Kansas P. Ry. Co. v. Bayles

• Decision Date: 05 February 1894
• Parties: KANSAS PAC. RY. CO. v. BAYLES.
• Court: Colorado Supreme Court

35 P. 744

19 Colo. 348

KANSAS PAC. RY. CO. v. BAYLES.

Supreme Court of Colorado

February 5, 1894

Appeal from district court, Arapahoe county.

Action by Benjamin H. Bayles against the Kansas Pacific Railway Company, on a contract, for certain rebates on freight charges paid defendant by plaintiff. From a judgment for plaintiff, defendant appeals. Reversed.

The other facts fully appear in the following statement by HAYT C.J.:

It is unnecessary to repeat in detail the facts alleged in the complaint as a first cause of action, as the same are fully set out in connection with a former appeal, and will be found in Bayles v. Railway Co., 13 Colo. 181, 22 P. 341. It is sufficient for the purposes of this appeal to state that the suit is brought to recover certain rebates agreed to be paid the plaintiff upon freight charges paid to the railroad company. The contract fixing the rate and rebate, it is alleged, was executed on the part of the receivers of the railroad company by S. R. Ainsley, at the time general freight agent at the city of Denver under the receivers Henry Villard and Carlos S. Greeley. It is averred that Ainsley made the contract for the receivers, and that it was adopted by them and by their successor, S. T. Smith, who afterwards operated the road as receiver; that at the time the contract was made, and during its entire term, Ainsley was operating the railway for the receivers, and that he and they performed it in part by paying rebates according to its terms; that the receivers received the moneys paid by plaintiff for freights under the contract, and used the same in part, in the operation of the road, paying the balance to appellant, and taking a receipt from the railroad company, by the terms of which the company obligated itself to pay any and all claims against the receiver then outstanding; that this claim was existing at the time of Smith's discharge as receiver. For a second cause of action, it is alleged that during the month of December, 1878, there arrived at Kansas City large amounts of goods consigned to the plaintiff at Denver, entitled to be carried under said contract, but that the defendant refused to carry the same under the contract and that the goods remaining in Kansas City until after the 1st day of January, 1879, the plaintiff caused the same to be shipped to Denver over the Atchison, Topeka & Santa Fe Railroad, and was obliged to pay $216 more than the contract price of carriage, and that he paid said sum on the 25th day of January, 1879; that said goods were holiday goods, and he lost a profit of $500 by failure of defendant to carry them under the contract. After the case was remanded by this court the defendant filed an answer--First, denying each and every allegation of the complaint; second, admitting that Greeley and Villard were receivers at the time the contract was made; admitting that Smith was appointed in lieu of said Greeley and Villard on or about the 25th day of October, 1878, and that he continued to act in such capacity until June, 1879; denying that Greeley and Villard, or either of them, had any authority to make the contract. It denies that by order of the court, or otherwise, they were ever empowered to make the contract set forth in the complaint; denies the agency of Ainsley, and alleges that immediately after Smith became receiver, learning of this contract, he repudiated the same, as not made by authority, and as not binding upon him; alleges that the contract was contrary to public policy, and void, and not binding upon either the company or upon the receiver Smith. Afterwards, a replication was filed to the new matter in the answer, and upon these issues the cause was submitted in the court below upon the evidence introduced by plaintiff, supplemented by a stipulation of counsel. A verdict and judgment having been rendered for the plaintiff, the defendant again brings the case here by appeal.

Feller & Orahood, for appellant.

Browne & Putnam, for appellee.

HAYT C.J., (after stating the facts.)

This case is before the court for the second time. Upon the former appeal the sufficiency of the complaint was inquired into and upheld, and the case remanded for further proceedings. Bayles v. Railway Co., 13 Colo. 181, 22 P. 341. The conclusions then reached, and the reasons therefor, are set forth in an exhaustive opinion by Mr. Commissioner PATTISON. It is unnecessary to repeat the reasoning of the learned commissioner, or to do more than restate such of his conclusions as bear directly upon the questions now presented. These may be summarized as follows: First. Freight charges must be reasonable, and when the circumstances and conditions are the same they must be equal. Second. An agreement for a rebate from the published tariff rates does not, of itself, necessarily constitute unjust discrimination, within the meaning of the law. Third. The contract set forth in the complaint is prima facie legal, and binding upon the parties, and the burden is upon the defendant to establish facts showing its illegality. Fourth. It being expressly alleged that the receiver operated the railway and controlled the business of the company, it cannot be assumed, in the absence of evidence, that the contract was in violation of his authority. These conclusions are, upon the present appeal, res adjudicata of the points decided, and must be accepted as the law of this case. Lee v. Stahl, 13 Colo. 174, 22 P. 436; Johnson v. Bailey, 17 Colo. 59, 28 P. 81; Routt v. Land Co., 18 Colo. 132, 31 P. 858; Israel v. Arthur, 18 Colo. 158, 32 P. 68.

At common law, all shippers stand on an absolute equality with reference to transportation by common carriers, and no such carrier has the right to discriminate in favor of one, as against another. In obedience to this universally recognized principle, the framers of our constitution have provided, in section 6, art. 15, as follows: '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 employe thereof, shall give any preference to individuals, associations or corporations in furnishing cars or motive power.' Neither the common law nor the constitutional provision inhibits the making of contracts by a common carrier to transport either persons or freight at less than its schedule rates, but an agreement not to allow the same rates to others is void. To this extent the law is well settled, as will appear by the copious extracts from adjudicated cases, and the citation of numerous authorities to be found in the former opinion in this case. The foregoing views are based upon sound public policy. To permit a railroad company to unjustly discriminate in the carriage of either freight or passengers, in favor of one...