it. 23 A railroad, which has duly published an advance in rates, may charge a shipper the advanced rate, despite a private agreement with him to carry goods at the rate in existence prior to the advance.24 The Commission has frequently held that contracts of parties, even if valid at the time, cannot justify an unjust discrimination, when conditions change.25 Rate making cannot be governed by private agreements respecting rates or schedules of rates, or by estoppel. 26 A contract based on a lower rate existing before an advance is no ground alone for condemning such advance.27 Though the defendant had by its contract with another road reserved the right to cancel joint through rates, the carrier was ordered to maintain such rates where their cancellation would result in unreasonable charges. 28 The terms of any contract to "continue a fair basis" of rates must always give way to the lawful, reasonable and non-discriminatory rate.29 And generally speaking any change in the law invalidates contracts for special transportation. 30

§ 655. Continuing contracts no justification.

A troublesome problem arises, it will have been seen, when the continuing to render service at certain rates fixed by a contract, which was legal when it was made, comes into conflict with new rates later scheduled, by which the public generally are called upon to pay higher rates.31 It once seems to have been thought that a continuing contract to take shipments must be respected

23 In re Advances on Vehicles, 22

I. C. C. 124.

24 Rhinelander Paper Co. v. Mo. Pac. Ry., 13 I. C. C. 633.

25 Baltimore Butchers Livestock Co. v. P. B. & W. R. R., 20 I. C. C. 124.

28 In re Investigation & Suspension Docket 28, 21 I. C. C. 455.

29 Sinclair & Co. v. C., M. & St. P. Ry., 21 I. C. C. R. 490.

30 Re Contracts of Express Companies, 16 I. C. C. 246.

31 Chicago & A. R. R. Co. v.

26 Michigan Upper Peninsula Pig- Chicago V. & W. Coal Co., 79 Ill.

iron Rates, 26 I. C. C. 284.

27 American Creosote Works V.

I. C. R. R., 18 I. C. C. 212.

121; and compare Southern Wire Co. v. St. Louis, B. & T. R. R. 38 Mo. App. 191.

when rates generally are raised; but of late with the stringent law against all discrimination and the insistent enforcement of it, even a definite contract, still continuing by its terms, is held no justification for giving to the particular customer lower rates than those called for from all by the present schedule. 32 Once the policy against discrimination is well established, there is no difficulty in saying that, for reasons of public policy, no further obligation attaches to such a contract. To the argument that the contract may have been valid when made if it fixed the rate then charged to all, and that, therefore, the subsequent action of the railroad in advancing rates generally could not invalidate it, the United States Supreme Court 33 replied recently: "This contention loses sight of the central and controlling purpose of the law, which is to require all shippers to be treated alike, and that the filed and published rate, shall be equally known by and available to every shipper." Under its new powers the Commission has recently held that discrimination resulted from demanding higher charges from new than from old subscribers for same telephone service and facilities. 34

§ 656. Whether executed contracts are different.

Where the full consideration for subsequent transportation has been paid in advance, the continued execution of this contract might not have seemed to be discrimination against those who are paying as they go the rates scheduled later. But it was held in Louisville & Nashville Railroad v. Mottley,35 that a contract by a railroad, upon consideration of a past release, that the 35 219 U. S. 467, 35 L. ed. 297, 31 Sup. Ct. 265.

32 Fitzgerald v. Grand Trunk Ry., 63 Vt. 169, 22 Atl. 76, 13 L. R. A. 70; but see Laurel Mills v. Railroad Co., 84 Miss. 339, 37 So. 134.

33 Armour Packing Co. v. United States, 209 U. S. 56, 52 L. ed. 681, 28 Sup. Ct. 428.

34 Shoemaker v. C. & P. Tel. Co., 20 I. C. C. 614.

But see Curry v. Kansas & Col. Pacific R. R. Co., 58 Kans. 6, 48 Pac. 583.

And see Hurley v. Big Sandy & C. Ry. Co. (Ky.), 125 S. W. 302.

releasors should travel without charge for the remainder of their lives was not to be supported, after the stringent provisions of the Act against transportation at varying rates had been enacted. The Supreme Court held that the Act is not unconstitutional as infringing the right of contract, or as taking property for public use without just compensation, or due process of law, by reason of the fact that it invalidates a contract entered into prior to its passage, between a person and a railroad, by which the latter, in consideration of the release of a cause of action for personal injuries, granted to such person and his family free transportation for life. In a more recent case, Fourche River Lumber Company v. Bryant Lumber Company,36 a differential allowed in arrangement for the purchase of a right of way was held to taint the whole transaction, although the consideration was apparently much less than the value of the land conveyed. And the Supreme Court insisted once more that the Act so forbade the making of any concessions that any departure by one from the payment of the rates scheduled for all would be held to be altogether illegal.

§ 657. Preference in certain services permissible.

In matters outside the scope of its public business the carrier is at liberty to discriminate at pleasure; for such cases are not covered by the Act. In providing cars for its traffic it may lease as well as buy them, and if it leases them, it may deal exclusively with one car company, and refuse to deal with other companies.37 So a railway company practices no discrimination within the Act by selling

36 235 U. S. 316, 57 L. ed. 1498, 33 Sup. Ct. 887.

It follows, of course, that the railroad is not justified in issuing passes on any contract old or new upon such consideration past or present. Gill v. Erie Ry., 135 N. Y. Supp. 355.

And a recent case goes the length

of holding that the former owner of the land in such a case cannot recover back land given for free passes or demand passes. Cowley v. Northern Pacific Ry. (Wash.), 123 Pac. 998.

37 Re Burton Stock-Car Co. v. Chicago, B. & Q. R. R., 1 Int. Com. Rep. 329, 1 I. C. C. 132.

passenger tickets at full fare to a land company which sells them at half rates to guests of its hotel, persons residing upon land sold or transferred by it, and others, but refusing to sell them at half rates to a person living in the same locality upon ground not acquired from it.38 So a railroad may make and carry out an exclusive contract with a stockyards company for the exclusive delivery to that company of live stock in a city, and no other stockyards company or carrier can complain so long as all shippers and consignees have equal facilities there.39 And this is true although in carrying out such contract it refuses to deliver to another railroad company, for delivery to a competing stockyards, live stock consigned to such competing stockyards. 40 In a recent proceeding the Commission declined to require a carrier to furnish petitioner the same facilities for conducting an auction business at its terminals as it accorded exclusively to a rival concern." And it has held that section 15 in regard to allowances is not applicable where an allowance is made to a compress company, not the owner of the cotton.42

$658. What favors constitute discrimination.

It has frequently been held that it is not undue prejudice to demand prepayment of freight of a consignee, although others do not need to prepay; for it was said that even a bad motive for lawful act does not render carrier liable.43 But this has recently been considerably modified by holding forbidden by the Act a device of extending credit to such a shipper for the freight charges on his shipments by acceptance of corporate securities in

38 Willson v. Rock Creek R. R., 7 I. C. C. Rep. 83.

Central Stockyards Co. v. Louisville & N. R. R., 118 Fed. 113, 55 C. C. A. 63.

40 Railroad Commission of Kentucky v. Louisville & N. R. R., 10 I. C. C. Rep. 173.

41 Southwestern Produce Distrib

utors v. W. R. R., 20 I. C. C. 458.

42 Merchants Cotton Press & Storage Co. v. I. C. R. R., 17 I. C. C. 98. 43 Compare Gamble-Robinson Commission Co. v. Chicago & N. W. Ry., 168 Fed. 161, the first case stated, with United States v. Hocking Valley Ry., 210 Fed. 738, the second case discussed.

settlement of freight bills, while exacting and collecting cash for substantially similar shipments from the other shippers." It has been held that, as it is a carrier's right to demand prepayment on all shipments, it may not distinguish between persons who pay in advance and those who do not. And it follows that where a new tariff requiring prepayment of charges has become effective prior to a shipment, the carrier is not bound to reconsign without prepayment of charges a car belonging to a shipper to whom it has been accustomed to extend credit. So the exercise by a railway company of the right to prepayment, or to retain a lien upon the goods until payment is made, or to hold the consignee responsible in case of delivery before payment, or the waiver of some of such rights at different times, cannot be construed to be a discrimination.45

§ 659. Where service of different character.

The duty of a carrier under the Act, to refrain from giving preference or advantages to one shipper over another, is applicable only where the same or similar conditions are prevalent. 46 The use in Section 1 of the Elkins Act of the word "discrimination," with the qualifying and adjective 'unjust" was not intended to broaden the prohibitions of the original Act to Regulate Commerce in that respect.47 The finding of the jury determines whether the transportation service was under "substantially similar circumstances and conditions," so as to make the defendant liable in a suit in the courts for damages for granting secret allowances to plaintiffs' competitors.48 The fundamental distinction should be insisted upon that the Act

44 See Boise Commercial Club v. Adams Express Co., 17 I. C. C. 115, the third case mentioned in this section, and Sage & Co. v. Ill. C. Ry., 18 I. C. C. 195, the fourth.

45 Little Rock & M. R. Co. v. St. Louis & S. W. Ry., 63 Fed. 775, 11 C. C. A. 417.

46 United States v. C. R. & Nav. Co., 159 Fed. 975.

47 United States v. Wells, Fargo Exp. Co., 161 Fed. 606.

48 Langden v. Penna. R. R., 194 Fed. 486.