G.R. No. L-8686; July 30, 1915
THE UNITED STATES, plaintiff-appellee, vs. PASCUAL QUINAJON and EUGENIO QUITORIANO, defendants-appellants.

FACTS:
The defendants, Pascual Quinajon and Eugenio Quitoriano, were charged with violating Act No. 98 (the Philippine Anti-Discrimination Act, analogous to the U.S. Interstate Commerce Act). They operated as common carriers at the port of Currimao, Ilocos Norte, loading and unloading merchandise from steamers using virayes (lighters). For over four years, they had a special agreement with certain Chinese merchants to charge a flat rate of 6 centavos per package, regardless of size or weight. However, in June, July, and September 1912, they unloaded 5,986 sacks of rice belonging to the Provincial Government of Ilocos Norte and charged 10 centavos per sack. The provincial government paid P598.60. The prosecution alleged that, at the regular 6-centavo rate, the charge should have been only P359.16, resulting in an overcharge of P239.44. The defendants were convicted in the Court of First Instance and sentenced to pay a fine and return P359.16 to the provincial government. They appealed.

ISSUE:
Did the defendants violate Act No. 98 by unjustly discriminating against the Provincial Government of Ilocos Norte in their charging of rates for unloading services?

RULING:
Yes. The Supreme Court affirmed the conviction but modified the amount to be returned.

The Court found that the defendants, as common carriers, charged different rates for substantially the same service under similar conditions. They charged the provincial government 10 centavos per sack of rice while charging only 6 centavos per package for merchants with whom they had a special contract. There was no evidence that the cost of service was different for the province. The law prohibits unjust and unreasonable discrimination. While common carriers may make special rates based on legitimate business considerations (e.g., quantity, nature of goods, cost differences), the mere fact that a carrier handles all goods of one shipper does not justify discrimination against another shipper where the service and conditions are identical.

The Court held that the defendants engaged in undue discrimination against the provincial government. However, it corrected the trial court’s computation of damages. The defendants had a right to charge 6 centavos per sack, amounting to P359.16 for 5,986 sacks. Since they collected P598.60, the overcharge was P239.44 (not P359.16). Thus, the judgment was modified to order the defendants to return P239.44 to the Provincial Government of Ilocos Norte. The fine imposed by the lower court was affirmed.