination of this
kind shall be made without the written approval of the railway
commissioner. It was evidently designed to put it in the power of
the commissioner to permit such discrimination to be made, possibly
in a case like the present one, if, in his opinion, the
circumstances seem to warrant it.
2. The second assignment of error is taken to the admission of
certain letters of Taggart and Kimball.
Upon the trial of the case before a jury, the plaintiffs gave
evidence tending to show that the Jackson Coal Company was
operating mines at Canfield, thirty-six miles from Denver, and was
charged by defendant $1 per ton for transportation, and that
another railroad company, which ran across the mine, charged the
same rate. There was also testimony showing the amount shipped by
plaintiffs over defendant's road to have been 12,961 tons, for
which they paid one dollar per ton. Plaintiffs thereupon called E.
R. Taggart, who resided in Denver and had been engaged in the coal
trade for several years selling the product of the Fox Coal
Company, which shipped its coal at the same station as the Marshall
Company, and was charged $1, and who testified that upon
information received by him of the rebate allowed to the Marshall
Company, through the proceedings of a commission appointed to
Page 149 U. S. 693
investigate the affair, he wrote to the president of the
defendant, and also to T. L. Kimball, the general traffic manager
and official head of the defendant company. The letter to Kimball,
with the reply, was objected to upon the ground that, the demurrer
to the second answer having been sustained, any statement of the
way in which the defendant acted relating to that defense was
immaterial, irrelevant, and incompetent, which objection was
overruled, and defendant excepted. The letter from Kimball to the
witness Taggart purported to be a reply to a letter from Taggart to
the president of the road, and stated generally that the contract
with the Marshall Company was made under circumstances entirely
dissimilar to those existing between the Fox Company and the Union
Pacific, and in consideration of the company's furnishing the
railroad coal for its own use at not exceeding $1.25 per ton, and
also in compromise and settlement of a claim against the company
for some sixty-odd thousand dollars. Taggart's reply thereto, dated
August 20, 1887, stated the claim from his standpoint, and that he
had been advised by the very highest legal sources that the
contract was without warrant and clearly in violation of law, and
further insisted upon his claim for the repayment of forty cents
per ton. If there were any objection to the admission of Kimball's
letter upon the ground that the letter to which it was a reply was
not produced, that objection was met by the production of that
letter upon cross-examination -- a letter which appears to have
been written July 25, 1887, to Mr. Adams, president of the road at
Boston. The witness stood in the same position as the plaintiffs
with respect to defendant, and had also brought suit against it to
recover the same rebate which had been allowed to the Marshall
Company, and which plaintiffs were suing to recover in this case.
Assuming the correspondence to have been between different parties,
and therefore irrelevant, it is not easy to perceive how it could
have prejudiced the defendant, as Kimball's letter was a mere
iteration of the defense set up in the answer, and put forward at
the trial, and Taggart's reply thereto, if irrelevant, was not
improper or prejudicial to the defendant. If the witness had had an
oral
Page 149 U. S. 694
conversation with Mr. Kimball, the manager of the defendant
company, there can be no doubt that such conversation, and the
whole of it, would have been admissible, as both Taggart's claim
and defendant's stood precisely upon the same footing, and if this
demand and refusal, instead of being oral, was by correspondence,
it would seem to be equally admissible. As Kimball's letter stated
clearly the position of the defendant with regard to both these
claims, it is difficult to see how it could be prejudiced by its
production.
3. The third, fourth, and fifth assignments of error are taken
upon the same ground to the action of the court in refusing to
allow the witnesses Taggart and Rubridge to testify as to what it
cost to get out coal, and put it on the cars at the Marshall mine,
and in ruling out testimony showing that by reason of such cost the
Marshall Company actually paid at least $1 per ton for coal carried
by defendant.
At the time witness Taggart was asked this question, the case
stood in this position: a demurrer to the second answer of the
defendant, setting up its excuses for the rebate, had been
sustained, and the case set for trial upon the complaint and the
denials -- in other words, upon the general issue. Plaintiffs had
shown that they, as well as the Jackson and Fox Coal Company, had
paid $1 per ton, and had shown the rebate paid to the Marshall
Company, but the contract had not been put in evidence, though the
witness Taggart had sworn that he knew
"that defendant set up in bar of plaintiffs' claim a contract
they had with the Marshall Company in consideration of the Marshall
Company supplying them with coal at a given price -- much below the
price at which they could mine it, or get it out of the mines --
and further, in settlement of an old lawsuit they had,"
and the record then states, in a very blind way, that
"the witness gave further testimony showing that Kimball's
testimony as to its own uses, and not exceeding $1.25 per ton,
which was then costing plaintiffs and others about $1.50 to mine,
and commercial coal at not exceeding $1.40 per ton at a time when
other producers asked $1.60 per ton -- that was making a difference
of from twenty to twenty-five cents per ton on
Page 149 U. S. 695
every ton of coal than what it cost."
Defendant's counsel here asked: "As a matter of fact, do you
know what it did cost to get out a ton of coal, and put it on cars
at the Marshall or Fox mine?" This was clearly immaterial, as it
was no excuse for a rebate that the coal cost more or less. The
right of a railroad to charge a certain sum for freight does not
depend at all upon the fact whether its customers are making or
losing by their business.
The next witness, Robert H. Rubridge, who had been the treasurer
and assistant secretary of the Marshall Company, testified that
from November 1, 1885, to August 1, 1887, there was shipped from
the Marshall mine to Denver 67,863 tons, upon which a rebate of
forty cents per ton was allowed. Upon cross-examination, he
testified that that rebate was allowed in consideration
"of our giving an indemnity bond. Our company gave an indemnity
bond protecting the Union Pacific from all claims on account of a
damage suit against them, amounting to about $65,000, for which
they had attachments on some of the rolling stock and ties and half
a mile of track of the Denver, Western and Pacific. . . . We were
to give them coal at cost for the company's use, but not to exceed
at any time $1.25 per ton, and also to give them coal for
commercial use at not exceeding $1.40 per ton -- that is, for
Kansas, but not for Denver."
This oral testimony with regard to the contract was objected to
by plaintiffs' counsel on the ground that the written contract
should be produced -- an objection which was overruled by the
court. There was evidently an attempt here to obtain from the
witness a statement of so much of the contract as was favorable to
the defendant, and at the same time not to put it in evidence,
since the contract would show on its face that the coal company was
not entitled to any rebate unless it furnished the railroad company
two hundred thousand tons per annum for transportation -- a far
larger amount than it did actually furnish. It further appeared
that the contract establishing the price of coal was not lived up
to, as the railroad company was paying anywhere from $1.25 to $1.75
per ton. The witness was then asked how much it cost to get
Page 149 U. S. 696
out coal and to put it on the cars for the use of the Union
Pacific in its engines and also for its commercial use in
Kansas.
The answer to this question, as well as the proposal of the
defendant to show by the witness that the cost of getting out the
coal, which they were obliged to furnish the Union Pacific under
the contract, was largely in excess of what they got, was properly
ruled out. The relations between the defendant and the Marshall
Company were fixed by their written contract, and under that
contract, the railway company was entitled to a certain amount of
coal at $1.25 per ton regardless of cost, and the Marshall Company
was not entitled to a rebate unless they furnished two hundred
thousand tons per annum for shipment. This testimony could only
have been offered to show that the company was losing money in
furnishing the coal at $1.25 per ton, and therefore that the
discrimination in their favor by the railroad company was not
unjust. But the court, having sustained the demurrer to the answer
setting up this contract upon the ground that it constituted no
defense, could not consistently have permitted the defendant to
introduce oral testimony of such contract for the purpose of
enabling it to rely upon such stipulations as were thought to be
favorable to itself. The witness had stated, in answer to the
question why the rebate of 40 cents per ton was allowed, that the
consideration for doing this was in writing. Plaintiffs' counsel
thereupon objected to the proposed oral evidence of the contract as
incompetent, and while this objection, though it seems to us to
have been well taken, was not sustained, and the witness was
permitted to give certain of its stipulations, the court was at
liberty at any time to put a stop to this character of testimony or
to rule out any further questions based upon it. The whole case
virtually turned upon the demurrer to that portion of the answer
setting up this contract. This demurrer having been sustained, the
defendant should not have been allowed, in this indirect way, to
obtain the advantage of certain stipulations included in the
contract.
4. The sixth assignment, that the court erred in refusing to
Page 149 U. S. 697
receive in evidence the release of the Marshall Company to the
defendant company, cannot be sustained, for the same reason. This
release, a copy of which is given in the record, was given by the
Marshall Coal Mining Company and by Langford and Marshall, the
previous owners of the mine, to the defendant railway company,
releasing it from
"all actions and causes of action, suits, controversies, claims,
and demands whatsoever for or by reason of any cause, matter, or
thing arising out of the construction of any railroad across the
property of either of us in Boulder and Jefferson counties,
Colorado."
It is obvious, upon the principles hereinbefore stated, that
this release was altogether too vague and general to serve as a
basis for making the rebate to the Marshall Company.
After some other testimony as to prices paid by other companies,
and of unsuccessful efforts made to ascertain why the Marshall
Company was given lower rates than its competitors, the plaintiffs
rested. The defendant put in no testimony, and the case was
committed to the jury, who returned a verdict for $5,481.34.
5. The seventh and last assignment of error was to the action of
the court in refusing to grant a new trial and in entering a
judgment on the verdict because there was no sufficient evidence to
support the verdict, and especially to sustain it as to the amount
of damages. Plaintiffs' evidence had shown that the Marshall
Company had been receiving a rebate upon all coal transported by it
to Denver, which was not allowed to its competitors in business,
and the damages sustained by the plaintiffs were measured by the
amount of such rebate, which should have been allowed to them. The
question whether they lost profits upon the sale of their coal by
reason of the nonallowance of such rebates was too remote to be
made an element of their damages. They were entitled to the same
terms which the Marshall Company would have received, and damages
to the exact extent to which the Marshall Company was given a
preference.
There was no error in the action of the court below, and its
judgment is therefore
Affirmed.
* Constitution, Art. XV, Sec. 6:
"All individuals, associations, and corporations shall have
equal rights to have persons and property transported over any
railroad in this state, and no undue or unreasonable discrimination
shall be made in charges or in facilities for transportation of
freight or passengers within the state, and no railroad company,
nor any lessee, manager, or employee thereof, shall give any
preference to individuals, associations, or corporations in
furnishing cars or motive power."
Session Laws of Colorado, 1885, page 309:
"SEC. 7. (Unjust Discrimination.) No railroad corporation shall,
without the written approval of said commissioner, charge, demand,
or receive from any person, company, or corporation, for the
transportation of persons or property, or for any other service, a
greater sum than it shall, while operating under the classification
and schedule then in force, demand or receive from any other
person, company, or corporation for a like service from the same
place, or upon like conditions and under similar circumstances, and
all concessions of rates, drawbacks, and contracts for special
rates shall be open to and allowed all persons, companies, and
corporations alike at the same rate per ton per mile upon like
conditions and under similar circumstances, except in special cases
designed to promote the development of the resources of this state,
when the approval of said commissioner shall be obtained in
writing,"
etc.
"SEC. 8. (Extortion.) No railroad corporation shall charge,
demand, or receive from any person, company, or corporation an
unreasonable price for the transportation of persons or property,
or for the handling or storing of freight, or for the use of its
cars, or for any privilege or service afforded by it in the
transaction of its business as a railroad corporation, and not
specified in the classification and schedule prepared and published
by such railroad corporation. The superintendent or other chief
executive officer of each railroad in this state shall cause to be
kept posted up in a conspicuous place in the passenger depot in
each station where passenger tickets are kept for sale, a printed
copy of the classification and schedule of rates of freight charges
then in force on each railroad, for the use of the patrons of the
road. Any railroad company violating any of the provisions of this
section shall be deemed guilty of extortion, and be subject to the
penalties hereinafter prescribed."
"SEC. 9. (Penalty.) Any railroad corporation that shall violate
any of the provisions of this act as to loading points, freight
cars, unjust discrimination, or extortion, shall forfeit, in every
such case, to the person, company, or corporation aggrieved
thereby, three times the actual damage sustained or overcharges
paid by the party aggrieved, which triple damages shall be adjudged
to be paid, together with the costs of suit, and a reasonable
attorney's fee, to be fixed by the court, and taxed with the
costs."
