1. In a suit by a shipper to set aside an order of the
Interstate Commerce Commission requiring a carrier to cease paying
the shipper tariff allowances for spotting cars in the shipper's
plant, which the Commission had found unlawful, the District Court,
in granting an interlocutory injunction, imposed the condition,
without objection from the shipper, that further payments be
withheld by the carrier, in a separate account, to be paid over to
the shipper or cancelled upon further order of the court.
Held within the equitable power of the court, though not
requested by the carrier nor, specifically, by the Commission. P.
306 U. S.
156.
2. The power of the District Court so to impound the allowances
and, finally, upon sustaining the Commission and dismissing the
bill, to order that the fund be retained by the carrier was not
affected by the fact that, because of the preliminary injunction,
the carrier had kept in force its published tariff providing for
the allowances, or by the fact that, for the same reason, the
Commission had undertaken to postpone the effective date of its
order. Pp.
306 U. S.
158-159.
3. Apart from the primary issue of the validity of the
allowances, it was not necessary that evidence be taken and special
findings be made with respect to the disposition of the impounded
fund. P.
306 U. S. 161.
Affirmed.
Appeals from decrees of the District Court in suits to set aside
orders of the Interstate Commerce Commission restraining carriers
from paying allowances for spotting cars to plaintiff appellant
shippers.
See 23 F. Supp. 291. These appeals were directed
only to provisions of
Page 306 U. S. 154
the final decrees requiring that funds resulting from impounding
of the allowances during the suit be retained by the carriers.
MR. JUSTICE BLACK delivered the opinion of the Court.
In No. 227, after full hearings, the Interstate Commerce
Commission, on July 11, 1935, found and reported [
Footnote 1] that the Indiana Harbor Belt
Railroad was engaged in the practice of paying an allowance for
appellant's service in spotting cars in appellant's plant;
[
Footnote 2] that appellant was
performing this plant service for its own convenience; that the
Railroad was under no legal obligation to spot the cars, and
therefore the allowance was paid for service for which the Railroad
was not compensated under line-haul rates; that the allowance was
unlawful, and afforded appellant a preferential service, not
accorded to shippers generally, amounting to refund or remission of
part of the rates charged or collected as compensation for
transporting freight. On the same date, an order of the Commission
incorporated its report and findings, including the finding that,
"by the payment of said allowances, the Indiana Belt Railroad
Company violates the Interstate Commerce Act." This order also
directed the Railroad
Page 306 U. S. 155
to "cease and desist on or before September 3, 1935, and
thereafter to abstain from such unlawful practice."
August 28, 1935, upon petition of appellant, the District Court,
three judges sitting, granted an interlocutory injunction by which
the Commission's report and order were "suspended, stayed, and set
aside" -- "pending the further order of the court;" the Commission
was restrained and enjoined from enforcing them; and, the Railroad
having previously given public notice that its published tariff
providing for the allowance would be cancelled as of September 3,
1935, in accordance with the Commission's order, the injunction
suspended the effective date of the cancellation. But the
interlocutory injunction also provided
"that, until the further order of the Court, any and all sums
due and payable to plaintiff [appellant], under the . . . tariff
providing said allowance, shall be set up by defendant Indiana
Harbor Belt Railroad Company on its books of account, which sums so
set up shall be paid over to . . . [appellant], or cancelled, only
upon the further order of this Court, [appellant] . . . by its
counsel having agreed in open court to such arrangement, without
prejudice."
February 26, 1937, the Commission entered an order purporting to
extend the effective date of its command to "cease and desist" to
June 15, 1937, but specifically provided that its order of July 11,
1935, should "in all other respects remain in full force and
effect."
April 27, 1938, the District Court dismissed appellant's
petition for want of equity, dissolved the interlocutory
injunction, and ordered the accrued allowances that had been set
aside in a special account by the Railroad as required by the
interlocutory injunction to "be retained by . . . [the Railroad] as
a part of its general funds and said account cancelled."
Appellant concedes the correctness of the District Court's
decree holding the Commission's order valid, dismissing the
petition and denying a permanent injunction. [
Footnote 3]
Page 306 U. S. 156
The appeal only seeks a review of the Court's action in ordering
that the unlawful allowances accumulated after the date of the
interlocutory injunction be retained by the Railroad and not paid
to appellant.
First. In granting the interlocutory injunction, the
District Court proceeded under a jurisdictional Act which provides
that
". . . the court, in its discretion, may restrain or suspend, in
whole or in part, the operation of the commission's order pending
the final hearing and determination of the suit. [
Footnote 4]"
Appellant invoked the Court's equity powers. [
Footnote 5]
A Court of equity,
"in the exercise of its discretion, frequently resorts to the
expedient of imposing terms and conditions upon the party at whose
instance it proposes to act. The power to impose such conditions is
founded upon, and arises from, the discretion which the court has
in such cases, to grant, or not to grant, the injunction applied
for. It is a power inherent in the court, as a court of equity, and
has been exercised from time immemorial. [
Footnote 6]"
In the exercise of its discretion, the District Court imposed
conditions in its decree granting appellant's petition for an
interlocutory injunction. Appellant neither objected to the
conditions nor sought review of the Court's action in imposing
them, but, under the interlocutory injunction, enjoyed for three
years the suspension -- which it had sought -- of the Commission's
order pending litigation. Now, the litigation ended, appellant
insists that the District Court lacked jurisdiction to do more
Page 306 U. S. 157
than vacate its interlocutory injunction and dismiss the
petition, since no pleadings of the Railroad or the Commission
sought the creation of the special allowance account. But this
overlooks the governing principle that it is the duty of a court of
equity granting injunctive relief to do so upon conditions that
will protect all -- including the public, whose interests the
injunction may affect. [
Footnote
7] And the Commission, in defending its report and order, acted
under its statutory duty as the representative of the interest
which the public, as well as the railroads, have in the maintenance
of fair, reasonable, and nondiscriminatory transportation
practices. [
Footnote 8]
Moreover, in intervening, the Commission prayed that it have "the
benefit of such . . . decrees or relief as may be just and
proper."
The Interstate Commerce Commission has primary jurisdiction to
determine whether the granting of allowances for services performed
by shippers constitutes a discriminatory practice. [
Footnote 9] Here, in the exercise of its
primary jurisdiction, the Commission considered the technical
questions involved and made findings that the Railroad's practice
was unlawfully preferential and discriminatory. In doing so, the
Commission was acting in the interest of shippers generally, and in
behalf of the public and the national railroad system. The District
Court, at the behest of this appellant, restrained the enforcement
of the Commission's report and order embodying these findings.
While thus acting in the interest of
Page 306 U. S. 158
a single shipper, the Court properly took steps to protect the
other interests -- represented by the Commission -- from injuries
that the injunction might cause. It did so by ordering the
payments, which the Commission had found unlawful, to be continued
-- on condition that they be segregated or paid into a separate
account, pending the Court's review of the Commission's finding of
illegality. This segregated account thus accrued as a result of
judicial restraint of administrative proceedings in which the
payments had been declared unlawful. When the Court finally
determined that the administrative findings and order were correct,
appellant could claim an interest in the fund only by asserting a
right to payments forbidden by law, and it became the duty of the
Court promptly to allocate the fund to its lawful owner.
An Equity Court having lawful control of a fund, in which there
may be interests represented only by a duly authorized governmental
agency, has the power and is charged with the duty of protecting
those interests in disposing of the fund. [
Footnote 10] Otherwise, rights (such as the
right of this Railroad to restitution) might be impaired or cut off
while an interlocutory injunction is in effect, as for instance, by
statutes of limitation. Here, the Court had the power, and it was
its duty, so to fashion its equitable decree that appellant should
not be the beneficiary of unlawful payments, and to prevent the
dissipation of the Railroad's assets through unlawful
preferences.
Second. Appellant further insists that the Court had no
power to impose the particular conditions here, because the
Railroad was ordered to retain (in a special account) allowances
provided for in its published tariff. This contention rests on the
statutory requirement that published tariffs must be observed.
[
Footnote 11] However,
before the Court
Page 306 U. S. 159
acted, the Commission had found and reported -- and had
incorporated its findings and report in an order -- that these
allowances provided in the published tariff were unlawful
preferences violating the Interstate Commerce Act. The Commission
had also ordered that payment of the unlawful allowances cease, and
the Railroad had already -- in obedience to the Commission's order
-- published a new tariff eliminating the allowance provision. But,
six days before the new tariff would, by its terms, have become
effective, appellant sought and obtained the preliminary injunction
which did not destroy, but tentatively suspended, the Commission's
report and order, and also tentatively suspended the Railroad's
tariff cancelling the unlawful allowance. The Railroad then
republished the old tariff, thus -- under court order -- restoring
the unlawful allowance. When the Court subsequently dismissed
appellant's petition and vacated the interlocutory injunction "in
all respects," it thereby found the Commission's report and order
valid, and they were then in effect as though the injunction had
never been granted. Thus, during the period the injunction was
pending (save for the first six days), the published tariff had
contained the unlawful allowance solely because of the Court's
injunction. To sustain the contention of appellant that the
provision for allowances in the published tariff limited the
authority of the court to prevent their payment would be to clothe
a published tariff, in existence solely by reason of equitable
intervention, with an immunity from equity itself. The Interstate
Commerce Act grants no such immunity. [
Footnote 12]
Third. The appellant takes the position that the
Commission's purported postponement of its command to cease and
desist (eighteen months after the interlocutory
Page 306 U. S. 160
injunction was granted) deprived the Court of authority to
enforce the conditions of its interlocutory injunction. However,
since the Court had exercised jurisdiction to review and suspend
the Commission's report and order, the administrative body was
without power to act inconsistently with the Court's jurisdiction,
had it attempted to do so. [
Footnote 13] But, since the Commission had already been
enjoined from enforcing its report and order when it entered its
postponement, there is no reason to construe the Commission's
action as anything more than a recognition of the postponement
actually effected by the Court's interlocutory injunction.
In addition, there were two separate aspects to the action of
the Commission. It found an illegal practice in existence that
involved unlawful disbursement of the Railroad's funds, contrary to
the public interest. The Commission also entered a cease and desist
order to operate prospectively. Even if the Commission's
postponement of the cease and desist portion of its order had been
operative, the Commission specifically left in effect its ruling
that the allowance was unlawful. [
Footnote 14]
The Commission had exercised its primary jurisdiction and had
found the allowances unlawful; upon review, the District Court
properly approved this finding; the
Page 306 U. S. 161
amount in the special allowance account was exactly known and
undisputed; this fund could have belonged only to the Railroad or
to appellant; the Railroad was in possession of the fund, and, in
equity and good conscience, was entitled to retain it. Therefore,
there was no necessity to take evidence, and the action of the
District Court in disposing of the fund required no additional
findings. The final decree of the District Court properly directed
that the unlawful allowances should not be paid to appellant, and
should be retained by the Railroad.
The questions presented in No. 228 are governed by our
conclusions here, and the judgments in both cases are
Affirmed.
* Together with No. 22,
Chicago By-Product Coke Co. v.
United States et al., also on appeal from the District Court
of the United States for the Northern District of Illinois.
[
Footnote 1]
209 I.C.C. 747; 216 I.C.C. 8 (No. 228).
[
Footnote 2]
"Spotting" involves handling of cars between the point of
interchange between the Railroad and appellant and the points at
which such cars are unloaded or loaded in appellant's plant.
[
Footnote 3]
See United States v. American Sheet & Tin Plate
Co., 301 U. S. 402;
United States v. Pan-American Petroleum Corp.,
304 U. S. 156.
[
Footnote 4]
28 U.S.C. § 46.
[
Footnote 5]
Cf. Ford Motor Co. v. Labor Board, 305 U.
S. 364.
[
Footnote 6]
Russell v. Farley, 105 U. S. 433,
105 U. S. 438;
Meyers v. Block, 120 U. S. 206,
120 U. S. 214.
[
Footnote 7]
Central Kentucky Natural Gas Co. v. Railroad Comm'n,
290 U. S. 264,
290 U. S.
271.
[
Footnote 8]
Arkadelphia Co. v. St. Louis S.W. Ry. Co., 249 U.
S. 134,
249 U. S. 146;
Smith v. Interstate Commerce Comm'n, 245 U. S.
33,
245 U. S. 42-43,
245 U. S. 45;
cf. Ex parte Lincoln Gas & Electric Co., 256 U.
S. 512,
256 U. S. 517;
49 U.S.C. §§ 15a, 43.
[
Footnote 9]
Mitchell Coal & Coke Co. v. Penn. R. Co.,
230 U. S. 247;
St. Louis, B. & M. Ry. Co. v. Brownsville Navigation
Dist., 304 U. S. 295;
Texas & Pacific Ry. v. Abilene Cotton Oil Co.,
204 U. S. 426.
[
Footnote 10]
Central Kentucky Co. v. Railroad Comm'n, supra.
[
Footnote 11]
49 U.S.C. § 6(7).
[
Footnote 12]
Cf. Merchants' Warehouse Co. v. United States,
283 U. S. 501,
283 U. S.
511.
[
Footnote 13]
Cf. Ford Motor Co. v. Nat. Labor Relations Board,
supra. It is therefore immaterial that, in No. 228, there were
consecutive purported postponements of the command to cease and
desist, each entered by the Commission before the expiration of the
postponement immediately preceding.
[
Footnote 14]
Cf. Terminal Warehouse Co. v. Penn. R. Co.,
297 U. S. 500,
297 U. S.
507-508. A suit at law based on a past alleged
discriminatory practice may be stayed in order to permit the
plaintiff to obtain the necessary preliminary ruling by the
Commission.
See Morrisdale Coal Co. v. Penna. R. Co.,
230 U. S. 304;
Mitchell Coal & Coke Co. v. Penn. R. Co., supra; Southern
Ry. Co. v. Tift, 206 U. S. 428.