First Department, March, 1910.

[Vol. 137. Railroad Co. v. Gage (12 Gray, 393) that the principle derived from that source (i. e., the common law) " is very plain and simple. It requires equal justice to all. But the equality which is to be observed in relation to the public and to every individual consists in the restricted right to charge in such particular case of service a reasonable compensation and no more. If the carrier confines himself to this, no wrong can be done and no cause afforded for complaint. If for special reasons in isolated cases the carrier sees fit to stipulate for the carriage of goods or merchandise of any class for individuals for a certain time or in certain quantities for less compensation than what is the usual, necessary and reasonable rate, he may undoubtedly do so without thereby entitling all other persons and parties to the same advantage and relief." The doctrine laid down in Lough v. Outerbridge has since remained the law of this State, and when a reargument was ordered of that case the original opinion was again adopted as the expression of the court (145 N. Y. 601). It has been explicitly followed in the opinion in Central New York Tel. & Tel. Co. v. Averill, No. 1 (129 App. Div. 757).

So in the United States courts it has been held that, under the common law, railway carriers were held to but little more than that they should carry for all persons who applied in the order in which the goods were delivered at the particular station, and that their charges for transportation should be reasonable; and that, under the Interstate Commerce Act, to come within the inhibition of its sections forbidding unjust discriminations, the differences must be made under like conditions, that is, there must be contemporaneous service in the transportation of like kinds of traffic under substantially the same circumstances and conditions; and, as to passenger traffic, the positions of the respective persons, or classes, between whom differences in charges are made, must be compared with each other, and there must be found to exist substantial identity of situation and of service, accompanied by irregularity and partiality resulting in undue advantage to one or undue disadvantage to the other, in order to constitute unjust discrimination. (Interstate Commerce Commission v. Baltimore & Ohio Railroad, 145 U. S. 263.)

"It is only unfair and unjust discrimination that the statute, as well as the common law, is aimed at." (United States v. Chicago & Northwestern R. Co., 127 Fed. Rep. 785; Delaware, Lackawanna

App. Div.]

First Department, March, 1910.

& Western R. Co. v. Kutter, 147 id. 51; United States v. WellsFargo Express Co., 161 id. 606.)

In the extension of this general doctrine to electric light companies it was determined that both reason and authority sustained the contention that a corporation engaged in public service may not discriminate against one customer in favor of others in charges for the same service and under the same conditions. (Armour Packing Co. v. Edison Electric Illuminating Co., 115 App. Div. 55.)

In a later case, in the same department, it was held that the mere fact that one man gets an equal amount of current for less money than his neighbor is not conclusive evidence of discrimination; that it must be shown as well that it was under the same circumstances and conditions. (Graver v. Edison Electric Illuminating Co., 126 App. Div. 376.) The dissenting opinion in that case admitted the possibility of the classification of users of electric light into those using it for household purposes and those using it for business. (Id. 380.)

It may be deduced from all these authorities that, granting the fullest application of common-law limitations to all public service corporations, what is prohibited is the exercise of unfair, unjust and unreasonable discrimination as between those so situated that the conditions and circumstances are identical.

It is difficult to imagine any ground upon which the consideration extended to the three particular classes enumerated can be held to be an unfair, unjust or unreasonable discrimination against any one.

The conditions and circumstances surrounding them, and under which they exercise their functions, are entirely different from those attending the defendant. The latter is a corporation engaged in a business, the magnitude of which is indicated, to some extent, by the amount of telephone service which it required. It is a matter of common knowledge that under commercial conditions the use of the telephone is an essential adjunct to the satisfactory transaction of business. It is a substitute for purchasing in person, saving time, exertion and expense. It is now more than a mere incident in business life. Clergymen, charitable institutions and the munici pality are not competitors or rivals in business of the defendant. What helps them does not damage it.

First Department, March, 1910.

[Vol. 137.

It does not appear that the concession made to the former adds one iota to the cost of the service furnished to the latter. If the corporation chooses to exercise benevolence by granting a reduction from its regular charge to those who are universally recognized as the proper recipients of consideration, that is a matter between the corporation and its stockholders, who are conferring the favor, and not a concern of the defendant, which contributes nothing to it. If the corporation chooses to recognize its obligation to the city by assisting in decreasing the expenses of government to the extent of a percentage of the charges for telephone service for official needs, it is doing that which proportionately reduces the burden upon the defendant and all other taxpayers, and this unusual recognition of a debt of gratitude should not be discouraged.

The courts have recognized the right of a common carrier to carry a person free who is unable to pay fare, or to carry supplies at nominal rates to communities scourged by disease or rendered destitute by floods or other casualty (Hays v. Pennsylvania Co., 12 Fed. Rep. 309); these are exercises of benevolence. They have also upheld the right, even under the common law, of a common carrier to allow ministers of the gospel to travel on half-fare tickets (United States v. Chicago & Northwestern R. Co., 127 Fed. Rep. 790), and to extend more favorable terms to a State or municipal government. (Interstate Commerce Commission v. Baltimore & Ohio Railroad, 145 U. S. 278.)

In the case of a gas company, it was said that to furnish gas to the city of New York for seventy-five cents per 1,000 feet, while private consumers paid eighty cents, was not an illegal discrimination. (Willcox v. Consolidated Gas Co., 212 U. S. 54.)

That the general policy of almost every State where legislation has been had upon the subject of unjust discrimination is to recognize certain concessions in rates made under the common law as still proper to be made, even in the face of the existence of a general prohibition against discriminations, is found in the exemp tions expressly made by the statutes themselves. Thus the right to give free or reduced rate transportation, despite the statute, either to persons or property, was granted to common carriers in Arkansas, Delaware, Indiana, Iowa, Louisiana, Michigan, North Carolina, Ohio, Oregon, South Carolina, South Dakota, Utah, Washington

App. Div.]

First Department, March, 1910.

and Wisconsin as to the government of the State or of a municipality; in Arkansas, Delaware, Florida, Indiana, Iowa, Louisiana Michigan, Minnesota, North Carolina, Ohio, Oregon, South Dakota, Texas, Utah, Virginia and Washington as to ministers of the gospel; and in Arkansas, Delaware, Florida, Indiana, Iowa, Louisiana, Michigan, Minnesota, Mississippi, North Carolina, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin as to certain specified charitable and benevolent objects.* Under the Interstate Commerce Act it was expressly provided, among other exemptions (24 U. S. Stat. at Large, 387, § 22, as amd. by 25 id. 862, § 9), that nothing therein contained should prohibit the carriage, storage or handling of property free or at reduced rates for the United States, State or municipal governments, or for charitable purposes; or the free carriage of destitute and homeless persons transported by charitable societies, and the necessary agents employed in such transportation, or the giving of reduced rates to ministers of religion. (See, also, 24 U. S. Stat. at Large, 379, chap. 104, § 1, as amd. by 34 id. 584, 585, chap. 3591; 34 id. 838, Res. No. 47, and 35 id. 60, chap. 143.)

Finally in the Public Service Commissions Law of this State (Laws of 1907, chap. 429) common carriers were expressly allowed to give free transportation to ministers of religion, inmates of hospitals, charitable and eleemosynary institutions and persons engaged exclusively in charitable and eleemosynary work, indigent and homeless persons and the agents accompanying them when sent by charitable societies; as well as to give free or reduced rate transportation of persons or property for the United States, State or municipal governments. (§ 33.)

It follows, therefore, that the discounts of twenty-five per cent heretofore given to clergymen, to charitable institutions and to the city of New York do not amount to an unfair, unjust or unreasonable discrimination, and that they are not illegal. The contract between plaintiff and defendant not being void as violative of any statute, nor as against public policy nor under the common law, defendant is liable to plaintiff thereunder for the amount due for the service concededly rendered. Judgment is, therefore, directed

*See N. Y. Supr. Ct. Cases and Briefs of Counsel (State Law Libr.), vol. 7826, No. 1, p. 11 et seq.- [REP.

First Department, March, 1910.

[Vol. 137. in favor of plaintiff against defendant in the sum of $37,750.61, with interest on $35,928.92 thereof from October 1, 1909, and with costs.

INGRAHAM, P. J., MCLAUGHLIN, LAUGHLIN and MILLER, JJ., concurred.

Judgment for plaintiff, as directed in opinion, with costs. Settle order on notice.

RUSSELL THAYER, Respondent, v. GRANT B. SCHLEY and ELVERTON R. CHAPMAN, Appellants, Impleaded with HENRY G. TIMMERMAN and GEORGE F. CASILEAR, Defendants.

First Department, March 11, 1910.

Fraud-proof necessary to recovery - false representations inducing stockholder to retain stock-principal and agent-representations made by stenographer of copartnership - failure to show authority or knowledge-evidence-books of corporation - minutes of meeting of directors- erroneous charge.

In order to recover in an action for deceit whereby the plaintiff was induced to refrain from selling stock, he must establish that false representations were made by the defendants; that they were calculated and intended to influence him; that they were made to him or brought to his knowledge; that the representations were false to the knowledge of the defendants, and that the plaintiff acted in reliance thereon in good faith and was deceived and damaged thereby. A letter written on the letter paper of a copartnership and signed by a stenographer of the firm in the firm name, purporting to give an opinion as to the financial condition of a corporation in which two of the partners were directors, is not binding upon the partnership nor upon the individual members thereof, except in so far as they authorized the stenographer to make the statement and advised him of their knowledge or belief.

There can be no recovery based upon the falsity of such statements when there is no proof that the stenographer had authority to make the statements or that the members of the firm had any knowledge of the letter.

While a plaintiff, suing members of a firm for deceit, whereby he was induced to refrain from selling stock of a corporation of which they were directors, having established the representations made by the defendants, may put the books of the corporation in evidence in order to show that the representations were false, they should be received for that purpose only and not to charge the defendants with knowledge thereof as directors, unless there be further evidence showing that they had knowledge of the entries.