CASES ADJUDGED

IN THE

SUPREME COURT OF THE UNITED STATES

AT

OCTOBER TERM, 1947.

RODGERS v. UNITED STATES.

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT.

No. 58. Argued October 16, 1947-Decided November 10, 1947.

Penalties incurred under the Agricultural Adjustment Act of 1938, as amended, for marketing cotton in excess of farm marketing quotas fixed pursuant thereto, do not bear interest for the period between the date the penalties became due and the date judgment is entered therefor. Pp. 373-376.

158 F.2d 835, reversed.

The District Court rendered judgment for penalties incurred under the Agricultural Adjustment Act of 1938, as amended, plus interest from the dates the penalties became due to the date of judgment. The Circuit Court of Appeals affirmed. 158 F. 2d 835. This Court granted certiorari. 331 U. S. 799. Reversed, p. 376.

Petitioner submitted on brief pro se.

Stanley M. Silverberg argued the cause for the United States. With him on the brief were Solicitor General Perlman, Assistant Attorney General Sonnett, J. Stephen Doyle, Robert W. Ginnane and W. Carroll Hunter.

Opinion of the Court.

332 U.S.

MR. JUSTICE BLACK delivered the opinion of the Court.

1

In the years 1940, 1941 and 1942 the petitioner produced on his farms and sold more cotton than the quota allotted him under authority of Part IV of the Agricultural Adjustment Act of 1938 as amended. 52 Stat. 31, 55-60; 55 Stat. 203; 7 U. S. C. §§ 1281 et seq. The United States filed this suit against petitioner to recover money "penalties" to which § 348 of the Act makes noncooperating farmers "subject" who market cotton from their farms in excess of their quota. The District Court rendered judgment for $7,039.52 in penalties plus interest at 6% from the various dates the penalties became due to the date of judgment. The Sixth Circuit Court of Appeals affirmed. 158 F. 2d 835. The Fifth Circuit had previously decided that no interest is allowable on such penalties prior to judgment. United States v. West Texas

1 Section 348 of the 1938 Act reads as follows:

"Any farmer who, while farm marketing quotas are in effect, markets cotton in excess of the farm marketing quota for the marketing year for the farm on which such cotton was produced, shall be subject to the following penalties with respect to the excess so marketed: 2 cents per pound if marketed during the first marketing year when farm marketing quotas are in effect; and 3 cents per pound if marketed during any subsequent year, except that the penalty shall be 2 cents per pound if cotton of the crop subject to penalty in the first year is marketed subject to penalty in any subsequent year." 52 Stat. 59; 7 U. S. C. § 1348.

The 1941 amendment required computation of the penalty on the following basis:

"That notwithstanding the provisions of the Agricultural Adjustment Act of 1938, as amended (hereinafter referred to as the Act)—

"(9) The marketing penalty for cotton and rice produced in the calendar year in which any marketing year begins (if beginning with or after the 1941-1942 marketing year) shall be at a rate equal to 50 per centum of the basic rate of the loan for cooperators for such marketing year under section 302 of the Act and this resolution." 55 Stat. 203, 205; 7 U. S. C. (Supp. V, 1946), § 1330 (9).

371

Opinion of the Court.

Cottonoil Co., 155 F. 2d 463. We therefore granted certiorari limited to this single question. 331 U. S. 799.

Since penalties under the Agricultural Adjustment Act are imposed under an Act of Congress, they bear interest only if and to the extent such interest is required by federal law. Brooklyn Savings Bank v. O'Neil, 324 U. S. 697, 714-716; Royal Indemnity Co. v. United States, 313 U. S. 289, 295-297. There is no language in the Agricultural Adjustment Act or in any other act of Congress which specifically allows or forbids interest on penalties such as these prior to judgment. But the failure to mention interest in statutes which create obligations has not been interpreted by this Court as manifesting an unequivocal congressional purpose that the obligation shall not bear interest. Billings v. United States, 232 U. S. 261, 284-288. For in the absence of an unequivocal prohibition of interest on such obligations, this Court has fashioned rules which granted or denied interest on particular statutory obligations by an appraisal of the congressional purpose in imposing them and in the light of general principles deemed relevant by the Court. See, e. g., Royal Indemnity Co. v. United States, supra; Board of Comm'rs v. United States, 308 U. S. 343.

As our prior cases show, a persuasive consideration in determining whether such obligations shall bear interest is the relative equities between the beneficiaries of the obligation and those upon whom it has been imposed. And this Court has generally weighed these relative equities in accordance with the historic judicial principle that one for whose financial advantage an obligation was assumed or imposed, and who has suffered actual money damages by another's breach of that obligation, should be fairly compensated for the loss thereby sustained. See,

228 U. S. C. 811 does allow interest on district court judgments in all civil cases where interest would be allowed by the law of the state in which the court is held.

Opinion of the Court.

332 U.S.

e. g., Brooklyn Savings Bank v. O'Neil, supra; United States v. North Carolina, 136 U. S. 211, 216; Funkhouser v. J. B. Preston Co., 290 U. S. 163, 168.

The contention is hardly supportable that the Federal Government suffers money damages, or loss, in the common law sense, to be compensated for by interest, when one convicted of a crime fails promptly to pay a money fine assessed against him. The underlying theory of that penalty is that it is a punishment or deterrent and not a revenue-raising device; unlike a tax, it does not rest on the basic necessity of the Government to collect a carefully estimated sum of money by a particular date in order to meet its anticipated expenditures. For the foregoing reasons this Court's holding that a criminal penalty does not bear interest, Pierce v. United States, 255 U. S. 398, 405-406, is consistent with its holding that the Government does suffer recoverable damages if a taxpayer fails to pay taxes when due and is therefore equitably entitled to interest. Billings v. United States, supra. Furthermore, denial of interest on criminal penalties might well be rested on judicial unwillingness to expand punishment fixed for a criminal act beyond that which the plain language of the statute authorizes.

Viewed in light of these principles, we think that the question of interest on the penalties provided in the Agricultural Adjustment Act on non-cooperators should be governed by the rule previously applied by this Court to criminal fines. Although Congress neither wholly prohibited nor made it a crime for a farmer to market cotton in excess of his quota, still it imposed sanctions upon noncooperators analogous to those of the criminal law. The purpose of Congress in requiring payment of penalties into the Federal Treasury for marketing above the allotted amount was not to raise revenue for the Government's financial advantage but to deter farmers from planting and marketing more than their quotas. In fact, the whole

371

Opinion of the Court.

philosophy of the Agricultural Adjustment Act is based on the theory that the public will be benefited, not damaged, if farmers produce and market within these quotas, thereby avoiding the payment of penalties. The framework of the Act itself, both as originally passed and as amended, and the reports of the congressional committees that drafted it, show a prime purpose to limit national and individual farm production and marketing to the quotas allotted, and show that the penalties were solely intended to deter farmers from exceeding those quotas. After careful consideration the original 1938 Act was amended in 1941 for the express purpose of making the farmers' penalties higher, because the prior penalties had not in practice proved a severe enough sanction to reduce production the desired amount. The House committee said in its report on the 1941 amendment:

"As in the case of corn and wheat, it appears that the present rate of penalty [for cotton] is too low to result in the desired adjustment of the amount to be marketed during the marketing year."

And with reference to wheat and corn, the committee had reported.

"With the higher penalties, it is expected that growers generally will store the farm .marketing excesses rather than pay the penalty and place the commodity on the market at the time when it is not needed." 5

In addition to these high penalties, the Act, as originally passed and as amended, wholly deprived non-cooperators like petitioner of substantial benefits authorized by the

3 Sen. Rep. No. 1295, 75th Cong., 2d Sess., 6 (1937); H. R. Rep. No. 1645, 75th Cong., 2d Sess., 1, 36 (1937); H. R. Rep. No. 1767, 75th Cong., 3d Sess., 90 (1938); H. R. Rep. No. 364, 77th Cong., 1st Sess., 3 (1941).

4 H. R. Rep. No. 364, 77th Cong., 1st Sess., 3 (1941).

5 Id. at 2.