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U.S. Supreme Court

St. Joseph Stock Yards Co. v. United States, 298 U.S. 38 (1936)

St. Joseph Stock Yards Co. v. United States

No. 497

Argued March 2, 1936

Decided April 27, 1936

298 U.S. 38


1. Past conditions of the business affected, during a reasonable period, as well as existing conditions, are properly to be considered by a ratemaking authority in fixing rates for the future. P. 298 U. S. 46.

2. An order of the Secretary of Agriculture fixing stockyards rates, not shown to be confiscatory by the evidence before him, and against which no further evidence was offered by the company affected in its suit for an injunction, held not invalid because the Secretary had refused to grant a further hearing on adverse changes in the company's business conditions alleged to have occurred after the close of the hearing granted. P. 298 U. S. 47.

3. Where the issue is whether rates fixed by the Secretary of Agriculture for stockyards services operate to confiscate property of the company affected, a court is not bound to accept the findings of the Secretary, though supported by substantial evidence, but must weigh the evidence and pass upon the questions of fact. P. 298 U. S. 49.

4. In the fixing of rates -- a legislative act -- the legislature has a broad discretion which it may exercise directly or through a legislative agency authorized to act in accordance with standards prescribed by the legislature. P. 298 U. S. 50.

5. Courts do not sit as boards of revision to substitute their judgment for that of the legislature or its agents as to matters within the province of either. P. 298 U. S. 51.

6. Where the legislature itself fixes rates, acting within the field of legislative discretion, its determinations are conclusive. P. 298 U. S. 51.

7. Where the legislature appoints a rate-fixing agent to act within the limits of legislative authority, it may endow the agent with power to make findings of fact which are conclusive, provided the requirements of due process which are specially applicable to such an agency are met, as in according a fair hearing and acting upon evidence, and not arbitrarily. In such cases, the judicial inquiry into the facts goes no farther than to ascertain whether there is evidence to support the findings, and the question of the weight of the evidence in determining issues of fact lies with the legislative agency acting within its statutory authority. P. 298 U. S. 51. chanroblesvirtualawlibrary

Page 298 U. S. 39

8. The Constitution fixes limits to the ratemaking power by prohibiting deprivation of property without due process of law or the taking of private property for public use without just compensation. P. 298 U. S. 51.

9. Acts of the legislature or of its agent in ratemaking, when properly challenged as exceeding these constitutional limits, are necessarily subject to judicial review upon the facts and the law, to the end that the Constitution, as the supreme law of the land, may be maintained. P. 298 U. S. 51.

10. Judicial scrutiny of legislative rates, their constitutionality being in issue, cannot be avoided by declarations or findings made by the legislature or its agent. P. 298 U. S. 51.

11. To say that the findings of fact of legislative agencies may be made conclusive where constitutional rights of liberty and property are involved, although the evidence clearly establishes that the findings are wrong and that constitutional rights have been invaded, is to place those rights at the mercy of administrative officials and seriously impair the security inherent in our judicial safeguards. P. 298 U. S. 52.

12. The judicial duty to examine the weight of the evidence exists for the protection of property rights, as well as rights of liberty, under the Constitution. P. 298 U. S. 52.

13. Under our system, there is no warrant for the view that the judicial power of a competent court can be circumscribed by any legislative arrangement designed to give effect to administrative action going beyond the limits of constitutional authority. P. 298 U. S. 52.

14. In determining whether a legislative rate consists with due process under the Constitution, the question is whether the legislative action has passed beyond the lowest limit of the permitted zone of reasonableness into the forbidden reaches of confiscation; the judicial scrutiny must of necessity take into account the entire legislative process, including the reasoning and findings upon which the legislative action rests; the complaining party carries the burden of making a convincing showing, and the court will not interfere with the exercise of the ratemaking power unless confiscation is clearly established. P. 298 U. S. 53.

15. Primary or subordinate findings of fact made by a legislative agency in fixing a rate will not be disturbed save as in particular instances they are plainly shown to be overborne. P. 298 U. S. 54.

16. Upon the question whether rates fixed by the Secretary of Agriculture for a stockyards company under the Packers & Stockyards Act are confiscatory, the Court in this case examines the chanroblesvirtualawlibrary

Page 298 U. S. 40

evidence and sustains findings made by the District Court and findings of ="page-number" name="40">Page 298 U. S. 40

evidence and sustains findings made by the District Court and findings of ="page-number" name="40">Page 298 U. S. 40

evidence and sustains findings made by the District Court and findings of the Secretary adopted by that court as to: (1) value of land used and useful in the business, p. 298 U. S. 56, (2) value of structures; existing depreciation, p. 298 U. S. 61; (3) going concern value, p. 298 U. S. 62, (4) annual depreciation allowance, p. 298 U. S. 65, and (5) income, p. 298 U. S. 68.

17. In fixing rates under the Packers & Stockyards Act, the Secretary of Agriculture was not estopped by findings and allowances made in an earlier proceeding which was abandoned. P. 298 U. S. 63.

18. In fixing rates of a stockyards company, a hotel run at a loss and not helpful to the stockyards business is properly excluded from the rate base. P. 298 U. S. 57.

19. Land, as part of the property valued in fixing rates, should be allowed its fair market value for all available uses and purposes, including value due to special adaptation to particular purposes, but excluding increments of value due to the public use. P. 298 U. S. 59.

20. In fixing rates, a separate allowance of going concern value supported only by assumptions and speculations of an expert, held properly denied. P. 298 U. S. 62.

21. In fixing rates for stockyards service, it was open to the Secretary of Agriculture to increase a company's charges for the use of feed lots, owned by it and included in the rate base, upon the ground that the existing charges produced discrimination and should be made reasonable for all customers, and it was not necessary to permit the company an alternative in removing the discrimination. P. 298 U. S. 67.

22. In fixing rates under the Act, the Secretary may classify them. P. 298 U. S. 69.

23. If rates, reasonable when fixed under the Packers & Stockyards Act, are shown by subsequent test to have become unreasonably low, application may be made to the Secretary of Agriculture to have them modified. P. 298 U. S. 72.

11 F.Supp. 322 affirmed.

Appeal from a decree of the District Court of three judges which dismissed a bill to enjoin enforcement of rates fixed by the Secretary of Agriculture under the Packers & Stockyards Act. chanroblesvirtualawlibrary

Page 298 U. S. 45

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