3

Pacific Railway Company, the complainant demanded a refund of overcharges by reason of discrimination against him by giving a lower rate to the Marshall Coal Mining Company. The defendant railroad as part of its defense brought out that it was formerly liable to the Marshall Company to a suit for damages for an alleged trespass and to settle this suit it entered into this contract for giving this company these lower rates. But Judge Hallet said that to allow this would endanger the law forbidding discrimination. "This law cannot be controlled or defeated by any agreement between the railroad company and the favored shipper. It is true that when the consideration paid for reduced rates by the favored shipper is obviously equal to the discount allowed him, the law does not apply. Whenever that fact appears, since it matters not in what form the shipper pays the usual rates, the alleged discrimination disappears, and the contract is no longer obnoxious to the law. If, to illustrate, the damages due from the Denver & Western Company had been liquidated, and the agreement was to carry a certain quantity of coal for the amount so fixed, the question would be different. As it stands, the agreement is to give to the Marshall Company a reduced rate for certain considerations which defendant says are sufficient to make up the discount from the schedule rate; and as to that matter, the fact cannot be ascertained from the contract or otherwise. So understood it is clear that the contract affords no protection to defendant for the discrimination in rates. to which plaintiffs and other shippers of coal over defendant's road are subjected. In this case no difficulty arises as to the meaning of the words unjust or undue discrimination' in the law. Plaintiffs and the Marshall Company are dealers in coal in the same market, depending largely on the same rates of transportation for the profits of their business. The direct effect of a reduced rate to the Marshall Company is to reduce the profits

337 Fed. 182 (1889), affirmed in 149 U. S. 680, 37 L. Ed. 986, 13 Sup. Ct. 970 (1893).

on plaintiff's coal to the extent of such reduction. The demurrer to the second defense will be sustained." 4

§ 790. Concessions to those who deal with the carrier.

The dangers inherent in any permission to the common carrier to make different rates to different classes of customers requiring the same service is most apparent in a case like Louisville, Evansville & St. Louis Consolidated Railroad Company v. Wilson. In that case it appeared that the railroad made high rates on cross-ties to all except one Dickason, with whom it entered into a contract giving him low rates in return for his agreement to sell it such ties as it should wish at a specified price. When this scheme was brought before the court for examination in a suit by a shipper who had suffered by this discrimination, it appeared that while he was paying $24 per car from one point to another, this Dickason was paying only $14 per car for the same transportation. The highest court sustained the instructions given in behalf of the plaintiff. A part of its opinion follows:

"Instruction No. 3, asked by the appellant, and refused by the court, was vicious, in that it was calculated to create the impression upon the minds of the jury that the contract between the appellant and Dickason did not amount to an unjust discrimination, if it was based upon an adequate consideration. If the

4 Free transportation issued in the form of an annual pass to a person not in the regular and stated service of the carrier nor receiving any wages or salary under a contract of employment, but requested by him as compensation for throwing in its way what business he conveniently could, held to be illegal in Slater v. Northern P. R. R., 2 Int. Com. Rep. 243, 2 I. C. C. Rep. 359 (1888).

A release of liability by commercial travelers to the railroad company does not constitute a good and sufficient consideration for discrimination in fare; nor does the fact that they may influence business in favor of the road, etc. Lamson v. Grand Trunk Ry., 1 Int. Com. Rep. 369, 1 I. C. C. Rep. 147 (1887).

5 132 Ind. 517, 32 N. E. 311 (1892).

contract was of such a character as to destroy the business of the appellees by reason of the discrimination in favor of Dickason, and thus enable Dickason to acquire a monopoly of the business of purchasing and shipping cross-ties on appellant's road, the discrimination was unjust, without regard to the consideration upon which it was based."

791. Rates adopted to foster the interests of the carrier. Despite any policy which the carrier may have in mind it must be evident that all patrons of the road have a right to adequate service at fair rates. Every producer has a right to sell his product as he pleases in the best market available, and rates must not be adopted with the idea of compelling the product to be disposed of in a way deserved by the carrier. In one extreme case of this sort the railroad company refused to furnish cars for a coal miner who would not sell his coal to a coal company which was allied with the railroad.8

In granting a mandamus in that case Mr. Justice Dean said: "It is a refusal to carry his coal because he will not sell it at a low price to the president's coal company. As the court below, in substance, says, it was iniquitous. It, in effect, if kept up, would completely destroy his plant, with the consequent loss of his invested capital; and even if now his wrong is, to some extent, remedied, he has lost months of active business. The public duty of defendant was to carry freight and passengers. Suppose it had refused to sell him a ticket as a passenger, and no

6 Accord, on similar facts, Reynolds v. Western N. Y. & Pa. R. R., 1 Int. Com. Rep. 685, 1 I. C. C. Rep. 393 (1888). See, also, The Cedar Lumber Products Case, 3 Can. Ry. Cas. 412 (1903).

A pass issued for valuable consideration is usually held not discrimination. See Curry v. Kansas & C. P. Ry., 58 Kans. 6, 48 Pac. 579 (1897), and cases cited; State v. Southern Ry., 125 N. C. 666, 34 S. E. 527 (1899), and cases cited.

7 Paxton Tie Co. v. Detroit S. R. R., 10 I. C. C. Rep. 422 (1905), accord. 8 Loraine v. Pittsburg, J. E. & E. R. R., 205 Pa. St. 132, 54 Atl. 580, 61 L. R. A. 502 (1903).

tified him that such refusal would be kept up unless he sold his coal to the president's coal company; the wrong would have been a violation of a duty which defendant owed to the general public as a common carrier of passengers, but it would also have been a wrong special to himself, distinct from the public of which he was one, and from which he alone specially suffered. It would have been a demand on him to do something having no connection with defendant's business of transportation, and, if he refused, to deprive him of a right which, under the most solemn forms, it had undertaken to accord to him. And it is wholly immaterial that the defendant treated some shippers in the same way." 9

9 The free transportation of shippers or dealers between state or interstate points on account of interstate freight traffic furnished to the carrier is unlawful. Milk Producers' Asso. v. Delaware, L. & W. R. Co., 7 I. C. C. Rep. 92 (1897).

In re Boston & M. R. R., 3 Int. Com. Rep. 717 (1891), the commission left the question open whether free passes could be given proprietors of hotels, agents of ice companies, milk contractors, trustees of railroad mortgages and newspaper publishers for advertising.

TITLE II.

UNDUE PREFERENCE IN SERVICE.

CHAPTER XXIV.

DISCRIMINATION BETWEEN DEPENDENT SERVICES.

§ 801. Discrimination in regard to dependent services.

TOPIC A-SUBORDINATE CARRIERS OF GOODS.

§ 802. Duty toward expressmen considered.

803. Express companies; conservative view.

804. Express companies; radical view.

805. Discussion of these conflicting views.

806. Exclusive contracts with private car lines. 807. Refrigerator car lines.

808. Live stock transportation companies.

TOPIC B-DEPENDENT PASSENGER SERVICE.

§ 809. Duty toward hackmen considered.

810. Cases permitting discrimination between hackmen. 811. Cases forbidding discrimination between hackmen. 812. Discussion of the duty toward hackmen.

813. Hauling sleeping cars.

814. Favoring certain eating houses.

815. Treating baggage transfer men with equality.

816. Granting concessions for private businesses.

TOPIC C-PRIVILEGES AT FREIGHT TERMINALS.

§ 817. Special privileges at freight terminals.

818. Arrangements with stockyards.

819. Contracts with grain elevavtors.

820. Access to connecting steamboats.

821. No access owed except at wharf stations. 822. Rights of compelling draymen.

823. Permitting limitation of telephones.

824. Fostering monopoly in public services.