United States v. Hanley

• Decision Date: 20 January 1896
• Citation: 71 F. 672
• Parties: UNITED STATES v. HANLEY et al. SAME v. MORRIS. SAME v. THOMSON. SAME v. JENKINS.
• Court: U.S. District Court — Northern District of Illinois

71 F. 672

UNITED STATES v. HANLEY et al. SAME v. MORRIS. SAME v. THOMSON. SAME v. JENKINS.

United States District Court, N.D. Illinois.

January 20, 1896

John C Black, U.S. Dist. Atty., for the United States.

W. S Forrest, T. E. Milchrist, Duncan & Gilbert, and Winston &amp Meagher, for defendants.

GROSSCUP District Judge.

These cases have been argued together on motions to quash the indictments. As they involve, in many features, the same questions, I will consider them together. The first and third counts of the indictment against Hanley and Reinhart were manifestly intended to charge the defendants with unjust discrimination under section 2 of the interstate commerce act. The second and fourth counts of the indictment were framed to bring the offenses within paragraph 2 of section 10 of the same act. The indictment against Morris was intended to bring his case within paragraph 4 of section 10. The indictments against Thomson and Jenkins were each intended to bring their alleged offenses within paragraph 3 of section 10.

I will not at this point recite in detail the averments of the indictments, except to say that the only substantive act of supposed criminality charged was the giving and receiving of a rebate, in all the cases except that of Morris, and in his the giving and acceptance of a special rate, whereby each of the shippers obtained a rate for the transportation of live stock from Kansas City to Chicago different from and less than the schedule rate then in force. The government counsel drawing the indictment appear to have considered that rebates or special rates were of themselves criminal, and could by appropriate averment be made the substance of every offense defined in the interstate commerce act.

The interstate commerce act, under which these indictments were found, has been held by the United States supreme court (Interstate Commerce Commission v. Baltimore & O.R. Co., 12 Sup.Ct. 844) to be in many of its features simply declarative of pre-existing law, both in this country and in England; its office to that extent being to make such pre-existing law applicable to a commerce which, otherwise, would be free. Among the chief purposes was the prevention of extortionate rates by the common carriers of the country, and the prohibition of unjust discrimination in the extension of their facilities to the commercial public. To accomplish the latter purpose, section 2 of the act provided that it should be unlawful, by any special rate, rebate, drawback, or other device, to collect or receive from any person a greater or less compensation for any service subject to the provisions of the act, than the carrier collects or receives from any other person for whom he does a like and contemporaneous service, in the transportation of a like kind of traffic, under substantially similar circumstances and conditions. The usual medium employed to discriminate between shippers was a special rate, rebate, or drawback, and this section was directed against unjust discrimination by the employment of any such artifices. The language of the statute recognizes that a uniform rate between different shippers is not always possible or proper; that the time of service, the kind of traffic, and the circumstances and conditions under which it is transported may materially change the just obligations and duties of the carrier to his patrons. Equality and uniformity of rate, disassociated from considerations of the time, kind, and circumstances of the transaction, is, therefore, not the object aimed at. The object of the statute is to prevent one shipper from getting the advantage over his competitor in the matter of rates only where they both make substantially a like offering to the carrier. There can, therefore, be no conviction under this section until it is alleged and proven that an advantage in rates has been given by the carrier to one person over that obtained by another, where both parties, fairly considered, are upon an equality in the time, kind, and circumstances of their offering.

The indictment ought to state all the facts that make the gist of the offense, and the gist of the offense is not completely disclosed unless it shows a case where two or more persons, making to the carrier an offering of traffic alike in point of time, kind, circumstances, and conditions, have been treated differently in the rate exacted. A rebate or variation from the usual rate in force is not, alone, sufficient. It must be supplemented by another member of the comparison, namely, the existence of another shipper or shippers who, entitled to like treatment, have been denied it. A rebate, drawback, or special rate is not, of itself, unjust discrimination; for it does not necessarily follow that a like rebate, drawback, or special rate has not been extended to all the patrons of the carrier.

The first and third counts of the indictment against Hanley and Reinhart aver, in substance, that the defendants were officers of a railroad company carrying on interstate traffic; that from April to November of the year 1892 the authorized rate for live stock between Kansas City and Chicago, as scheduled, published, and approved by the interstate commerce commission, was 23 1/2 cents per hundred that the shippers named in the indictment transported, during this period, more than 100 car loads of live stock between these cities, and were charged and paid the schedule rate; and that on the 15th of October of the same year they received from the carrier, by way of rebate upon these shipments, a sum of money equal to $5 per car load, whereby, the indictment recites, there was collected and received from such shippers a less compensation for the transportation of the property than was collected and received by the same carrier from divers other persons, whose names are unknown to the grand jury, for doing a like and contemporaneous service in the transportation of a like kind of traffic, under substantially similar circumstances and conditions. It was not contended, on argument, that the indictment set forth any specific instance of discrimination between persons entitled to uniform rates from the carrier. It was, indeed, admitted that, while the grand jury knew of the rebate set forth in the indictment, they did not know of any instance in which a like rebate was not given, or was refused, to another shipper. No basis of comparison, such as the law contemplates, is laid in the indictment, and the defendants are given no notice, by any of its averments, with what conduct of the carrier the transactions set forth are to be compared. A conception of discrimination necessarily involves at least two instances of shipment, one of which, in the matter of rates, has fared better than the other, though both, by reason of their similitude in those features named by the act, should have fared alike. The indictment in this case states the one instance, but is silent as to any...