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Matched Legal Cases: ['§ 181', '§ 316', '§ 217', '§ 47', '§ 238', '§ 345', '§ 305', '§ 305', '§ 309', '§ 310', '§ 309', '§ 305', '§ 309', '§ 309', '§ 308', '§ 309']

United States v. Morgan (full text) :: 307 U.S. 183 (1939) :: Justia US Supreme Court Center Log In
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United States v. Morgan 307 U.S. 183 (1939)
U.S. Supreme CourtUnited States v. Morgan, 307 U.S. 183 (1939)United States v. MorganNo. 221Argued October 20, 21, 1938Reargued April 20, 1939Decided May 15, 1939307 U.S. 183APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES
4. In reviewing an order of the Secretary of Agriculture fixing rates under the Packers and Stockyards Act, the District Court sits as Page 307 U. S. 184 a court of equity, and, in exerting its extraordinary powers to stay execution of the order, and in directing payment into court of so much of the rates in effect as has been found administratively to be excessive, the court assumes the duty of making disposition of the fund in conformity with equitable principles. P. 307 U. S. 191.
Appeal from an order of the District Court respecting the disposition of funds impounded in the litigation over the validity of the order of the Secretary of Agriculture which this Court held invalid for want of due procedure in Morgan v. United States, 298 U. S. 468, id., 304 U. S. 304 U.S. 1, 304 U. S. 23. The decree permanently enjoined against enforcement of the order but, as permitted by the mandate from this Court, undertook to make proper disposition of the fund. It overruled the motion of the Government and Page 307 U. S. 185 the Secretary of Agriculture for a stay to await the outcome of further proceedings by the Secretary, and granted a countermotion of the plaintiffs, who had paid the money into court, that it be returned to them.
On June 14, 1933, the Secretary of Agriculture promulgated an order under the Packers and Stockyards Act, 1921, 42 Stat. 159, 7 U.S.C. §§ 181-229, setting aside a schedule of maximum rates to be charged for stockyard services, filed by market agencies at the Kansas City stockyards, and prescribing a new and lower rate schedule for the future. In a suit brought in the District Court for Western Missouri by appellees, 24 F.Supp. 214, conducting market agencies at the Kansas City stockyards, to set aside the Page 307 U. S. 186 order as confiscatory and as having been rendered without procedural due process, the court, on July 22, 1933, entered a temporary restraining order enjoining enforcement of the Secretary's order upon condition that appellees should
"We remand the case to the District Court for further proceedings in conformity with our opinion. What further proceedings the Secretary may see fit to take in the light of our decision, or what determinations may be made by the District Court in relation to any such proceedings, Page 307 U. S. 187 are not matters which we should attempt to forecast or hypothetically to decide."
The Secretary thereupon, by order of June 2, 1938, reopened the original proceedings which had resulted in the challenged order of June 14, 1933. He directed that the "Proceedings, Findings of Fact, Conclusion, and Order" of June 14, 1933, be served upon the appellee market agencies as his tentative findings and order, with an opportunity for appellees to file exceptions to them and to make oral argument upon the exceptions. This action was followed, June 11, 1938, by the present proceeding, begun by motion of appellants in the district court to stay further proceedings there and to direct the clerk of the court to retain the impounded funds until such time as the Secretary, proceeding with due expedition, should have entered a final order in the proceedings reopened by him. This motion was denied, and, from the order of the district court granting a countermotion by appellees to distribute the fund among them, the case comes here on appeal. [Footnote 1] § 316 of the Packers and Stockyards Page 307 U. S. 188 Act, 42 Stat. 168, 7 U.S.C. § 217; 38 Stat. 220, 28 U.S.C. §§ 47, 47a; § 238(5) of the Judicial Code, 28 U.S.C. § 345(5). This Court has stayed and superseded the order of the district court pending appeal. October 10, 1938.
Decision turns on the meaning and application of the provisions of the Packers and Stockyards Act, construed in the light of its dominant purpose to secure to patrons Page 307 U. S. 189 of the stockyards prescribed stockyard services at just and reasonable rates, and upon the authority and duty of the district court to effectuate that purpose in making disposition of the fund. Section 304 of the Act requires every stockyard owner and market agency to furnish nondiscriminatory and reasonable stockyard services, and § 305 declares that
Appellees insist that, notwithstanding the command of § 305 that all rates shall be "just, reasonable, and nondiscriminatory," its mandate is effective only so far as implemented by the other sections of the Act; that, except Page 307 U. S. 190 in a reparation case, the statute forbids the Secretary to make orders affecting completed transactions, and that, acting on his own initiative, as he does here, he can fix rates for the future only. They point out that, under § 309(a) and (e) and § 310, any person aggrieved may, on petition to the Secretary, seek damages for the exaction of an unreasonable rate in the past, the naming of a new rate for the future, or both, but that, when the Secretary institutes such proceedings on his own motion, he is precluded by § 309(c) from making any order for the payment of money. As the original proceeding here and the action of the Secretary in reopening it were taken on his own motion, the conclusion is drawn that there can be no legal warrant for restitution of the impounded moneys to the patrons of the market agencies, even though the Secretary shall now determine, on evidence and by proper procedure, that the scheduled rates exceeded the reasonable rate prescribed by § 305.
In answering these questions, there are two cardinal principles which must guide us to our conclusion. The Page 307 U. S. 191 one is that, in construing a statute setting up an administrative agency and providing for judicial review of its action, court and agency are not to be regarded as wholly independent and unrelated instrumentalities of justice, each acting in the performance of its prescribed statutory duty without regard to the appropriate function of the other in securing the plainly indicated objects of the statute. Court and agency are the means adopted to attain the prescribed end, and so far as their duties are defined by the words of the statute, those words should be construed so as to attain that end through coordinated action. Neither body should repeat in this day the mistake made by the courts of law when equity was struggling for recognition as an ameliorating system of justice; [Footnote 2] neither can rightly be regarded by the other as an alien intruder, to be tolerated if must be, but never to be encouraged or aided by the other in the attainment of the common aim. The other guiding principle is that, in reviewing the action of the Secretary and in similarly reviewing the action of the Interstate Commerce Commission in conformity with the provisions of the Urgent Deficiencies Act, the district court sits as a court of equity, see Ford Motor Co. v. Labor Board, 305 U. S. 364, 305 U. S. 373; Inland Steel Co. v. United States, 306 U. S. 153, and in exerting its extraordinary powers to stay execution of a rate order, and, in directing payment into court of so much of the rate as has been found administratively to be excessive, it assumes the duty of making disposition of the fund in conformity to equitable principles.
Assuming, as appellees contend, that, after the Secretary's order of June, 1933, was set aside, he could, in the reopened proceeding, neither promulgate a rate order as of that date nor make an order for the payment of Page 307 U. S. 192 money, he was still not without authority in the premises under the statute and the mandate of this Court. He was free to make an order fixing rates for the future, and, for that purpose or any other within the purview of the Act, he is now free to determine a reasonable rate for the period antedating any order he may now make. See Atlantic Coast Line R. Co. v. Florida, 295 U. S. 301, 295 U. S. 312. No prior decision of the Secretary stands in the way of his making the determination now. Cf. Arizona Grocery Co. v. Atchison, T. & S.F. Ry. Co., 284 U. S. 370. The sole limitation upon his power, prescribed by § 309(c), is that, upon an inquiry instituted by him, he may not order the payment of money. In other respects, his power to investigate and decide is unaffected. [Footnote 3] He may make inquiry "as to any matter or thing concerning which a complaint is authorized to be made" to him, "or concerning which any question may arise under any of the provisions" of the Act, "or relating to the enforcement of any" provision. He is given
§ 309(c). Page 307 U. S. 193
The district court, in staying the Secretary's order and at the same time arresting the excess payments to appellees under the scheduled rates, assumed the duty of making the proper disposition of the fund upon the termination of the litigation. The duty was the more imperative here because the court's injunction order not only deprived the public of the benefit of the lower rates, but obstructed any effective reparation order by the Secretary. Its action presupposed that the ownership of the excess payments was in doubt, and could be finally determined only by an adjudication on the merits of the reasonableness of the filed rates. In taking the payments into custody, it acted as a court of equity, charged both Page 307 U. S. 194 with the responsibility of protecting the fund and of disposing of it according to law, and free in the discharge of that duty to use broad discretion in the exercise of its powers in such manner as to avoid an unjust or unlawful result. It entered into no contract or understanding with the litigants; it entered into no undertaking as to the manner of disposing of the fund; its duty with respect to it is that prescribed by the applicable principles of law and equity for the protection of the litigants and the public, whose interests the injunction and the final disposition of the fund affect. Inland Steel Co. v. United States, supra.
It is familiar doctrine that the extent to which a court of equity may grant or withhold its aid, and the manner of moulding its remedies, may be affected by the public interest involved. Central Kentucky Gas Co. v. Railroad Commission, 290 U. S. 264, 290 U. S. 271; Pennsylvania v. Williams, 294 U. S. 176, 294 U. S. 185; Virginia Ry. Co. v. Federation, 300 U. S. 515, 300 U. S. 552 et seq. Congress having, by the Packers and Stockyards Act, established the public policy of maintaining reasonable rates for stockyard services, and having prohibited and declared unlawful any unjust or unreasonable rate, a court of equity should be astute to avoid the use of its process to effectuate the collection of unlawful rates, and equally so to direct it to the restitution of rates which it has taken into its own custody once they are shown to have been unlawful. If such a determination had already been made by the Secretary in the proceeding before him, after full hearing, and if it were found by the district court to be supported by evidence, the duty of the court to make restitution forthwith would seem evident notwithstanding the absence of any order of the Secretary directing the payment. Inland Steel Co. v. United States, supra. [Footnote 4] The Secretary, as we Page 307 U. S. 195 have seen, is authorized to make the determination. Section 305 denounces unreasonable rates as unlawful. The statute, as declared by § 308(b), saves to the court authority to give any remedy which in the present circumstances it might otherwise afford.
This Court went much further in Atlantic Coast Line R. Co. v. Florida, supra, in denying, on equitable grounds, restitution to shippers of the excess of an intrastate rate, prescribed by order of the Interstate Commerce Commission to avoid discrimination against interstate commerce, over that prescribed by the state commission, where the order of the former was later set aside by this Court for want of proper findings by the Commission. Upon further proceedings before the Commission, it made a second order, upon proper findings of discrimination, establishing the rate as before. The final result of the litigation was that the railroads were permitted to collect and retain the higher rates for a period during which there was no lawful order of the Commission superseding the state commission rates. There, as here, the administrative Page 307 U. S. 196 agency could prescribe rates only for the future, and the higher rates exacted between the date of the first order and the second were without the sanction of a valid order. But there, as here, the first administrative order was not a nullity. Ewell v. Daggs, 108 U. S. 143, 108 U. S. 148-149; Weeks v. Bridgman, 159 U. S. 541, 159 U. S. 547; Toy Toy v. Hopkins, 212 U. S. 542, 212 U. S. 548. Though voidable, it could not be ignored without incurring the penalties for disobedience inflicted by the applicable provisions of the statute. The rates did not lose their unjust and unreasonable quality in the one case, or cease to be unjustly discriminatory in the other, merely because the administrative orders in each were voidable for procedural defects or because a second order could operate only for the future. In each case, the administrative agency was not without power to inquire whether injustice had been done by the earlier rate, and the court, called on to ascertain, according to equitable principles, the rights of the parties with respect to payments made under the voidable order, could take into account the subsequent determination of the administrative agency as the basis of its action. Atlantic Coast Line R. Co. v. Florida, supra, 295 U. S. 312-313, 295 U. S. 317; New York Edison Co. v. Maltbie, 244 App.Div. 436, 279 N.Y.S. 949; Brooklyn Union Gas Co. v. Maltbie, 245 App.Div. 74, 281 N.Y.S. 233.
It is said that the distinction between this and the Atlantic Coast Line case is the distinction between judicial inaction and judicial action; that there, the court, upon settled equitable principles, was free to refrain from compelling restitution if satisfied that no injustice had been done, See Tiffany v. Boatman's Institution, 18 Wall. 375, 85 U. S. 385; Mississippi & M. R. Co. v. Cromwell, 91 U. S. 643, 91 U. S. 645; Deweese v. Reinhard, 165 U. S. 386, 165 U. S. 390, but that here, the court is called on by appellants to act by withholding from appellees Page 307 U. S. 197 rates which are still lawfully in force because the filed schedule has not been set aside by a valid order of the Secretary. While, at the moment, appellants are content with inaction, and it is appellees who are demanding action -- the payment to them of rates whose lawfulness is challenged and not yet determined -- the actual posture of the case is such that the court is under a self-imposed duty to act by virtue of having taken the fund into its possession, and, in acting to dispose of the fund, it must conform to controlling legal principles. Reasonableness of the rates was not established by the filed schedules. Had the rates collected been paid to appellees, instead of to the clerk of the court, the Secretary could have ordered reparation upon proper findings that they were unreasonable. And the question is whether the court must now, in the face of a proceeding by the Secretary to determine the reasonableness of the challenged rates, use its power to complete their collection at the risk of obstructing reparation, or whether it should itself remain inactive until their lawfulness is determined, and then act accordingly.
Arkadelphia Milling Co. v. St. Louis Southwestern Ry. Co., 249 U. S. 134, 249 U. S. 146. See Northwestern Fuel Co. v. Brock, 139 U. S. 216, 139 U. S. 219. What has been given or paid under the compulsion of a judgment the court will restore when its judgment has been set aside and justice requires restitution. Northwestern Fuel Co. v. Brock, supra; Ex parte Lincoln Gas & Electric Light Co., 257 U. S. 6; Baltimore & Ohio R. Co. v. United States, 279 U. S. 781. And where, by its injunction, a court has compelled payment into its registry of amounts which may in pending proceedings be found not to have been due Page 307 U. S. 198 from those who paid them, we think justice equally requires the court to await the outcome of the proceedings in order that it may discharge the duty which it owes to the litigants and the public by avoiding unlawful disposition of the fund in the meantime, and ultimately distributing it to those found to be entitled to it. See New York Edison Co. v. Maltbie, supra; Brooklyn Union Gas Co. v. Maltbie, supra; cf. United States v. Klein, 303 U. S. 276.
MR. JUSTICE REED took no part in the consideration or decision of this case. Page 307 U. S. 199
The money on deposit in the district court is made up of amounts taken from charges as low as, or lower than, those so put and kept in force and applied until November 1, 1937. In the proceedings pending before him, the Secretary may not order reparation (see § 309; also Arizona Grocery Co. v. Atchison, T. & S.F. Ry. Co., 284 U. S. 370, 284 U. S. 389), and is without jurisdiction to do more than prescribe charges to be applied after the effective date of that order, if one shall be made. The challenged order having been adjudged invalid because made in violation of the Act, Morgan v. United States, 304 U. S. 1, the appellees immediately became entitled to the money that, in pursuance of the restraining order, was deposited in court by them to secure their compliance with the Secretary's order if found valid. The record contains nothing to support the idea that the pledge was for any other purpose, or to justify or excuse withholding it for another use. For the reasons stated in its opinion, 24 F.Supp. 214, the district court rightly held appellees entitled Page 307 U. S. 200 to have their money returned to them. Its decree should be affirmed.