Western Union Telegraph Co. v. Call Publishing Co.

Irvine, C.

The Call Publishing Company is a corporation publishing a daily newspaper in the city of Lincoln. It brought this suit against the Western Union Telegraph Company,, alleging that since July 1, 1888, it had been receiving from the telegraph company the dispatches of the Associated Press collected by that organization at Chicago and transmitted daily from Chicago to Lincoln as well as to 'other cities; that thei’e existed between the Associated Press and the telegraph company a contract which prevented the Cali Company from procuring its news otherwise than over the lines of the telegraph company; that during said period the telegraph company had charged and collected from the Call Company $75 per month for transmitting such dispatches, not exceeding 1,500 words each day; that the State Journal Company published in the city of Lincoln a daily newspaper which had been during the whole of such period and prior thereto receiving the same dispatches; that during the whole of said period the telegraph company unjustly discriminated in favor of the State Journal Company and against the Call Company, and gave to the State Journal Company an undue advantage, in that it. charged the State Journal Company for the same, like, and contemporaneous services as were rendered to the Call Company only the sum of $1.50 per hundred words daily per month; that the amount charged and collected by the telegraph company from the Call Company was excessive and unjust to the amount of the excess of the charge to it over that to the State Journal Company; that immediately upon discovering such discrimination, the Call Company demanded repayment of such excess, which was refused. Damages were alleged on this account in the sum of $1,962, for which judgment was prayed. The telegraph company admitted the charges made to the Call Company and admitted that it charged the State Journal Company for its dispatches $125 per month, but denied that it had given the State Journal Company any undue advantage or that it had unjustly discriminated in favor of the State Journal Company. Tt further alleged that the Call Company published an evening paper, and received over.the telegraph company’s lines dispatches not exceeding 1,500 words per day, all transmitted and delivered in the day-time, and that this charge was fair and reasonable and was no greater than was charged other persons for similar services. It further alleged that it had accepted the provisions of the act of congress of 1866, in regard to telegraph companies, and pleaded that the subject-matter of the action was within the exclusive jurisdiction of the federal courts; and it further pleaded that it at all times had been ready to transmit all dispatches with impartiality in the order in which they were received, and had ever been willing to offer the same and equal facilities to the plaintiff and all publishers of newspapers, and to furnish dispatches for publication to all newspapers on the same conditions as to payment and delivery. The reply was a general denial. There was a verdict for the plaintiff lor $975, upon which judgment was rendered, and the telegraph company prosecutes error.

The errors assigned relate to the instructions given and refused, and to the sufficiency of the evidence. The assignments of error in regard to the instructions group themselves in the same manner as in the case of Hiatt v. Kinkaid, 40 Neb., 178. One assignment is directed against the instructions given by the court, en masse. Another is directed against those asked by the telegraph company and refused. Some of those given by the court were manifestly correct, and at least one asked by the telegraph company was substantially covered by the court’s charge. These assignments must, therefore, be overruled, and we are remitted in an examination of the case toa consideration of the sufficiency of the evidence.

' The evidence shows, without substantial conflict, that prior to July, 1888, a newspaper had been published in the city of Lincoln known as the State Democrat. This paper had acquired what is styled a “franchise” in the Northwestern Associated Press, and had been receiving the dispatches of that organization, paying to the Associated Press $20 per mouth therefor, and paying to the telegraph company for transmitting and delivering the dispatches $75 per month for a maximum of 1,400 words per day. The manner in which this contract was brought about was that Mr. Calhoun, the proprietor of the State Democrat, negotiated with the manager of the press association for procuring its news, and was by that manager informed that he should first make terms with the telegraph company for transmitting the messages. Negotiations were entered into between Mr. Calhoun and the telegraph company, resulting in an offer by the telegraph company to transmit 1,400 words per day for $75 per month, and this offer was accepted by Mr. Calhoun. About July 1, 1888, Mr. Calhoun sold his paper to the Call Company and assigned to that company the franchise which he had. acquired in the Northwestern Associated Press. Nq new contract is disclosed between the Call Company and telegraph company, but the telegraph company continued to deliver and the Call to receive the dispatches in the same manner as they had been transmitted and received to and by the Democrat before the sale, and the Call Company paid the rate of $75 per month. The paper published by the Call Company was an evening paper published between 3 and 4 o’clock in the afternoon.

The State Journal Company published a morning paper. It was also a member of the Associated Press and received over the wires of the telegraph company dispatches not to exceed 5,600 words a day, for which it paid, during this period, the sum of $125 per month. It also was a member of the United Press, another association for the collection of news, and received through that association over the wires of the Postal Telegraph Company from 7,500 to 8,000 words per day, for which it paid to the Postal Company $200.

The Associated Press transmits its news in two groups, called “reports.” The day report is transmitted between 11 A. M. and about 2:30 P. M., and is for the especial benefit of evening papers. It is this report which the Call Company received. The night report is usually transmitted at night and generally between 7 P. M. and 3 A. M., and is for the especial benefit of morning papers. The Journal Company’s contract strictly included only the night report, but for many years it has in fact received both day and night reports. Prior to the acquisition by the Democrat of its franchise in the Associated Press the day report to the Journal was relayed at Omaha, whence it was usually transmitted to Lincoln by wire, but sometimes by mail. The Journal Company sent to the office of the telegraph company for this report, and usually obtained it about 4 P. M. After the Democrat’s acquisition of the franchise the day report was transmitted from Chicago directly, except when the weather or other influences required a relay at Omaha. It was sent in time for use by the afternoon paper, was committed to writing on manifold paper, one copy delivered to the Democrat, and after its sale, to the Call, and the other to the Journal. The Journal was not permitted to use this report until after it had been published in the Call. It was also shown that in order to be of any service to the Call the day report must be delivered to it not later than 3 o’clock in the afternoon, while the night report to the Journal might be transmitted at any time prior to about 3 o’clock in the morning. Prior to the contract between the Democrat and the telegraph company for the day report, the telegraph company used but one wire between Omaha and Lincoln. In order to promptly transmit the day report to the Democrat the telegraph company was required to erect another wire and to employ an additional operator at Lincoln. Neither this wire nor this operator was employed exclusively for transmitting the report. Other business between the two cities demanded additional facilities, and this wire and this operator, when not engaged in transmitting the press report, were used for commercial business. But the necessity of transmitting this report was one of the elements, and evidently a large one, in requiring the telegraph company to so increase its facilities. During the hours within which the day report must be transmitted the facilities of the telegraph company are taxed with a great burden of commercial business, and during those hours certain wires are leased to individuals to accommodate their business. After 4 o’clock in the afternoon these leased wires are free and can be used by the telegraph company for other purposes. During the night when the night report is transmitted not only are these leased wires free for use by the telegraph company, but there is not the same pressure of commercial business generally, and it is the established usage of telegraph companies, on account of these circumstances, to transmit messages during the night at less rates than in the day-time. There is also evidence tending to show that there were more morning papers to divide the aggregate cost of transmitting the night report than there were evening papers to divide the aggregate cost of transmitting the day report.

There was some question made as to whether or not the Call and the Journal were in any sense competitors in such a way that either could be affected by the relative rates charged. On this point we have no doubt that a state of competition was shown. One was a morning paper, the other an evening paper, and the same persons frequently buy or subscribe to both; but it was shown that the advertising rates of a newspaper depend chiefly upon its circulation, and that its circulation depends largely upon its ability to supply the news to its patrons. That a paper with good facilities for obtaining and publishing the news will, other things being equal, exceed in circulation a paper with poorer facilities; and that these influences operate upon newspapers having the same field of circulation, although one be published in the morning and the other in the evening Indeed it would hardly require evidence to establish such patent facts.

From the foregoing statement of the evidence it will be seen that the following propositions were established: First — That the actual rate charged to the Call was much greater than the actual rate charged to the Journal. Second — That the two papers were in such sense competitors, that if one, for a given sum, could not obtain the same news facilities as the other for the same sum, the difference would operate to the disadvantage of the former. Third — That from the requirements of the two papers, based upon their respective hours of publication, there was a marked and substantial difference in conditions affecting the convenience and expense to the telegraph company in transmitting to each its dispatches. Fourth — That there was no evidence of any character showing to what extent this difference in conditions affected the telegraph company. There was no evidence tending to show that the charge to the Call Company was in itself unreasonably high, that the charge to the Journal Company was unreasonably low, or that the charge to either was greater or less than the ordinary or reasonable charge to others for similar services. It follows, therefore, that the verdict was sustained by the evidence if, as a matter of law, it was sufficient to show either that another person was obtaining dispatches for a less sum than the plaintiff without regard to differences in conditions, or if it was sufficient to show a difference in rate accompanied by a difference in conditions, leaving to the jury, without other evidence, the duty of comparing the difference in rates with the difference in conditions and determining without other aid whether or not the difference in rates was disproportionate to the difference in conditions. But the verdict was not sustained by the evidence if a mere difference in rates without regard to conditions was insufficient to ground a right of action, or, a difference both in rates and conditions being shown, it was also necessary to establish by evidence that these differences were disproportionate.

The action was evidently begun under section 8 of chapter 89a, Compiled Statutes, providing that “it shall be unlawful for any telegraph company, association, or organization engaged in the business of forwarding dispatches by telegraph to demand, collect, or receive from any publisher or proprietor of a newspaper any greater sum for a given service than it demands, charges, or collects from the pub.isher or proprietor of any other newspaper for a like service, * * and * * * such telegraph company or association shall be liable for all damages sustained by the person or parties in consequence of such discrimination.” Our constitution contains an express grant of authority to legislate upon this subject. Article 11, section 7, of the constitution is as follows: “The legislature shall pass laws to correct abuses and prevent unjust discrimination and extortion in all charges of express, telegraph, and railroad companies in this state, and enforce such laws by adequate penalties to the extent, if necessary for that purpose, of forfeiture of their property and franchises.” In the absence of such a provision in a state constitution there could be little doubt of the power of the legislature in the premises. But expressio unius est exclusio alterius, and the constitution containing this express grant of power the provision quoted must be taken as establishing the limits of legislative authority upon this subject. We refer to the constitutional provision because it simply grants the right to prevent by legislation “unjust discrimination.” This phrase has been frequently used by the courts and legislatures and has obtained a well settled construction. It is not every discrimination which is unjust. So many cases illustrate this principle that it would be difficult to collate them. But the general nature of the decisions may be readily seen from an examination of the note to Root v. Long Island R. Co., 11 Am. St. Rep. [N.Y.], 643. In construing o.ur statute it is necessary to bear in mind the constitutional limitation quoted, and the statute bears a just and reasonable construction within that limitation. It provides in its filth section that all telegraph companies shall transmit all dispatches with impartiality in the order in which they are received, and use due diligence in their delivery without discrimination as to any person or party to whom they may be directed. This section evidently refers to the duty of the telegraph company as to the mode of conducting its business and not to the charges therefor, and forbids partiality or discrimination in the transmission of messages. Section 7 is very similar in its terms to what is known “as the long and short haul clause" of the interstate commerce act, and forbids the charging of a greater sum for the transmission of a message over a given distance than it charges for a similar message over a greater distance, but adds this significant proviso: “That dispatches transmitted during the night and dispatches for publication in newspapers may be forwarded and delivered at reduced rates; such rates must, however, be uniform to all patrons for the same service.” Section 8 we have already quoted so far as it is material. Section 9 provides: “Every telegraph company and every press association engaged in the transmission, collection, distribution, or publication of dispatches shall afford the same and equal facilities to all publishers of newspapers, and furnish the dispatches, collected by them for publication in any given locality, to all newspapers there published, on the same conditions as to payment and delivery.”

An analysis of these provisions discloses that the legislature sought, by the act referred to, to prohibit, first, all partiality or discrimination between patrons in the handling of business; second, all partiality or discrimination in regard to rates for similar services; third, all such partiality or discrimination as to terms of payment or delivery; and fourth, all discrimination in favor of persons transmitting dispatches to the greater distance. Without violence to the language of the act, and without giving it an interpretation beyond the constitutional grant of power, it cannot be construed so as to require a telegraph company to transmit messages to two patrons under different conditions at the same rale. So interpreted we do not think that the act, in so far as it affects civil actions, and disregarding the penalties it imposes, is anything more than declaratory of the common law. In the present state of civilization it would be idle to assert that a telegraph company is not charged with a public function. The telegraph company in this •case does not so assert. It is now the established law that a telegraph company is a public carrier of intelligence, with rights and duties analogous to those of a public carrier of goods or passengers. The law regulating the duties of railroads and other carriers is, therefore, largely applicable to telegraph companies. The act of congress known as the “Interstate Commerce Act” contains few new features and was chiefly designed to carry into the statutes of the United States (the United States as such not having any common law) the principles of the common law already enforced by the states in their domestic affairs. England and many of the states have adopted similar statutes, not so much to engraft new principles upon the law as to make certain and more readily enforce principles already established.

It is argued by the telegraph company that no cause of action can be predicated upon the mere fact that another patron obtained services for a lesser rate, unless it be shown that the rate charged the complainant is in itself unreasonable and excessive. There are cases to this effect, but we cannot lend our assent either to their reasoning or to their conclusion. On the contrary, we believe the true rule to be that rates must not only be reasonable in themselves, but must be relatively reasonable; that is, that a person or corporation engaged in public business, and obligated to render its services to all persons having occasion to avail themselves thereof, is bound, in fixing its rates, to observe two rules: First, its rates must be reasonable, and second, it must not, without a just and reasonable ground for discrimination, render to one patron services at a less rate than it renders to another, where such discrimination operates to the disadvantage of that other. (Board of Trade v. Chicago, M. & St. P. R. Co., 1 Int. Com. Rep., 215; Hays v. Pennsylvania R. Co., 12 Fed. Rep., 309; Scofield v. Lake Shore & M. S. R. Co., 43 O. St., 571; Chicago & A. R. Co. v. People, 67 Ill., 11; Indianapolis, D. & S. R. Co. v. Ervin, 118 Ill., 250; Messenger v. Pennsylvania R. Co., 36 N. J. Law, 407; Atwater v. Delaware, L. & W. R. Co., 48 N. J. Law, 55; McDuffee v. Portland & R. R. Co., 52 N. H., 430; Houston & T. C. R. Co. v. Rust, 58 Tex., 98; Ragan v. Aiken, 9 Lea [Tenn.], 609.) But it is not unjust discrimination, it is not contrary to the common law,, and it is not contrary to our statutes to make a difference in rates where the expense or difficulty of performing the-services renders such discrimination fair and reasonable. Many of the cases already cited illustrate this principle. In addition thereto there may be cited Interstate Commerce Commission v. Baltimore & O. R. Co., 43 Fed. Rep., 37 ; Bayles v. Kansas P. R. Co., 13 Col., 181; Root v. Long-Island R. Co., supra; Savitz v. Ohio & M. R. Co., 49 Ill. App., 315, 37 N. E. Rep., 235. With the general rule-announced in the latter cases we concur, but we do not wish to commit ourselves to its application in all of them. Some cases justify a discrimination merely on account of the quantity of business transacted. In the language of Hays v. Pennsylvania R. Co. and Scofield v. Lake Shore & M. S. R. Co., supra, such discrimination in favor of the patron-having the larger business tends to create monopoly, destroy competition, and is contrary to public policy. The same-objection can be urged to the giving of privileged rates for the purpose of obtaining the business of a particular patron, and a discrimination on this ground is, we think, very justly condemned by the house of lords in the case of London & N. W. R. Co. v. Evershed, L. R., 3 App. Cases [Eng.], 1029. Many of the cases cited construe statutes, but they were statutes declaring what we think to be common law rules, so that whether this case be viewed as one under our statutes relating to telegraph companies, or one based upon the common law, we think the principles governing it are the same. These are that the telegraph company was bound, first, to charge for services no-more than what was reasonable; second, that under like-conditions it must render services t.o all patrons on equal terms; .third, that it must not so discriminate in its rates to different patrons as to give one an undue preference over another; but fourth, it is not an undue preference to make-to one patron a less rate than to another when there exist differences in conditions as to the expense or difficulty of the services rendered which fairly justify such a difference in rates.

As we have already stated, a considerable difference in the absolute rate charged the Call Company and the Journal Company was shown, but there were also shown a difference in conditions affecting the expense and difficulty of rendering the services which at common law would justify some difference in rates, and this difference was one which the proviso quoted from the seventh section of our statute expressly recognizes as justifying a discrimination in this, state. There was no evidence to show that the rate charged* the Call Company was unreasonably high. There was no-evidence to show that the rate charged the Journal Company was unreasonably low. There was no evidence to-show what difference in rates was demanded or justified by the exigencies of the differences in conditions of service». We do not think that the enforcement of contracts deliberately entered into should be put to the hazard of a mere-conjecture by a jury without evidence upon which to base-its verdict. How can it be said that a jury acts upon-the evidence and reaches a verdict solely upon consideration thereof when, having established a difference in rates- and a difference in conditions, without anything to sliowhow one difference affects the other, or to what extent, it is-permitted to measure one against the other, and to say that, to the extent of one dollar or to the extent of one thousand-dollars the difference in -rates was disproportionate to the-difference in conditions? It may be said that it would ber difficult to produce evidence to show to what extent such* differences in conditions reasonably affect rates. This may be true, but the answer is that-whatever may be the difficulties of the proof a verdict must be based upon the proof and a verdict must be founded upon evidence and not upon the conjecture of the jury, or its general judgment as to what is fair without evidence whereon to found such judgment.

The chief justice takes a different view, and thinks there is found in the evidence a basis for the verdict. This conclusion is arrived at by considering the service performed for the Journal so far as the day report is concerned as similar in its conditions to that performed for the Call. We agree with him that it is the fair inference from the evidence of the witness Hathaway that the sum of $125 per month paid by the Journal is intended to include compensation for both day and night reports, but we do hot think that any basis of comparison is thus afforded. The chief justice argues that because the day report is now taken from the wires on manifold paper and one copy given to the Call and the other to the Journal, the conditions of service as to this report are the same. In this we think there is overlooked the fact that it is only on account of the Call’s contract that the telegraph company is required to deliver the report to either paper at the time or in the manner in which it is now delivered. At the risk of some repetition we shall point out what are conceived to be the differences in the conditions affecting the two papers. Before the Call, or rather its predecessor, the Democrat, began to take the report, the day report was delivered to the Journal at the convenience of the telegraph company. The Journal had no contract requiring the delivery of this report at any particular time. This is shown by the testimony both of Mr. Calhoun and Mr. Horton. The Journal makes use of this day report only to assist it in editing the night report, and did not then have, nor. has it now, any use for the day report until evening. Indeed, now that there is an evening paper in Lincoln, for the purposes of the Journal it might wait until the Call appeared and use the dispatches published in that paper, without depending upon the telegraph company at all. Under the former conditions, therefore, commercial business was given, the right of way on the wires and the day report was transmitted-during lulls in the commercial business, without any requirement that it should go to Lincoln before evening. In taking advantage of this right to give commercial business the preference there was then a delay of several hours at Omaha. According to the testimony on behalf of both parties the day report is of no use to the Call unless it is all received by 3 o’clock, or within a few minutes thereafter, and this report now has the right of way during the hours of its transmission as against commercial business. In order to accommodate this business the telegraph company was compelled to increase its facilities between Omaha and Lincoln. The evidence is undisputed upon this. Mr. Horton says in answer to a question as to what the telegraph company did to enable it to transmit the day report:

I put up an additional wire between Omaha and Lincoln over the Missouri Pacific railway. We had to employ an additional operator at Lincoln to take the afternoon report. A portion of his time, of course, was utilized in other business.

Q,. What portion of the time was devoted to this exclusively ?

A. From 11 o’clock to 3:30.

Q. How much was his salary per month?

A. Sixty dollars.

On cross-examination the same witness was asked whether it was not the growth of commercial business that made it necessary to put in a new wire for this report. His answer was, “That was partly it, certainly. We would not have built a wire on purpose to accommodate one newspaper at $75 a month.” From this we think it appears not that the wire was erected chiefly on account of ¡the commercial business, but that it was the necessity of supplying the day report to the Call which was the immediate cause of erecting the wire. Under the old conditions the Journal paid the same rate which it does now for its report. Those conditions were then, and are now, sufficient for the purposes of the Journal. The fact that it now gets .the day report on manifold paper as early as the Call is a matter of no consequence to the Journal, as it is not allowed to use the report until after the Call is published. Both Mr. Cox and Mr. Calhoun testify to this. To hold that the conditions are now similar and that the Journal and Call must have the same rate would'require either that the telegraph company make its rate for the increased service as 'low as it was for the former service, or else that it increase the rate charged the Journal, although the Journal is in nowise interested in the increase of service. We think, therefore, that the conditions of service which the Call requires and which the Journal requires are so different as to leave no basis for comparison.

Reversed and remanded.