Atchison, Topeka, & Santa Fe Railway Company v. United States (225 U.S. 640)/Opinion of the Court

The Atchison, Topeka, & Santa Fe Railroad had a four-year contract with the Postoffice Department to carry the mail between Chicago and Kansas City. Payment was made on the basis of weight hauled and the speed with which the service was performed. The company also furnished sufficient 'railway postoffice cars,' 60 feet in length, to make three round trips each twenty-four hours. This constituted three 'car lines,' for which the plaintiff received the maximum additional compensation then allowed by Rev. Stat. § 4004 (U.S.C.omp. Stat. 1901, p. 2721), under which the pay varied in proportion to the length of the car.

This contract was to expire June 30, 1907, by limitation; and, with a view of obtaining data, and proposing terms for a new arrangement to begin July 1st, 1907, the postal authorities, in February, mailed to the company a 'Distance Circular,' which, among other things, stated that the company was 'to accept and perform mail service under the conditions prescribed by law and the regulations of the Department.' The form was filled out and signed by an agent of the company. He, however, noted exceptions to certain postal orders previously promulgated, and 'future regulations which, in the company's opinion, might be unjust or unfairly reduce its compensation for services.' The circular, with these objections, was not received by the Department until July 24th, but the company, in the meantime, and without any express contract, continued to carry the mails and to furnish the three car lines. Payment therefor was made at the maximum rate allowed by the act of March 2, 1907 (34 Stat. at L. 1212, chap. 2513, U.S.C.omp. Stat. Supp. 1911, p. 1148), which declared:

'Additional pay allowed for every line comprising a daily trip each way of railway postoffice cars shall be at a rate not exceeding $25 per mile per annum for cars forty feet in length. . . $32.50 per mile per annum for fifty-foot cars, and $40 per mile per annum for cars fifty-five feet or more in length.'

The reports and returns as to the amount of mail carried over plaintiff's road during the spring of 1907 indicated that the quantity of east-bound matter was less than that going west from Chicago to Kansas City. Accordingly the Department, on July 18, 1907, 'authorized 'three half lines' R. P. O. cars 50 feet in length. . . to supersede three 'half lines' of such cars 60 feet in length over route 135,098, Chicago to Kansas City.' As the distance between the two cities was about 450 miles this change would largely reduce the rate of pay, and the company at once objected, claiming in the lengthy correspondence and subsequent suit which followed, that the statute did not authorize 'half car lines;' that the order would require the company to furnish 60-foot cars in one direction and 50-foot cars on the return, thus involving an empty haul one way, or forcing the company to furnish 60-foot cars both ways, without corresponding or adequate compensation.

The Department, on the other hand, insisted that under the statute, regulations, and long-continued practice it had the right to establish 'half lines;' that 'no contract would be made with any railroad by which it could be excepted from the postal laws and regulations,' and that compensation would only be made in accordance with the orders of the Department establishing the three half lines.

The warrant in settlement of the September quarter was made out on this basis. It was accepted by the Company, but under protest. In answer the Department again repeated the statement that any service performed by the company must be with the distinct understanding that payment was to be made in accordance with the orders for space, facilities, and car service required by the postal authorities. The plaintiff continued to protest and to furnish the three full lines. They were daily used by the Department for postal purposes, but payment was made only for half lines.

The plaintiff thereupon brought suit, under the Tucker act [24 Stat. at L. 505, chap. 359, U.S.C.omp. Stat. 1901, p. 752], claiming that even though there was no express agreement, it was entitled, as under an implied contract, to recover the reasonable value of the three car lines authorized by law, furnished by the company, and actually used by the Postoffice Department. This contention should have been sustained but for the fact that neither party was bound to continue the indefinite relation begun July 1, 1907, and under which the rights and liabilities of each arose, from day to day, as the facilities were furnished by the one and used by the other. Whatever may be the rule between private parties where both are demanding performance, and each is insisting on different terms (Thompson v. Sanborn, 52 Mich. 141, 17 N. W. 730; Jenkins v. National Mut. Bldg. & L. Asso. 111 Ga. 734, 36 S. E. 945), no such question arises in a controversy like this between the railroad on the one hand and the postoffice on the other. For public policy requires that the mail should be carried subject to postal regulations, and that the Department, and not the railroad, should, in the absence of a contract, determine what service was needed and under what conditions it should be performed. The company, in carrying the mails, was not hauling freight, nor was it acting as a common carrier, with corresponding rights and liabilities, but in this respect it was serving as an agency of government, and as much subject to the laws and regulations as every other branch of the Postoffice.

The statute defined a car line, but did not fix the compensation. It left that to be determined by the Postmaster General, who could have named any rate, not to exceed the statutory maximum. By virtue of that authority he could have made the same price for 60-foot cars as for 50-foot cars, and, as the greater includes the less, he could abolish full lines, or establish 'half lines,' and adjust the rates accordingly. Such had been the practice before the passage of the act of 1907, and there is nothing in its language indicating any intent to change the construction previously given Rev. Stat. § 4004, U.S.C.omp. Stat. 1901, p. 2721.

The railroad, however, was not bound to furnish 'half lines' nor to accept the terms named by the Postmaster General. For Congress had not legislated so as to require compulsory service, at adequate compensation, to be judicially determined, or in a method provided by statute. And as the plaintiff's road between Chicago and Kansas City had not been aided by a land grant, it was, under existing law, not obliged to carry the mails when tendered, nor to supply R. P. O. cars when demanded. Eastern R. Co. v. United States, 129 U.S. 395, 396, 32 L. ed. 731, 732, 9 Sup. Ct. Rep. 320; United States v. Alabama G. S. R. Co. 142 U.S. 615, 35 L. ed. 1134, 12 Sup. Ct. Rep. 306. It may have been impracticable to furnish long cars one way and short ones the other. But there was in that fact no hardship imposed by law. The company could have protected itself against onerous terms or inadequate compensation by refusing to supply the facilities on the conditions named by the Department. But if, instead of availing itself of that right, it preferred to furnish 60-foot cars after having been informed that the Department only needed and would only pay for those 50 feet in length, the company cannot recover for more than the Department ordered; nor, under the statute, can it demand compensation for full lines, when the Postmaster General had established 'half lines' consisting of cars of one length going and of another returning on the route between Chicago and Kansas City.

There was no error in dismissing the complaint, and the judgment is affirmed.