rate for the sale of tickets by its regular agents between the same points and for the same accommodations is in violation of the Interstate Commerce Act.47 So also a pass issued as a matter of personal favor to a person not within any of the exceptions contained in the Interstate Commerce Act is unjust discrimination. 48 Sec. 542. Reasonableness of rate not necessarily involved in section two. The reasonableness or justice of the charge which is the subject of section one of the act is not necessarily involved in determining the unjust discrimination which is the subject matter of section two. The charge made for transporting freight may be entirely reasonable, and the plaintiff may have no occasion to complain of the intrinsic value of the services rendered, but may be injuriously af fected by advantages given his competitors in rates of freight.48 49 Sec. 543. A distinction exists between wholesale rates in freight and passenger traffic-Party rates.-A distinction has been recognized by the courts between wholesale rates in freight and passenger traffic. The fact that one man is a large shipper and another a small shipper does not entitle the carrier to make an appreciable difference in the rate, if the property carried in each case is of the same class, and the distance and route is the same.50 Otherwise the large shipper would be able to sell his goods at a lower price than his competitors and this would enable him to obtain a monopoly of that business. "The same result, however, does not follow from the sale of tickets for a number of persons at a less rate than for a single passenger; it does not operate to the prejudice of the single passenger, who cannot be said to be injured by the fact that another is enabled at a particular instance to 47. Railroad Co. v. Swanson, 102 Ga. 754, 28 S. E. Rep. 601, 39 L. R. A. 275. 49. Kinnavey v. Terminal R. Assn., 81 Fed. 804. 50. United States v. Tozer, 39 48. In re Charge to Grand Jury, Fed. 369. But see Interstate Com 66 Fed. 146. merce Commission v. Chicago Great W. Ry. Co., 141 Fed. 1003. travel at a less rate than he. If it operates unjustly to any one, it is the rival road which has not adopted corresponding rates;" but it was not the design of the act to stifle competition, nor is there any legal injustice in one person's procuring a particular service cheaper than another. In other words, it was not intended to ignore the principle that one can sell at wholesale cheaper than at retail. Party rates are, therefore, not in violation of the act if they are available to the public generally.51 Sec. 544. Car-load is usually taken as the unit in fixing freight rates. The rule in the preceding section as to wholesale freight rates, of course, must be based on some definite units for fixing freight charges, and the difficulty is to find the proper unit. Probably no fixed rule can be given, for each article of commerce should depend somewhat on itself in that respect, and due consideration should be given to its value, bulkiness, weight, etc. In general, the Interstate Commerce Commission has regarded the car-load as the unit, but has held that the difference between the rate on car-loads and less than car-loads must be reasonable.52 In a pioneer Federal case, the court held that a railroad company is not required by the Interstate Commerce Act to 51. Interstate Commerce Commission v. Baltimore, etc. R. Co., 145 U. S. 263, 12 Sup. Ct. R. 844, 36 L. Ed. 699, affirming 43 Fed. 37. The United States government in transporting its soldiers is not entitled to the benefits of a tenparty rate ticket given by a railroad to theatrical, operatic or concert companies, glee clubs, brass or string bands, boat, baseball, polo or football teams, and other parties of like character regularly organized for the purpose of giving exhibitions and traveling to gether." There is no analogy or likeness between the business of the government in the transporta tion of its soldiers and the various classes of persons described in the company's schedules. Nor does a denial of the party rate made by such schedule amount to a violation of section 2 or 3 of the interstate commerce act. The traffic provided for in the railroad sched ule has no analogy or resemblance to that carried on by the government. It is not a like service nor "under substantially similar circumstances and conditions. United States v. Chicago & N. W. Ry. Co., 127 Fed. 785, 62 C. C. A. 465. 52. 9 Int. Com. Rep. 78. give the same car-load rates on interstate shipments to forwarding agents who solicit property for shipment from different owners with less than a car-load each and combine it into car-load lots, that it makes on car-load shipments to a single owner. The higher rate demanded of the forwarding agent is not for a "like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions. ''53 Sec. 545. Rebate equal to cartage charges is discriminative. The fact that a shipper has a siding connection with one railroad which enables him to get his goods delivered at his door will not authorize a competing railroad under section two, in order to obtain his business, to give him a rebate equal to the cartage charges between its station and his warehouse when other shippers over the competing railroad are compelled to pay the full charges for the same service without being allowed the rebate for cartage charges. Such a rebate is prohibited by section two as a discrimination between shippers.54 Sec. 546. Payment of carrier's prior debt by carriage as discrimination. Where a carrier owes a legal, enforceable, and ascertained sum of money, the Interstate Commerce Act is not violated if the debt be paid by carriage done by the carrier for its creditor at the carrier's legal freight rate.55 But it would practically emasculate the law of its most healthful feature to permit an unexplained, indefinite and unadjusted claim for damages arising from a tort, never prosecuted to a final determination in the courts, to be put forward as an excuse for a clear discrimination in rates. To hold a defense thus pleaded to an action against the carrier 53. Lundquist v. Railway, 121 in New Haven R. R. Co. v. InterFed. 915. 54. Wight v. Railroad, 167 U. S. -512, 17 Sup. Ct. R. 822, 42 L. Ed. 258. 55. Interstate Commerce Commission v. Chespeake & O. Ry. Co., 128 Fed. 59, affirmed and modified state Commerce Commission, 200 U. S. 361, the U. S. Supreme Court holding that a claim based on an admittedly illegal prior contract could not be used in payment of the carrier's legal freight rate. for rate discrimination to be valid would open the door to the grossest frauds upon the law and practically enable the railroad company to avail itself of any consideration for a rebate which it considers sufficient and to agree with the favored customer upon some fabricated claim for damages which it would be difficult, if not impossible, to disprove.5 Sec. 547. Agreement for rebate does not void contract of carriage. Although the fact of agreement for rebate and special rate may be proven, it does not prevent liability on the part of the carrier for loss of freight through the carrier's negligence. The law makes agreements as to rebate or special rate void, but does not make the contract of affreightment otherwise void. There is nothing in the law or the policy of it which requires a construction that would excuse a carrier from all liability when it made such a contract in connection with that for receipt and transportation of freight. Such a construction would encourage rather than discourage such unlawful agreements for rebates. The carrier might prefer them to liability for freight.57 Sec. 548. Effect of section two on limitations on the value · of the goods placed in bills of lading.-A limitation placed by the shipper on the value of the goods, if lost or damaged in transit, in consideration of a reduced rate being given on an interstate shipment, is in violation of section two and void. If there is but one rate or charge permissible for one class of freight under the act, then such a thing as a rate "less than the regular rate" is prohibited and the carrier ought not to be permitted to plead the violation of law as a defense to liabilities incurred in the line of its duty as a common carrier under the law. To say that a rate "less than the regular rate" was made in consideration that the shipper placed a 56. Railway Co. v. Goodridge, 149 U. S. 680, 13 Sup. Ct. R. 970, 37 L. Ed. 896; Railway Co. v. Taggart, 149 U. S. 698, 13 Sup. Ct. R. 977, 37 L. Ed. 905. 57. Merchants Cotton Press & Storage Co. v. Insurance Co. of North America, 151 U. S. 368, 14 Sup. Ct. 367, 38 L. Ed. 195, affirming Insurance Co. of North America v. Delaware Mutual Safety Insurance Co., 91 Tenn. 537, 19 S. W. Rep. 755. reduced valuation upon the property shipped does not put the contract of shipment without the prohibition of the act, but simply illustrates how, by the mere subterfuge of a reduced valuation clause, inserted in shipping contracts, classes innumerable might be established and the whole scheme of uniformity in charge contemplated in the Interstate Commerce Act be nullified. If the simple suggestion of a diminished valuation of a designated article or class of property to be shipped would work for it a new rule in the schedule of charges required to be printed or hung up to public view in the depot or station house of the transportation company, the provisions of the law forbidding reductions, as well as advances in the rate charges, except after public notice, would mean nothing; and new schedules arranged and classes formed to suit every special friend of the company or favored locality applying for transportation rates would be the practice, as before the enactment of the law. Special contract rates and scheduled rates, or rates determinable by definite and published rules, cannot be reconciled one with the other.1 Sec. 549. Question of relative rates is involved in section two. In questions of unreasonableness of rates arising under section one, we have seen that a comparison of rates is of little importance. In determining questions under section two, however, it often, if not always, becomes necessary to contrast the rates to other places and persons, for objections under that section involve the question of relative rates with all their elements.2 Sec. 550. Failure to pay expenses no excuse for unjust discrimination under section two.-The fact that a line, operated as a part of a great railroad system, considered as a separate railroad, fails to pay its expenses, does not justify an unjust discrimination in rates. There are many such roads absorbed by the principal railway systems of the country, 1. Ward v. Railway, 158 Mo. 226, 58 S. W. Rep. 28; Griffin v. Wabash R. Co., 91 S. W. Rep. 1015. Mo. App. 2. Interstate Commerce Commission v. Louisville & N. R. Co., 73 Fed. 409. |