Lehigh Valley R. Co. v. United States
243 U.S. 444 (1917)

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U.S. Supreme Court

Lehigh Valley R. Co. v. United States, 243 U.S. 444 (1917)

Lehigh Valley Railroad Company v. United States

No. 124

Argued March 23, 1917

Decided April 9, 1917

243 U.S. 444

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE SOUTHERN DISTRICT OF NEW YORK

Syllabus

Forwarders who, under contract with importers of goods, look after the transportation from origin abroad to destination in this country, charging the owners amounts agreed upon in advance for the transportation and the services rendered and consigning the goods in their own names to themselves as consignees, are the shippers of the goods so far as concerns their relations with the interstate carrier over whose line the consignments go.

Any allowance by the interstate carrier to the forwarder in reduction of the regular tariff rates on goods shipped by the forwarder over the carrier's line, whether it be by deducting a percentage of the freight or by commissions and salary from carrier to forwarder, is condemned by § 6 of the Act to Regulate Commerce, as amended by the Act of June 29, 1906, c. 3591, § 2, 34 Stat. 586, 587, and also, semble, by § 2 of the original act, c. 104, 24 Stat. 379.

Services rendered by the forwarder to the carrier in maintaining offices, advertising the railroad, and soliciting traffic over it are not services connected with the transportation for which an allowance may be made by the carrier under § 15 of the Act to Regulate Commerce, as amended by the Act of June 29, 1906, supra, § 4, 34 Stat. 589. Interstate Commerce Commission v. Peavey & Co.,222 U. S. 42, distinguished.

222 F. 685 affirmed.

The case is stated in the opinion.

Page 243 U. S. 445

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 & 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 F. 685.

As toward the railroad, George W. Sheldon & 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. Co.,220 U. S. 235; Great Northern Ry. Co. v. O'Connor,232 U. S. 509. If the shipper

Page 243 U. S. 446

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, etc. 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 cross-payment. Any payment made by a carrier to a shipper in consideration of his shipping goods over the carrier's line comes within the prohibiting words.

It is true, no doubt, that George W. Sheldon & 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. Co. v. Updike Grain Co.,222 U. S. 215, and United States v. Baltimore & Ohio 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 & Company, although in a practical sense "connected with such transportation," were not connected with it as a necessary part of the carriage -- were

Page 243 U. S. 447

not "transportation service" in the language of Union Pacific R. Co. v. Updike Grain Co.,222 U. S. 215, 222 U. S. 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 & Company, whether by way of salary, commission, or otherwise, in consideration of the shipment of goods by George W. Sheldon & Company over the appellant's line.

Decree affirmed.

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