corporation results from the fact that there were innocent and deceived members of the corporation when the property was taken over by it.

Neither is the corporate right of action defeated by the fact that the recovery will inure to the guilty as well as to the innocent, nor is the fact that all of the parties who may have shared in the secret profits are not sued fatal to the case. The corporation may well sue either one or all of those who received secret profits. There is no want of necessary parties because all are not here sued.

The distinction between a case in which all of the owners of the property and all of the members of the buying corporation are the same persons, and participate in the profit realized, and the case here presented is fully recognized in Old Dominion Copper Company v. Lewisohn, supra, as well as in Phosphate Company v. Erlanger, 5 Ch. Div. 73, and in the well considered opinion of Judge Severens in Yeiser v. U. S. Paper Co., 107 Fed. Rep. 340.

There was no error in cancelling the shares issued to the plaintiff's in error for promotion of the corporation. They and the other members of the syndicate received these shares upon the assumption that they had in good faith served the corporation in the procurement of the property. Obviously appellants were serving themselves to the detriment of the corporation and innocent subscribers to its stock. In such a situation the corporation may recover the shares.

The decree will be affirmed.

1

No. 600. Argued October 17, 18, 1912.-Decided January 20, 1913.

The Act to Regulate Commerce, as amended by the Hepburn Act, gives a right to a full hearing on the subject of rates, and that confers the privilege of introducing testimony and imposes the duty of deciding in accordance with the facts proved.

A finding without evidence is arbitrary and useless, and an act of Congress granting authority to any body to make a finding without evidence would be inconsistent with justice and an exercise of arbitrary power condemned by the Constitution.

Administrative orders quasi-judicial in character are void if a hearing is denied; if the hearing granted is manifestly unfair; if the finding is indisputably contrary to the evidence; or if the facts found do not, as matter of law, support the order made.

Administrative orders can only be reviewed by the court where a

justiciable question is presented, and where the act provides for judicial review of such orders it will be construed as providing for a hearing so that the court may consider matters within the scope of judicial power. Under the Act to Regulate Commerce the carrier retains the primary right to make rates, and the power of the Commission to alter them depends upon the existence of the fact of their unreasonableness, and, in the absence of evidence to that effect, the Commission has no jurisdiction.

The legal effect of evidence is a question of law, and a finding without evidence is beyond the jurisdiction of the Commission.

Where the party affected is entitled to a hearing, the Interstate Commerce Commission cannot base an order establishing a rate on the information which it has gathered for general purposes under the provisions of § 12 of the act. The order must be based on evidence produced in the particular proceeding.

In this case, the Interstate Commerce Commission having found, after

taking evidence, that the new rates were excessive and that the through rate which exceeded the sum of the locals should have been lowered, instead of the locals being raised to equal the through rate, this court holds that the finding, having been based on evidence, should not be disturbed and that the order of the Commission was proper.

The value of evidence in rate proceedings varies, and the weight to be given to it is peculiarly for the body experienced in regard to rates and familiar with the intricacies of rate-making.

When rail rates are advanced with the disappearance of water competition no inference adverse to the railroad can be drawn, but when the old rates had been maintained for several years after such disappearance, there is a presumption, if the rates are raised, that the advance is made for other reasons.

In this case the order of the Commission restoring local rates that had been in force many years between New Orleans and neighboring cities and making a corresponding reduction in through rates was not arbitrary but was sustained by substantial, although conflicting, evidence, and the courts cannot settle such a controversy or put their judgment against that of the Commission which is the ratemaking body.

THE facts, which involve the construction of the Act to Regulate Commerce in regard to the provisions of the Hepburn Act for fixing rates, are stated in the opinion.

Mr. Assistant Attorney General Fowler and Mr. P. J. Farrell, with whom Mr. Blackburn Esterline, Special Assistant to the Attorney General, was on the brief, for appellants.

Mr. Helm Bruce, with whom Mr. Henry L. Stone and Mr. Albert S. Brandeis were on the brief, for appellee.

MR. JUSTICE LAMAR delivered the opinion of the court.

The New Orleans Board of Trade, in October and November, 1907, brought three separate proceedings against

the Louisville & Nashville Railroad, asking the Commerce Commission to set aside as unfair, unreasonable and discriminatory certain class and commodity rates (local) from New Orleans to (1) Mobile, to (2) Pensacola, and (3) through rates, via those cities, to Montgomery, Selma, and Prattville. The Railroad answered. A hearing was had, the issue as to commodity rates was adjusted by agreement, and on December 31, 1909, the Commission made a single order in which it found the class rates complained of to be unreasonable, directed the old locals to be restored and a corresponding reduction made in the through rates. The Railroad thereupon, on January 26, 1910, filed a bill, in the United States Circuit Court for the Western District of Kentucky, praying that the Commission be enjoined from enforcing this order, which it alleged was arbitrary, oppressive and confiscatory, and deprived the company of its property and right to make rates, without due process of law.

After a hearing before three Circuit Court judges, the carrier's application for a temporary injunction was denied (184 Fed. Rep. 118). Testimony was then taken before an Examiner. Later the suit was transferred to the newly organized Commerce Court-the United States being made a party. There, in addition to the evidence in the Circuit Court, the Railroad exhibited all that had been introduced before the Commission, as a basis for the contention that this evidence utterly failed to show that the rates attacked were unreasonable. This view was sustained by the Commerce Court, which, in a lengthy opinion, held (one judge dissenting) that the order was void because there was no material evidence to support it.

On the appeal here, the Government insisted that while the act of 1887 to regulate commerce (24 Stat. 379, c. 104, §§ 14, 15, 16) made the orders of the Commission only prima facie correct, a different result followed from the provision in the Hepburn Act of 1906 (34 Stat. 584, c. 3591,

§ 15) that rates should be set aside if after a hearing the "Commission shall be of the opinion that the charge was unreasonable." In such case it insisted that the order based on such opinion is conclusive, and (though Int. Com. Comm. v. Union Pacific R. R., 222 U. S. 541, 547, was to the contrary) could not be set aside, even if the finding was wholly without substantial evidence to support it.

1. But the statute gave the right to a full hearing, and that conferred the privilege of introducing testimony, and at the same time imposed the duty of deciding in accordance with the facts proved. A finding without evidence is arbitrary and baseless. And if the Government's contention is correct, it would mean that the Commission had a power possessed by no other officer, administrative body, or tribunal under our Government. It would mean that where rights depended upon facts, the Commission could disregard all rules of evidence, and capriciously make findings by administrative fiat. Such authority, however beneficently exercised in one case, could be injurously exerted in another; is inconsistent with rational justice, and comes under the Constitution's condemnation of all arbitrary exercise of power.

In the comparatively few cases in which such questions have arisen it has been distinctly recognized that administrative orders, quasi-judicial in character, are void if a hearing was denied; if that granted was inadequate or manifestly unfair; if the finding was contrary to the "indisputable character of the evidence." Tang Tun v. Edsell, 223 U. S. 673, 681; Chin Yoh v. United States, 208 U. S. 8, 13; Low Wah Suey v. Backus, 225 U. S. 460, 468; Zakonaite v. Wolf, 226 U. S. 272; or, if the facts found do not, as a matter of law, support the order made. United States v. B. & O. S. W. R. R., 226 U. S. 14. Cf. Atlantic C. L. v. North Carolina Corp. Com. 206 U. S. 1, 20; Wisconsin, M. & P. R. Co. v. Jacobson, 179 U. S. 287, 301;