#### ILLINOIS CENTRAL RAILROAD COMPANY v. THE UNITED STATES.

[No. B-116.

Decided November 5, 1923.]

*On the*Proofs.

*Railroad rates; combination of party fares.*— The combination on Vicksburg of a party fare from Jackson to Vicksburg with a party fare from Vicksburg to Shreveport and another combination on Shreveport of a party fare from Vicksburg to Shreveport with a party fare from Shreveport to San Antonio, made by the auditor for the War Department in disallowing certain payments made to plaintiff by the disbursing quartermaster for the transportation by it and its connecting carriers of officers and men of the Army, were triple combinations of party fares with party fares and as such were unauthorized by the arrangement between the railroads transporting such troops and the Quartermaster General.

*594
      *Settlement; acquiescence.*— Where payments have been made by disbursing- officers to railroads in accordance with their bills for transportation of troops, and such payments are disallowed by the auditor four years afterwards. *Query:*Should not the rule of acquiescence applicable to claimants apply also to the Government?

*The Reporter's*statment of the case:

*Mr. Lawrence H. Cake*for the plaintiff. *Britton da Gray*were on the briefs.

*Mr. Lisle A.*Smith, 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, a corporation, owns and operates a system of railroads in and through the States of Illinois, Indiana, Iowa, Minnesota, Wisconsin, Nebraska, South Dakota, Kentucky, Tennessee, Louisiana, Alabama, and Mississippi. The plaintiff is a common carrier for hire of freight and passengers, its tariff charges for such services being duly published and filed with the Interstate Commerce Commission in accordance with law.

II. Prior to the dates of the performance of the transportation hereinafter referred to, the plaintiff with other railroad carriers of the United States entered into certain agreements with the United States Government on the subject of fares and allowances for the transportation of military passenger traffic, entitled “ Devised western military arrangement,” dated April 1, 1916, and *“*Interritorial military agreement,” dated March 1,1916. The said agreements were signed on behalf of the carriers, including the plaintiff, by their duly authorized agents and on behalf of the United States by authorized officers of the United States Army, Navy, and Marine Corps.

III. The said revised western military arrangement, by its terms, was effective beginning July 1,1916, and provided in substance that for the transportation of officers and enlisted men the Government would be charged lawful commercial fares as on file with the Interstate Commerce Com-missicgi, less lawful land-grant deductions, less 5 per cent *595additional. It contained, among others, the following provisions relative to the construction of net fares and the use-of party fares:

“ 9. Party fares (where authorized) apply for parties' traveling together on one party ticket.

“(a) Party fares may be used as factors in constructing through net fares to and from central, trunk line, southeastern, and New England territories, in the understanding that the basing points shall be Chicago, St. Louis, Memphis, Vicksburg, and New Orleans only. Neither two or more party fares, nor a party fare and an individual fare, east or west of the gateways named, may be combined in establishing a basing fare to or from the basing point. Party fares used to and from basing points named must be authorized as one- through party fare to or from such basing points, as the case may be. A party fare or an individual fare, published as one through fare to or from the basing points named, may, however, be combined with authorized individual fares east or west of such points in making through net fares between the eastern and western territories described except that where through fares of like class are published they shall be used in all cases in establishing through net fares. All fares used in establishing net fares must be lawfully on file with the Interstate Commerce Commission.

“(5) In construction of net military fares having origin- and destination within the territory west of and including Chicago, St. Louis, Memphis, Vicksburg, and New Orleans, party fares to or from St. Louis and Kansas City only may be combined with individual fares to and from those gateways only. Two or more party fares, nor a party fare and an individual fare, on either side of St. Louis and Kansas City, may not be combined in establishing the basing fare to or from St. Louis or Kansas City.

“(c) Net fares established on combinations made under sections *(a)*and (5) apply via usual one-way ticketing routes carrying short-line fares or via routes specifically equalizing net fares so made, but shall be restricted to usually traveled routes for military traffic from starting point to destination.

*"(d)*Where party fares are used in the territories and upon the bases outlined in sections *(a)*and (b) herein, the same shall be net cashed in the usual way via rate-making gateway only, but where such fares are used for any part of the distance in the territory west of Chicago, St, Louis, Memphis, Vicksburg, and New Orleans, under sections *(a)*
      *596and (6) herein, the five per cent allowance to the Government shall not apply to any part of the through fare or proportion, either party or. individual fare factor, so far as western carriers are concerned.

“(e) The intent of this agreement is that where through fares are published no combinations of fares whatsoever are to be made, except as specified in sections *(a)*and *(b)*herein. # * * * *

“(17) The concessions in fares afforded by this agreement (supplements thereto or reissues thereof), as a whole, are made a condition precedent to:

“(a) The observance of the fares authorized herein, regardless of possible lower combinations, until such fares automatically change with the commercial fares upon which they are based, except as specifically authorized herein;

“(5) The nonuse of two or more Government transportation requests for the purpose of reducing the fares authorized herein,*

“(c) The nonuse of mixed fares (like a combination of party fares and individual fares) in the construction of through net fares, except as specifically authorized herein.”

IV. The said interterritorial military agreement of March 1, 1916, by its terms became effective July 1, 1916, and among other things, provided as follows:

“ 1. Party fares may be used as factors in constructing through net fares to and from central, trunk lines, southeastern, and New England territories, in the understanding that the basing points shall be Chicago, St. Louis, Memphis, Vicksburg, and New Orleans only. Neither two or more party fares, nor a party fare and an individual fare, east or west of the gateways named, may be combined in establishing a basing fare to or from the basing point. Party fares used to and from basing points named must be authorized as one through party fare to or from such basing points, as the case may be. A party fare or an individual fare, published as one through fare to or from the basing points named, may, however, be combined with authorized individual fares east or west of such points in making through net fares between the eastern and western territories described except that where through fares of like class are published, they shall be used in all cases in establishing through net fares. All fares used in establishing net fares must be lawfully on file with Interstate Commerce Commission.”

*597V. The railroads of this country are divided into seven passenger territorial groups, in each of which there- is a passenger association. These associations are: New England, Trunk Line, Central, Southeastern, Southwestern, Western, and Transcontinental, each of which function on all commercial and military matters within its particular territory. The chairman of the said various passenger associations constitute the committee which handles or functions on all inter-territorial business; that is, business moving from one territorial group into another, of which Mr. E. L. Bevington was chairman. The movement in question was form Jackson, Miss., located in southeastern territory, to San Antonio, Tex., in the southwestern territory.

VI. Under date of April 7, 1917, E. L. Bevington, chairman of the railroad military committee, wrote the Quartermaster General of the Army as follows:

“ Confirming my telegram of this date, as follows: “

“ Yours fifth. Interested carriers have concurred proposition permit Government combine party fares over Shreveport, Louisiana, in establishing net fares between points in southeastern territory east of the Mississippi and south of the Ohio and Potomac Eivers and points in Texas to and from which party fares are authorized to and from Shreveport. This m accordance with proposition advanced you January thirteenth. Concession is made in understanding all limitations and restrictions applicable to the combinations over Vicksburg, New Orleans, and other specified gateways under western and interterritorial military arrangements shall apply and further that this concession on part of carriers shall not establish a precedent. This arrangement to take effect July first, nineteen sixteen, within territory defined and to continue during the period that such combinations are available under tariffs duly filed with Interstate Commerce Commission. Writing to-day fully specifying conditions this concession. Assume under circumstances no-ruling comptroller this connection necessary. Acknowledge..

“You are informed that this question was considered at conference of directly interested lines held in Houston,, Texas, March 27th last, where the recommendation as quoted below was adopted, which recommendation has since been confirmed by all southwestern carriers interested: “ ‘

“ ‘ Eecommended, that with the concurrence of other southwestern carriers interested, it is understood that the Govern*598ment may combine party fares over Shreveport, La., in establishing net fares between points in southeastern territory east of the Mississippi and south of the Ohio and Potomac Rivers and points in Texas to and from which party fares are authorized to and from Shreveport. This concession not to be used as a precedent. In all other respects the combinations of party fares to be restricted to the gateways specifically authorized in the military arrangement — that is, Chicago, St. Louis, Memphis, Vicksburg, and New Orleans, on military traffic moving to and from eastern and southeastern territories and St. Louis and Kansas City on military traffic moving within territory west of and including Chicago, St. Louis, Memphis, Vicksburg, and New Orleans.

“ ‘ The combinations over Shreveport as herein authorized may be used beginning July 1, 1916, and may continue during the period that such combinations are available under tariffs duly filed with the Interstate Commerce Commission.’

“ As stated in foregoing, this concession under which the Government is permitted to combine party fares over Shreveport, La., on business originating in territory east of the Mississippi and south of the Ohio and Potomac Rivers and destined to Texas points, and vice versa, is not to establish a precedent. In other words, conditions of the western and interferir itorial military arrangements as to the combinations of party fares are to be confined to Chicago, St. Louis, Memphis, Vicksburg, and New Orleans on traffic from eastern and southeastern territory to territory west of those gateways and vice versa, and within western territory the only combinations of party fares permissible are those over St. Louis and Kansas City, except as stated in the above recommendation with reference to Shreveport. Triple combinations either of party fares with party fares or party fares with individual fares not permissible.

“ Combinations may be made over Shreveport beginning July 1, 1916, from the territory east of the Mississippi and south of the Ohio and Potomac Rivers to points in Texas and vice versa to and from which party fares are authorized to and from Shreveport and to continue during the period that such combinations are available under tariffs duly filed with the Interstate Commerce Commission.

“ It is assumed that this will obviate the necessity of any decision of the Comptroller of the Treasury with reference' to combinations over Vicksburg and Shreveport or over other points not now specifically named in the military arrange.ments and herein.

“ Please acknowledge receipt and advise if satisfactory.

“ Respectfully,

“E. L. BevinutoN, *0 hair man."*

*599VII. In October, 1916, acting upon United States Government transportation requests numbered 56856, 56857, and 56858, dated October 17, 1916, the plaintiff, in cooperation ■with other carriers, transported from Jackson, Miss., to San Antonio, Tes., 1,222 officers and men of the First Mississippi Infantry. For the said transportation the plaintiff, as initial carrier, submitted to Lieut., Col. C. C. Clark, quartermaster disbursing officer, its bill in the sum of $18,158-.92. The said hill was based upon a net fare of $14.86 per capita, derived from a mixed fare of $18.56 constructed by taking $0.90 party fare to Vicksburg, Miss, (southeastern party tariff K2,1. C. C. 2600), plus $17.66 individual fare thence to destination (Jos. Eichardson, I. C. C. No. F-2593), less land-grant deduction of $2.97, less 5 per cent additional west of Vicksburg, $0.73. The plaintiff’s said bill was paid by the disbursing ■officer in the full amount stated.

VIII. Subsequently, in February, 1921, said payment was disallowed in part by the Auditor for the War Department in auditing the accounts of the disbursing officer and the amount of the disallowance, $4,460.30, deducted from current balances due the plaintiff for other and different transportation services subsequently rendered. The overpayment was determined and the disallowance made by the Auditor for the War Department by the application to the transportation in question of the following formula:



which resulted in a net party fare of $11.21 per capita from Jackson, Miss., to San Antonio, Tex.

IX.The fare used by the plaintiff was constructed over the Alabama & Vicksburg Eailroad to Vicksburg, Miss., the

*600Vicksburg, Shreveport & Pacific Railroad to Shreveport, and the Missouri, Kansas & Texas Railroad to San Antonio,, Tex. The Alabama *So*Vicksburg Railroad is a member of the Southeastern Passenger Association, and the Vicksburg, Shreveport & Pacific Railroad and Missouri, Kansas *So*Texas Railroad are members of the Southwestern Passenger Association.

The interritorial'military arrangement, effective July 1, 1916, was in force at the time this movement took place and applies to all movements from one territorial group into' another territorial group.

X. The Government constructed its fare through the authorized gateways of Vicksburg and Shreveport, combining-a party fare from Jackson, Miss., to the gateway of Vicksburg, Miss., with a party fare from Vicksburg to Shreveport and a party fare from Vicksburg to the gateway of Shreveport, with a party fare from Shreveport to San Antonio, using a single combination in each instance, or one-party fare on either side of each gateway.

The gross fare used by the Government in establishing the-net fare of $11.21 paid plaintiff was a fare which the general public would be entitled to use.

XI. Stated in summary, the transaction was as follows:

Transportation of 1,222 men, Jackson, Miss., to San Antonio, Tex.



XII.September 22, 1921, the plaintiff applied to the-Comptroller General of the United States for a revision of the action of the Auditor for the War Department. December 10, 1921, the Comptroller General denied the appeal and. sustained the action of the auditor.

DowNey, *Judge,*

delivered the opinion of the court:

The question herein is solely as to the applicable rate for the transportation of a large number of men from Jacksom *601Miss., to San Antonio, Tex., and the essential difference between the parties involves the legality of the Government’s action in applying a rate constructed upon a combination of party fares. The movement originated at Jackson and the destination was San Antonio, and both parties construct their asserted rates by way of Vicksburg, Miss., and Shreveport, La.

There were party rates between these several points but no through party rate and no party rate through from Vicksburg to San Antonio. Eliminating for the moment the situation presented by the action of the railroad military committee as reported by Mr. Bevington, its chairman, and set out in Finding VI, we have the existent conditions and the basis on which the plaintiff billed for the service, the billing antedating the Bevington letter referred to. Vicksburg was then a gateway or basing point and plaintiff constructed its rate by combining an available party fare from Jackson to Vicksburg with the individual fare from Vicksburg to point of destination. Under the tariffs and particularly the military agreements then in force (see findings) this was the only authorized combination since there could be no combination of party fares west of Vicksburg, and we do not understand that there is any dispute in this respect. The plaintiff had been paid by a disbursing ofiicer on this basis and there seems to have been no contrary action until long after.

By the action of the military committee, reported in the Bevington letter referred to, combination of party fares was permitted over Shreveport, with conditions stated, thus in effect erecting a second basing point or gateway within the lines here involved. The settlement as made by the disbursing officer was undisturbed until a considerable time thereafter, approximately four years, when the auditor reopened this settlement, disallowed $4,460.30, and deducted it from amounts due the plaintiff. The disallowance was predicated on the conclusion that an overpayment had been made by reason of the application of an erroneous rate, and held the true rate to be derived from a combination of party fares, Jackson to Vicksburg, Vicksburg to Shreveport, and Shreveport to San Antonio.

*602The action of the railroad military committee relied upon as authority for this combination by authorizing combinations on Shreveport prohibited triple combinations either of party fares with party fares or party fares with individual fares. Plaintiff asserts that the combination used by the Government was a triple combination, in violation of that provision. The defendant disputes that it was such a combination and, as we understand it, seeks to avoid that contention by asserting that it used an authorized combination on Vicksburg of a party fare from Jackson to Vicksburg with a party fare from Vicksburg to Shreveport and another combination on Shreveport of a party fare from Vicksburg to Shreveport with a party fare from Shreveport to San Antonio.

if the defendant thus escaped triple combination, it must have substituted therefor a double combination or a combination of combinations. To do this it theoretically used a party fare from Vicksburg to Shreveport in combination, on Vicksburg, with a party fare east of that point, and again used this party fare from Vicksburg to Shreveport in combination on Shreveport with a party fare west of that point, a double use of the party fare between Vicksburg and Shreveport as authority, because of its relation to the two basing points, for a through combination, but, of course, this was only a theoretical use, for in actually constructing the rate the fare from Vicksburg to Shreveport was not twice included.

The purpose of the action taken by the railroad committee is apparent, and it was a concession to the United States of advantages available under some circumstances. It did not contemplate such a combination as that used in this instance, and we are of the opinion that the rate adopted was unauthorized and that payment was correctly made in the first instance.

The action of the railroad committee was taken subsequent to the rendition of the service herein and the rendering of the bills therefor. It was attempted to be made retroactive, but it may be open to question whether such an action could deprive the plaintiff of the advantages of a rate authorized when the service was rendered. The con-*603upon first point renders the decision of this question unnecessary.

It is noticeable that this service was rendered in October, 1916. The settlement was by a disbursing officer, and while the date is not shown such settlements are not usually long delayed. The disallowance by the auditor is shown to have been in February, 1921, probably some four years after the original settlement.

This court, having in mind, among other things, the desirability of prompt settlement of Government accounts to the end that “ there may be an end of accounting,” has inclined to insistence that claimants against the United States shall promptly assert their claims and under such circumstances as repudiate any idea of acquiesence in a settlement made, and representatives of the Government are frequently and properly invoking these principles. Aside entirely from any question of legal right, may it not be pertinently said that even as against the Government a settlement permitted to stand for such a time as to raise all sorts of presumptions as to its finality ought to be permitted the sanctity of that quiet repose to which its presumed finality entitles it? The operation of a rule “ both ways ” is never inequitable.

Judgment for plaintiff in the sum of $4,460.30.

Graham, *Judge,;*Hay, *Judge;*Booth, *Judge;*and Campbell, *Chief*Justice, concur.