SAMUELS V. LOUISVILLE & N. R. CO.
be removed for prejudice or local influence, unless the parties are also citizens of different states, yet it may be remo.ved on the former ground after it is too late to apply on the latter one alone. The petition, in the case of diverse citizenship, must be filed before or at the time at which the suit could first be tried; while, in the case.of prejudice or local influence, it is sufficient if the petition is. filed before the final trial or hearing thereof,- and this may be long after the time at which the suit could first be tried. Indeed, it may be filed after a mistrial or a new trial granted, w4en the prejudice or local influence has so manifested. itself as to enable the party against whom it exists to makethe necessary affidavit for removal. Insurance Co. v. Dunn, 19 Wall. 214. The fact is, th;is case was removed on two grounds, or at least two grounds [email protected]
& N. R. Co.
Oourt, No D. Alabama. April Term, 1887.)
Where there are two rival lines of steam-boats on a river plying between the same points, and carrying freight for hire, both bearing the same relation to a railroad company and both seeking its services to· forward their freight to the. same points. of destination, and the company systematically discriminates against one by charging it 50 cents a hundred more for freight than the other, it is liable in damages at the suit of the line so discriminated against. The fact that the higher rate is not unreasonable does not affect the fact of discrimination. .
SAME-" PRORATING. "
The relative situations of the two lines with reference to the railroad company. both asto the kind of service sought and as to the conditions under which it is to be performed, being substantially the same, such a suit cannot be regarded as a claim for damages founded upon the refusal of the company to "prorate" with one line, upon through freights, upon the same terms that it does with theothel'.
At Law. On Demurrer to Complaint. L. W. Day, for plaintiffs. ." R. A. McOlellan and a. a. Harria, for defendant.
BRUCE, J. The plaintiffs allege they were engaged as common carriers for hire by means of steam-boats on the Tennessee river, between Decatur and intermediate points, to Bridgeport, in the year 1886; that at the same time, and between the same points on the Tennessee river, the steamboats Chattanooga and Wilder were also running on the river between the sanie points, as carriers, in competition with the plaintiffs; that the
FEDERAL REPORTER. defendant, the Louisville & Nashville Railroad Company, a common carrier by rail, operating its roads south from Louisville, Kentucky, to points on the Tennessee river, discriminated against plaintiffs in the matter of freights delivered to them by plaintiffs for transportation to points of <iestination, and in favor of the steam-boats Chattanooga and Wilder; that the discrimination consisted in this: that, for substantially the same service in the carriage of the same class of freight, under like circumstances and conditions, and to the same points of destination, the defendant railroad company charged and received from plaintiffs 50 cents more per hundred than it charged l:U1d received from the steam-boats Chattanooga and Wilder. Plaintiffs say that, by reason of such discrimination and charges for freight against them, they were injured in their business as common carriers 011 the river, and were put to expense, trouble, and increased risk in carrying their freight long distances on the river, to obtain carriage for it to points of destination, for which alleged injury to them they bring this complaint and suit for damages. The demurrer admits the discrimination in the rates, as stated; and the question at once suggests itself whether a common carrier, under the circumstances stated, has the right to have and maintain two prices, or different prices to different parties, for substantially the same service rendered under like conditions. The question here is not whether a common carrier must necessarily have one and the same price for all, or whether a discrimination in a single case can be made. the ground of an action; but here were two lines of steam-boats on the Tennessee rivElr, plying between the same points, carrying freight for hire,anQ bearing the same relation to the defendant railroad company; both seeking its service to carry their freight to the same points of destination; and the question is, has the defendant the right to discriminate against one, and in favor of the. ;other, not in a single or isolated case, when different circumstances and conditions might be at once suggested, but systematically, in a course of dealing with the plaintiffs in the transportation of their freight? The idea that lies at the very base of the law of common carriers is that they are public servants, and serve all alike. The general proposition needs no citation of authority, and, as applied to railroad companies, the doctrine is thus stated by MCCRARY, J., in the case of Southern Exp. Cb. v. Memphis R.R., 13 Cent. Law J. 68, 8 Fed. Rep. 802. "(1) A railroad company is a quas. public corporation,and bound by the law regulating the powers and duties of common carriers of persons and property; (2) it is the duty of such a company, as a public servant. to receive and carry goods for all persons alike, without injurious discrimination as to rates or terms." Other cases might be cited to the same purport. In Hays v. PennJ. says: "The defendant is a common carrier by rail, Its road, althougb owned by a corporation, was nevertheless constructed for public uses, and is, in a qualified sense, a public highway. Hence everybody constituting a part of the public, for whose benefit it was authorized, is entitled to an equal and imparIf!Jlvania Cb., 12 Fed. Rep. 311, BAXTER,
tial participation in the use of the facilities which it is capable of affording. Its ownership by the corporation is in trust, as well for the pUblic as for the shareholders; 'but its first and primary obligation iato the publiC." In the light of these authorities, where can this defendant railroad -company and public servant base its right to make the discrimination daimed by this demurrer? If a discrimination of 50 cents per hundred .can be thus made and sustained, under such circumstances, then any discrimination, however great and oppressive, can be made; and practically the defendant can say who may and who may not serve the public, .as common carriers on the Tennessee river, one of the great water-ways of commerce in the United States. It is true there is a line of decisions to the effect that railroad companies may make different rates to different persons; and the cases show upon what grounds discrimination in rates may be aud are sustained, and upon what grounds they have been held to be vicious, and are condemned, by the courts. But it is not necessary here to go into any examination of the cases on this line of decision until advised by plea or otherwise upon what ground, and under what circumstances and conditions, the defendant made the discrimination here complained of. He admits the fact of discrimination; and when the service is stated to have been substantially the same, and rendered under substantially the same circm;tlstances and conditions, the burden is on him to justify it. The demurrer, however, goes to the point that the mere fact that the .defendant charged a higher price to the plaintiffs than to the line of rival steam-boats is no ground of complaint, unless it is alleged that the price charged the plaintiffs was unreasonable. In other words, thepropo"lition seems to be that the defendant had the right to make the discrimination up to the point that the charge became unreasonable, and that charging a less price to the rival line of boats is no ground of complaint, unless the larger price is an unreasonable one. It is said that to charge one too little for a service is not to charge another too much for the same service; that the smaller charge does not make tlie greater charge more than the service is really worth, for that the service may have been worth every penny asked and received for it. Concede that, then it follows that the defendant company was serving the steam-boats Wilder and Chattanooga for a less hire and compensation than the service was really worth; and the practical result to these plaintiffs, as carriers on the river, is the same, whether the 'defendant charged them 50 cents per hundred too much, or charged their rivals 50 cents per hundred too little. In either case,the defendant railroad company makes the discrimination, and the plaintiffs lose and are deprived by the defendant of their equal right and opportunity for business as common carriers on the river. And the question recurs, what right, or upon what ground, can this public servant, owing an equal duty to the entire public, say to one, "I will serve you for less than I will serve your neighbor?" The proposition insisted upon is that a common carrier is bound to carry for a remuneration, but is not bound to carry for the same price forall; an,l the case of Johnson v. Pensacola R. 00., 16 Fla. 623, is cited, where the
supreme court of that state say: rule is not that all 811a11 be charged equally, but reasonably, because the law j.s for tAe reasonable charge, and not the equal charge;" and other authorities are cited on the same line. rt would add to the complaint, in its statement of fact, if the word "unreasonable" had been used. The word "unlawful" is used; but the use of qualifying words such as these is unimportant. The ultimate test of what is a reasonable or unreasonable charge, a lawful or unlawful charge, in a given case, is a mixed question of law and fact, to be reached by the verdict of a jury, under proper instructions by the court, Or, perhaps, by the action of what is called sometimes a railroad statutes, state or national, on that subject. commission, This is not a case for the recovery of extortionate and unreasonable charges, exacted by the defendant railroad company, where the question as to what is a f!iir and just charge for a given service might properly arise, and be determined by some accepted rate ofcharges, or some usage or custom which has acquired the force of law. Nor is it the question as to what is the intrinsic value of the service, in the ascertainment of which there are many elements to he considered, such as the amount of the capital employed, and the difficulty and expense attendant upon the service rendered, including compensation for services of officers having the administrative capacity required for such service. But, so to speak, on this side of that ultimate question is the question of the legal right of the ,d'efendant to make the discrimination here complained of. When it is said that to charge one too little is not to charge another too much for a given service, we are ready to give assent. Because individuals may serve for hire, or may, without compensation, donate their services, it does. not follow that common carriers by rail may do the same thing. The company owns the property, and the capital employed in the construction and operation of its road, but it must not be forgotten that insllch operation of its' railroad it is also in the enjoyment of a public franchise; and in the control of the property it has not the measuredf power that persons have and exercise over property that is affected by no public use, and operated without the exercise of any public franchise. ,Munn v. IUinois, 94 U. S. 113. There may be, and there is, difficulty in the determination, in given cases, of the line of public 'and private right, as to this species of property, as is illustrated in the enactment and administration of the recent act of congress known as the "Interstate Commerce Law." But the question in this case is to be determined upon the principles of the common law, and in the light of those principles as applied to railroad companies. In a case like the one at bar, can there be a reasonable charge which is not at the same time8ubstantially an equal charge? And is not a charge unrea:sonable ween it is unequal, and in breach of the obligation and duty of the common carrier to the public? There is a suggestion in the argument that this is a claim for damages founded upon the refusal of the defel'ldant railroad company to prorate with the plairltiffs, upon through freight, upon the same terms that it
SAMUELS V.LOUISVILLE & N. R. CO
did with the rival line of boats; and the case of Atchison, T. &c S. F. R. Co. v. Dmwer R. R., 110 U. S. 667,4 Sup. Ct. Rep. 185, is cited upon this point, and in SUppOIt of the general proposition insisted upon by the defendant in his demurrer to this complaint. Thatis not the case made by the complaint, and the supreme court of the United States, in the opinion in that case, in so far as it touches the issues involved in this ca<.le, is against the views of the demurrant, as is seen from page 684 of the opinion, where the court say: . "The bill does not seek to reduce the local rates, but only to get this company put into the same position as the Denver & Rio Grande, on a division of through rates. This cannot be done until it is shown that the relative situations of the two companies with the Atchison, Topeka & Santa Fe, both as tv the kind of service and as to the conditions under which it is to be performed, are substantially,the same, so that what is reasonable for one must be reasonable for the other." Applying this to the case .at bar, the implication is certainly very strong' that the relative situation of the two rival lines of boats on the river being the same as to the defendant company, both as to the kind of service and the conditions under which it is to be performed, no charge is reasonable for one party that is not also reasonable for the other; and the idea of different prices to different parties, for substantially the same service, performed under like conditions, finds no favor in the authority cited. Another proposition ofthe defendant is that there is a charter provision, to the benefit of which the defendant is entitled, by which the legislature granted thepower to take "tolls from all persons, property, merchandise, and other commodities, tram;ported on their road, provid ed only the net profits of the road shall never exceed twenty-five per cent. per annum.'" And withinthis limitation, which it is said has never been passed, the company was vested with absolute discretion, bounded only by the common law,over the rates of compensation it should have for services rendered. This proposition answers itself, because it admits the boundnnd limit of the common law; and we have shown that the gravamen olthis action is in the alleged violation by this defendant of the obligation and duty under the common law, as applied to common carriers by rail. The suggestion ofa charter right which gives the defendant an option to discriminate at will, provided only the net profits of the road do not exceed a certain limit, scarcely merits serious consideration. Upon the question of the remote, indefinite, and speculative character of the damages claimed, the complaint is within the rule on that subject. As to the loss of business, it may' be that the proof may show that it is incapable of measure by a pecuniary standard; but the reading of the complaint shows that an objection to the whole complaint, on the ground '. stated, ought not to be maintained. The result of these views is that the demurrer is overruled.
RoOD ".RAILWAY PASSENGER
(Oiro'Uit Oourt, No D. IllinoiB. June 6, 1887.)
BENBVOLENT SOCIETIEs-CON8TITUTION-DE0I8ION OF DIRECTORS-,FINAT,ITY·
.A.corporation was orll:anized for the purpose of providing for its members in. c!'se of permanent disability, and for their dependents in case of death, by assessments to be leviedon the surviving IQembers. Its constitution provides that "all claims against the association shall be referred to the board of directors,whose decision shall be final," and that "assessments shall not be made except on its authority." Held that, after the decision of the board refusing payment of a death claim no suit upon such claim can be maintained. Where the laws of such an organization provide that, if a member neglects or refuses to pay any assessment for a specified period, he shall cease to be a member"and the secretary shall strike his name from the roll, such laws are self-executing, and the member so omitting to pay loses his rights as a member, although the secretary does not strike his name from the roll.
At Law. F. S. Winston and James Meagher, for plaintiff. S. J. for defendant.
BLODGETT, J. This is a suit at law brought to recover the surp. of $2,500 as a benefit fund, claimed by the plaintiff to be due her from the defendant by reason of the death of Sidney G. Rood, plaintiff's husband, while a member of the defendant association. The case was tried before a jury,and, there bE-ing no disputed facts, a verdict for the plaintiff was taken by direction of the court, and the questions of law arising upon the undisputed facts have been discussed upon motions in arrest of judgment and for a new trial. The dp,fendant is a corporation, not for pecuniary profit, organized under an act of the legislature of IllinoiS, "concerning corporations," approved April 18, 1872; the objects of the corporation, as stated in the preamble to its articles of association, being "to provide for the widows and children. heirs and representatives, ot those of our members who may lose their lives, die, or become permanently disabled;" and the membership was to consist of persons who were conductors, on railroads in the United States or Canada. The general plan for carrying out this object was that, upon the death or disability of a member in good standing, a claim Jor the benefit funds was presented to the board of directors, and, if the board approved and allowed the claim, an assessment of $2.50 on each member was made, which assessment was to be paid by the members within 30 days from the time it was made, and the proceeds, not to exceed $2,500, when collected, were paid over to the beneficiary of such member; but the payment of an assessment was wholly voluntary on the part of members. It is conceded that the of members subject to assessment at the time the claim now in question was presented, was sufficient to have made the aggregate of the assessment amount to $2,500. Sidney G. Rood, the husband of the plaintiff, became a member of the defendant association on the twenty-third of May, 1883; he was at
BOODl1. RAILWAY PASSENGER &: Ji'REIGRT CONDUCTORS'MUT. BEN. ASS'N.
that time in the employ of the Michigan Central Railroad Company as conductor of passenger trains, and continued in such employment up to August 3, 1885, when he WllS killed by a railroad accident. Proof of his death was duly presented by the plaintiff to the board of directors of the association, and a claim made that the benefit fund should be allowed and paid to her. It was conceded that she was tlle proper person to make this claim for the benefit fund to be paid upon the death of Mr. Rood, if any person was entitled to such a fund. The board of difectors of the association, after an investigation of the facts in regard to this claim, at a meeting held February 14, 1886, refused to allow the claim a.nd order an assessment for its payment; assigning as the reason of their action that Mr. Rood was at least 60 days delinquent in the payment of his assessments at the time of his death. A motion to reconsider this adion was made before the board at a meeting held May 2, 1886, but such motion was defeated by a ,unanimous vote, and this suit is brought to enforce the claim. Thernotion in arrest is based upon the ground that the power to allow or refuse payment of a claim is vested wholly in the board of directors, and that their action in the premises is final, and can only be disturbed for fraud or gross mistake, and that, inasmuch as the board of directors of the defendant association has passed upon and refused payment of this claim, no suit can now be maintained against the association to en", force it. The powers of the board of directors who have considered this claim, and refused to pay it, are defined by the fifth article of the constitution of the association, an<l, so far as they bear upon the questions in this case, areas follows: II Art. 5. The board of directors sball consist of seven members. ... ... ... To them shall all claims against the association be referred; and upon the approval of a majority of said hoard, with that of the president, the same shall be paid by the secretary and treasurer. ... ... ... They shall decide all points of dispute and questions of doubt that may arise, and their decision shall be final. ... ... ... Assessments shall be only made by authority of the board of directors." '
It will be seen that the power of these directors in regard to the allowance of this claim, and ordering an assessment to pay it, is plenary. They are clothed with full authority to pass upon each and every claim presented against the association, and their decision is final. This is a purely voluntary association. The members of the association have, by their own organic law, provided a tribunal to hear and determine all claims against it, and I do not think any court can be invoked to review the action of the board in a matter so completely delegated to them. To attempt to enforce by suit any claim which the board of directors has acted upon, or refused to allow or approve, is equivalent to prosecuting an appeal from this board. It was certainly competent for the members of this· association to agree among themselves that. the actIon of their board of directors in reference to any claim presented against the association should be final i and there can be no doubt, from the language of
the clause from the constitution Just quoted. that they have so agreed. The duty of the board of directors is twofold: First, to approve the claim; and, second, to order an assessment to pay it; .and no memberis under any obligations, expressed or implied, to pay an assessment for, the liquidation of a claim against the association unless the claim has been approved by the board of directors, and the assessment ordered by the board. Waiving, therefore, all questions as to whether the board of directors would be under any. more obligations to appr0ve this claim after a judgment had been rendered in favor of this plaintiff than before, it is sufficient to say that it seems clear to me that the sale power of determining whether the association should or should not pay a claim, and an assessment be ordered to pay it. isv6sted in this bpard of directors, and no court can review or re-examine their decision in that regard. The ,constitution says the action of the board shall be final, and the courts must so treat it. The motion, in arrest of judgment is therefore well founded. As to the motion for a new trial. It appears, without doubt, from the proof, that an assessment was made upon the fifth day of June,. 1885, for the payment of a claim which had been duly approved by· the board of direotors; and this assessment should have been paid within 30 days from that day. Another assessment for the payment ofa claim which had been duly approved by the. board of directors was made on the first day of July, 1885, payable within 30 days from that date; and neither of these assessments had been paid at the time of Mr. Rood's death. Article 6 of the by-laws of the association provides as follows: ..Any and all members of this association neglecting or refusing to pay any assessment for the period of thirty days from date of such assessment shall cease to be a member, and the secretary shallstrike his name from the roll of meJl?bership, and lie shall only be readmitted to. membership upon the payment of all unpaid assessments, and an additional fee of two dollars." . It is contended that this clause did not become operative against Mr. Rood, because the secretary did not strike his name from the roll of members, and did not notify him tha.t he had ceased to be a member, but that, on the contrary, although in default, he was treated as a member by making further assessments against him. I do not think this position is well taken. As I have said, the default as to the June assessment was fully shown by the proof, and I am of opinion that the clear intent and purpose of this by-law was that it should be self-operating. As members were under no legal obligations to pay their assessments, the evident intention of this provision was to visit the serious consequences ofloss of membership upon all who should refuse or neglect to pay their assessment. Every time a member of this association is called upon to pay an assessment he must make, the election either to pay within 30 days, or suffer the penalty of loss of membership by neglecting or refusing to pay within that time. The language of the article is "he shall cease to be a member," and it becomes the duty of the secretary to strike his name from the roll of membership. This latter clause is purely directory to the secretary I and is not the act which severs the relation be-
tween the member and the association. It is the failure of the member' to pay his assessment within the time limited which terminates his membership, and not the action or the secretary in striking his name from the rolls; and the neglect of the secretary to perform this duty cannot defeat the operation of this provision in the fundamental law of the body. If, by merely neglecting to wve notice to a defaulting member that his name had been stricken from the rolls, the membership is continued, it would then be in the power of the secretary to continue a defaulter as a member without the payment of his unpaid assessment and his additional fee ·of $2, which the articles expressly provide he shall pay before he can be rehabilitated with his rights of membership. I am therefore of the opinion that .the cour1ierred in directing the verdict for the plaintiff. For this reason the vt;lrdict of the jury must be set aside, and judg,:" ment rendered for the defendant.
, STEWART and others'l7.ScHELL and others, Ex?rs, etc.
(Oilrcuit Oourt, 8. lJ. New YO'I'k. December 1 and 2, 1886.)
lnan action commenced November, 1868, against a collector of customs, to recover excess of duties, and brought to trial in December, 1886, where the question of the right of the plaintiffs to recoverinterest on the principal sum thereof is submitted to the jury, if the jury find that the 'plaintiffs have been guilty of laches in prosecuting, the action from the date of the commencement of the same until the date of the trial thereof, though entitled to recover the principal sum of such excess, the plaintiffs are not entitled to recover any interest. If the jury find that the plaintiffs have been guilty of such 'laches for a part only of such time, then the plaintiffs are not entitled to recover interest for such part thereof.
was commenced November 27, 1863, to recover, with interest, certain duties exacted of the plaintiffs by the late Augustus Schell, as collector of customs at the port of New York, during 1857, 1858, 1859. 1860, and 1861. December 26, 1863, the defendant appeared therein, and demanded a bill of particulars of the plaintiffs' claim, and a copy of their complaint, (declaration.) April 28, 1864, the plaintiffs served a common-law declaration, alleging indebtedness as existing at the time of the commencement of the suit. May 17, 1864, the defendant served his plea of non assumpsit. March 13, 1876, on the consent of the respective parties, an order was made referring this action to a referee for his determination and adjustment of the plaintiffs' then supposed cause of action therein, to recover duties exacted on commissions above the usual rates, and on non-dutiable charges, under section 1 of the act of March 3, 1851, (9 U. S. St. at Large, 629,) but in reality there was no such issue in the case. June 26, 1883, the plaintiffs not having served their bill of particulars, the court, upon tlie defendant's motion, ordered the service by plaintiffs of such bill. February 27, v.31F.no.2-5