crimination under section 2, the carrier must charge or receive directly from one person a greater or less compensation than from another, or must accomplish the same thing indirectly by a special rate, rebate, or other device; but in either case it must be for a 'like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions.' To bring the present case within the words of this section, we must assume that the transportation of ten persons on a single ticket is substantially identical with the transportation of one, and in view of the universally accepted fact that a man may buy, contract, or manufacture on a large scale cheaper proportionally than upon a small scale, this is impossible. In this connection we quote with approval from the opinion of Judge Jackson in the court below: 'To come within the inhibition of said sections 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. . . . . In short the substance of all these decisions is that railway companies are only bound to give the same terms to all persons alike under the same conditions and circumstances, and that any fact which produces an inequality of conditions and a change of circumstances justifies an inequality of charge. . . . . But in so far as relates to the question of "undue preference," it may be presumed that Congress, in adopting the language of the English act, had in mind the construction given to these words by the English courts and intended to incorporate them into the statute: McDonald v. Hovey, 110 U. S. 619.'"

In the case of Fitchburg R. R. Co. v. Gage, 12 Gray, 393, the right to discriminate upon the basis of a carriage for a certain time and in certain quantities was declared. The claim of the shipper was for an equality of charge for shipments of ice with charges for shipments of bricks, because they were of the same class of freight, but the claim was not allowed. The court said, by way of illustration of the principle upon which there might be a lawful discrimination of rates upon the same class of goods: "If for special reasons in isolated cases 239 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 entitling all other persons

and parties to the same advantage and relief." And this court said in the case of Shipper v. Pennsylvania R. R. Co., 47 Pa. St. 338: "We are not prepared to say that a railroad company may not discriminate in its rate of tolls in favor of domestic trade over foreign; in favor of home products over those which are extraterritorial, especially when the railroad lies wholly within the state. Ownership may not be a reasonable ground for a distinction, but weight, bulk, value, place of production, and many other things may be."

These cases are cited as illustrations of various reasons and principles upon which lawful discriminations may be made, even in charges for the carriage of the same goods over the same roads and to be used for the same purposes. But in the present case where not only a particular quantity must be furnished to the railroad every day, but the goods at the point of delivery are to be used for totally different purposes which do not conflict or compete with each other, the reason for a discrimination has an infinitely greater force.

In Hutchinson on Carriers, page 353, after a protracted review of all the cases, and they are very numerous, the writer sums up the result thus: "Mere inequality in charges does not, therefore, of itself amount to an unjust discrimination. It only becomes such when a discrimination is made in the rates charged for transportation of goods of the same class, of different shippers, under like circumstances and conditions. So a mere reduction from the established rate is not necessarily an unjust discrimination. But it becomes such when it is either intended, or has a natural tendency, to injure another shipper in his business, and destroy his trade by giving to the favored shipper a practical monopoly of the business."

We come now to consider the case of Borda v. Philadelphia etc. R. R. Co., 141 Pa. St. 484. It was an action of case brought against the Philadelphia and Reading Railroad Company by the plaintiffs, who were shippers of coal, to recover damages for alleged illegal discriminations in the freight charged to the plaintiffs on shipments of coal over the defendant's road, as against lower rates charged to other 240 shippers over the same road. The case was by agreement of the parties referred to Mr. Peter McCall as referee, who made a most exhaustive and elaborate report, denying the claim of the plaintiffs, and his report was affirmed by this court. As the shipments had been made prior to the adoption of our

constitution of 1874 a preliminary question arose, whether it was the duty of the defendant to carry without discrimination. The referee held that such was the duty of the defendant, saying, "I regard it, then, as settled law in this state, that a railroad company, a common carrier, owes a duty of equality to every citizen, and I adopt the position taken by Mr. Bullitt in argument, that railroad companies have no right to make any undue discrimination or preference in their charges; and a charge made to one shipper higher than another, for the same service, under like circumstances, constitutes undue preference and discrimination, and by consequence renders the charge unreasonable. Such is the general rule, and it is vastly important to the general public that there be no undue relaxation of this rule; for, exercising, as they practically do, a monopoly of transportation on their roads, railway managers have in their hands a tremendous power, by discrimination, to enrich one man and ruin another. The equality, however, which is thus prescribed, is not a strict and literal equality under all circumstances, however varying and different. It is rather an equality in the sense of freedom from unreasonable discrimination. It is only unjust, undue, or unreasonable discrimination against which the law has set its canon. Arbitrary discrimination is illegal; so discrimination made with a view of giving advantage to one person. But the truism that circumstances alter cases applies here, and, under a different state of circumstances, a discrimination may be reasonable and lawful, which, were the circumstances the same, would be undue and unreasonable. In order to render lawful an inequality of charge, the goods must be carried under different circumstances, and the question whether the difference is material or essential arises in each particular case."

The writer regards the foregoing as the most precise and the most felicitous expression of the law upon the general subject under consideration that he has met with, and therefore quotes it entire.

The claim of the plaintiffs was to recover damages to the 341 amount of upwards of sixty thousand dollars for unjust discrimination in favor of Audenried & Co., rival coal shippers to the plaintiffs, by the payment to Audenried & Co. of rebates on coal shipped from Port Richmond to points beyond New Brunswick at the rate of one dollar and sixty-five cents for steamer coal, and other rates for other grades. It

was proved that these rebates were paid under agreements between Audenried & Co. and the defendant, made at the beginning of the season, and to continue throughout the season, and the referee was of opinion, and so found, that these contracts for continuous shipments during the whole season at fixed rates constituted such a difference in the conditions and circumstances of the shipments for Audenried & Co. and the plaintiffs respectively, as to justify the discrimi nation and prevent it from being illegal. In expressing his conclusions the referee says: "The defendant's case denies that the discrimination was willful, and made with any such design as imputed by the plaintiffs. It rests upon the ground that the payment of the drawbacks to Audenried & Co., under an honest and bona fide belief that they were entitled to them, under an arrangement by which, in consideration of their having made contracts early in the spring for delivery of coal at fixed prices throughout the season, they were allowed the drawbacks in question. . . . . On the whole, I am of opinion, upon the best consideration I have been able to give the subject, that the defendants did not pay to Audenried & Co. the drawbacks complained of in the first and additional count of the declaration, willfully and with intent to enable them to increase their business at the expense of the plaintiffs, but that it paid the same in good faith under the belief that Audenried & Co. had made contracts in the spring at a fixed price for the delivery of the coal. . . . . I am of opinion therefore that the defendant could legally have allowed the drawbacks to Audenried & Co., which it did allow, if that firm had had contracts made in the early part of the season for delivery of coal in the eastern market at fixed prices. In that case, although the service rendered, to wit, the transportation, would have been the same as that rendered to the plaintiffs, yet the circumstances were different, and the difference of circumstances would have justified the discrimination."

While this court did not review the testimony taken before 242 the referee, because it was not before us, we affirmed the judgment in favor of the defendant, upon the report, conceding the facts to be as found by the referee.

It will be perceived therefore that in that case the circumstance, that the coal was shipped for Audenried & Co. under contracts made at the beginning of the season at fixed prices, and to continue throughout the season, was held a sufficient

reply to a charge of unjust discrimination, although the commodity shipped was the same, to wit, anthracite coal, and the shipments were between the same points, to wit, from Port Richmond to points east of New Brunswick, and the plaintiffs were engaged in the same business as Audenried & Co.

Whereas, here, the plaintiffs were not engaged in the same business as the Bellefonte nail company, there could not be any competition between them in the products sold, and the rate at which coal was carried for the nail company was a matter of absolute indifference to the plaintiffs. We repeat again that we do not regard the sales of coal by the nail company to its own employees as of any moment in the case: 1. Because there is no proof that they were made with the knowledge of the defendant, but there is positive and uncontradicted proof that they were made without such knowledge; 2. Because the defendant is not responsible for such sales by the nail company; 3. Because the coal carried by the defendant for the nail company was not carried for purposes of sale at retail, but for the purpose of manufacturing nails and muck bar; and 4. Because there is no proof that the plaintiffs sustained any damage by reason of the sales of the nail company to their employees.

But it must be understood, and we so decide, that a manufacturing company has no right to engage in the business of selling coal, even to its own employees, and if it does so, and the transporting company is notified of such selling, it must thereupon cease to carry coal to the manufacturing company at any less rate than it charges to the coal-dealers, or incur the penalties of unjust discrimination.

The ruling of the court below would require that coal carried to blast furnaces, rolling-mills, rail-mills, foundries and all other manufacturing enterprises should be carried for the same price as the coal carried to any retail dealer in the same locality, though the quantity consumed by the former might 243 extend to many thousand of tons each year, while the quantity carried for the latter might be a few hundred tons only, and although the manufacturing companies gave back to the carrier many thousands of tons of freight each year, while the retail dealer gave back none, and although the business of the manufacturer in no wise competes with the business of the dealer, we think the differences in these respects between these two kinds of business are such as to justify a discrimination in the rates of freight charged to each, and