# Brief for the Respondent in Opposition — St. Louis & San Francisco R. Co. v. Spiller > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_0682%3A06 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the Respondent in Opposition - **Published:** January 1, 1927 - **Citation:** 274 U.S. 304 ## Text lage Pratrew oad TTTTy peee | Gretemment of FACTS, 26 ccc cece ceeeneeeeeteeeeeeeees x) Matters of fact omitted in petitioners’ statement of S| PPP PEP EELELELELELILIE Lit 5 Pires 5 Meroe 5 Third 6 Pests ccc cccccccccceccveccesscccecsceveseeeeese . Analyste of petitioners’ statement of alleged boldingse of United States Cireuit Court of Appeals... ” Poa 1 ” Teeat 2 ” Poet 2 LD Poa 4 Ww Preiat > iZ Pout 6 12 Aaaly eae of pretitiomers reacome relied on for writ of cottpot att . a Pom 1 3 Point 2 4 Feit 3 Bs Pronet 4 16 Poets 5 and 6 iy Poet 7 i7 Prmmramaney of ened termcwmne telocul cm is Aawly ete of boiet ie eapqpott of pectition 1” Aaalyete of epewifie clan: advanced by petitioners @ Court of Apgewle 19 Aaalyess of petitioners’ etateement ae to alleged ral mae of the Curt of Apaerale ii Analysis of petitioners’ statement of the case in their brief, which includes specification of assigned errors RIE a Sick cone GAs Shae ema Boeke bee iekasstes I. The collection by the carrier of the published tariff rate (the lawful rate) does not prevent the shipper from securing reparation for the ex- action of an unjust and unreasonable rate be- cause such exaction is ipso facto unlawful both under section 1 of the act and under the common DUE onsancuetdweenhs beaNeowhneswkseesedeckses Il. The kind of identification and tracing of the fund required as a basis for the enforcement of » trust ex maleficio. The earmarking doctrine has DUR SE Noh eek Gn ecan winds beeeseesvocs Ill. The provisions of the Commerce Act for the collection of overcharges by action is not incon- sistent with a subsequent suit to impress a trust ex maleficio after the award of the Commission of reparation has been affirmed by a judgment of the United States Supreme Court.......... (1) Diseussion of alleged conflict of decision in instant case with prior decisions of United States Cireuit Court of Appeals, Eighth Cir- GEES se eccvsseves ebeeenssneeesioe'e pakewe vee IV. The interest on a reparation judgment runs from the time of the payment of the excess charges, as settled by the repeated decisions of the Interstate Commerce Commission approved by the United States Supreme Court.......... V. Respondents were entitled to have their claims allowed as preferential claims............ Saene Wa, MND. “Dock anh Genebiwleeeecinsetiwsecess 21 » » 38 65 ili INDEX TO AUTHORITIES AND CASES. Act to Regulate Commerce, Section 1.............. 23 Angle v. Chicago, St. Paul & C. Rwy. Co., 151 U. tt eee ac idabbe cas ans cawie beers eds 36 Arkansas Fuel Co. v. C. M. & St. P. Ry. Co., 16 I. C. TE sacs Gh edvin ssa seh évsresanssecceee 24 Baer Bros. Mere. Co. v. D. & R. G. R. R. Co., 233 U. S. 479, 1. ¢. 486-7, 58 Law Ed. 1055, 1. ¢. 1060...... 55 Barksdale et al. v. Finney et al., 14 Grattan 338.... 63 Broom on Legal Maxims (8th Ed., p. 101 et seq.).... 62 Butler v. Western German Bank, 159 Fed. 116, 1. ¢. Re Se ee ee |) 61 Cattle Raisers Association of Texas v. M. K. & T. Ry. Co. et al., 11 I. C. C. Rep. 296, 1. c. 352........ 8 Central National Bank of Baltimore v. Connecticut Mutual Life Insurance Co., 104 U. S. 54, 26 Law OS RE Sg el er er ree ee 40, 61 C. B. & Q. R. R. Co. v. Merriam and Millard Co., cn aa aweheesines esac s0tasesskdsen see 32 City of Litchfield v. Ballou, 114 U. S. 190, 29 Law MT in Ciavacnecuuec aces ebewewtav + «es 45 Converse v. Sickles, 44 N. Y. Supp. 1080 (affirmed in I nk una Gw'cu-w aenedbe pASwendhes se 63 Darnell-Taenzer Co, v. Southern Pacific, 221 Fed., ECU CiUGlnuauwedewaad drs yeinvissscvevses 27 Dayton-Goose Creek Ry. Co. v. U. S. 263 U. S. 455.. 66 Empire State Surety Co, v. Carroll County, 194 Fed. 33 (U.S. CC. A. Sth Circuit)................ 47 Ex parte Dale & Co., L. R., 11 Ch. D. 773.......... 42 ‘ederal State Bank v. McFarlin, 257 Fed. (U. S. C. es ac claceccecccece 50 Frelinghuysen v. Nugent, 36 Fed. 229, 239.......... 43 Harrigan v. Gilchrist, 99 N. W. 909.............. 63 iv Hart v. Ten Eyck, 2 Johns. Ch. 62, 1. ¢. 108.......... 43 Louisville & Nashville R. R. Co. v. Sloss-Sheffield Steel and Iron Co., U. S. S. C. Advance Opinions, Law Ed. 4, December 15, 1925, page 94, 1. c. 101.... 28 Love v. North American Co., 229 Fed. 103........ 11, 56 Matthews v. Forslund, 112 Mich. 591.............. 63 Mercantile Trust Co. v. St. Louis & San Francisco Bird Ce, BO FOG MI iaok scien cht inns aadnssccess 36, 63 *Mills v. Lehigh Valley R. R. Co., 238 U.S. 473...... 26 Pennsylvania Railroad Company v. International Coal Mining Company, 230 U. S. 184................. 29 Peters v. Bain, 133 U. S. 670, 33 L. Ed. 696..........38, 43 Phillips v. Grand Trunk Ry. Co., 236 U.S. 662...... .26, 55 Pomeroy’s Equity Jurisprudence, Vol. I, See. 423.... 62 Richardson v. New Orleans Debenture Redemption Co., 102 Fed., p. 785 (C. C. A., Sth Cir.)........... 37, 61 Robinson v. Baltimore & Ohio Railroad Company, 222 BY. BB sca hhnnc kes nec ivvesevseateee seins 30 Schuyler v. Littlefield, 232 U. 8S. 707, 58 Law Ed. 806. 47 Scullin Steel Co. v. North American Co., 255 Fed. 945 (0. & CC. C.. Ay Cth Ciremit) oi. ccc cvcccccenenss 50 Smith v. Mottley, 150 Fed. 266 (C. C. A., 6th Circuit), 2 Err tT eer rr ret rr res ere 44 Smith v. Township of Au Gres, 150 Fed. 257, 1. ¢. 260-265, 9 L. R. A. (n. s.) 876, and 80 C. C. A. 145 COR UIE os hoes 50's cae Whi aniceces ies excesses 42 Southern California Ry. Co. v. Rutherford et al. (Cir- cuit Court, Southern District of California, June 90, 1604), GB Pied, Li 6. TOT. TB. oc cvs cusvscsienss 62 Southern Pacifie Co. v. Bogert, 250 U. S. 482........ 63 Southern Pacifie Company v. Darnell-Taenzer Co., 245 ye errr rry rrr Perey rrr rr ye here 25, 27 Sugar Refining Company v. Fancher, 145 N, Y. 552, l. ¢. 561 7 Sweet v. The Montpelier Savings Bank & Trust Co., ee ee O54 Oy MOR ews ue dad veeres be ew eh 63 Standard Oil Company of Kentucky v. Hawkins (C. (. A., 7th Cireuit), 74 Fed. 395, 1. ¢. 395-402... .48, 54, 63 Terre Haute and I. R. Co. v. Cox, 102 Fed. Rep. 825 eT SA MS FP i cees pie ves esraenvenaaweees 38 Texas & Pacifie Ry. v. Abilene Cotton Oil Co., 204 U. DES Neos ceed eh seen bie wud nun eeswaeeduak 27, 29 Titlow v. McCormick, 236 Fed. 209, |. e. 214, 215..... 51 Toledo, A. A. & N. M. Ry. Co. v. Penn. Co. et al., Traders’ Bank v. Fraser, 162 Mich. 315, 1. ec. 318..... 63 U. S. National Bank of Centralia v. City of Centralia, 940 Fed. 93 (U. S. C. C. A, 9th Circuit).......... 52 ue Cee ek, FOR, BE 5 aes sh cpee-seadsveuvab ae’ 62 U. S. v. Koenig Coal Co., U. S. S. C. Adv. Opinion, May 1, 1926, No. 12, p. 488, 1. c. 490............. 49 Weideman v. Newton Arms Co., 271 Fed. 302, 304 (C. Nee 8 Re er ae re 51 Williams v. Young, 81 Atlantic 1118.............. 63 Winfield v. Alva Security Bank, 232 Fed. 847 (U.S. arn. i CDG sb wk Wie A ou a hon aw meek ae rr wo i ns ivaG hwe naw een ee avec ee eiura IN THE SUPREME COURT OF THE UNITED STATES, OCTOBER TERM, 1926, ST. LOUIS AND SAN FRANCISCO 5 RAILROAD COMPANY and ST. LOUIS-SAN FRANCISCO RAILWAY COMPANY, Petitioners, $ No, 577, VS. E. B. SPILLER et al., Respondents. | BRIEF OF RESPONDENTS IN OPPOSITION TO PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT. FOREWORD. This case involves the right of certain cattle shippers to receive preferential payment under a reparation judg- ment rendered by this Court affirming the award of the Commission, in the ease of Spiller et al. v. Atchison, Topeka & Santa Fe Railway Company, 253 U. 8. 117, against nine carriers, eight of whom, presumably, have paid the judgment of this Court. During the pendency of these proceedings before the Commission for an award of reparation, which originated in an advance by certain carriers of cattle rates in the year 1903 to the extent of _—, 3 cents a hundred from Southwestern points to various markets, the St. Louis & San Francisco Railroad Com- pany, one of the carriers, went into the hands of Re. ceivers on May 27, 1913, under consent proceedings (Rec., p. 11). This Railroad Company, its Receivers and its successor, have, at all times, contested the right of the shippers (respondents herein) to obtain reparation for these excess charges. The history of this litigation is well set out in the opinion of the United States Cireuit Court of Appeals in this case (Rec., pp. 699 to 704), and shows that, from 1905 to date, respond- ents have been diligently endeavoring to recover from these petitioners the excess charges, paid by them and condemned by the Commission in its reparation orders and by this Court in its judgment supra. Petitioners in their application do not contend that, if the excess charges were unlawfully collected from re- spondents, the Court of Appeals was in error in applying the doctrine of trust ex maleficio as to such excess charges, provided such fund was sufficiently identified and traced. Their contention is that because the excess charges were collected under the published tariff they were, therefore, ‘‘lawfully’’ collected, and for that rea- son there was no basis for the application of the trust ex maleficio doctrine. The decision of the Distriet Court proceeded upon this theory, namely, the alleged lawful collection of the excess charges, and did not discuss the question of the identification or tracing of the funds (Ree., a ‘ves pp. 199 to 222, opinion of District Court). Previous to this opinion, the same Court had written a memorandum opinion granting leave to the respondents to intervene in the receivership suit of petitioners (Ree., pp. 57-58), which intervention asserted the right to preferential pay- ment by reason of the trust ex maleficio doctrine, and at that time the defense, namely, the denial of the ap- plication of the trust ex maleficio doctrine by reason of the published rate, was urged and considered by the Court; the Court, however, wrote the memorandum opin- ion granting leave to file intervening petitions (Ree., pp. 57-58) which is as follows: ‘*Filed February 12, 1921. ‘Sanborn, Cireuit Judge: ‘‘In view of the opinion in Love v. North American Company, 229 Fed. 123, and of the averments of the applicants, that on account of the necessity of first establishing their claims by the findings and orders of the Interstate Commerce Commission they could not have enforced them in the foreclosure proceed- ings at any time before February 1, 1916, the limit of the time fixed for presenting claims by the or- ders in those proceedings; that they have been dili- gently establishing these claims by necessary litiga- tion before the Interstate Commerce Commission, the Distriet Court and the Supreme Court, and that they notified the attorneys for the purchasers at the foreclosure sale before they paid for the purchase of their claims and their intention to press them, the Court is not persuaded that they are barred in this ae ee court of equity from a presentation and considera- tion of their claims either by the orders limiting the time within which claims were to be presented in the foreclosure proceedings or by the inexcusable laches of the applicants.’’ It is obvious that, if the published rate theory, now and then urged by Petitioners, precluded Respondents from establishing their claim on the basis of a trust ex male- ficio, then the application, at that time, should have been denied, because that objection was continuous and, if valid, was as fatal when the interventions were allowed, as it was when the District Court’s decision was ren- dered. If that theory is sound, then there could be no reparation under the Commerce Act as developed, infra. a STATEMENT OF FACTS. The statement of facts in the petition under paragraph I, ‘Statement of Matter Involved,’’ pp. 2 to 10, both in- clusive, omits some important facts, found by the Special Master and affirmed by the United States Cireuit Court of Appeals in its opinion in the instant case. (Report of Special Master, Ree., pp. 123-178, and opinion of the United States Cireuit Court of Appeals, Rec., pp. 699- 722.) These omitted matters are as follows: First. That under the accepted plan of reorganization the stockholders of the St. Louis & San Francisco Rail- road Company (hereafter called the Frisco Company), put into receivership by consent decree, were to receive, and did receive, more than forty-five million dollars of the stock of the new company (St. Louis-San Francisco Rail- way Company), as representing their equity in the prop- erty, without the payment of anything therefor. This is found to be a fact by the decision of the United States Cireuit Court of Appeals (Rec., p. 702). Second. That the intervenors received no offer of any kind for their claims in the reorganization, though offers were made to all other creditors, both secured and unse- cured, the reason, no doubt, being, as stated in the opinion of the United States Cireuit Court of Appeals that the proceedings to obtain the award and enforce it was: **Againet the cometagt cqpypeition of the selbend company, ite Reewivere amd the fallway come thelr claime had bere ectabicded Ge DMs Cornet ated im the Sequtomne Court of the Dante Saran (Ree, p. P21) Ard the Court aleo cand. 'Tivtemmets alll teem cient Chee altthestiers ie Bent the heed toed commen bee Mew wcewe soted Ube tiellway ctennngpiens fought these deanands of interweneee The exllnuy Commpany, Utoongh ite attedweyea mendbarted Whe nero im the Sepureeme Comet of the Dented Siteten BF wit eewen that thee iedewwemscnbe were elbvened aie peeberierenitl amd comesetemdtly diligend we bitagucnte wend We > Bin, p. 707) TE wrod Ber aeemeifncd ly dtaromeietemd be atetdke get eiftos intertemore whew heut claims wees Bernenage stent yanettonny’ bs fared pertenetiemtly cremated Third. lt ie cotablicked by the reed ewe Gat, OP ALL TIMES AFTER THE EXCESSIVE PampoET CHARGES WERE COLLECTED AND DOWR To Tee RECEIVERSHIP, THE BAILSOAD COMPANY Bad IN ITS TREASURY MONEY I* EkOESE OF THe CLAIMED OVERCHARGES AND THAT IT TERED Opinien of the T. & Clr, Oh of Agee, & Pree) Bit cape care ) i | OC iia Oe ie oe ey Reger SET) te alle arene cue Te le ineeniaie Pe Pe ee ee ee | a i Lr ee Co i ot | cee et aT Se eaehahhih, DALLA ea al el Lo Ce ee A ae ten ~~ ee eee, Ole Gee Ge ee tH ‘Die Spee! Wines cites Giete fe. ge OP) teem tte HORE Hem Me Ieee ieee Catan eg ee ee ee ee eer) ee REMI) Hie enti tis an Sete ER el) cn ee Se Se | ac ae verre S aielahaiesbelaiheeiel saben i. a SM estat, Se a ct er ee Se eee ce ee OH Che lines oP doe onetM | ffm gi, WE Hite aHONIE Bneitigl Gee die daemons ge oem acet mnantied Arig: Ae gel WR catenmieh Gree ee, ay eal Fourth. The Special Master in his report (Ree., p. 162) finds that the Interstate Commerce Commission stated its conclusion in its opinion in the case of Cattle Raisers Association of Texas v. M. K. & T. Ry. Co. et al, 11 I. C. C. Rep. 296, 1. ¢. 352, as follows: ‘*Tt has been found that the advances made during the year 1903, as shown by the appendix, were unjust and unreasonable, and that the present rates are un- just and unreasenable by the amount of said ad- vanees. The deiendants should, therefore, be required to cease and desist from the maintenance of these ae?" * ‘*All questions of reparation are reserved.’’ Subsequently, upon petition of the respondents to re- open this matter before the Commission, on April 14, 1908 (13 I. C. C. Rep. 418), the Commission reaffirmed its position of August 16, 1905, and again pronounced the rates excessive and unreasonable by the amount of the said advances (Opinion of the U. S. Cir. Ct. of Apps, Ree., pp. 699-700), and entered an order to that effect, which shows that the Commission, despite the fact that these rates were published, continuously condemned them as unjust and unreasonable to the extent of the 3-cents- per-hundredweight advance, which the Commission by its reparation award directed the carriers to pay. This brings us, therefore, to a consideration of the grounds advanced in the petition for the issuance of a writ of certiorari in this case, and to the arguments and authorities offered in support thereof, ee en STATEMENT OF ALLEGED HOLDINGS OF UNITED STATES CIRCUIT COURT OF APPEALS. (Petition, p. 7.) On pages 7 to 10 of the petition are set out the alleged holdings of the Cireuit Court of Appeals in the instant ease, Which respondents assert require some correction. These holdings are set out under six heads. Point 1 asserts that the Court held that intervenors are not barred from presenting their claims by laches, either (a) by reason of their delay, or (b) by reason of failing to file their cl: ims, as required by the interlocutory decree entered in the receivership ease. Point 2 states the holding of the Court in regard to the construction of the terms of the interlocutory and final decrees and the order of confirmation of sale, and the hold- ing that intervenors were entitled to present their claims, after the expiration of the time limited thereby. Since in the brief no attempt was made to discuss either the prope ‘ion of laches or the effect of the construction of the terms of said decrees and order of confirmation, it is safe to assume that these two points have been aban- doned by petitioners. The reasoning of the Court in its opinion on these two points (Rec., pp. 704-710) as to laches, and (Ree., pp. 710-714) as to the construction of aiitiiun said decrees, is so conclusive that we merely refer the Court to the reasoning of the opinion on these two points to show that there is no merit in them. Point 3, page \ contains a misstatement of the Court's holding in regara to the action of the Commission, as above pointed out, because it asserts that the Commission afterwards found the excess rate charges to be unjust and unreasonable and hence unlawful, and that the finding of the Court that the railroad company became a trustee ex maleficio for the benefit of intervenors of such money so collected, was based upon the alleged said subsequent finding of the Commission. On the contrary, the Court specifically held, as above stated, that, since the excess charges were unjust and un- reasonable, they were, ipso facto, unlawful when collected, under section 1 of the act, that they were exacted under duress, under the compulsion of the statute, section 6, re- quiring the published tariff rate, and that said charges were condemned by the Commission as unjust and un- reasonable by its decisions above referred to, both prior to their collection and subsequent thereto (Ree., pp. 715- 716, and Ree., pp. 699-700). Peint 4 also contains an omission of facts found as the basis of the Court’s holding. It omits any reference what- ever to the fact, above set out, as to the $300,000.00 always carried by the railroad company in its treasury and paid over to the Receivers and held by them, and the =) $5,000,000.00 sum paid over by the Receivers to the re- organized railway company. It also omits the fact that there were no other claimants to this fund except in- tervenors and a man named Love (Love v. North Ameri- can Co., 229 Fed. 103), whose claim was paid under the judgment of the United States Cireuit Court of Appeals of the Kighth Cireuit (Ree., pp. 718-721; report of Special Master, pp. 150-151). And that after the payment of such claim there was still in the treasary of the railroad company at all times an amount of money largely in ex- cess'of claims of intesvenors, which was turned over to the Receivers, as above stated; it also omits the further fact found by the Court that no offer of any kind was made to the intervenors, although offers were made to all other creditors of the Frisco Company, both secured and unsecured, and that the railroad company, prior to receivership, during receivership and subsequent thereto, and its successor at all times consisten.ly opposed the claims of intervenors; it also omits the fact that under the decree requiring the Receivers to list all claims as- serted against the railroad company or i. Receivers the Receivers failed and refused to list intervenors’ claims. The petition makes no reference to the service of the Commis- sion’s reparation order upon the railroad company or its Receivers, which is required by the Commerce Act, and presumably was served. This point also omits the fact that the stockholders of the old railroad company re- — ceived over $45,000,000.00 of common stock in the new company at par without paying one cent therefor (Lec., pp. 702-721; report of Special Master, p. 147). Point 5 states that the Court held it was not inconsist- ent to file a bill against the railroad company as trustee ex maleficio for the excess freight charges when, prior thereto, an action at law for damages against the carrier, based on an order of reparation of the Commission, had been filed, and that such action was not such an election of remedies as defeated the right of intervenors to charge the railroad company as trustee ex maleficio, after the reparation claims had been reduced to judgment in the United States Supreme Court. Under section 16 of the Act, the petition is upon the order, attaching it, and it is prima facie evidence, and the section further provides that: ‘‘A petition for the enforcement of an order for the payment of money shall be filed in the District Court * * * within one year * * *.” Thus, the suit and judgment were, upon the orders of the Commission, directing the payment of the unlawful rates collected. Point 6, page 10, states the holding of the Court in re- gard to the preferential claims of intervenors, held by the Court to be superior to the rights of other creditors, including bondholders, and adjudged to be prior m lien and superior in equity to the refunding mortgage and general lien mortgage of the St. Louis & San Francisco = Railroad Company and directed to be enforced against the property conveyed to the St. Louis-San Francisco Railway Company as assignee of the purchasers at the foreclosure sale had in the consolidated receivership ease, and that said claims should he collected with interest from August, 1, 1916. This point likewise omits any ref- erence to the fact, found by the Court, that the Railroad Company, its Receivers and successors, at all times, re- tained the money of the shippers and persistently con- tested their claims. Petitioners, on pages 10, 11 and and 12, ‘“‘REASONS RELIED ON FOR ALLOWANCE OF WRIT OF CER- TIORARI,”’ set out seven reasons for the purpose of bringing this application within the statute governing the issuance of writs of certiorari by this Court, namely, _ See. 240 (a) of the Judicial Code, as amended Feb- ruary 13, 1925 (Chap. 229, See. 1, 43 Stat. 938; See. 1217, U. S. Comp. Stat. Cum. Supp. 1925), and Rule 39 of this Court, adopted June 8, 1925, effective July 1, 1925, 69 Law Ed. U.S. Sup. Ct. Repts. APPENDIX, pp. 1192-1193, amended June 7, 1926, West Reporter, U. S. Ad. Opinions, July 1, 1926. Analyzing these said reasons, it will be observed: That Point 1 is based upon the alleged subsequent find- ing of the Commission as to the rate being unjust and un- reasonable, and avers that, when the rates were collected, they were the regular and legally established rates, and further avers that the Court in holding that such rates nition were wrongfully and unlawfully collected, had decided a federal question in a way in conflict with the applicable decisions of this Court. It will be observed, as pointed out, supra, that the claim that the opinion was based upon said alleged ‘‘sub- sequent finding’’ is absolutely contrary to the holding of the Court. As to the alleged federal question, namely, that the rate was lawfully collected because in accordance with the published tariff, it will be pointed out, infra, in the argument that the holdings of this Court are to the exact eontrary. Point 2, page 10, is based upon the holding of the Court as to the trust ex meleficio doctrine arising from the col- lection of rates, thereafter found by the Commission to be unjust and unreasonable (the legally published rates at the time of collection), and avers that the Court had de- cided an important question of general law (the trust ex maleficio doctrine) in a way untenable and in conflict with the weight of authority, and has decided an important question of federal law (the collection of unjust and un- reasonable rates, despite the published tariff) which has not been, but should be, settled by this Court. It will be observed that the same erroneous premise as to said alleged subsequent finding is contained in point 2 as in point 1, and it will also be observed that it is not denied that, if the excess charges were unlawful, because unjust and unreasonable, as found by the Commission (its — oo award affirmed by the judgment of this Court) and con- demned by section 1 of the act, then the proper basis ex- ists for the application of the trust ex maleficio doctrine. Point 3, pages 10 and 11, relates to the holding of the Court to the effect that it was not necessary for intervenors to prove that the identical money that they had paid had been placed in a separate account, or to trace the identical fund in the hands of the carrier, in order to become pre- ferred creditors, and stated that in so holding the Court had decided a question of general law in a way untenable and in conflict with the weight of authorities, and partic- ularly in conflict with decisions of other Cireuit Courts of Appeal on the same matter. This is an erroneous statement of the holding of the Court, which is in harmony with the great weight of au- thority on this point, including the decisions of this Court, and is a correct application of the law to the facts found by the Court in its opinion. We have pointed out, supra, the exact facts upon which this holding of the Court was predicated, all of which are omitted from the statement of facts of petitioners and from their argu- ment. There is not the slightest reference to the $300,000.00 held at all times by the old railroad com- pany in its treasury and paid over by it to the Receivers and the sum of over $5,000,000.00 paid by the Receivers to the new railway company. This is pointed out, supra. = Point 4, page 11, relates to the question of remedy and avers that the Court, in holding that the provision in the Commerce Act for enforcing reparation is not exclusive and did not preclude a bill to charge the railroad company as trustee ex maleficio, decided an important question of federal law, which has not been, but should be, settled by this Court. This matter is considered very fully by the Court in its opinion (Ree., pp. 718-719), where the Court cites the fa- mous Abilene Cotton Oil Company case, 204 U. S. 426-446, discussing the provision in section 22 of the act providing: ‘‘And nothing in this act contained shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this act are in addi- tion to such remedies.”’ The Court of Appeals points out that the right to im- press a trust upon the fund must necessarily follow the establishment of the reparation claimed and that there could be no inconsistency nor could there be an election of remedies under the circumstances and that the inter- vention of respondents was in aid of the judgment of this Court, affirming the Commission’s award of reparation, to secure the payment thereof. No execution could issue upon the judgment of this Court because of the status of the property transferred under the receivership foreclos- ure. Therefore, unless the bill to impress the trust could be maintained, respondents, fortified with the judgment of a= 17 this Court, would have been without remedy. The de- cision of the Court of Appeals is an exact application of the settled law to the facts of this case, in harmony with the Act and decisions of this Court. Point 5, as to laches, page 11, and Point 6, as to the meaning of the decrees in the reecivership suit, are not argued in the brief and are, therefore, we assume, not relied on. As pointed out supra, these two points are so completely answered by the opinion of the United States Circuit Court of Appeals that they have been abandoned. Point 7, page 12, relates to the holding of the Court that interveners have established preferential claims, superior to the rights of other creditors, to the extent of the judg- ment obtained by them against the Railroad Company in the District Court for the Western District of Missouri, with interest thereon from August Ist, 1916, and avers that this holding decided an important question of general law in a way untenable and in conflict with the weight of authority. The holding of the Court on this point harmonizes with the great weight of authority, and especially with the de- cisions of this Court, as pointed out, infra, in the argu- ment. The rights of Respondents, established by the judgment of this Court, would be as ‘‘idle as a painted ship upon a painted ocean,’’ if not made effective by the decree herein entered. — = No one who has any just claim can be hurt by this de- cree as pointed out by the Court in its opinion (Ree., p. 721): ‘‘Other creditors, bondholders, mortgagees, stock- holders acquired no interest of any kind in these ex- cessive and unjust charges. Preferential allowance of the claims arising therefrom takes nothing from them to which they are entitled. The Railway Company received the property of the Railroad Company sub- ject to these claims if allowed by the Court, as we have before pointed out, and hence suffers no wrong. Every consideration of equity and fair dealing de- mands that these claims should not be lost in a labyrinth of technicalities.”’ The petition concludes with the averment that the de- cree of the Cirenit Court of Appeals is erroneous and that this case should be certified; prayer accordingly. Summarizing the seven above points, it will be observed that it is asserted that the Court decided in Point 1 a ques- tion of Federal Law in conflict with the decisions of this Court. In Point 2, a question of general law in conflict with the weight of authority and a question of Federal Law which has not been but should be settled by this Court; in Point 3 a question of general law in conflict with the weight of authority; in Point 4, a question of Federal Law, which has not been but should be settled by this Court: and in Point 7, a question of general law, in con- flict with the weight of authority. _— Not a single reason has been adduced for granting the writ of certiorari in this ease. The motive for this appli- eation is delay and more delay, and this is made manifest by the history of this controversy now drawn out to the extent of twenty-one years—to use Lord Thurlow’s vivid expression, ‘‘to pluck the last hair from the tail of pro- crastination.’’ We now pass to the ‘‘Brief in Support of Petition.’’ After referring to the two cases below, pages 15 and 16, District Court opinion, and U. S. C. C. A. opinion, peti- tioners set out the ‘‘Grounds on which jurisdiction of this Court is invoked.”’ Under paragraph 2 of this head are set out ‘‘The spe- cific claims advanced and rulings made in the lower court which are relied upon as a basis of this Court’s jurisdic- tion.”’ Then under paragraphs (a) to (f), both inclusive, pages 16 and 17, are set out the specific claims advanced by petitioners in the Court of Appeals. The two first points, (a) and (b), viz., laches and mean- ing of decree, have been abandoned in the brief. The next points are: (c) Denial that the Railroad Company became trustee ex maleficio by collecting the ‘‘freight charged at the rates then legally in effect’’; (d) denial that inter- vener could invoke the trust-fund doctrine; (e) the asser- tion that said trust-fund theory was inconsistent with and abrogated by the Commerce Act, and by the exclusive remedies for collection by reparation prescribed by that act; (f) that interveners’ claims were not a preferred debt _ of the railroad company, and, if allowable at all, could only be established as general unsecured creditors’ claims, On page 17 of petitioners’ brief, paragraphs 1 to 6, both inclusive, are set out the alleged rulings of the Circuit Court of Appeals. Paragraphs 1, laches, and 2, meaning of the decree, are not argued in the brief, and are therefore presumably abandoned. Paragraphs 3 to 6, both inclusive, are sub- stantially the same as paragraphs 3 to 6, pages 9 and 10 of the petition, analyzed and discussed, supra, and con- tain the same errors of fact, viz., omissions of essential facts above pointed out, and constitute, we believe, a very distorted statement of the holdings of the Court of Ap- peals. Nothing is easier than to convict a court of error by asserting an abstract holding and not giving the essen- tial facts upon which that holding is based. It is easy to knock down a straw man. On page 18 of the brief is set out, under paragraph 3, the statutory provision under which this Court’s juris- diction is invoked, Section 248 of the Judicial Code, as amended February 13, 1925, and under paragraph 4, page 18, eases believed to sustain the jurisdiction of this Court, four in number, all of which will be discussed, infra, un- der the Argument. — ini Go “STATEMENT OF THE CASE”’ (Page 19) IN BRIEF. The statement adopts the statement in the petition. It is followed by ‘SPECIFICATION OF ASSIGNED ERRORS INTENDED TO BE URGED,”’ page 19. The specification of errors contains eight grounds. Paragraphs 5, as to laches, and 6, as to the meaning of the decree, are presumably abandoned in the brief, as pointed out supra, and will not be argued. Points 1, 2, 3 and 4 are an abbreviation of points 1, 2, 3 and 4 under the head, ‘‘REASONS RELIED ON FOR ALLOWANCE OF THE WRIT OF CERTIORARI,”’ pages 10 and 11 of the petition, all of which have been heretofore discussed, and contain even in a larger degree omissions of important matters of fact, found in the opin- ion of the U. S. C. C. A., and pointed out supra, and are all predicated upon misconceptions of the holdings of the court below. Points 7 and 8, page 19, are the same as point 7, page 12, of the petition, under the head, ‘‘ REASONS RELIED ON FOR ALLOWANCE OF THE WRIT OF CERTI- ORARI.”’ Following the Specification of Errors is the Argument, under five heads, pages 20 to 35, both inclusive. i vi G ies ARGUMENT. i. In the Brief of the argument counsel for Petitioners, in substance, makes the same points that are set out in ‘‘Reasons Relied on for Allowance of the Writ of Cer- tiorari.’’? In the first point they contend that the decision of the Circuit Court of Appeals held that the collection of legally-established rates becomes wrongful and un- lawful because such rates are subsequently found by the Commission to be unjust and unreasonable and _ such holding is in conflict with the applicable decisions of this Court. This is an erroneous statement of the decision and holding of the Cireuit Court of Appeals. The Circuit Court of Appeals did not hold that the rates became wrongful and unlawful because such rates were subse- quently found by the Commission to be unjust and un- reasonable. The Cireuit Court of Appeals decided and held that these rates to the extent of 3 cents a hundred pounds were wrongful and unlawful, because they were unjust and unreasonable at the time they were collected. The Cirenit Court of Appeals did not hold that the rates became unlawful because the Commission found them unjust and unreasonable either before or after they were collected, but because they were unjust and unreasonable. a.) 1: pe The Cireuit Court of Appeals held that they were ipso facto unlawful, because to the extent that they were un- just and unreasonable they were unlawful both at common law and under section 1 of the act itself. The actual holding and decision cf the Cireuit Court of Appeals is not in conflict with the decisions of this Court, but is in harmony with the decisions of this Court and with the Act to Regulate Commerce itself. Section 6 of the act was enacted to insure uniformity and to prevent discrimination of all kind, and, of course, we concede that, so long as the rate remains a published rate, the carrier must collect it and the shipper must pay it. But, because this is true, it by no means follows that a published unjust and unreasonable rate is a lawful rate. Section 1 of the Act (effective in 1905) provided: ‘*All charges made for any service rendered or to be rendered in the transportation of passengers or property, as aforesaid, or in connection therewith, or for the receiving, delivering and handling of such property shall be reasonable and just, and every unjust and unreasonable charge for such service is prohibited and declared to be unlawful’? which was declaratory of the common law. (Bold-face type ours.) In all the earlier cases for reparation before the Inter- state Commerce Commission the carriers made the con- tention that reparation could not be ordered because the a Ee carrier, when it collected the published rate, was collect- ing the legal rate, and, therefore, had a right to retain everything it collected under the published tariff, because when it collected the legal rate it obtained complete title to the entire amount collected. It will be interesting to note how the Interstate Com- merce Commission disposed of that contention. In the case of Arkansas Fuel Co. v. C. M. & St. P. Ry. Co., 16 I. C. C. Reports, p. 97, the Commission said: ‘‘It has been said that the word ‘legal’ looks more to the letter and ‘lawful’ to the spirit of the law; that ‘legal’ imports rather than the forms of law are ob- served and the rules prescribed obeyed, and the word ‘lawful’ that the act is rightful in substance. The two words may aptly be used as illustrative of the distinction that we have attempted to draw in the cases cited. It is provided in section 6 of the act that no earrier shall collect or receive a greater or less compensation than the rates specified in the tariff in effect at the time of the movement. Other provisions of law make it a misdemeanor for the car- rier to depart from the published rate. In dealing with shippers the earrier is therefore required to conform the freight charges actually collected to the amount fixed in its published tariffs. In that sense the published rate in effect at the time of the move- ment is, therefore, the legal rate. It is what the let- ter of the law requires the shipper to pay and the earrier to collect. ‘‘But the first section of the act, following the rule of the common law, declares that all charges for serv- — a ices rendered by a carrier in the transportation of passengers or property shall be reasonable and just. It also declares every unjust and unreasonable charge for such a service to be unlawful. In publishing a rate or schedule of rates the carrier therefore acts under this admonition of the statute. * * * While it may be, and indeed is, the legal rate—the rate that must be paid by the shipper and collected by the ear- rier because it is the published rate—the mere publi- cation cannot make a rate lawful that is unreason- able and excessive.”’ The underlying and basic idea of reparation is that the collection of an unjust and unreasonable rate is unlawful. If it were not unlawful, then the carrier, when it collected it, would obtain both the legal and equitable title to the unjust and unreasonable rate and could hold it as against the shipper and as against the world. This holding of the Circuit Court of Appeals, instead of being in conflict with the decisions of this Court, has been sustained many times by this Court. In the case of Southern Pacifie Company v. Darnell-Taenzer Co., 245 U.S. 531, the excessive freight charge had been passed on by the shipper to the conswmer, and it was contended by the rrilroad company that the shipper had suffered no loss. This Court said: ‘The plaintiffs suffered losses to the amount of the verdict when they paid. Their claim accrued at once in the theory of the law and it does not inquire into later events. * * * THE CARRIER OUGHT NOT = TO BE ALLOWED TO RETAIN HIS ILLEGAL PROFIT, and the only one who ean take it from him is the one that alone was in relation with him, and from whom the carrier took the sum.’’ (Black caps ours.) If the exactions had not been unlawful, the claims could not have accrued at the time the exactions were made. The carrier receives the ‘‘illegal profit’? when the ex- action is made. In the ease of Mills v. Lehigh Valley R. R. Co., 238 U. S. 473, the Interstate Commerce Commission found that the shipper was entitled to the excess charges as reparation. It was contended by the railroad company in this case that this was not a finding that the shipper had been damaged. The Court said on page 481 of the opinion: ‘‘What the Commission decided was that the ship- pers were entitled to reparation; that is, to be made whole, to be compensated for a loss because of an illegal and unreasonable exaction * * *.”’ In the case of Phillips v. Grand Trunk Ry. Co., 256 U. S. 662, a recovery was denied because suit had not been filed within the time fixed by the statute. The Court said, on pages 665-6: ‘*But while every person who had paid the rate could take advantage of the finding that the advance was unreasonable, he was obliged to assert his claim —< po within the time fixed by law. When the overcharge was collected a cause of action at once arose and the shipper at once had the right to file a complaint or to intervene in proceedings instituted by others.’’ The cause of action at once arose because the exaction was unlawful, at the time it was made. The Cireuit Court of Appeals, in the case of Darnell- Taenzer Co. v. Southern Pacific, 221 Fed., 1. c. 894, which came to this Court and was decided in Southern Pacific Company v. Darnell-Taenzer Co., 245 U. S., supra, said: ‘‘Cases of excessive and unreasonable rates differ from discriminating charges in the fact that in the latter there is nothing unlawful in the charging and receiving of the higher or published rate on which the demand for reparation is based; the unlawfulness is in giving a lower rate to someone else. On the other hand, the charging of an excessive and unreasonable rate is ipso facto unlawful.’’ In the case of Texas & Pacific Ry. v. Abilene Cotton Oil Co., 204 U. S. 426, the Court said: ‘‘Although an established schedule of rates may have been altered by a carrier voluntarily or as the result of the enforcement of an order of the Commis- sion to desist from violating the law, rendered in ac- cordance with the provisions of the statute, it may not be doubted that the power of the Commission would nevertheless extend to hearing legal complaints for awarding reparation to individuals for wrongs — unlawfully suffered from the application of the un- reasonable schedule during the period when such schedule was in force.’’ Of course, a wrong cannot be unlawfully suffered, if the act which causes the wrong is a lawful act. This Court, in the recent case of Louisville & Nashville R. R. Co. v. Sloss-Sheffield Steel and Iron Co., U. 8. S.C. Advance Opinions, Law Ed. 4, December 15, 1925, page 94, 1. ec. 101, held ‘‘the tariff rate, although unlawful be- cause excessive, was, as between the shipper and carrier, the only legal rate.’’ (Bold-face type ours.) All of these cases of this Court were reparation cases and all of them hold that the exaction of an unjust and unreasonable rate is an unlawful exaction and unlawful at the time it is made. As the Master well said in his re- port (Ree., p. 165): ‘‘Tt can make no difference that in the interest of uniformity a shipper, before he can bring his action to recover, must secure a finding of the extent to which the rate is unreasonable and unjust. The basic act itself is unlawful. The prescribed procedural steps cannot affect the situation.’’ The procedural steps provided to determine the extent to which a rate was unjust and unreasonable were pre- scribed by Congress to insure uniformity. The cases from this Court, cited by Petitioners, in sup- port of their proposition, are not in conflict with the — ro holding and decision of the Court of Appeals on this point, as a brief analysis will demonstrate. In the case of Pennsylvania Railroad Company v. Inter- national Coal Mining Company, 230 U. 8. 184, the shipper was attempting to recover, first, the amount of the differ- ence between the rebate allowed to the plaintiff and the amount of the rebate allowed to another shipper; and, second, the difference between the tariff, or published rate, and the tariff, or published rate, less the rebate made to another shipper. The Court held that as to the first at- tempted recovery the parties were particeps criminis and that they would be left where they were. On the second proposition the Court held that the amount of the differ- ence between the tariff rate and the tariff rate, less the rebate allowed the other shipper, was not evidence of the amount of the plaintiff’s loss, and that, since he had not made any other proof of loss, there’could be no recovery. The question as to whether or not a published, unjust and unreasonable rate was unlawful at the time of its collee- tion was not before the Court at all, and the Court simply announced the familiar doctrine that a published rate was the legal rate in the sense that it was the only rate that could be charged by the earrier and collected from the shipper. As we have already seen, the case of Texas and Pacific Ry. v. Abilene Cotton Oil Co., 204 U. 8S. 426, where it con- siders the point involved here, ruled that the application of unreasonable schedules during the period, when such — schedule was in force, afforded the shipper grounds for legal complaint and a recovery for wrongs unlawfully suffered from such application. However, the real point decided in the Abilene Cot- ton Oil Company case was that, in order not to destroy one of the objects of the Act to Regulate Commerce, which was to secure uniformity and to prevent discrimina- tion of all kinds, the shipper must first go to the Inter- state Commerce Commission to have the extent to which any given rate is unreasonable, established. The case of Robinson v. Baltimore & Ohio Railroad Company, 222 U. S. 506, involved a question of whether a shipper could sue the carrier direct to recover the ex- cess which he claimed to have paid under a rate at- tacked as unjustly discriminatory. The Court quoted at length (1. ¢. 510-511) the famous Abilene Cotton Oil case, supra, holding that such right on the part of the shipper would be inconsistent with the purpose of the act and followed the rule there announced. The quotation from this case in Petitioners’ brief (p. 22) stops at a very con- venient point. They have put a period after the word ‘‘effect.”’ In the opinion a comma follows the word ‘‘effect,’’ and the rest of the sentence is as follows: “* * * invested the Interstate Commerce Com- mission with authority to receive complaints against rates so established, and to inquire and find whether they were in anywise violative of the prohibitions of the act, and, if so, what, if any, injury had _ been = done thereby to the person complaining or to others, and further authorized the Commission to direct the carrier to desist from any violation found to exist, and to make reparation for any injury found to have been done. Provision was also made for the en- forcement of the order for reparation by an action in the Cireuit Court of the United States if the carrier failed to comply with it.’’ Of course, this decision is not in conflict with the de- cision of the Cirenit Court of Appeals. It is in harmony with that decision and the decisions, supra, of this Court. Following this quotation in their brief (p. 22), counsel for Petitioners make an odd assertion. They say: ‘‘No order was or could have been entered by the Commission, in August, 1925, requiring a railroad company to cease and desist from collecting the rates held to be unreason- able for the future.’’ It is true that no order was made requiring the carriers in this case to cease and desist. The finding of the Commission was that an order should be made requiring them to cease and desist from col- lecting the rate to the extent which the Commission ha found it to be unreasonable. Undoubtedly it did not make an order reguiring the carrier to cease and desis’ from collecting the unjust and unreasonable rate because of the filing of the petition by the shippers for additional findings, but no one ever contended that the Commis- sion did not, at that time, have power to make such an order, although it is true that’ the Commission did not, — 32 — at that time, have the right to fix rates, because it only got that right under the Hepburn Act, which went into effect, August 29, 1906. The opinion of Judge Sanborn (288 Fed. 612, 1. «. 629-30) is, of course, no authority for the proposition that the decision of the Circuit Court of Appeals reversing Judge Sanborn is in conflict with the decisions of this Court. Judge Sanborn’s decision is clearly in conflict with the decisions of this Court. This opinion undertakes to create an impossible con- flict between Sections 1 and 6 of the Act, and then de- clares that ‘‘such an absurdity ought to be rejected.”’ As often construed by this Court in cases, cited herein, there is no conflict between requiring the carrier to collect the published tariff rate and the right of the shipper to repa- ration for an unjust and unreasonable charge. There is no real conflict between the decision of the Court of Appeals in this case and its decision in the case of C. B. & Q. R. R. Co. v. Merriam and Millard Co., 297 Fed. 1. In the last cited case the question involved was whether or not reparation could be recovered, in advance of a finding, or without a previous determination by the Interstate Commerce Commission, of the extent to which a rate was unjust and unreasonable. In that case the In- terstate Commerce Commission had found a published rate to be unjust and unreasonable for the future and fixed a rate for the future which would be just and reasonable. There had been no determination by the Interstate Com- — merce Commission that the published rate would be unjust and unreasonable, up to the time that the new rate under the order of the Commission was to go into effect. The Court simply follows the Abilene Cotton Oil Co. case and held that, until the Commission had declared the existence of a right to reparation, an action in the courts to recover reparation could not be maintained. : In this point and in the Specification of Errors and in the ‘‘Reasons relied on for the allowance of the writ,”’ petitioners’ counsel persistently refer to the finding of the Commission made ‘‘subsequently’’ to the collection of these unlawful exactions. As a matter of fact, the Com- mission, before any of these unlawful exactions were made, to wit, August 16, 1905, had found these rates to be unjust and unreasonable and, therefore, unlawful, so that in this ease the carriers continued to collect the unjust and un- reasonable rate not only in the teeth of section 1 of the statute, declaring their action in that regard unlawful, but in the teeth of a positive and unequivocal finding of the Interstate Commerce Commission. II. In the second point of their brief of the argument coun- sel for the Petitioners combine the second and third “Reasons Relied on for Allowance of Writ of Certiorari’’ and the second and third points in their Specification of Errors. They say in the second point that the decision of the Circuit Court of Appeals that the railroad com- ae ee pany became chargeable as trustee ex maleficio of the excessive charges collected by it, and that the trust fund doctrine could be invoked by the Respondents is erro. neous and in conflict with the decisions of this Court, with the decisions of the same Circuit Court of Appeals and with the decisions of other Cireuit Courts of Appeal on the same matter. It should be borne in mind that this contest is really between the shippers on the one side and the railway company on the other. The stockholders of the old rail. road company, under the findings of the Master (Ree, p. 147) and under the findings of the Circuit Court of Appeals (Rec., p. 702) received over $45,000,000.00 par value of the stock of the new railway company without paying anything therefor. The Circuit Court of Appeals (Rec., p. 718) said it is established hy the record here that at all times after the excessive freight charges were collected and down to the receivership the railroad com- pany had in its treasury money in excess of the claimed overcharges and that it turned over to the Receivers some $300,000.00 and that under the doctrine of the Love ease it will he presumed that the money exacted by duress from the intervenors and their assignors for unjust and excessive freight rates was a part of the money in the treasury of the company which passed to the Receivers. No one else claimed any part of the $300,000.00 so turned over to the Receivers by the railroad company except Love, the complainant in the case of Love et al. v. North — oe American Company et al., 229 Fed. 103. His Honor, Judge Sanborn, decided that Love was not a preferred creditor. This same Circuit Court of Appeals reversed the decision of Judge Sanborn and held that Love was a preferred creditor and the petitioners paid the judgment directed in favor of Love by the Cireuit Court of Appeals, but after this payment there was still at all times in the hands of the Receivers over $300,000.00 and turned over by them to the new Railway Company, a sum greatly in excess of the claims of Respondents. The Circuit Court of Appeals in this case followed the Love case, pointing out that there was no substantial distinction between this case and the Love case. The facts in this case, found by the Cireuit Court of Appeals and by the Master, are that the railroad company commingled the moneys unlawfully ex- acted from the shippers with their own, From the time of the first unlawful exaction, down to and including the date of the appointment of the Receivers, the railroad company had in its treasury a sum largely in excess of the claims of these respondents plus the claim of the complainant in the Love case. It was contended by counsel for peti- tioners in the Cireuit Court of Appeals that because re- spondents did not trace every dollar of the illegal exac- tions into this bank or that bank and did not show that it remained there, they had not traced their money. The railroad company did deposit their funds in several dif- ferent banks, but, suppose they had kept their money in several different boxes today, one day taking money out an of one box and paying it out and another day taking money out of another box and paying it out, but always having in their boxes a sum in excess of the trust fund, would not the presumption be indeed that the railroad company had acted honestly and had paid out its own money, leaving in the boxes money belonging beneficially to respondents? What the Cireuit Court of Appeals did in this case was to treat all of the boxes as one box. It held that since the railroad company always had in its treasury an amount in excess of the trust fund, the trust could be enforced on such excess. This decision prop- erly understood is not in conflict with the decisions of this Court or with the decisions of the Courts of Appeals. In the case of Angle v. Chicago, St. Paul & C. Rwy. Co.,, 151 U. S. 126, this Court said it is familiar doctrine that the party who acquires title to the property wrongfully may be adjudged a trustee ex maleficio in respect to that property. In the case of Mercantile Trust Co. v. St. Louis & San Francisco Rrd. Co., 69 Fed. 193, which arose under an earlier receivership of this railroad, the Court, in that case (p. 197), said of this situation: ‘*Two-fifths of all the money that went into the treasury of the company for fares of passengers rep- resented unlawful and illegal exactions. That money it still has. No portion of it has been returned to the persons who were illegally forced to pay it. The sums illegally exacted from the interveners have never been — returned or tendered to them. It required eight years of litigation for the interveners to establish their own and the rights of the public in the premises. * * * When, as sometimes happens, a railroad company de- sires to avoid the payment of debts and obligations incurred in the operation of its road, or to reduce the wages of its employes below a fair and reasonable compensation for their services—there are not many such companies, but occasionally there is one—it secks the aid of a friendly creditor, through whose agency it is quickly placed in the hands of a receiver, and im- mediately a court of equity is asked and expected to do the mean things which the company itself was unable or ashamed to do. But it is believed this is the first instance in which a court of equity has been asked to become, in effect, something bordering very closely on a receiver of stolen goods, and urged to hold the ill-gotten gains in trust for the guilty party, and refuse to make restitution even of the smallest portion of them to the persons from whom they were unlawfully taken. High considerations of public policy, not less than the plainest principles of equity and justice, demand that the property of the defend- ant company in the custody of the Court as a trust fund should be made to respond to the payment of these judgments.’’ Also vid Richardson v. New Orleans Debenture Re- demption Co., 102 Fed., p. 785 (C. C. A. 5th Cir.). In commingling this trust money with its own money, the Railroad Company violated its duty as trustee, and the courts, in order to correct this situation, indulge every —_ sn presumption for the beneficiary. The proposition that no such narrow doctrine as that contended for by counsel for petitioners exists is shown by the case of Terre Haute and I. R. Co. v. Cox, 102 Fed. Rep. 825 (U. S. C. C. A. 7). In that case the Railroad Company commingled the trust fund with its own in its treasury. The Court said: ‘‘But it is insisted by the Indianapolis Company that the excess of operating expenses over the earn- ings of the Peoria Railroad necessitated and justified the withholding of the thirty percentum, and the ree- ord shows that a large sum of money came into the hands of the Receiver as a part of the estate at the time of their appointment. We may, therefore, we think, safely assume that that portion of the earnings which otherwise would have gone to the Peoria Company came into the hands of the Receivers, either as money at the time they took possession of the road, or as a benefit in virtue of the fact that they were consumed in the general operating expenses of the Indianapolis Company.”’ The Court, in this last-cited case, quoted from Peters vy. Bain, 133 U. S. 670, 33 L. Ed. 696. Formerly the equitable right of following misapplied money or other property into the hands of parties receiving it depended upon the ability to identify it. The equity attached only to the very property misapplied. This right was first extended to the proceeds of the property, viz., to that which was procured in place of it by exchange, purchase or sale, and if it became confused with other property of the same kind — _— wae so as not to be distinguishable without any fault on the part of the possessor, the equity was lost. Finally, how- ever, it has been held as a better doctrine that confusion does not destroy the equity entirely, but converts it into a charge upon the entire mass, giving the party injured by the unlawful conversion a priority of right over the other creditors of the possessor in this case; that, when the railroad company commingled these unlawful exac- tions with their own money, the shipper’s equity became a charge upon the entire mass in the treasury of the com- pany. It makes no difference that part of the money may have been deposited in one bank to the railroad’s credit and part in another. No matter how many banks it may have been deposited in, the railroad company remained in control of it and, at all times, the money was in the treasury of the railroad company, as was held by the Cir- cuit Court of Appeals. The narrow contention of counsel for petitioners would take us back to the old rule that every dollar had to be earmarked. The Circuit Court of Appeals, in the ease of Terre Haute I. R. Co., supra, said: “Clearly, then, the Indianapolis Company in its own right could not oppose the restoration of these moneys to the Peoria Company.”’ The railroad company clearly in that case could not oppose the restoration of these moneys to the Peoria Com- pany and neither can the railway company in this case to respondents. Not only did the amount in the treasury, a from the time these unlawful exactions were made, exceed the trust fund; not only did the railroad company turn over to the Receivers a sum greatly in excess of these un- lawful exactions from its treasury, but there never was a time, after the appointment of the Receivers, that the moneys in their treasury did not greatly exceed the trust fund, as was found by the Master and the Circuit Court of Appeals. The Receivers turned over to the railway company over $5,000,000.00, after paying all operating charges, all taxes, interest on bonded indebtedness and after taking up car trust certificates issued before the receivership. The above principles were declared in the leading case of Central National Bank of Baltimore v. Connecticut Mutual Life Insurance Co., 104 U. S. 54, 26 Law Ed. 693, in which the syllabus was written by Mr. Justice Mat- thews, the author of the opinion. The syllabus (para- graph 3, page 694) is as follows: ‘“‘That, so long as trust property can be traced and followed into other property into which it has been converted, the latter remains subject to the trust, and that if a man mixes trust funds with his own, the whole will be treated as the trust property, except so far as he may be able to distinguish what is his own, are established doctrines of equity and apply in every ease of a trust relation, and to moneys deposited in a bank account, and the debt thereby created, as well as to every other description of property.’’ — } This proposition is discussed in the opinion, 26 Law Ed, i. e. 699-701. The Court reviews the English cases on this subject and points out that the original doctrine, re- quiring money to be earmarked, or specifically identified, had been abandoned in cases of trust relationship. The Court cites the opinion of Vice-Chancellor Sir W. Page Wood, as follows (1. ¢. 699): ‘Vice-Chancellor Sir W. Page Wood, in Frith v. Cartland, 2 Hem. & M. 420, said that Pennell v. Deffell rested upon and illustrated two established doctrines. One was that ‘So long as the trust property can be traced and followed into other property into which it has been converted, that remains subject to the trust.’ The second is, ‘That if a man mixes trust funds with his own, the whole will be treated as the trust prop- erty, except so far as he may be able to distinguish what is his own.’ ”’ Again the Court said (1. ¢. 700) (after quoting the opin- ion of the Master of the Rolls, Sir George Jessell, as set out in the rule announced in the headnote above): ‘‘He adopts the principle of Lord Ellenborough’s statement in Taylor v. Plumer, 3 M. & S. 562, that ‘It makes no difference in reason or law into what other form different from the original the change may have been made, whether it be into that of promissory notes for the security of money which was produced by the sale of the goods of the principal, as in Scott v. Surman, Willes 400, or into other merchandise, as in Whitcomb v. Jacob, 1 Salk. 161, for the product or — 42 — substitute for the original thing still follows the nature of the thing itself, as long as it can be ascertained to be such, and the right only ceases when the means of ascertainment fail.’ But he dissents from the applica- tion of the rule made by Lord Ellenborough when the latter added, ‘which is the case when the subject is turned into money and confounded in a general mass of the same description,’ for equity will follow the money, even if put into a bag, or an undistinguishable mass, by taking out the same quantity. And the doe- trine that money has no earmark must be taken as subject to the application of this rule. The Court of Appeals had previously applied the very rule as here stated in the case of Birt v. Burt, reported in a note to Ex parte Dale & Co., L. R., 11 Ch. D. 773.”’ The Court further added that the principles, above enunciated, had been illustrated by many cases in the United States, citing and analyzing a number of such cases, l. ce. 700. This case on this point has been cited and followed by this Court, by the lower federal courts and by nearly all of the state courts. It would be useless to attempt to give this vast mass of citations, but, in addition to the cases of Cox and Richardson, above quoted, citing and follow- ing this case, we refer to the two following cases: Smith v. Township of Au Gres, 150 Fed. 257, 1. ec. 260-265, 9 L. R. A. (n. s.) 876, and 80 C. C. A. 145 (6th Circuit). This case contains an excellent discussion of the doctrine, above announced, and quotes (1. ¢. 261) from the opinion a em of Chancellor Kent in Hart v. Ten Eyck, 2 Johns. Ch. 62, l. e. 108, as follows: “Tf a party having charge of the property of others so confounds it with his own that the line of dis- tinction cannot be traced, all the inconvenience of the confusion is thrown upon the party who produces it, and it is for him to distinguish his own property, or lose it.’’ This is as strong a statement of the rule of presumption as ean be found on this subject and amply supports the presumption invoked both in the Love case and in the instant case. The ease of Standard Oil Company of Kentucky v. Hawkins (C. C. A., 7th Cirenit), 74 Fed. 395, 1. ¢. 395-402, reviews the authorities on this subject and cites and follows the rule announced in the Central National Bank case, supra. The Court traces the history of this doctrine, citing the English authorities and their application in the American decisions. The Court cites (1. ¢. 401-2) the opin- ion of Mr. Justice Bradley in Frelinghuysen v. Nugent, 36 Fed. 229, 239, which language is quoted with approval in Peters v. Bain, 133 U. S. 670, 693, in which he points out and disapproves the old equitable doctrine as to the necessity of exact identification of a trust fund or trust property commingled with others, and adds: ‘Finally, however, it has been held as the better doctrine that confusion does not destroy the equity = a entirely, but converts it into a charge upon the entire mass, giving to the party injured by the unlawful diversion a priority of right over the other creditors of the possessor.’’ The Court (1. ¢. 402) cites numerous cases, announcing the same proposition, and states that the Central National Bank rule had been followed in Peters v. Bain, 133 U. S. 670. The principles above stated have an even stronger ap- plication to the facts in the instant case, because in the eases above quoted the trust doctrine arose out of con- ventional agreements of the parties, whereas, in the in- stant case the money of the shippers was extorted under duress and under the compulsion of the statute, and, under the theory of the Reparation Provision of the Commerce Act, constituted a trust fund, which must be restored to the shipper. In the case of Smith v. Mottley, 150 Fed. 266 (C. C. A, 6th Circuit), 1. ¢. 268, the Court again discusses the com- mingling of trust funds and the rights of the beneficiary. The Court refers to the Au Gres case, decided by it (150 Fed. 267), and reannounces the same doctrine, citing ad- ditional cases in support thereof. The Court said (1. ¢. 268) that it was shown that three times the amount of the trust fund claimed remained in the bank from the time of payment to the time of the assignment and came to the trustee. The Court added: — ‘‘The burden of showing that his property has been wrongfully mingled in a mass of the property of the wrongdoer is upon the owner; but, when this is done, the burden shifts to the wrongdoer. It is for him to distinguish between his own property and that of the innocent party’’ (citing a number of cases). The cases cited by counsel for petitioners are not in conflict with the decision of the Cireuit Court of Appeals in the instant case. When the different states of facts are considered, those cases are in harmony with the de- cision of the Cireuit Court of Appeals. In the case of City of Litchfield v. Ballon, 114 U. 8S. 190, 29 Law Ed. 132, the city had issued bonds which this Court held to be void, because they were issued in viola- tion of the state Constitution. Thereupon, the purchaser of the bonds brought a suit in equity on the theory that, notwithstanding the bonds were wholly invalid, the city was in possession of the money, received for the bonds, or its equivalent in property identified as having been pro- cured with the proceeds of the bonds. The evidence showed that the money represented by the proceeds of the bonds had long since passed out of the hands of the city. However, the evidence showed that some of the proceeds of the bonds had gone into a water works plant. A large part, however, of the money, which had gone into the water works plant, was obtained by taxation, or from other resources of the city. It was not ascertainable how much. The land, on which the work was constructed, was — on purchased before the bonds were issued. The streets, through which the pipes were laid, were public property into which no money of the complainants had entered. In connection with the allegations in the bill that the city was in possession of the money, the Court said (1. ¢. 133); ‘“‘The money received by the city from Ballou has long passed out of his possession and cannot be re- stored to complainant. Neither the specific money nor any other money is to be found in the safe of the city or anywhere else under its control.’’ Speaking about the tracing of the money into the water works property, this Court used the language set out in petitioners’ brief. In this case respondents have traced their money into the treasury of the railroad com. pany and from the treasury of the railroad company into the hands of the Receivers, and from the hands of the Re- ceivers into the hands of the railway company, and have showed that the stockholders of the old railroad company obtained over forty-five million ($45,000,000.00) dollars of the stock of the new railway company without paying anything for it. Here respondents’ money can be reclaimed and deliv- ered without taking others’ property with it and without injury to other persons, or interfering with others’ rights. Moreover, the decree of the lower court appealed from in this Ballou ease did not proceed upon the trust fund theory. It found a debt from the city to Ballou and — — pn impressed a lien upon the water works plant for the pay- ment of that debt. This Court held that that was as much within the condemnation of the. constitutional provision as the express contracts evidenced by the bonds. The case of Schuyler v. Littlefield, 232 U. S. 707, 58 Law Ed. 806, simply announces the familiar doctrine: “‘Trust funds deposited by a trustee in his indi- vidual bank account are dissipated if the mingled fund is at any time wholly depleted, and cannot be treated as reappearing in sums subsequently deposited to the same account.’’ The next case cited is Empire State Surety Co. v. Car- roll County, 194 Fed. 593 (U.S. C. C. A., 8th Cirenit). In this case Judge Sanborn (1. c. 604-605) undertakes to announce the rules governing the enforcement of a trust against the proceeds of an insolvent estate in the hands of a receiver. After announcing the general rule: “It is not sufficient to prove that the trust property or its proceeds went into the general assets of the insolvent estate and increased the amount and the value thereof which eame to the hands of the Re- ceiver’’ (citing 1. ¢. 604 and a number of cases), the Court stated (1. ¢. 605) the second rule on this sub- ject, which is as follows: ‘Proof that a trustee mingled trust funds with his own and made payments out of the common fund — — is a sufficient identification of the remainder of that fund coming to the hands of the Receiver, not ex- ceeding the smallest amount the fund contained sub- sequent to the commingling (Board of Com’rs y, Strawn, 157 Fed. 49, 51, 84 C. C. A. 553, 555, 15 L. R. A, [n. s.] 1100; Weiss v. Haight & Freese Co. [C. C.), 152 Fed. 479; American Can Co. v. Williams, 178 Fed. 42, 423, 101 C. C. A. 634, 6387) as trust property, be- cause the legal presumption is that he regarded the law and neither paid out nor invested in other prop- erty the trust fund, but kept it sacred (Board of Com’rs v. Patterson [C. C.], 149 Fed. 229, 282; Spo- kane County v. First National Bank, 68 Fed. 979, 16 CC. Ca. Gh” This rule fits the facts found in the instant case, viz., the $300,000.00, at all times held by the carrier, the Re- ceivers and successor, and accords with the finding of the Circuit Court of Appeals in this case (Ree., p. 718), that the excess freight rates collected by the carrier were part of the moneys in the treasury of the company, which passed to the Receiver. The next case cited is the case of Winfield v. Alva Se- curity Bank, 252 Fed. 847 (U. S. C. C. A., 8th Circuit). In this case the complainants had purchased forged notes from the cashier of the Alva Bank. The complainants had credited the Alva Bank with the purchase price of these notes. Subsequently, these credits were entirely exhausted by drafts and there was no evidence that any part of the . fund ever reached the Alva Bank. What was said by the — a ee Court in this Alva Bank case, after finding that there was no evidence that any of the proceeds of the forged notes ever reached the bank, may have been right on the facts in that ease, but is not authority on the facts in this case. Whatever may have been the principles announced in that case, they are clearly inapplicable to a reparation case like this, the principles governing which have been stated by the United States Circuit Court of Appeals in this and the Love case. Certainly the robust morality of the opinion of the United States Cireuit Court of Appeals in the instant case must appeal to all fairminded persons. One of the deep-seated convictions of Congress, as re- flected by its legislation, namely, the Carmack Amend- ment, and the Elkins Act, designed ‘‘to eut up by the roots every form of discrimination, favoritism and in- equality’? (U. S. v. Koenig Coal Co., U. S. S. C. Adv. Opinion, May 1, 1926, No. 12, p. 488, 1. ¢. 490), and by the provisions of the Commerce Act, was to protect the ship- per in the wholly unequal fight with the earrier. It is very easy for the carrier to get the shipper’s money, and Congress, as shown by its legislation, as construed by this Court, is determined that the shipper shall get it back, and has even gone to the extent of authorizing the assess- ment of attorneys’ fees in favor of the defrauded shipper. It is the clear intent of Congress, as shown in the Com- merce Act, to restore to the shipper all unjust and unrea- sonable charges, plus interest from the date of payment, and attorneys’ fees, thereby penalizing the carrier and — —_ ee predisposing the carrier to treat the shipper fairly and not litigate his just claims with him, in season and out of season, day and night, Sundays and_ holidays, fers period of twenty-two years, during which time an oppor- tune financial receivership is invoked to entirely defeat the shipper, though the stockholders of the railroad com- pany in receivership are enriched at the expense of its creditors to the extent of over forty-five millions of dollars. The next case cited is the case of Federal State Bank v. McFarlin, 257 Fed. (U.S. C. C. A. 8th Cir.). This case involved the distribution of assets of a bank- rupt grain company and merely announces the general proposition, citing the Carroll Company and Alva Bank cases, supra, that a claimant, whose property has helped to swell the general assets of a party, subsequently becom- ing bankrupt, has no prior right in those general assets without specific identification or tracing of the claimant's property. There was no proof that a large fund claimed by no one except the interveners was carried at all times by the zankrupt company, both before and after bankruptcy. The next ease cited, Scullin Steel Co. v. North American Co., 255 Fed. 945 (U.S. C. C. A., 8th Cirenit), merely an- nounces the proposition that, where there is collusion and fraud between the agent of the shipper and the agent of the carrier, and the carrier had no notice of such fraud and was not enriched by it, the money so siphoned from the shipper could not be treated as a preferred claim over other creditors of the carrier. The next case cited is Weideman v. Newton Arms Co., 971 Fed. 302, 304 (C. C. A., 2nd Circuit), in which the Court held that, where a trust claim-was asserted on the ground that money had been secured from claimant by the false representations of a corporation, it was necessary to show, first, that such representations were relied on, and, second, trace their money into some particular prop- erty or fund which came into the hands of the Receiver; and it is not sufficient to show that it was used by the corporation generally in its business. In that case the Court pointed out (1. ¢c. 303) that the cash on hand had fluctuated down to zero, with liabilities of $400,000.00, and that all that claimants could prove was that their money was spent in carrying on the business or procuring certain articles of machinery and the like, whick ultimately passed into the Receiver’s hands (1. ¢. 304). How ean this holding fit the facts in the instant case? The next case cited is Titlow v. MeCormick, 236 Fed. 209, 1. e. 214, 215. This ease involved the distribution of the assets of an insolvent bank, where a trust was asserted by one claimant. This case cites and follows (1. ¢. 211) the Schuyler case, 232 U. S. 707, analyzed supra. This case also announces the doctrine (1. ¢. 214) that, where a trust fund has been commingled with other funds, still claimant is entitled to recover if there remained in the possession of the bank a sum of money equal to the amount due him, winemTat Sti inc Bitlis Gi che RR SEL a “IT BEING THE PRESUMPTION OF THE LAW THAT, IF MONEYS HAD BEEN DISBURSED OUT 0? SUCH FUND, IT WAS THE MONEY WHICH THE BANK HAD THE RIGHT TO PAY OUT, AND NOT THE MONEY WHICH WAS ENTRUSTED TO ITINA FIDUCIARY CAPACITY.’’ (Black caps ours.) Again, 1. e. 215, the Court announces the same rule, quoting the ease of Brennan v. Tillinghast, 201 Fed. 609-614 (C. C. A, 6th Cireuit), where the Court declared that, when trust funds were mingled with other funds there was a_pre- sumption of law ‘““THAT THE SUMS FIRST DRAWN OUT WERE FOR THE MONEYS WHICH THE TORT FEASOR HAD A RIGHT TO EXPEND IN HIS OWN BUSINESS, AND THAT THE BALANCE WHICH RE- MAINED INCLUDED THE TRUST FUND WHICH HE HAD NO RIGHT TO USE.”’ (Black caps ours.) In the Titlow ease the Court applied this principle and established a trust to the extent of the unexpended de- posit. In the instant case, we repeat, there was always over $300,000.00 in the treasury of the carrier upon which inter- veners’ trust lien remained, and which was not dissipated in any manner, and upon which no other claimant asserted rights. The last case cited on this point is the case of U.S. National Bank of Centralia v. City of Centralia, 240 Fed. 93 (U. S.C. C. A., 9th Cireuit). This case involved the _— distribution of the assets of an insolvent bank in a re- ceiver’s hands, and announces (1. ¢. 95) this proposition: ‘‘The law impresses a trust upon funds (trust funds so misapplied, that is commingled with other funds) and to the extent that the said money or any portion thereof, either in its original or a substituted form, can be traced into the fund which came into the pos- session of the Receiver, the appellee is entitled to a preference over the general creditors’? (citing the Titlow, Schuyler and Brennan cases, supra). The Court held in the Centralia case that there was no proof that claimant’s moneys ever came to the Centralia bank or were traceable to any fund that came to the Re- ceiver’s hands, and, therefore, there could not be any re- covery upon the trust theory. How this case applies to the facts of the instant case, we cannot conceive. Since the provisions of the Commerce Act require uni- formity as between shippers, the same uniformity is re- quired in the enforcement of reparation—a restitution of money unlawfully taken by the carrier from the shipper. This restitution presupposes priority of payment and nec- essarily establishes the basis for the enforcement of the trust ex maleficio doctrine, when a carrier, owing repara- tion to a shipper, has gone into the hands of a receiver. If this were not true the basic uniformity required by the Commerce Act would be destroyed, because the solvent carriers, participating in the collection of an unlawful rate from the shipper, condemned by the act as unjust and a §4 unreasonable, would be forced to make restitution; whereas, the carrier in the hands of a receiver, adminis. tered by a court of equity, would appropriate the repara- tion due the shipper, and thereby create a preference and advantage to the carrier in the hands of a receiver anda discrimination against the shippers on such road. No wonder that Judge Caldwell, in the case of Mercantile Trust Company v. St. Louis and San Francisco Railroad Co., above quoted, 69 Fed. 193, 1. ¢. 198, indignantly de- nounced such effort of the carrier (a prior receivership of this same railroad company) to escape reparation lia- bility via the receivership route. The Commerce Act is just as applicable, as shown by its provisions, to carriers, operated by receivers, as to the corporation performing the carrier’s service, and the same equality of duties, re- sponsibilities and uniformity of rates applies under the provisions of the act to the receiver of the carrier as to the carrier not in receivership. As to the general obliga- tion of the receiver to pay claims and do exact justice as to a preferred claimant, asserting a trust, vid. Standard Oil Co. v. Hawkins, 74 Fed. 395, 1. ¢. 402. The receiver of a carrier cannot in equity be the ageney to accomplish prohibited discrimination and the destrue- tion of the basic uniformity in rates, prescribed by the act, by refusing to recognize a reparation order of the Commission, affirmed by the judgment of this Court. It is because of the rule of uniformity that the proceeding to have the rate declared unreasonable, therefore unlaw- — vor ful, with consequent reparation to the shipper, is not a proceeding of a private nature, but of a public nature, so as to afford the foundation of an order for repayment to all shippers affected, though not parties to the proceeding. Baer Bros. Mere. Co. v. D. & R. G. R. R. Co., 233 U. S. 479, 1. e. 486-7, 58 Law Ed. 1055, 1. e. 1060; Phillips v. Grand Trunk R. R. Co., 936 U. S. 662, 1. ec. 665, 59 Law Ed. 774, |. ¢. 776. The whole effect of Petitioners’ argument is that there is no basis for the application of the trust ex maleficio doctrine because of the alleged fact that the excess charges were ‘“‘lawfully’’ collected from the shippers, he- eause under the published tariff. We have shown by re- peated decisions of this Court that this contention is an obvious fallacy and the collection of such unjust and un- reasonable charges is not and could not be ‘‘lawful,’’ be- eause such holding would destroy the basic right to repa- ration. With this fallacious premise exploded, it is not denied by petitioners that a trust ex maleficio did arise. The chief remaining question, therefore, is whether or not there has been a sufficient identification and tracing of the exeess charges, paid by the shippers, to authorize their recovery in the manner and form decreed by the United States Cireuit Court of Appeals, and this is dis- cussed fully, supra. —_— ALLEGED CONFLICT WITH PRIOR DECISIONS OF THE UNITED STATES CIRCUIT COURT OF APPEALS, EIGHTH CIRCUIT. Two of the grounds advanced for the granting of the writ of certiorari is that the decision of the Circuit Court of Appeals in this case is in conflict with other decisions of the same Circuit Court of Appeals, both as to the trust fund theory and identification of the fund. As we have heretofore showed, when the facts in this case are ana- lyzed and differentiated from the facts in those other cases, there is no conflict. The case of Love v. North American Company, 229 Fed. 103, is the only case decided on facts identical with the facts in this case. The controlling principle in the Love ease is cited and approved by the opinion of the United States Circuit Court of Appeals in the instant case (Rec., p. 717), quot- ing from the Love case, 999 Fed. 103, 1. e. 106, and in said opinion of the United States Circuit Court of Appeals in this case (Rec., p. 718) the Court adds that the Love ease, ‘is the latest expression of this Court on the subject, and is authority for the proposition that in order to establish a trust in a railroad company for the benefit of the shipper as to freight charges, wrongfully ex- acted, it is not necessary to show that the identical money received has been placed in a separate account or to trace the identical fund.”’ aw §7 The Court further cites from the Love case (Ree., p. 717): “The question now might be properly asked, to whom do the excessive charges received by the Frisco Company for the transportation of freight belong? They certainly do not belong to the general creditors of the Trisco Company, nor to the bondholders, nor the Frisco Company, itself. Without qnestion they belong to the shippers. We must not be deceived as to the true status of this claim, nor allow the bond, or the fact that the claim is presented by the Corpo- ration Commission, to blind us to the fact that the claim is one due to the shippers for excessive charges paid by them to the Friseo Company for transporta- tion of freight. The shippers not only paid the lawful charge, but they did more. They paid an excessive charge. That payment was an illegal exaction, and, as against the railroad company, and volunteers, like the Receivers, the money belonged to the shippers after the payment the same as before. It will be pre- sumed that it was a part of the money in the treas- urer of the company which passed to the Receivers. That money came into the hands of a court of equity. What ought such a court to have done with it? Surely it could do nothing but direct that it be returned to the shippers to whom it belonged. It having been paid to the bondholders, or for permanent hetterment of the property for their benefit through the ageney _of a court of equity, that court, as a court of con- scienee, ean do no less than direct its restoration.” The Court carefully considered the Carroll County case, 194 Fed. 593-604, and the various other cases, now cited = by the petitioners in this application. Counsel for peti- tioners attempt to distinguish the Love case from this ease. They made this same attempt before the Master and before the Cireuit Court of Appeals and advanced the same points. The answer of the Master is found on pages 175-177 of the record. The Cireuit Court of Appeals held that there was no substantial distinction between the in- stant case and the Love case when the same points were reargued before it. As heretofore stated, when the facts in the various cases are considered, there is no conflict between the decision of the Cireuit Court of Appeals in this case and prior decisions of the same court; but con- ceding, arguendo, which we deny, that there is such con- flict, still, under the rules of this Court, such conflict would be no ground for granting a writ of certiorari, The Cireuit Court of Appeals in this case pointed out that there was no conflict between its opinion in this ease and any of its prior decisions and followed the Love ease, announcing that the doctrine of the Love case was correct and should be and would be followed. III. Paragraph III of the brief, page 30, announces this proposition: ‘“‘The trust fund theory is inconsistent with, and is abrogated by, the exclusive remedy for collection of overcharges prescribed by the Act to Regulate = Commerce; and the decision of the Circuit Court of Appeals that the equitable remedy is not inconsistent with the remedy by reparation is erroneous.’’ This proposition is discussed at length in the opinion of the United States Cireuit Court of Appeals (Ree., pp. 718-721). The Abilene case is there discussed (Ree., pp. 718-719). The opinion of the District Court, 988 Fed., |. e. 630, on this point, was carefully considered by the United States Cirenit Court of Appeals. The purpose of the Commerce Act and of the other acts of Congress regulat- ing carriers, as above stated, is to give the shipper full relief in recovering excess charges, and so these acts have been construed by this Court. The Ballou ease, 114 U. S. 190-194, has been discussed supra and it is not necessary to reanalyze it. The Keogh, 260 U. S. 156, here cited, was also cited by petitioners under the head of jurisdiction. It supports neither the jurisdictional proposition nor the question of the asserted exclusive remedy for collection of over- charges, prescribed by the Act to Regulate Commerce, which petitioners insist abrogates the trust fund theory. In the Keogh ease a suit was filed under Section 7 of the Antitrust Act, and the only question (1. ¢c. 161) was whether there was a cause of action under section 7. The charge in that case was that the carriers had combined to fix rates for the transportation of excelsior and flax tow, and that Keogh, plaintiff, had been damaged under section 7 by such alleged combination, because deprived —_ = of the benefit of competitive rates, and that the elimina- tion of competition had increased his rates. The Court held, through Mr. Justice Brandeis, that there was no right of action in that case, because there was nothing to show that plaintiff was damaged by the alleged combina- tion. The Court pointed out with great care (1. e. 165): ‘It (the claim of plaintiff) is not like those cases where a shipper recovers from the carrier the amount by which its exaction exceeded the legal rate (South- ern Pac. Co. v. Darnell Taenzer Co., 240 U. S. 531, 2 Law Fd. 451).’’ The Court again, in this case (1. ¢. 163}, declared: “The legal rights of shipper as against carrier in respect to a rate are measured by the published rate. Unless and until suspended or set aside, this rate is made, for all purposes, the legal rate, as between earrier and shipper. The rights, as defined by the tariff. cannot be varied or enlarged by either contract or tort of the earrier’’ (citing a number of cases). The Court in this case, on the prior page, 162, points out what rates are legal under the Act to Regulate Commerce, and states: ‘‘Under section 8 of the latter act the exaction of all illeval rate makes the earrier liable to the ‘person in- jured thereby for the full amount of damages sus tained in consequence of any such violation,’ together with a reasonable attorney’s fee. Sections 9 and 16 = provide for the recovery of such damages, either by complaint before the Commission or by an action in a federal court.” From these excerpts it is perfectly apparent that the Court had in mind the distinction between the legal pub- lished rate and the rights of a shipper to recover from a carrier the amount by which its exaction exceeded the legal rate. In the Keogh case no question of election of remedies was considered and there was no diseussion of the alleged abrogation of the trust fund theory by sections 9 and 16 of the Commerce Act. The same observation applies to the Ballon ease, 114 U. S. 190-194, cited under this point. The last case cited under this point is Butler v. Western German Bank, 159 Fed. 116, 1. e. 117 (U.S. C. C. A., 5th Cirenit), in which the distribution of the assets of an insolvent bank was involved, and the Court held that interest was not recoverable on the fund withheld, and, also, that, where a bank, known by its officers to be in- solvent, collected money for a customer and mingled the same with its own funds which, to an amount larger than the sum received, passed it to the bank’s Receiver in in- solveney, the eustomer, though unable to trace the identi- eal money into the Receiver’s hands, was entitled to re- cover from the Reeeiver an amount equal to that collected, citing and following the above-quoted case of Richardson v. New Orleans Deb. Red Co., 102 Fed. 780, based upon the Central National Bank ease, 104 U. S. 54. Not one a of the above cases discusses the points involved in the instant case, or the effect of Section 22 of the Commerce Act, providing, in substance, that the remedies provided , by the act shall not in any way abridge or alter the rem. ‘ edies now existing in common law or by statute, but the ' provisions of the act are in addition to such remedies, Furthermore, not a single one of these cases discusses election of remedies or the fundamental maxims of equity ; governing in this case, The fundamental basis of reparation under the Com- merce Act has been discussed, supra, and no repetition is (legal), and the corresponding equitable maxim, ‘‘ Equity j needed. The two maxims, ‘‘Ubi jus, ibi remedinm” % Y 4 will not suffer a wrong without a remedy,’’ have been F cited and applied innumerable times by the federal and state courts. They are two corner stones of well-ordered jurisprudence and absolutely essential to cut through the ‘labyrinth of technicalities’? and do justice. See the fol- : lowing authorities: Broom on Legal Maxims (8th Ed., p. 101 et seq.), citing the celebrated case of Ashby v. White, 2d Ld. Ryam. 953, and also the famous opinion of Chief Justice Marshall in the case of Mar- bury v. Madison, 1 Cr. 137, 2d L. Ed., p. 60; Pomeroy’s Equity Jurisprudence, Vol. I, See. 423; Toledo, A. A. & N. M. Ry. Co. v. Penn. Co. et al. 54 Fed. 746, |. e. 751, 752; Southern California Ry. Co. v. Rutherford et al. (Cireuit Court, Southern District of California, June 30, 1894), 62 Fed., |. e. 797, 798; = = Harrigan v. Gilchrist, 99 N. W. 909; Mercantile Trust Co. v. St. Louis & San Fransisco Ry. Co., Ogden et al., Interveners, 69 Fed. 193; Sweet v. The Montpelier Savings Bank & Trust Co., 69 Kan. 641 (77 Pac. 538); Matthews v. Forslund, 112 Mich. 591; Barksdale et al. v. Finney et al., 14 Grattan 338; Williams v. Young, 81 Atlantic 1118; Traders’ Bank v. Fraser, 162 Mich. 315, 1. e«. 318; Converse v. Sickles, 44 N. Y. Supp. 1080 (affirmed in 161 N. Y. 666); Sugar Refining Company v. Fancher, 145 N. Y. 552, l. e. 561. Some of the cases, just cited, also announce the proposi- tion that a judgment at law is, in many cases, not such an election of the remedy as will preclude a bill in equity to impress a trust, because there is no inconsistency what- ever between the two proceedings. In conclusion on this point the case of Southern Pacific Co. v. Bogert, 250 U. S. 482, is partienlarly strong on the proposition that there is no election of remedies, when the relief subsequently sought is of a different character and in aid of the original rights. Also, see on this point, the case of Standard Oil Co. of Ky. v. Hawkins, 74 Fed. 395, 1. ¢. 397-399, in which the doctrine of election of remedies is discussed at length and it is held that resort to a prior remedy will not preclude claimant from filing a bill to impress a trust upon the fund. / — Also see the reasoning of the Cireuit Court of Appeals on this point (Ree., pp. 718-719), which is very convine- ing. ZF; The fourth paragraph of the brief, page 33, announces this proposition: “The decision of the Cirenit Court of Appeals al- lowing interest on respondents’ claims from a date subsequent to the date of appointment of the Re- ceivers is erroneous.”’ The right to interest in this case, upon the reparation judgments entered, is settled by the Sloss-Sheffield case, citing many authorities and quoted, supra (u. 8S. 8. ¢. Ad. Opin., Law. ed. No, 4, Dee, 15, 1925, 1. e. 103). The Receivers continued to contest the claims of re- spondents and continued to withhold their money from them and the railway company continued to contest the claims of the respondents and is now contesting their claims, The Receivers stand in the shoes of the carrier and in withholding the trust fund elect to pay interest thereon, if the Court subsequently deerees that such must be re- turned, The Receivers, at any time, could have terminated their obligation to restore the trust fund and their obligafion to pay interest thereon by making restitution. This, like- — a wise, is true of the new railway company, which obtained the fund from the Receivers. Since they elected to continuously litigate a preferred claim, they must now pay interest, particularly since, as pointed out in the opinion of the United States Circuit Court of Appeals in this case, no one has any just claim to this trust fund except respondents, and, therefore, no one can be prejudiced by the payment of principal and interest. A Point V of the brief, page 34, announces this proposi- tion: “The decision of the Cireuit Court of Appeals that respondents were entitled to have their claims allowed as preferential claims superior to the claims of other creditors, including the bondholders, is erroneous.’’ This proposition is not argued in Petitioners’ brief and it involves the consideration of the entire case, which is completely covered in the diseussion in this brief, supra. _ CONCLUSION. In conclusion, we believe that it has been demonstrated that no grounds for the issuance for a writ of certiorari in this ease have been shown by petitioners. The trust fund doctrine in this case is well supported by the recent decision of this Court in the case of Dayton- — 66 — Goose Creek Ry. Co. v. U. S., 263 U. S. 455, in which the Court construed the recapture clause of the Transporta. tion Act and held that as to the excess the carrier never had title. Necessarily the same principle applies to excess freight rates collected under a published tariff, because prohibited by the Commerce Act as unjust and unreason- able. We have an abiding conviction in the justice of re- spondents’ claims, and, though the course of this long litigation would seem to indicate that at some time there had been some doubt as to the collection of these claims, and that technicalities would triumph over justice, we now feel certain that the long-delayed rights of these cattle shippers will be sustained by this tribunal and that the application for certiorari, will be denied. Respectfully submitted, S. H. COWAN, DAVID A. MURPHY, JOHN A. LEAHY, WALTER H. SAUNDERS, Attorneys for Respondents. SS + NU yA Je cot Qe a, --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_0682%3A06. Public record. Not legal advice.