Hocking Val. Ry. Co. v. United States

Citation210 F. 735
Decision Date03 February 1914
Docket Number2351.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

[Copyrighted Material Omitted]

J. H Hoyt, of Cleveland, Ohio (Lawrence Maxwell, of Cincinnati Ohio, Clarence Brown, of Toledo, Ohio, and John F. Wilson, of Columbus, Ohio, of counsel), for plaintiff in error.

U. G. Denman, U.S. Atty., and John S. Pratt, Asst. U.S. Atty., both of Toledo, Ohio.

Before KNAPPEN and DENISON, Circuit Judges, and COCHRAN, District judge.

DENISON Circuit Judge.

The railway company was indicted for giving special concessions to the Sunday Creek Company, one of its coal shippers, in violation of the Interstate Commerce Act and the Elkins Act. After demurrers to all the counts had been overruled, and after certain counts of the indictment had been dismissed, there remained ten, and to each of these counts the defendant, by leave of the court, pleaded nolo contendere. The defendant was thereupon by the court found guilty upon each of these counts, a motion in arrest of judgment was overruled, and the defendant was fined $42,000.

The railway company assigns as error that the indictment was fatally insufficient, so that there was nothing to support the judgment.

The whole question involved is whether the giving of credit by a railway company to a shipper, under the conditions and circumstances here existing, constitutes a violation of section 6 of the Act of 1887 to regulate commerce, as amended June 29, 1906 (34 Stat. 586, 587), taken in connection with the Elkins Act of February 19, 1903, as amended June 29, 1906 (34 Stat. 587, 588). The specific portions thought applicable are those providing that the schedules giving tariff rates shall also state all privileges allowed which in any wise affect the tariff rate; that the carrier shall not collect or receive a greater or less or different compensation than the tariff rates, and shall not extend to any shipper any privilege in the transportation of property not specified in the tariff; that the willful failure by a carrier strictly to observe such tariff shall be a misdemeanor; and that it shall be unlawful for the carrier to give any concession or discrimination in respect to the transportation of property whereby it is transported at a less rate than that named in the tariff, or whereby any other advantage is given or discrimination is practiced, and that the carrier, giving such discrimination, is guilty of a misdemeanor. While carrying at a less or different rate is not in terms declared an offense or penalized, the same result follows from the fact that such carrying, willfully done, would be that failure 'strictly to observe' such tariff which is expressly, by a later clause, made a misdemeanor. So we think it clear that a prosecution will lie for the offense of 'carrying at a less or different rate. ' The two specific questions presented, then, by this record are whether extending to the shipper, who is to prepay his freight, such credit as was here given, is collecting a less or a different rate than the tariff, and whether such conduct amounts to granting a concession whereby any advantage is given or discrimination practiced.

Before considering the sufficiency of the indictment, a preliminary question must be met: Was the plea of nolo contendere such a submission to the discretion and mercy of the court as to preclude the company from afterwards prosecuting error? An interesting discussion and review of the practice under this plea are found in the opinion of the Circuit Court of Appeals of the Seventh Circuit, in Tucker v. United States, 196 F. 260, 116 C.C.A. 62. This discussion seems to confirm the view that the plea is, in some respects, in the nature of a compromise between the state and the defendant, and that the latter may not have all the advantages of exception and review that could be saved to him by plea of not guilty or by standing mute; but it does not follow that the defendant, in such case, cannot prosecute error at all. In the instant case, the controlling question is not of niceties in pleading or of refinement in construction or application; it is the broad general question of whether the acts described do or do not constitute an offense against the criminal law. If the railway company is right in its contentions, its plea could not be taken as a final admission of the offense, because no offense was charged; it could not be guilty of a crime, because no crime had been committed. It seems to be the settled rule that, even after explicit plea of guilty, defendant may urge, in the reviewing court, such an objection (Carper v. Ohio, 27 Ohio St. 572; Com. v. Hinds, 101 Mass. 209; 12 Cyc. 353, note 35); and we are satisfied that the plea of nolo contendere should not be construed as a waiver of a right which the plea of guilty does not waive (U.S. v. Hartwell, 26 Fed.Cas. 196, 201, 3 Cliff. 221; Com. v. Horton, 9 Pick. (26 Mass.) 206; Com. v. Grey, 2 Gray (68 Mass.) 501, 61 Am.Dec. 476). We must therefore examine on their merits the questions presented.

The ten counts are divisible into three groups. Counts 4, 5, and 6 undertook, particularly, to allege the acceptance of a 'less or different compensation' and the extension of a 'privilege in regard to transportation' not specified in the tariffs on file. They cover, respectively, the shipments for the months of March, April, and May, 1909. The second group-- counts 17, 18, 19, and 20--cover the respective shipments for the months of August, September, October, November, 1909, and allege discrimination during these months in favor of the Sunday Creek Company and against other coal shippers in like situation. The third group does not require separate consideration, because the counts of this group only allege individual instances of discrimination included within the monthly totals covered by the counts of the second group.

The sixth count will serve to illustrate the first group. It alleges that during May, 1909, the railway company received from the Sunday Creek Company and shipped 11 cars of coal destined to points on other roads and beyond the state line; that these were all treated as 'prepaid freight,' the total charges to destination being payable by the Sunday Creek Company to the railway company; that the total of freight charges to destination for such shipments, at tariff rates, was about $600; that during the same period, and for prepaid freights on cars of coal destined to points within the state, the Sunday Creek Company incurred an obligation of $24,600; that at the regular monthly accounting and settlement between the railway and the shipper, had on June 28, 1909, for the May shipments, the total indebtedness of $25,200 was settled by paying the odd $200 in cash and by giving the Sunday Creek Company's note at four months with 5 per cent. interest for $25,000; that the railway company neither made any demand for, nor collected in cash, this $25,000, but that the note therefor was given and received in accordance with an arrangement antedating the shipments; that the note was not paid but was renewed from time to time, interest being paid until April 1, 1910, when it was merged into three-year debenture bonds.

Count 17, which may be taken as typical of the second group, alleged facts similar to count 4, and, further, that other shippers, in all respects similarly situated, were required, at the time of the shipments, to give bond that the freights would be paid, and were also required to make payment in cash promptly after the monthly settlement.

As to the first group-- counts 4, 5, and 6-- it is argued that a payment after four months, and with legal interest, is the same thing as cash, and that a solvent shipper who receives such credit does not thereby get a 'less or different rate.' It is further urged that the phrase 'privilege in the transportation,' used in section 6, refers to something which is directly connected with, or attendant upon, the physical transportation, and does not extend to the method of making freight payments. If there is merit in either of these contentions (which we do not intend to intimate), they do not require decision now. The conviction was general, the sentence was general, and was less than the maximum possible under three counts; in other words, the sentence would be sufficiently supported by three counts. If therefore the four discrimination counts-- 17, 18, 19, and 20-- are good, as we think they are, there is no reason to consider any others. Claassen v. U.S., 142 U.S. 140, 146, 12 Sup.Ct. 169, 35 L.Ed. 966; Hardesty v. U.S. (C.C.A. 6) 168 F. 25, 26, 93 C.C.A. 417; Bennett v. U.S. (C.C.A. 6) 194 F. 630, 633, 114 C.C.A. 402.

Upon the broad and underlying question whether it is such discrimination as is forbidden by the Elkins Act, in force in 1909, for the carrier to insist that shippers generally pay cash while it gives long credit to another similar shipper and gives such credit pursuant to a previous contract-- upon this broad question, we have no doubt. Such conduct, by its very terms, is discrimination. Shippers are not treated alike. Giving to one shipper four months' time in which to raise the the money, even if interest is added, while the same privilege is denied to others, is plainly a 'concession or discrimination.' It also must be considered a concession or discrimination 'in respect to transportation'; it cannot be thought that these two words in this clause of the Elkins Act pertain only to a facility of transportation; they are used in immediate connection with 'rebate,' and so the clause must be intended to reach and affect the subject of freight payments. Whether, by this concession, it results that the property is 'transported at a less rate than that named in the...

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