# Amicus Curiae Brief — 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%3A09 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1927 - **Citation:** 274 U.S. 304 ## Text IN THE SUPREME COURT OF THE UNITED STATES. OCTOBER TERM, 1926. —_—_—— —_——- ST, LOUIS AND SAN FRANCISCO 4 RAILROAD COMPANY and ST. LOUIS-SAN FRANCISCO RAILWAY COMPANY, Petitioners, VS. E, B, SPILLER et al., Respondents. . _ ee —_— — PETITION OF MISSOURI PACIFIC RALROAD COMPANY FOR LEAVE TO FILE AMICUS CURIAE BRIEF. Comes now the Missouri Pacific Railroad Company, a Missouri corporation, by its undersigned attorneys, here- inafter for convenience termed intervener, and presents to this Court the fact that claims outstanding against it approximating, without interest, a million dollars, are vitally affected by the decision of the Cireuit Court of Appeals of the Eighth Cireuit in this ease, which de- cision it is earnestly contended is in conflict, in many im. portant respects, with the decisions of this Court and with the decisions of other Cireuit Courts of Appeals, and intervener, therefore, joins with the petitioners, St. Louis and San Francisco Railroad Company et al., in urging that certiorari to review the decision of the Circuit Court of Appeals be granted, and prays for leave to enter its appearance herein and file amicus curiae brief. The interest of intervener in this litigation is by rea- son of the following facts: The Missouri Pacific Railroad Company, during 1917, through foreclosure proceedings, acquired the property of The Missouri Pacific Railway Company and the St. Louis, Iron Mountain & Southern Railway Company. The or- ders and proceedings in the receivership cases were very similar to those in evidence in the case at bar. The prior companies referred to, together with other Missouri carriers, in 1905 enjoined the enforcement of certain Mis- souri statutory rates, and under and pursuant to the au- thority and orders of the United States District Court for the Western District of Missouri proceeded to collect their tariff rates then on file, which were in excess of the stat- utory rates. The statutory rates were upheld by this Court in 1913, and numerous claims for overcharges arose predicated on the difference between the tariff rates collected and the statutory rates. These overcharge claims were solicited by a certain claim adjuster, who ’ during 1916, filed in the Missouri Pacifie-Iron Mountain a wm receivership proceedings claims approximating one mil- lion dollars. The several hundred original petitions filed by him in behalf of the various claimants were in the nature of actions for an accounting predicated on the trust-fund theory—that is to say, upon the theory that title to the overcharges never passed to the carriers, and that the overcharge funds were @b initio the property of the shipper. These claims are stil] pending and this issue is still being urged in connection with both the procedure and the classification of the claim, The Special Master, as well ag administrative Judges Hook, Sanborn and Faris, have. so far uniformly held that said overcharges having been collected under and pursuant to a decree of a court ©f competert jurisdiction both the legal and equitable title to the money passed to the carrier at the time of the eollection, and that the cause of action arose upon the reversal of the judgment, the remedy being an action for money had and received predicated on the right to restitution. None of the claims has yet reached the Circuit Court: of Appeals. The views of the Special Master and the respective administrative Judges are very concisely set {forth in the unreported opinion of Judge Sanborn, the relevant portion of which appears in the appendix hereof, wherein he follows the reasoning of this Court in the leading case of Bank of United States v. Bank of Washington, 6 Pet. 8 (cited with approval in Arkadelphia Company y, Ry. Co., 249 U.S. 145), to the effect that: a! Bo ‘“‘The reversal of the judgment cannot have a retroactive operation and make void that which was lawful when done. The reversal of the judgment gives a new right.’’ The overcharge claims against intervener which were collected under and pursuant to a decree of a court of competent jurisdiction which was afterwards reversed are closely analogous to the claims in the case at bar, wherein the rates were collected under and pursuant to a lawfully filed tariff, which rates were afterwards deter- mined to have been unreasonably high. The remedy in the former instance is in the nature of an action for money had and received, predicated on the right to resti- tution, which right arises upon the reversal of the de- eree. The right in the latter instance is reparation and the remedy is a statutory action for damages. United States Cireuit Judges Hook and Sanborn and District Judge Faris, in the decisions above referred to, have followed the long line of decisions quoted from in the brief of petitioner, St. Louis and San Francisco Rail- road Company, for writ of certiorari in this case, and the decision of the Court of Appeals for the Eighth Judicial Circuit in this case is diametrically opposed to those de- cisions and to the rule of property established thereby, upon which your intervener herein, it is respectfully con- tended, has a right to rely. By reason of the foregoing facts intervener avers that its rights are vitally affected and greatly prejudiced by os each and all of the following findings of the Cireuit Court of Appeals in this case, to wit: (1) That claimants were not guilty of laches in failing to file their claims, and it was error to dismiss their in- tervening petitions on that ground (R. 722). (2) That said claims arose after the entry of the final decree and claimants were not precluded by the final de- eree and order of confirmation of sale from asserting said claims (R. 722). (3) That the Railroad Company, in collecting rates which the Commission later found to be unjust and un- reasonable, and, therefore, unlawful, became a_ trustee ex maleficio (R. 722). (4) That claimants could invoke the trust-fund doe- trine, even though the moneys collected could not be traced into any distinct fund or into any specifie prop- erty (R. 718). (5) That an equitable action, based on the trust-fund doctrine, was not inconsistent with the remedy by repara- tion prescribed by the Act to Regulate Commerce (R. 719), (6) That claimants were entitled to have their claims established as preferential claims superior to the rights of other creditors, including the bondholders, in the amounts of the judgments obtained by them against the Railroad Company, with interest from August 1, 1916, a date more than three years after the date of appointment of the Receivers on May 27, 1913 (R. 722). per ten Wherefore, intervener prays that certiorari be granted and that intervener be permi intervene herein and file amicus curiag briefs: BY Kh a Counkel * eae Missouri priit Railroad Company. State of Missouri, | _. City of St. Louis. | Thos. T. Railey, being duly sworn, makes oath and says that he is attorney for intervener in the above cause, that he has read the foregoing petition fer leave to intervene and knows the contents thereof, and+hat the allegations Subscribed and sworn to before me this able (day of August, 1926. My commission expires. VM i, coe, BA Pee & eecseeeveeeseeseeasteeeeeveeneeeeen? Notary Public. —— — APPENDIX. Extract from unreported opinion of Circuit Judge Wal- ter H. Sanborn, filed March 5, 1923, holding that over- charges collected under and pursuant to a decree of a court of competent jurisdiction pending Missouri rate litigation did not constitute trust funds. * * * * * * * “The question in this case, therefore, is not whether or not the mortgagor company became and is liable to pay to the interveners the amount of the excessive charges it collected and interest thereon. It is admitted that the mortgagor company is so liable. The interveners claim more. “They argue that the mortgagor company unlawfully or wrongfully collected these charges; that one who un- lawfully or wrongfully collects or obtains money or prop- erty of another from him becomes immediately a trustee ex maleficio of that money or property for the benefit of him from whom he obtains it; and that, therefore, the mortgagor company became, the instant it collected any of these excessive charges, a trustee ex maleficio of the moneys thus collected for the benefit of the interveners. The soundness of the major premise of this syllogism is challenged and the crucial question in this case is, did the mortgagor company unlawfully or wrongfully collect these excessive charges and thereby make itself a trustee ex maleficio of the moneys it collected as fast as it received them? * * * * * * * “From the time the District Court first held the statu- tory rates of 1905 and 1907 confiseatory and issued its first restraining order or injunction until the Supreme a a Court reversed its final decree, that holding was ihe law of the land on the subject of these rates so far as the parties to the suit before that Court were concerned, be- cause that Court was the judicial tribunal in which the power was then vested and on which the duty was then imposed to adjudge what rates were confiscatory and what were not. While its holding and adjudication on which all its injunctions were founded and its injunctive orders remained in force, it was unlawful and wrongful for the officers of the state or others to put in force the statutory rates of 1905 and 1907, and the collection of the higher earlier-established rates by the mortgagor company was. lawful and right, because it was the duty of that company to collect compensatory rates, and the Court in which the power to determine what rates were compensatory was vested had held that the lower statu- tory rates were confiscatory and unconstitutional. Dur- ing this time the putting in foree or enforcement of the use of these statutory rates by the officers of the state, their agents or others would have been unlawful, wrong- ful and punishable by fine or imprisonment for violation of the injunction, because during that time that judicial determination was the law of the land as between the parties to that suit. If the Supreme Court had affirmed the holding of the District Court such would have been the rights and relations of these parties and such the law upon this subject still. Its reversal of that holding adjudged that that holding was mistaken and erroneous, and vested in the interveners a right to a reparation of the losses thev had sustained by the collection of the ex- cessive rates, of the amount of which those excessive rates and interest on them were competent evidence. But that reversal did not so relate back as to render the mortgagor company’s collection of the excessive charges, which was woes rightful and lawful when it was made, wrongful and un- lawful when it was made, nor did it have the effect to charge the mortgagor company which lawfully and right- fully made the collection and applied the moneys collected to the payment of its current expenses and obligations while the District Court’s holding and injunctions were in force, as a trustee ex maleficio of those moneys as fast as it coilected them. “In this state of the case the interveners are entitled, upon proper proof, to the allowance of their claims, as general unsecured creditors of the mortgagor company, but the Court is unable to find, in the collection by the mortgagor company of these excessive charges in accord- ance with the holdings, orders and injunctions of the District Court in force at the time of their collection, any fraud, misrepresentation, deceit, illegality, wrong or breach of moral or legal duty that taints the conscience of the mortgagor company or any of its officers whose duty it was to advise and direct its course when these charges were collected, or that justifies a charge of this mortgagor company as a trustee er madleficio or a trustee de son tort of the moneys collected from these excessive charges while the adjudications and injunctions of the District Court were in foree. “Judge James A. Seddon, the Special Master in this case; Judge George C. Hitcheock, the Special Master in the case of Guaranty Trust Company of New York, and Benjamin F. Edwards, trustees, against the Missouri Pa- cific Railway Company in the matter of the intervention of the Laclede Gas Light Company, after an exhaustive stndy and consideration of the question here invelved and a review of the authorities, and Judge Hook, upon eonsid- eration of excentions to the renort of Judge Hitcheock, have reached the conclusion which has just been stated, ian tee and the present consideration of the question has con- vineed the Court that their decisions were right. ‘‘Reference is made to the reports of Special Masters Hitchcock and Seddon for citations and reviews of the authorities pertinent to the question that has been con- sidered. “This question was not discussed, determined or ad- judged by the Court in St. Louis, Tron Mountain & South- ern Ry. Co. v. McKnight, 244 U. 8, 368, 369, 371, 372, 375; Bellamy v. St. Louis, Iron Mountain Ry. Co., 220 Fed. 876, 877; Love v. North American Company, 229 Fed. 103, and other like cases, in which the mortgagor was not justified in its collection of excessive charges by the hold- ing and injunctions in its favor in full force of the judi- cial tribunal authorized to determine the question con- fiseatory or not or in which the mortgagor company did not claim such protection, or in which the question at issue was the general liability of the company to pay the shippers an amount equal to the excessive charges and interest, and no question of its taking those collections as a trustee ex maleficio was deliberately considered or de- cided. And remarks of the Courts in their opinions in such eases that might have been persuasive if they had heen deliberately made after presentation and discussion of the very questions here at issue are not very persua- sive, much less authoritative here, under the oft-quoted rule announced by Chief Justice Marshall in these words: ‘¢