#### LOUISVILLE & NASHVILLE RAILROAD COMPANY v. THE UNITED STATES.1

[No. 33239.

Decided May 1, 1922.]

*On the Proofs.*

*I,and grant deductions; settlement; no protest.*— Where property has been transported over a land grant railroad on Government bills of lading and the railroad company has presented its bills to the Government for transportation, with land grant deductions thereon from the commercial rates and payment has been accepted on that basis by said company without protest or objection, the company, in the absence of fraud or mistake of fact, can not maintain an action to recover additional compensation for the same services.

*Same; contractor’s property; liability for transportation.*— Where property belonging to a contractor is delivered to the Government at the place of its use over a land grant railroad, there is no liability on the part of the Government to pay the railroad company for such transportation.

*Same; commercial rates; hoisting and switching charges.*— Where the tariff of a land grant railroad company fixes a commercial rate of $1 per ton with hoisting and switching free, the Government is entitled to hoisting and switching without charge after making land grant deductions from the commercial rates.

*The Reporter's*statement of the case:

*Mr. Benjamm Garter*for the plaintiff.

*Mr. Perry W. Howard,*with whom was *Mr. Assistant Attorney General Robert H.*Lovett, for the defendant.

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

I. The plaintiff is and was during the different transactions hereinafter set out in these findings a corporation duly incorporated under the laws of the State of Kentucky, owning and operating a system of railroads in the States of Kentucky, Indiana, Illinois, Virginia, Tennessee, Georgia, Alabama, Florida, Mississippi, and Louisiana. One of plaintiff’s lines traverses the State of Alabama from its northern boundary south through Decatur and Birmingham to Flomation, Ala., thence, still south, through western Florida to Pensacola, a port of export and coastwise traffic *269on the Gulf of Mexico, thence in an easterly direction to River Junction, Fla. This line was constructed from- Decatur, Ala., to River Junction, Fla., by the aid of public lands granted by the United States. (Acts of May 17, 1856, June 3, 1856, and March 3, 1857 (11 Stat. 15, 17, 200); April 10, 1869, and March 3, 1871 (16 Stat. 45, 580); March 3, 1875 (18 Stat. 509).) From Flomation to Mobile, Ala., also a port of export and coastwise traffic on the Gulf of Mexico, another line of plaintiff’s system runs in a southwesterly direction, and was built without Government aid.

II. After development of coal mining began in northern Alabama, in order to facilitate the exportation of coal from Mobile and Pensacola, the plaintiff, without assistance from the Government, constructed wharves with hoists thereon for loading coal on vessels and barges, and switches from its main lines to said wharves. The wharves and hoists at Pensacola were operated by plaintiff and at Mobile by the Mobile Coal Co.

III. During the years 1915, 1916, and 1917, when the coal in question was transported over plaintiff’s lines via Birmingham and Flomation to Mobile, Ala., and Pensacola, Fla., the following published tariff rates filed with the Interstate Commerce Commission were in force: Louisville & Nashville G. F. O. 1791; I. C. C. 12137, effective January 30,1912.

[In cents per ton of 2,000 pounds.] Mobile, Ala. Pensacola, Fla. Coal for bunkerage and purposes other than export. L. & N. R. R. From groups-110 110 115

The above tariff was modified by Supplement No. 42, nóte 4-B, effective February 7, 1915, the material parts of which read: “ Coal for bunker use and for coastwise and export movement at or via Mobile, Ala., and Pensacola, Fla.”

(c) On coal paying the Louisville & Nashville Railroad to Mobile, Ala., and Pensacola, Fla., a road haul revenue of *270$1 per ton of 2,000 pounds or more, the cost of transferring the coal from cars onto barges or into vessels through the hoist of the Mobile Coal Co. (Mobile, Ala.), and Louisville & Nashville ftailroad Co. (Pensacola, Fla.), will be assumed by the Louisville & Nashville Kailroad Co.

*(d)*On coal paying the Louisville & Nashville Kailroad to Mobile, Ala., and Pensacola, Fla., a road-haul revenue of less than $1 per ton of 2,000 pounds, the cost of transferring coal from cars onto barges or into vessels will be 10 cents per ton of 2,000 pounds, plus $2 per car switching, or spotting, charge in addition to the freight rate, subject, however, to a maximum total charge of $1 per ton of 2,000 pounds, including transportation and hoisting and switching (or spotting) service.

The coal hereinafter described as transported over plaintiff’s lines to Mobile and Pensacola came from mines near Birmingham, which were scheduled in plaintiff’s tariffs as in Groups 1 and 2, and if not for export of coastwise traffic was charged for at the rate of $1.10 per ton of 2,000 pounds.

IV. On March 15, 1915, the Gulf States Coal Co. entered into a contract with the United States, through Lieutenant Colonel Keller, of the United States Engineer Corps, to furnish and have delivered, when requested, 18,000 short tons of coal from the Dixiana mines onto United States barges, or in bunkers, in carload lots, from hoists at Mobile, Ala., at $1.38 per short ton, the United States to pay the freight thereon and the contractor to transfer the coal at its expense to the barges. The specifications provided for inspection of the coal either when it was loaded on the cars or when it was unloaded therefrom. A copy of the contract is made part of this finding by reference thereto.

Y. The coal under the above contract was shipped over plaintiff’s lines to Mobile on Government bills of lading, which- were accomplished, the coal inspected and accepted at that place, and none of it appears to have been rejected. Part of the coal was delivered for Government engineering work at or near Mobile, and part was switched to wharves of the Mobile Coal Co. and loaded from its hoists onto Government barges, which were towed by Government tugs to Fort Morgan, Ala., Pascagoula, Miss., and Gulfport, Miss., *271places on the Gulf coast west of Mobile, where it was to be used for Government engineering work near those places. The transportation of the coal to be used at Mobile was paid for by the Government at the basic rate of $1.10 per short ton, and that to be used near Fort Morgan, Pascagoula, and Gulfport at the basic rate of $1 per short ton, with land-grant deductions therefrom.

The plaintiff rendered its bills to the Government, for auditor’s settlement, on the approved form of voucher 'for transportation, land grant involved, upon which it stated the basic rate and the amount to be deducted on account of land grant and claimed the net amount remaining after the deduction of land grant. In no case did it claim payment upon other than a land-grant basis, but it included in its bills and claimed switching, or spotting, and hoisting-charges.

The land-grant deductions for coal to be used at Mobile amounted to $2,941.80, and for coal to be used at the other points to $2,177.83, or a total of $5,119.63, and the hoisting-charges $1,317.10, and the switching charges $550, or a total of $1,867.10.

The auditor disallowed the switching and hoisting charges, but otherwise allowed the claims as filed except that on two shipments on bills of lading numbered 24451 and 24452 the auditor determined the basic rate to be $1 per ton instead of $1.10 per ton, as claimed, and corrected the land grant accordingly.

VI. The plaintiff company protested the disallowance of the switching and hoisting charges in settlements made by the auditor, except as to settlements set out in finding XIII as to which no protests of any kind were made, and protested also the application of the $1 per ton basic rate instead of the $1.10 per ton rate on bills of lading 24451 and 24452, and as to the disallowances in the auditor’s settlement covering these two bills of lading the plaintiff applied to the Comptroller of the Treasury for a revision of the settlement.

The plaintiff claimed that it was entitled to the switching and hoisting charges because the road-haul revenue after the deduction of land grant was less than $1 per ton, and *272upon the other point, that the $1.10 basic rate was applicable to these shipments under the provision of the tariff.

The comptroller affirmed the action of the auditor, holding that under supplement to former tariff the $1 rate was the proper rate on shipments to the points involved and that plaintiffs were not entitled to switching and hoisting charges on the ground claimed because charges for Government transportation are based upon commercial rates, from which land-grant deductions follow by operation of law.

VII. On August 21, 1916, the Imperial Coal & Coke Co. entered into a contract with the United States through Major Schulz, of the United States Engineer Corps, by which it agreed to deliver on the railroad cars at its mines at Dixiana, Ala., approximately 12,000 tons of coal at $1.50 per ton of 2,000 pounds. The specifications provided for adding the land-grant freight rate from the mines to Mobile to the price bid for mine delivery for comparison of bids, and that the coal should be inspected when loaded on cars or unloaded therefrom, and the contract provided that the coal should be subject to rejection until final inspection and acceptance. This contract is made part of this finding by reference thereto.

VIII. The coal under the second contract was also shipped on Government bills of lading over plaintiff’s lines to Mobile, the bills of lading accomplished, and the coal inspected and accepted at that place by the proper Government officials, and none of it appears to have been rejected. Part of this coal was also delivered for use on Government engineering work at or near Mobile, and part was switched to the wharves and loaded on Government barges and towed by Government tugs to Fort Morgan, Ala., Pascagoula and Gulfport, Miss., for use on engineering work near those places. The freight on the coal for use at Mobile was paid for at the rate of $1.10 per short ton and that for use at the other places mentioned at $1 per short ton.

The plaintiff in stating its bills made land-grant deductions and claimed the net amount after making such deductions, as it had done in its claims for shipments made under the Gulf States Coal Co. contract, and also claimed switching and hoisting charges, which latter were disallowed by *273the auditor, but the bills were otherwise allowed and paid as rendered.

The percentage of laiid-grant deductions from the total gross commercial charges amounted to 38 per cent, and on a freight rate of $1 per ton the plaintiff received 62 cents net per ton, and on $1.10 per ton it received 68.2 cents net per ton under both contracts.

The land-grant deductions under this contract for coal to be used at Mobile amounted to $2,636.36, and for coal to be used at the other places to $2,929.66, or a total of $5,566.02, and the hoisting charges to $1,448 and the switching charges to $642, or a total of $2,090.

IX. The total land-grant deductions for coal to be used at Mobile under both contracts amounted to $5,578.16; the total land-grant deductions for coal to be used at Fort Morgan, Pascagoula, and Gulfport under both contracts amounted to $5,107.49; and the total hoisting and switching charges for coal shipped to Fort Morgan, Pascagoula, and Gulfport amounted to $2,95L10.

The difference between the payments of freight on coal shipped to Fort Morgan, Pascagoula, and Gulfport and that shipped to Mobile was 10 cents per ton, or a total of $510.75.

X. There was purchased on advertisements, specifications, bids, and acceptances in the Birmingham district 7,540 tons of coal of 2,240 pounds, as follows: November 2, 1914, 2,000 tons of Old Pratt coal, from the Tennessee Coal, Iron & Railroad Co., of Birmingham, at $1.80 per ton, to be shipped on Government bills of lading via routes to be shown thereon; on October 20, 1915, 5,000 long tons of Old Pratt coal from the same company, at $1.75 per ton, to be shipped on Government bills to 10 probable points, the first named being Pensacola, Fla.; on May 24, 1917, from Cary & Co., of Pensacola, 40 long tons of Old Belle Ellen coal, at $4.50 per ton, to be shipped on Government bills of lading to the engineer officer at Pensacola for testing; on September 10,1917, from Cary & Co., 500 tons of Old Belle Ellen coal, at $3.14 per ton, to be shipped on Government bills of lading to the engineer officer at Pensacola.

The form of advertisements and the proposals and acceptances are made a part of this finding by reference thereto.

*274XI. Part of the coal purchased as above, without a formal contract, was shipped to Pensacola on plaintiff’s lines during the years 1916 and 1917, on Government bills of lading, which were duly accomplished, and the coal inspected and accepted at Pensacola by the proper Government officials. The said coal was for use at or near Pensacola, and was paid for at the rate of $1.10 per ton. The land-grant deductions on said coal amounted to $1,773.23, the hoisting charge amounted to $350.30, and the switching charges to $164, or total switching and hoisting charges of $514.30. The percentage of land-grant deductions from total gross commercial charges amounted to 48 per cent and the net revenue to the plaintiff was 62 cents net per ton.

XII. On April 8, 1915, the assistant paymaster on the U. S. S. *Tonapah,*at .the naval station, Pensacola, sent an invitation to bid and a blank proposal to the Zimmern Coal Co., of Pensacola, to furnish 250 long tons of coal to be delivered alongside of said vessel at Pensacola on April 20, 1915, free of charge, subject to the usual inspection and test. The Zimmern Co.’s bid was $3.59 per long ton, or if Government bills of lading should be furnished, $2.36 per long ton, the coal to come from the Imperial Coal & Coke Co.’s mines at Dixiana, Ala. The bid of the Zimmern Coal Co. at $2.36 per long ton was accepted and Government bills of lading were furnished for the shipment of the coal involved.

The coal was transported on plaintiff’s lines and the land-grant deductions made were $153.30 (the amount claimed in the petition is $150.30) ; the hoisting charges were $29.79, and the switching charges $16, or a total of $45.79. The invitation to bid and the proposal as filled out are made part of this finding by reference thereto.

XIII. The plaintiff did not in any respect protest against settlements for transporting coal to Mobile under the contract with the Gulf States Coal Co. on bills of lading numbered 24471, 24472, 24474, 24476, 24477, 24478, 24480, 24484, 24483, 24481, 24487, 24488, 24485, 24491, 24494, and 26761, in which the land-grant deductions amounted to $2,921.80, the hoisting charges to $747.71, and the switching charges to $320; nor against settlement for transporting coal to Mobile under the contract with the Imperial Coal & Coke Co. on

*275Government bills of lading numbered 26752, 26754, 26758, and 26762, in which the land-grant deductions amounted to $290.72, the hoisting charges, $70.99, and switching charges, $34; nor against settlement for transporting coal to Pensacola on Government bills of lading numbered 29358 and 29384, in which land-grant deductions amounted to $223.80 and hoisting charges to $44.76 and switching charges to $20.

The total land-grant deductions, against which no protests were made, amounted to $3,435.78, and the total charges for hoisting and switching, against which no protects were made, amounted to $1,237.46, and the total land-grant deductions, hoisting and switching charges, against which no protests were made, amounted to $4,673.24.

In all cases other than those above referred to in which there were no protests, the plaintiff’s protests were limited to the disallowances of switching and hoisting charges and the adoption of the $1 basic rate instead of the claimed $1.10 rate as to the shipments covered by bills of lading numbered 24451 and 24452.

XIY. The regulations of the Treasury Department in force at the time the coal in question was hauled provided that Government bills of lading were to be issued for the transportation of Government property only. That prepayment of charges in no case was to be demanded by the carrier, nor collected from the consignee. That presentation to the officer indicated on the face of the bill of lading, when properly accomplished, and attached to the freight voucher prepared on the authorized Government form, payment was to be made to the last carrier, unless otherwise specifically stipulated. That when shipments were made under contract or special rates notation of such fact should appear on the face of the bill of lading. That shipments were required to be made at the restricted or limited valuation specified in the tariff or classification at or under which the lowest rate was available, unless otherwise indicated on the face of the bill of lading.

XY. There is no evidence in the record as to plaintiff’s knowledge of the terms of any or all of the contracts or orders here involved or proving or tending to prove that it was deceived, misled, or mistaken as to any material fact or *276that it did not act, in presenting its bills at land-grant rates, with full knowledge of all the facts.

1

 Appealed.

MEMORANDUM BX THE COURT.

All of the coal here involved was contracted for or ordered on the basis of mine delivery, except that bought under the contract with the Gulf States Coal Co., and the fact that inspection was provided for at point of delivery or some duty in relation thereto imposed upon the contractor does not require another conclusion. The Gulf States Coal Co. contract is to be construed as for delivery at destination with obligation to the contractor on the part of the United States to pay the freight.

The fact that in rendering all its bills the plaintiff made land-grant deductions and claimed only the net land-grant rate, arrived at by deducting land grant from commercial rates, and accepted payment on that basis without protest precludes the right to assert a further claim for the same service in the absence of a showing of fraud or mistake of fact, as to which the record is silent. The mere use of Government bills of lading can not avail plaintiff. *B. & O.*case, 62 C. Cls. 468; *Oregon-Wash,*case, 54 C. Cls. 181; affirmed 255 U. S. 339.

Upon the facts all shipments except those made under the Gulf States Coal Co. contract were subject to land-grant deduction. As to shipments under that contract, aside from the effect” of the presentment and settlement of bills on a land-grant basis, as stated above, if these shipments were not subject to land-grant deductions because not Government property, there is, as between the plaintiff and the United States, no liability on the latter to pay any freight at all.

On all of these shipments the road haul revenue at commercial rates was $1 per ton or more, the condition under which the shipper was entitled to switching and hoisting without charge. The fact that proper land-grant deductions reduced the actual cash receipts for said shipments to less than $1 per ton can not deprive the United States of the same right to switching and hoisting without charge as would accrue under the tariff to a private shipper paying *277full commercial rates. The amounts by which the cash receipts, by reason of land-grant deductions, were reduced below $1 per ton had been theretofore paid by grants of lands and the “ revenue ” to the plaintiff was the aggregate of the cash paid and the determined value, in relation to said shipments, of the land grant. Government rates over land-aided roads are always predicated on commercial rates, from which deductions follow by operation of law in return for benefits conferred, the conditions imposed by the land-grant acts and the acceptance of the grants thereunder partaking of the nature of a contract, and land-aided roads, having accepted the benefits conferred, may not by constructing or construction of tariffs deprive the United States of the benefits stipulated for as the consideration of the gratuity.

The application of the $1 per ton basic rate on shipments made on bills of lading 24451 and 24452, under the Gulf Coal Co. contract, was, so far as appears of record, correct.

The petition is dismissed.