Source: http://openjurist.org/338/us/96/securities-and-exchange-commission-v-central-illinois-securities-corporation-streeter
Timestamp: 2015-10-13 07:13:23
Document Index: 120081413

Matched Legal Cases: ['§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 24', '§ 11', '§ 205', '§ 11', '§ 11', '§ 24', '§ 11', '§ 11', '§ 24', '§ 11', '§ 11', '§ 1', '§ 1', '§ 77', '§ 207', '§ 207', '§ 501', '§ 77', '§ 77', '§ 205', '§ 205', '§ 11', '§ 11', '§ 77', '§ 11', '§ 77', '§ 77', '§ 77', '§ 11', '§ 77', '§ 77', '§ 11', '§ 24', '§ 11', '§ 24']

338 US 96 Securities and Exchange Commission v. Central-Illinois Securities Corporation Streeter | OpenJurist
338 U.S. 96 - Securities and Exchange Commission v. Central-Illinois Securities Corporation Streeter Homethe United States Reports338 U.S.
338 US 96 Securities and Exchange Commission v. Central-Illinois Securities Corporation Streeter 338 U.S. 96
69 S.Ct. 1377
93 L.Ed. 1836
SECURITIES AND EXCHANGE COMMISSIONv.CENTRAL-ILLINOIS SECURITIES CORPORATION et al. STREETER et al. v. CENTRAL-ILLINOIS SECURITIES CORPORATION et al. HOME INS. CO. et al. v. CENTRAL-ILLINOIS SECURITIES CORPORATION et al. CENTRAL-ILLINOIS SECURITIES CORPORATION et al. v. SECURITIES AND EXCHANGE COMMISSION et al.
Nos. 226, 227, 243, 266.
Argued Jan. 12, 13, 1949.
[Syllabus from pages 96-98 intentionally omitted]
Mr. Roger S. Foster, for Securities & Exchange Commission, washington, D.C.
Mr. Lawrence R. Condon, New York City, for Thomas W. Streeter and others.
Mr. Francis H. Scheetz, Philadelphia, Pa., for Home Ins. Co. and others.
Mr. Louis Boehm, New York City, for Lucille White and others.
Mr. Alfred Berman, New York City, for Central-Illinois Securities Corp. and others.
The case involves an amended plan filed under § 11(e) of the Public Utility Holding Company Act of 19351 by Engineers Public Service Company. The plan provided, inter alia, for satisfying the claims of Engineers' preferred stockholders in cash as a preliminary to distributing the remaining assets to common stockholders and dissolving the company. Broadly, the question is whether the Securities and Exchange Commission, in reviewing the plan, correctly applied the 'fair and equitable' standard of § 11(e) in determining the amounts to be paid the preferred stockholders in satisfaction of their claims.
As will appear, the ultimate effect of the Commission's determination was to allow the holders of the three series of Engineers' outstanding cumulative preferred stock to receive the call (or voluntary liquidation and redemption) prices for their shares, namely, $105 per share, $110 per share and $110 per share, rather than the involuntary liquidation preference which, for each of the three series, was $100 per share. Common shareholders oppose the allowance to the preferred of the call price value, insisting that the maximum to which the preferred are entitled is the involuntary liquidation preference of $100.
In this view the District Court and, generally speaking, the Court of Appeals have concurred, declining to give effect to the plan as approved in this respect by the Commission. Consequently we are confronted not only with issues concerning the propriety of the Commission's action in applying the 'fair and equitable' standard of § 11(e), but with the further question whether its judgment in these matters is to be given effect or that of the District Court, either as exercised by it or as modified in certain respects by the Court of Appeals.
The facts and the subsidiary issues involved in the various determinations are of some complexity and must be set forth in considerable detail for their appropriate understanding and disposition.
At the time the Public Utility Holding Company Act was enacted, the holding company system dominated by Engineers consisted of 17 utility and nonutility companies. Of these, nine were direct subsidiaries of Engineers and eight were indirect subsidiaries. Integration proceedings under § 11(b)(1) of the Act were instituted with respect to Engineers and its subsidiaries in 1940. In a series of orders issued in 1941 and 1942 the Securities and Exchange Commission directed Engineers to dispose of its interests in all companies except either Virginia Electric and Power Company or Gulf States Utilities Company, and designated Virginia as the principal system if Engineers failed to elect between it and Gulf States.2 At the time the plan now under review was filed Engineers had complied with the divestment orders to the extent of disposing of all its properties except its interest in Virginia, consisting of 99.8 per cent of that company's common stock, and its interest in Gulf States and El Paso Electric Company, consisting of all their common stock. Engineers' principal assets were the securities representing its interest in these companies and $14,650,000 in cash and United States Treasury securities.
Engineers had no debts. It had outstanding three series of cumulative preferred stock of equal rank: 143,951 shares of $5 annual dividend series, 183,406 shares of $5.50 series, and 65,098 shares of $6 series. As has been said, all three series had involuntary liquidation preferences of $100 per share, call prices of $105 for the $5 series and $110 for the $5.50 and $6 series, and voluntary liquidation preferences equal to the call prices.
Proceedings before the Commission. The Plan as Originally Filed. The plan as originally filed by Engineers provided for the retirement of all three series of preferred stock by payment of the involuntary liquidation preference of $100 per share, plus accrued dividends to the date of payment.3 The remaining properties of Engineers were then to be distributed among the common stockholders, and Engineers was to dissolve.4
In order to insure adequate presentation of the views of the preferred stockholders, Engineers' board of directors authorized one of its members, Thomas W. Streeter, who was primarily interested in the preferred stock, to retain counsel partly at the company's expense. Streeter and members of his family are petitioners in No. 227. These preferred stockholders and representatives of a group of institutional investors who held preferred stock, the Home Insurance Company and Tradesmens National Bank and Trust Company, petitioners in No. 243, appeared before the Commi sion in opposition to the plan. They contended that they should receive amounts equal to the voluntary liquidation preference of the preferred.
After summarizing the issuing prices,5 the dividend history,6 and the market history7 of the three series of preferreds, the Commission analyzed the assets coverage and earnings coverage of the stock. The preferred stock of Engineers represented 17.5 per cent of the consolidated capitalization and surplus of the system. That stock was junior to the 66.2 per cent of the consolidated capitalization and surplus which consisted of securities of Engineers' subsidiaries held by the public, and senior to 16.3 per cent, consisting of Engineers' total common stock and surplus.
The system's average earnings coverage of fixed charges and preferred dividends for the last five years prior to the submission of the plan was 1.4 times. For these five years Engineers' average earnings coverage of preferred dividends was 1.5 times.
Certain expert testimony concerning the going-concern or investment value of the preferred stock was adduced before the Commission. Dr. Ralph E. Badger was an expert witness on behalf of certain preferred stockholders. He made a detailed analysis of the earnings and assets of Engineers and of the three series of preferred stock. He then compared Engineers and the preferred stock with relevant information concerning other comparable companies and securities.8 He concluded that, apart from their call provisions and on the basis of quality and yield, the three series of preferred stock should be valued at $108.70, $119.57, and $130.33 respectively, but that because of the redemption privilege, 'the present investment values are represented by their call price, plus a slight premium to account for the time required to effect a call.' The fair investment values of the preferred, in view of the redemption privilege, were: $5 series—$106.25; $5.50 series—$111.38; $6 series—$111.50. No rebuttal testimony was introduced, and there was no serious challenge to Badger's conclusions that the fair investment value of each series of the preferred exceeded the call prices.
Donald C. Barnes, Engineers' president, testified that apart from the impact of § 11 of the Act and taking into account the call prices, the fair value of the preferreds, i.e., 'what a willing buyer would pay and what a willing seller would take in today's market for such securities,' was somewhat above the redemption prices. Barnes spoke of several factors, viz., possibilities of continued inflation, of depression, government competition, adverse changes in regulatory policy, or developments in atomic energy, all 'common to the utilities industry generally,' which might have a future adverse effect on the value of Engineers preferred. Both witnesses agreed, however, as Engineers stated in its brief before the Commission, that 'the present value or investment worth of these three series of stock, on a going concern basis and apart from the Act, under prevailing yields applied to comparable securities' was in excess of the call prices. Barnes also testified that the preferred stock would have been called if it had not been for the impact of § 11.
The Commission first held that 'the dissolution of Engineers (was) 'necessary' under the standards of the Act.' However, since such a liquidation, under Otis & Co. v. Securities and Exchange Commission, 323 U.S. 624, 65 S.Ct. 483, 89 L.Ed. 511, 'does not mature preferred stockholders' claims' the so-called involuntary liquidation provision of Engineers' charter was not operative. The Otis case ruled 'that Congress did not intend that its exercise of power to simplify should mature rights, created without regard to the possibility of simplification of system structure, which otherwise would only arise by voluntary action of stockholders or, involuntari y, through action of creditors.' 323 U.S. at page 638, 65 S.Ct. at page 490.
After announcing that in a § 11 reorganization 'a security holder must receive, in the order of his priority, from that which is available for the satisfaction of his claim, the equitable equivalent of the rights surrendered,' the Commission considered all the charter provisions which affected the preferred, 'such as the dividend rate and the call price as well as the liquidation preferences,' and analyzed the financial condition of the company 'with particular regard to the asset and earnings coverage of the preferred.' On the basis of the undisputed testimony the Commission found that the going concern or investment value of the preferred was at least equal to the respective call prices. Since the call prices operated as ceilings on the value of the security by providing with respect to each series, 'a means, apart from the Act, whereby the security can be retired at a maximum price,'9 no attempt was made to determine whether the investment value of any series of preferred would exceed the call price if there were no call provision.
The Commission concluded that the payment of only $100 per share, plus accrued dividends, would not be fair and equitable to the preferred stockholders. It therefore refused to approve that provision of the plan which provided for retirement of the preferred at involuntary liquidation preferences.
Turning its attention to whether the plan was fair to the common stock, the Commission stated that, because of the accumulation of large amounts of idle cash,10 elimination of preferred stock having fixed dividend requirements was 'highly beneficial to the common.' Moreover, by implementing adjustment of the system to compliance with the Act, retirement of the preferred brought the common closer to the time when it would begin receiving dividends.
Engineers' contended that payment to the preferred of any amount in excess of $100 per share was unfair, because certain divestments required by the Act resulted in losses to the common stock and also eliminated the advantages of a 'diversified portfolio of securities.' In reply to this the Commission noted that it did not accept the hypothesis that losses were incurred by divestments caused by the Act,11 and stated that the preferred claims, measured by their going-concern value, were entitled to absolute priority, and that what remained to junior security holders after satisfying this priority was necessarily their fair share.
Certain mechanical features of the plan were also disapproved by the Commission.12
The Amended Plan. Engineers then acquiesced in the Commission's determination and submitted an amended plan. In addition to meeting the Commission's mechanical objections to the original plan, the amended plan provided for payment of the preferred stocks at their voluntary liquidation or call prices.
Over the objections of certain common stockholders, the Commission approved the plan as amended. It stated that, in the event the common stockholders continued to litigate the fairness of the plan after approval by the district court, it would be appropriate 'to achieve expeditious compliance with the Act and fairness to the persons affected * * * for Engineers to make prompt payment of $100 per share and accrued dividends in order to stop the accrual of further dividends, and set up an escrow arrangement.' The escrow would secure the payment of the amount in issue and also 'an additional amount to provide the preferred 'for the period of the escrow a return on the amount in escrow which is measured by the return which would have been received by it if the stock had remained outstanding." Such an escrow could be established under court supervision without returning the plan to the Commission. Holding Co. Release No. 7119, p. 6. By later order the Commission provided for the establishment of such an escrow at the option of Engineers if it appeared likely that common stockholders would litigate beyond the district court. Holding Co. Release No. 7190.13
Proceedings in the District Court. The Commission applied to the District Court for the District of Delaware for approval of the plan as amended. § 11(e). Certain common stockholders, respondents in Nos. 226, 227, and 243, and petitioners in No. 266, filed objections to the plan, contending that the Commission had erred in awarding to the preferred stockholders the equivalent of the voluntary liquidation preferences of their shares. The Streeter group of preferred stockholders o jected to the Commission's finding of the appropriateness of an escrow arrangement to stop the accrual of further dividends in the event of continued litigation.
The District Court considered the case on the record made before the Commission. It preferred not to determine whether the involuntary liquidation preferences controlled, but stated that (71 F.Supp. 797, 802) 'in each case the inquiry is one of relative rights based on colloquial equity.' That standard, thought the court, necessitated consideration of various factors to which it was thought the Commission had attached little or no importance. Thus it was important to consider not only the charter provisions but the issuing price in terms of what the company received for the securities, and the market history of the preferred. These factors might more than offset the factor of investment value, the testimony as to which the court accepted. In any event, thought the court, several other considerations have this effect. The Act, in addition to compelling the preferred stockholders to surrender 'this present enhanced value,' worked hardships on the common. All classes of securities, the court said, suffered losses as a result of the divestment orders issued by the Commission under the Act. Earnings retained in the system at a sacrifice to the common contributed to the enhancement of the value of the preferred. These standards of 'colloquial equity,' which the District Court conceived to be controlling in our decision in Otis & Co. v. Securities and Exchange Commission, supra, compelled the conclusion that it would not be fair and equitable to give the preferred more than $100 per share. Arguments concerning the worth of the preferred in the absence of a Public Utility Holding Company Act were thought not profitable to consider 'for there is a Public Utility Holding Company Act.' In effect amending the plan to provide for payment of the preferred at $100 per share, the District Court approved the plan as thus amended. The escrow agreement prescribed by the Commission was approved, the court concluding that there was no merit in the preferred stockholders' objections to this feature. 71 F.Supp. 797.
Proceedings in the Court of Appeals. The Court of Appeals for the Third Circuit regarded as a central issue in the case the question whether the District Court had exceeded the scope of review properly exercised by a district court reviewing a plan under § 11(e) of the Public Utility Holding Company Act. It concluded that the District Court was charged with the duty of exercising a full and independent judgment as to the fairness and equity of a plan, 'to function as an equity reorganization tribunal within the limitations prescribed by the Act.' 168 F.2d 722, 736.
Turning to the various factors which should have been taken into consideration in arriving at the equitable equivalent to the rights surrendered by the preferred shareholders, the Court of Appeals criticized the Commission for finding the investment value of the preferred as if there were no Holding Company Act while omitting to evaluate the common by the same standard, and for failing to consider factors other than the investment value. It was thought that the Commission should have estimated the future earning power of Engineers, absent a Holding Company Act, and apportioned that power between preferred and common stockholders in accordance with their respective claims. It was also thought that, in the process of valuing the preferred and the common by the same approach, the Commission should have considered 'the substantial losses which occurred to Engineers by virtue of divestitures compelled by the Act.'14 Losses of this nature 'should be returned to the credit side of the enterprise's balance sheet as a matter of bookkeeping.' Id. at pages 737—738.
The District Court, however, was held to have erred in one particular: it had amended the plan by substituting its own valuation of $100 per share for the preferred stock for that of the Commission. The court had no power to do this. It could only reject the Commission's valuation, and return the case to the Commission for further action in the light of the court's views.
At the time the opinion of the Court of Appeals was rendered, the plan had been consummated, with the exception of the payment of the disputed amounts in excess of the involuntary liquidation preferences of the preferred. The escrow arrangement, which had been employed to preserve the issue of the amount to which the preferred was entitled after having been approved by the Commission and the District Court, was held to be proper.
We granted certiorari because of the importance of the questions presented in the administration of the Public Utility Holding Company Act. 335 U.S. 851, 69 S.Ct. 80.
The Court of Appeals was of the view that the question of the extent of 'the power conferred on the district courts * * * by the Act' was one which went 'to the heart of the instant controversy.' 168 F.2d at page 729. The Commission apparently took the position before that court that the District Court had erred in setting aside the agency's conclusions unless those conclusions lacked 'any rational and statutory foundation.'15 This view was rejected by the Court of Appeals. Distinguishing judicial review under § 24(a) as being limited to the inquiry whether the Commission 'has plainly abused its discretion in these matters,' Securities and Exchange Commission v. Chenery Corp., 332 U.S. 194, 67 S.Ct. 1575, 1583, 1760, 91 L.Ed. 1995,16 the Court of Appeals held that a § 11(e) court was charged with the duty of exercising a full and independent judgment as to the fairness and equity of a plan, 'to function as an equity reorganization tribunal within the limitations prescribed by the Act.' 168 F.2d at page 736.
This position is maintained before this Court by the representatives of the common stockholders. The preferred stockholders' representatives urge that the Court of Appeals erred in this regard, and that the conclusion of the Commission should not have been disturbed by the District Court, because that conclusion was supported by substantial evidence and was within the agency's statutory authority. The District Court, in their view, exceeded the proper scope of review.
The Commission apparently no longer takes so restrictive a view of the District Court's function as it formerly held. It now concedes that that court had power to eview 'independently' the method of valuation employed. But it urges that in this case the question, whether a proper method of valuation was employed, is one of law, since Congress has itself prescribed the standard for compensating the various classes of security holders instead of delegating to the Commission the task of fixing that standard.
In the alternative the Commission argues that 'If, as the court below seemed to assume, the question is not one of law, * * * the scope of review under Section 11(e) is limited in the same manner as that applicable to determinations of the Interstate Commerce Commission under Section 77 of the Bankruptcy Act (11 U.S.C.A. § 205),' which is said to embody a similar statutory scheme and under which administrative determinations of valuation are sustained if supported by substantial evidence and not contrary to law. Ecker v. Western Pacific R.R. Corp., 318 U.S. 448, 473, 63 S.Ct. 692, 707, 87 L.Ed. 892; R.F.C. v. Denver & Rio Grande W.R. Co., 328 U.S. 495, 505—509, 66 S.Ct. 1282, 1288—1290, 1384, 90 L.Ed. 1400.
The problem of the scope of review which Congress intended the district court to exercise under § 11(e) arises from and is complicated by the fact that Congress provided not one, but two procedures for reviewing Commission orders of the type now in question.
The first is afforded by § 11(e) itself. It relates to orders approving voluntary plans submitted by any registered holding company or subsidiary for compliance with subsection (b). The Commission is authorized to approve such a plan if, after notice and opportunity for hearing, it 'shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan.' Then follows the provision that 'the Commission, at the request of the company, may apply to a court * * * to enforce and carry out the terms and provisions of such plan. If * * * the court, after notice and opportunity for hearing, shall approve such plan as fair and equitable and as appropriate to effectuate the provisions of section 11,' the court is authorized 'as a court of equity' to take exclusive jurisdiction and possession of the company or companies and their assets, and to appoint a trustee, which may be the Commission, for purposes of carrying out the plan.17
The alternative mode of review is provided by § 24(a). It applies to all orders issued by the Commission under the Act and in abbreviated form is as follows:
'Any person or party aggrieved by an order issued by the Commission * * * may obtain a review of such order in the circuit court of appeals * * * by filing in such court, within sixty d ys * * * a written petition * * *. The Commission shall certify and file in the court a transcript of the record upon which the order complained of was entered * * * (S)uch court shall have exclusive jurisdiction to affirm, modify, or set aside such order, in whole or in part. No objection to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission or unless there were reasonable grounds for failure so to do. The findings of the Commission as to the facts, if supported by substantial evidence, shall be conclusive.'18
The District Court and the Court of Appeals, focusing their attention primarily on § 11(e), emphasized the section's requirement of approval by the District Court, that court's declared status 'as a court of equity,' and the absence from § 11(e) of such explicit provisions as those of § 24(a) making the Commission's findings of fact conclusive, if supported by substantial evidence; limiting the court to consideration of objections urged before the Commission in the absence of reasonable grounds for failure to urge them; and restricting the court's consideration to the record made before the Commission in the absence of any showing requiring remand to the Commission for the taking of additional evidence.
Chiefly from these factors the two courts reached their respective conclusions that the District Court was required to exercise a full and independent judgment as to the fairness and equit of the plan, functioning as an equity reorganization tribunal within the limitations prescribed by the Act. However, they differed, as has been noted, concerning the scope of those limitations.
The District Court thought it was authorized to substitute its own judgment for that of the Commission as to whether the plan was 'fair and equitable,' after considering independently the various matters it denominated as 'colloquial equities.' Accordingly, after reaching numerous conclusions on those matters contrary to the Commission's or not given final effect in its determinations, the court arrived at an over-all judgment opposite to that of the Commission and held the plan not 'fair and equitable' to the common stockholders in awarding the preferred more than $100 per share. Modifying the plan to allow the latter only that amount, the court ordered it enforced as modified.
The Court of Appeals was in general agreement with the District Court concerning its power to exercise a full and independent judgment in giving or withholding approval of the plan as 'fair and equitable' and, on the whole, was in accord with the District Court's dispositions of the matters of 'colloquial equity.' Stressing statements appearing in the legislative history of § 11, the court thought they gave basis for a strong analogy between the functions of district courts under § 11(e) and those of such courts 'when called upon under the Sherman and Hepburn Acts (15 U.S.C.A. §§ 1—7, 15 note, 49 U.S.C.A. § 1 et seq.) to effect compulsory corporate readjustments required by the public policy expressed in those acts.'19 The court's opinion then added: 'We think that it will not be contended that a district court * * * adjudging a controversy arising under the Sherman Act would function other than as in an original equity proceeding, exercising all the powers and duties inherent in a court of equity under such circumstances.' 168 F.2d at page 729. Accordingly, the court upheld the District Court's view that it had power, as a court of equity, to withhold approval and enforcement of the plan upon its own independent judgment of the 'colloquial equities,' notwithstanding the Commission's contrary judgment and, apparently even though the Commission's judgment involved no clear error of law or abuse of discretion.
The Court of Appeals, however, viewed somewhat differently the limitations placed by the Act upon the power of review. 'The proceedings before the equity reorganization court are not strictly de novo since the district court can only approve a plan when it has been approved by the Commission. See Application of Securities and Exchange Commission, D.C.Del., 50 F.Supp. 965, 966.' 168 F.2d at page 732. The district court, it was said, could receive evidence aliunde the Commission's record, could decide on that evidence and the Commission's record that the plan is unfair and inequitable, and remand the cause to the Commission for further consideration, or could remand without taking new evidence. The District Court therefore was wrong in ordering enforcement of the plan as modified by itself. It could only approve and enforce or refuse approval and remand. Only a plan approved by the Commission and by the court could be enforced.
These views were thought supported by the history of the law of reorganization, including equity receiverships, reorganization of insolvent companies under former § 77B of the Bankruptcy Act, 11 U.S.C. § 207, 11 U.S.C.A. § 207, and Chapter X reorganizations (id. at § 501 et seq.), although the court did not 'mean to imply that Congress intended to grant a Section 11(e) court the same full and untrammeled scope that a court of bankruptcy would have in a Chapter X proceeding.' 168 F.2d at pages 735—736. Nevertheless, 'Any question which goes to the issue of what is fair and equitable may be raised and must be passed upon.' 168 F.2d at page 735. Moreover, since 'the critical phra e employed alike by courts of equity and by Congress in framing the test under which a plan shall be approved or disapproved, has always embraced the phrase 'fair and equitable' or its substantial equivalent,' the court thought that the power and functions of the district courts in review of plans submitted did not 'vary much from statute to statute and from case to case,' 168 F.2d at page 734, i.e., whether the plan was to be consummated by way of equity receivership, by action under former § 77B, by suit under Chapter X, by a proceeding under § 77, 11 U.S.C. § 205, 11 U.S.C.A. § 205, or by petition to a district court under § 11(e).
The variant views held respectively by the Commission, the District Court, the Court of Appeals, and the parties to the proceeding demonstrate the complexity of the problem. Each view has a rational basis of support but none is without its difficulties, either in statutory terms, history and intent or in practical consequences.
The legislative history of § 11(e) throws little light on the problem. There was, surprisingly, only casual, indeed tangental, discussion of it. The analogy to proceedings under § 77 of the Bankruptcy Act, drawn by the Commission and referred to by the Court of Appeals, rests chiefly upon the statement of Senator Wheeler, cosponsor of the bill, made during a colloquy in debate on the Senate floor and set forth in the margin.20 But that statement did not occur in any detailed consideration of the scope and incidence of judicial review. It arose only as it were incidentally in the course of extended discussion which centered about the receivership provisions of § 11(e) as it stood at the time of the debate.
Moreover, the discussion did not and could not take account of the fact that, under our subsequent decisions in the Western Pacific and Denver & Rio Grande cases, supra, matters of valuation in § 77 reorganizations have been held to be exclusively for the Interstate Commerce Commission, not for the district courts, except as stated above. Ecker v. Western Pacific R.R. Corp., supra; R.F.C. v. Denver & Rio Grande W.R. Co., supra. Significantly, this fact seems not to have been taken into account when the Court of Appeals included the § 77 proceedings among its general grouping of reorganization procedures for analogical purposes. And in this respect the Commission makes clear its difference from the Court of Appeals, pointing out that under the Western Pacific and Rio Grande decisions the Commission decides questions of valuation, subject only to the narrow scope of review there allowed.
But, as if to complicate the matter further, the Commission's analogy is somewhat weakened by the fact that the Western Pacific and Rio Grande rulings concerning review of valuation matters rested upon language in § 77 not repeated in § 11(e) of the Act presently in question. That language, appearing in subsection (e) of § 77, provided: 'If it shall be necessary to determine the value of any property for any purpose under this section, the Commission shall determine such value and certify the same to the court in its report on the plan.' This, the Court held, left to the Interstate Commerce Commission the determination of value 'without the necessity of a reexamination by the court, when that determination is reached with material evidence to support the conclusion and in accordance with legal standards.' 318 U.S. at pages 472—473, 63 S.Ct. at page 707, 87 L.Ed. 892.
On the other hand, the opposing analogy drawn by the Court of Appeals from the history of the law of reorganization in general is highly indiscriminate. Insofar as it includes equity receiverships, e.g., pursuant to Sherman and Hepburn Act readjustments, it ignores the important fact that in such proceedings there is no effort to brigade the administrative and judicial processes. Nor does it take account of the substantial differences 'from statute to statute,' e.g., between proceedings under § 77 of the Bankruptcy Act as construed in the Western Pacific and Rio Grande cases, on the one hand, and Chapter X reorganizations, on the othr. Moreover, and perhaps most important, it substitutes analogy drawn from other statutes and judicial proceedings, together with a reading of § 11(e) in comparative isolation from the other provisions of the Act, for a consideration of that section in the context of the Act, as a whole and particularly with reference to any effort toward harmonizing the section with § 24(a) and bringing the two as close together as possible in practical operation.
Of course Congress could provide two entirely dissimilar procedures for review, depending on whether appeal were taken by an aggrieved person to a Court of Appeals or the plan were submitted by the Commission at the Company's request to a district court. But it is hard to imagine any good reason that would move Congress to do this deliberately. The practical effect of assuming that Congress intended the review under § 11(e) to be conducted wholly without reference to or consideration of the limitations expressly provided for the review under § 24(a) certainly would produce incongruous results which would be very difficult to impute to Congress in the absence of unmistakably explicit command.
For one thing the consequence would be, in effect, to create to a very large possible extent differing standards for administration and application of the act, depending upon which mode of review were invoked. In the one instance, apart from reviewable legal questions, the Commission'