1. A payment made by the government to a railroad company under
the guaranty provision (§ 209) of the Transportation Act, not in
excess of the amount due as then found and certified by the
Interstate Commerce Commission, but an overpayment if tested by the
Commission's final computation of the guaranty, five years later,
held not recoverable by the United States as a payment
made by mistake of fact or in violation of law, the discrepancy
being attributable merely to the use of different formulae for
adjusting maintenance expense to fluctuations in cost of labor and
material, and the superiority of one method over the other being a
matter of opinion, and not of mathematical precision. Pp.
287 U. S.
151-152.
2. A certificate issued by the Commission under § 212(a) of the
Transportation Act (added by amendment of Feb. 26, 1921) for an
amount "definitely ascertained by it to be due" to a carrier under
the guaranty of § 209, is not provisional and tentative, and the
fact that the amount paid under such certificate exceeds the
Commission's subsequent and final certificate of the amount
guaranteed to the carrier does not entitle the United States to a
repayment of the excess. P.
287
U.S. 153.
3. If the meaning of a statute be uncertain, recourse may be had
to its legislative history and to the statements by those in charge
of it during its consideration by Congress. P.
287 U. S.
154.
Page 287 U. S. 145
4. The evidence does not require a holding that the Commission
acted with undue haste and upon inadequate data in approving the
payment here in question. P.
287 U. S.
155.
57 F.2d 385 affirmed.
Certiorari, 286 U.S. 540, to review the affirmance of a judgment
for the above-named railway company, in an action by the United
States to recover a payment of money.
Page 287 U. S. 146
MR. JUSTICE CARDOZO delivered the opinion of the Court.
The petitioner, the United States of America, has sued to
recover a payment made to the respondent, the Great Northern
Railway Company, by force of a certificate of the Interstate
Commerce Commission, the government asserting that the payment was
excessive, and that the certificate permitting it was the product
of mistake. A judgment of the District Court in favor of the
respondent was affirmed by the Circuit Court of Appeals for the
Eighth Circuit. 57 F.2d 385. The case is here on certiorari.
The respondent was a railroad under federal control when control
was relinquished by the government on March 1, 1920. By the
Transportation Act of that year (41 Stat. 464, § 209, 49 U.S.C. §
77), it had the protection of guaranty as to its railway operating
income for six months thereafter. The United States guaranteed
that, during this guaranty period, the income should be not less
than one-half of the annual compensation to which the carrier was
entitled during the period of federal control.
United States v.
Guaranty Trust Co., 280 U. S. 478;
Texas & Pacific Ry. Co. v. United States, 286 U.
S. 285;
Continental Tie & Lumber Co. v. United
States, 286 U. S. 290.
Upon the Interstate Commerce Commission was laid the duty of
ascertaining the amounts necessary to make good this guaranty, and
of certifying to the Secretary of the Treasury the results of the
inquiry. Something more was required for this purpose than the mere
comparison of receipts and expenses during the period of control
with receipts and expenses during the six months following. In the
ascertainment of railway operating income or any deficit therein,
the amount to be included in operating expenses for maintenance of
way and structures, or for maintenance of equipment, was to be
fixed by the Commission, and was not dependent solely on the
action
Page 287 U. S. 147
of the carrier. For that purpose, reference was to be had to the
tests prescribed by the standard form of contract for federal
control. Transportation Act 1920, § 209(f)(3); Federal Control
Contract, § 5(a). The Commission was to take as its base the
average six months' maintenance expenses of the carrier during the
years characterized as "the test period" --
i.e., the
three years ending June 30, 1917. This amount was to be readjusted,
however, so as to make allowance for changes in the extent of
property maintained, for changes in the nature or intensity of the
use, and, most important, for changes in the cost of labor and
material. The end in view was the arrival at a figure that would
permit the property to be kept up in the same state of reparation
as at the time when the carrier's possession had been yielded to
the government. The task of the Commission was not exhausted,
however, when it ascertained the allowance to be made for the cost
of maintenance. It was to require the restatement of other
operating expenses in addition to those for maintenance "to the
extent necessary to correct and exclude any disproportionate or
unreasonable charge to such expenses" for the guaranty period, or
any charge "which under a proper system of accounting is
attributable to another period." Transportation Act 1920, §
209f(5).
A task so vast and intricate exacted time and study. Many of the
carriers, however, including this respondent, were in urgent need
of cash for pressing obligations. The statute contained provisions
that were intended to relieve the pressure. By § 209(h), the
Commission was empowered, upon application during the guaranty
period, to issue certificates for advance payments, such advances
to be not in excess of the "estimated amount" necessary to make
good the guaranty. The Secretary of the Treasury was directed to
make the advances in the amounts specified in the certificate upon
the execution by the carrier of a contract, "secured in such manner
as
Page 287 U. S. 148
the Secretary may determine," that, upon final determination of
the amount of the guaranty, it would repay the excess payment with
interest, if excess there should be found to be. Under the
authority of that section, certificates in the amount of $6,500,000
were issued by the Commission and collected by the carrier. The
payments thus received were well within the limit of the guaranty
as finally determined, and, as to these, no claim for reimbursement
is put forward by the government.
The relief permissible under § 209(h) turned out to be
inadequate. It was limited to applications made before the guaranty
period had expired, to applications, that is to say, before
September 1, 1920. In the case of the respondent, as in that of
other carriers, the guaranty period expired with the Commission
still unready to announce its ultimate award, and with the pressure
of the need for intermediate relief as urgent as before.
Accordingly, the Transportation Act 1920 was amended on February
26, 1921, by authorizing the Commission, if not at the time able
finally to determine the whole amount due, to make its certificate
for any amount definitely ascertained by it to be due, and
thereafter in the same manner to make further certificates, until
the whole amount due had been certified. Act of February 26, 1921,
c. 72, 41 Stat. 1145, § 212, 49 U.S.C. § 79. The text of the
statute is quoted in the margin.
*
Page 287 U. S. 149
At the time of the enactment of that section, the respondent had
already filed with the Commission a guaranty claim in the sum of
$18,498,391.67, of which $6,500,000 had already been paid through
certificates issued under § 209(h), leaving a balance of
$11,998,391.67 still claimed to be due. The respondent, in
submitting this claim, gave notice that it required a $6,000,000
advance to meet a pressing obligation, and asked for a certificate
to that extent to be used as a basis for credit upon an application
for a bank loan. Such a certificate was issued on February 23,
1921, though the Commission and the carrier understood that, under
the statute then in force, it could not be made the basis for a
payment by the Secretary of the Treasury. Three days later § 212
was added to the Transportation Act, and the legal aspect of the
situation was at once transformed. At the respondent's request, the
Commission cancelled its advisory certificate of February 23, 1921,
and, on March 1, 1921, issued a new certificate under the authority
of the statute.
"The Commission has ascertained, and hereby certifies to the
Secretary of the Treasury, that the amount of six million dollars
($6,000,000) in addition to
Page 287 U. S. 150
any sum or sums heretofore certified in favor of the carrier
under § 209 of the Transportation Act 1920, is necessary to make
good to said carrier the guaranty provided by the said section. The
Commission hereby certifies that such amount of six million dollars
($6,000,000) cannot be reduced by further accounting or
otherwise,"
with which was coupled a statement that additional amounts might
be found to be owing on further investigation.
The respondent, armed with this certificate, procured from the
Treasury the $6,000,000 required for its present needs. This
amount, added to the earlier payments of $6,500,000, makes up a
total of $12,500,000 collected on account of its claim against the
government. The total was nearly $6,000,000 less than the amount
claimed by the respondent to be ultimately due. It was about
$3,200,000 less than the estimate of the final payment submitted as
a basis for the certificate in a report to the Commission by the
Bureau of Finance. Whatever the final payment might afterwards be
found to be, the sum certified to be due left or seemed to leave a
margin of error ample enough for any change within the zone of
reasonable expectation.
The Commission, after satisfying thus the instant needs of the
respondent, continued the investigations necessary to ascertain the
final balance. Not till five years had passed was it ready to
announce its findings. In the meantime, it had filed a series of
reports or decisions defining or revising the principles and
formulae that were to govern it thereafter in the allowance or
disallowance of expenditures for maintenance.
See, e.g.,
Maintenance Expenses under § 209, 70 I.C.C. 115; In the Matter of
Final Settlement under § 209 of the Transportation Act 1920, 70
I.C.C. 771. By its final certificate issued on June 8, 1926, under
§ 209(g), it certified that the total amount necessary to make good
the guaranty was
Page 287 U. S. 151
$11,170,214.02, which was less by $1,329,786.98 than the
payments already made.
Cf. Great Northern Ry. Co. v. United
States, 277 U. S. 172. For
the recovery of the difference with interest, this action was
brought.
We may assume in favor of the petitioner that a certificate
issued by the Commission under § 212 of the statute is open to
impeachment for fraud or mistake, and that payments burdened with
those infirmities are subject to be reclaimed. If this be assumed,
it does not avail without more to lay a duty of restitution upon
the carrier before us. Fraud in the making of the certificate is
neither proved nor even intimated. Mistake also there was none, but
merely a revision of judgment in respect of matters of opinion. The
respondent reported that it had paid out for maintenance during the
guaranty period $28,982,000. There is no claim that this report was
false, even to a penny. Readjustments were needed, however, as we
have already pointed out, whereby allowance might be made for
fluctuations in the cost of labor and material, as well as for
other economic changes, between the period of test and the period
of guaranty. The formulae for the readjustment of maintenance
expenditures in use by the Commission on March 1, 1921, reduced the
maintenance allowance to $27,233,000, which was more than one and a
half million dollars less than the expenditures actually made. The
formulae in use on June 8, 1926, reduced the allowance for
maintenance to $23,815,000. In this last reduction lies the
explanation of the discrepancy between the partial certificate and
the final one. Neither set of formulae is an expression of
mathematical truth in such a sense that accuracy may be affirmed of
one and error of the other. Each makes it necessary to multiply the
expenses of the test period by a factor derived from an imperfect
and approximate estimate of a composite change of prices. To what
extent the factor is an expression of mere opinion is perceived
when the process back of it is
Page 287 U. S. 152
considered. At the date of the partial certificate, various
items of expense during the years of the test period -- the cost of
locomotives, of cars, of tracks, and many others -- were separately
considered, and the proper percentages of increase during the
period of the guaranty applied separately to each of them. At the
date of the final certificate, the Commission determined to abandon
these refinements. It joined together all the property of all the
carriers in regional or territorial groups, and ascertained the
factor of increase for the members of a group collectively. By the
use of this method, the test period expense was to be
"multiplied by a factor representing the increase in the general
level of cost of labor and material for the territories in which
the lines of railroad of the carrier are situated."
A general equation factor was substituted for a series of
factors separately computed and separately applied. The result, as
the Commission concedes in its report, is, at best, an
approximation representing an exercise of judgment as to the effect
of a composite increase. What is thus conceded in the report as to
the source of the discrepancy between the two certificates was
confirmed upon the trial by the testimony of a witness for the
government. The difference, he tells us, "grew out of a difference
of opinion as to the method of calculation, rather than out of
errors in the figures submitted." The Commission has not said that,
in any particular case, the general equation factor will yield
results more accurate than those attained by the method theretofore
in use. It has claimed no more for the new method than an
enhancement of simplicity, along with an approach to accuracy not
inferior to that of the method displaced.
In these circumstances, we find no basis for a holding that the
payment made to the respondent under the partial certificate of
March 1, 1921, was due to any mistake of fact, either unilateral or
mutual.
United States v. Barlow, 132 U.
S. 271,
132 U. S.
280-281.
Cf. 105 U. S.
Butler,
Page 287 U. S. 153
105 U. S. 553,
105 U. S.
557-558. The officials of the government knew precisely
what they were doing, and kept well within the statute defining
their authority. They did not act illegally, like the officials
whose acts were challenged in the cases cited by the petitioner.
Wisconsin Central R. Co. v. United States, 164 U.
S. 190;
Grand Trunk Western Ry. Co. v. United
States, 252 U. S. 112;
Burnet v. Porter, 283 U. S. 230.
Charged with a difficult task exacting judgment and discretion,
they came to a decision in good faith, with knowledge of the
relevant facts and without departure from the law. If the payment
under their certificate is to be reclaimed, some other ground than
mistake or illegality must be found to sustain the reclamation.
Mistake and illegality being thus excluded from the reckoning,
we are brought to a second ground for reclamation put forward by
the government. The argument is made that, by the true construction
of the statute, a certificate issued by the Commission under § 212
is provisional and tentative; that, upon the issuing of a final
certificate of inconsistent tenor, it is superseded and nullified
as to the past, as well as to the future, and that payments made
under its authority, though legal in the making, become illegal by
retroaction. We do not so interpret the meaning of the statute. If
all that the lawmakers had in view was to authorize mere advances
on the basis of an estimate, the carrier remaining bound to refund
the excess in the event that the estimate was thereafter found to
be too high, a suitable form was at hand in § 209(h) for the
expression of their purpose. All that was necessary was to strike
out the requirement that application must be made during the
guaranty period, and to provide that the promise of the carrier to
refund might be accepted without security. Section 209(h), thus
reframed, would have given expression with nicety to the obligation
which the respondent is said to have assumed.
Page 287 U. S. 154
But § 212, as enacted, was drafted upon different lines. By
subdivision
a of the section, the Commission, if unable
finally to determine the whole amount due, may make its certificate
for any amount definitely ascertained by it to be due, with
supplemental certificates from time to time thereafter. No longer
does the statute speak, as it had spoken in § 209(h), of "estimated
amounts" and of contracts to refund any excess in the "advances."
The newly authorized certificates are to represent what has been
"definitely ascertained," and moneys procured thereby are
characterized no longer as "advances," but as partial or final
payments. If, however, the meaning of subdivision
a, §
212, could conceivably be doubtful when considered by itself, the
doubt is removed by subdivision
b. The lawmakers foresaw
that there might be "deferred debits and credits," such as
unsettled damage claims, which could not be fully ascertained till
a long time had gone by. Accordingly, subdivision
b
provides that the Commission shall be
"authorized, in the case of deferred debits and credits which
cannot at the time be definitely determined, to make, whenever in
its judgment practicable, a reasonable estimate of the net effect
of any such items,"
the estimates so made to be "
prima facie, but not
conclusive, evidence of their correctness in amount in final
settlement." The petitioners would have us hold that subdivisions
a and
b, parts of a single section, mean one and
the same thing with all their differences of form. The contrast
between them is too pointed to permit us to find identity of
thought lurking dormant and concealed beneath this diversity of
phrase.
Thus far, we have not traveled, in our search for the meaning of
the lawmakers, beyond the borders of the statute. In aid of the
process of construction, we are at liberty, if the meaning be
uncertain, to have recourse to the legislative history of the
measure and the statements by those in charge of it during its
consideration by the
Page 287 U. S. 155
Congress.
United States v. Missouri Pacific R. Co.,
278 U. S. 269,
278 U. S. 278.
If such recourse be had, there is confirmation of the view that the
certificates were more than estimates of provisional advances.
Subdivisions
a and
b, as originally introduced,
drew no distinction as to the effect of payments made thereunder,
the certificates being as conclusive under the one as under the
other. A proposed amendment to modify subdivision
b by
making the effect of such certificates
prima facie, but
not conclusive, was carried. 60 Congressional Record, part 3, pp.
2815-2816. A separate proposed amendment to modify subdivision
a in substantially the same way was rejected. 60
Congressional Record, part 3, pp 2812, 2815. In the discussion of
these amendments, the inquiry was pressed whether the government
would be helpless if the certificates were too high. The answer was
emphatic -- that the certificates were final. 60 Congressional
Record, part 3, pp. 2739, 2802-2803, 2809, 2812-2813.
A word of answer is still due to the argument of the government
that the certificate is void because the work of the Commission was
so hasty and imperfect as to involve an abdication of its statutory
duty. Without probing at this time the legal implications of this
argument, we find it without adequate basis in the facts. Whatever
basis it has is in the testimony of an accountant in the service of
the Commission. His conclusions are contradicted by evidence,
direct and circumstantial, offered by the carrier, and contradicted
also by the recitals of his superior's certificate. The record may
permit an inference that the whole amount owing in order to
discharge the guaranty had not been so definitely determined as to
make the Commission willing to recommend a settlement in full,
though even this may be uncertain. It does not command a holding
that the margin of error was so inscrutable as to preclude the
definitive approval of a payment on account.
The judgment is
Affirmed.
*
"Sec. 212. (a) In making certifications under § 204 or § 209,
the Commission, if not at the time able finally to determine the
whole amount due under such section to a carrier or the American
Railway Express Company, may make its certificate for any amount
definitely ascertained by it to be due, and may thereafter in the
same manner make further certificates, until the whole amount due
has been certified. The authority of and direction to the Secretary
of the Treasury under such sections to draw warrants is hereby made
applicable to each such certificate. Warrants drawn pursuant to
this section, whether, in partial payment or in final payment,
shall be paid: (1) if for a payment in respect to reimbursement of
a carrier for a deficit during the period of federal control, out
of the appropriation made by § 204; (2) if for a payment in respect
to the guaranty to a carrier other than the American Railway
Express Company, out of the appropriation made by subdivision (g)
of § 209, and (3) if for a payment in respect to the guaranty to
the American Railway Express Company, out of the appropriation made
by the fifth paragraph of subdivision (i) of § 209."
"(b) In ascertaining the several amounts payable under either of
such sections, the Commission is authorized, in the case of
deferred debits and credits which cannot at the time be definitely
determined, to make, whenever in its judgment practicable, a
reasonable estimate of the net effect of any such items, and, when
agreed to by the carrier or express company, to use such estimate
as a definitely ascertained amount in certifying amounts payable
under either of such sections, and such estimates so agreed to
shall be
prima facie, but not conclusive, evidence of
their correctness in amount in final settlement."