from the Kanawha district to Newport News, whilst the published tariff for like carriage from the same district was $1.45 per ton. This was held to be a violation of the act.

In United States v. Union Stockyard & Transit Company, 226 U. S. 286, 33 Sup. Ct. 83, 57 L. Ed. 226 (1912), the Supreme Court enjoined the Union Stockyard & Transit Company, a carrier, from fulfilling its agreement to contribute $50,000 to the construction of a new packing plant. By the same agreement the packers had agreed to slaughter and pack only such live stock as passed through the Union Stockyard & Transit Company's yards, at the customary rate of charge, or to pay the charges which would have accrued had those yards been used. The Supreme Court was convinced that the $50,000 was contributed in consideration of the charges to be collected on the live stock, and therefore that the net result would be to reduce those charges. The agreement was held to be in violation of the Elkins Act.

In Cleveland, C., C. & St. L. Ry. Co. v. Hirsch, 204 Fed. 849, 123 C. C. A. 145 (1913), the Circuit Court of Appeals in the Sixth Circuit held that a contract by which an interstate railroad carrier leased ground to a dealer in scrap iron for a term of five years at a rental not much exceeding one-tenth of its actual rental value, in consideration of receiving the lessee's shipments at regular rates, was a violation of the Elkins Act.

In Vandalia R. Co. v. U. S., 226 Fed. 713, 141 C. C. A. 469 (1915), the Circuit Court of Appeals in the Seventh Circuit sustained a conviction of the railroad company under an indictment charging it with the offense of giving a rebate contrary to the provisions of the Elkins Act. In that case there was a contract between the railroad company and a mining company, it being agreed that the latter should have a loan from the former at 2 per cent. interest and should ship exclusively over the former's lines at full tariff rates and sell coal to the railroad for its use at $1.20 per ton. The jury found this was a device whereby the coal was in effect transported at less than tariff rates. The court held that the fact that the full tariff rate is collected does not negative the possibility of a rebate in respect thereto, either in a lump cash sum in advance, or by later or earlier indirect payments. It declared that a loan at less than the market rate of interest, like a lease at less than market rental, is in effect a gift of the difference between the contract and the market rate, and is in every respect equivalent to a direct payment of that amount of money.

[2] The cases show that it is the law that any pecuniary inducement held out to a shipper to procure his business over a particular railroad is or may be a rebate or concession within the prohibition of the Elkins Act.

[3] But as the original lease was made in 1878, and the Elkins Act was not passed until 1903, it is said that the defendant at the time it made the lease could not have made it to circumvent the statute. That is, of course, conceded. But the failure to collect the royalties from 1905 through all the years down to December 31, 1913, may have been a device to give a concession in consideration of the transportation of the coal, and if it was it involved a violation of the act.

Whether it was such a device, and whether the purpose was to give a concession or discrimination which resulted in shipping the coal to its destination at a less rate than that mentioned in the tariff, was for the jury to determine. The verdict of the jury has established the fact that the failure to collect the royalties was with the intention of giving the Mining Company an advantage or concession, and that it resulted in the transportation of the coal at less than the established rates. It seems to us that the evidence is such as to justify the jury in coming to the conclusion it did as to the motive and consequent intent of the defendant.

In the instant case there was no deduction from the actual tariff rate, and there was no direct rebate. The judge in his charge so informed the jury, adding that the statute was broad and comprehen

sive:

"It does not merely forbid the giving of a rebate out of the rate that the shipper or the consignee pays; but, as I have indicated to you, if the railroad company by any device, plan, or method gives to a shipper a refund or advantage or concession which, if given, operates as a rebate or refund, then the statute is violated."

Again in his charge he said:

"If you believe from the evidence that the purpose was to give a concession or discrimination which resulted in shipping the coal to its destination at a less rate than that mentioned in the tariff, then I conceive that the statute has been violated, irrespective of whether the Susquehanna Coal Company was the actual shipper or the Mining Company."

Again in his charge he said:

"The evidence in this case, and this entire controversy, in its last analysis, will turn upon the question of what you may believe with reference to the intention of the defendant railroad company, as to whether the intention was that the Mining Company should have an advantage or privilege or concession or whether it was merely an honest purpose to carry it along for a period of time on account of its financial embarrassment, but to ultimately collect the royalties."

And referring to the subsequent payment of the royalties he said: "In other words, if during this period of time specified in the indictment there was an intention on the part of the railway company to give to the mining company a concession, then the offense forbidden by the Elkins Act was completed and consummated, and the subsequent payment after the offense was discovered obviously cannot be held to excuse the violation of the statute."

The charge was full and clear and accurate. If the arrangement made with the Mining Company constituted a device for effecting a reduction in rates, or for giving an advantage to the shipper, and was so intended, the defendant was guilty of a violation of the statute. The question whether there was an intention to accomplish such a result was left to the jury under appropriate instructions, and the jury has found that such intention did exist. The defendant's guilt is thereby established.

Judgment affirmed.

HOUGH, Circuit Judge (dissenting). This was a criminal prosecution, and there was no evidence at all of violation of the act, or of

criminal intent, except the continuance or maintenance of relations between the railway and the Mining Company, which began long before the Elkins Act became law. From this alone the jury was permitted to infer the commission of a crime.

Under such a ruling a creditor, who is also a carrier subject to the act, is indeed between the devil and the deep sea. If all traffic is refused, the functions of a common carrier are abnegated; if traffic as per published tariff is accepted, a crime is said to be committed; if payment of debt is insisted upon as a prerequisite to the transport of goods, the debtor is broken, and both debt and traffic are lost, until (at the best) some reorganization emerges from the ruins.

The statute does not compel such result, and from it I dissent.

CITY OF PORT TOWNSEND, WASH., v. FIRST NAT. BANK OF CENTRAL CITY, COLO.

(Circuit Court of Appeals, Ninth Circuit. February 5, 1917. Rehearing Denied March 19, 1917.)

1. MUNICIPAL CORPORATIONS

No. 2833.

1010-COMPROMISE AND SETTLEMENT OF CLAIM

-VALIDITY OF ACTION OF COUNCIL.

Evidence held to sustain a finding that judgments rendered against a city on warrants were not fraudulent or collusive, and that the subsequent action of the mayor and city council in deciding by unanimous vote not to appeal from such judgments, but to make a compromise settlement of the same by the issuance of new bonds at a lower rate of interest, was also free from fraud or collusion, and valid.

[Ed. Note.-For other cases, see Municipal Corporations, Cent. Dig. §§ 2181, 2182.]

2. MANDAMUS 154(7)-TO ENFORce JudgmenT AGAINST MUNICIPAL CORPORATION-ALLEGATION OF DEMAND TO LEVY TAX.

It is not necessary to allege a demand on a city council to levy a tax to pay an indebtedness as a condition precedent to proceedings for a mandamus to compel such levy, where the statute imposes the duty to make the levy, or where such demand would manifestly be useless.

[Ed. Note. For other cases, see Mandamus, Cent. Dig. § 308.]

3. LIMITATION OF ACTIONS 25(8)-MANDAMUS.

Under the law of Washington, by which an action on a municipal warrant is not barred until six years after notice is given that there is money in the treasury to pay it, where no such notice is given, an action to obtain a judgment as preliminary to mandamus to compel the levy of a tax is not barred merely because it might have been brought more than six years before.

[Ed. Note. For other cases, see Limitation of Actions, Cent. Dig. § 125.] In Error to the District Court of the United States for the Northern Division of the Western District of Washington; Jeremiah Neterer, Judge.

Action at law by the First National Bank of Central City, Colo., against the City of Port Townsend, Wash. Judgment for plaintiff, and defendant brings error. Affirmed.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

NAT

The defendant in error brought an action at law against the plaintiff in error on warrants issued by the latter, drawn on the indebtedness fund of the city, to obtain a judgment, preliminary to mandamus against the city officers to compel them to levy taxes for the indebtedness fund wherewith to pay the warrants. The parties will be designated herein plaintiff and defendant, as they were in the court below. Upon an agreed statement of facts and the testimony taken the court made in substance the following findings of fact: That on February 1, 1898, the Bank of British Columbia, a foreign corporation, obtained a judgment in the state superior court against the defendant for the sum of $18,600.15 as the debt due to said corporation, which judgment by its terms bore interest at 10 per cent. per annum from its date; that on February 5, 1898, the Manchester Savings Bank, a corporation of New Hampshire, as plaintiff, obtained in the same court a judgment against the defendant for the sum of $7,788.71, as the debt due to the plaintiff, which judgment also bore interest at 10 per cent. per annum from its date; that those judgments were obtained upon street grade warrants drawn upon spécial improvement funds, to be paid out of special assessments on the property improved, and in payment for the improvements; that there was no contract, ordinance, or resolution by the defendant which authorized it to guarantee the payment of said warrants; that on February 17, 1898, the mayor and the city council of the defendant unanimously decided to pay said two judgments by issuing to the judgment creditors the appropriate amount of warrants of the defendant drawn against its indebtedness fund, which warrants were to draw interest at 6 per cent. per annum until paid, and the judgment creditors accepted the defendant's offer to that effect; that the defendant at the same time was making like disposition of certain other judgments then recently entered against it, and accordingly it issued against its indebtedness fund sundry warrants, serially numbered from 2 to 159, aggregating about $67,000, all dated on February 18, 1898, each warrant reciting that it was issued in part satisfaction of a specified judgment; that all said warrants were ordered to be issued by the unanimous vote of the mayor and the city council at a regular meeting thereof, duly held according to the statute, and after deliberation on the subject of the said judgments each warrant was duly issued and delivered; that the warrants payable to the Manchester Savings Bank were presented by it to the city treasurer of the defendant on February 18, 1898, for payment, but payment was refused for want of funds, and the warrants payable to the Bank of British Columbia were presented by it to said city treasurer for payment on February 19, 1898, but payment was refused for want of funds; that in the year 1898 the warrants issued to said two last-named judgment creditors were transferred and assigned to the plaintiff at their then fair market value, in the ordinary course of banking business, and without notice of any intention on the part of the defendant to contest the payment thereof; that there was no fraud or fraudulent collusion or acquiescence in the payment of an unlawful claim on the part of the mayor and city council in authorizing the payment of said judgments by said warrants.

The findings set forth the taxes levied for the payment of indebtedness from the indebtedness fund of the defendant from and including the year 1899, and to and including the year 1908, and found that no levy for the payment of indebtedness from that fund had been made since the levy of 1908, and the court found that the defendant since 1898 had realized from delinquent tax collections and otherwise for its indebtedness fund certain sums to the credit of that fund, of which it had applied portions to the payment of its outstanding indebtedness prior in rank to the warrants numbered from 2 to 159 as aforesaid, and had transferred certain other portions from the indebtedness fund, and had used them for other purposes, and that no call for any warrants drawn on the indebtedness fund, excepting Nos. 1 and 160, has been issued, nor have any such warrants been paid, except said two warrants and warrant No. 2, which was paid pursuant to a judgment of the court below in the case of Perkins v. Intermela, affirmed by this court in Intermela v. Perkins, 205 Fed. 603, 123 C. C. A. 619. And the court found that there was due to the plaintiff from the defendant $13.952.80, with interest at 6 per cent. per annum on $6,072.80 thereof, from February 18, 1898, 241 F.-3

and on $7,880 thereof from February 19, 1898. As conclusions of law the court found that the warrants in suit are valid and subsisting liabilities of the defendant for the amount of their face, and the accrued interest from their respective dates of presentation and refusal to pay; that the defendant is estopped by the judgments from relying on any defense which might have been pleaded to the actions in which those judgments were entered, including the defense that the defendant was not liable on the causes of action sued on in said former actions, and the defense that it was already indebted beyond its constitutional limit; that it was the defendant's duty to levy a property tax to the amount of six mills on the dollar of assessed valuation for the indebtedness fund during each year, beginning with 1898, and to apply the proceeds according to law until the warrants in suit with accrued interest were paid; and that the plaintiff is entitled to judgment against the defendant in the sum of $13,952.80, with accrued interest as stated in the findings of fact, and with the costs of the action, and to the process of the court to enforce payment.

U. D. Gnagey, of Port Townsend, Wash., and L. B. Stedman, of Seattle, Wash., for plaintiff in error.

Charles E. Shepard, of Seattle, Wash., for defendant in error. Before GILBERT, MORROW, and HUNT, Circuit Judges.

GILBERT, Circuit Judge (after stating the facts as above). The defendant presents certain questions which were determined by this court in Intermela v. Perkins, 205 Fed. 603, 123 C. C. A. 619. Those questions were carefully considered, both on the original hearing and on a petition for rehearing, and a petition to the Supreme Court for certiorari was denied. Intermela v. Perkins, 231 U. S. 757, 34 Sup. Ct. 324, 58 L. Ed. 468. One of the questions so decided, and now again presented, was whether the city council of the defendant, which met at a regular session on February 15, 1898, and took recess until a designated hour on February 16th, and thereupon took a further recess until a designated hour on February 17th, could, upon said last-named date, lawfully authorize the issuance of the warrants, in view of the Code provision which inhibited the passing of any ordinance or the allowance of any bill for payment of money at a special meeting, or at any adjourned regular meeting of a city council. We held that such an adjournment taken from day to day does not interrupt the business of the session, that it was the intention and purpose of the council to hold a continuous session, and that such adjournments were permissible, as within the intendment of the statute. But it is said that facts are presented in the case at bar which were not before the court in the Intermela Case. Attention is directed to the fact that in the latter case it was said in the opinion that the council met on February 15, 1898, at a regular meeting "and, finding itself unable to complete or transact the business in hand, took a recess * * * until another day, at which time the business in hand was completed"; whereas in the case at bar it is proven that the regular meeting of February 15th was a short meeting, and that all pending business might have been transacted at that time, and that the recess was taken because the council was not yet ready to act. Conceding this to be true, it does not take the case out of the rule of the Intermela decision, nor does it create a distinction in principle between that case and this. On the other hand, its tendency is to show that the three