#### THE CHICAGO AND ALTON R. R. CO. v. THE UNITED STATES.

[No. 30249.

Decided February 10, 1913.]

*On the Proofs.*

A railroad company agrees to transport the mail from Mexico, Mo., on the north side of the Missouri River, to Jefferson City, on the south side. The road does not cross the river and the company has to carry it over the Jefferson City Bridge at a cost greatly exceeding the allowance made to it under the agreement. On the termination of the agreement it refuses to continue the service beyond the limits of its own road, but, expecting some arrangement to be made, continues to carry the mails to Jefferson City.

I. The Postmaster General may contract over the whole or any part of a railroad’s line, and beyond the terminus of its line, for a compensation not exceeding that fixed by law; and where a railroad so contracts and performs, it can not repudiate its express contract as to a fraction of the service beyond the termination of its line.

II. Where the railroad on the termination of its contract notifies the Post Office Department that it will not continue the service beyond the termination of its own line, but continues to render it, expecting that a satisfactory arrangement will be made, and the department accepts the service as a public necessity, it should in conscience be paid for.

*150*The Reporters’*statement of the case:

The following are the facts as found by the court:

I. Claimant is a corporation organized under the laws of ■file State of Illinois. In the year 1906 it owned and operated and it has since owned and operated a system of railways in the States of Illinois and Missouri, which were formerly ©wned and operated by the Chicago & Alton Eailway Co. Said system included a branch line between Mexico and South Cedar City, both in the State of Missouri. South Cedar City is on the north side of the Missouri Eiver, opposite Jefferson City, also in Missouri. During four years, commencing July 1, 1899, said branch line between Mexico and Cedar City, six-tenths of a mile from South Cedar City, constituted a postal route, No. 145021, the United States mails being carried thereon by said Chicago & Alton Eailway Co. under an agreement entered into by the proper officers ©f that company and the authorized officers of the Post Office Department. Between Cedar City and Jefferson City all mails from or for said route, as well as all passengers from ®r for said line, were during said period transported and have ever since been transported by the Jefferson City Bridge & Transit Co., a corporation operating wagons and omnibuses on a bridge crossing said river. During said four-years period said Jefferson City Bridge & Transit Co. was paid by the United States for said transportation of the mails.

II. On November 11,1902, with a view to the fixing of pay for a new quadrennial period to commerce on July 1, 1903, the Postmaster General made an order by which said route would extend to Jefferson City instead of terminating at Cedar City. The president of said Chicago & Alton Eailway Co. thereupon, to wit, on January 15, 1903, addressed and mailed to the Second Assistant Postmaster General a letter, of which a copy follows:

“ Chicago, *January 15,1903.*

S£Hon. W. S. ShalleNbeRgee,

*“Second Assistant Postmaster*General,

“Washington, *D. O.*

“Dear Sir: Your favor of November 11, advising this company, the Chicago & Alton Eailway Co., that‘ from July *1511, 1903, route No. 145021 is started from Mexico, via intermediate offices, to Jefferson City, Mo.,’ is received.

“ Your favor also invited the attention of this company to sections 1191 and 1192 of the Postal Laws and Regulations of 1902, according to slip attached.

“ I beg leave to inform you that the terminus of the road of this company is at Cedar City, on the north shore of the Missouri River, opposite to Jefferson City, and that this company has no means of transporting mail from Cedar City to Jefferson City except by the employment of another agency, namely, the bridge company at that place.

“An investigation discloses that the bridge toll across the bridge at Jefferson City, Mo., for this service would be $450 a year, and the amount allowed by the Government for the whole route from Mexico to Jefferson City earns only $81.88 per annum.

“ I am satisfied that it can not he the purpose of the Government that this company should handle the mail between Mexico and Jefferson City for $81.88, when the additional service which is to be embraced in the route from Cedar City to Jefferson City would cost this company, for bridge toll alone, $450.

“ Yours, very truly,

“ S. M. FeltoN, *President.'1'1*

On February 25, 1903, the Second Assistant Postmaster General sent to the president of said Chicago & Alton Railway Co. a letter, as below:

“ FEBRUARY 25, 1903.

*“ Sir :*Referring to your letter of the 15th ultimo, relative to the statement of route 145021 to end at Jefferson City, Mo., I have to state that such action was taken in accordance with the usual practice of the office in such cases where it is ascertained that the railroad company in question sells tickets, checks baggage, and carries passengers to and from such terminal office.

“ The department is willing to give the matter further consideration, but must suggest in this connection that it is not entirely fair for your company to undertake to consider route 145021 alone when it is but a spur of your main line and used as a feeder thereto. In this connection it is deemed advisable to call your attention to the fact that we have eight routes stated in the name of your company, and that the total compensation of these routes for transportation and postal cars amounts to nearly $250,000 per annum. This rate will probably be increased under the coming weighing, and the suggestion is made that you should consider the system as a *152whole, rather than route 145021, in connection with the service to and from Jefferson City.

“Very respectfully,

“ W. S. SHALLENBERGER,

“ *Second Assistant Postmaster General.*

“Mr. S. M. Felton,

*“President Chicago c& Alton Railway Co.,*

*“Chicago, IUP*

Eeferring to said letter of February 25, said president wrote to the Second Assistant Postmaster General, as below:

“ Chicago, *March 6,1903.*

“ Mr. W. S. Shallenberger,

“ *Second Assistant Postmaster General,*

*“Washing ton, D. C.*

“ Mr Dear SiR: I find your letter of February 25 on my return from the South.

' “ I agree with you on the general proposition, but want to call your attention to the fact that the Government pays us for the mail on the Cedar City branch only $81.88 per annum ; and this indicates, of course, that we are only allowed for the transportation of mails locally between stations on that branch. If we were handling mails from Kansas City and Chicago to Jefferson City, I should say at once that we ought to undertake to transport the mails across the river. But when we get no mail from points on our main line to- Jefferson City, is it quite fair to ask us to spend $450 per annum for bridge toll alone when the mail would probably not amount to over half a dozen letters a day ?

“ I want to call your attention to this so that in giving the matter further consideration you can see whether it would not be practicable in the new weighing to give us, some of the through mail from points on our mainline to Jefferson City, so as to justify us in performing the service.

“ Will you not kindly let me hear from you further on this subject?

“ Yours, very truly,

“ S. M. Felton, *PresidentP*

On March 14,1903, the Second Assistant Postmaster General again wrote to said president, as below:

“ March 14, 1903.

“■Sir: Your letter of 6th instant, relative to statement of route 145021 to end at Jefferson City, instead of Cedar City, received.

*153“ In reply you are informed that your statement that your company only receives $81.88 per annum for the mail on the Cedar City branch is not understood by this office. Our records show that your company receives $8,615.41 per annum for service on this route, being $71.82 per mile for 50.34 miles. The average daily weight carried on this route during the last quadrennial weighing was 697 pounds, and the rate allowed is the maximum which may be allowed for that weight. It is the desire and intention of the department to have mails from all points which can be delivered at Jefferson City to best advantage by trains of your route 145021 dispatched by those trains. It is thought quite likely that the weight of mail handled over this route during the present weighing will be greater than that on which the compensation of your company was based.

“ Yery respectfully,

“ W. S. ShalleNbeRGER,

“ *Second Assistant Postmaster General.*

“ Mr. S. M. FeltoN,

“ *President Chicago & Alton Bailway Co.,*

“ *Chicago, IUP*

On March 19, 1903, said president again wrote to the Second Assistant Postmaster General, as below:

“ Chicago, *March 19,1903.*

“ Mr. W. S. ShableNberger,

“ *Second Assistant Postmaster General,*

“ *Washington, D. C.*

“My Dear Sir: I have your letter of March 14, and it seems that my information was wrong in regard to the $81.88 per annum, which represents the payment for the extension of the route from Cedar City to Jefferson City, against which we have to pay a bridge toll of $450 per annum.

“ I shall adopt your suggestion, and agree to establish the route, trusting that you will see that we receive all the mails that can be handled over that route without detriment to the interest of the department.

“ Yours, very truly, “ S. M. FeltoN,

“ President.”

After said correspondence said president forwarded to the Second Asistant Postmaster General an agreement, signed by himself, that said company would “ accept and perform the service upon the conditions prescribed by law and the regulations of the department,” which agreement was printed into a form, furnished by the Post Office Department, on *154which said president also stated the distances between the stations on said line from which the compensation for said services was to be computed. Under said agreement said Chicago & Alton Railway Co. and claimant, as its successor in title, performed said service during the four years commencing July 1, 1903; and during said period they, under contract with said Jefferson City Bridge & Transit Co., paid it for the transportation of the mails between Cedar City and Jefferson City.

III. The amount so paid to said transfer company for said four years was one thousand and six hundred dollars ($1,600). The payments made to said Chicago & Alton Railway Co. and to claimant by the Post Office Department for said service between Cedar City and Jefferson City were at the rate fixed by law for transportation of mails by railroads, and the aggregate thereof was, for one year, ninety-eight dollars and twelve cents ($98.12), for said four years three hundred ninety-two dollars and forty-eight cents ($392.48).

IV. Between 1899 and 1907 said Chicago & Alton Railway Co. and claimant, successively, maintained and claimant has since maintained an office in Jefferson City, but merely for the purpose of selling passenger tickets, quoting rates for transportation of passengers and freight, and soliciting business. Neither said Chicago & Alton Railway Co. nor claimant has ever carried or offered to carry passengers or freight between Jefferson City and Cedar City or South Cedar City. Baggage and freights for and from said line were and are carried between Jefferson City and Cedar City or South Cedar City by the shippers themselves or their agents, being received from and delivered to the railroad at Cedar City or South Cedar City. The passenger tickets of the railroad read and still read from and to Jefferson City, but with each ticket sold at said office in said city a separate ticket was there furnished for the transportation to Cedar City, and, when taking up the tickets for Jefferson City, the conductors on the trains in all cases gave the passengers separate tickets for the transportation beyond Cedar City. Said Chicago & Alton Railway Co. and claimant have had no interest what*155ever in any of said transportation between Jefferson City and Cedar City or Sontb Cedar City. Said tickets for said transfer service were printed by said Jefferson City Bridge & Transit Co. and furnished by it to the agents of the railroad, and they were collected from the passengers during such service by the agents of said company and thereafter were redeemed by the railroad agents at the full rates fixed by said company.

V. It appears that there never has been any regulation of the Post Office Department relative to the carrying of mail from and to railroads at their terminal stations except in paragraph 1 of section 1191 of the Postal Laws and Eegulations (published in 1902), which provision is in the words below:

“ Every railroad company is required to take the mails from and deliver them into all terminal post offices, whatever may be the distance between the station and post office, except in cities where other provision for such service is made by the Post Office Department.”

YI. In February, 1907, the Second Assistant Postmaster General mailed to claimant’s president a form for an agreement by which to provide for the mail service on said route for the next quadrennial term, commencing July 1, 1907, in which form the termini of the route were again stated as Mexico and Jefferson City. Claimant’s general passenger agent thereupon, to wit, on May 9, 1907, wrote and mailed to the Second Assistant Postmaster General a letter explaining that claimant’s railroad terminated at South Cedar City and requesting that a new form be prepared in which that point should be given as the terminus of the route, and with that letter he returned the form. Some further correspondence occurred between said general passenger agent and the Second Assistant Postmaster General and between officials of the Post Office Department, but no corrected form was submitted to claimant before the end of the fiscal year then current. On June 5, 1907, said general passenger agent wrote and mailed a letter to the Second Assistant Postmaster General in which he gave some additional explanation. Expecting a new arrangement, claimant continued to carry the mails throughout, to and from Jefferson City, until Octo*156ber 1, 1907. On July 13, 1907, said general passenger agent wrote and mailed to the Second Assistant Postmaster General a letter in which he declared the purpose of claimant to render its bill to the Post Office Department for $100, the amount due to be paid, under said former arrangement, to said Jefferson City Bridge & Transit Co. for the months of July, August, and September, 1907, and requested that a new arrangement be made. The Second Assistant Postmaster, in reply to said letter, wrote to said general passenger agent, on July 20,1907, stating his conclusion that Jefferson City was the proper terminus of the route, returning the form previously prepared, and requesting that the same be properly filled and executed on claimant’s part. After some additional correspondence, in which no adjustment was promised by the postal authorities, said general passenger agent, on September 7, 1907, wrote a letter to the Second Assistant Postmaster General saying that claimant would on October 1 following cease carrying the mails between South Cedar City and Jefferson City, suggesting that the department make some new arrangement for said supplemental service, and inclosing an application for reimbursement of the sums which claimant and its said predecessor in title had expended for such service. An order was thereupon issued by the Postmaster General making South Cedar City ■the terminus of the route, and the Second Assistant Postmaster General, with a letter of date September 6,1907, sent to said general passenger agent a new form agreeing with said order. In said new form the distances wei’e inserted, and claimant’s president signed the agreement to perform the service until June 30, 1911. Said general passenger agent has since renewed his application to the Post Office Department, both as to the quadrennial period of 1903-1907 and as to the months of July, August, and September, 1907, for reimbursement of the cost of said service between Cedar City, or South Cedar City, and Jefferson City, but the Second Assistant Postmaster General has declined to reimburse any part of said expense.

VII. For said service beyond South Cedar City rendered in July, August, and September, 1907, claimant, before its said applications for reimbursement had been made to the *157Second Assistant Postmaster General, paid to said Jefferson City Bridge & Transit Co. $100. The amount received by claimant from the Post Office Department for said service, at the rate fixed by law for transportation by railroad, was $24.53.

*Mr. Benjamin Carter*for the claimant; *Mr. F. O. Pope*was on the brief.

*Mr. 8. 8. Ashbaugh*(with whom was *Mr. Assistant Attorney General John Q. Thompson)*for the defendants.

AtKINSON, J.,

delivered the opinion of the court:

The Post Office Department makes the following concise statement of the important facts in this case:

> “ During the quadrennial term ending June 80, 1903, the service on route 145021 was stated in the name of the Chicago & Alton Eailway Company and was for the carriage of mails between Mexico and Cedar City, Mo. From July 1, 1903, to June 30, 1907, the service was continued in the name of that company, but was between Mexico and Jefferson City. From July 1, 1901, to September 30,1907, the service was in the name of the Chicago & Alton Eailroad Company, and was between Mexico and Jefferson City. Effective October 1, 1907, the route was curtailed to end at South Cedar City station. The claimant contends that during the period from July 1, 1903, to September 30, 1907, the route should have been stated to end at the terminus of its railway, Cedar City or South Cedar City station; that the statement of the service to Jefferson City unlawfully imposed upon it the expense of transporting the mails between the terminus of its railway and Jefferson City, for which it claims $1,288.80 from the United States.”

The Chicago & Alton *Railway*Co., to which the first contract was awarded, as above stated, was on March 14, 1906, merged into the Chicago *&*Alton *Railroad*Co., the plaintiff in this suit, by proceedings had in accordance with the laws of the State of Illinois.

Mexico is a town on the line of the Chicago & Alton Eailroad, 501, miles from South Cedar City, a station on said railroad immediately opposite Jefferson City, Mo., which is situated on the south side of the Missouri Eiver, the two towns being connected by the Jefferson Bridge & Transit *158Co.’s bridge, the distance from the railroad station to the J efferson City post office being about TJ miles.

The first contract was for the carrying of the mails of the United States between Mexico and Cedar City, and the Government transported the same across the bridge to the Jefferson City post office; but for the succeeding quadren-’ nial (1903 to 1907) Jefferson City was made the terminal point by the Post Office Department, and the plaintiff company was accordingly required to deliver the mail at the post office in that city, the department allowing a pro rata rate of transportation for the increased distance of the route of T(~ miles. After some correspondence between the railroad company and the Government regarding the expense of transferring the mails across the river, the plaintiff company finally agreed'to perform the service on the mail route as restated by the Post Office Department and received the compensation therefor without objection or protest. However, a short time before the expiration of the 1903-1907 contract the plaintiff company reported to the Post Office Department that inasmuch as its railroad terminal was South Cedar City station and not Jefferson City the mail route should be curtailed to end at said station. The Government insisted that as the plaintiff company maintained passenger and ticket offices in Jefferson City, that city should be regarded the terminus of the mail route. Plaintiff thereupon, on September 7, 1907, notified the department that on October 1, 1907, it would discontinue carrying the mails between its South Cedar City station and the post office at Jefferson City. The Postmaster General accordingly issued an order making South Cedar City station, where there was no post office, the end of the postal route, and thereafter provided for conveying the mails across the Missouri Eiver to the J efferson City post office.

It appears that the amount paid by the plaintiff company under a contract with the Jefferson City Bridge & Transit Co. for the transportation of the mails between South Cedar City and the Jefferson City post office was $400 per year, and that it in return was only paid by the Government for said service the rate fixed by law for the transportation *159of mails by railroads, viz, $98.12 per annum for that particular distance, which was about one and one-third miles.

All contracts for the carrying of the mails of the United States by railroad companies require each company to perform the service .at the rates fixed by law and upon the conditions prescribed by law and the regulations of the Post Office Department. Section 4002 of the Eevised Statutes, and its amendments, provide the maximum rates that may be paid for such service, and each carrier is governed by the postal laws and regulations and the usual customs of the Post Office Department.

With regard to the transfer of mails between terminal post offices and the respective railroad stations, paragraph 1 of section 1191, Postal Laws and Eegulations, edition of 1902, provides as follows:

> “Every railroad, company is required to take the mails from and deliver them into all terminal post offices, whatever may be the distance between the station and post office, except in cities where other provision for such service is made by the Post Office Department. In ,all cases where the department has not made other provision, the distance between terminal .post office and nearest station is computed in and paid for as part of the route.”

If there be no post office near either station, such point is designated as “ no office.”

The contention of the defendants is that it is competent for the Postmaster General to contract with a railroad company to carry mails over the whole or any part of its line of railway, or beyond the terminus of such line if the necessities require, at not exceeding the rates of pay fixed by law; that the plaintiff company expressly agreed with the Postmaster General to carry the mails between the post office' at Mexico, Mo., and the post office at Jefferson City, Mo., in accordance with the law and regulations of the department, and at the rate of pay based on the weights of mails carried, as embodied in the orders of the Postmaster General; that the plaintiff company entered into -this agreement with full knowledge of its liability for the transfer of mails between its station at South Cedar City and the post office at Jefferson City; that it began the performance of this transfer service July 1, 1903, and continued such performance to September *160BO, 1907; that the company terminated its agreement with the department to carry mails to Jefferson City on October 1, 1907; that the company has received compensation for the transfer service between South Cedar City station and the post office at Jefferson City in accordance with the terms of its agreement with the Postmaster General, and that it can not now be heard to repudiate its express contract regarding this service and claim other or different compensation therefor.

We agree with this contention as to the amount claimed for the period from July 1,1908, to June 30, 1907, for the reason that it was covered by an express contract between the Government and the plaintiff company that required it to deliver the mails at the post office in Jefferson City, which service was rendered by it. But it appears that there was no contract requiring such service by plaintiff from July 1 to October 1, 1907.

The findings show that in February, 1907, the Post Office Department mailed to claimant an agreement, reentering said route for the quadrennial period of July 1, 1907, to June 30, 1911, which continued the terminal of the route at Jefferson City. This contract the plaintiff company refused to sign, and so informed the Post Office Department on May 9, 1907, and requested that South Cedar City, the terminus of its railroad, should be designated as the terminal of the mail route instead of Jefferson City. Not hearing from the postal department, plaintiff again, on June 5, 1907, wrote the Second Assistant Postmaster General a letter in which it gave some additional information, and no reply was received to either of said letters. Plaintiff, expecting a new and satisfactory arrangement to be made, continued to carry the mails to Jefferson City until October 1, 1907; but, in' the meantime, on July 13, 1907, it again wrote the Post Office Department, stating that it would not convey the mails from its station at South Cedar City across the Missouri Eiver to Jefferson City, except upon condition that it be paid $100 per quarter therefor, that being the amount it was required to pay the bridge company for such service. To this letter the Second Assistant Postmaster General replied stating that Jefferson *161City was the proper terminus of the route and declined to pay the amount demanded. Plaintiff thereupon, on September 7,1907, wrote the postal department stating that it would on October 1 following cease carrying the mails from its depot at South Cedar City across the Missouri Eiver to Jefferson City. In reply to this communication the Second Assistant Postmaster General issued an order making South Cedar City the terminus of the mail route, and at the same time forwarded to plaintiff a new form of contract, agreeing with said order.

It is therefore apparent that there was no contract, either express or implied, for carrying the mails on said route from July 1 to October 1, 1907, and that plaintiff company rendered the service under compulsion as a public necessity, and it should in all good conscience be paid therefor.

From the facts set out in the findings and considering the postal laws and regulations involved in the case, we decide that the claim for additional compensation for the quadrennial period from July 1, 1903, to July 1, 1907, which was covered by an express contract, can not be allowed; but the claim of $100 for the period from July 1 to October 1, 1907, for which time no contract existed, should be paid, less the sum of $24.53 already paid, which would be $75.47, and judgment against the United States is accordingly rendered for said amount.