Eastern v. United States/Opinion of the Court

After the 1st of July, 1877, the company was under no legal obligation to carry the mails. It carried them after that date under an implied contract that it should receive such compensation as was reasonable, not exceeding the maximum rates prescribed by congress, and subject to a readjustment of rates as required by the act of 1876. Such readjustment took place jon the 20th of December, 1877. If the order made by the postmaster general on that day, fixing certain rates, upon the basis of a reduction of 10 per cent., for carrying the mails from July 1, 1877, to June 30, 1881, and its acceptance by the railroad company, constituted an express contract in respect to the compensation to be paid to it, still as, by the terms of both the order and the notice, those rates were to govern, 'unless otherwise ordered,' there is no ground for the company to complain of the subsequent reduction of 5 per cent. This reservation of power in the postmaster general opened the way for him to exercise the authority conferred, and to conform to the direction given by the act of 1878. It cannot be said that the reduction of 5 per cent. was a violation of that contract; for according to its terms, the parties agreed that the rates fixed at the latter date were subject to such future orders as the postmaster general might make. We do not mean that the railroad company was bound to continue the carrying of the mails, if subsequent changes in the rates were unreasonable, or did not meet with its assent. On the contrary, it was at liberty, when the 5 per cent. reduction was made, to discontinue their transportation on its cars.

Chief Justice RICHARDSON, speaking for the court of claims, properly said that the order for the reduction under the act of 1878, and the notice thereof to the company, 'constituted an offer on the part of the postmaster general which the claimant might decline or accept at his pleasure.' Having received the reduced compensation without protest or objection, it may be justly held to have accepted that offer. It is a mistake to suppose that these views are inconsistent with the decision in Railroad Co. v. U.S., 104 U.S. 684. It was there held that the act of 1876 should not be construed as affecting the rights of a railroad company under a contract for transporting the mail which was in all respects valid under the laws in force when it was made; that the language of the acts of 1875 and 1876 'may well be satisfied by confining them to cases where no time contracts for service were then in existence, and to contracts thereafter to be entered into;' and that this did not legitimately apply to contracts then existing, whose terms had not expired. That case differs from the present one in the important particular that in the former the company bound itself to carry the mails during a certain period, and consequently its acceptance from time to time, during that period, of less than it was entitled to demand, did not prejudice its right to claim what was legally due under its contract; whereas, in the present case, the company could have declined to accede to the readjustments of rates when they were made.

We perceive no error in the judgment, and it is therefore affirmed.