New York Central & Hudson River Railroad Co. v. U.S.

29 S.Ct. 304 (1908)

Facts:

  • The Defendant Corporation was a railroad company that was prosecuted by the federal government for violating a statute that prohibited the provision of rebates for shipments. The violated statute permitted the company to be criminally liable.
  • D corporation employed individuals who were involved in promulgating the rebates, which were in violation of the Elkins Act. The individual employees ultimately submitted the rebates, which were paid by the D corporation. The employees never had written authorization to submit rebates.

Issue:

  • Whether the employee’s conduct constitutes a valid violation of the Elkins Act, such that the D corporation is criminally liable for their conduct.

Holding:

  • Yes, the company can be held liable for the acts of its agents, even if the employees’ actions are not specifically authorized by the company.
  1. “A corporation is held responsible for acts not within the agent’s corporate powers strictly construed, but which the agent has assumed to perform for the corporation when employing the corporate powers actually authorized, and in such cases there need be no written authority under seal or vote of the corporation in order to constitute the agency or to authorize the act.”
  • The specific offense doesn’t need to be authorized by the employer. Only the subject matter of the offense needs to be within the general authorization/duty of the employee.
  • It is a legitimate interstate commerce policy to criminally punish corporations for the acts of their employees. The Elkins Act would be far less effective were the corporation absolved of any criminal responsibility for the illegal acts. The deterrence effect of the Act would be less, as the corporation would have no incentive to police the behavior of its employees and would moreso benefit from their criminal activity.

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