Western Union Telegraph Company v. Call Publishing Company

• Citation: 181 U.S. 92,21 S.Ct. 561,45 L.Ed. 765
• Decision Date: 15 April 1901
• Docket Number: No. 117,117
• Parties: WESTERN UNION TELEGRAPH COMPANY, Plff. in Err. , v. CALL PUBLISHING COMPANY
• Court: U.S. Supreme Court

181 U.S. 92

21 S.Ct. 561

45 L.Ed. 765

WESTERN UNION TELEGRAPH COMPANY, Plff. in Err.,

v CALL PUBLISHING COMPANY.

No. 117.

Argued and Submitted December 4, 1900.

Decided April 15, 1901.

This was an action commenced on April 29, 1891, in the district court of Lancaster county, Nebraska, by the Call Publishing Company, to recover sums alleged to have been wrongfully charged and collected from it by the defendant, now plaintiff in error, for telegraphic services rendered. According to the petition the plaintiff had been engaged in publishing a daily newspaper in Lincoln, Nebraska, called the Lincoln Daily Call. The Nebraska State Journal was another newspaper published at the same time in the same city, by the State Journal Company. Each of these papers received Associated Press despatches over the lines of defendant. The petition alleged:

'4th, That during all of said period the defendant wrongfully and unjustly discriminated in favor of the said State Journal Company and against this plaintiff, and gave to the State Journal Company an undue advantage, in this: that while the defendant demanded, charged, and collected of and from the plaintiff for the services aforesaid $75 per month for such despatches, amounting to 1,500 words or less daily, or at the rate of not less than $5 per 100 words daily per month, it charged and collected from the said State Journal Company for the same, like, and contemporaneous services only the sum of $1.50 per 100 words daily per month.

'Plaintiff alleges that the sum so demanded, charged, collected, and received by the said defendant for the services so rendered the plaintiff, as aforesaid, was excessive and unjust to the extent of the amount of the excess over the rate charged the said State Journal Company for the same services, which excess was $3.50 per 100 words daily per month, and to that extent it was an unjust and wrongful discrimination against the plaintiff and in favor of the State Journal Company.

'That plaintiff was at all times and is now compelled to pay said excessive charges to the defendant for said services, or to do without the same; that plaintiff could not dispense with such despatches without very serious injury to its business.'

The telegraph company's amended answer denied any unjust discrimination, denied that the sums charged to the plaintiff were unjust or excessive, and alleged that such sums were no more than a fair and reasonable charge and compensation therefor, and similar to charges made upon other persons and corporations at Lincoln and elsewhere for like services. The defendant further claimed that it was a corporation engaged in interstate commerce; that it had accepted the provisions of the act of Congress entitled 'An Act to Aid in the Construction of Telegraph Lines and to Secure to the Government the Use of the Same for Postal, Military, and other Purposes,' approved July 24, 1866 [14 Stat. at L. 221, chap. 230]; that it had constructed its lines under the authority of its charter and that act; and denied the jurisdiction of the courts of Nebraska over this controversy. A trial was had resulting in a verdict and judgment for the plaintiff, which judgment was reversed by the supreme court of the state. 44 Neb. 326, 27 L. R. A. 622, 62 N. W. 506. A second trial in the district court resulted in a verdict and judgment for the plaintiff, which was affirmed by the supreme court of the state (58 Neb. 192, 78 N. W. 519), and thereupon the telegraph company sued out this writ of error.

Messrs. Rush Taggart and John F. Dillon for plaintiff in error.

Mr. Franklin W. Collins submitted the case for defendant in error, and Mr. John M. Stewart was with him on the brief.

Mr. Justice Brewer delivered the opinion of the court:

The contention of the telegraph company is substantially that the services which it rendered to the publishing company were a matter of interstate commerce; that Congress has sole jurisdiction over such matters, and can alone prescribe rules and regulations therefor; that it had not at the time these services were rendered prescribed any regulations concerning them; that there is no national common law, and that whatever may be the statute or common law of Nebraska is wholly immaterial; and that therefore, there being no controlling statute or common law, the state court erred in holding the telegraph company liable for any discrimination in its charges between the plaintiff and the Journal Company. In the brief of counsel it is said: 'The contention was consistently and continuously made upon the trial by the telegraph company, that as to the state law it could not apply for the reasons already given, and that, in the absence of a statute by Congress declaring a rule as to interstate traffic by the telegraph company, such as was appealed to by the publishing company, there was no law upon the subject.' The logical result of this contention is that persons dealing with common carriers engaged in interstate commerce and in respect to such commerce are absolutely at the mercy of the carriers. It is true, counsel do not insist that the telegraph company or any other company engaged in interstate commerce may charge or contract for unreasonable rates, but they do not say that they may not; and if there be neither statute nor common law controlling the action of interstate carriers, there is nothing to limit their obligation in respect to the matter of reasonableness. We should be very loth to hold that in the absence of congressional action there are no restrictions on the power of interstate carriers to charge for their services; and, if there be no law to restrain, the necessary result is that there is no limit to the charges they may make and enforce.

It may be well at this time to notice what the exact rulings of the state court were: The charge to the plaintiff was $5 per 100 words, and to the State Journal Company $1.50 per 100 words. When the case came to the supreme court for examination of the proceedings in the first trial it appeared that no proper exceptions to the instructions had been preserved, and the only question, therefore, for consideration, was the sufficiency of the evidence to sustain the verdict; and the court held that the mere fact of a difference in charge was not sufficient to invalidate the contract made with the plaintiff, and that there was no satisfactory evidence that the difference in the charge was unreasonable. In the course of its opinion the court said:

'There was no evidence tending to show that the charge to the Call Company was in itself unreasonably high, that the charge to the Journal Company was unreasonably low, or that the charge to either was greater or less than the ordinary or reasonable charge to others for similar services. It follows, therefore, that the verdict was sustained by the evidence if, as a matter of law, it was sufficient to show, either that another person was obtaining despatches for a less sum than the plaintiff, without regard to differences in conditions, or if it was sufficient to show a difference in rate accompanied by a difference in conditions, leaving to the jury, without other evidence, the duty of comparing the difference in rates with the difference in conditions, and determining without other aid whether or not the difference in rates was disproportionate to the difference in conditions. But the verdict was not sustained by the evidence if a mere difference in rates without regard to conditions was insufficient to ground a right of action, or, a difference both in rates and conditions being shown, it was also necessary to establish by evidence that these differences were disproportionate. . . . As we have already stated, a considerable difference in the absolute rate charged the Call Company and the Journal Company was shown, but there was also shown a difference in conditions affecting the expense and difficulty of rendering the services, which at common law would justify some difference in rates, and this difference was one which the proviso quoted from the 7th section of our statute expressly recognizes as justifying a discrimination in this state. There was no evidence to show that the rate charged the Call Company was unreasonably high. There was no evidence to show that the rate charged the Journal Company was unreasonably low. There was no evidence to show what difference in rates was demanded or justified by the exigencies of the differences in conditions of service. We do not think that the enforcement of contracts deliberately entered into should be put to the hazard of a mere conjecture by a jury without evidence upon which to base its verdict. How can it be said that a jury acts upon the evidence and reaches a verdict solely upon consideration thereof, when, having established a difference in rates and a difference in conditions, without anything to show how one difference affects the other, or to what extent, it is permitted to measure one against the other, and to say that to the extent of $1 or to the extent of $1,000 the difference in rates was disproportionate to the difference in conditions? It may be said that it would be difficult to produce evidence to show to what extent such differences in conditions reasonably affect rates. This may be true, but the answer is that whatever may be the difficulties of the proof, a verdict must be based upon the proof, and a verdict must be founded upon evidence, and not upon the conjecture of the jury or its general judgment as to what is fair, without evidence whereon to found such judgment.'

Under this construction of the law the first judgment was reversed, and the second trial proceeded upon the lines thus laid down by the supreme court. On that trial the court charged:

'You are instructed that not every discrimination in rates charged by a telegraph company is unjust. In order to constitute an unjust discrimination, there must be a difference in rates under substantially similar...