Certainly the judgments entered are res judicata of the tax claims for the years 1933, 1938 and 1939, whether or not the basis of the agreements on which they rest reached the merits. But unless we can say that they were an adjudication of the merits, the doctrine of estoppel by judgment would serve an unjust cause: it would become a device by which a decision not shown to be on the merits would forever foreclose inquiry into the merits. Estoppel by judgment includes matters in a second proceeding which were actually presented and determined in an earlier suit. See Commissioner v. Sunnen, supra, at 598. A judgment entered with the consent of the parties may involve a determination of questions of fact and law by the court. But unless a showing is made that that was the case, the judgment has no greater dignity, so far as collateral estoppel is concerned, than any judgment entered only as a compromise of the parties.

Reversed.

Syllabus.

CALLANAN ROAD IMPROVEMENT CO. v.
UNITED STATES ET AL.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK.

No. 488. Argued April 8, 1953-Decided May 4, 1953.

A certificate of convenience and necessity to operate as a common carrier by water, issued by the Interstate Commerce Commission under § 309 of Part III of the Interstate Commerce Act, was subsequently amended by an order of the Commission restricting the carrier's operations to freightage as distinguished from towage, and the amended certificate was accepted by the carrier. Appellant sought and obtained Commission approval of a transfer of the amended certificate to appellant. Thereafter appellant claimed the right under the certificate to engage in towage operations. The Commission denied the right, and appellant sued to set aside its order. Held:

1. Appellant had no standing to raise, in this collateral proceeding, the question of the power of the Commission to modify the original certificate. Pp. 508-512.

2. Having invoked the power of the Commission to approve the transfer of the amended certificate, appellant was estopped to deny the Commission's power to issue the certificate in the form in which it was when appellant sought its transfer. P. 513.

107 F. Supp. 184, affirmed.

In a suit to set aside an order of the Interstate Commerce Commission, 285 I. C. C. 75, a three-judge District Court held against appellant. 107 F. Supp. 184. On direct appeal to this Court, affirmed, p. 513.

William A. Roberts argued the cause for appellant. With him on the brief was James E. Wilson.

William J. Hickey argued the cause for the United States and the Interstate Commerce Commission, appellees. With him on the brief were Acting Solicitor General Stern, Acting Assistant Attorney General Hodges,

Ralph S. Spritzer, Daniel M. Friedman and Edward M. Reidy.

R. Granville Curry argued the cause for the Cornell Steamboat Company, appellee. With him on the brief was Frederick M. Dolan.

MR. JUSTICE MINTON delivered the opinion of the Court.

In 1941, one Joseph R. Hutton applied to the Interstate Commerce Commission for a permit to operate as a contract carrier by water between points on Long Island Sound, New York Harbor, the Hudson River, the New York State Barge Canal System, the Niagara River, and contiguous ports. In the alternative, he prayed a certificate of convenience and necessity if he be found to be a common carrier. The application was a "grandfather" clause proceeding under § 309 of Part III, Water Carriers, of the Interstate Commerce Act, 54 Stat. 941, 49 U. S. C. (1946 ed.) § 909.

The Commission, after hearing and investigation, made findings of fact and conclusions of law thereon to the effect that for 37 years Hutton had been in operation; that "[h]e owns and manages 1 steam power boat of about 240 horsepower, and 4 barges, all of which are operated as a unit. The power boat is used to tow the barges but also carries about 150 gross tons of freight. On occasion other barges are rented or chartered for operation in applicant's fleet." It was further found that during and since 1939 and 1940, "applicant's operation has been that of a common carrier of commodities generally between points on New York Harbor, the Hudson River below its junction with the New York State Barge Canal, the New York State Barge Canal between the Hudson River and the Niagara River including the Oswego branch, and the Niagara River." The Commission further found that the applicant was in operation January 1, 1940, the crit

ical date provided in § 309 for "grandfather" proceedings, and by reason of his long, continuous operation, public convenience and necessity would be served by continuance of such operation, and specifically found:

"We find that applicant is a common carrier by water; that public convenience and necessity require operation by applicant as a common carrier in interstate or foreign commerce, of commodities generally, between points on New York Harbor as determined in Ex Parte No. 140, points on the Hudson River below its junction with the New York State Barge Canal, the New York State Barge Canal between the Hudson River and the Niagara River including the Oswego branch, and the Niagara River; that applicant is fit, willing and able properly to perform said transportation; and that applicant is entitled to a certificate authorizing such operation, subject, however, to general conditions which are necessary to carry out, with respect to such operation, the requirements of Part III of the act and the orders, rules, and regulations of the Commission thereunder."

The Commission entered an order on July 17, 1942, effective October 5, 1942, granting the certificate of convenience and necessity to Hutton. This order recited the fact of the above findings and incorporated them by reference. 250 I. C. C. 804.

Thus it will be seen that the Commission found the operations of Hutton to be those of a common carrier by water of commodities generally in self-propelled vessels which he owned and which he also used to tow barges he owned, rented, or chartered. There is no finding that his operations included the towing of barges which he did not own, rent, or charter. The certificate was accepted by Hutton, and, as far as appears on this

record, he operated under it until March 7, 1944, in the same manner as he had before.

On March 7, 1944, the Commission of its own motion opened the record in Hutton's original application and, after reconsidering its former findings, specified the type of vessels to be used in the exercise of its authority theretofore granted. 260 I. C. C. 804. The Commission's order of March 7, 1944, in pertinent part reads as follows:

"That public convenience and necessity require the continuance of operation by applicant as a common carrier by water, by self-propelled vessels and by non-self-propelled vessels with the use of separate towing vessels in interstate or foreign commerce, in the transportation of commodities generally between points in the area defined by the order of the Commission ...

This amended certificate, which limited Hutton to the identical operations he had long carried on and upon which his § 309 rights were authorized, was accepted by him without question, and he continued to operate under it until his death several months later.

The Callanan Road Improvement Company, the appellant here, sought to purchase the amended certificate from Hutton's administratrix for operations limited to the Hudson River and New York Harbor. By § 312 of the Interstate Commerce Act, 54 Stat. 944, 49 U. S. C. (1946 ed.) § 912, the Interstate Commerce Commission's authorization is required for such a transfer. An application for approval was filed before the Commission by the appellant and the administratrix. After hearing, the Commission by order dated August 18, 1947 (265 I. C. C. 813), authorized the transfer of the amended certificate to the appellant in the following words:

"It is further ordered, That, following consummation of the sale to the transferee of the operating