Bayles v. Kansas P. Ry. Co.

• Decision Date: 13 September 1889
• Citation: 22 P. 341,13 Colo. 181
• Parties: BAYLES v. KANSAS PAC. RY. CO.
• Court: Colorado Supreme Court

22 P. 341

13 Colo. 181

BAYLES v. KANSAS PAC. RY. CO.

Supreme Court of Colorado

September 13, 1889

Commissioners' decision. Appeal from superior court of Denver.

REED C., dissenting.

Browne & Putnam, for appellant.

Teller & Orahood, for appellee.

PATTISON C.

The question presented for consideration in this case arises upon the judgment of the court below, sustaining a demurrer to the complaint. The grounds of demurrer were, in substance, (1) that the complaint did not state facts sufficient to constitute a cause of action; (2) that the contract sought to be enforced was void as against public policy; (3) that there was a defect of parties defendant. To discuss the case intelligently a careful analysis of the contract and the allegations of the complaint is necessary. The contract is set out in haec verba, and is as follows: 'This agreement, made this 20th day of March, A. D. 1878, by and between B. H. Bayles, of Denver, Colorado, party of the first part, and S. R. Ainslay, general agent of and representing the Kansas Pacific Railway Co., party of the second part witnesseth, that the said party of the first part hereby agrees to ship all merchandise bought by him, and shipped from eastern cities, by the Kansas Pacific Railway Co., in consideration of which the said party, on behalf of and representing the Kansas Pacific Railway Co., agrees to transport all merchandise consigned to said party of the first part from (1) New York to Denver, Colorado, one dollar per hundred pounds, regardless of classification; (2) Chicago, Ills., to Denver, Colo., $110 per car-load, and 80 cents per hundred pounds on less than car-load shipments; (3) St. Louis, Missouri, to Denver, Colo., eighty cents per hundred pounds on less than car-load shipments, and $110 per car-load lots; (4) Kansas City, Mo., and Leavenworth, Kan (proper,) ninety dollars per car-load, and sixty cents per hundred pounds on less than car-load shipments. It is agreed that the above rates shall be and remain in force until January first, 1880. And it is further agreed that the said party of the second part shall rectify and correct all overcharges, and protect the said party of the first part in the above-named rates, in Denver, Colo. And it is further agreed that when merchandise shipped to the care of the Kansas Pacific Railway Co. shall be diverted to other roads, and be delivered by other than the Kansas Pacific Railway Co., it shall in no way work a forfeiture of this contract. (Signed) B. H. BAYLES. S. R. AINSLEY, Agt. K. P. Ry.' It is then alleged that prior to the date of said contract, by order and decree of the circuit court of the United States for the district of Kansas, in a certain suit wherein John A. Stewart and others were plaintiffs, and the Kansas Pacific Railway Company was defendant, one S. T. Smith had been appointed, and had duly qualified as receiver, and had taken possession of the said railway for its entire length, from Kansas City, Mo., to the city of Denver, and from that time until June 14, 1879, had managed said railway, and that all transportation of freight was contracted for and controlled by him as such receiver. This allegation is followed by the statement that S. R. Ainsley, at the time the contract was made, and during all of his term of office, was the general agent of the said receiver, at the city of Denver, and authorized to execute, on his behalf, agreements for the transportation of freight, including the contract above set forth; that by mutual mistake in the form of the agreement the contract was executed by said Ainsley as representative of the said railway company, rather than said receiver. It is then alleged that the contract was adopted, and partially performed, by the said receiver, and that freight of plaintiff was transported under such contract by him, through his agents and employes, and all money paid by plaintiff was received by his agents, and used by him in the management of said railway, and accounted for by him upon his final discharge. It is then stated that the railway remained in the possession and under the control of the receiver, until June 4, 1879, when the circuit court decreed that it should be delivered to and retained by the railway company, which order was complied with by the receiver, who, on the 14th day of the same month, turned over to the railway company all moneys in his hands, amounting to the sum of $265,791.20, and took a receipt therefor, by which it was stipulated and agreed by the railway company that 'any other claims against the receiver should be assumed and paid by the said railway company,' which said adjustment was afterwards approved by a final decree, rendered October 17, 1884. It is then stated that at the time the money was so paid to defendant by the receiver the indebtedness sought to be recovered in this action was a valid claim against the receiver, and one of the debts which the railway company assumed and agreed to pay. It is then alleged that under the provisions of the contract plaintiff, in performance thereof, shipped all merchandise bought by him in eastern cities over the Kansas Pacific Railway to Denver, and that the total freight on such merchandise aggregated the sum of $10,619.69, which sum he from time to time paid to the agents of the receiver in full; that under the contract he was entitled to a rebate on the amounts paid for freight, in the sum of $2,565.91; that of that sum the agent of the receiver, with his full knowledge and consent, paid to the plaintiff at various times, and in different amounts, the sum of $1,353.53, leaving a balance still unpaid on March 3, 1879, of $1,211.39; that the railway company refused to pay the balance remaining unpaid; that plaintiff paid the full freight rates on merchandise shipped by him as aforesaid, and by the terms of the contract was entitled to a return of said sum of $2,565.91, 'which sum was the aggregate of overcharges made by said receiver thereon in consequence of some running arrangement between the said receiver and certain other connecting lines, the nature of which is wholly unknown to plaintiff, and cannot, therefore, be stated.' The second cause of action need not be stated. Judgment is prayed for the reformation of the contract, so that the same shall conform in its executior to the real intention of the parties, and for the sum of $1,211.39 upon the first cause of action, and for the sum of $2,000 upon the second cause of action, and for costs. The demurrer was sustained upon the sole ground that the contract sought to be enforced was void as against public policy. The court, in effect, held that under the contract, the plaintiff secured rates for the transportation of merchandise, which wereless than the published schedule rates of defendant; that such charges amounted to an unjust discrimination, within the meaning of the law and the constitution of this state, of which the court could take cognizance upon demurrer, without proof of any of the facts, circumstances, conditions, or surroundings under which the contract was made, and which may have existed while the same was being performed by the plaintiff. This decision, and the principles which are invoked to sustain it, will now be discussed.

The naked facts of the case are, simply, that upon the day named a contract was made, by the terms of which plaintiff, for a certain period, was to have a special rate upon the merchandise purchased by him in eastern cities, in consideration of his undertaking to consign such merchandise from Kansas City via Kansas Pacific Railway. This rate applied only to shipments made at the eastern terminus of the railway, or which were shipped from eastern cities consigned to appellee. Whether the rate was either different or less than that given to other shippers residing in Denver, under like conditions, and under the same circumstances, does not appear. It does not appear, either directly or indirectly, that the special rate given to plaintiff was an exclusive privilege enjoyed by him alone. There is nothing to warrant the inference that any shipper residing in Denver could not have secured the same rate upon property which was to be shipped by him from eastern cities. There is nothing in the complaint showing that any shipper, whether he desired to ship much or little, might not have secured the same rate upon application to appellee. Neither is there anything to warrant the assumption that the arrangement was a secret one. Neither is there any reason for the inference that it was the intention of the railway company to give to appellant a preference. There was no promise not to give the same rate to others. The railway company remained at liberty to charge others the same or lower rates. Upon all the facts, therefore, if effect be given not only to the language of the contract itself, but to every allegation of the complaint, it is clear that the purpose of the contract was to give appellant a special rate, and nothing more. This contract was performed by him, and partially performed by the railway company. The ultimate conclusion to be drawn from the entire record is that appellant secured a rate which was less than the regular schedule rates in force at the time; that there was some inequality in charges made by the appellee, but nothing to show that such inequality in charges was practiced towards those who shipped property under like circumstances and conditions. Do these facts, standing alone, warrant the conclusion that, within the meaning of the law and of the constitution, an unjust discrimination was intended, which rendered the contract void as against public policy? It is a wellsettled elementary principle of the law of common carriers that mere inequality in charges does not amount to unjust...