Source: https://supreme.justia.com/cases/federal/us/279/363/
Timestamp: 2019-04-23 06:53:24+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 279 › United States v. Fruit Growers Express Co.
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.
Appeal under the Criminal Appeals Act from a judgment of the district court quashing an indictment.
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 The paragraph was originally enacted in the Act of March Stat. 936, 938. The paragraph was originally enacted in the Act of March 2, 1907, c. 2564, 34 Stat. 936, 938.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.
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.
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.
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 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.
"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.
"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.

References: v. 
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 § 238
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