Rebate

In Mercantile Law. Discount; the abatement of interest in consequence of prompt payment. An allowance by way of discount or drawback. The allowance of rebates is a common method by which common carriers discriminate between shippers; the practice is unlawful; and a contract to procure rebates from railroad companies for a shipper is void as being in violation of the provisions of the interstate commerce law; Parks v. Tacking Co., 0 Misc. 570, 27 N. Y. Supp. 280. Rebate, as used in the interstate commerce act and its amendments, refers only to such a discount, reduction or draw back as creates a discrimination in favor of a particular shipper and against other shippers in like situations, and destroys that equality of treatment which it is the great purpose of the law to enforce; American Sugar Ref. Co. v. R. Co., 207 Fed. 733, 125 C. C. A. 251. Under the act of Congress of February 4, 1887 (Cullom Act), the standard of comparison was the treatment of other shippers. It was necessary to prove, not only that the favored shipper really paid less than the published rate, but also that other shippers paid the full rate, or a greater rate than that of the favored shipper. Under the Elkins Act the standard of comparison is the published rate. It is only necessary to prove that the favored shipper has had his property transported at a less rate than that published and filed; Chicago & A. R. Co. v. U. S., 156 Fed. 558, 84 C. C. A. 324, 26 L. R. A. (N. S.) 551. An allowance to a packer of a certain sum per car for the use of his plant tracks in hauling his freight to the railroad line, being in the form of a refund of terminal charges, is an illegal rebate under the Elkins Act; Chicago & A. R. Co. v. U. S., 212 U. S. 563, 20 Sup. Ct. 689, 53 L. Ed. 053. An allowance to a shipper for the use of his private tap line is a rebate and illegal under the Elkins Act; Central Yellow Pine Ass’n v. Ry. Co., 10 Inter-St. Com. Rep. 193, 505; or for elevator service; In re Allowances to Elevators by Union Pac. R. Co., 13 Inter-St. Com. Rep. 408; or for the handling of cars by a shipper within its plant; General Electric Co. v. R. Co., 14 Inter-St. Com. Rep. 237; or for the construction and use by the shipper of a tie hoist; Chesapeake & O. Ry. Co. v. Lumber Co., 174 Fed. 107, 98 C. C. A. 81; but it is also held that a carrier may compensate a shipper for services rendered and instrumentalities furnishhibited rebate or discrimination, even if the carrier does not allow other shippers to render and furnish similar services and instrumentalities and compensate them therefor; U. S. v. R. Co., 231 U. S. 274, 34 Sup. Ct. 75, 58 L. Ed.. Where there is a continuous carriage from Kansas City to New York at a concession from the legal rate for part of the carriage, it is a single continuing offense and not a series of offenses, although it is continuously committed in each district through which the goods are transported, at the prohibited rate; Armour Packing Co. v. U. S., 209 U. S. 57, 28 Sup. Ct. 428, 52 L. Ed. 681; and the provision of the Elkins Act, making the offense triable in any Federal district through which such transportation is had, is not in violation of the sixth amendment to the constitution requiring a prosecution to he had in the state or district where the offense is committed; Armour Packing Co. v. U. S., 209 U. S. 57, 28 Sup. Ct. 428, 52 L. Ed. 681. The court within whose jurisdiction a fraudulent scheme is first devised has jurisdiction of the offense, regardless of where the formal contract was executed; Thomas v. U. S., 156 Fed. 897, 84 C. C. A. 477, 17 L. R. A. (N. S.) 720 (under the Elkins Act). The return to an applicant for life insurance by the agent of a part of his commission is not within a statute forbidding rebates by life insurance companies, so as to avoid the policy; Interstate Life Assur. Co. v. Dalton, 165 Fed. 176, 01 C. C. A. 210, 23 L. R. A. (N. S.) 722; contra, Heffron v. Daly, 133 Mich. 613, 05 N. W. 714. If the agent rebate against his company’s consent, it is not liable to the statutory penalty; Equitable Life Assur. Soc. v. Com., 121 Ky. 543, 89 S. W. 537.