UNION PACIFIC RY. CO. V. GOODRIDGE, 149 U. S. 680 (1893)

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U.S. Supreme Court

Union Pacific Ry. Co. v. Goodridge, 149 U.S. 680 (1893)

Union Pacific Railway Company v. Goodridge

No. 211

Argued April 14, 17, 1893

Decided May 15, 1893

149 U.S. 680


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.1d 2, 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.

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