charge to all persons for similar service. Several cases have held that while it was elementary that common carriers could charge no more than a reasonable compensation, the mere discrimination in rates was not illegal. If a rate charged one party was reasonable, he could not complain if another was charged a less rate; though the fact that another was charged less might be material as evidence for the jury tending to prove that the reasonable charge was the smaller one. Mr. Justice Blackburn in Great Western Railway Co. v. Sutton, L. R. 4 H. L. 238; Johnson v. Pensacola, etc. Co., 16 Fla. 623. In Cowden v. Pacific Coast Steamship Co., 94 Cal. 470 and 18 L. R. A. 221, the court intimated that it was because the common law was not clearly settled on this point that it was necessary for parliament to enact the stringent equality clauses, and that there was a lack of direct authority in this country for the reason that common carriers, especially railway companies, had been placed entirely under the control of statute laws.

On this question of the right of discrimination at common law, see Ex parte Benson, 18 S. C. 38; Baxendale v. Railway, 4 C. B., N. S. 63. In the latter case, in 1858, it was said that though a carrier was limited to a reasonable charge, there was no common law obligation to charge equal rates to all customers. It followed that he could discriminate in the purpose of securing traffic which would otherwise go by another route. Ragan v. Aiken, 9 Lea (Tenn.), 609 (1882.)

In Menacho v. Ward, 27 Fed. 529 (S. D. of N. Y.), de cided in 1886, the court, Wallace, J., conceded the right to discriminate, and said the courts had always recognized the rights of carriers to regulate their charges with reference to the quantities of merchandise carried for the shipper, either at a given shipment or in a given period of time, although, said the court, public sentiment in many communities had objected to such discrimination and had crystalized into condemnation of the practice. The court however refused to apply this principle to the case where the carrier (a steamship company), sought to make a discriminating rate in order to prevent competition, that is, by charging a higher rate to those who refused to patronize it exclusively.

See also later cases decided by the same court after the passage of the Interstate Commerce Act. Thus in United States v. D. L

& W. R. Co., 40 Fed. 101 (1888), it was said that the Interstate Commerce Act had qualified materially conimon law rights and obligations of carriers. That at common law the carrier was not obliged to treat all who patronized him with absolute equality and that discriminations were only unreasonable, when they inured to the undue advantage of one person, or class of persons in consequence of some injustice inflicted on another.

See also the same court in Interstate Commerce Commission v. Texas & Pacific R. Co., 52 Fed. 187.

§ 197 (148). Just and unjust discrimination at common law. The right of discrimination at common law was not unlimited, and the general statement found in some of the opinions that the carrier had the right at common law to consult its own interests, was qualified by the distinct recognition, especially in the latter cases, that this discrimination must be exercised within the limits of fairness and impartiality in view of the public duty owing by the carrier. See C. C. C. & I. R. Co. v. Closser, 126 Ind. 348 and 9 L. R. A. 754, decided in 1890. There is an obvious difficulty in the application of this principle in cases where the discrimination is sought to be justified on the ground of securing traffic which would not otherwise be secured, and in thus making concessions to large shippers, thereby giving them a distinct advantage over their competitors.

The trend of the later cases, both in the federal and state courts, irrespective of the Interstate Commerce Act, distinctly condemns discrimination based solely on the ground of the quantity of the freight shipped, as contrary to sound public policy and inconsistent with the obligations of the carriers to the public. Thus in B. C. R. & N. R. Co. v. Northwestern Fuel Co., 31 Fed. (Iowa) 652, the Circuit Court, Brewer, J., held that at common law a contract whereby a railroad company made a rate of $1.60 per ton to all shippers of 100,000 tons per month or over, with a rate of not less than $2.40 per ton to those shipping less than 100,000 tons per month, was so arbitrary and obviously in the interest of capital as to be contrary to public policy and void, though it was not distinctly decided that any discrimination based upon the amount of shipments was permissible.

In another case, Handy v. C. & M. R. Co., 31 Fed. 689, S. D. of Ohio (1887), Baxter, J., removed the receiver of a rail

road for making a discriminating rate in favor of the Standard Oil Company of ten cents a barrel while charging a rival shipper thirty-five cents a barrel and agreeing to pay the twenty-five cents per barrel excess thus received over to the Standard Oil Company. This discrimination was sought to be justified because the Standard Oil Company had threatened to store its oil until it could lay a line of pipes unless the receiver should give such rates. The court said this was such gross and wanton discrimination as to warrant the removal of the receiver, although he had acted under the advice of counsel for what he deemed the protection of the interests of the railroad, and it did not appear that the money received from the rival shipper had been paid over to the Standard Oil Company.

In Hayes v. Pennsylvania Co., 12 Fed. 309, decided in 1882, on common law principles before the enactment of the Interstate Commerce Act (Dist. of Ohio), Judges Baxter and Walker, it was held that discriminations based solely on the amount of freight shipped without reference to any conditions tending to decrease the cost of transportation, were discriminations in favor of capital and were a wrong to the disfavored party, entitling him to recover the difference between the amount paid by him and that paid by the favored competitor. The court in its opinion distinguished the case of Nicholson v. Great Western Railroad Co., 28 L. J. C. P. 89, as in that case there was an undertaking to furnish a specific quantity of freight within a stated period. The court said in the Hayes Case, however, that while this English case was clearly distinguishable, future experience might possibly call for a modification of the principle there announced. This decision was approved in Kinsley v. B. N. Y. & P. R. R. Co., 37 Fed. 181, decided in 1888, where the receiver of a railroad was directed to pay the claim for money exacted for freight, when a lower rate was charged to another shipper who shipped larger quantities of freight.

On the other hand, there is a class of cases where a reduced rate in consideration of the amount of shipment, where the shipment was attended with decreased expense to the carrier, was sustained, as was Hoover v. Pennsylvania, 156 Pa. 220, and 22 L. R. A. 263, and L. & N. Consolidated R. Co. v. Wilson, 132 Ind. 517, and 18 L. R. A. 105. In the Pennsylvania case cited, the Pennsylvania Constitution prohibited discriminations in

somewhat the same terms as section 2 of the Interstate Commerce Act, and the court held that the carrier had a right to discriminate in rates on coal in favor of a manufacturer, saying:

"Differences in freight rates on coal to manufacturers and mere dealers are and have been for many years in universal practice, and not a single case other than this has reached the courts of last resort, either in England or in this country, questioning the entire propriety and legality of such differences, and that circumstance is ample proof that both the professional and the lay mind recognize that the difference is legal." The court cited in this case the decision of the supreme court of the United States in the Party Rate Case, infra.

In Evershed v. London & Northwestern R. Co., L. R. 3 Q. B. D. 135, decided in 1877, the court conceded that a large business could be done at a cheaper rate than a small one, and that speaking generally, it was open to the railway company to make a bargain with a person provided they were willing to make that same bargain with another, although that other was not in a position to make it. In this case, however, it was held that a gratuitous carting, loading and unloading, by a railroad company for three firms of brewers in order to get their business, was an unjust discrimination against another brewer in the same place, the three being connected with another railway while the complainant was not connected with either railway.

On the other hand, the right to make any discrimination in favor of a shipper, where the ground of discrimination is based solely on the amount furnished for shipment, even when necessary to secure the traffic of the favored shipper, has been denied on the ground of public policy and the public duty of the carrier. See Scofield v. Lake Shore & Michigan Southern R. Co., 43 Ohio St. 571; State v. Railroad, 47 Ohio St. 130. In Hilton Lumber Co. v. Atlantic Coast Line R. R. Co., the supreme court of North Carolina, 1904, 60 C. L. J. 30, in a review of the cases, held that a railroad carrying raw material to factories could not charge a factory, agreeing to ship the manufactured product by the same road, less for the same service than it charged the factory which makes no such agreement, saying that discrimination was a more dangerous power than high rates, if the latter were charged impartially to all. It will be observed however that the facts of this case would permit the allowance of a through rate under the

milling in transit principle, as recognized under the Interstate Commerce Act. See infra.

As to other cases on the same general subject, see Fitchburg R. Co. v. Gage, 12 Gray, 393; Spofford v. B. & M. R. Co., 128 Mass. 326; Avinger v. So. Car. R. Co., 29 S. C. 265; Railroad Co. v. Forsaith, 59 N. H. 122; Chicago, etc. R. Co. v. Suffern, 129 Ill. 274; Atwater v. Railroad Co., 48 N. J. Law, 55; Cook v. C. R. I. & Pac. R. Co., 81 Iowa, 151, 9 L. R. A. 764. In this latter case the court held, that the allowance of a rebate by a carrier to certain of his customers, from the tariff rate charged other customers for precisely the same service, was sufficient of itself to show that the rate charged was unreasonable and unjustly discriminative. See also Great Western R. Co. v. Sutton, L. R. 4 H. L. 238; Messenger v. Penn. Co., 37 N. J. Law, 531.

§ 198 (149). Discrimination in charge based upon difference in service not discriminative.-While therefore there has been a difference of judicial opinion as to what constitutes unjust discrimination, at common law, with a distinct trend towards a clearer recognition of the public duty of the carrier and the public policy of equality of charge, it is also recognized that a discrimination is not unjust when it is based upon a substantial difference in the mode and kind of service.

Thus it was held by the supreme court of the United States in the case already cited as to the common law in the federal courts, Western Union Telegraph Co. v. Call Publishing Co., supra, that common carriers, whether engaged in interstate commerce or in that wholly within the state, were performing public service. "They are endowed by the state with some of its soveign power, such as the right of eminent domain, and so by reason of the public service they render. As a consequence of this all individuals have equal rights both in respect to service and charges. Of course such equality of right does not prevent differences in the modes and kinds of service and different charges based thereon. There is no cast iron rule of uniformity which prevents the charge from being above or below a particular sum, or requires that the service should be exactly along the same lines. But that principle of equality does forbid any difference in charge which is not based upon difference in service, and even when based upon difference in service must have some reason