A railroad company which enters into a contract to carry the
mails "upon the conditions prescribed by law," etc., is liable to
fines or deductions from its compensation for failures to maintain
its mail train schedules (Rev.Stats., §§ 3962, 4002; Act of June
26, 1906, c. 3546, 34 Stat. 472). P.
252 U. S.
149.
The fact that the Post Office Department long abstained from
making such deductions under Rev.Stats. § 3962 where delays were
less than 24 hours does not amount to construing that section as
inapplicable to shorter delays. P.
252 U. S.
150.
And, in any event, the right to such a construction could not be
claimed by a company whose contract was made soon after the
Postmaster General had issued an order for deductions in future
when trains arrived fifteen or more minutes late a designated
number of times
Page 252 U. S. 148
per quarter, and soon after the approval of the Act of June 26,
1906,
supra, directing him to impose and collect
reasonable fines for failure of railroads to comply with their
contracts respecting the times of arrival and departure of trains.
P.
252 U. S.
150.
53 Ct.Clms. 630 affirmed.
The case is stated in the opinion.
MR. JUSTICE CLARKE delivered the opinion of the Court.
The appellant, in its petition, alleges that in June, 1906, it
entered into contracts with the Post Office Department to transport
the mails over three designated routes "upon the conditions
prescribed by law and the regulations of the Department applicable
to railroad mail service;" that, during the fiscal year 1907 (the
petition was not filed until December 19, 1912), the Department
withheld from its stipulated pay $3,355.48, "as a penalty imposed
on account of late arrivals . . . of trains, and failure to perform
service on the . . . mail routes," and that such deductions were
"unlawfully withheld." The prayer was for judgment for the full
amount of the deductions, which are also designated in the record
as fines or penalties. The petition was dismissed by the Court of
Claims.
The appellant acquiesced in the deductions when they were made,
accepted the reduced compensation without protest or objection,
except in one instance, when the item complained of was adjusted to
its satisfaction, and continued to perform the contracts to the end
of their
Page 252 U. S. 149
four-year periods without complaint as to the reasonableness of
the deductions involved. And thus it comes admitting that it freely
entered into the contracts, fully performed them, and accepted pay
for such performance, but asking judgment for deductions which it
avers were "unlawfully withheld" more than five years before the
petition was filed.
The contracts were of the type, familiar in many reported cases,
evidenced by "distance circulars," orders establishing the routes,
specific agreements on the part of the contractor that it would
perform the service "upon the conditions prescribed by law and the
regulations of the Department applicable to railroad service" and
that the "adjustment" should be "subject to future orders and to
fines and deductions."
Among the applicable "conditions prescribed by law" were
Rev.Stats. § 3962, that the Postmaster General might
"make deductions from the pay of contractors for failure to
perform service according to contract, and impose fines upon them
for other delinquencies,"
Rev.Stats. § 4002, authorizing contracts for the conveyance of
the mails "with due frequency and speed," and the Act of June 26,
1906, c. 3546, 34 Stat. 467, 472, commanding the Postmaster General
to require all railroads carrying mail to comply with the terms of
their contracts "as to time of arrival and departure of mails" and
"to impose and collect reasonable fines for delay" when not caused
by unavoidable accidents or conditions.
It is conceded by the appellant that the Postmaster General had
authority under Rev.Stats. § 3962 to make deductions from the pay
when a "trip was not performed" within twenty-four hours of the
stipulated time for performance. But it is contended that he had no
authority to make deductions or impose fines for shorter delays,
and this is the sole question upon which this appeal is pursued
into this Court.
Page 252 U. S. 150
It is argued for the appellant that power to make the disputed
deductions must be found, if at all, in the provision of Rev.Stats.
§ 3962, that the Postmaster General may
"make deductions from the pay of contractors for failure to
perform service according to contract, and impose fines upon them
for other delinquencies,"
that, when the contracts were made, long departmental
construction had limited the failure to perform service, described
in the act, to twenty-four hours of delay in the arrival of trains,
and that failure, from 1872, when the section was enacted, to 1907,
to impose fines or deductions for shorter delays, amounted to a
construction by the Department that authority to impose fines upon
contractors for delinquencies did not warrant deductions for
failure to maintain train schedules when the delay was less than
twenty-four hours.
We need consider only this last contention, and, in reply, it is
pointed out that the findings of fact show that the amount and
rates of compensation were determined by the Department for the
various routes between the 10th and 26th of September, 1906, though
effective as of the first day of the preceding July; that in
October, 1905, the Postmaster General, "on account of the failure
to observe schedules on routes or parts of routes," issued an order
that deductions should be made, in sums stated, after December 31,
1905, when trains arrived at termini or junction points fifteen or
more minutes late a designated number of times in a quarter, and
that the Act of Congress approved June 26, 1906, referred to,
declared it to be the duty of the Postmaster General to impose and
collect reasonable fines for failure of railroads to comply with
the terms of their contracts with respect to the time of arrival
and departure of mails. This act was repealed in the following
year, but the substance of it was immediately reenacted in a more
adaptable form.
Thus, the appellant had notice before it made the contracts
Page 252 U. S. 151
under discussion that failure to maintain train schedules was
regarded by Congress and the Department as a violation of
mail-carrying contracts, justifying the imposition of fines or
deductions, and that both believed there was authority under the
customary contracts and the law to impose such deductions. The Act
of June 26, 1906, was not a grant of new power to the Postmaster
General to impose such fines or deductions, but was an imperative
direction to him to exercise the power which it assumes he already
had for that purpose.
This action of Congress and of the Department is sufficient
answer to the claim, if it were otherwise sound, that failure to
exercise the power to impose fines for such a cause amounted to a
departmental declaration that no such power existed.
But the contention is not sound. Failure, within moderate
limits, to maintain train schedules may well have been regarded by
the Postmaster General as a necessary evil to be tolerated, and not
to call for the exercise of his power to impose fines under the
statute when more flagrant neglect to maintain such schedules might
very justly require him to exercise such authority in order to
prevent intolerable public inconvenience. We cannot doubt that the
contracts of the appellant, and the law which was a part of them,
furnished ample authority for the action of the Department in this
case, and that omission to exercise such power did not make against
the proper use of it when, in the judgment of the Postmaster
General, adequate occasion for its use should arise.
We need not pursue the subject further. The principles involved
are adequately and admirably discussed by the Court of Claims in
its opinion rendered in the case of
Louisville & Nashville
R. Co. v. United States, 53 Ct.Cls. 238, upon authority of
which this case was decided.
The judgment of the Court of Claims is
Affirmed.