October 17, 1925, appellee delivered to the railroad of the Southern Pacific Company at Kingsburg, Cal., a shipment of grapes for transportation to Chicago for delivery to a named consignee. The appellant received the car at Omaha, hauled it to Chicago, and there delivered it to the consignee without collecting the freight and other charges, which amounted to $683.79. Because of unreasonable delay on the part of appellant and its failure to use reasonable care to keep the car properly iced, the grapes were delivered in a damaged condition. Appellant sued in the United States District Court for the Southern District of California to recover such charges; and appellee by answer set up the loss. While claiming to have suffered damages of $1,011.70, he asked no affirmative relief, but only that the loss be held to be a set-off against appellant's claim. The court allowed the set-off.
The Circuit Court of Appeals, under section 239 of the Judicial Code, 28 U.S.C., § 346 (28 USCA § 346) certified to this court the following question:
'Where an interstate railroad carrier delivers to the consignee at destination a consignment of freight without collecting the transportation and other lawful charges and thereafter brings an action at law to recover from the shipper the amount thereof, in a United States court in a district where the state law provides that if a defendant omits to set up a counterclaim arising out of the transaction constituting the foundation of the plaintiff's claim he cannot thereafter maintain an action upon the same, and, further, that where such cross-claims have existed 'the two demands shall be deemed compensated,' is the shipper, acting in good faith and without collusion, debarred by the Interstate Commerce Acts, particularly the Hepburn Act (34 Stat. 587) from pleading, by way of set-off, a counterclaim for a loss suffered by him as a result of the carrier's failure to perform its obligations touching the transportation and delivery of the identical shipment?'
The appellant is liable to the appellee for damages in an amount at least equal to the charges sued for. 49 U.S.C. § 20(11), 49 USCA § 20(11). And, unless the Hepburn Act stands in the way, the shipper has the right, under established practice in California, to set up his loss as a counterclaim. 28 U.S.C. § 724 (28 USCA § 724); California Code of Civil Procedure, §§ 437, 438, 439, 440; Payne v. Clarke (D. C.) 271 F. 525.
The provision follows: '* * * Nor shall any carrier charge or demand or collect or receive a greater or less or different compensation for such transportation of passengers or property, or for any service in connection therewith, * * * than the rates, fares and charges which are specified in the tariff * * *; nor shall any carrier refund or remit in any manner or by any device any portion of the rates, fares, and charges so specified, nor extend to any shipper or person any privileges or facilities in the transportation of passengers or property, except such as are specified in such tariffs.' 49 U.S.C. § 6(7), 49 USCA § 6(7).
The purpose of the act to prevent discrimination has been emphasized by this court, and is well known. Since its enactment, carriers may not accept services, advertising, property, or a release of claim for damages in payment for transportation. They are required to collect the established rates, charges, and fares from all alike in cash. Louisville & Nashville R. R. v. Mottley, 219 U.S. 467, 31 S.C.t. 265, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671; Chicago, Ind. & L. Ry. Co. v. United States, 219 U.S. 486, 31 S.C.t. 272, 55 L. Ed. 305; Lake & Export Coal Corp. v. Chesapeake & Ohio Ry. Co. (C. C. A.) 1 F. (2d) 968; State v. Union Pacific R. R. Co., 87 Neb. 29, 126 N. W. 859, 31 L. R. A. (N. S.) 657.