LEHIGH VALLEY RAILROAD COMPANY
v.
UNITED STATES
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The Supreme Court affirmed an injunction prohibiting a railroad from paying rebates and commissions to a freight forwarder in exchange for directing shipments over the railroad's line. The Court held that the Interstate Commerce Act's prohibition on carriers refunding or extending privileges on published rates applies universally to all shippers, regardless of whether the payments are characterized as deductions, commissions, salaries, or cross-payments, and that services rendered by the forwarder that were not integral to the actual transportation process did not qualify as exceptions under the statute.
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Mr. Justice Holmes delivered the opinion of the court.
This is a proceeding instituted by direction of the Attorney General at the request of the Interstate Commerce Commission to prevent the appellant railroad from carrying freight at less than its published rates on file. The case was heard upon bill and answer and a stipulation, and the question is whether the facts warrant an injunction, as matter of law.
George W. Sheldon and Company is an Illinois corporation engaged in forwarding, or bringing goods for importers from the place of purchase in Europe to their destination in the United States and charging the importers for the transportation and such other services as it may perform. Of course the expectation is that it will make a profit from the transaction, although from the uncertainty of ocean freight charges it may lose, as the contract is made in advance. By arrangement with the appellant, so far as it is able it sends the goods over the appellant’s line, and for doing so receives from it a varying percentage upon the published rates and also a salary of $5,000 a year. These payments by the appellant are the ground of the bill. The District Court issued an injunction as prayed. 222 Fed. Rep. 685.
. As toward the railroad, George W. Sheldon and Company is consignor and consignee, and although it may be in no case the owner, that does not concern the appellant. Upon the admitted facts there can be no doubt and it-is not denied that it is to all legal intents the shipper of the goods. Interstate Commerce Commission v. Delaware, Lackawanna & Western R. R. Co., 220 U. S. 235, Great Northern Ry. Co. v. O’Connor, 232 U. S.
508. If the shipper were the owner an allowance to him of a percentage upon the freight as an inducement to ship by that line, however honest and however justifiable on commercial principles, would be contrary to the Act to Regulate Commerce as it now stands. Act of June 29, 1906, c. 3591, § 2, 34 Stat. 586, 587, amending § 6 of the original act, &c. See also the original Act of February 4, 1887, c. 104, § 2, 24 Stat.
379. Wight v. United States, 167 U. S.
512. But the-above cases show that the carrier cannot inquire whether the shipper is the owner and therefore the statute expresses a necessary policy when it forbids in universal terms refunding in any manner any portion of the rates specified in the published tariffs or extending to “any shipper” any privilege not so specified. Of course it does not matter whether the allowance takes the form of a deduction or a crosspayment. Any payment made by a carrier to a shipper in consideration of his shipping goods over the carriers line comes within the prohibiting words.
It is true no doubt that George W. Sheldon and Company in .the performance of the services for which it is paid maintains offices here and abroad, advertises the Railroad, solicits traffic for it, does various other useful things, and, in short, we assume, benefits the road and earns its money, if it were allowable to earn money in that way. It is true also that in Interstate Commerce Commission v.
F. H. Peavey & Co., 222 U. S. 42, an owner of property transported was held entitled under § 15 of the Act to Regulate Commerce to an allowance for furnishing a part of the transportation that the carrier was bound to furnish; (So Union Pacific R. R. Co. v. Updike Grain Co., 222 U. S. 215, and United States v. Baltimore & Ohio R. R. Co., 231 U. S. 274.) But that case goes to the verge of what is permitted by the act. The services rendered by George W. Sheldon and Company, although in a practical sense “ connected with such transportation,” were not connected with it as a necessary part of the carriage — were not “ transportation service,’’ in the language of Union Pacific R. R. Co. v. Updike Grain Co., 222 U. S. 215, 220 — and in our opinion were not such services as were contemplated in the Act of June 29, 1906, c. 3591, § 4, 34 Stat. 589, amending § 15 of the original act. On the other hand the allowance for them falls within the plain meaning of § 2 of the Act of 1906, to which we referred above.
There is some criticism of the form of the decree, but it prohibits with sufficient plainness all payments to George W. Sheldon and Company, whether by way of salary, commission, or otherwise, in consideration of the shipment of goods by George W. Sheldon and Company over the appellant’s line.
Decree affirmed.
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Cited By (18 total)
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United States v. Chicago Heights Trucking Co., 310 U.S. 344 (U.S. 1940)…ommission’s bill to enforce its holding that the difference between domestic and imported merchandise could not justify different rates between the port of reception and point of delivery, ordered dismissed) . Lehigh Valley R. Co. v. United States, 243 U. S. 444. Interstate Commerce Comm’n v. Delaware, L. & W. R. Co., supra, at 255. Cf. Standard Oil Co. v. United States, 283 U. S. 235, 239; Illinois Central R. Co. v. Interstate Commerce Comm’n, 206 U. S. 441, 454. Cf. Inland Steel Co. v. United States, 3…
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Merchs. Warehouse Co. v. United States, 283 U.S. 501 (U.S. 1931)…their competitors alike, since, as to both, they would be departures from carload rates of the published tariffs of the carriers and amount to rebates forbidden by §§ 2 and 3 of the Interstate Commerce Act. See Lehigh Valley R. Co. v. United States, 243 U. S. 444, 446; United States v. Union Stock Yard Co., 226 U. S. 286, 307. Apart from this consideration, the practical effect of the arrangement with appellants is that the carriers extend, in the form of money allowances to the favored warehousemen, forty-…
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Thomson v. United States, 321 U.S. 19 (U.S. 1944)…Malley v. United States, 38 F. Supp. 1; Moore v. United States, 41 F. Supp. 786, affirmed 316 U. S. 642. Nor can it be described as the consignor or consignee of the freight so transported by motor vehicle. Cf. Lehigh Valley R. Co. v. United States, 243 U. S. 444. The provisions and actual operation of the contracts with the operators demonstrate the railroad’s rigid control over the movement of the freight and its retention of full responsibility to the shippers. The operators are “independent” only by grac…
Previewing 3 of 18 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Interstate Commerce Comm'n v. Delaware, 220 U.S. 235 (U.S. 1911)
- Interstate Commerce Comm'n v. Diffenbaugh, 222 U.S. 42 (U.S. 1911)
- Great N. Ry. Co. v. O'Connor, 232 U.S. 508 (U.S. 1914)
- United States v. Baltimore & Ohio R.R. Co., 231 U.S. 274 (U.S. 1913)
- Wight v. United States, 167 U.S. 512 (U.S. 1897)
- Union Pac. R.R. Co. v. Updike Grain Co. & Crowell Lumber & Grain Co., 222 U.S. 215 (U.S. 1911)
- Savannah v. Fla. Fruit Exch., 167 U.S. 512 (U.S. 1897)