The defendant, a corporation performing the service of icing
refrigerator cars under contract with a railroad company, made out
and delivered to.the railroad company false reports concerning the
quantity of ice used, which reports were kept by the railroad
company as required under the Interstate Commerce Act, and were
made the basis of icing charges rendered by it in its bills to
shippers. The railroad company was innocent.
Held that the
defendant was not punishable under § 20(7) of the Interstate
Commerce Act as a person who willfully makes a false entry in a
record kept by a carrier. P.
279 U. S.
368.
Affirmed.
Appeal under the Criminal Appeals Act from a judgment of the
district court quashing an indictment.
Page 279 U. S. 365
MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
The case is brought here under paragraph 2 of § 238 of the
Judicial Code, as amended by the Act of February 13, 1925, c. 229,
43 Stat. 936, 938. The paragraph was originally enacted in the Act
of March Stat. 936, 938. The paragraph was originally enacted in
the Act of March 2, 1907, c. 2564, 34 Stat. 936, 938. It provides
for appeals in criminal cases where the decision of the district
court is adverse to the United States and the defendant has not
been put in jeopardy.
This review is of an indictment of seventy-five counts against
the Fruit Growers' Express Company, a corporation of Delaware,
engaged in icing and reicing refrigerator cars containing shipments
of perishable commodities transported to Pittsburgh by the
Pennsylvania Railroad, for misreporting ice furnished and
falsifying the official records of the railroad company showing
expenditures made in those shipments. By a contract executed by the
two companies on May 1, 1925, the express company agreed to perform
the icing and other service which the railroad company by and
through its published schedules and tariffs had stipulated to
perform with the shippers of such shipments. The express company,
as provided in the contract, made and furnished written reports
Page 279 U. S. 366
of the quantity of ice placed by it in the bunkers of the cars
for the railroad company at Pittsburgh. These reports were received
and kept by the railroad company, and from them the railroad
company prepared its reports of ice delivered, and rendered bills
to the consignees of the shipments at Pittsburgh in accordance with
its tariffs and schedules. In the performance of the contract, as
the recitals of the counts of the indictment show, the agent of the
express company in fifty-nine instances delivered less ice in each
car, and in sixteen instances more ice in each car, than he
reported to the railroad company, knowing that his report would be
accepted by the railroad company as a true and accurate statement
of the deliveries. The making of fifty falsified ice reports by
defendant's agent was charged in counts 1 to 50. Counts 51 to 65
charged that, by falsifying ice reports, defendant made and caused
to be made false entries in freight bills. Counts 65 to 75 were not
urged by the government as valid. Each count of the indictment
involved a separate carload shipment of a perishable commodity, and
the falsification by the express company was charged to be of an
official record "kept by the Railroad Company" under the law. We
have inserted in the margin the applicable parts of sections of the
Interstate Commerce Act which are here involved.
*
Page 279 U. S. 367
On behalf of the defendant, a motion was made and granted by the
district court to quash the indictment in all its counts on the
ground, first, that the quoted §§ 10 and 20, relied on to support
the indictment, are really intended only to apply to common
carriers, their directors, officers, agents, and employees or
others acting for and in the interest of carriers or in collusion
with them, and not to persons whose only relation to a carrier is
that of an independent contractor acting adversely to the carrier's
interest in fraud of it and without its knowledge or acquiescence;
and, second, that the counts of the indictment only denounce the
keeping of false or inaccurate official "records kept by the
carrier," and do not include records not kept by the carrier, like
bills, memoranda, and other data furnished by an independent
contractor, intentionally misleading the carrier or its agents in
keeping its official records.
Page 279 U. S. 368
The question is really one of the construction of the two
sections of the statute quoted in the margin and the intent of
their penal provisions. The general object of the statute was to
require that common carriers should keep reliable records of the
receipts and expenditures of and for each shipment which was the
subject of transportation. They were intended to be an ultimate
protection not to the carriers, but to the shippers, to secure a
proper accounting of the expenditures that might properly be
charged to each shipper on the basis of the tariff published in
accordance with law. Their importance is shown in
Interstate
Commerce Commission v. Goodrich Transit Co., 224 U.
S. 194,
224 U. S. 211,
and
United States v. Louisville & Nashville R. Co.,
236 U. S. 318,
236 U. S. 334,
236 U. S.
336.
It was the duty of the common carrier to provide for the icing
and also to furnish reports as to the amount delivered in a record
kept by it for the information of shippers and of the Interstate
Commerce Commission. But there is no reason why this duty with
respect to the furnishing of ice might not be performed by an
independent contractor.
Cincinnati, New Orleans & T. P. Ry.
v. Interstate Commerce Commission, 162 U.
S. 184,
162 U. S. 197;
Express Cases, 117 U. S. 1,
117 U. S. 24;
Baltimore & Ohio S.W. Ry. v. Voigt, 176 U.
S. 498,
176 U. S. 504;
Chicago, St. Louis & New Orleans R. Co. v. Pullman Southern
Car Co., 139 U. S. 79,
139 U. S. 89;
Berwind-White Coal-Mining Co. v. United
States, 9 F.2d 429,
439;
Ellis v. Interstate Commerce Commission, 237 U.
S. 434,
237 U. S. 443.
Such contracts, unless forbidden, are legal, but what their civil
consequences are is often a question. If the duty performed is one
which the common carrier is obliged to perform, the latter is
civilly liable for the failure of the independent contractor to
perform the carrier's duty. Whether a breach of the duty in such
case will lead to criminal liability on the part of the contractor
is a question of construction of the statute. Of course, if
Page 279 U. S. 369
the common carrier were privy to the furnishing of short ice, or
to the making of false preliminary data by the independent
contractor, both the carrier and the independent contractor would
become criminally responsible for the shortage and for the
misrepresentation of the official record. But that is not the case
we have here. The railroad company, having certain duties to
perform in respect of the shipments, attempts to perform them by
contract with an outside person not an agent of the carrier, and is
itself deceived and defrauded by the contractor and outsider in his
failure to perform his contract, so that, by the falsification, the
carrier is led into the making of the erroneous report. In such
circumstances, is the outsider to be held guilty of criminality
under the above statutory provisions? Congress, of course, could
render these false statements by the defendant a crime, but has it
done so in the absence of any collusion by the railroad company? It
is a nice question, but the statute is a criminal one, and may lead
to heavy penalties. A defendant under such circumstances is
entitled to a reasonably strict construction of the language used
to effect the particular purpose that Congress has in mind. We do
not think that Congress was looking to protect an independent
contractor against his servants or a common carrier against its
independent contractor. A fraud as between them was a matter
collateral to the intent and object of the legislation in holding
the common carrier and all its agents to strict responsibility to
the shipper and the Commission.
If the independent contractor colludes with the common carrier
by the false data it furnishes, and the common carrier knowingly
uses them, of course, the contractor is nothing but an aider and
abetter and so a principal in the keeping of the false official
records, but otherwise not.
The result is therefore that, while the independent contractor
might well be penalized by a different statute for
Page 279 U. S. 370
the fraud he has committed on the common carrier, we do not
think that the present statutes bring him within the scope of the
crime denounced when the common carrier and its servants are
innocent of offense.
It is clear to us that the words "record or memoranda kept by a
carrier," contained in § 20, mean the official record kept by the
carrier, and do not refer to bills or memoranda kept by the
contractor as a basis on which the carrier keeps its records. The
defendant's bills or memoranda are not in that sense a record at
all under § 20. They are not subject to the supervision of the
Interstate Commerce Commission, and it would seem that, if the data
proved to be dishonest and incorrect, the punishment for that,
unless with the complicity of the common carrier, must be found
elsewhere than in the provisions of the present Interstate Commerce
Act.
This leads us necessarily to affirm the ruling of the district
court.
Affirmed.
* Section 10(1).
"Any common carrier subject to the provisions of this Act, or,
whenever such common carrier is a corporation, any director or
officer thereof, or any receiver, trustee, lessee, agent, or person
acting for or employed by such corporation, who, alone or with any
other corporation, company, person, or party, shall willfully do or
cause to be done, or shall willingly suffer or permit to be done
any act, matter, or thing in this Act prohibited or declared to be
unlawful, or who shall aid or abet therein, or shall willfully omit
or fail to do any act, matter, or thing in this Act required to be
done, or shall cause or willingly suffer or permit any act, matter,
or thing so directed or required by this Act to be done not to be
so done, or shall aid or abet any such omission or failure, or
shall be guilty of any infraction of this Act for which no penalty
is otherwise provided, or who shall aid or abet therein, shall be
deemed guilty of a misdemeanor, and shall, upon conviction thereof
in any district court of the United States within the jurisdiction
of which such offense was committed, be subject to a fine of not to
exceed five thousand dollars for each offense. . . ."
C., 24 Stat. 379, 382.
Section 20(7).
"Any person who shall willfully make any false entry in the
accounts of any book of accounts or in any record or memoranda kept
by a carrier, or who shall willfully destroy, mutilate, alter, or
by any other means or device falsify the record of any such
account, record, or memoranda, or who shall willfully neglect or
fail to make full, true, and correct entries in such accounts,
records, or memoranda of all facts and transactions appertaining to
the carrier's business, or shall keep any other accounts, records,
or memoranda than those prescribed or approved by the Commission
shall be deemed guilty of a misdemeanor and shall be subject, upon
conviction in any court of the United States of competent
jurisdiction, to a fine of not less than one thousand dollars nor
more than five thousand dollars, or imprisonment for a term not
less than one year nor more than three years, or both such fine and
imprisonment. . . ."
C. 3591, 34 Stat. 584, 594.