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A treatise on the law of carriers (Volume 4) online

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R- -^- ^53. Cotton Mills V. Gulf, etc., R. Co., 84

63. Central Yellow Pine Ass'n v. V. S. Miss. 339, 37 So. 134, 66 L. R. A. 453.

& P. R. Co., 1 Inters. Commerce Com. 67. Validity dependent upon circum-

Rep. 703. stances of particular case. — Laurel Cotton

64. Crews v. Richmond & D. R. Co., Mills v. Gulf, etc., R. Co., 84 Miss. 339,
1 Inters. Commerce Com. R. 401. 37 So. 134, 66 L. R. A. 453.

3705 INTERSTATE COMMERCE ACT. §§ 4088-4090

Particular Instances. — It is unlawful for a corporation organized to control
the interstate transportation of a brewing company to demand and receive as a
consideration for the routing of the brewing company's products over certain
lines of railroad a concession equal to one-eighth or one-tenth of the published
freight rates.*'** But where a refrigerator company was incorporated to own and
operate a private car line, and to have charge of all the interstate transportation
of the products of a brewing company. A majority of the brewing company's
stock, however, was owned by persons who had no interest in the refrigerator
company, and the stock of the latter was bought and paid for by the holders wath
their own money and in their own interest ; none of it being held in trust for the
brewing company, though the majority of it was owned by persons who also
owned brewing company stock. The brewing company paid its freights in full
and received no rebates, nor was it a party to contracts between the refrigerator
company and the railroad companies by which the refrigerator company received
a rebate of from one-eighth to one-tenth of all freight moneys on all interstate
traffic it controlled. Such facts were insufficient to establish that the brewing
company had received rebates.**^

§ 4089. Effect of Granting Rebate.— The granting of a rebate contrary
to the provision of the interstate commerce law does not render the bill of lading
void, so that no action can be maintained against the carrier for loss of the goods
by negligence."'^

Contract Made before Act Took Effect. — The act applies to an agreement
for a rebate made and the goods transported before the act took effect, and not-
withstanding the actual refunding of the part of the rate was not made until after
the act took effect." ^ The payment of a rebate after the passage of the act, but
upon shipments of property transported prior to that enactment, is compre-
hended by its provisions that it shall be unlawful to offer, grant, or give, or to
solicit, accept, or receive any rebate in respect to property in interstate commerce
transportation, whereby any such property shall be transported at less than the
published rates."- A contract by which a railroad company, before the passage
of the interstate commerce act, discriminates by agreeing to allow a certain
shipper a rebate on freight charges, is not valid and enforceable at common law,
and is not such a contract as could be impaired by the interstate commerce act
prohibiting such discrimination." ^

Rebate of Part of Rate. — A rebate or concession from a part of a single
rate whereby property is transported thereunder at a less rate than the established
rate is a concession from the entire rate, and renders all transportation there-
under illegal."^

§ 4090. Criminal Liability. — See elsewhere.'^^

68. Particular instances. — United States 195, affirming Insurance Co. v. Delaware
V. Milwaukee, etc., Trans. Co.. 145 Fed. Mut. Safety Ins. Co., 91 Tenn. 537, 19
1007. S. W. 755.

69. United States v. Milwaukee, etc., 71. Contract made before act took ef-
Trans. Co., 145 Fed. 1007. feet.— New York, etc., R. Co. v. United

Lease of premises to shipper. — A con- States, 212 U. S. 500, 53 L. Ed. 624, 29

tract by which a railroad company leased S. Ct. 309.

premises to a shipper for less than their 72. Judgment. United States v. New

rental value, as a means of grantmg to York, etc., R. Co., 146 Fed. 298, affirmed

the lessee a rebate or concession from ;„ 212 U. S. 500, 53 L. Ed. 624, 29 S.

its published rates, held invalid, under q^ 399
Interstate Commerce Act § 3 and Fl- '^^ Fitzgerald v. Grand Trunk R. Co.,

)\l r'.L' ^ r/ 1 ?' ; P 63 Vt. 169r22 Atl. 76, 13 L. R. A. 70.

Ohio, § 505 et seq. Cleveland, etc., R. .

Co. V. Hirsch, 204 Fed. 849, 123 C. C. 74. Rebate of part of rate.— Armour

A. 145. Packing Co. v. United States, 82 C. C.

70. Effect of granting rebate.— Mer- A. 135, 153 Fed. 1, 14 L. R. A., N. S., 400.
chants', etc.. Storage Co. v. Insurance Co., 75. Criminal liability. — See post, "Re-
151 U. S. 368, 14 S. Ct. 367, 38 L. Ed. ])ates," § 4222.

§§ 4091-4092 CARRIERS. 3706

§ 4091. Payment of Charges. — A common carrier can under the common
law demand the prepayment of charges for freight of one and give credit to an-
other, and such right is not made unlawful by the Interstate Commerce ActJ*^
But a railroad company practices discrimination in respect to transportation, in
violation of the Interstate Commerce Act, by systematically extending credit for
freight charges to one interstate shipper, while exacting and collecting such
charges from other shippers under substantially similar circumstances and con-
ditions.''"'' Plaintiff, a corporation, was engaged in the general produce business
with offices in different places in two states. Defendant had stations at the towns
in those states and in adjoining states. It was defendant's custom for the termi-
nal carrier to advance charges of connecting lines upon freight consigned tO'
parties at those stations, and to deliver the freight to consignees, and to receive
freight and deliver it to consignees, and to hold the bills until the correctness of
the charges had been adjusted. From a bad motive defendant, after notice, re-
fused to advance charges to connecting lines and transport freight consigned to
plaintiff unless the charges were prepaid, while it gave credit to other consignees
similarly situated. The plaintiff is subjected to undue or unreasonable prejudice
or disadvantage within the Interstate Commerce Act.'^^

Payment in Advertising. — The acceptance of advertising by a carrier, in
lieu of money in payment of interstate transportation furnished to the publisher,
his employees and the immediate members of his and their families, violates the
provisions of the Interstate Commerce Act as amended prohibiting the furnishing
of interstate transportation for a less or different compensation than that speci-
fied in the carrier's published rates."^^

§ 4092. Demurrage Charges. — A demurrage or car service charge, made
by an interstate railroad company for the time during which cars loaded with
hay are left standing on its tracks at a suburban station in a city after the expira-
tion of the time given for unloading, is not discriminative, because at another
station which is the terminal of the road in the city, a hay shed is provided intO'
which hay is unloaded at the request of a consignee to the extent of its capacity,,
and where it is stored at a somewhat less rate, the charge being the same at the
two places where hay is left in the car.^o The provisions of the Interstate Com-
merce Act, requiring rates for the transportation and for the "receiving, deliver-
ing, storage or handling" of property by an interstate carrier to be reasonable,
and prohibiting discrimination, are sufficiently broad to cover demurrage
charges. ^^

" 76. Payment of charges. — Gamble-Rob- Co. v. United States, 210 Fed. 735; Sun-

inson Comm. Co. v. Chicago, etc., R. Co., day Creek Co. v. United States, 210 Fed.

168 Fed. 161. 747.

An interstate carrier does not subject Extension to one shipper of credit for

a consignee to an unreasonable disad- freight charges not given to others un-

vantage under Interstate Commerce Act der similar circumstances held unlawful

(Act Feb. 4, 1887, c. 104, 24 Stat. 380 [U. under Elkins Act as amended by Act June

S. Conip. St. 1901, p. 3155]) § 3, by ex- 29, 1906, though the other shippers, not

acting after due notice the prepayment knowing of the discrimination, had not

of charges while it does not require such demanded equal treatment. Hocking

charges to be paid in advance on freight Valley R. Co. v. United States, 210 Fed.

consigned to others similarly situated. 735.

Gamble-Robinson Comm. Co. v. Chicago, 73. Gamble-Robinson Comm. Co. v.

etc., R. Co., 168 Fed. 161. Chicago, etc., R. Co., 168 Fed. 161.

77 United States v. Hockmg Valley ^^ Payment in advertising.-Illinois

R. Co., 194 l<ed. 234 , . , ^ . Cent. R. Co. v. Holman (Miss.), 64

Givmg of credit for freight charges <5o 7 v />

pursuant to contract antedating the ship- ' i« ' tx l >»■• 1 •

ments to one shipper, while others un- ^80. Demurrage charges.—Michie v.

der similar circumstances were denied New York, etc., R. Co., 151 Fed. 694.

such privilege, held a concession or dis- 81. Act Feb. 4, 1887, c. 104, §§ 1, 3, 24

crimination in respect to transportation Stat. 379, 380 [U. S. Comp. St. 1901, pp.

within the Elkins Act as amended by 3154, 3155] ; Michie v. New York, etc.,.

Act June 29, 1906. Hocking Valley R. R. Co., 151 Fed. 694.

3707 INTERSTATE COMMERCE ACT. §§ 4093-4094

§ 4093. Purchase and Sale of Goods. — An interstate carrier, not em-
powered by its charter or by any legislation existing at the time of the adoption
of the act to regulate commerce to mine and market coal, violates the mandate
of that act respecting the maintenance of published rates, and its prohibitions
against undue preferences and discriminations, by stipulating to sell and transport
coal at an agreed price, insufficient to yield its published freight rates after de-
ducting the cost of purchase and delivery. ^-

§ 4094. Justified Discrimination. — An unlawful discrimination in rates
is not justified because the rate charged is the statutory local rate, and the trans-
portation is over a railroad wholly within the state nor by the fact that the rail-
road is a small and w^eak road, whose business is unimportant as compared with
other roads. ^^

To Safeguard Public. — It is settled law relative to questions of this kind that
discriminations or preferences in rates may be justified to safeguard the interest
of the public. It follows that the contrary proposition is true — that they may not
be justified when they injure the interest of the public. ^"^

To Overcome Natural Advantage of Particular Locality. — Under the
Interstate Commerce Act, forbidding carriers to give any unreasonable pref-
erence or advantage to any shipper or locality, a carrier cannot lawfully make
rates so as to overcome the natural advantage of one locality over another, or so
as to build up one place at the expense of another.^^

To Promote Carrier's Own Interest. — Conceding that a railroad company
may, to a reasonable extent, so adjust its rates as to promote its own interest by
favoring and building up a seaport on its own line at the expense of another on
a rival road, it can not, with that purpose, adopt rates unreasonable in themselves,,
nor which are unduly preferential to its own port and unduly prejudicial to the
other or to the public; and rates upon products shipped from points on its line
where there is no competition, which are so grossly discriminating as to be pro-
hibitory of shipments to the latter place, which affords the better market, adopted
for the purpose of compelling the shipment of such products in the opposite di-
rection to its own port, are unlawful, not only as unduly discriminating between

82. Purchase and sale of goods. — De- ued to be substantially the same. Held,
cree, 128 Fed. 59, modified in New York, that the charge of such increased rate
etc., R. Co. z'. Interstate Commerce was an unlawful discrimination, not jus-
Comm., 26 S. Ct. 272, 200 U. S. 361, 50 tified because the rate charged was the
L. Ed. 515. statutory local rate, and the transporta-

83. Justified discrimination. — The A. tion over the W. Railway was wholly
Railway connected at T. with the C. Rail- within the state, nor by the facts that the
way and the W. Railway. Both the A. A. Railway was a small and weak road,
and C. Railways were engaged in inter- whose business was unimportant as com-
state commerce, reaching by their own pared with that of the C. Railway, or that
lines and connections the same regions. there was no direct connection between
By the W. Railway, they both made con- the tracks of the A. and W. roads, the
nections with other important railways, tracks of the C. Railway being used for
and with routes of water transportation. switching, it not appearing that the C.
For a considerable time, the W. Railway Railway objected to such use of its
charged the same rate for transportation tracks; and, accordingly, that the W.
over its line of freight received from or Railway should be enjoined from exact-
destined to either of the other railways; ing more from the A. Railway than from
but in December, 1895, it withdrew these the C. Railway, for similar services. Au-
rates as to the A. Railway, and there- gusta, etc., R. Co. v. Wrightsville, etc., R.
after charged for transportation, over its Co., 74 Fed. 523.

line, of freight received from or destined 84. To safeguard public. — Interstate

to the A. Railway, the full local rate of Commerce Comm. v. Louisville, etc., R.

freight allowed by statute, which was con- Co., US Fed. 613.

sidcrably higher than tlic rate previously 85. To overcome natural advantage of

charged to both railways, and still particular locality. — State v. Adams Exp.

charged to the C. Railway. There had Co., 171 Ind. 138, 85 N. E. 337, 19 L.

been no change of conditions, and the R. A., N. S., 93, rehearing denied in 85-

service rendered to both railways contin- N. E. 966.

§§ 4094-4096



the two cities, but as making a discrimination injurious to the pubHc.^'^

By Length of Time. — The length of time a discriminating rate has been main-
tained can not justify it. It was because time had not corrected abuses of dis-
crimination that the interstate commerce act was passed. ^"^
By Competition. — See elsewhere. ^^

§ 4095. Effect of Discrimination.— Effect on Contract of Shipment.

— There is nothing in the interstate commerce law which vitiates bills of lading,
or which, by reason of an allowance, special rates, rebates, or drawbacks, if ac-
tually made, would invalidate the contract of affreightment or exempt the rail-
road company from liability on its bills of lading.'^» Such a construction of the
act would encourage rather than discourage such unlawful agreements for re-
bates. The carrier might prefer them to liability for the freight. Such a con-
tract as to rebate would be void, and could not be enforced ; but the shipper could
nevertheless recover for loss of his freight through the carrier's negligence and,
incidentally, of carrier's insurance.'"*

On Action for Damages for Delay. — If a contract for the shipment of stock
was void as discriminating in favor of the shipper by giving him a rate which was
too low in violation of Interstate Commerce Act, so that the carrier would be en-
titled to collect the correct rate, it would not prevent the shipper from recovering
damages for delay in shipment where he had no actual knowledge that the rate
was unlawful. ^^

§ 4096. Remedies. — When the act to regulate commerce was enacted there
was contrariety of opinion whether, when a rate charged by a carrier was in and
of itself reasonable, the person from whom such a charge was exacted had at
common law an action against the carrier because of damage asserted to have been
suffered by a discrimination against such person or a preference given by the car-
rier to another.^- That the act to regulate commerce was intended to afford an

86. To promote carrier's own interest.

— Interstate Commerce Comm. v. Louis-
ville, etc.. R. Co.. 118 Fed. 613.

87. By length of time. — East Tennes-
see, etc., R. Co. V. Interstate Commerce
Comm., 39 C. C. A. 413, 99 Fed. 52, re-
versed on another point in 181 U. S. 1,
45 L. Ed. 719, 21 S. Ct. 516.

88. By competition. — See ante, "Com-
petition," § 4078; "Reduced Rates," §

89. Effect of discrimination. — The prin-
ciples laid down in Interstate Commerce
Comm. V. Baltimore, etc., R. Co., 145 U.
S. 263, 36 L. Ed. 699, 12 S. Ct. 844, fall
far short of establishing that the alleged
allowance of rebate to Jones Brothers &
Company would render the railroad com-
pany's bills of lading invalid and defeat
the right of the marine insurance com-
panies, who had paid the losses, to sub-
rogation against the railroad company on
bills of lading issued to the owners or
consignees of the cotton, who are not
shown to have known of, or consented
to, the railroad company's agent giving
such rebates. Merchants', etc., Storage
Co. V. Insurance Co., 151 U. S. 368, 38
L. Ed. 195, 14 S. Ct. 367.

"The Interstate Commerce Act made
the agreement as to the special rates, re-
bates, or drawbacks void, but did not
otherwise invalidate the contract of af-

freightment." Kirby v. Chicago, etc., R.
Co., 242 111. 418, 90 N. E. 252.

90. Merchants', etc., Storage Co. v.
Insurance Co., 151 U. S. 368, 38 L. Ed.
195, 14 S. Ct. 367.

91. On action for damages for delay.
—Kirby v. Chicago, etc., R. Co., 242 111.
418, 90 N. E. 252.

"It seems clear to us that the shipper
entered into this contract in good faith
and without actual knowledge of its
claimed unlawful character, and even if
the contract were construed to be void as
to the rate fixed, and even if the com-
pany may be permitted to collect the
proper rate, still the rights of the ship-
per under the contract are not in other
respects different from what they would
have been if the contract had been free
from the illegality mentioned. This view
finds support in the case of Merchants',
etc., Storage Co. v. Insurance Co., 151
U. S. 368, 38 L. Ed. 195. 14 S. Ct. 367."
Kirby v. Chicago, etc., R. Co., 242 111.
418- 90 N. E. 252.

92. Remedies. — Texas, etc., R. Co. v.
Abilene Cotton Oil Co., 204 U. S. 426.
51 L. Ed. 553, 27 S. Ct. 350, 9 Am. &
Eng. Ann. Cas. 1075. citing Parsons v.
Chicago, etc., R. Co., 167 U. S. 447, 42
L. Ed. 231, 17 S. Ct. 887; Interstate Com-
merce Comm. V. Baltimore, etc., R. Co.,
145 U. S. 263, 36 L. Ed. 699, 12 S. Ct.


effective means for redressing the wrongs resulting from unjust discrimination
and undue preference is undoubted. Indeed, it is not open to controversy that to
provide for these subjects was among the principal purposes of the act.*^^ And
it is apparent that the means by which these great purposes were to be ac-
complished was the placing upon all carriers the positive duty to establish sched-
ules of reasonable rates which should have a uniform application to all and which
should not be departed from so long as the established schedule remained un-
altered in the manner provided by law.^'^ A shipper seeking reparation predi-
cated upon the unreasonableness of the established rate must, under the act to
regulate commerce, primarily invoke redress through the interstate commerce
commission, which body alone is vested with power originally to entertain pro-
ceedings for the alteration of an established schedule, because the rates fixed
therein are unreasonable.^^ An order of the interstate commerce commission re-
quiring to desist from giving flour milled in transit at interior points a lower rate
for export than was imposed upon grain brought from interior points by a milling
company to a seaport, and there ground into flour and other grain products and
exported, is within the powers of the commission and valid on a motion for a pre-
liminary injunction to restrain its enforcement.^'"'

Power of Commission as to Intrastate Rates. — The authority of the in-
terstate commerce commission to remove discriminations against interstate traffic
includes power to control intrastate rates by a carrier under state authority, neces-
sary to remove resulting unjust discrimination against interstate commerce, not-
withstanding the proviso in § 1 of the Act of Feb. 4, 1887, that its provisions shall
not apply to purely intrastate traffic.'''^

Necessity for Payment of Freight. — To entitle a shipper to maintain an ac-
tion to reco\er damages for being unjustly discriminated against in rates, it is
not necessary that he should have paid the freight charged under protest."'*^ A
shipper may maintain an action at law under the Interstate Commerce Act to re-
cover damages from an interstate railroad company because of the giving of a
preference or advantage to another shipper by permitting him to keep cars on its
terminal tracks without payment of the charges fixed by its schedules while deny-
ing the same right to plaintiff.'*^'

By Prescribing Different Rate. — One of the primary purposes of the in-
terstate commerce law is to remove discriminations, and under the broad powers
given the interstate commerce commission to execute and enforce the provisions
of this act and to make an order that the carrier shall cease and desist from such
violation to the extent to which the commission find the same to exist^ where it
has found that discrimination exists against a shipper or commodity, it may pre-
scribe a relative rate, as that the charge shall be the same as that for a similar
service to other shippers or on another similar commodity, instead of fixing maxi-
mum rate, which would enable the carrier to continue the discrimination by re-
ducing the rate to other shii)pers or on the other commodity. -

93. Interstate Commerce Comm. v. United States, 234 U. S. 342. 34 vS. Ct.
Cincinnati, etc., R. Co., 167 U. S. 479, 42 833.

L. Ed. 243, 17 S. Ct. &96. 98. Necessity for payment of freight.

94. Cincinnati, etc., R. Co. v. Inter- —Mitchell Coal etc., Co v. Fennsylva-
state Commerce Comm., 1G2 U. S. 184, "'^ R. Co., 181 Fed. 403; Pennsylvania R.
40 L. Ed. 935, 16 S. Ct. 700, 4 Am. & ^o. i;. International Coal Mm. Co., 97
Eng. R. Cas., N. S., 223; S. C, 167 U. C. C. A. 383, 173 Fed. 1. „ ^ „,
S. 479, 42 L. Ed. 243, 17 S. Ct. 896. , 99- Lyne v. Delaware, etc., R. Co., 170

Fed 847

. ^^xT^^^''on*,''-VT\S°o/-./'T'^^5! S^l' 1-' By 'prescribing different rate.-(Act

1°" 0>^5°-;f t.H- ^- fV \ ^'^■r^^' Feb. 4. 1S87. c. KM, § 12, 21 Stat. 383 [U.
27 S. Ct. 350, 9 Am. & Eng. Ann. Cas. ^ ^^^^^^^ y^ jg„,_ p _.j,,.,,_ ^^,^^, j. ^^^ ^^

^^^- amended by Hepl)urn Act June 29, 1906,

96. New York, etc., R. Co. v. Inter- c. 3591, § 4, 34 Stat. 589 [U. S. Comp.
state Commerce Comm., 16,s Fed. 131. gt. Supp. 1907, p. 900]).

97. Power of commission as to intra- 2. New York, etc., R. Co. v. Inter-
state rates. — Houston, etc., R. Co. v. state Commerce Comm., 168 Fed. 131.

§§ 4096-4097 carriers. 3710

Sufficiency of Petition. — A petition to recover under § 2 of the interstate
commerce act is sufficient if it states facts which show the circumstances and
conditions under which the defendant had charged plaintiff a given rate for trans-
portation of freight, and alleges, in the language of the act, that for like services,
under substantially similar circumstances and conditions, the defendant had
charged another a less given rate, without alleging facts which show that the serv-
ices were alike, or rendered under substantially similar circumstances and con-
ditions, or that plaintiff was charged more than the schedule rate.-^ The schedule
of rates required to be established, published, and filed with the commissioners
by a common carrier, by the interstate commerce act, is, prima facie, the criterion
in determining whether or not a given charge is unreasonable ; and a petition to
recover, under § 1 of such act, which fails to allege either that the defendant had
no published schedule of rates, or that it charged plaintiff in excess of rates
thereby fixed, is insufficient."^

Sufficiency of Order. — An order of the interstate commerce commission de-
signed to remove a discrimination in rates is not invalid or inoperative because
it'^does not go as far as it might, and correct other discriminations. -^ The pro-
vision of the interstate commerce law that, where the commission finds that a
rate or any practices aft'ecting rates are unjustly discriminating, it shall determine
and prescribe what will be the just and reasonable rate or rates; and what regula-
tion or practice in respect to such transportation is just, fair, and reasonable to
be thereafter followed,*^ does not require the commission, on finding that a cer-

Online LibraryThomas Johnson MichieA treatise on the law of carriers (Volume 4) → online text (page 114 of 214)