Prior to the expiration, June 30, 1877, of a written contract
with a railroad company for carrying the mails, the Postmaster
General, acting under provisions of law, notified the company in
writing that from the day of that expiration to a day which made a
term of four years, the compensation would be at rates named in the
notice, "unless otherwise ordered." The company transported the
mails and accepted pay therefor at those rates, without objection.
On the 1st July, 1878, the Postmaster General reduced the rates 5
percent under the provisions of an act of Congress to that effect.
The company made no objections to this, and continued to transport
the mails for the rest of the term of four years, and received pay
therefor at the reduced rates. They then brought suit to recover
the amount of the reduction made after July 1, 1878.
Held:
(1) That there was no contract to carry the mails for four years
at fixed rates.
(2) That the company might have refused to transport them at the
reduced rates.
(3) That its failure to do so and the absence of a protest
constituted an assent to the rates fixed by the reduction.
The case was stated thus by the Court in its opinion.
The claim upon which this action is brought is for the balance
alleged to be due the appellant for carrying the mails of the
United States on certain routes between July 1, 1878, and June 30,
1881.
It appears from the findings of fact that this company, for some
years prior to March 31, 1877, carried the mails on each one of
thirteen routes under written contracts with the Postmaster General
prescribing the compensation it was to receive for such services.
The last one of these contracts was made March 31, 1874, and
covered the period beginning January 1, 1874, and ending June 30,
1877. This contract was made subject to the provisions of the Act
of March 3, 1873, 17 Stat. 558, c. 231; Rev.Stat. ยง 4002, which
authorized and directed
Page 129 U. S. 392
the Postmaster General to readjust the compensation thereafter
to be paid for the transportation of mails on railroad routes, the
pay per mile per annum, not to exceed certain rates, graduated by
the average weight of the mails carried
"to be ascertained in every case by the actual weighing of the
mails for such a number of successive working days, not less than
thirty at such times after June 30, 1873, and not less frequently
than once in every four years, and the result to be stated and
verified in such form and manner as the Postmaster General may
direct."
By an Act approved March 3, 187, 18 Stat. 341, c. 128, the
Postmaster General was directed to have the mails weighed by the
employees of the Post Office Department, and to have the weights
stated and verified to him by them, under such instructions as he
considered just to the department and to the railroad companies.
Subsequently, by an Act approved July 12, 1876, that officer
was
"authorized and directed to readjust the compensation to be paid
from and after July 1, 1876, for transportation of mails on
railroad routes by reducing the compensation to all railroad
companies for the transportation of mails ten percentum per annum
from the rates fixed and allowed"
by the first section of the Act of March 3, 1873. The same act
provided that railroad companies, whose railroads were constructed
in whole or in part by a land grant made by Congress on the
condition that the mails should be transported over their road at
such price as Congress should by law direct shall receive only
eighty percentum of the compensation authorized by the Act of July
12, 1876, 19 Stat. 78, 79, c. 179; Richardson's Suppl.Rev.Stat.
224.
The company was paid according to the terms of the contract of
March 31, 1574, up to and including June 30, 1877.
Prior to February 1, 1877, the Postmaster General sent to
claimants, for each of the routes covered by its contract with the
United States, a "railroad distance circular," and prior to April.
16, 1877, a "railroad weight circular;" the object of the first
circular being to obtain accurate information for the use of the
department in regard to the length and location of the plaintiff's
road, and that of the last being to obtain a statement
Page 129 U. S. 393
of mail matter conveyed by it. The information called for by
these circulars having been furnished, the Postmaster General,
December 20, 1877, readjusted the compensation to be paid for
carrying the mails over the routes in question, giving due notice
thereof to the sixth auditor and to the railroad company. That
order was in this form:
"Authorize the Auditor of the Treasury for the Post Office
Department to pay the Eastern Railroad Company, quarterly, for
carrying the mail between _______ and ______from July 1, 1877, to
June 30, 1881 at the rate of $____ per annum (being $____ per mile
per annum), unless otherwise ordered, subject to fines and
deductions."
On the same day, the Postmaster General sent to the company a
circular notice of adjustment of pay for each route in this
form:
"The compensation for the transportation of mails, etc., on your
road, route between _______ and _______, has been fixed from July
1, 1877, to June 30, 1881, (unless otherwise ordered), under Acts
of March 3, 1873, July 12, 1876, upon returns showing the amount
and character of the service for thirty days, commencing April 16,
1877 at the rate of $____ per annum, being $____ per mile for ___
miles."
The compensation thus fixed was the maximum authorized by the
act of 1873, as amended by that of 1876.
By the first section of the Act of June 17, 1878, making
appropriations for the fiscal year of the Post Office Department
for the year ending June 30, 1879 and for other purposes, the
Postmaster General was
authorized and directed to readjust the compensation to be
paid from and after the first day of July, 1878, for transportation
of mails on railroad routes by reducing the compensation to all
railroad companies for the transportation of mails five percentum
per annum from the rates for the transportation of mails, as the
basis of the average weight fixed and allowed
by the first section of the Act of July 12, 1876, 20 Stat. 140,
c. 259; Richardson Suppl.Rev.Stat. 359. On the 12th of July, 1878,
that officer readjusted the compensation to be paid to the
appellant for the transportation of mails on said routes after July
1, 1878. Of this readjustment due notice was given to the company
and to the Auditor of the Treasury for the Post Office Department.
The
Page 129 U. S. 394
notice to the Auditor was in this form:
"Authorize the Auditor to decrease the pay of the Eastern
Railroad Company for carrying the mails between _______ and _______
from July 1, 1878, to June 30, 1881 at the rate of $____ per annum,
leaving the pay from that date $____ per annum (being $____ per
mile), being a reduction of five percentum from the rates fixed for
weight of mails in accordance with the Act of June 17, 1878."
The notice to-the company was in this form:
"Please take notice that the Auditor of the Treasury for this
Department has been directed to decrease the pay of your company
for the conveyance of the mails on Route 9, between Portland and
Portsmouth, from July 1, 1878, to June 30, 1881, $558.19 per annum,
leaving the pay from the first-named date $13,233.55 per annum,
being a reduction of five percentum from the rates fixed for weight
of mails in accordance with the provision of the Act of June 17,
1878."
In 1879, the Postmaster General, upon the application of the
railroad company, caused the mails on the route between Portland
and Boston to be reweighed. That reweighing resulted in an order,
August 26, 1879, considerably increasing the compensation
previously directed to be paid, but still it was five percent less
than it would have been under the order of December 20, 1877,
unaffected by the reduction made by the order of July 12, 1878.
For carrying the mails on all the routes in question from July
1, 1877, to June 30, 1881, both inclusive, the railroad company
received compensation in conformity with the above orders of the
Postmaster General -- that is, from July 1, 1877, to June 30, 1878,
according to the orders and notice of December 20, 1877, and from
July 1, 1878, to December 30, 1881, according to those orders as
modified July 12, 1878, and August 26, 1879.
The difference between the amounts actually paid to the claimant
under all of said orders and the amount it would have received
under the order of December 20, 1877 -- if it was not bound by the
order of July 12, 1878, making the reduction of five percent -- is
$5,926.56, the amount claimed in the petition.
Page 129 U. S. 395
It does not appear that the company, at any time before the
commencement of the action, made any protest against or objection
to the readjustments of its compensation made by the Postmaster
General.
MR. JUSTICE HARLAN, after stating the facts in the foregoing
language, delivered the 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 on 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 ten percent,
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 five percent. 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 five percent 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
Page 129 U. S. 396
unreasonable or did not meet with its assent. On the contrary,
it was at liberty, when the five percent 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
Chicago &c.
Railway Co. v. United States, 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.