St. Joe Paper Co. v. Atlantic Coast Line R. Co.,
347 U.S. 298 (1954)

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U.S. Supreme Court

St. Joe Paper Co. v. Atlantic Coast Line R. Co., 347 U.S. 298 (1954)

St. Joe Paper Co. v. Atlantic Coast Line Railroad Co.

Argued October 15, 1953

Decided April 5, 1954*

347 U.S. 298


The Interstate Commerce Commission does not have the power under § 77 of the Bankruptcy Act to initiate and submit to a district court a plan of reorganization whereby a debtor railroad would be compelled to merge with another railroad having no prior connection with the debtor. Pp. 299-315.

(a) Subsection b(5) of § 77 of the Bankruptcy Act does not give to the Commission a power which Congress has repeatedly denied to the Commission under the Interstate Commerce Act -- i.e., the power to initiate the merger or consolidation of two independent railroads. Pp. 347 U. S. 303-306.

(b) The "consistency" clause of § 77(f) of the Bankruptcy Act incorporates by reference § 5 of the Interstate Commerce Act, as amended, under which a merger of two independent carriers may be approved by the Commission only if it originates as a voluntary proposal by the merging carriers. Pp. 347 U. S. 306-310.

201 F.2d 325, reversed.

In a railroad reorganization proceeding under § 77 of the Bankruptcy Act, the Interstate Commerce Commission formulated a plan of reorganization which provided for a forced merger of the debtor railroad and another railroad. 282 I.C.C. 81. The District Court set the plan aside. 103 F. Supp. 825. The Court of Appeals reversed. 201 F.2d 325. This Court granted certiorari. 345 U.S. 948. Reversed and remanded, p. 347 U. S. 315.

Page 347 U. S. 299

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