United States v. Alabama Great Southern R. Co., 142 U.S. 615 (1892)
U.S. Supreme CourtUnited States v. Alabama Great Southern R. Co., 142 U.S. 615 (1892)
United States v. Alabama Great Southern Railroad Company
Submitted January 8, 1892
Decided January 18, 1892
142 U.S. 615
When the Executive Department charged with the execution of a statute gives a construction to it and acts upon that construction for a series of years, the Court looks with disfavor upon a change whereby parties who have contracted with the government on the faith of the old construction may be injured, especially when it is attempted to make the change retroactive and to require from the contractor repayment of moneys paid to him under the former construction.
The postal appropriation Act of July 12, 1876, c. 179, fixed a rate of pay to railroads for carrying the mails, and provided that roads constructed in whole or in part by a land grant, conditioned that mails should be transported at a rate to be fixed by Congress, should receive only 80 percent
of that rate. As applied to a line of road a part of which only was constructed with such aid, the department held, and acted in accordance therewith for many years, that it was entitled to the percentage pay for the portion of the line so constructed, and to full pay for the remainder. Subsequently the Department reversed this construction and claimed that the mails should be carried over the whole line at the reduced rate, and it accordingly withheld from sums due for current transportation not only the 20 percent thereon, but a sufficient amount to settle claims for past transportation on that basis. The railroad company sued to recover the pay withheld. The Court of Claims gave judgment in its favor, and this Court affirms that judgment.
The Court stated the case as follows:
This was a petition by the appellee to recover certain sums, amounting to $4,620.74, alleged to be due it for the carriage of mails, which had been deducted from what was claimed to be its proper compensation by the order of the Postmaster General. There was also a counterclaim by the United States for overpayments. The facts found by the Court of Claims were substantially as follows:
Claimant is a corporation organized under the laws of Alabama, and operates a railroad running southwest from Chattanooga, Tennessee, to the southern boundary of Tennessee, across the northwestern corner of Georgia, and through the States of Alabama and Mississippi to Meridian, in the latter state. This road is 295.45 miles in length. By the Acts of June 3 and August 11, 1856, 11 Stat. 17 and 30, Congress granted certain public lands to the States of Alabama and Mississippi to aid in the construction of certain railroads in those states. That part of the road now composing the line of this company lying in the States of Alabama and Mississippi, 263.85 miles in length, was aided by this grant. The construction of that part of the railroad lying in the States of Tennessee and Georgia was not aided by land grants from the United States, and is 31.6 miles in length, of which 5.7 miles is not owned by the claimant, but is operated under lease. The United States mail was carried over this railroad from July, 1876, to July, 1880, by the Alabama and Chattanooga Railroad Company, and from the latter date to the present time
by the appellee, the Alabama Great Southern Railroad Company. By section 5 of the Act of June 3, 1856, 11 Stat. 17, c. 41, making land grants to the State of Alabama in aid of certain railroads, it was enacted
"that the United States mail shall be transported over said roads, under the direction of the Post Office Department at such price as Congress may by law direct, provided that until such price is fixed by law, the Postmaster General shall have the power to determine the same."
Section 5 of the Act of August 11, 1856, making a similar grant to the State of Mississippi, was identical with this.
By the Postal Appropriation Act of July 12, 1876, 19 Stat. 78, 82, c. 179, it was provided in section 13
"that railroad companies whose railroad was 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 this act."
In construing this section in connection with the transportation of the mails by the Alabama and Chattanooga Railroad Company, the Postmaster General decided that the section required that the reduced rate should be paid for carrying the mails only upon that part of its road which had been aided by the land grant, and that the full rate allowed to roads which had not been thus aided should be paid for the residue of this road. The railroad company was therefore paid upon this basis from July 1, 1876, to June 30, 1880. At this time, the railroad having passed into the hands of the appellee, payments to the Alabama and Chattanooga Company ceased. The same service, however, was performed by the appellee, and compensation was paid to it upon the same basis from July 1, 1880, to June 30, 1885. In August, 1885, the Postmaster General then in office reviewed the Act of July 12, 1876, reversed the construction given to it by his predecessors, and decided that it required the payment of the reduced rate to the appellee over the whole of its line with the exception of the 5.7 miles operated under lease. This construction was given not on account of any mistake of fact in the original
orders under which payment had been made, but upon the ground of a supposed error of law in the interpretation of section 13. He gave to his opinion both a prospective and a retroactive effect, and ordered first that all future payments should be made on the reduced basis, and second that an account should be taken of all payments made by his predecessors since July 1, 1876, for mail service over this road in excess of the rate he held to be proper, and that this sum should be withheld from the amount due to the claimant.
Upon this state of facts, the Court of Claims gave judgment for the appellee both for the amount withheld for services prior to the revised construction of the law and for the amounts becoming due subsequent to such construction.
The opinion of the court is reported in 25 Ct.Cl. 30. From the judgment thus rendered the United States appealed to this Court.