#### LOUISVILLE & NASHVILLE RAILROAD COMPANY v. THE UNITED STATES.

[No. 22934.

Decided March 27, 1911.]

*On the Proofs.*

The Postal Laws and ^Regulations, constituting the contract in this case, provide that where trains do not stop at points where mails are to be exchanged, or do not check their speed so that mail pouches can be exchanged in safety, “ *a device for*
      *268
      *the receipt and delivery of the mails satisfactory to the department must he erected.”*Tie railroad sues for money expended for equipping mail cars with certain mail-exchanging devices selected and approved by the department.

I. Where the contract leaves it optional with a railroad either to reduce the speed of trains at mail stations or entirely stop them, or provides some device “ *satisfactory to the department,”*by which mail pouches can be exchanged when trains are running at full speed with safety to mail oficiáis and to the public, the expense of the device must be borne by the railroad. „

II. The fact that the Post Office Department disapproved a device, which had been installed with its consent, because it was found to be dangerous and sometimes destroyed mail matter, does not change the optional character of the contract. The claimants were chargeable with knowledge of the fact that the cost of the device, if introduced, was to be borne by the railroad.

*The Reporters'*statement of the case:

The following are the facts of the case as found by the court:

I. From July 1, 1896, to June 30, 1900, the claimant, the Louisville and Nashville Railroad Company, whose principal offices were located at Louisville, Ky., was- engaged, among other things, in the transportation of United States mails over the portions of its road involved in the controversy in this suit, under contract relations created as follows:

On January 25, 1896, the Post Office Department, in contemplation of the regular quadrennial readjustment of railway mail transportation rates, wrote the claimant company inclosing it the department’s regular railroad distance circular, with a request that it be filled out and returned to the department.

' Said distance circular was filled out and returned by the company, with an agreement and verification, signed by the general manager of the company, reading as follows:

“ In case the Post Office Department authorizes the transportation of mails over this line, or any part of it, the railroad company agrees to accept and perform the service upon the conditions prescribed by law and the regulations of the department. The statement of distances, etc., contained herein is correct.”

*269Thereupon the Second Assistant Postmaster General, under date of August 3, 1896, gave the company notice of a readjustment of the rates to be paid it for the transportation of mails, stating that its compensation had been fixed “ from July 1, 1896, to June 30, 1900 (unless otherwise ordered),” at certain specified rates, and further stating the adjustment to be “subject to future orders and to fines and deductions,” and that it was based on a service of not less than six round trips per week. And on the same date, August 3, 1896, the Postmaster General issued an order for the payment of the company at the rate specified, reading in part, and so far as concerns the issues in this case, as follows:

“Pay to the parties named, quarterly, for carrying the mail between the points stated, from July 1, 1896, to June 30, 1900, unless otherwise ordered, at the rates per annum and per mile specified, for transportation, subject to future orders and to fines and deductions, and based on a service of not less than six round trips per week.”

The claimant company also transported the mails, .under similar contract relations, during the preceding four years— that is, from July 1, 1892, to June 30, 1896. . The contract relations between the claimant and the Government were not time contracts — that is, for any particular period of time, but as being terminable by either party at any time, upon reasonable notice.

II. For a number of years prior to the time involved in this suit, the claimant and other railroad companies transporting United States mails were to make exchange of mails without stopping their trains at stations where they preferred to do so rather than bring their trains to a stop. The practice followed in making such exchanges without stopping of trains was by the mail for delivery *from*the car being merely thrown off to the ground or station platform by hand, and the mail for delivery *to*the car being suspended from a crane erected alongside the railroad track at or near the station and being caught by an adjustable arm attached to the side of the car door. The crane used for this purpose has always been required by the department to be furnished by the railroad company, while the adjustable arm was furnished by the department up to January 4, *2701896, since which time it also has been required to be furnished by the railroads.

The method of delivery of mail from rapidly moving trains by merely throwing the mail bags from the cars often resulted in accidental injury, and sometimes in death, to-bystanders at stations where such delivery was made, on account of which the claimant company frequently paid-damages. Also, bags of mail so delivered from the cars frequently bounded, rolled, or were drawn under the wheels of the moving train and were ground up and partially -or wholly destroyed. In view of these facts it was desirable on the part of both the railroads and the Post Office Department that some way be devised by which such delivery could be more safely and satisfactorily effected.

With a view to securing a satisfactory device for this purpose the Postmaster General on February 28, 1895, issued an advertisement for proposals for improvements in mail catchers; and on September 14, 1895, he appointed a committee of seven of the officers of the Eailway Mail Service of the department who were especially familiar with this branch of the service to ascertain, by suitable tests, the merits of the different devices submitted in response to said advertisement, and if any were found which in the opinion of the committee were “ either necessary or desirable to supply a real want of the postal service,” or would contribute, with due economy, to its convenience and efficiency, to specify and recommend for adoption the one which in the committee’s judgment would be the most suitable and advantageous.

The committee proceeded to test a number of devices submitted to the department, and after subjecting them to reasonably exhaustive tests, with trains running at all rates of speed up to 60 miles per hour, and with varying weights of mail, ranging from light to heavy, recommended two of such devices unqualifiedly, and two others subject to the correction of certain defects in them.

III. About the middle of March, 1896, the claimant company received from the Post Office Department a circular letter, dated March 11, 1896, signed by the General Superintendent of the Eailway Mail Service, in which, after reciting *271the facts set forth in Finding II, relative to the then existing method of exchanging mails without stopping of trains and objections thereto, and the appointment of a committee to test and report upon devices for making such exchanges, stating that said committee recommended four devices (the Fleming patent being one of them), either of which, in its judgment, would be satisfactory to the Post Office Department.

By a circular letter from the General Superintendent of the Railway Mail Service, dated June 3, 1896, the claimant was notified that the defects in the Winsor and Ayars devices had been corrected and these devices again tested and found to meet the requirements of the department.

The claimant company not having installed one of the catching devices recommended, the Second Assistant Postmaster General, by circular letter of October 1, 1897, wrote the company referring to the original letter of March 11, 1896, requesting the adoption of one of the devices therein recommended and stating that by reason of questions that had arisen as to the validity of some of the patents on said devices the department had not felt justified in insisting upon the installation of any one of them, but that the time had then arrived when the department deemed it very important that either the Fleming or the Ayars device, both of which had, after additional tests, proven satisfactory to the department, should be adopted by the company with the least possible delay; that the department had endeavored to protect railway companies against excessive charges for such devices by requiring each of the companies manufacturing them to fix a reasonable maximum price beyond which they would not go in selling to railroad companies; and that the necessity of securing at once some better device for delivering mails from rapidly moving trains had so impressed itself upon the department that prompt action by the railroads to this end had become imperative.

The General Superintendent of Railway Mail Service informed claimant in writing, under date of December 24, 1897, that the use of the Hauss mail catcher and crane had proved destructive to the mail and directed claimant to discontinue its use. By arrangements made by the claimant and *272officials of the department claimant was permitted to use the Hauss crane, which it had theretofore purchased, with attachments of the Fleming Mail Catcher and Delivery-Company.

IV. In December, 1897, officials of the Post Office Department again called to the attention of claimant the circular letter of October 1, 1897. Under date of February 28, 1898, claimant addressed a letter to Hon. James E. White, General Superintendent Eailway Mail Service, Washington, D. C., in which claimant stated it found the Fleming device would be the most economical one for it to adopt, but even this would cost about $7,000. Claimant called attention to the financial depression then existing which had resulted in a falling off of its earnings and a consequent reduction of 10 per cent in the salaries of all its employees, and asked in view of the above that the department permit claimant to make the change gradually; that is, as the equipment then in use might require renewals. On about March 5,1898, claimant received a reply in writing to its above-mentioned request from the General Superintendent of Eailway Mail Service bearing date March 3, 1898, in which it was stated that it would be impossible to grant the extension of time which claimant had requested.

V. On March 11, 1898, the claimant company gave orders to its proper officials for the adoption of the Fleming catching and delivering attachments in conjunction with the Hauss crane, a number of which cranes the company then had in use on its road, and on March 28, 1898, the company directed its purchasing agent to purchase 75 sets of the Fleming attachments, an order for which was given the Fleming Company on March 31, 1898, and filled by it about June, 1898.

VI. Under date of August 15,1898, the claimant company wrote the department that it was about to equip its main line from Cincinnati to Nashville with Fleming attachments to the cranes and mail cars, in response to which the department, on August 19,1898, wrote the company that the Fleming device had been put in use over a portion of the Pennsylvania lines some time before and had been found to be in some respects unsatisfactory, but was then undergoing im*273provement; that the company’s attention was called to the matter so that it might be advised as to the situation and the latest improved device put on its line; and that the department would be glad to advise the company when the improved device was ready for use.

In response to the above letter the company, on August 21, 1898, wrote the department that it would be obliged for full information as to the unsatisfactory performance of the Fleming device, referred to the fact of the department’s previously limiting the company’s choice to the Ayars and Fleming devices, and stated that the company could not afford to equip, its line with a device that did. not work properly, and that it had assumed that all desired tests had been made, and that there was no question about the device working all right.

VII. On or about August 27, 1898, the department forwarded to the claimant company a letter received by the department from the Fleming company, stating that the claimant then had most of its outfit, that it knew no reason why the device should not make a perfect working system on the claimant’s road, as there were several southern roads where the device was working properly; that the only places where trouble had been experienced with it were where- the service was very heavy or very fast; that none of the southern roads had such service; and that the claimant- company had catchers with very late improvements and should have no trouble whatever.

At this time the claimant company had most, but not all, of the necessary equipment for the change to the device in question. The company proceeded to install the device on its line, and on July 7,1899, notified the department, through its railway mail superintendent at Cincinnati, that commencing on August 1,1899, the Fleming device would be put in operation on its line between Cincinnati and' Nashville, and stated that the matter had been much delayed by reason of the company’s inability to secure necessary catcher arms from the manufacturers of the device.

VIII. The said device was put into operation by the claimant company on its road between Cincinnati and Nashville on August 1,1899, and in a service of about four months *274was found to be very unsatisfactory in the way of failure to effect proper delivery of mails, with resulting injury and destruction thereof, danger of personal injury to those handling the device, and excessive injury and breakage of and necessary repairs to both the device and the Government’s mail equipment; and on December 4, 1899, the Post Office Department requested that its use be discontinued and the old catcher and crane reinstated, which was acquiesced in and done by the company, without protest, in the shortest practicable time thereafter.

The failure of said device to perform satisfactorily the Avork desired and expected of it was due to its inability to stand the strain of continued heavy use, such as was required of it on the claimant’s road, which inability, or defect, did not manifest itself and could not be discovered in the tests given, or which could well have been gNen the device by the department prior to its recommendation of it for use by the claimant and other mail-carrying railroad companies.

IX. The claimant company’s adoption and installation of the said Fleming device Avas in pursuance of the requests and direction of the Post Office Department, as shown by the foregoing findings. It does not appear that the company at any time protested either against adopting and installing said device or against removing and replacing the same with the old device previously in use.

The Post Office Department had, at the time in question, and has now, no part in the fixing or controlling of the time schedules of railway trains of the claimant and other railroad companies transporting the United States mails; and the matter of whether the exchange of mails at railway stations should be made by bringing such trains to a stop, or by the use of catching and delivering devices with the trains in motion, was and is considered and treated by the Post Office Department as a matter wholly within the discretion and control of the carrying companies, subject only to a right of the department to require the use of exchanging devices satisfactory to the department where exchanges are made without stopping of trains.

X. From the year 1893 up' to July 1, 1896, section 713 of the Postal Laws and Eegulations contained a provision reading as folloAvs:

*275“At all points where the department deems the exchange of mails necessary, the speed of trains must be slackened so as to permit the exchanges to be made with safety.”

On July 1,1896, the above provision of said rules and regulations was amended, by order No. 382 of the Postmaster General, to read as follows:

“At all points at which trains do not stop, where the department deems the exchange of mails necessary a device for the receipt and delivery of the mails satisfactory to the department must be erected; and pending the erection of such device the speed of trains must be slackened so as to permit the exchange to be made with safety.”

XI. The actual outlay and expense to which claimant was put in connection with the installation and use of the Fleming device is as follows:

61 Hauss iron cranes_ $763. 00

385 sets Fleming attachments_ 3,676.91

465 rings- 605. 00

62 catchers_ 441. 00

37 collars and arms_ 40. 00

82 weights_ 41.00

7 mail crane heads_ 10. 50

1 crane column_ 6. 50

12 collars_ 7. 86

6 top arms_ 6.00

6 chain guides- 3.75

Other parts--_ 37. 04

- $3, 638. 56

And—

Labor substituting Hauss cranes for old standard

wooden cranes_ 229. 54

Labor substituting Hauss arms for Fleming attachments _ 130.87

Cost of Hauss arms, 80 at $3.50_ 280. 00

Maintenance of cranes_ 850. 66

Repairs to catchers_ 264. 34

Repairs to rings and ropes- 17. 75

- 1,773.36

Making a total of_ 5,411. 72

Credit by Hauss fixtures continued in use:

61 Hauss cranes_ 763. 00

80 Hauss arms- 280. 00

- 1,043.00

Balance due_ 4, 368.72

*Mr. Barry Mohttn*for the claimant. McGowan, *Serven and Mohun*were.on the brief.

*Mr. Charles F. Kmeheloe*(with whom was *Mr. Assistant Attorney General John Q.*Thompson) for the defendants.

*276Atkinson, J.,

delivered the opinion of the court:

Tliis is a suit brought by the Louisville and Nashville Bail-road Company (a United States mail transportation railroad) for money expended in equipping mail cars with certain mail-exchanging devices for receiving and discharging mail pouches at mail stations on its main line without stopping its trains.

Claimant company, at the time of the institution of the devices above referred to and prior thereto, under a continuing contract with the Post Office Department, was engaged in transporting the mails of the United States over all of its lines. Said contract, as shown by Finding I, was terminable by either party at any time upon reasonable notice, and the service of the company was to be subject to the conditions prescribed by law and the regulations of the Post Office Department. Section 713- of- the Postal Laws and Begula-tions, prior to July 1,1896, required'trains carrying the mails of the United States to check their speed at mail stations so that mail pouches could be exchanged' with safety to mail officials and the public. On July 1, 1896, said section was amended so as to read as follows:

> “At all points at which trains *do not stop*where the department deems the exchange of mails necessary, a device for the receipt and delivery of the mails satisfactory to the department must be erected; and pending the erection of such device, the speed of trains must be Slackened so as .to permit the exchange to be made with safety.”

In addition to the above regulation, claimant company, in response t'o a “ distance circular ” issued by the Post Office Department on January 25, 1896, relative to the regular quadrennial readjustment of railway transportation rates, by its general manager, after filling the blanks in said circular, signed and returned the same to the Post Office Department. Said circular contained the following provision:

> “ In case the Post Office Department authorizes the transportation of mails over this line, or any part of it, the railroad- company agrees to accept and perform the service upon the conditions prescribed by law and the regulations of the department. The statement of distances herein are correct.”

*277Under the contract the service was to be subject to The postal laws and regulations, and if the department’s requirements were not within the terms of the-contract, claimant’s compliance therewith was voluntary, because the Post Office Department had no authority to compel claimant company to transport the mails upon terms to which it had not agreed. (Sec. 3999, Revised Statutes; *Eastern Railroad Co.*v. *United States,*20 C. Cls., 23; *Evansville & Indiana R. R. Co.*v. *United*States, 32 C. Cls., 555; *Penn.*v. Wheeling, 18 How., 441.)

It seems clear, from what we have stated above, that it was incumbent upon the claimant company, in order to comply with the postal regulations, to materially reduce the speed of its trains at mail stations, or to entirely stop them, -or provide some device, satisfactory to the Post Office Department, by which mail bags could be exchanged when trains were running at full speed. It chose the latter plan, and for a considerable period theretofore it had been using a-device by means of which mail was received and delivered at mail stations while trains were running at full speed. This device was not satisfactory to the department,-because it-endangered the lives not only of postal employees but of persons standing near the passing trains when mail pouches were being thus exchanged, and not infrequently destroyed mail matter by the car wheels passing over it. (Finding II.) The Post Office Department, with a desire to secure a more satisfactory device for this purpose, on February 28, 1895, issued-an advertisement for proposals for improvements in mail catchers, and shortly thereafter appointed a committee of seven-experienced Eailway Mail Service officials to ascertain-by suitable tests the merits of the different devices submitted in response to its advertisement. This committee -reported favorably upon four devices tested by them which, in their judgment, would work satisfactorily. Thereafter the superintendent of the Eailway Mail Service issued a circular letter to claimant company and other railroads engaged in the transportation of the mails of the United States announcing the findings of the committee and recommending the adoption of any one of these devices by the different railroad managements engaged in transporting the mails of the United States. It *278appears, however, that all of these devices proved to be more or less defective, but the Post Office Department was of the opinion that the Fleming patent was the nearest satisfactory, and upon the department’s opinion and recommendation claimant company, after considerable delay, installed it upon its lines. After giving this device a careful test it proved to be inadequate to handle satisfactorily the heavy mails on its main line, and it was abandoned. Thereupon claimant company instituted this suit against the United States to recover the sum of $4,368.72 alleged to have been expended by it in installing said Fleming mail-catching device on its main line.

It is contended by the claimant that there was an implied contract on the part of the Government, in case the device recommended by it proved unsatisfactory, to reimburse claimant for the cost of its installment. In other words, that the Government assumed the risk that the device would answer all the purposes for which it was intended; and from the facts as found that is the only question before the court. As we have already stated, it was optional with claimant to stop its trains at all stations where mails were to be received and delivered, so that the same could be changed safely, or to adopt, some device which would accomplish that purpose while the trains were in motion, and it adopted the latter method.

A contract implied in fact arises only where there is circumstantial evidence showing that the parties thereto intended to make a contract. That is to say, to create such a contract the facts must show an intention or meeting of the minds of the parties to the effect that it was agreed between them that the Government was to reimburse claimant for its outlay in installing the device on its railroad. *(Harley*v. *United States,*198 U. S., 229.) It is clearly shown in Finding IX that there was not only no coming together of the minds of the parties to the alleged contract that the defendants were to bear the expense of the device if it should prove a failure, but, on the contrary, both parties understood that any expense by the introduction of the device was to be borne by the claimant company. The mutual understanding of both parties to the effect that claimant was to bear such *279expense and any incidental loss which might accrue, must be given controlling weight in determining their rights and liabilities. Hence no implied contract arose.

It was the desire of the claimant to carry the mails without stopping its trains at all mail stations, and the Government was willing it should do so, if it would adopt some system by which this could be done with safety to the public as well as to the mails; and it was more to the advantage of the claimant than to the Government that this should be done, and the Government very properly required that any system adopted must meet with its approval. For this purpose it went to the trouble and expense of investigating the different devices for that purpose which had been invented, and recommended several which met its approval.

This method of changing mails was in a tentative state, and it was known by both parties that any device adopted would necessarily be an experiment. Therefore claimant, with the advice, and advice only, of the Post Office Department, made the experiment and must pay for the failure.

For the reasons given the petition must be dismissed, and judgment entered for the United States.

Howry, J., took no part in the decision of this case.