independently of his relations to certain newspaper corporations, for whose business the wagon was used; while the defendant's proofs tended to show that he was but a stockholder and officer of a corporation to which the wagon belonged. The plaintiff was permitted, over the objection and exception of the defendant, to introduce evidence showing that the newspaper corporations had failed to file annual reports with the county clerk and with the state comptroller. At the request of the plaintiff, the jurors were instructed that they might consider the fact of a failure to file the reports, in deciding whether such corporations were conducted in good faith and whether their articles of association were mere forms, under which defendant had, and exercised, control. To these instructions the defendant excepted and I think that the errors in that respect, and in admitting the evidence above referred to, were important, in view of the closeness of the question of ownership, and that they were substantial, as diverting the minds of the jurors to a collateral and a false issue. The validity of the creation of the corporations and their right to exist as such, in consequence of a failure to comply with statutory conditions and requirements, as questions, had no place in such an action as this and they had no bearing upon the dispute as to the defendant's ownership and liability. We must assume that the evidence had purpose and that it had an influence upon the jurors; for its introduction must have been with the object of invalidating the corporate status and the jurors may have been led to believe that, by reason of the failure to observe corporate obligations imposed by statute, incorporation was a sham and a device, adopted by the defendant to shield himself from liability. The plaintiff was, thus, permitted to interject an irrelevant issue as to the character and valid existence of the corporations and it is reasonable, and, indeed, upon the record, fairly, conceivable that the jurors may have reached their verdict upon the supposition that, if the newspaper corporations were invalid, or defunct, corporate entities, the defendant was, necessarily, liable. But that is not so. They were corporations, in fact; however open to inquiry as to their right to continue as such, as the instance of the proper authorities. It was not the province of the jury to determine whether they were incorporated in good faith, or whether incorporation was a mere form and an evasive device on the defendant's part to escape an individual responsibility for the conduct of the business. (Demarest v. Flack, 128 N. Y. 205, 213.) The issue was whether the defendant was the employer of the negligent driver, or whether the newspaper corporation was. All evidence establishing, or tending to establish, the fact in either way was competent; but it was not competent proof upon the subject to show that the corporation had defaulted in its obligations and duties under the law, which gave it corporate rights and regulated its existence. Other errors were committed in the rulings upon evidence and in the instructions given to the jurors, at the request of the plaintiff, bearing upon the defendant's relation to the corporations and upon their conduct, to which I think reference unnecessary; as, upon a new trial, they may not be repeated, in view of this opinion. For these reasons, briefly stated, I think that the judgment appealed from should be reversed and that a new trial should be ordered; with costs to abide the event. Judgment reversed. NEW YORK CENTRAL AND HUDSON RIVER RAILROAD CO. v. UNITED STATES. 1908. 212 U. S. 481, 54 L. ed. 613, 29 Sup. Ct. 304.7 THE facts are stated in the opinion. Mr. Justice Day delivered the opinion of the court. This is a writ of error to the Circuit Court of the United States for the Southern District of New York, sued out by the New York Central and Hudson River Railroad Company, plaintiff in error. In the Circuit Court the railroad company and Fred. L. Pomeroy, its assistant traffic manager, were convicted for the payment of rebates to the American Sugar Refining Company and others, upon shipments of sugar from the city of New York to the city of Detroit, Michigan. The indictment was upon seven counts and was returned against the company, its general traffic manager and its assistant. traffic manager. The first count, covering the offering of a rebate, 6 See Demarest v. Flack (1891), 128 N. Y. 205, 28 N. E. 645; Tilley v. Coykendall (1902) 172 N. Y. 587, 65 N. E. 574; Stone v. Cleveland, &c., R. Co. (1911) 202 N. Y. 352, 95 N. E. 816; Summo v. Snare & Triest Co. (1915) 166 App. Div. 425, 152 N. Y. S. 29; Otway v. Snare & Triest Co. (1915) 167 App. Div. 128, 152 N. Y. S. 845; Crown Cork & Seal Co. v. Brooklyn Bottle Stopper Co. (1911) 190 Fed. 323; Willem Van Driel Sr. v. Penna. R. Co. (1918) 252 Fed. 35. In SUMMO V. SNARE & TRIEST Co., supra, it was held that, in an action to recover damages for the death of an employee, it was competent to show that a corporation, apparently an independent sub-contractor, was in reality but a dummy device or tool used to enable another corporation, as the true and secret principal, to carry on its manipulations as to hiring and contracting of labor employed really for the purpose of the secret principal, and that this was a question for the jury. In CROWN CORK & SEAL Co. v. BROOKLYN BOTTLE STOPPER CO., supra, it was held, in a suit for infringement, that individuals, who organized a corporation with a small capital for the purpose of enabling them to infringe a patent through the corporation, without subjecting themselves to personal liability, may be joined with the corporation as defendant in a suit for infringement and held jointly liable therefor. IN THE WILLEM VAN DRIEL, SR. v. PENNA. R. Co, supra, it was held that the Pennsylvania Railroad Company was liable for the damages resulting from the negligence of an elevator company. All the stock of the elevator company, except a few shares to qualify the directors, was owned by the Northern Central Railroad Co. The latter company leased all its property and franchises to the Pennsylvania Railroad Company and thereafter the Pennsylvania Railroad Company controlled and managed the elevator company, although the elevator company maintained its corporate existence and its stockholders and directors held meetings. 7 Arguments and portion of opinion omitted.-Eds. was withdrawn from the jury by the district attorney, and it is unnecessary to consider it. The second count charges the making and publishing of a through tariff rate upon sugar by certain railroad companies, including the plaintiff in error, fixing the rate at twentythree cents per 100 pounds from the New York city to Detroit, and charges the railroad company's general traffic manager and assistant traffic manager with entering into an unlawful agreement with the shippers, the American Sugar Refining Company of New York and the American Sugar Refining Company of New Jersey, and the consignees of the sugar, W. H. Edgar & Son, of Detroit, whereby it was agreed that for sugar shipped over the line, the full tariff rate. being paid thereon, the railroad company should give a rebate of five cents for each 100 pounds. This count charges that during the months of April and May, 1904, shipments were made under this agreement and the regular tariff rates paid thereon. On July 14 of that year a claim for a rebate in the sum of $1,524.99 was presented by the agents of the shipper and consignees and paid on the thirty-first day of August to Lowell M. Palmer, agent of the sugar company, for the benefit of the shippers and consignees. In each of the counts, except the sixth, the lawful rate is charged to have been 23 cents per 100 pounds. During the month of June, 1904, the same was reduced to 21 cents per 100 pounds, and the rebate agreed to and paid being 3 cents per 100 pounds. The second count covers the shipments of April and May, 1904; the third count, the shipments for July and August, 1904; the fourth for September, 1904; the fifth for October, 1904; the sixth for June, 1904, and the seventh for April and May, 1904. In each of these counts there is an allegation of the payment of the published rate, the presentation of the claim for the rebate, and the statement of a specific sum allowed and paid on account thereof. Upon the trial there was a conviction upon all of the six counts, two to seven inclusive. The assistant traffic manager was sentenced to pay a fine of $1,000 upon each of the counts; the present plaintiff in error to pay a fine of $18,000 on each count, making a fine of $108,000 in all. The facts are practically undisputed. They are mainly established by stipulation, or by letters passing between the traffic managers and the agent of the sugar refining companies. It was shown that the established, filed and published rate between New York and Detroit was 23 cents per 100 pounds on sugar, except during the month of June, 1904, when it was 21 cents per 100 pounds. The sugar refining companies were engaged in selling and shipping their products in Brooklyn and Jersey City, and W. H. Edgar & Son were engaged in business in Detroit, Michigan, where they were dealers in sugar. By letters between Palmer, in charge of the traffic of the sugar refining companies and of procuring rates for the shipment of sugar, and the general and assistant traffic managers of the railroad company, it was agreed that Edgar & Son should receive a rate of 18 cents per 100 pounds from New York to Detroit. It is unnecessary to quote from these letters, from which it is abundantly established that this concession was given to Edgar & Son to prevent them from resorting to transportation by the water route between New York and Detroit, thereby depriving the roads interested of the business, and to assist Edgar & Son in meeting the severe competition with other shippers and dealers. The shipments were made accordingly and claims of rebate made on the basis of a reduction of five cents a hundred pounds from the published rates. These claims were sent to the assistant freight traffic manager of the railroad company by Palmer, the agent of the sugar companies, and then sent to one Wilson, the general manager of the New York Central and Fast Freight Lines of Buffalo, New York. Wilson returned to the assistant traffic manager of the railroad company a cashier's draft for the amount of the claim. This draft was then sent to the agent of the sugar companies and his receipt taken. It was stipulated that these drafts were ultimately paid from the funds of the railroad company. Numerous objections and exceptions were taken at every stage of the trial to the validity of the indictment and the proceedings thereunder. The principal attack in this court is upon the constitutional validity of certain features of the Elkins act. 32 Stat. 847. That act, among other things, provides: "(1) That anything done or omitted to be done by a corporation. common carrier subject to the act to regulate commerce, and the acts amendatory thereof, which, if done or omitted to be done by any director or officer thereof, or any receiver, trustee, lessee, agent or person acting for or employed by such corporation, would constitute a misdemeanor under said acts, or under act, shall also be held to be a misdemeanor committed by such corporation, and upon conviction thereof it shall be subject to like penalties as are prescribed in said acts, or by this act, with reference to such persons, except as such penalties are herein changed. * * * * "In construing and enforcing the provisions of this section, the act, omission or failure of any officer, agent or other person acting for or employed by any common carrier, acting within the scope of his employment, shall in every case be also deemed to be the act, omission or failure of such carrier, as well as of that person." It is contended that these provisions of the law are unconstitutional because Congress has no authority to impute to a corporation the commission of criminal offenses, or to subject a corporation to a criminal prosecution by reason of the things charged. The argument is that to thus punish the corporation is in reality to punish the innocent stockholders, and to deprive them of their property without opportunity to be heard, consequently without due process of law. And it is further contended that these provisions of the statute deprive the corporation of the presumption of innocence, a presumption which is part of due process in criminal prosecutions. It is urged that as there is no authority shown by the board of directors or the stockholders for the criminal acts of the agents of the company, in contracting for and giving rebates, they could not be lawfully charged against the corporation. As no action of the board of directors could legally authorize a crime, and as indeed the stockholders could not do so, the arguments come to this: that owing to the nature and character of its organization and the extent of its power and authority, a corporation cannot commit a crime of the nature charged in this case. Some of the earlier writers on common law held the law to be that a corporation could not commit a crime. It is said to have been held by Lord Chief Justice Holt (Anonymous, 12 Modern, 559) that "a corporation is not indictable, although the particular members of it are." In Blackstone's Commentaries, chapter 18, § 12, we find it stated: "A corporation cannot commit treason, or felony, or other crime in its corporate capacity though its members may in their distinct individual capacities." The modern authority, universally, so far as we know, is the other In considering the subject, Bishop's New Criminal Law, § 417, devotes a chapter to the capacity of corporations to commit crime, and states the law to be: "Since a corporation acts by its officers and agents their purposes, motives, and intent are just as much those of the corporation as are the things done. If, for example, the invisible, intangible essence of air, which we term a corporation, can level mountains, fill up valleys, lay down iron tracks, and run railroad cars on them, it can intend to do it, and can act there in as well viciously as virtuously." Without citing the state cases holding the same view, we may note Telegram Newspaper Company v. Commonwealth, 172 Massachusetts, 294, in which it was held that a corporation was subject to punishment for criminal contempt, and the court, speaking by Mr. Chief Justice Field, said: "We think that a corporation may be liable criminally for certain offenses of which a specific intent may be a necessary element. There is no more difficulty in imputing to a corporation a specific intent in criminal proceedings than in civil. A corporation cannot be arrested and imprisoned in either civil or criminal proceedings, but its property may be taken either as compensation for a private wrong or as punishment for a public wrong.' It is held in England that corporations may be criminally prosecuted for acts of misfeasance as well as nonfeasance. Queen v. Great North of England Railway Company, 9 Queen's Bench, 315. It is now well established that in actions for tort the corporation may be held responsible for damages for the acts of its agent within the scope of his employment. Lake Shore & Michigan Southern R. R. v. Prentice, 147 U. S. 101, 109, 111. And this is the rule when the act is done by the agent in the course of his employment, although done wantonly or recklessly or against the express orders of the principal. In such cases the liability is not imputed because the principal actually participates in the malice or fraud, but because the act is done for the benefit of the principal, while the agent is acting within the scope of his employment in the business of the principal, and justice requires that the latter shall be held responsible for damages to the individual who |