St. Louis & O'Fallon Ry. Co.,
279 U.S. 461 (1929)

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U.S. Supreme Court

St. Louis & O'Fallon Ry. Co., 279 U.S. 461 (1929)

St. Louis & O'Fallon Railway Company

Nos. 131 and 132

Argued January 3, 4, 1929

Decided May 20, 1929

279 U.S. 461


1. Under Jud.Code § 238, as amended, this Court has jurisdiction to review directly the final decree of a district court of three judges in a suit to annul an order of the Interstate Commerce Commission directing a railway company to place in a reserve fund one-half of its excess net income, as determined under § 15a of the Interstate Commerce Act, and to pay the other one-half to the Commission. P. 279 U. S. 481.

2. This Court accepts the conclusion of the Interstate Commerce Commission and the district court that the two carrier plaintiffs in this suit -- one operating a switching railroad in St. Louis, Missouri, and the other a coal-carrying railroad in Illinois, the two being separated by 12 miles and communicating only over the tracks and bridge of a terminal company -- were not proved to be under common control and management and operated as a single system within the meaning of par.(6), § 15a of the Interstate Commerce Act. P. 279 U. S. 483.

3. Where a carrier resists by suit a recapture order made by the Commission under § 15a, denying, unsuccessfully but bona fide and

Page 279 U. S. 462

under circumstances justifying the contest, that there was any excess income, no interest should be imposed for any time prior to the final order of the district court. P. 279 U. S. 483.

4. Recapture of excess earnings of a carrier, under pars.(5) and (6) of § 15a of the Act, does not depend upon a prior fixing of a general level of rates intended to yield fair return upon the aggregate value of carrier property, either as a whole or in some prescribed rate or territorial group, under pars. (5) and (6). Id.

5. Under par.(4) of § 15a, which directs that, in determining values of railway property for purposes of recapture, the Commission

"shall give due consideration to all the elements of value recognized by the law of the land for ratemaking purposes, and shall give to the property investment account of the carriers only that consideration which under such law it is entitled to in establishing values for ratemaking purposes,"

it is the duty of the Commission to give consideration to present or reproduction costs in estimating the value of a carrier's property. P. 279 U. S. 484.

6. It appearing from the report of the Commission in this case, and from opinions delivered by some of its members, that reproduction costs were not considered, the order is invalid because of failure to obey this mandate of the statute. P. 279 U. S. 485.

7. The weight to be accorded to reproduction costs in valuing railroad property for recaption purposes is not a matter before the Court in this case. P. 279 U. S. 487.

8. As the making of a recaption order without consideration of reproduction costs in valuing the property is beyond the power conferred on the Commission by the statute, an order so made cannot be sustained upon the ground that the income it permits the railroad to retain is sufficient to negative any suggestion of confiscation. Id.

22 F.2d 980 reversed.

Cross-appeals from a decree of the district court, three judges sitting, in a suit brought by the two railway companies to set aside a recaption order of the Interstate Commerce Commission. The decree annulled so much of the order as provided for payment of interest, but, in other respects, denied relief.

Page 279 U. S. 478

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