295 U.S. 301 (1935), 344, Atlantic Coast Line Railroad Co. v. Florida

Docket Nº:No. 344
Citation:295 U.S. 301, 55 S.Ct. 713, 79 L.Ed. 1451
Party Name:Atlantic Coast Line Railroad Co. v. Florida
Case Date:April 29, 1935
Court:United States Supreme Court

Page 301

295 U.S. 301 (1935)

55 S.Ct. 713, 79 L.Ed. 1451

Atlantic Coast Line Railroad Co.

v.

Florida

No. 344

United States Supreme Court

April 29, 1935

Argued January 17, 18, 1935

Reargued March 4, 5, 1935

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE NORTHERN DISTRICT OF GEORGIA

Syllabus

Higher intrastate rates were substituted for lower intrastate rates by an order of the Interstate Commerce Commission upon the ground that the lower ones were so low as to result in unjust discrimination against interstate commerce. The order was upheld

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by a decree of the federal District Court dismissing complaints of the State and interested shippers, seeking injunctions. This Court reversed the decree because the order was not supported by proper findings (282 U.S. 194), whereupon the Commission after reinvestigation made a new order, upon the same ground as before, which reinstated the higher rates for the future and which, being supported by adequate findings, was sustained in further litigation (292 U.S. 1). In the interim between the first order and the decree enjoining its execution, the carrier had collected the higher rates. The State and other plaintiffs in the original suit applied to the District Court for a supplementary decree requiring the carrier to return the excess of such collections over the lower rates.

Held:

1. That the claim of restitution was without equity as to all or any part of such excess. Pp. 316-317.

2. A cause of action for restitution upon reversal of a judgment belongs to the class of actions for money had and received. The remedy is equitable in origin and function, and the claimant, to prevail, must show that the money was received in such circumstances that the possessor cannot in equity and good conscience retain it. The question is not whether the law would put the defendant in possession of the money if the transaction were a new one, but whether the law will take it out of his possession after he has been able to collect it. P. 309.

3. Award of restitution after reversal of a judgment is ex gratia, resting in sound discretion, and will not be ordered where the justice of the case does not call for it. P. 310.

4. The Interstate Commerce Commission has jurisdiction, exclusive of that of any court, to set aside intrastate rates which discriminate unduly against interstate commerce, but its order is prospective only, and it cannot in such case give reparation for the past. P. 311.

5. The order that first substituted the higher rates in this case was voidable, not void, and the carrier was not at liberty to disobey it. P. 311.

6. The absence of an equity to restitution in this case is apparent from the findings of the trial court confirming the reports and findings of the Interstate Commerce Commission whereby it appears that the lower rates were discriminatory against interstate commerce, and therefore forbidden and declared unlawful under § 13(4) of the Interstate Commerce Act, from the time of

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the Commission's first order, and that the higher rates ordered by it would have been the only lawful ones through the period in question but for a mere slip in procedure. P. 312.

7. The carrier's equity is reinforced by the fact that the lower rates would be confiscatory if enforced by the State after suitable challenge by the carrier. P. 313.

8. Assuming that the carrier's only remedy under the state law for escaping the lower rates, though they were voluntarily initiated, was by administrative proceedings, followed, if necessary, by action in court, it does not follow that their confiscatory character is not to be considered as bearing on the carrier's equity in this case. P. 313.

9. In cases of this kind, the tests of conscience and fair dealing are the same whether the claim of restitution be based on contract or on statute. P. 314.

10. The power of the District Court to compel restitution is ancillary to the power to determine whether the challenged orders of the Commission should be vacated or upheld. P. 314.

11. In the exercise of this ancillary power, the court was not called upon to lend its aid to a forbidden practice, and, in the absence of any equities of the State or the shippers, it should stay its hand, leaving the parties where it finds them. P. 314.

12. This mere inaction of the federal court is not an assumption of the ratemaking power, nor an encroachment upon the powers of the State. P. 315.

13. Restitution in this case is denied in toto, since the determination of the Interstate Commerce Commission, though not res judicata in respect of past transactions, is entitled to great weight as evidence of the reasonableness of the rates collected, and the claimants have failed to prove them unreasonable. P. 317.

Reversed.

Cross-appeals from a decree of the District Court of three judges requiring the Railroad Company to refund to shippers (but in part only) moneys collected by it in excess of the lawful state rates on intrastate consignments of lumber. The collections were made under color of an order of the Interstate Commerce Commission, sustained by the District Court, but adjudged invalid by this Court on appeal. 282 U.S. 194. See also 292 U.S. 1. After the case had been argued at this Term, the Court called for reargument upon the following questions:

(1) Whether the District Court had jurisdiction to award restitution, or should exercise such jurisdiction in a case of this character relating to intrastate rates. (2) If the District Court had such jurisdiction and should exercise it in a case of this character relating to the revenue needs of the carrier, what should be the measure of an award of restitution. And (3) in such an inquiry, what effect, evidentiary or otherwise, should be attributed to the proceedings before, and findings of, the Interstate Commerce Commission.

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CARDOZO, J., lead opinion

MR. JUSTICE CARDOZO delivered the opinion of the Court.

Freight charges were collected by a railroad carrier in accordance with an order of the Interstate Commerce Commission after [55 S.Ct. 715] the refusal of a United States District Court to declare the order void. Later, the decree was reversed by this Court without considering the evidence on the ground that the findings of the Commission were incomplete and inadequate. Florida v. United States, 282 U.S. 194. Still later, the Commission, upon new evidence and new findings, made the same order it had made before, this Court confirming its action after appropriate proceedings. Florida v. United States, 292 U.S. 1. The question now is whether restitution is owing from the carrier for the whole or any part of the rates collected from its customers while the first order was in force. The narrative must be expanded to bring us to an answer.

For many years, beginning with 1903, the Atlantic Coast Line Railroad Company or its predecessor maintained a schedule of charges known as the Cummer scale for the transportation of logs in train and carload shipments within the State of Florida. In its inception, this scale was established by agreement between the railroad company and one or more companies engaged in the sale of lumber. Later, in January, 1927, an order was made by the Railroad Commission of Florida whereby voluntary rates then in force, if not higher than the maximum rates approved by the Commission, were to be continued in effect as if officially prescribed. For the purpose of the present controversy, we assume that, by force of this order, the Cummer scale, even though less than compensatory, and even

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though voidable through appropriate action, must be deemed to have been fixed by law for intrastate transactions.

In May, 1926, the Public Service Commission of Georgia filed a complaint against the Atlantic Coast Line Railroad Company with the Interstate Commerce Commission, the complaint being directed to the maintenance of the Cummer scale. In that proceeding, the Railroad Commission of Florida intervened, and also important shippers affected by the challenged schedule. On August 2, 1928, the Interstate Commerce Commission made a decision (146 I.C.C. 717), amended and broadened on February 7, 1929, enjoining the maintenance of the schedule then in force on the ground (along with others) that the rates were so low as to result in unjust discrimination against interstate commerce. To avoid this discrimination, a new schedule was established. Florida and the intervening shippers brought suits in a federal District Court, made up of three judges in accordance with the statute (28 U.S.C. § 47), to vacate the orders of the Commission and restrain enforcement. The District Court dismissed the bills. 30 F.2d 116; 31 F.2d 580. Upon appeal to this Court, the decrees were reversed on the ground that the report of the Commission did not contain the necessary findings. 282 U.S. 194. It was not enough to find that the intrastate rates were unreasonably low. 282 U.S. at p. 214. It was not enough to state the conclusion that interstate commerce was unjustly affected. 282 U.S. at p. 213. It was necessary to find the facts supporting the conclusion -- as, for instance, that the revenues of interstate commerce would probably be increased if the rates for intrastate hauls were established at a higher level.

In the absence of such findings, we are not called upon to examine the evidence in order to resolve opposing contentions as to what it shows or to spell out and state such conclusions of fact as it may permit.

282 U.S. at p. 215. The Commission

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was to be free, however, to consider the facts anew and file its report in proper form. It "is still at liberty, acting in accordance with the authority conferred by the statute, to make such determinations as the situation may require." The mandate of reversal, giving effect to that decision, went down from this Court on February 19, 1931, and on March 7,...

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