'648
that the claimants are entitled to this fund. I hase this conclusion on a nnding, as stated above, of the facts as to the doings;und intentions of the parties preceding and attending the execution of the aSi:\ignment. This finding is in accordance with the testimony of the claimants, but I have had much difficulty in coming to the conclusion that a judgment ought to be based on their testimony. Three of the claimants have worked as foremen or superintendents in the business of dyeing. One is in imperfect health, and has apparently worked as \1 journeyman at the same tradA. None ofthem had reached 40 years of age at the time assignment. It seems improbable that they should have accumuof lated so large a sum of money in the time here stated" besides paying their expenses of living, and accumulating, as I understand some of them to say, other property. But it is to be observed that three of them have received large pay, and, for all that appears, may haye liveA at very small expense. The statement ofthe sum said to have been loaned by Isaac Crossley Jr., seems especially open to suspicion, since his health appears to have been such that he has not thought it prudent to take the care of his own money, ·but has depended on one of his brothers to render that service for him. But their testimony is not contradicted, and I am not prepared to say it is not true. It seems, also, an unusual contract to pay so large a suru as is here named .for a claim for insurance which was then disputed and, was in litigation. But it appears that the claimants were assured by counsel that the validity ,of the claim, would undoubtedly be' established by the courts. Tbey might therefore, perhaps, proceed under the supposition that the only risk in the matter related to the amount to be recovered. Considering that they had a large sum at stake, and that the purchase offered the only present chance of obtaining payment, I cannot say is impossible that they should agree to take the chances. as to the amount, of the fund which they should receive. An order will be tnade that the trustees be discharged.
SCHLESINGER
'I).
ARLINE and others.
«(Jircuit OQurt, S. D. Georgia, 'Iv. D. June 27, 1887.)
1.
NEGOTIABLE INSTRUMENT NEY'S FEES.
WHAT IS.,.,. STIPULATION FOR COSTS AND ATTOR-
A promise to pay in these words: "Four months after date we promise to pay to the ,order of M. Nussbaum & 00., $539.46, for value received, payable at the Exchange Bank, Macon, Ga., with interest from March - , at the rate of eight per cent. per annum, with all costs of collection, inclUding ten per cent. attorney's fees. [Signed] T. C. ARLINE & Co....-isnegotiable by the lawmerchant. The conflicting authorities upon the question of negotiability, as affeGted by the presence of stipulations to pay costs,attorney's fees, etc., cited.!
I
See note at end of case.
!lCHLES1NGER 2. SAM]JJ. .
V.
ARLINE.
649
The tendencies of the courts have been to enlarge the rule as to negotiabil· ity; and stipulations which do not render uncertain the amount to be paid. or the time of payment, but whiclJ. tend to increase the value of the instrument, do not impair its negotiability.
3.
SAME-WAIVER OF EXEMPTION.
Nor does a waiver of state .homestead or exemption laws impair the negotiability.I
(Syllabus by the Oourt.)
Action on Promissory Notes. Hill &- HarriS, for plaintiff. D,essau &- Bartlett, for defenda,nt. SPEER, J. The plaintiff brings his action on a. pJ:omissory note writ; ten in the following language: ' I'l'our months after date we prl,lmise to pay to the order of M. Nussba)lID &00., $539.46, fOl' value received, payable at the Exchange Bank, Macon, Ga., 'with Interest from. Match -.- , at the rate of eight percent. per annum, witb aU costs of collection, including ten per cent. attorney's fees. lSigned] " . . "T. C. ARLINE & Co." The plaintiff, who sues as indorsee, having taken the note by assignment 'frbm Nussbaum who was the payee, is a nOlI-resident 6f this state, but Nusshaum resides here.. The defendants demur to the declaration, and to the jurisdiction o(tlie court, because the suit is by an assignee, the assignor cbuld'uot have sued because of his residence in the same state with the defeno.ants, and insist that the note sued on is not negotiable by the law-merchant, because it contains Ii: provision that the makerBhall pay all costs of collection, including 10 per attorney's under the circUmstances, that we have fees. It is conceded,of no jurisdiction of the action unless the note is negotiable by the lawmerchant. The demurrer presents a question upon which the decisions of the courts have been very conflicting. A promissory note, or note of hand, as it is often called, is an open promise in writing by one J>ers<?n to pay to another person,or to his order, orto'bearer, a specified sum of money absolutely and at: all events. Daniel, Neg. lnst. § 28. "In order to fulfill the definition given, the paper must carry its full history on its face, and embrace the following req11isites: First, it must be open,-that is, unsealed; second, the engagement to pay must be certain; third, the fact of payment must be certain; fourth, the amount to be paid must be certain; fifth, the medium of payment must be money; sixth, the contract must be only for the payment oflpo,ney; and, 8eventh, it is essential to the operation of the instrument that it should be delivered. " Daniel, Neg. lnst. § 30'. . The defendants insist in this case that two requisites are wanting: (1) That the arrlount to be paid is uncertain; and (2) the contract contains stipril:,ltiollS 6ther than for the payment of money. rely on Smith v. Nightingale, 2 Starkie, N. P. 'Bee Cayuga Co. Nat. Bankv. Purdy, (Mich.) 22 N. W. Rep. 93.
650
:FEDERAL
REPORTER.
375, where 'Lord ELI,ENBOROUGH held that an instrument wherein the promise "to pay J. S. the Sllm of sixty-five pounds or lawful interest for the, same. and all other sums which be due to him," was not a promissory note. Byles, Bills, 147. This is clearly indefinite. Lord KENYON in Car.lo8 v. Fancourt, 5 Term R. 483, observed,: "It would perplex commercial transactions ifpaper seeurities of this kind were issued into the world incumbered with conditions and cqutingencies, and if the person to whom they were offered in negotiation were obliged to inquire when these uncertain events would probably be reduced to a certainty." Defendants also cite Thomp8on v. Sloan, 23 Wend. 71, to show that a promise to pay a certain sum in money, is not negotiable, ahd 1 Pars. Notes & B. 37, where it is declared the maxim id certum est, quod cerium reddi:(Jote8t, has no application to the question ofnegotiability by the law-merchant, is also cited.' ,', ' , In Ayrey, v, FearnBide8, 4 Mees &W. 168, held that the to rule," the negotiability. words, "and all fines That eminent judge makes it plain, b:owever, that word" fines" import pecuniary, fines! and: forfeitures,and was ,al:t:ogetper indefinite. Leading Cases upon Bills of Exchange and Promissory Notes, by Redpage 10, is ,for the clissellting,opinion of CAMPfield & BELL,J.,: in, BO/xter v. Stewart,4 Sneed, 213; and Hughitt v. Johnson, 28 is cited' for ,the opinion of Judge BREWER, who holds that a note is rendered non-negotiable by the incorporation therein of an agree!I;x:wpt to pay the sum named, "with This case, however, lisoverb9rne by ,the ml1sso,f l1uthorityCited by Mr. Daniel in his on Negotlablelmitruinents,§ 54,alld note. ,In Fir8t N,at!Bank of New, Wind80r v. Bynum, C.24, reported in 37, Rep. 604 ,: .counsel fees and' expenses of .collection were promised,but were left altogether uncertain, and :the time of payment, which is was left to tlle option of the payees. There tlie i,1 ", '," ' , " , ' note was held non-negotiable. In Nat. Bank of Stillwaterv. JA,rsen; 60 N.W. Rep. 67, it is, deeMed squarely for the that a provision for the payment ofJO I per: ,cent. attorney's, fees for collection the negotiais placed upon the aut40rity of the bility of,th,E( nqte;and this v. Nort;h, 84Pa. St. 407, and M. Co. y.Newman,6,0 Md. 584, ,45 Amer. Rep. 750. had to consider a 5 per cent, fee,and he it is possible the attomey Wight askInore. r{)ndering the It seems, however, the maker would not b{) liable;}ol's1l;ch excess., In the ¥aryland case, which, from the high characterqfthe court, fs entitle<l to very the promise 'Ya§t<;i, pay all costs and charges for collecting the same, with pro., au,d, con, are collat,e,,d,' Wit"b,' ',th,e ,u,s,ual fair,.interest, ness of thlitdistinguished tribunal. The court there declares" the cost andcharges of:collection could never with collection had been made complete; imd'hence, by coupling the certain sum mentioned in the note,with that which is uncertain, and treating
651
the note as an entirecoIitraet, it is for an unascertaiiled sum, and therefore uncertain on its face as to the amount ptomised to be paid. This, as we M:ve seen, is not allowable in notes intended to be negotiable." Here th terms Ilcosts and charges" were apparently' understood by the court and counsel to mean all the expenses of the litigation. It will be, however, perceived that all of these cases, except that from Wisconsin, are distinguishable from the note before tis. Here the promise is to pay 10 per cent. attorney's fees. This I think is definite and fixed, so far as the maker of the note is or can be affected, and the word Ilcosts" imports the expenses of the suit which may be recovered by law from the losing party. Bouv.. Law Diet. tit. "Costs." This being the proper construction the words are merely surplusage, because it follows llecessanly that, in case of suit, the costs at law faU upon the losing party. . See Davis v. State, 33 Ga. 531j Wetherbee v. Kusterer, 41 Mich. ' 359, 2.N.W. Rep. 45. It follows, then, that the amount promised by the note is definite and fixed; the promise of the makers to pay 10 per cent. attorney's fees exheld to PIloY more or less than eludes the. possibility that they could that amount. . The riotecitn very well represent money effectually, and there is no chance of mistake as to the amount of money of which it takes the place andp!"l'forms the function, and this perfects its negotiability. Mr. ,Daniel, in his work on Negotiable Instruments, before quoted, page 73, arguesthitt when theamquntof fees is fixed by a certain percentageoI' certain sum, as, in ml1liy cases, the objection to the negotiability oitha paper becomes exceedingly technical alld sophistical, and it is only when their amount is left undetermined' that such objection seems to be forcible. See, also, Adams v. Addington, 16 Fed. Rep. 89. The waiver of exemption anq. .homestead in the note does not affect the amount or the time of payment, and therefore does not affect negotiability. Zimmerman v. Anderson, 67 Plio. St. 421; Daniel, Neg. Inst. § 61 !,', '. '. .
): think all the tendencies of law have been to enlarge the rules relating to the negotiability of promissory notes. It was. strenuously dellied by l.ord HOLT that they were negotiable at all at common law, and he said that the effort to place them on the same footing as bills of exchange Ilproceeded .from the obstinacya.nd opinionativeness of the merchants, w'howere endeavoring to set the law of Lombard street above the law of Westminster Hall." Themerchants, however, had their way, and parliament put promissory notes on the same footing with bills of exchange in the time of Queen Anne, (1705.) I'll this case lam the more inclined to hold the instrument negotiable, and'maintain the jurisdiytion of the court, inthe absence of contr9lling the contrary,. because upon principle it would seem that, where there are stipulations which provide for the payment of a fixed and cent. for attorney's fees, and, a waiver of those exemptiQns·.'whichtend to delay ,and:.defeat payment, such stipulations and waivers largely enhance the value of the note,which is, after all, a main
652
"FEDE;RAL REPORTER.
element ()f ,negotiability, and there is no reason, save the authority of courts should deny to suitors othercertain state. courts, why the wise competent to sue the right to collect these demands now so numerous in the national tribunals. Besides, this is a question of general commercial law, and the federal courts are controlled by the general principles of jurisprudence, and are not bound by the decisions of the courts of the state even where the federal court is held. For these reasons the demurrer is overruled. , .NOTE. NEGOTIABILIT'r.....ATroRNEY'sFEES..A. stipulation to pay a reasonable attorney's fee in case a promissory note or other oemtract is not performed according to its terms, and t,he party entitled to demand such performance is compelled to enforce it, by law, is just e.nd valid. Wilson Sewing-Me.chine Co. v. Morenq, 7 Fed. Rep. 806; Johnston Harvc ester Co. v. Clark, (Minn.) IBN,' W. Rep. 252., A promissory note containing such a provision is under the 10. Adams v. Rep',89. Indorsers l\re hable for the payment ofstlpulated attorney's feeam case should be instituted 'furthe'payment of the notl., BlIllkof British N. A. v. Ellis, 2 Fed. Rep.'44. Such stipulatiOl1shave been held ;toAestroythe negotiability of the note. Dakota, Garretson v. Purdy, 14 N. W. Rep. 100. '. Minnesota, IIardin v. Olson, 14 Fed. Rep. 705; Jones V'. ,Radflta,'6 N. W. Rep. 800. Mscomi1l, First Nat. Bank v.,Larsen, 19 N. W.' Rep. 67. .; . But it has !:Jesn held that a stipulatiqn in I' promissory note to pay a reasqnable attorney's fee for instituting a suit on the note. in addition to legal interest, is unauthorized by law, and void. Dow v. UpdilUl, (Neb.) 7 N. W. Rep. 857. A provision in a is promissory note" to pay an attorney's fee of 10 per cent. On the e.ccount due if brought to enforce payment, for use of the attorney bringing the suit," is a stipUlation for a penalty of forfeiture, and tends to the oppression of the debt.or; is a cover for usury. and is without consideration !J,l)d cpntrary to public policy. Merchants' Njl.t. Bank v. Sevier, 14 Fed. Rep. 662. and see note. See generaIlY. as to the negotiability of commercial paper, Hughitt v. Johnson, 28 Fed. Rep. 867·. note; McOomas v. Haas, (Ind.) 8 N. lll. Rep. 582, and note; Chandler v. Carey, (Mich.) 31 N. W. Rep. 309, and note.
BURLINGTON,
C. R. &
N.
Ry. Co. 'IJ.
NORTHWESTERN FUEL
Co. and others.
(Oircuit Court, n.Mirpneaota. June Term, 1887.)
RAILROAD CQ¥PANIES-DISCRIMI:l"A'j.'10N IN RATES.
2.
SAME-DIVISIBILITY OF CONTRACT.
Where a railroad company enters' into a contract with· a coal company for the carriage of the latter's coal" One clause of which is void as 1Daking .an illegal discrimination against smaller shippers, and the obvious intent of the . contract; read as a whole, is to secUre to the coal company an illegal monopoly of the coa.! industry served 'bythe railroad, the contract will not be disintegrated by th.e conrt for the purpose'ofenforcing a.gainst the railroad. company other stipulations contained lD it, which, though innocent on their.face. were entered into with the intent of securing an illegal monopoly to the coal cpmpsny,a,nd would, if enforced, effect thstpurpose.
BuRLINGTON, C. R. &: N. RY. CO. V. NORTHWESTERN
'FuEL
CO.
653
This is an action on an attachment bond executed in a former suit brought by the defendant herein against the plaintiff in this action, in which suit a and cars belonging to this plain.tiff were attached. The defendant fuel company, in its answer, sets, forth the contract between itselfand the plaintiff, and .claims damages for an alleged total breach thereof by the plaintiff. Said contract is as follows: ' "Memorandum of agreement made this seventh day of July, k. D. 1881, between the Burlington, Cedar Rapids & Northern Railway Company, a corporation created and existing under and by virtue of the laws of the state of Iowa, with head-quarters at Cedar Rapids, Iowa, hereafter called the party oithe first part; and the Northwestern Fuel Company, a corporation crl(ated and eXisting by virtue of the laws of the state of Minnesota, with head"quartel's at St;, Paul, Minnesota, called the party of the second part,, witnesseth: In consideration of the premises and agreements hereinafter stated upon. the part of the party of the second part, said first party that they will establish and maintain, during the continuance of this' :contract, a rate on coal mined at or in the vicinity What lowa" to Walleca, Merriam Junction, Minneapolis. and White Bear, as follows: Two dollars and forty cents ($2;40) per ton on shipments of less than One hundred thonsand (100,000) tons, annually, by any one party, Anyone party. ship;. ping, or causing to be shipped. ,onfil-hundred thousand (100,000) tons or more per annum, the rate to be one dolla?' and sixty-jive cents ($1.65) per tpn qn all shipments from October jirst ,to March tMrty-jirst of each one first to dollar mId sixty cents ($1.60) perton on all shipments from September thirtieth of each year: ' : ': "The second party f!,greesto ship. or cause to be shipped, during each year of this agreement, not less than one hund1'ed thousand (100,000) of of said agreement on the part of the saili party coal, and, in ()f the second part, said party of the first part agrees to bill all coal cOllsigned to said second party to points mimed at rates previollsly specifieil for shippers of one hu,ndred thousand (100,000) tons or more per annum; both parties to this agreemen! to furnish all possible transportation,-party of thl! first part expecting and aiming to furnish an equal or excess number of cars as' party of .the second· part. For such cars as the party of the second part rnfty Ane constructed and placed in the trade they shall be allowed one-half c13nt,(i c.) per mile; in the ,event of the regularly established mileage or car seryiceb.,,ing made less than one-half cent (! c.) per mile. such agreed mileage to apply to the cars furnished by said second party. Such cars as are furnIshed 'by parties of the second part shall be handled expeditious!y. and hauled empty from Albert Lea south ward to destination, and shall not be loadecl'except with the consent Of the party of the second part. Said secon<i party agrE\es to cause less to be eonstructed and put into the trade at the earliest possible date, than two hundred (200) twenty- (20-) ton cars of the best construction, ,and increase that number to four hundred (400) as soon as the circumstanceswm warrant. The party of the second part will'l1se all feasona'ble efforts to hilrry the unloading and return of such cars as are furnished by the party of the first part. "And it is further mutually agreed between the parties hereto .that the party of the second part will ship by the linesof the party of the fil"stpart all or controlled by them, or in which they may have any coal mined, interest, which is produced from the mines at or in'the vicinity of What Cheer that can be reached by the lines of the party of the firstJ}art 'and its connections; said partyagt'eeing that it will at all ti:mes.make such freight rateS as
65&
FEDERAL, REPORTEH;
second party to succesilfully compete for the: business with any lines,tllatmay hereafter be built into libove-mentioneddistrict, with a view of to points that are reached by the party of the first ,." , " . " ,',,' , " . II Thi'S!contract to take effect on and after this date, and continue in full force arid effect for five (5) years from. thisdate,'linless changed by mutual consent and agreement, in whicb event six (6) months' notice to be given by one party to the other of any desired change. "In witness whereof the parties to this agreement have hereunto set their ban<;l.s Ilnd,lseaJl:ltbe day and year first before written; tbeparty of the first part, by its general freight agent. at that time authorized, and the party of the secondplU"t, by its president, and corporate seal company· . RAPIDS & N"OIl(rHERlil Ry.. Co. . '. ' ,'" . '" ",By A. L. MOHLER, General FreiKht Agent. "Witness: ,J· STANFIELD. "NORTHWESTERN FUEL COMPANY,
: ,', " "By E. N. SA1,TNDERS, President. [Seal of N.;W, File! Company.], Attest: H. Y. SMITH, Secy. ,.. Witness: J. STANFIELD. , "ApprO\TeElfC: J. IVES, Genl.-SUpt.B., C. R.- &N. R. R." :', ,:', _, " ""'" "',,1,.1 :.
!;i,
On thetri,aJ it appeared tb-atihe fqrmeractlon, which was brought in ,the district court for Ramsey county, and removed :into this court, was tried at the June, 1883, term, and: that at the close ofthe plaintiff's evithe ,plaintiff askedapll' obtained leave to enter a nonsuit, with leave'toJ:hqve to reinstaw and thereupoJlR Juror was withdrawn, and at the'same time the court ordered adis.solution of the attachment. A ,to set aside said nonsuit was made and denied; .but no further proceedings were had, and no further judgment was entered in the .origin'al a<::tion';' The condition oithat attachment was as follows: if the salddeflmdantrecover plaintiff shall awarded'to all damages which he I:>f the attaQhment, not exceeding the penalty of this obligation to bEi void; otherwise, of'fQrQe." , .-And:·o:hthe trial ofthis cause ,defendants insisted and requested an that, in the absence of 'Ii formal entry 'Of judgment in the ci,o recovery could be hlJ-d 'upon the, bond. De.fendatiW, ',fMsQ' 'requested ari in;str1!1ction that no recovery could be had upon u.nless a judgmentupon its merits had been entered in the former:aotion. Both these instructions wererefu!'edj the court holding that thlHionsuit at the trial of the former action: sustained the condition of ',', '' , the counter-claim plea.ded in, the al1!>wer the defendant tending to prov,e performltng6,of the contract on its part, and,"",breach olthe sameon-the part of the defendant plaintiff, and thereupon' offe;red to show by competent evidence the amount of dam',ages' company sustained by reason of such breach. The to the adrtiission of any evidence of damages, upon the ground; 4ID:Wig, thlJ,t the contract was megal, as being against ,public cou,rt ruled that, if the contract was legal, the de,fendants R-ad, introdu,cell evidence .sufficient of performance On its .part,
BURLINGTON, C. B. &:N. 'BY. CO. '11. NORTHWESTERN FUEL 00.
655
and of ahreach of the same by the plaintiff, to entitle ,them to introduce the evidence of damages offered; and upon the question of the validity of the contract pronounced the following opinion. J. D. Springer and O.K. Da'/7is, for BurlingtOn Railroad Co., plaiI?-tiff. C. D. O'Brien, Geo. B. Young, and Gordon E. ,Cole, for defendants. BREWER, J. In this case, upon the questionswNch have been argued, I have cOII1e to a conclusion, l!-nd 'it is unnecessary to continue theargument further. I stop to consider but one question. I may premise ];>y saying that a contract which puzzled my Brother MILLER, one whose pre-eminent abilities we all recognize, may well ha,e puzzled me; and" '\Vhile upon, part of the question which I shall consider I am clear in my upon another pa:t:t I l\.m very much as to tb,e"v8.]idity of'the contract as a whole. is quest,ioned on ,the ground of discriinination, and that the one clause which, providesfora discrimination is invalid I have little doubt. It provides that 'theC'Ompany shall maintain a rate of'$2;40:perton on till coal sbippe.9when the amount is less tban 100,OOO'0nsj and that the rate Jor 100,000 tons or $1.60 ihsunimer, ll,nd,$1.65 in win;ter. That such a discrimination is againstppblic tp ,be sustained, I am very, clear. On the face of it, it is a discrimination, baseclnot upon the cpst' of transportation ,upon the time and labor B.?,d ap.noyances which JIlay result to the railroad upon the .amount of the transpc>!'tation. " , , , ", . " " In ofScoji.eld v.Railway 00.,43 Ohio·St. '606, BN. E. Rep. 907, two quotationsjone frornJustice and one from The one brieflyq:uoted from Justice is: ." ,,'" ; .'"I .am' of, the opinion that it is the duty of every railroad to pro. s,uch conveyances, by special cars or otherwise, '. ' .as are re· ,qtiired for the safe and proper transportation of this expressmattelon their ·tMds, and that the USe ofthese facilities should: be, extended on eqUal. terms '-to all who'3re'actually and usually engaged·intheexpre3l'1 business." 'that, ltSa statement general law obligatbryupon railroad com· "panies, will not be questioned. The other quotMion from Judge BKx1JEB coiliesmorenearlyto the case at bar. In it hee;aya: ' "Tl:!e discriniination complained of rested exclusifelyon theamountaf freight supplied by the 'l'especti,veshippers during the yea'r· . Ought 'a discrimination resting exclusively I)D such a basis to be, I:lUstlj.ined? ,If so, then .thebusiuess, of the country. is ·in some degree subject to, the will of railroad officials; for-if one man engaged in mining coal, and, dependentoI,l the sal,lle railroad for transportation to the same market, carl obtairi transportation thereof at from twenty-ftvetofifty cents per ton lesl'\than another 'Competing with him in business, 801e1)+on the ground that he able to furnish, and does furnish, a larger quantity for shipment, the small operator will, sooner orlater, be forced toabandou,the unequal contest, anli surrender tohis more opUlent rival. ,If the pril,lclple is, sound in its lj.pplication to rival parttesengaged in rpining coal. it is. equally applicable to merchants" manufactilrers. millers, deaJers in lumber ,and grain. and to everybody else !nterested in any business requiring any considerable amount of transpol'tation by 'rail; and it follows that the success of all such enterprises would depend as much on the favor of milroad officials as upon the energies and .capacities of the parties
656
".,. f.
FEDERAL REPORTER.
prosecuting the same. It is not difficult,with such a ruling, to forecast the The men who railroads would be quick to appreciate the power with which such a holding would invest them, and, it may be, not slow. tl?r make ,the most of their opportunities and, perhaps, tempted to favor their ftiends to the detriment of their personal or political opponents; or demand 1\' dh>ision of the profits realized from· such collateral pursuits. as could qe .ffj.xorlld, or ,depressed by discriminations for or against them; or else, seeing th,e augmented power of capital, organize into overshadowing combinaall petty competition, monopolize business, and dictate tions" 'a:nd the aoal'and every other commodity to consumers.: We say, these results miglht follow the exercise of suah a right as is claimed for railroads in iBuliwe think nQsllchpower exists in them. have been autJ;lOrizeiJ;fol\ the common. benefi,t of everyone, and cannot be laWfully manip}pr; of any class at the expense ()f any other. Capital nee(ls 110 sucn e.lj:traneousidd. Itpossesses inherent advantages which canit. But it has no just claim, by reason ofitsaccumulated not strengtI'l,'to deniand the use of the public highways of the country, constructed for the con1monbenefit of alll,on, more favorable terms than are accorded to ,the, hqmolest oitha land; and. Ii discrimination in favor of parties furnishing t4e of solely on that ground, is a discrimination in and is contra.ryto a.s?und public policy, violath:e of that equality guarantied to Elvery CItIzen, and a wrong to the dIsfavored party, foT:'Wlhcb: the courts 'are competent to give redress." If it 'held by Ju.dge WALLACE, that the rule forbidding an unjust does not necessarily prevent a railroad company from charging a less rate to one who ships a large quantity than to one whoshjps,.a (and I am not prepared to deny that, under some c1rcull}l'ltances, there is force, in that proposition, on the same principlethat awholesale dealer sells a large bill of goods at a less rate than a small bW 'of goods,) yet, even with that limitation, a discrimination so vast thIs, is,and so purely arbitrary, and which is so obviously solely in, the,i.nterest of capital, and not based upon reasonable distine,tion infavoll·ofa large as against a small shippl;Jr, cannot .be sustained. For here the contract provides a special rate for shipment of 100,000 tons or over; that is, for one who ships 99,500 tons it makes a rate of $2.40; .while to the man who ships 100,000 tons, or 500 tons more than the other, it makes a rate of $1.60,-l1.difference of 50 per cent. in favor of -the latter., Such a discrimination, even ,if any discrimination based upon the amounts, of shipments is tolerable, is one so gross that it cannot be sustained. Upon that proposition I have no doubt, and I had none wherithecontract was first read ; but the question which is doubt'ful is the,oi)e which I sliggested to Gov. Davis, and which Judge YOUNG ,has at some length and with great ability. Conced.ing, .and I think) that Judge YOUNG practically concedes, that this stipulation, standing by itself, cannot, be upheld,-conceding, I say, that 'this is invalid,"-'let it be dropped from the contract as surplusage, and "there isa cdiltract with ample. considerations on both sides, for the b{t,l'i,e fuel company of 100,000 tons'and over, and for the the railroad company at a specified rate, which con,tract the railroad company has broken; and can it be allowed to shield ,itself {or its breachQf that stipulation on the ground that there is some
BURUNGTON, C. R. & N. RY.
co.
V. NORTHWESTERN FUEL CO.
657
other covenant in the contract which is void? That is a very doubtful question. If I hold against the defendant on this question, it is upon these grounds; in the. first place, I may say that the fuel company is in no attitute to ask the straining of any point in order to uphold this contract in its behalf. It has placed itself in the position of seeking to obtain from the railroad company, not merely very favorable rates, but a discrimination against other parties. The contract, its evident purpose, and its necessary result, will be the building up in its own behalf of a monopoly of the coal business; and a party who voluntarily enters:into a contract with such a purpose and necessary result is in no position to come before the courts and ask that anything shall be strained in its pehalf, no matter what the conduct of the opposing party may be. It needs b\lt little reflection to see that such a contract as this, in its necessary result, would tend to build up a monopoly on behalf of the fuel company, and that that was its purpose was evident. If it could succeed in making similar transportation contracts with other transportation companies, running to other coal-fields, it would soon be ina position where it would be absolute master of the coal business of this northwestern country. It would have the monopoly of that business, and, when once that monopoly was secured, it could dictate prices to the consumers, and could dictate starvation wages to the producers-in the coal. fields; and finally, when the first contracts had expired, it could dictate transportation rates to the railroad companies. And having thus, by these various contracts, reached out to the various coal-fields, and become master of the business, it would build up just such a monopoly, and by just such contracts, as the Standard Oil Company has built up in this country, to the great detriment of an. It is true that where there are void and valid independent stipulations in a contract, a court will sometimes enforce the one, and ignore the other. This was held in the case of Erie Ry. Co. v. Union Locomotive Exp. Co., 35 N. J. Law, 246; yet in the opinion the court says: "These and other authorities which might be referred to, settle the rule that the fact that one promise is illegal will not render another disconnected promise void. The doctrine will not embrace cases where the objectionable stipulation is for the performance of an immoral or criminal act, for such an ingredient will taint the entire contract, and render it uninforceable in all its parts by reason of the maxim, ex tU1-pi causa non oritur actio; nor will it, in general, apply where any part of the consideration is illegal. So that, in the present case, if upon the trial it should appear that the plaintiffs had agreed to pay to the defendant more than the charter of the latter allows, it may become a question whether this suit will lie. There are many decisions to the· effect that where there are a number of considerations, and anyone of them is illegal, the whole agreement is avoided; this doctrine being put upon the ground of the impossibility of saying how much or how little weight the void portion may have had as an inducement to the contract." Judge YOUNG, in his argument, very fmcibly puts the question in this way: That one promise of the railroad company was to transport for $1.60 per ton, and that that was a promi':1e independent of the one that v.31F.110.1l-42
658
it would not ship for anyone a l()ss amount than 100,000 tons at a less rate than $2.40. On the other. hand, the promise of the fuel company w.as that it would ship 100,000 tons or over, and that it would furnish 400 cars for the transaction of this business, and promise of the ,fuel compat;ly was legitimate. The promise to ship, promise to cars,;..o.;...the consideration furnished by the fuel company,......thereforejbeing entirely unobjectionable, we can look upon these two proJJ;lises of the railroad company as separate /l.nd independent, and uphold the one while we reject the other. As 1 said before, there is great force in that; but the contract must be looked upon an entirety, and itmnst be looked upon under the circumstanoes surroundoo the partie$ at the time,-not merely for the purpose of determining the con.sideratitm of the various. stipulations, but also for the· pUrpose of deter,. mining· the intent ofthe parties. . What were.those circumstances? There were undeveloped, or partially at What Cheer; the railroad company with a limited business; and the fuel company seeking to occupy this territory for the businessofsupplying coal. The railroad company sougllt to increaSe its transportation. business, and the fuel company to ;monopolize the business of supplying the market here. The latter had notmE:rely the desire to obtainlrates· (or itself, ,which it could have accomplished by the one stipulationi of a rate of 81.60 a ton, but it had the further purpose of ex<:hiding competition, securing it by enforcing or obtaining from the railroad promise that no other limited. shipper should have any,. thing like; equal terms. As Eltated, the cost of prod\lction attha mines was no·g:I1ea!er; than the ratebf transportation .awarded to this fuel cow., pany. If,in addition .Mthat, it could securefroill the railroad company 11 guaranty that only those. who should embark enormous capital in the business CQuld obtain anything like favorable terms of transportation, it would bein a position to the supply of coal from that territory for this market;. and that such was its intent is obvious, not merely from thestipnlation as to rates,but,a;lso from other provisions orthe contract.. The railroad company was one 01 limited means, and unable, as it seems, to furnish the necessary for such an immense' transporta:tion. The ,evidence showa that it woul!! need trains of 14 cars a day to ship this 100,000 tons. The fuel company agreed to furnish 400 cars. This stipulation for additional Cll;rs, and other stipulations, impose such promptness and such transportation ,engagements on the part of the railroad company, for the bene:(it of this fuel company, as practically to pre:vent it from entering into the business of shipping coal for any otlier party. . No person can read that contract in the,Jight of the circumstances without perceiVing that there was on thepatt'of the fuel company an attempt to monopolize the entire product of this coal-field;'asfar as respects this market; and it would he part and parcel of similar purposes to contro: 'in' 'like manner the products of other coal-fields. '1'0 sustain the contract .even in part would practically validate it for all purposes, and lend the .;aid of the 'court to the furtherance ofsuch an objectionable scheme.
BURLINGTON, C. R. &N. RY.CO·· 'V. NORTHWESTERN FUEL 00.
659
It is impossible, in my opinion, to disintegrate this contract, and to say that one part is good, and the other bad. It cannot be said, by the reading of the contract under the circumstances, that the parties would have entered into it with simply the unobjectionable features in it. They entered into that contract as a whole, binding upon both parties. It would be wrong now to attempt its disintegration, or try to throw out one part, and leave the other in force. As I said before, this is a doubtful question '17nd 1 am not as clear upon this point as upon the other. At the same time it seems to me that courts, when they have such a tract as that before them, should not try to divideik-should not try to uphold any distinct parts. The authorities cited show such to be the rule in acas.·elike this, alid indicate that if one part of such a contract is void, and'.the other part valid, the contract must be read as an entirety, and a whole declared void. Any other doctrine would result in building up monopolies. I do not mean to intimate that I consider that the conduct of the railroad company is free from blame in this matter. It obviously went into this contract deliberately, for its own gain, and from pecuniary motives; and, wheni.t found that it did not pay to carry out the contract, it as deliberately.made efforts to break it. But courts, when such matters CaIne before them, should not and do not act from any considerations of approval or disapproval of the conduct of parties. But when the evidence shows, as in this case, that a contract is one thatis against public policy, tends to the building up of monopolies which are against the spirit Of outiinstitutions, courts do not lend their aid,-certaiIily do not strain anytllingto sustain such a contract. But they say that persons that enter into such need never expect, no. Inatter what may be the wrongful conduct of the other party, any recognition in courts of justice; so, while it is very evident that this railroad company, having entered into this contract deliberately, set about as deliberately to break it, yet, at the'same time, the parties in the first instance, in making the contract, were equallyblamable,..;..-the one seeking to buildup a monopoly, and the other willing to assist in such purpose. Parties who enter into these contracts must deperid upon the good nature and blYna fides of each other, and not upon the aid of the court, to see that these contracts are carried out. The objection to the introduction of the testimony as to damages will be sustained.
The jury found a verdict in favor of theolaintiff for 86,520.06.
· 660 FEDERAL. REPORTER.
ARCHER '11. HARTFORD FIRE INS. SAME '11. NORTH BRITISH
Co.' Co.
&
MERCANTILE INS.
(CirCUit (](Juri, W; D. Tennessee.
July 6, 1887.) TWO
COSTs-DOCKET FEES FOR DEPOSITIONS-USE OF SAME DEPOSITION m SUITS.
Under the United States Revised Statutes, § 824, where.a.deposition, though written out but once, was taken by consent tobe read in two cases, entitled as of 'both, so filed and admitted in evidence on the joint trials of the same, held, that a taxation of the $2.50 docket fee for such deposition, in favor of the party prevailing in each suit, is authorized, no agreement to the contrary having been enterlldin,to. . .' .... .
SAME-WITNESS FEES.
Ha witness be sUbpamaed.in two cases, the parties being different, to IW tend therei\l before the court, and testify orally, or before any officer pursuant to law, to give his deposition, and does so attend, heis'entitleq to the witness . fees prescribed by section 848 of the Revised Statutes. fOr his travel and attendance in each case. The fact that he actually testifies but once on the trial of the cases. together by consent, or that his testimony is but once written out in the deposition to be used by agr.eement in both cases, makes no difference; nor is theJ;ea distinctiOtl between witness fees for attendance "in court" and those "before any officer pursuant to law." , .
Motion of Defendants to Retax Costs. In these cases there were 41 "depositions taken by consent of parties, * * * to be used as evidence on the part of the defendant in each and both of the above-styled causes." The caption of the depositions is entitled as of both suits, and they are marked filed, and are docketed in both cases. The suits, by agreement, were tried together; the records, however, being in every way separate, with separate verdicts and judgments,and these depositions, were read upon the trial so had. The same counsel represented the 'common plaintiff in both cases, and both the defendant companies appeared by the same counsel. The clerk taxed in plaintiff's favor a docket fee of $2.50 on each deposition, in both cases making $102,50 against each defendant. Upon the taking of these depositions, the fees of plaintiff's witnesses for mileage and at:tEiDdance, amounting to. $31.-95 in each case, were claimed and proven before the officer taking the depositions, and have been allowed in the clerk's taxation. These witnesses attended before the officer. and gave their evidence in writing, und.er writs of subprena served upon them in each case, to so appear and testify therein. In the taxed billso! costs witness fees have also been allowed the plaintiff in the sum of $149.50 in each case, for like attendance and travel of other witnesses to testify orally in court, the same persons being witnesses in both cases. All these items are objected toas being excessive, because respectively taxed in more than one case. Tomlin & Haynes, for the motion. McCorry & Bond and Sweeney & Thompson, contra.