#### ATCHISON, TOPEKA & SANTA FE RAILROAD COMPANY v. THE UNITED STATES

[No. A-22.

Decided December 10, 1923]

*On the Proofs*

*Implied contract; expense of construction of tracks from railroad lines to camp sites.*— Where it has been the custom of railroad companies to extend tracks and switches from their lines to camp sites free of cost to the Government in consideration of increased traffic, and the Government notifies such railroad companies that it will pay the cost of such tracks within the limits of such Government reservation but not outside, and a railroad company, upon request of a constructing quartermaster in charge of work at such camp site, builds a track from its lines to a camp site, with notice that he has no authority to • bind the Government to pay for the same, there can be no implied promise on the part of the Government to pay the cost of tracks outside the limits of such camp site.

*The 'Reporter's*statement- of the case:

*Mr. James L. Colema/n*for the plaintiff. *Britton c& Gray*were on the briefs.

*Mr. Percy M. Cox,*with whom was *Mr. Assistant Attorney General Robert II. Lovett,*for the defendant.

*13Tlie following are the facts of the case as found by the court:

I. The plaintiff, a corporation, is a common carrier by railroad, having its eastern terminus at Chicago, Illinois, and its western termini at San Diego, Los Angeles, and San Francisco, California. A portion of the plaintiff’s line passes through and adjacent to the city of Deming, New Mexico.

II. In July, 1917, and for some time prior thereto, the United States Government had a military camp in the neighborhood of Deming, which was known as Camp Cody. This camp was used in the prosecution of the war with Germany. ***

III. At the same time F. E. Summers was division superintendent of the railway company, having charge of that part of its lines which included Deming.

IV. On or about August 1,1917, Superintendent Summers had interviews and conversations with Maj. Charles FI. Miller, construction quartermaster at Camp Cody, during which the subject of the construction of tracks and facilities outside the yard limits of the railway company for the purpose of serving Camp Cody was discussed. During these conversations Major Miller expressed orally his desire for and requested the construction of what were later designated as tracks Nos. 53, 54, 55, 56, and 57.

V. During August, 1917, various letters were addressed by Major Miller to Superintendent Summers on the same subject, which are set out in full as Exhibits A, B, C, D, and E to the plaintiff’s petition. The material parts of these letters are as follows:

August 16, 1917:

“ It is now expected that your company will be asked to place the following tracks:

140 ft. warehouse track.

975 ft. No. 1 passenger track.

1,415 ft. No. 2 passenger track.

“These tracks are extensions of ones that will be constructed by the Southern Pacific. The last two named tracks will not be fully completed at this time, but will be cut off just west of the camp bakery and before they cross the street at that point.

*14“ 2. Detraining track along the Santa Fe tracks which leads up through the middle'of the camp 3,500 feet.

“ 3. To the above 3,500 feet must now be added 1,000 feet, or a total of 4,500 feet, in order to accommodate the remount depot. It will be advisable to put in a crossover switch at the end of the detraining track or at the 3,500-foot point.”

August 21, 1917:

“ L I have not as yet received the advice regarding the question of who will participate in the expense of the installation of the necessary tracks for Camp Cody.

“ 2. My advice is that Mr. W. B. Scott, of Houston, has this matter under consideration and will advise us as soon as something definite has been arranged.

“ 3. you should keep a careful record of all expense in connection with this work.”

August 28, 1917:

“1. It has been decided to change the location of the remount depot, placing it on the west side of your main line instead of on the east.

“2. This is to advise you, therefore, that Ave desire sidetrack placed at approximately the same point on the main line, but on the west side of the track instead of on the east.

“ 3. As advised heretofore, the total length of this track should be approximately one thousand feet.”

August 31, 1917:

“ 1. In order to have your records complete, I wish to advise that in addition to the 3,500 feet detraining track and 1,000 feet remount depot, we will wish to continue on your property the entraining tracks now started by the Southern Pacific on their property, and in the vicinity of the office, of the camp quartermaster, and to continue these tracks and connect them with the track which served the old stock pens.

“ 2. Please note that although the tracks for the remount depot and the detraining sidings are given 1,000 and 3,500 feet, respectively, they will be somewhat shorter, because it is desired not to have the switches at the road crossing in that vicinity.

“ 8. The entraining tracks near the old stock pens will connect up with your sidetrack very nearly at the-west end of the stock pens. Your engineer, Mr. Harris, has just been on the ground with me and understands exactly the location.

“4. In connection with this entraining track it will be necessary to have water, gas, coal, and ice, and you should arrange to build the necessary facilities. The Government *15will have a line of water pipe coming into that territory and can supply the water, you to provide for the distributing-line.”

October 5, 1917:

“ 1. With reference to your letter of October 2d, I beg to advise that I have no understanding whatever as to how the expense in connection with the tracks in Camp Cody is to be handled.

“ 2. It was my understanding when I last saw your general manager that he would present the matter to Mr. Scott.”

The Mr. Scott referred to in the letter of October 5, 1917, was W. 13. Scott, representing the American Railwajr Association.

VX In compliance with the oral and written requests of Major Miller, the plaintiff constructed the tracks referred to in Findings IV and V, *&upm,*the entire length of such tracks being 7,071.3 feet, and they being designated tracks Nos. 53, 54, 55, 56, and 57; 915 feet of track No. 53, all of track No. 54, and all of track No. 57, a total of 2,139.8 feet, were located on land owned by the plaintiff, which land had been previously leased by the plaintiff to the Chamber of Commerce of Deming, New Mexico, exclusively for use as a site for a camp, and by the chamber of commerce subleased to the United States. The remainder of the tracks in question, namely, all of track No. 55, all of track No. 56, and all except 915 feet of track No. 53, a total of 3,931.5 feet, were located on land owned by the plaintiff and not leased to the United States, either directly or through the chamber of commerce.

VII. The tracks and facilities owned by the plaintiff at Deming prior to the construction of tracks 53, 54, 55, 56, and 57, referred to in Finding VI, supra, were sufficient for the plaintiff’s business at that time. The tracks in question, Nos. 53, 54, 55, 56, and 57, were not necessary for the handling of the plaintiff’s ordinary business and were not constructed to form a part of the plaintiff’s permanent railroad system or for the purpose of obtaining commercial revenue. They were used by the plaintiff in connection with movements of Government freight and passengers only. Plaintiff, how*16ever, continued to use said tracks for commercial purposes after the abandonment of Camp -Cody by the Government in 1919, and was using the same as late as the spring of 1922. They were also used by the Southern Pacific Railroad in moving its trains into the camp, most of the freight movements into the camp being over the Southern Pacific. The plaintiff did not receive any revenue for the use of these tracks by the Southern Pacific either from the Government or from the Southern Pacific Company. The plaintiff had sufficient trackage of its own, without the construction of the side tracks in question, to handle all Government freight and passengers moving over its lines into Doming, although the location was not favorable or convenient in connection with the camp, being from one-half mile to two miles from the points in the camp where the Government wanted the freight and passengers unloaded.

VIII. The location of Camp Cody upon the land of plaintiff company resulted in increasing very greatly the freight and passenger earnings of said company, because of the Government freight and passenger business going into and out of the camp.

IX. On June 16, 1917, the following order was issued by The Adjutant General of the United States Army:

[Telegram]

JUNE 15, 1917.

Number 7234.

COMMANDING GENERAL, SOUTHERN DEPARTMENT,

*Fort 8am*Houston, *Texas.*

It has recently come to the attention of the War Department in connection with the selection of sites for divisional training camps that certain railways have expected to charge the Government cost plus ten per cent for constructing railway tracks and switches connecting suitable points on their lines with proposed camp sites.' In the establishment of similar camps theretofore, it has been customary for railways to so extend their lines and switches free of cost to the Government in consideration of the profit derivable from the greatly increased traffic incidental to the location of such camps. No authority has been given to any one to offer or give compensation to railways for said services. You will without delay make the contents of this message known to the controlling officials of all railways concerned in your *17department, informing them that no authority has been or will be given contemplating payment for such facilities in any case whatever. Where such payment is demanded you will proceed to hunt for suitable camp sites having other railway facilities and make no agreement to pay for facilities of above type.

McCain.

War Department telegraph office, please send same telegram to:

Commanding general Southeastern Department, Charleston, S. C.

Commanding general Eastern Department, Governors Island, N. Y.

Commanding general Northeastern Department, Boston, Mass.

Commanding general Central Department, Chicago, Ill.

Commanding general Western Department, San Francisco, Calif. (Number 212.)

(Signed) J. T. Dean,

*Adjutant General.*

CaNtokmeNt DxvisioN, O. Q. M. G.,

*Washington, D. O., June %6,1917.*

True copy referred to each constructing quartermaster and each division auditor for their information and guidance.

I. W. Litteee,

*Colonel, Quartermaster Corps,*

*in charge of Cantonment Construction.*

By W. A. DeMpset,

*Major, Q. M. C., S. B.*

X. Major Miller did request the railroad to build the tracks, but called attention of the railroad to the fact that lie had no authority to pay for such construction and that he did not know what the attitude of the Government in connection with payment therefor would be. There was no intention on the part of the officer of the Government or on the part of the railroad division officials to enter into any agreement relative to the question of compensation for track construction.

XI. Approximately from June 28, 1917, until February 27, 1919, negotiations were in progress between the execu-*18lives of the railroads of the United States and the Secretary of War in order to arrive at some agreement relative to the question of compensation for rail connections between railroads and camp sites of the Army, and on June 28, 1917, Mr. Fairfax Harrison, chairman of the committee of railroad executives, in a letter to the Secretary of War, on behalf of the railroads of the United States, stated:

“We agree, however, that, within reasonable limits, the railroacl should provide rail connections to the limits of the camp sifes. We cirge, however, that the Government should reimburse the railroad for the cost of railroad construction required within the camp sites.”

On June 14-, 1917, Mr. E. H. Aisliton, chairman, special committee on national defense, issued to all railroads in the central department a notice in which the following language was used:

“ The. general plan adopted for payment of trackage at military camps is for the Government to pay expense of trackage outside the railroad company’s right of way, railroad company to assume expense on railroad property.”

Later in a proposed agreement of February 27,1919, negotiated by the railroads, the Federal administration, and General Goethals and submitted to the Secretary of War, it was provided:

“ The carrier to pay for all construction and maintenance on the original right of way, not including temporary construction tracks built for handling War Department construction material. When the latter are converted into permanent team or bulk delivery tracks they are to be paid for by the carrier.”

These several propositions were submitted to the *Secretary*of War, who took them under consideration, but it does not appear that they ever became binding agreements.

XII. The claim sued on here was presented to the War Department and was first heard by the War Claims Board transportation service, which board on June 21, 1920, rejected that portion of the claim for trackage outside of the leased ground occupied by the defendant amounting to $13,468.19 and allowed that part of the claim for construction of tracks on land leased by the defendant amounting to $4,040.32. On appeal to the War Claims Board, that board *19on August 14,1920, affirmed this latter decision of the claims board of the transportation department, and thereupon appeal was taken to the Secretary of War, who, on November 17, 1920, affirmed the decision of the War Claims Board.

Graham, Judge,

delivered the opinion of the court:

The facts in this case are fully set out in the findings. Briefly stated, the Government needed railroad connections and facilities for loading and unloading men and materials at the military camp in the neighborhood of Doming, New Mexico, known as Camp Cody. This camp was used in the prosecution of the war with Germany, but had been used on a smaller scale prior to that time. The land upon which it was constructed was under lease by the defendant from the railroad. The defendant needed railroad connections and facilities for loading and unloading men and materials at this camp, which was being enlarged and additional construction made. The representative of the defendant was one Major Charles Miller, constructing quartermaster in charge of the work on the ground. On or about August 1, 1917, the said constructing quartermaster expressed to the representative of the plaintiff his desire for and requested the construction of certain railroad tracks and facilities, a portion of which was on the railroad’s unencumbered right of way and a portion upon the leased land within the boundaries being used for the camp. This request was complied with and the necessary trackage, and facilities constructed, the details of which are set forth in the findings.

While Major Miller requested the construction of these tracks, he stated that he had no authority to arrange for payment for or enter into any agreement for the payment for the same and did not know what the attitude of the Government would be. in regard to payment.

Prior to the time that Major Miller preferred this request, namely, on the 15th day of June, 1917, an order was issued by The Adjutant General of the Army to the commanding general of the Southern Department, within which this camp was located, stating that the War Department’s attention had been directed to the fact that certain railroads were expecting to charge the Government for the cost of con*20structing tbe railroad tracks and switches connecting suitable points on their lines with proposed camp sites and stating that it had been the custom of the railroads to extend their lines and switches free of cost to the Government in consideration of the profit to be derived from increased, traffic.

This order further stated that no authority had been given to anyone to offer or give compensation to the railroads for such work and directing the commanding general to notify the controlling officials of all railroads operating in his department that no authority had been given or would be given for payment for facilities in any case whatever. On June 14th the chairman of the special committee of national defense gave notice to all the railroads that a general plan had been adopted for the payment of trackage at military camps, by which the Government was to pay the expense of trackage outside of the railroad’s right of way, namely, within the camp site, the railroad to assume the expense of construction on railroad property; and later on, September 27, 1919, a proposed agreement was negotiated by the railroads, the Federal administration, and General Goethals and submitted to the Secretary of War, which, in substance, provided that the carrier was to pay for all construction and maintenance on the original right of way, not including temporary construction tracks built for handling-War Department construction material.

The claim sued upon here included the cost of construction of the trackage on the company’s right of way as well as that within the camp site. It, was presented to the War Department and heard by the War Claims Board transportation service, which board rejected the portion of the claim for trackage outside of the camp site, and allowed for that portion of it within the camp site, amounting to $4,040.32. The plaintiff appealed to the War Claims Board and that board affirmed this latter decision. Whereupon the plaintiff appealed to the Secretary of War, who affirmed the decision of the latter board allowing the plaintiff to recover for cost of construction of trackage within the camp.

The award thus made by the War Claims Board transportation service and affirmed by the War Claims Board *21and approved by the Secretary of War, taken in connection with the notice to the railroads of the plan adopted by the special committee of national defense and the communications of the representative of the railroads to the Secretary of War, indicate that it was the policy and purpose of the Government to pay for railroad trackage constructed as it should order within the limits of camp sites. On the other hand, it is equally clearly indicated that it was not the Government’s purpose and intention to pay for trackage constructed outside of said camp sites on the railroad’s right of way and that there was no- authority to enter into any agreement for this latter construction. The foregoing is further borne out by the order from The Adjutant General’s office of June 15, 1917, recited in Finding IX, which distinctly indicates that no authority had been or would be given to obligate the Government to pay for constructing railroad tracks and switches connecting suitable points on the lines of the railroads with proposed camp sites. This arrangement of the Government paying for tracks and facilities constructed Avithin the camp sites, and the railroad paying for tracks and facilities constructed on its own right of way connecting its road with the camp site, seems to have been the understanding of the railroads as well as the Government.

Judgment should be entered in favor of the plaintiff in the sum of $4,040.32, and it is so ordered.

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