undue discrimination shall be brought about;15 and second, that the competition relied on shall not be artificial or merely conjectural, but material and substantial, thereby operating on the question of traffic and rate making.16 The right can be exercised only with due regard to the interest of the public, after giving full weight to the benefits to be conferred on the place from whence the traffic moved as well as the benefits to be derived from the locality to which it is to be delivered.17 [§ 787] (d) Necessity for Obtaining Permission from Interstate Commerce Commission. Prior to the amendment of the Interstate Commerce Act by the act of June 18, 1910, it was well settled that, when the circumstances and the conditions were such as to justify it, the carrier could charge more for the short than for the long haul, without first obtaining leave from the commission,18 and it could do so even though the commission had made an order forbidding the charge in the particular case.19 In so doing the carrier judged for itself on peril of the consequences;20 but, when its action was challenged in the courts, it could justify itself by showing a substantial dissimilarity of circumstances and conditions within the meaning of the act.2 By the amendment mentioned this rule is changed, and the power previously lodged in the carrier is withdrawn and reposed in the commission.22 Nevertheless the right of carriers to seek and obtain under authorized circumstances the sanction of the commission to charge a lower rate for a long than for a short haul because of competition, or for other adequate reasons, is expressly preserved;23 and as a correlative the authority of the commission to grant on request the right sought is made by the statute to depend on the facts established and the judgment of that body in the exercise of a sound legal discretion as to whether the request should be granted 15. Louisville, etc., R. Co. v. Behlmer, 175 U. S. 648, 20 SCt 209, 44 L. ed. 309 [rev 83 Fed. 898, 28 CCA 229]. 16. Interstate Commerce Commn. V. Louisville, etc., R. Co., 190 U. S. 273, 23 SCt 687, 47 L. ed. 1047; East Tennessee, etc., R. Co. v. Interstate Commerce Commn., 181 U. S. 1, 21 SCt 516, 45 L. ed. 719 [rev 99 Fed. 52, 39 CCA 413 (aff 85 Fed. 107)]; Louisville, etc., R. Co. v. Behlmer, 175 U. S. 648, 20 SCt 209, 44 L. ed. 309; Great Northern R. Co. V. Loonan Lumber Co., 35 S. D. 155, 125 NW 644. 17. Louisville, etc., R. Co. v. Behlmer, 175 U. S. 648, 674, 20 SCt 209, 44 L. ed. 309 [rev 83 Fed. 898, 28 CCA 229]. 18. East Tennessee, etc., R. Co. v. Interstate Commerce Commn., 181 U. S. 1, 21 SCt 516, 45 L. ed. 719 [rev 99 Fed. 52, 39 CCA 413 (aff 85 Fed. 107)]; Louisville, etc., R. Co. v. Behlmer, 175 U. S. 648, 20 SCt 209, 44 L. ed. 309 [aff 71 Fed. 835]; Interstate Commerce Commn. v. Alabama Midland R. Co., 168 U. S. 144, 18 SCt 45, 42 L. ed. 414; Interstate Commerce Commn. v. Cincinnati, etc., R. Co., 56 Fed. 925; Interstate Commerce Commn. v. Atchison, etc., R. Co., 50 Fed. 295 [app dism 149 U. S. 264, 13 SCt 837, 37 L. ed. 727]. [a] Reason for rule.-"The charging or receiving the greater compensation for the shorter than for the longer haul is seen to be forbidden only when both are under substantially similar circumstances and conditions; and, therefore, if in any case the carrier, without first obtaining an order of relief, shall depart from the general rule, its doing so will not alone convict it of illegality, since if the circumstances and conditions of the two hauls are dissimilar the statute is not violated. Beyond question the carrier must judge 21 compatibly with a due consideration of the private and public interests concerned, and in view of the preference and discrimination clauses of the act.24 [§ 788] (e) Lines Maintaining Joint Tariff. Where two railroad companies owning connecting lines of road unite in a joint through tariff, they form for the connected roads a new and independent line, and the through tariff on the joint line is not the standard by which the separate tariff of either company is to be measured in determining whether such separate tariff violates the provision which forbids greater compensation for a short than for a long haul.25 The portion of a through rate received by one of several railroad companies operating under the conditions mentioned for transporting goods as interstate commerce may be less than its local rate without a violation of this section.20 26 It is not to be understood, however, that, when two companies by their joint tariff make a new and independent line, such line may not become subject to the long and short haul clause.27 On the contrary, where a state railroad company whose road lies wholly within the limits of the state enters into the carriage of foreign freight by agreeing to receive the goods by virtue of foreign through bills of lading and to participate in through rates and charges, it thereby becomes a part of a continuous line, not made by a consolidation with the foreign companies, but by an arrangement for the continuous carriage or shipment from one state to another, and thus becomes amenable to the long and short haul clause of the Interstate Commerce Act.28 [ 789] (2) Under State Legislation. In a number of states provisions similar to those of the Interstate Commerce Act are found in the constitutions or statutes. The validity of such provisions has been upheld;29 and they have been held to apply to a charge of more for a short than a long haul, for itself what are the 'substantially similar circumstances and conditions' which preclude the special rate, rebate, or drawback, which is made unlawful by the second section, since no tribunal is empowered to judge for it until after the carrier has acted, and then only for the purpose of determining whether its action constitutes a violation of law." In re Louisville, etc., R. Co., 1 Int. Com. Commn. 31, 57, 59 [quot with appr Interstate Commerce Commn. v. Alabama Midland R. Co., 168 U. S. 144, 163, 18 SCt 45, 42 L. ed. 414]. 19. Interstate Commerce Commn. v. Alabama Midland R. Co., 168 U. S. 144, 18 SCt 45, 42 L. ed. 414; Brewer v. Central of Georgia R. Co., 84 Fed. 258. 20. Interstate Commerce Commn. v. Alabama Midland R. Co., 168 U. S. 144, 18 SCt 45, 42 L. ed. 414. 21. Detroit, etc., R. Co. v. Interstate Commerce Commn., 74 Fed. 803, 21 CCA 103. "The 22. U. S. v. Atchison, etc., R. Co., 234 U. S. 476, 485, 34 SCt 986, 58 L. ed. 1468 (where the court said: situation under the amendment is this: Power in the carrier primarily to meet competitive conditions in any point of view by charging a lesser rate for a longer than for a shorter haul has ceased to exist because to do so, in the absence of some authority, would not only be inimical to the provision of the fourth section but would be in conflict with the preference and discrimination clauses of the second and third sections"). 23. U. S. v. Atchison, etc., R. Co., 234 U. S. 476, 34 SCt 986, 58 L. ed. 1408. 24. U. S. v. Atchison, etc., R. Co., 234 U. S. 476, 34 SCt 986, 58 L. ed. 1408. 25. Chicago, etc., R. Co. V. Osborne, 52 Fed. 912, 3 CCA 347 [rev 48 Fed. 49]. 26. Parsons V. Chicago, etc., R. Co., 167 U. S. 447, 17 SCt 887, 42 L. ed. 231 [aff 63 Fed. 903]; Allen v. Oregon R., etc., Co., 98 Fed. 16; Chicago, etc., R. Co. v. Osborne, 52 Fed. 912, 3 CCA 347 [rev 48 Fed. 49]. And see infra § 1016. [a] As illustrative of this proposition, it was said by Mr. Justice Brewer: "On the defendant's road, the distance from Turner to Chicago is 30 miles; on the Lake Shore line, from Chicago to Cleveland it is two or three hundred miles. The defendant company may charge 15 cents for transporting grain the 30 miles from Turner to Chicago, providing that be in fact only a reasonable charge for the service, although the Lake Shore Company charges no more for transporting it from Chicago to Cleveland; and the fact that the rate on each line is 15 cents for the distance named will not prevent the two companies from making a joint tariff for grain shipped from Turner to Cleveland of 12 cents; less than the local tariff of either.' Chicago, etc., R. Co. v. Osborne, 52 Fed. 912, 914, 3 CCA 347. 27. Chicago, etc., R. Co. v. Osborne, 52 Fed. 912, 3 CCA 347. 28. Cincinnati, etc., R. Co. v. Interstate Commerce Commn., 162 U. S. 184, 16 SCt 700, 40 L. ed. 935 [aff 9 CCA 689 mem (rev 56 Fed. 925)]. See also Junod v. Chicago, etc., R. Co., 47 Fed. 290. 29. California Adjustment Co. v. Southern Pac. Co., 226 Fed. 349; Ex p. Koehler, 23 Fed. 529; Illinois Cent. R. Co. v. Com.. 63 SW 448, 23 KyL 544 (holding that Const. § 218, and St. § 820, prohibiting a common carrier charging more for a short haul than for a long haul, where the shorter distance is included in the longer distance, are not in conflict with the although the carrier does not actually carry any freight the greater distance.30 In construing these provisions, it is generally held that honest and substantial competition of rival carriers will justify a charge of a less amount for a long than for a short haul,1 at least where permission is obtained from the state commission.32 As regards the character of the competition, water competition as well as that of rival railway companies may be considered.33 These provisions apply where the transportation is over the same road, but not where the two hauls are over different lines operated by different corporations, although both have common offices;34 and where the prohibition is limited to cases where the short is included in the long haul, it does not apply where the long haul is on the main line and the short haul is partly on a branch line.3 But the prohibition is not limited to cases where the freight is being transported between the same points.30 35 36 [§ 790] (3) Under Legislation in Canada. Under the Canadian Railway Act, charging more for a short haul than for a long haul is justified by competition,37 as is the case under legislation of the various states in the United States,3 38 and under the Federal Interstate Commerce Act.3 39 [§ 791] e. Rebates-(1) At Common Law.40 As already shown, there are a limited number of decisions which take the view that a common carrier is not bound to treat all shippers equally in the matter of rates charged for transportation; that there is nothing in the common law to hinder a carrier from transporting freight for favored individuals at an unreasonable rate or even free of charge; and that all that the common law required was that the carrier should not charge other shippers more than was reasonable.41 But it was also shown that the weight of authority is decidedly against this doctrine, the view being taken that at common law the carrier is bound to carry at an equal rate for constitution of the United States or any act of congress). [a] For construction of Illinois statute relating to long and short hauls as applied to interstate transportation before the passage of the Interstate Commerce Act see Wabash, etc., R. Co. v. People, 105 Ill. 236. 30. Cohn v. St. Louis, etc., R. Co., 181 Mo. 30, 79 SW 961 (where it was said that, if defendant published and held out to the public that certain rates announced would be charged for the transportation of merchandise, the carrier would be considered as having charged such rates); Seawell v. Kansas City, etc., R. Co., 119 Mo. 222, 24 SW 1002. 31. Ex p. Koehler, 23 Fed. 529, 533 (construing Oregon statute. In this case it was said: "It is not the fault of the railway that the shipper who does business at a competing point has the advantage of him [a shipper at a noncompeting point]. It is a natural advantage which he must submit to"); Cohn v. St. Louis, etc., R. Co., 151 Mo. A. 661, 133 SW 59. 32. Hutchison v. Louisville, etc., R. Co.. 108 Ky. 615, 57 SW 251, 22 KyL 361. [a] In Kentucky under a constitutional provision making it unlawful for any common carrier to charge any greater compensation in the aggregate for transportation "of property of like kind, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line. in the same direction, the shorter being included within the longer distance," the fact that competition exists at the point to which the short haul is made does not justify the carrier in charging more for the all customers for substantially similar services and under substantially similar conditions.2 In jurisdictions where the first of these views prevails, in the absence of statute providing otherwise, the giving of a rebate to a shipper by a carrier is not unlawful, as long as the charges against other shippers are not unreasonable and in no way increased by the rebate given to the favored shipper.43 In jurisdictions where the majority view prevails, a rebate allowed by a carrier on the regular tariff of rates to one shipper is an unjust discrimination, at common law, against others shipping the same class of goods under the same conditions at the regular rate without rebate.44 But even where this view prevails, the giving of a rebate to a shipper is not necessarily illegal, as the services may not be substantially similar or rendered under substantially similar conditions. In other words, the giving of a rebate, to be illegal, must be an unfair and unjust discrimination in favor of the shipper against the general public.45 [§ 792] (2) Under Federal Legislation.46 The Interstate Commerce Act, with its amendments, in addition to dealing generally with the subject of discrimination, contains specific provisions in respect to giving rebates. Under the Interstate Commerce Act, a carrier is guilty of unjust discrimination which is unlawful, if, by any rebate or other device, it charges one person less for any service rendered in the transportation of property than it does another for a like service, and the Elkins Act makes it an offense for any person or corporation to give or receive any rebate, concession, or discrimination in respect to the transportation of property in interstate commerce, whereby any such property shall be transported at a rate less than that named in the published tariff, or whereby any other advantage is given or discrimination is practiced. It is further provided that, if the owner of property directly or tains this view, although the opinion is too meager to be sure). short haul than for the long haul without permission of the railroad commission. Hutchison v. Louisville, etc., R. Co., 108 Ky. 615, 618, 57 SW 251. 22 KyL 361. And see infra § 1015. 33. Cohn v. St. Louis, etc., R. Co., 151 Mo. A. 661, 133 SW 59 (holding that this is so, although a steamboat carrier does not deliver the freight to the consignee, but the freight must be hauled in wagons from the river several miles away). routes. [a] Rail and water Where the road of such corporation forms a part of a line of transportation consisting largely of water carriage between two principal points, the rate may be made so as to enable it to compete with another road that constitutes a part of another line of water and railway transportation between the same points. Ex p. Koehler, 25 Fed. 73. 34. Darlington Lumber Co. V. Missouri Pac. R. Co., 243 Mo. 224, 147 SW 1052. 35. Louisville, etc., R. Co. V. Walker, 110 Ky. 961, 63 SW 30, 23 KyL 453. 47 44. Cook v. Chicago, etc., R. Co.. 81 Iowa 551, 46 NW 1080, 25 AmSR 512. 9 LRA 764. 45. State v. Illinois Cent. R. Co.. 246 Ill. 188, 92 NE 814; Cleveland, etc., R. Co. v. Closser, 126 Ind. 348, 26 NE 159, 22 AmSR 593, 9 LRA 754; Root v. Long Island R. Co., 114 N. Y. 300, 21 NE 403, 11 AmSR 643, 4 LRA 331 (where a contract was made between A and a railroad company, where the former agreed to build, on the latter's lands, a dock, of prescribed character and size, each to use portions of it when constructed. In consideration, the company agreed to transport coal for A at a specified rebate from the usual rates. It also agreed to provide him with certain coal yards and offices for a term of years, after which the improvements were to be appraised, and the value paid to A. It was held that it could not be said, as matter of law, that the contract was void for unjust discrimination among shippers; whether in the particular case such discrimination was made being a question of fact). Kute46. Criminal prosecutions for givCoasting rebates see infra § 1017. 36. Texas, etc., R. Co. v. man, 79 Tex. 465, 14 SW 693. 37. British Columbia Pac. Cities v. Canadian Pac. R. Co., 7 Can RCas 125. 38. See supra § 789. 39. See supra $$ 784-788. 40. See also infra § 796. Criminal liability of carrier and shipper for giving or accepting rebates see infra §§ 1016, 1028. 41. See supra § 775. 42. See supra § 775. 43. Ex p. Benson, 18 S. C. 38. 44 AmR 564. See also Bibber-White Co. v. White River Valley Electric R. Co., 175 Fed. 470 (which perhaps sus 47. Act Febr. 4, 1887 (24 U. S. St. at L. 379 c 104 § 2); Act Febr. 19, 1903 (32 U. S. St. at L. 847 c 708). [a] Construction of tariff provision. The words "actual cost of the same" in the following tariff provision: "When cars furnished by carriers named below for grain or other loading require repairing in order to insure against leakage in transit, and material necessary for this repair is furnished by the shipper, the carrier will pay the actual cost of the same, but not to exceed 80 cents per car," indirectly renders any service connected with the transportation, or furnishes any instrumentality used therein, the charge and allowance therefor shall be no more than is just and reasonable, and the commission may, after hearing, determine what is a reasonable charge as the maximum to be paid by the carrier for the service so rendered or for the use of the instrumentality so furnished, and may fix the same by an appropriate order.48 The phrase "connected with," as used in this statute, is a synonym of a "part of it," and does not mean something in addition to transportation that touches or is attached to transportation.49 Carriers subject to this act are also required to file with the interstate commerce commission, and to print and keep open for public inspection, schedules showing all rates, fares, and charges, and stating all privileges or facilities granted or allowed and all rules or regulations affecting such rates, fares, and charges.50 or include the cost of the material and labor necessary to be paid, but do not include the cost of inspecting cleaning cars or the cost of attaching grain doors. Rock Milling, etc., Co. v. Atchison, etc., R. Co., (Kan.) 154 P 254. 48. Int. Com. Act § 15 (24 U. S. St. at L. 384 c 104 § 15), as amended by the act of June 18, 1910 (36 U. S. St. at L. 551 c 309 § 12). 49. New York Cent., etc.. R. Co. v. General Electric Co., 83 Misc. 529, 146 NYS 322 [rev on other grounds 167 App. Div. 726, 153 NYS 478]. the 50. U. S. Comp. St. (1913) § 8569. 51. See cases infra this note. [a] Rule applied.-(1) Under the provision requiring carriers to file and publish schedules of rates, fares, etc., a carrier cannot pay a shipper for the shipper's services in wharfage and handling of goods, unless the charges therefor are specified in a duly published schedule or tariff. Southern Cotton Oil Co. v. Central of Georgia R. Co., 228 Fed. 335, 142 CCA 627. (2) In an action against a carrier for the expense incurred by a shipper in furnishing grain doors to box cars, plaintiff cannot prevail by showing merely the total cost of all the doors he had furnished, including an unascertained number of items for which no charge could be made because they accrued in interestate shipments, after the interstate commerce commission had forbidden the reimbursement of such expenses unless provided for in the tariff, and before any tariff provision had been made in that regard. Stockton El, etc., Assoc. v. Missouri Pac. R. Co., (Kan.) 154 P 1126. (3) A contract giving a shipper a salary for shipping his own freight violates the statute. U. S. v. Lehigh Valley R. Co., 222 Fed. 685 (where it was said that this was as much within the prohibition of the statute as if a commission were paid him for doing the same thing). (4) A contract by which an interstate railroad company agreed to pay an elevator company a certain amount for grain originating on its line and passing through the elevator, not allowed to all elevators nor covered by a filed and published rate schedule is void. Elwood Grain Co. v. St. Joseph, etc., R. Co., 202 Fed. 845, 121 CC 153. (5) The statute is violated by a contract between a packing house firm and a stockyard company, by which the company agreed to pay a bonus to the packers if they would erect their new plant adjacent to the stockyard instead of in another city as proposed, and would operate the plant, buy only such stock as moved through such stockyards, and pay regular charges on live stock not so bought as if the same had moved to the stockyards. U. S. v. Union Stock Yard, etc., Co., 226 U. S. 286, 308, 33 SCt 83, 57 L. ed. 226 [mod 192 Fed. 330] (where the court said: "Any other company with which it has [10 C.J.-32] 51 These several provisions are violated by any form of transaction, arrangement, or device which produces the prohibited result. The word "rebate," as found in the Interstate Commerce Act, is used in an offensive sense, and refers only to such discount, deduction, or drawback as is the basis of a discrimination in favor of a particular person and against other persons in a like situation, and destroys that equality of treatment in rates to which the public is entitled and which it is the purpose of the law to enforce; an undiscriminatory rebate is not a criminal offense, nor is it in any way prohibited.52 An allowance made to all shippers alike, which is not a concession from the published schedules but in strict accordance therewith, and which is not discriminatory or preferential in its character, is not a rebate offensive either to the common law or to the statute.53 [ 793] (3) Under State Legislation. Statutes on service here rendered is normally one that falls upon the shipper, and not the carrier, and could not be exacted from the latter. It is clear that, as the act casts upon the carrier the duty to perform, upon request, what it defines as transportation, any services which could not be exacted from the carrier would not come within the meaning of 'transportation' thus defined, even though rendered by the shipper"). 52. American Sugar Refining Co. v. Delaware, etc., R. Co., 207 Fed. 733, 125 CCA 251. 53. American Sugar Refining Co. v. Delaware, etc., R. Co., 207 Fed. 733, 125 CCA 251. And see cases infra this note. made no contract will be compelled | draying to pay the full charge for the services rendered without any rebate or concession. Another company might have a contract for a larger or smaller bonus, and thereby, receive different treatment. Certainly as to the company which receives no such bonus there has been an undue advantage given to and an unlawful discrimination practiced in favor of" the party with whom the contract was made). (6) A contract between a railroad company and a shipper, whereby the shipper agreed to build a hoist at a station, and the company agreed to haul its ties at a less rate than that charged other shippers and to return ten per cent of the amount so received to apply on the cost of the hoist until entirely paid for, when it was to become the property of the railroad company, the hoist to be used only by the shipper until so paid for, is illegal and not enforceable. Chesapeake, etc., R. Co. v. Standard Lumber Co., 174 Fed. 107, 98 CCA 81. (7) A railroad company may not refuse to pay the owner of an elevator located on another railroad compensation for elevating grain similar to that paid to owners of elevators located its own road, on account of failure to return cars within an arbitrary and unreasonable time fixed by it. Union Pac. R. Co. v. Updike Grain Co., 222 U. S. 215, 220, 32 SCt 39. 56 L. ed. 171 [aff 178 Fed. 223, 101 CCA 583] (where the court said: "The carrier cannot pay one shipper for transportation service and enforce an arbitrary rule which deprives another of compensation for similar service. To receive the benefit of such work by one elevator without making compensation therefor would, in effect, be the involuntary payment by such elevator of a rebate to the railroad company, for it would enable the railroad to receive more net freight on its grain than was received from its competitor located on the railroad's tracks. This cannot be directly done, nor indirectly by means of regulation"). (8) Where a railroad company, in order to obtain shipments from one so located as to require no cartage when he ships by another road, makes him a rebate to cover the cost of cartage, but makes no such rebate to other shippers who require cartage by whichever road they may ship, it is guilty of unjust discrimination, under § 2 of the Interstate Commerce Act. Wight v. U. S., 167 U. S. 512, 17 SCt 822, 42 L. ed. 258. And see American Sugar Refining Co. v. Delaware, etc., R. Co., 200 Fed. 652, 656 (holding that cartage of sugar from refinery to cars did not constitute "transportation" nor "a service connected with" transportation within § 15, for which the carrier was justified in making an allowance, and that such allowance constituted an illegal rebate. "The [a] Rule applied.—(1) The provisions of the statute are not violated by a contract between a railway company and shipper whereby the latter was allowed five cents a bushel for hauling his wheat to the station, across a lake which was frozen over, it appearing that the allowance was reasonable and represented the amount apparently charged for transporting grain by barges. Knapp v. Minneapolis, etc., R. Co., (N. D.) 156 NW 1019. (2) A contract by a carrier to pay a shipper twenty cents a ton for the services of the shipper in "spotting cars" on its own track, so that they can be unloaded, is not illegal, in the absence of anything to show that the services performed by the shipper are not worth the agreed price. New York Cent., etc., R. Co. v. General Electric Co., 167 App. Div. 726, 153 NYS 478 [rev 83 Misc. 529, 146 NYS 322] (it being the duty of the carrier to place each car SO that it can be unloaded). (3) An agreement of the agent of a railroad company transporting goods for plaintiff, on discovery that the goods are in a defective condition, on delivery, to reimburse plaintiff for damages suffered by reason of deterioration of the goods, is not an agreement for a rebate. Missouri, etc., R. Co. v. Want. (Tex. Civ. A.) 179 SW 903. (4) Contracts made by railroad companies for the expenses of elevating grain at points of transshipment, at rates not exceeding those fixed by the commission as reasonable, are not rebates when paid to owners of elevators on their own grain, although such owners perform services other than those paid for at the same time, to their own advantage. Interstate Commerce Commn. v. Diffenbaugh, U. S. 42, 46, 32 SCt 22, 56 L. ed. 83 [mod and aff 176 Fed. 409] (where the court said: "The act of Congress in terms contemplates that if the carrier receives services from an owner of property transported, or uses instrumentalities furnished by the latter, he shall pay for them. That is taken for granted in § 15; the only restriction being that he shall pay no more than i. 222 exist in the several states under which the giving of a rebate to a shipper on the regular rate paid by other shippers for like services under similar circumstances is illegal.54 But as at common law, the giving of a rebate to a shipper is not necessarily illegal, since the services may not be substantially similar or rendered under substantially similar conditions.55 [$ 794] (4) Under Canadian Legislation. Under the Quebec Railway Act prohibiting the grant of undue advantage, privilege, or monoply to a person, or class of persons, in relation to tolls, an agreement by which a railway company undertakes to grant a rebate on shipments of carload lots of goods, made by the manufacturer who engaged to bear the cost of loading and unloading his freight, is not unlawful unless shown to be an artifice to secure unjust discrimination.56 zone reasonable, and the only permissive was sation for his loss is all he seeks, and is all that has been awarded. No discrimination was intended in granting him the rate which was charged, and, even if that had been the intent, we doubt whether the defendant is in position to avail itself of such discrimination, in an action against it for negligence"). Coal Co., 61 Oh. [§ 795] f. Franks. The giving of free transportation of personal packages to officers, employees, and members of their families, and to the officers of other transportation companies and members of their families, in exchange for passes issued by the latter to the officers of the express companies, is in violation of the Hepburn Law, which forbids all transportation of property at less than the published rates, and the giving or receiving of any concession, rebate, or discrimination in respect to the transmission of any property in interstate or foreign commerce. 57 [§ 796] g. Milling in Transit. The stopping of a commodity in transit for the purpose of subjecting it to treatment and then to fur.her transportation in its altered state is termed "milling in transit.' The object of the practice is to escape a local rate to and from the point of treatment, and to secure a St. 242 55 NE In 1158 carload lots. The rate charged being less than that charged to transient shippers, is not in violation of statutes prohibiting discrimination by carriers; it appearing that the lessee who constructs his own storehouse and also supplies, at his own expense, the supervision and labor necessary for the care, storage, and loading of his grain relieves the carrier of much expense that it would necessarily incur in the case of transient shippers. American Cent. Ins. Co. v. Chicago, etc., R. Co., 74 Mo. A. 89. (2) A carrier may employ shippers to perform valuable services and may pay therefor lawful compensation, and the fact that the compensation thus allowed reduces the shipper's freight expenses does not necessarily operate as an unjust discrimination in his favor. This was a case where a rebate was allowed to a shipper of cattle for services rendered in taking care of them. Rothschild v. Wabash R. Co., 15 Mo. A. 242 [aff 92 Mo. 91, 4 SW 418]. [b] In Alabama under a statute which prohibits railroad companies from making any departure from their published freight rates, except to aid in the development of industrial enterprises in the state, an shipped to a miller and used by him agreement to allow a rebate on coal in manufacturing corn into meal is valid. Louisville, etc., R. Co. v. Fulgham, 91 Ala. 555, 8 S 803. [a] Illustrations.—(1) A contract by a railway company with a shipper by which he is to ship his goods at the regular rate paid by all the shippers for like services under simular circumstances and for like distances, and then receive a special rebate, is in violation of a statute providing that a railroad company shall not charge or receive a higher rate from any person than it shall at the same time charge and receive from any other person for the transportation of a like quantity of freight of the same class, being transported from the same point in the same direction over equal distances of the same railroad; and that all such discriminating rates, whether made directly or by means of any rebate, shall be taken as prima facie evidence of unjust discrimination. dianapolis, etc., R. Co. v. Ervin, 118 Ill. 250, 8 NE 862, 59 AmR 369 [dist Toledo, etc., R. Co. v. Elliott, 76 I11. 67, decided under a previous statute differing in its provision and overruling in effect Erie, etc., Despatch v. Cecil, 112 Ill. 180]. (2) A railroad company whose line extends to a point of intersection with a canal of the state cannot make a valid contract to repay to a shipper a portion of the freight paid by him, it being the regular rate posted by the company and received from other shippers, such contract being prohibited by Rev. St. §§ 3366, 3367, to prevent discrimination in rates of carriage. Baltimore, etc., R. Co. v. Diamond Coal Co., 61 Oh. St. 242, 55 NE 616. (3) Under a statute prohibiting carriers from charging one person more than another for the service, contract by which a carrier agreed that, if shipper would build a tramroad to a certain road on its line, it would pay him a half cent per hundred pounds on all lumber or timber delivered to it by the tramroad, the amount to be deduced from the regular rate charged other people from such junction point is void, as giving an illegal rebate. Wilcox v. Durham, etc., R. Co., 154 N. C. 582, 70 SE 940. 55. Toledo, etc., R. Co. v. Elliott,dling in the more compact shape, as, 76 I11. 67 [dist Indianapolis, etc., R. Co. v. Ervin, 118 Ill. 250, 8 NE 862, 59 AmR 369]; American Cent. Ins. Co. v. Chicago, etc., R. Co., 74 Mo. A. 89. See also Christie v. Missouri Pac. R. Co., 94 Mo. 453, 7 SW 567 (holding that the constitutional and statutory provisions are merely declaratory of the common law, and that a carrier may contract to carry at less than the published tariff rate. unless such rate is made exclusive to him, or denied to other shippers). a a same 54. See statutory provisions; and Indianapolis, etc., R. Co. v. Ervin, [a] Illustrations.—(1) A stipu118 Ill. 250, 8 NE 862, 59 AmR 369; lation between a railroad company Indianapolis, etc., R. Co. v. Davis, and its elevator lessee, by which the 32 Ill. A. 67; Wilcox v. Durham, etc., former allows the latter a rebate R. Co., 154 N. C. 582, 70 SE 940; from its regular tariff in carrying the Baltimore, etc., R. Co. v. Diamond latter's grain from the elevator in 56. Quebec, etc., R. Co. v. Kennedy, 48 Can. S. C. 520 [app dism 21 Que. K. B. 85, 14 CanRCas 161]. 57. American Express Co. v. U. S., 212 U. S. 522, 29 SCt 315, 53 L. ed. 635 [aff 161 Fed. 606]. 58. Hilton Lumber Co. v. Atlantic distinguished [a] from "milling in transit."-"The defendant cannot justify under what is known as transit.' 'milling in Those are cases where freight is distance the long and shipped a carrier will, at his own cost, defray the expense of its change in form enroute because of the easier han for example, Cowan v. Bond, 39 Fed. 54, where a railroad company receiving cotton in Louisiana for shipment to mills in New England had it compressed en route at Vicksburg at its own expense. charging the shipper no more than if it had carried the uncompressed cotton all the way. the same privilege being open to all shippers. That has no analogy to this case, where the plaintiff is shipping logs to its mill in Wilmington and is charged nearly one-fifth more freight than others, unless it will agree to ship its lumber out of Wilmington over the defendant's road." Hilton Lumber Co. v. Atlantic Coast Line R. Co., 136 N. C. 479, 486, 48 SE 813, 1 AnnCas 52. This through rate to the ultimate destination." 63 A mill ing in transit rate is an entirety and must be accepted and carried out in its entirety or not et all. It is applicable only when all of its substantial terms and provisions are observed. A shipper who fails to conform to these terms cannot claim the privilege.62 In granting the privilege of milling in transit carriers may not discriminate between markets or individuals. And, if a contract for milling in transit privileges is in material part violative of the Interstate Commerce Act, the illegal part will vitiate the whole contract and prevent recovery of damages for its breach.64 The legality of the principle of milling in transit arrangements being generally recognized, the question whether a particular agreement will be upheld depends on the circum [797] h. Stoppage in Transit to Test Market. Before a special privilege to stop cattle in transit to test the market en route can be granted by a railroad company it is necessary that the tariffs and schedules pertaining thereto should be filed with the public utilities commission and be open to all shippers on equal terms.67 And where the tariffs filed with the public utilities commission specified the points at which live stock might be stopped in transit to test the market, any special contract enlarging on that privilege, which is not specified in the tariffs, is void.68 59. Lewis v. Southern R. Co., 217 | reshipped to Eastern points for a Fed. 321, 324, 133 CCA 237 (where the rate equal to its published through court said: "The essential object of rate from Delhi to such eastern the usual milling in transit privi- points, where such an arrangement lege is to enable shippers to employ is in compliance with a recognized a method of transit which, but for custom of which all other shippers the privilege, would subject the ma- including petitioner could or did avail terial to local rates instead of entit- themselves, and where it does not apling it to an ultimate through rate. pear that petitioner desired to ship The through rate is applied later any cotton from Delhi to the eastern upon the theory and the condition points or that he was compelled to that stoppage at the transit point pay a higher rate under similar cirwas for some legitimate treatment of cumstances. Cowan v. Bond, 39 Fed. the material, and that the continua- 54. (2) Where a carrier made no tion of the transit desired is of the distinction in rate between comsame material, its product or equiva- pressed and uncompressed cotton, lent, to a through rate destination. but included in its rate the cost of compression and accorded to both places the same privilege of rebilling and through rating, but declined to compress the uncompressed cotton at The object at least is to escape local rates and secure a through rate; indeed, apart from this object a milling in transit privilege would have no reason to exist"). 60. Southern R. Co. v. St. Louis Hay, etc., Co., 214 U. S. 297, 29 SCt 678, 53 L. ed. 1004; Priebe v. Southern R. Co., 189 Ala. 427, 66 S 573. 61. Priebe v. Southern R. Co., 189 Ala. 427, 430, 66 S 573. "Shippers are not entitled, as matter of right, to mill grain in transit and forward the milled product under the through rate in force on the grain from the point of origin to the place of ultimate destination; on the contrary, milling in transit is a special privilege allowable at designated points, and for which extra compensation is usually exacted by carriers under the control and direction, in the case of interstate shipments, of the Interstate Commerce Commission." Priebe v. Southern R. Co., supra. 62. Carson Lumber Co. V. St. Louis, etc., R. Co., 209 Fed. 191, 126 CCA 139; St. Louis, etc., R. Co. Walton-Chandler Lumber Co., 44 Okl. 452, 145 P 340. V. a discrimination and carried the cot the article of this class, the more economically may it be transported. Whether the place at which the compression of the cotton is accomplished is near or remote from the place of original shipment is a matter of no concern to any one save the carrier'). [b] Milling in transit privilege held illegal.-Complainant at Knoxville manufactured a saccharine feed consisting of fifty per cent oats and corn, twenty-six per cent molasses, ten per cent cottonseed meal, ten per cent corn shive, and four per cent salt. The corn and oats were shipped from points north of the Ohio river through Cincinnati and Louisville and the other ingredients, except the salt, from points in the south. The feed was shipped from Knoxville to points east and south, and by an agreement with defendant complainant was allowed a milling in transit privilege by which the feed was shipped out on the through rates applying to the corn and oats. Since these grains composed only half of the feed, complainant at first compelled to sell locally one half of the corn and oats shipped in, but this being inconvenient it was later arranged that complainant should be permitted to ship out double quantity of feed as compared with the corn and oats shipped in. Complainant paid the inbound local rates on the articles entering into the product and the outbound proportional rates on the feed and, under arbitrary calculations was afterward reimbursed in the form of refunds on the hypothesis that the ingredients transit were all articles like the corn and oats and so entitled, when milled, to the transit rate. It was held the that such agreement was illegal. Lewis v. Southern R. Co., 217 Fed. 321, 133 CCA 237. plant in the district charging ton to a distant place, and had it compressed at a plant in which it was interested, although the cost of compression was not greater at one plant than at the other, this did not render the carrier guilty of discrimination. State R. Commn. v. Central of Georgia R. Co., 159 Ala. 550, 553, 49 S 237 (where the court said: "The discrimination complained against is wholly predicated upon the practice of the carrier in selecting the plant at which compression of cotton shipped over its lines shall be, at its cost and expense, compressed. As indicated, the compression is a service of no concern to the producer. It simply enables the carrier to put two bales of compressed cotton in a space one uncompressed bale would occupy. The carrier pays the cost and expense of a process resulting in such benefit peculiarly and only to it. Naturally, those concerned with the Union Springs Compress and people of that community are interested in the patronage of that plant. Any deflection of business of that character therefrom affects the enterprise and the business activity of Union Springs. But, natural and certainly righteous as their stated interests are, that alone cannot avail to condemn the described practice of this carrier. Such a practice is in no sense a discrimination or a favoritism violative of the enactments in question. The practice is only an exercise by the carrier of its right to economize its shipping facilities at its own expense, just as it has the right to locate its shops wherever it sees fit, or to buy its equipment in any market, and this without violating any law of which we know, and without the breach of any duty to any interest or community. There is no obligation on the carrier to compress cotton. There is no right 2 and 3 of the Interstate Com- in any one to compel it to compress merce Act by receiving from a ship- cotton delivered to it for transporper cotton at Delhi, La., shipping it tation. Its practice in so doing is to Vicksburg, having it compressed merely the execution, at its own exthere at the company's expense and pense, of the idea that, the smaller 63. Southern R. Co. v. St. Louis Hay, etc., Co., 214 U. S. 297, 29 SCt 678, 53 L. ed. 1004; State v. Atlantic Coast Line R. Co., 59 Fla. 612, 52 S 4. 64. Lewis v. Southern R. Co., 217 Fed. 321, 133 CCA 237. 65. State v. Atlantic Coast Line R. Co., 60 Fla. 218, 53 S 601 (holding that the circumstances of each railroad and each market or locality must determine the rates of toll property to be allowed for the stopping of a commodity in transit for treatment, since while the carrier is entitled to receive some compensation beyond the mere cost of such service, the cost thereof may be greater or less in one city than another); Laurel Cotton Mills v. Gulf. etc.. R. Co., 84 Miss. 339, 37 S 134, 66 LRA 453. [a] Milling in transit privileges held legal.-(1) A railroad company is not guilty of an unlawful discrimination or preference in violation of was the 66. Laurel Cotton Mills v. Gulf, etc., R. Co., 84 Miss. 339, 366, 37 S 134, 66 LRA 453 (where the court further said: "Whether the raw material pays the local rate into the point of manufacture and afterwards the manufactured product pays a lower rate, calculated from point of original shipment, or whether the raw material pays the local rate, and this is credited in whole or in part upon the transportation of the manufactured products subsequently shipped, the result is the same in principle; the one being, in the language of the interstate commerce commission, 'an equivalent arrangement' of the other, and neither contravening the mandate of the law devised to protect shippers from unjust discrimination, whether the same arises from extortion or from unlawful rebates granted to a favored few"). 67, Mollohan v. Atchison, etc., R. Co.. (Kan.) 154 P 248. |