United States v. Utah Nevada California Stage Company/Opinion of the Court

It is the contention of the government that, under the authority of the Postmaster General to require new or additional mail messenger or transfer service, without additional compensation, the contractor might be required to perform the additional service made necessary by the establishment of the Industrial building branch under the authority of the act of Congress of March 3, 1893 (27 Stat. at L. 732, chap. 213), authorizing the renting of the building to be used for general postoffice purposes in the city of New York. The findings of fact establish that this Industrial building branch was more than 3 miles distant from the general postoffice, and was intended to and did transact nearly all of the business north of Fourteenth street. This necessitated the carrying of the mails, not only from the general postoffice to the railroad stations, but to and from the branch station established at the Industrial building. In order to perform this service under the directions of the Department, complainant was required to furnish 80 additional horses, more than 30 additional wagons, and from 33 to 50 additional men, requiring an additional distance to be traveled in wagons, over and above the normal increase, of 311,939 miles for the period from October 5, 1893, to February 6, 1895, and to pay an increased sum for ferrying the wagons across the North and East rivers of $9,950.22. Can such enormous increase of the service required and the expense entailed be exacted of a contractor who had agreed to perform new or additional service of the kind specified without additional compensation? There can be no doubt that the purpose of placing this stipulation in the contract was to require the performance, without additional compensation, of new or additional service which might arise from improved methods in the transaction of the business of the Postoffice Department and in the increased demand for service resulting from the growth and developments of towns and cities. The contract gave to the Postmaster General very considerable discretion in calling for additional service which might result from these causes, without compensation. This was well illustrated in the case of Slavens v. United States, 196 U.S. 229, 49 L. ed. 457, 25 Sup. Ct. Rep. 229, in which it was held that while the Postmaster General might not order, under such a contract, service of a different character not within the contractual arrangement, he might order, without additional compensation, a change in the service which required the mail to be taken to and from street cars, met at crossings instead of landings and stations. In that case it happened the burden upon the contractor was not increased. But in the present case we find more service required, amounting to additional mileage of hundreds of thousands of miles, and the payment of a large additional sum of money for ferrying wagons to deliver the mails. There must be some limit to the service which can be required without additional compensation, under the authority vested in the Postmaster General by the contract, to call for new or additional service of the same character. Otherwise it is within the power of the government to ruin a contractor by new and wholly unanticipated demands, which caution and prudence, however great, could not have forseen. If this were a contract between individuals, a claim of the right to require this vast amount of additional work-evidently no within the contemplation of the parties-without additional compensation would hardly be seriously entertained. The same principles of right and justice which prevail between individuals should control in the construction and carrying out of contracts between the government and individuals. The phrase 'new or additional service' is not one of exact meaning, defining the precise extent of the obligation incurred, and permits the court to give it a reasonable construction with a view to doing justice between the parties. In giving a proper construction, the court is required to examine the entire contract, to consider the relation of the parties, and the circumstances under which it was signed. Chicago, R. I. & P. R. Co. v. Denver & R. G. R. Co. 143 U.S. 596, 609, 36 L. ed. 277, 281, 12 Sup. Ct. Rep. 479. It was said by Mr. Justice White, in O'Brien v. Miller, 168 U.S. 287, 297, 42 L. ed. 469, 473, 18 Sup. Ct. Rep. 140, 144:

'The elementary canon of interpretation is not that particular words may be isolatedly considered, but that the whole contract must be brought into view, and interpreted with reference to the nature of the obligations between the parties, and the intention which they have manifested in forming them. Boardman v. Reed, 6 Pet. 328, 8 L. ed. 415; Chesapeake & O. Canal Co. v. Hill, 15 Wall. 94, 21 L. ed. 64.'

And, upon the same subject, Mr. Justice Bradley, in the case of Chesapeake & O. Canal Co. v. Hill, 15 Wall. 94, 99, 21 L. ed. 64, 67, said:

'We should look carefully to the substance of the original agreement,. . . as contradistinguished from its mere form, in order that we may give it a fair and just construction, and ascertain the substantial intent of the parties, which is the fundamental rule in the construction of all agreements.'

We cannot believe it possible that the parties to this contract contemplated the establishment of a new postal department in the city of New York not then authorized by any act of Congress, which should so greatly increase the service, requiring more than 300,000 miles of additional transfer service and nearly $10,000 of additional expense for ferrying during the time covered in the suit. The government, in its advertisement, had stated the probable additional annual mileage at 6,718.40 miles. This may be presumed to have been a fair and impartial estimate, made for the benefit of those with whom the government was about to contract, notwithstanding they were warned that it was not conclusive. There is nothing in the record to show that it was not a reasonable estimate in the light of the facts then known. In this case, after the contract was entered into, this enormous new service, clearly not intended by either of the parties to be rendered, was required. In this instance we think the limit of reasonable requirement under the new and additional service clause was exceeded, and the service required cannot be held to be within the terms of the contract. We find no error in the court of claims reaching this conclusion.

2. The second question involved is as to the right of the contractor to recover because the government's advertisement for proposals, instead of stating the number of elevated stations to be served at four, which was, in fact, the number, gave the number of stations at two, thus doubling the number of trips necessary. It is true that the advertisement required the bidders to inform themselves as to the facts, and stated that additional compensation would not be allowed for mistakes; but, in the present instance, the government, in its advertisement, had positively stated the number of stations at two. The contractor had a right to presume that the government knew how many stations were to be served; it was a fact peculiarly within the knowledge of the government agents, and upon which, in the advertisement, it spoke with certainty. We do not think, when the statement was thus unequivocal, and the document was prepared for the guidance of bidders for government service, that the general statement that the contractor must investigate for himself, and of nonresponsibility for mistakes, would require an independent investigation of a fact which the government had left in no doubt. We think the court of claims correctly allowed this item.

3. As to the compensation for the socalled 'foot service,' for carrying the mails up and down the steps at the elevated railroad stations, the delivery of the mail at the foot of the steps would not have been sufficient, and the contractor agreed to deliver the mail into the postoffices, mail stations, and cars. The statement of facts shows that the preceding contractor had delivered the mail on the platform of the stations, at the door of the cars. We think the contract was not exclusively for wagon service, but, reasonably construed, required the delivery of the mail into the elevated stations in such wise as to be placed in the cars, and consequently required it to be carried upstairs without extra allowance of pay. We find no error in disallowing this claim for extra compensation.

The judgment of the Court of Claims is affirmed.