Vandalia R. v. United States

226 F. 713 | 7th Cir. | 1915

MACK, Circuit Judge

(after stating the facts as above). While a number of errors are assigned, but two have been argued: (1) The refusal of the court to direct a verdict for defendant; (2) the refusal to charge as requested.

[1] 1. No question of discrimination, whether just or unjust, by the Railroad as between competing coal companies is involved. The indictment charges a concession or rebate — a departure from the tariff rate in respect to the transportation of certain car loads. Giving a rebate “whereby any such property shall by any device whatever be transported at a less rate than that named in the tariffs” is one of the offenses enumerated in section 1 of the Elkins Law. The contract, the execution of the 4 per cent, notes and the 2 per cent, notes, their payment, and the resulting payment of the excess interest for and during the year in which the acts of transportation mentioned in the indictment occurred, are alleged in the indictment to constitute the device by means of which the Railroad knowingly and willfully gave the Coal Company a rebate in respect to the transportation in interstate commerce of the specified property “whereby said property was transported at a less rate and charge than that named in the tariffs.”

The statute evidently aims to prohibit, not only discrimination as between shippers, but departure from the tariff rates, irrespective of its actual discriminatory effect. The history of this legislation demonstrates that both discriminations and rebates have ever been sought to be hidden under the most subtle diguises. Every device that seeks to cover up either a rebate or a discrimination in interstate transportation is denounced by the statute, provided only, as to a rebate, that thereby the property is actually transported at less than the tariff rate. That the full tariff rate is collected at the time of transportation does not negative the possibility of a rebate in respect thereto. The rebate may be in a lump cash sum in advance (United States v. Union Stockyards, 226 U. S. 286, 33 Sup. Ct. 83, 57 L. Ed. 226), or by later or earlier indirect payments (G. R. & I. Ry. Co. v. United States, 212 Fed. 577, 129 C. C. A. 113).

[2] While it is conceded that, if the effect of a contract to purchase tonnage would -be to give an undue preference or advantage, such a contract would come within the inhibition of the Elkins Law, it is contended that a similar result would not follow if the effect were to cause only a departure from the tariff rate. In the Union Stockyards Case, however, a cash bonus, paid to a shipper for locating next to the stockyards, and giving the stockyards the exclusive transportation of its property, was denounced, not merely as an unjust discrimination, but specifically as a departure vfrom rates which were not, but ought to have been, and, for the purposes of the case, were treated as if, published; and the Grand Rapids & Indiana Railway Company was convicted under an indictment which charged the giving of a rebate alone, not a discrimination.

If, then, a direct cash payment for exclusive tonnage is a rebate.in respect: to property transported under such a contract, any device whereby a similar payment is made comes within the prohibition of the statute. A loan at less than the market rate of interest, like a lease at less than market rental (C., C., C. & St. L. Ry. Co. v. Hirsch, 204 Fed. 849, 853, 123 C. C. A. 145), 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. The evidence detailed above shows clearly that, under all the circumstances, 2 per cent, was far below the market rate, and that the payment of at leasl the difference between 2 per cent, and 4 per cent., if given for the exclusive tonnage privilege, would be an unlawful rebate.

It is contended, however, that there were other considerations given by the Coal Company in. addition to the exclusive tonnage; that the burden of proof is on- the government to establish that these other considerations were not worth the entire difference between the 2 per cent, and the market rate of interest; and that the government has failed to make any such proof. Specifically, the defendant claims that the agreement to furnish coal at $1.20 a ton, subject only to the change in the wage scale and mining scale, was a consideration of great value. The implication is that the jury was bound, in the absence of direct proof, to consider that this value exceeded what would otherwise have been a rebate. The jury, however, were not without evidence tending to show the very slight, value of this alleged insurance against a combination of dealers to raise 1he price of coal to the railroad. The fact that the company was actually paying $1.10, and not the stipulated' price of $1.20, at the time the contract was made; the further fact that the company had never had any actual difficulty in getting coal at: the market price, in themselves would have justified the jury in regarding this clause as a mere subterfuge, and of no value whatsoever.

The other alleged advantages to the railroad might well have been deemed either offset by the advantages to the other parties, as shown by the contract, or of no substantial value whatsoever. We conclude, therefore, that tile evidence fully sustains the charge that the defendant knowingly gave a rebate in respect to the interstate transportation whereby such property was transported at a less rate than that named ill the tariff. *

2. At the conclusion of Hie charge, defendant’s attorney requested certain additional charges successively. To each of these in turn the trial judge cither gave or refused his assent, or expressed his own modifying views. The last request and the action of the court thereon, ate thus presented in the bill of exceptions:

“Mi'. Whitnel: It the court please, one further charge. I ask the jury bo charged that devices or rebates are not contrary to- law, and prohibited, unless fo such devices or rebates property of the shipper, the Lmnaghi Goal Com-jfcmy In this case, was transported at a less rate than that named in the tariffs published and iiled by the Vandalia Railroad Company.

"The Court: Well, I refuse that instruction. It is not necessary, and add this to what I have said: It is not necessary for the governmeiit to show that the money that was paid, that specific money was rebating or reducing; that’s all. It is sufficient, if from the whole evidence, as I have said before, you believe from the whole evidence that the defendant did pay one or more sums of money, for the purpose of reducing the costs of the transportation of this property, and that must be determined from the whole evidence.

“To which ruling of the court the defendant by its counsel asked for and was granted an exception.”

Whether defendant excepted to the refusal so to instruct, or to the statement of the court, or to both, is not clear. Indeed, it is so vague that, in preparing the assignments of error, counsel deernéd it to extend to the rulings on every request.

[3] Waiving this, however, we consider the only error in regard thereto presented in the brief:

That “the jury were given to understand that thereby the Vandalia should be convicted of concocting a device, and not of transporting the property at less than the published rate.”

While the request stated concisely a correct and applicable legal proposition, and might well have been given, the trial judge did not err in regarding it as not absolutely necessary, inasmuch as the court had theretofore pointed out the necessary elements of the offense.

[4] After giving the language of the act and discussing the allegations as to a device and the purpose and intention of the parties, the court said:

“The indictment concludes with this sort of a charge. That is what you are to determine and try by the evidence in the case: ‘And so the grand jurors aforesaid, upon thei'r oaths aforesaid, do say that the said Vandalia Bail-road Company, at the time and place and in the manner and form and through the device aforesaid, did conduct and transport property into and through said Eastern district of Illinois, and unlawfully did knowingly and willfully offer, grant, and give to said Lumaghi Coal Company a rebate in respect to the transportation' of said property in interstate commerce from said Lu-maghi Coal Conrpany’s mine in Illinois to the state of Missouri.’ ”

This is a direct statement that it was the duty of the jury to determine, among other things, whether or not the defendant did transport the property and did knowingly give a rebate in respect to such transportation. The jury could not have understood therefrom that the mere concoction of the device without the transportation at a reduced rate resulting therefrom would justify a verdict of guilty.

The additional statement "made by tíre judge after refusing the request indicates that he believed defendant was endeavoring to have him hold that payment of a lump sum applicable to any and all subsequent shipments could not be deemed a rebate as to any specific transportation. The assertion that it was not necessary for the government to show that “the money paid, the specific money,” was rebating, was intended as a denidi of the supposed contention. In adding that “it is sufficient if the jury believe from the whole evidence that the defendant did pay one or more sums of money for the purpose of reducing the cost of the transportation of this property” the court neither held nor intended to hold that this was tire only element necessary to be established, but only that, to establish the rebate element, it would be sufficient for the jury to find from the entire evidence, including as well iue excess interest payment as the payment of the tariff rate at the time of shipments, that a reduction from the lawful rate had in fact beeo made.

Judgment affirmed.