Opinion
32153.
DECIDED NOVEMBER 11, 1948. REHEARING DENIED DECEMBER 10, 1948.
Complaint; from Fulton Superior Court — Judge Almand. June 1, 1948. (Application to Supreme Court for certiorari.)
Madison Richardson, for plaintiff.
Moise, Post Gardner, for defendant.
1. Where an industrial consumer of gas enters into a contract with a gas company, in which it is stipulated that "the customer agrees to pay for all gas delivered . . at the company's industrial rate now or hereafter on file with the Georgia Public Service Commission, and now known as rate No. Four (4) of the company's rate schedule on file with said Commission, provided that no rate charge hereunder shall exceed the rate prescribed or approved therefor by the Commission," the gas company is not liable for a breach of the contract because it contracts with other industrial users for lower rates and files such contracts with the Georgia Public Service Commission, when there was no other rate specifically and expressly prescribed by the Commission for the complaining consumer, and it has paid no higher rate than that specifically prescribed for it.
2. A gas company under the jurisdiction of the Georgia Public Service Commission is not liable to an industrial consumer for the difference between the rates charged to it and those charged to other industrial users of gas, when the latter rates are provided for in contracts filed with the Commission which it permits to go into effect.
3. The measure of damages for unjust discrimination by a public utility is not the difference in rates, but the damages resulting to the consumer by reason of its being charged a higher rate, which damages were neither alleged nor proved in this case.
DECIDED NOVEMBER 11, 1948. REHEARING DENIED DECEMBER 10, 1948.
Columbia Baking Company sued Atlanta Gas Light Company to recover the alleged excess in gas rates charged to the plaintiff, the amount so claimed to be due being the difference between the rates charged to and paid by the plaintiff and the rates charged to and paid by other industrial consumers of gas in like circumstances with him. The petition alleged in substance the following: In October, 1930, the Georgia Public Service Commission prescribed rates for industrial consumers of gas, what is known as industrial rate No. 4, which was available to any industrial consumer. On January 30, 1931, the defendant entered into a contract with the plaintiff, by which the defendant undertook to furnish the plaintiff gas for industrial use. This contract provided: "In consideration of such service, the customer agrees to pay for all gas delivered by the company at the company's industrial rate now or hereafter on file with the Georgia Public Service Commission and now known as rate No. Four (4) of the company's rate schedule on file with said Commission, provided that no rate charge, hereunder shall exceed the rate prescribed or approved therefor by the Commission. . . The customer further agrees to accept and be bound by all rules and regulations in connection with the service hereby covered, which are now or may hereafter be filed with, issued or promulgated by the Georgia Public Service Commission and/or other governmental bodies having jurisdiction thereof." Since January 1, 1936, plaintiff paid the rates prescribed by said rate No. 4. Beginning in 1935 defendant entered into certain special arrangements with various industrial users, including laundries, dry cleaning establishments, dye works, linen services, rubber companies and others, by which it sold gas to them for industrial use at rates less than those prescribed by rate No. 4. If there was any difference in situations between plaintiff and the various industrial users mentioned which might cause a difference in rate treatment, the situation of plaintiff was more favorable rate-wise than that of such other industrial users in that plaintiff's operations were for the most part conducted at night, at which time the peak load upon defendant's facilities is less than in the daytime. Since before 1936 the following rules of the Georgia Public Service Commission were in effect. Rule 2. "All unjust discrimination forbidden. The several companies, in the conduct of their intra-state business, shall afford to all persons equal facilities in the conduct of such business, without unjust discrimination in favor of, or against, any; and wherever special facilities are afforded to one patron, whether upon a special rate authorized by this Commission or otherwise, such company shall be bound to afford to any other patron, or patrons, under substantially similar circumstances, like facilities upon like rates. All rates bona fide. No rebates. The rate charged for any service, by any company, shall be bona fide and public; and the giving of any rebates, bonus or `draw-back' is hereby expressly forbidden." Rule 3 in part. "Rates of Commission are maximum rates. All of the rates prescribed by the Commission are maximum rates, which shall not be exceeded by any company. Rates may be reduced below maximum provided no discrimination is made. Any company may charge less than the prescribed maximum rate, provided that, if a less rate be charged one person, such company shall, for a like service, charge the same lessened rate to all persons." Rule 5 "Special rates must be approved by the Commission. All special rates, made by any company for any service to be rendered shall first be submitted to and approved by the Commission before being put into effect." Independent of the rules of the Georgia Public Service Commission, defendant was a public utility holding itself out as willing to serve all persons or corporations desiring to purchase gas for industrial use, and as such was under a common-law duty to offer to all persons desiring to purchase gas from it the same rates for substantially the same service, and it was bound to abstain from discrimination against any customer by charging it higher rates than it charged other customers under substantially the same circumstances. The existence of the special arrangements above mentioned came to the knowledge of the Commission as a result of which the Commission passed an order discontinuing the special rates in a proceeding to which plaintiff was not a party. Plaintiff did not at any time prior to April, 1945, have any knowledge that defendant was selling gas for industrial use to other purchases, who were situated substantially the same as plaintiff, at rates less than the rates charged for gas used by plaintiff, and plaintiff from January 1, 1936 to April, 1945, believed it was buying gas on the same basis as other similar consumers. During said time plaintiff could not by reasonable diligence have discovered that defendant was selling gas for industrial use at lower rates to other customers similarly situated. Defendant was under a duty, as a public utility, both at common law and under the rules of the Georgia Public Service Commission, to sell gas to plaintiff for industrial use at as low rates as it sold it to other users similarly situated. During said time defendant did not disclose to, and in fact concealed from, plaintiff, the fact that it was selling gas at lower rates to other similar industrial users. It was defendant's duty in morals and law to notify plaintiff of such lower rates. The reason defendant did not so inform plaintiff was because its purpose was to obtain large sums of money from plaintiff by charging it higher rates. Plaintiff placed its confidence in defendant and relied upon it for such information. In failing to make the disclosure defendant wilfully breached its moral and legal duty owed to plaintiff and such failure was a fraud by defendant which deterred plaintiff from sooner bringing this action. Plaintiff amended the petition and set forth its claims in three counts: (1) for breach of an express contract, (2) liability by reason of a rule of the Commission, (3) for breach of the common-law duty to charge plaintiff the same rates as those charged to those similarly situated. The defendant answered and denied the material allegations of the petition as amended. By agreement the case was submitted to the court for trial and "final disposition" without the intervention of a jury upon agreed facts and oral evidence introduced on the trial, with the right of each party to appeal from the judgment of the court. The court rendered a judgment in favor of the defendant and the plaintiff excepted. While evidence was introduced, the court's findings and judgment show that the judgment was on the pleadings and not on the pleadings and evidence. No demurrers are brought up in the record, but the statements of the trial judge in his judgment show that the case was presented to him under both pleadings and evidence. The court stated in his judgment: "The defendant's contentions are (1) that the plaintiff is not entitled to recover under any count of the petition, (2) that the plaintiff and the laundry and rubber processors were not competitors, and, even if there was unjust discrimination, there is no right to recover under either count of the petition, (3) that the evidence does not establish unjust discrimination, (4) even if the evidence did establish unjust discrimination, payments made by the plaintiff were voluntary and cannot be recovered, and (5) if there was a right to recover, the plaintiff is barred by the statute of limitations to recover any sum paid by it more than four years prior to April, 1945." There is no exception to the judgment of the court on the ground that under the agreement to authorize the court to try the case without a jury the court was not authorized to pass on the sufficiency of the petition or that the petition, in the absence of adjudication on demurrer to the contrary, set forth a cause of action and that therefore the court was bound to determine only whether the allegations were proved. The only exception to the judgment is that the court erred in his legal rulings on the sufficiency of the various counts to set forth a cause of action in contract. This court will therefore determine whether the judgment of the trial court was correct, whether under the law as applied to the pleadings alone or to the pleadings and evidence combined.
1. The trial judge did not err in finding for the defendant on count one. The contract provided that "no rate charged hereunder shall exceed the rate prescribed or approved therefor by the Commission." As stated by the trial judge, the plaintiff does not contend that it paid more than the rate specifically established or approved for the plaintiff or its class of consumers. This ruling is also correct for the reason stated in the following division of this opinion.
2. Count two seeks recovery on the ground that rule three of the Commission had the effect of fixing the lower rate for all industrial gas users by reason of the lower charge to laundries and rubber processors. Rule three of the Georgia Public Service Commission is, in part, as follows: "Any company may charge less than the prescribed maximum rate, provided that, if a less rate be charged one person, such company shall, for a like service, charge the same lessened rate to all persons." The contention of the plaintiff here is that when the utility charged to one customer in the industrial class a lower rate than that charged to others similarly situated, such action by the utility had the effect of fixing the rate for all industrial customers at the lower-rate level. The lower court ruled that rule three did not have such effect, but was merely an order or command of the Commission which could subject the utility to a penalty for a violation of the rule or to mandamus. The evidence in this case supports this finding at least insofar as the Commission's interpretation of its own rule supports it. The Commission investigated the special laundry and rubber processing rates and eliminated them from the rate schedules rather than order them into effect for all industrial users. But even if the lower rate could have the effect contended for by the plaintiff, a lower rate made with the consent and approval of the Commission would not have such effect for the reason that when such a lower rate is filed with the Commission, and the Commission takes no action repudiating the rate, such action by the Commission has the effect of making a new class of industrial customers, and whether right or wrong, just or unjust, the lower rate is legal and authoritative, and the above rule becomes inapplicable, since another and distinct class of customers is created by the implied approval of the Commission of the lower rate, the only justification for which would be that the customer to whom it is given is in a different industrial class of users of gas from the industrial users using the rate No. 4. So, if the rule ever could have the meaning contended for by the plaintiff, it would only be where the lower rate is given by the utility without the knowledge or consent of the Commission. In this case the laundry rates were filed with the Commission, which it received subject to objection and complaint. The rubber processing contracts were filed with the Commission, and for a number of years were left in operation without molestation. The Commission is charged with the duty of fixing rates and preventing unjust discrimination between the various classes of those served by public-utility companies. Where utility patrons are classified by the Commission and rates fixed accordingly, either upon notice and hearing, or by the express or tacit approval of a classification and rate voluntarily filed by a utility company, the result is either actually or in effect a judgment and finding of the Commission. If the Commission erroneously makes a classification or inadvisedly acquiesces in one voluntarily made, there is no liability on the part of a utility company to one who contends that he or it was erroneously omitted from the classification and given a higher rate. His remedy is before the Commission to correct whatever mistake has been made. In this case, the classifications and rates were made with due notice to the Commission and without its disapproval. Therefore, there is no liability on the part of the utility company to a customer for the difference between the rate charged it and that charged another in the same general but not specific class defined by the Commission in its tacit acquiescence in the classification and rate. The rule refers to lower rates given without authority, and even then creates no liability, in and of itself, against the utility company in favor of one discriminated against. There was no error in finding for the defendant on the second count.
3. Assuming for the sake of argument that a utility company could be liable for breach of duty not to unjustly discriminate in a case where a lesser charge to one of a class was authorized or acquiesced in by the rate-making body, the great weight of authority is to the effect that the measure of damage is not the difference in rates, but the actual damage suffered in competitive business. See Parsons v. Chicago Northwestern Ry. Co., 167 U.S. 447 ( 17 Sup. Ct. 887, 42 L. ed. 231), Pennsylvania Railroad Company v. International Coal Co., 230 U.S. 184 ( 33 Sup. Ct. 893, 57 L. ed. 1446, Ann. Cas. 1915A, 315). Interstate Commerce Commission v. United States, 289 U.S. 385 ( 53 Sup. Ct. 607, 77 L. ed. 1273), and cases cited. Also see Boerth v. Detroit City Gas Company, 152 Mich. 654 ( 116 N.W. 628, 18 L.R.A. (N.S.) 1197), Homestead Company v. Des Moines Electric Company, 248 Fed. 439 (12 A.L.R. 390), Cock v. Marshall Gas Company (Tex.Civ.App.), 226 S.W. 464, Callender v. Northern States Power Company, 192 Minn. 591 ( 257 N.W. 512), Charles H. Lilly Company v. Northern Pacific Railway Company, 64 Wn. 589 ( 117 P. 401), Kousal v. Texas Power Light Company, 142 Texas 451[ 142 Tex. 451] (179 S.W.2d 283), New York Telephone Company v. Seigel-Cooper Company, 202 N.Y. 502 ( 96 N.E. 109, 36 L.R.A. (N.S.) 560), and United States Gas Corp. v. Shepherd Laundries Company, 144 Texas 164[ 144 Tex. 164] (189 S.W.2d 485). Most if not all of the cases cited by the plaintiff in error to sustain the contention that there is a common-law liability for the difference in rates to one of a class charged a higher rate than others similarly situated are distinguishable in that they are mandamus or other types of cases, in that they have been modified or overruled, or in that they were based on a specific statute. There is no Georgia statute giving a right of action for difference in rates. Code § 93-415 only gives a right of action for loss, damage, or injury. Section 8 of the Interstate Commerce Act, interpreted by the Supreme Court, allows recovery for damages sustained and not for difference in rates. The action here is not for damages by reason of unjust discrimination suffered in competitive business, but only for the difference in rates. The court did not err in finding for the defendant on the third count.
The court did not err in finding for the defendant on the pleading and evidence.
Judgment affirmed. Sutton, C.J., and Parker, J., concur.