Allman v. United States/Opinion of the Court

The contracts in question were made in conformity with the provisions of sections 3960 and 3961 of the Revised Statutes. Section 3960 is as follows: 'Compensation for additional service, in carrying the mail, shall not be in excess of the exact proportion which the original compensation bears to the original service, and when any such additional service is ordered, the sum to be allowed therefor shall be expressed in the order, and entered upon the books of the department; and no compensation shall be paid for any additional regular service rendered before the issuing of such order.' Section 3961 provides: 'No extra allowance shall be made for any increase of expedition in carrying the mail, unless thereby the employment of additional stock and carriers is made necessary, and in such case the additional compensation shall bear no greater proportion to the additional stock and carriers necessarily employed than the compensation in the original contract bears to the stock and carriers necessarily employed in its execution.' All the orders made by the postmaster general, subsequent to the execution of these contracts, and while the service was in course of performance, were made after the act of congress of April 7, 1880, which contained this proviso: 'Provided, that the postmaster general shall not hereafter have the power to expedite the service under any contract either now existing or hereafter given to a rate of pay exceeding fifty per centum upon the contract as originally let.' 21 St. 72. The attorney general, construing the provision last quoted, in a letter to the postmaster general, dated July 20, 1881, held that 'the original letting, and not any subsequent increase of service and pay,' was made 'the standard of limitation.' It was in conformity with this opinion that the postmaster general withheld from the appellant the 50 per cent. on the expedited service under his contract.

We think it is clear that the language of the proviso may be interpreted in accordance with the original orders of the post-office department, and pursuant to the terms of the contracts sued on. Those orders allowed the contractor, for expedition, 50 per cent. additional upon the sum paid, for the service actually performed. These allowances did not exceed 50 per cent. of the rate of compensation fixed by the contracts as originally let, though they did exceed 50 per cent. of the sum named in those contracts. The proviso, in express terms, refers to the 'rate of pay' established in the contracts as originally let, and it is the rate of pay, not the amount expressed in the first contract, which is manifestly intended to be the unit of computation. Our construction of this legislation, considered in pari materia with the provisions of sections 3960 and 3961, is this: Section 3960 treats the rate of pay for additional service as definitely fixed by the original contract, and under its provisions the compensation which the contractor is to receive for each extra trip placed upon his route is to bear an exact proportion to the additional service performed; that is, it is to be based upon the rate established by the original contract. Section 3961 has direct reference to the compensation to be paid for the expedited service, and expressly provides that, in computing such compensation, the rate of pay fixed in the original contract is to be taken as the standard of limitation, which shall not be exceeded. These two sections left it within the discretion of the postmaster general to expedite the service to an indefinite extent, and to allow a pro rata compensation therefor. The proviso added in 1880 was clearly intended to limit that discretion by providing that thereafter he should not have authority to expedite the service, under any contract, beyond 50 per cent. of the rate fixed in the original contract. The circumstances under which contracts for the transportation of the mails are awarded, we think, sustain this construction. Such awards are made after public advertisement, and upon competitive bids, and it is presumed that the contract price is at as low a rate as can be made consistently with a proper performance of service. In the present case, it appears from the record that the actual cost of the expedition ordered upon the single one of the seven weekly trips upon the second route was more than 50 per cent. of the aggregate sum named in the original contract. The interpretation on which the last order is based assumes that congress intended to leave with the postmaster general the power to exact from a contractor seven times the service stipulated in the contract as originally let, and to allow but 50 per cent. compensation on the amount named in that contract. The construction contended for by the appellant is in harmony with the previous legislation on the subject, and the established policy of the mail service, and is entirely equitable. As to so much of the demand as is claimed in the petition to be due to the petitioner under the contracts, and as to the 50 per cent. of one month's extra pay, we hold and decide that the court of claims erred in sustaining the demurrer. But with regard to the claim for the amount deducted as forfeitures imposed by the postmaster general, because the contractor failed to cause the mail to be carried between the termini within the time prescribed, it is considered that these forfeitures were made by virtue of the power conferred upon the postmaster general by the statutes, and also recognized by the terms of the contracts to be within his discretion, and are not subject to review by this court. Railway Co. v. U.S., 127 U.S. 406, 407, 8 Sup. Ct. Rep. 1194; Railroad Co. v. U.S., 129 U.S. 391, 396, ante, 320. As far as the claim for the deduction of the amount of these forfeitures is concerned, the demurrer was properly sustained. The judgment is reversed, and the case remanded for action in accordance with the principles of this decision.