Homestead Co. v. Des Moines Elec. Co.

• Citation: 226 F. 49
• Parties: HOMESTEAD CO. v. DES MOINES ELECTRIC CO.
• Decision Date: 30 August 1915
• Court: U.S. District Court — Southern District of Iowa

226 F. 49

HOMESTEAD CO. v. DES MOINES ELECTRIC CO.

United States District Court, S.D. Iowa, Central Division.

August 30, 1915

Dunshee & Haines, of Des Moines, Iowa, for plaintiff.

Cummins Hume & Bradshaw, of Des Moines, Iowa, for defendant.

WADE District Judge.

Action at law, upon petition in three counts. Each count of the petition is challenged by a demurrer. The first count charges that the defendant, a public service corporation, furnishing electric light and power to the inhabitants of Des Moines was guilty of discrimination in charges, having demanded and received from the plaintiff the established public rates for light and power, while the defendant at the same time, and under like conditions, and without any cause for such discrimination, charged the Register and Leader Company a rate equivalent to 42 per cent. of the published rate. The petition further charges that the plaintiff and the Register and Leader Company are competitors, engaged in the same line of business, and that during all the period for which action is brought the defendant represented to the plaintiff that the rates were uniform, and that no inhabitant of the city of Des Moines in plaintiff's class, or under conditions similar to plaintiff, was receiving a lower rate.

Plaintiff asks judgment for $8,471.81, being the difference between the amount of the published rate charged the plaintiff and the reduced rate charged its competitor as aforesaid. During all of the time in controversy an ordinance was in force in the city of Des Moines, fixing the maximum rate to be charged by the defendant for light and power, and the rates charged the plaintiff were less than the maximum charge allowed by the ordinance.

Under the demurrer it is necessary to determine: (a) Whether, in case of discrimination in rates, the person paying the higher rate has a cause of action for damages; and (b) whether the difference in rates is the measure of damages; and, if not (c) whether the first count of the petition states facts upon which any other damage than the difference in rates can be recovered.

As hereafter decided, in ruling upon the demurrer to the second count of the petition, the rate fixed by ordinance must be assumed to be a reasonable rate. The plaintiff, not having paid in excess of the ordinance rate, cannot recover upon any theory that the rate paid was unreasonable. In fact, the first count of the petition makes no claim that the rate was unreasonable. Complaint is only made of the discrimination by which plaintiff was compelled to pay a higher rate than its competitor.

I cannot agree with counsel for defendant that mere discrimination in rates furnishes no cause of action for damages to a person injured thereby. A public service corporation cannot charge one patron one price, and a competitor another price for the same service, even though the higher rate may not be in excess of the legal rate.

'Corporations or persons who undertake to supply a demand which is 'affected with a public interest' are not a law unto themselves, but are required to supply all alike who are alike situated, and are not permitted to discriminate in favor of or against any. By accepting from the city a franchise to lay pipes and mains in the streets and alleys and through them furnish the inhabitants and the public with fuel, illuminating, and power gas, the company assumed a public duty. That duty was to supply gas at reasonable rates to all the inhabitants of the city, and to charge each the same price and furnish on the same terms as it did to every other for like service under the same or similar conditions. ' Phelan v. Boone Gas Co., 147 Iowa, 626, 125 N.W. 208, 31 L.R.A. (N.S.) 319.

In Cook v. Railway, 81 Iowa, 551, 46 N.W. 1080, 9 L.R.A. 764, 25 Am.St.Rep. 512, the Supreme Court quotes with approval from Redfield on Law of Railroads:

'But as the rule is clearly established at common law that a carrier is bound by law to carry everything which is brought to him for a reasonable sum to be paid to him for the same carriage, and not to extort what he will, it would seem to follow that he is bound to carry for all at the same price, unless there is some special reason for the distinction. * * * Carrying for reasonable compensation must imply that the same compensation is accepted always for the same service, else it could not be reasonable, either absolutely or relatively.'

The court also quotes from Hutchinson on Carriers:

'Hence we may conclude that in this country, independently of statutory provisions, all common carriers will be held to the strictest impartiality in the conduct of their business, and that all privileges or preferences given to one customer, which are not extended to all, are in violation of public duty.'

In Huffman v. Telephone Company, 143 Iowa, 590, 121 N.W. 1033, 23 L.R.A. (N.S.) 1070, it is said:

'No question is raised but that telephone companies are, to a limited extent and yet in a strict sense, common carriers of intelligence and news, and are bound to afford equal facilities to all in like situations. They must supply all alike who are alike, and cannot discriminate against any one.'

In St. Paul Book Company v. St. Paul Gaslight Company, 153 N.W. 262, the Supreme Court of Minnesota says:

'The charge seems to be that in the conduct of defendant's business all consumers similarly circumstanced are not treated alike. We doubt not that, the conditions being the same, the price must also be the same. Favoritism in a public service corporation towards some of its patrons is not tolerated in law.'

In Pennsylvania Company v. Coal Company, 230 U.S. 184, 33 Sup.Ct. 893, 57 L.Ed. 1446, Ann. Cas. 1915A, 315, a case which fully reviews all the authorities, the Supreme Court of the United States, after stating that 'the English courts have held that a shipper, who paid a reasonable rate, had no cause of action because the carrier had charged a lower rate to another,' says that prior to legislation:

'The American decisions were conflicting, though 'the weight of authority in this country was in favor of an equality of charge to all persons for similar services.'' Justice Brewer, in Western Union Co. v. Call Company, 181 U.S. 92, 21 Sup.Ct. 561, 45 L.Ed. 765, says:

'No one can doubt the inherent justice of the rules thus laid down. Common carriers, whether engaged in interstate commerce or in that wholly within the state, are performing a public service. They are endowed by the state with some of its sovereign powers, such as the right of eminent domain, and so endowed by reason of the public service they render. As a consequence and charges. Of course, 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

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