#### PACIFIC MAIL STEAMSHIP CO. v. THE UNITED STATES.

No. 12474

January 15, 1883.

The claimants contracted to transport mails monthly, in round trips, for ten years between San Francisco, China, and Jactan, in steamships therein described and accepted by the Postmaster-General. They sue to recover for two round trips begun before but not finished until after the ten years of their contract had expired. By a subsequent contract the claimants agreed to perform other mail services in the same line, in vessels described therein, and to be subject to inspection, &c., by a naval officer and acceptance by the Postmaster-General. A steamship accepted under the second contract performed the last round trip under the first contract. This steamship was constructed according to the terms iirescribed by the first contract as well as to other and additional provisions.

Held:

I.The *Act of February*17, 1865 (13 Stat. L., 430), authorizing the Postmaster-General to contract for the carriage of the mails “by means of a monthly line * * * for a term of not more than ten years ” called for a monthly service, to consist in each case of a round trip.

II.A contract under that act providing for “twelve round trips per an-num” to be performed by means of a “monthly line” for the term of ten years must be so construed as to permit that to bo done. It must have been contemplated that the voyages begun in the last' two months would be prolonged beyond the’year, and in such case those voyages are within the terms of the contract.

III.The fact that a steamship accepted only under a second contract for carrying the mails on a particular line, but which in all respects conforms to the terms prescribed for the construction, &c., of steamships accepted for, service under a former contract with the same line, was used for carrying the mails under the first contract, without objection by the Postmaster-General, will not prevent the contracting- company from recovering pay under the first contract for the service performed in such steamship.

The following are tbe facts as found by the court:

I. On the 16th day of October, 1866, a contract was entered into between the claimant and the defendants, of which the following is a copy:

This article of contract, made the sixteenth day of October, infthe year of our Lord one thousand eight hundred and sixty-six, between the United States of America (acting in this behalf by their Postmaster-General) and *31the Pacific Mail Steamship Company, with Howard Potter and Francis Skiddy, of New York City, as sureties, witnesseth:

That whereas the said Pacific Mail Steamship Company have been accepted, in accordance with the stipulations and provisions of the act of Congress approved February 17, 1865, entitled “An act to authorize the establishment of ocean mail-steamship service between tho United States and China,” and in conformity with the advertisement inviting proposals for said service issued by the Postmaster-General of the United States, on the 20th of March, 1865, as contractors to carry the mails of the United States between San Francisco, California, and Hong-Kong, in the Chinese Empire, the steamships to touch, on each voyage outward and homoward, at the ports of Honolulu, in the Sandwich Islands, and Kana-gawa, in Japan, at the sum of five hundred thousand dollars for the performance of twelve round trips per annum, for a contract term of ten years, to begin on or before the first day of January, eighteen hundred and sixty-seven, aDd on the day the first steamship of the line shall depart from the port of San Francisco with the mails for China:

Now, therefore, the said The Pacific Mail Steamship Company, contractors, and Howard Potter and Francis Skiddy, as sureties, do jointly and severally undertake, covenant, and agree with the United States, and do hind themselves to transport the mails of the United States between the ports of San Francisco and Hong-Kong, in China, touching, to land and receive mails, at Honolulu, in the Sandwich Islands, and ICanagawa, in Japan, both on the outward and inward passages, twelve round trips per anmiin by a monthly line of first-class American sea-going side-wheel steamships, of from thirty-five hundred to four thousand tons burden each, Government measurement, and of sufficient number, not less than four, to perform the required monthly service for and during the term of ten years, commencing on or before the first day of January, eighteen hundred and sixty-seven, and from the day the first steamship of the line shall depart with the mails from San Francisco for the Sandwich Islands, Japan, and China. And the said contractors do further covenant and agree with the United States, and do hind themselves, that the steamships offered for the service Bhall be constructed of the best materials and after approved models, with all the modem improvements adapted to sea-going steamships of the first class, and shall, before acceptance by the Pestmaster-General, he subject to inspection and survey by an experienced naval constructor, to he detailed for that purpose by the Secretary of the Navy, whose report shall he made to the Postmaster-General; and further, that the said steamships, after acceptance by the Postmaster-General, and during the period they may he employed in conveying the mails, shall be kept up by alterations, repairs, and additions, as the exigency may require, fully equal to the best state of steamship improvement attained, and if not so kept up and maintained, they may he rejected by the Postmaster-General of the United States as not meeting the requirements of the act of Congress authorizing the establishment of the service, and other satisfactory steamships required in their place. And the said contractors do further covenant and agree to transport, free of expense, on each and every steamer, a mail agent of the United States to take charge of and arrange the mail matter, and to assign to such agent a separate state-room on the upper or main deck, *32with suitable accommodations for that purpose. And it is further covenanted and agreed by the said contractors, and they do bind themselves:

First. To despatch a steamship from the port of San Francisco on the first day of each month, and from Hong-ICong on the fifteenth day of each month, at such hours as may be fixed hereafter, or upon such other days as may be hereafter selected, with tho approval of the Postmaster-General, in order to make connection with tho steamships from New York, and the English lines from China to Southampton and Marseilles, and also that said steamship shall make an average run of not less than two hundred *nautical*miles a day while at sea; and that the stoppages at the intermediate ports of Honolulu and Kanagawa shall not exceed the time absolutely necessary to land and receive the mails, passengers, and cargo, and receive coals; and further, that after the performance of the second round voyage to Hong-ICong and back to ax-range and adopt a schedule with the approval of the Postmaster-General, fixing the days and hours of arrival at and departure from the respective terminal and intermediate ports.

Second. To transport the mails in a safe and secure manner, free from wet or other injury, in a separate apartment in each steamship, to be fitted up for the exclusive accommodation of the mail.

Third. To take the mail and every part of it from, and deliver it and every part of it into, the post-offices at San Francisco, Honolulu, Kanagawa, and Hong-ICong, respectively.

They also undertake, covenant, and agree with the United States, and do bind themselves, to be answerable for the proper care and transportation of the mails, and accountable to the United States for any damages which may be sustained by the United States through the unfaithfulness or want of care of their officers, agents, and employés; and they do further covenant and agree that they will not transmit, by themselves or their agents, or be concerned in transmitting commercial intelligence more rapidly than by mail, and that they will not carry or suffer to be carried letters or newspapers out of the mail, and they will not, knowingly, convey any person carrying- on the business of transporting letters or other mail matter without special consent of the Post-Office Department of the United States. And, further, that they will convey, without additional charge, post-office blanks, mail bag's, and the occasional special agent, on business of the Post-Office Department exclusively, on the exhibition of his credentials. For which service, when performed, the said Pacific Mail Steamship Company are to be paid by the United States the sum of five hundred thousand dollars per an-num, in the currency of the United States, in quarterly payments, on the receipt at the Post-Office Department of satisfactory evidence of the per-fuman ce of the round trips embraced in said payments; subject, however, to deductions, fiues, and penalties imposed by the Postmaster-General for failures and irregularities as hereinafter stipulated. It is hereby also stipulated and agreed by tbe said contractors and their sureties, that in ease of failure from any caxise to perform any of the regular monthly voyages stipulated for in this contract, a *pro rata*deduction shall be made from the compensation on account of such omitted voyage or voyages.

And it is further stipulated and agreed that suitable fines and penalties shall be imposed, in the discretion of the Postmaster-General, for delays and irregularities in the performance of the service. After the completion *33of the second voyage to Hong-Kong and back to San Francisco, and the adoption of a schedule of the days and hours of arrival and departure of the steamships, if delays occur in the arrivals of the steamers, the company ■will be fined in a sum not exceeding two thousand dollars for every forty-eight hours, and should delays occur in their departure a fine will be imposed not exceeding one thousand dollars for every twenty-four hours,, except in cases of unforeseen and uncontrollable events; and suitable' fines shall also be imposed unless the deliquency shall be satisfactorily explained to the Postmaster-General in due time for failing to take or deliver the mail or any part of it; for suffering it to be wet, injured, lost, or destroyed; for carrying it in a place or manner that exposes it to depredation, loss, or injury by being wet or otherwise ; and for setting up or running1 an express to transmit letters or commercial intelligence in advance of the mails; or for transmitting knowingly, or after being informed, any one engaged in transporting letters or mail matter in violation of the laws of the United States. And it is hereby further agreed that the first steamship of the line shall leave the port of San Francisco with the mails for Japan and China on or before the first day of January, one thousand eight, hundred and sixty-seven.

And it is hereby further stipulated and agreed that the Postmaster-General shall have the power to determine this contract at any time in case of' its being underlet or assigned to any other party; and that he may annul the contract for repeated failures, for violating the post-office laws of the United States, for disobeying the instructions of the Department, or for transporting persons conveying mail matter out of the mails as aforesaid; and that this contract shall in all its parts be subject to, and in all respects governed by, the requirements and provisions of the act of Congress approved February 17, 1865, entitled “An act to authorize the establishment of ocean mail-steamship service between the United States and China,” and also of the act of Congress approved the 21st of April, 1808, entitled “An act concerning public contracts,” so far as the provisions of the act last cited shall apply thereto.

In witness whereof the said Postmaster-General has caused the seal of the Post-Office Department to be affixed hereto, and has attested the same by his signature, and the said The Pacific Mail Steamship Company, by Allen MeLane, president, and their sureties, have hereto set their hands and seals the day and year first hereinbefore written.

Alex. W. Randall, ■ [seal.]

*Postmaster- General.*

Signed, sealed, and delivered by the Postmaster-GeneTal in the presence of—

Joseph H. Blackean.

[seal.] The Pacific Mail Steamship Company,

By Allah McLanb, *President.*

Howard Potter.

Francis Skiddy.

Attest:

Theo. T. Johnson, *Seoretary.*

Signed by Pacific Mail Steamship Company by Allan MeLane, president, and signed by Howard Potter and Francis Skiddy in presence of—

Richard B. Irwin.

*34II. On the 20tti of March, 18G7, the said “original contract” was modified by a supplemental contract between said claimant and the defendant, which supplemental contract is in the words and figures following:

This article of contract, made the twentieth day of March, in the year of onr Lord one thousand eight hundred and sixty-seven, between the United States of America (acting in this behalf by their Postmaster-General) and the Pacific Mail Steamship Company, with Howard Potter and Francis Skiddy, of Hew York City, as sureties, witnessetk:

That whereas the contract executed by the said Pacific Mail Steam-Company, on the sixteenth day of October, A. D. one thousand eight hundred and sixty-six, for the performance of the ocean mail-steamship service between the United States, Japan, and China, authorized by act of Congress approved February seventeen, eighteen hundred and sixty-five, provides that the steamships of said company shall touch on each voyage, outward and homeward, at the port of Honolulu, in the Sandwich Islands, as required by the aforesaid act; and whereas the second section of the act of Congress entitled “An act making appropriations for the service of the Post-Office Department during the fiscal year ending June thirtieth, eighteen hundred and sixty-eight, and for other purposes,” approved February eighteenth, eighteen hundred and sixty-seven, provides as follows, to wit: “That so much of the act of Congress approved February seventeenth, eighteen hundred and sixty-five, authorizing said service as requires the said steamships to touch at Honolulu, in the Sandwich Islands, shall be, and the same is hereby, repealed, upon the express conditiou, however, that the contractors for said steamship service shall enter into contract, to the satisfaction of the Postmaster-General, agreeing to establish, within five months from the passage of this act, in lien of said service released, a branch line of steamship service, carrying the United States mails between the port in Japan used by the main line of steamships and the port of „Shanghae, in China, making continuous regular trips, connecting with the main line both on the outward and homeward voyages, under the direction of the Postmaster-General, which service shall be performed *by*first-class American sea-going steamships, and without additional charge to the United States”; and whereas the said Pacific Mail Steamship Company havd accepted the terms and provisions of the said act:

How, therefore, the said The Pacific Mail Steamship Company, contractors, and Howard Potter and Francis Skiddy, as sureties, in consideration of the release granted by said act of Congress *from*touching with their steamships to land and receive mails at Honolulu, in the Sandwieh Islands, on both outward and inward passages between the United States, Japan, and China, do jointly and severally undertake, covenant, and agree with the United States, and do bind themselves to establish, in lieu of said service released, a branch line of first-class American sea-going steamships, carrying the United States mails, without additional charge, between Yokohama (Kanagawa), or other port in Japan used by the main line of steamships plying between San Francisco and Hong-Iiong, and the port of Shanghai, in China, making continuous regular monthly trips between said *35ports, in connection with the main line, hoth on the outward and homeward voyages, according to the terms and conditions of the aforesaid act, approved February eighteenth, one thousand eight hundred aud sixty-seven. And they do further stipulate and agree to commence this branch service from Yokohama to Shanghai and back in connection with the steamship leaving San Francisco on third July, eighteen hundred and sixty-seven, for Yokohama and Hong-Kong and her return, and to maintain the same during the continuance of their contract. And it is further covenanted and agreed between the parties hereto, that the stipulations and provisions of the original contract, executed with said company ®n the sixteenth' day •of October, A. D. one thousand eight hundred sixty-six, so far as they are applicable, shall also apply to the service to be performed on the branch line between Yokohama or other port in Japan used by the main line and the port of Shanghai, in China.

In witness whereof the said Postmaster-General has caused the seal or the Post-Office Department to be affixed hereto, and has attested the same by his signature; and the said The Pacific Mail Steamship Comisany, by Allan MeLane, president, and their sureties, have hereto set their hands and ■seals the day and year first hereinbefore written.

Alex. W. Randall, [seal.]

*Postmaster-General.*

Signed, sealed, and delivered by the Postmaster-General in the presence of—

Jospbh H. Blackfan.

Pacific Mail Steamship Company, By Allan McLane, *President.*[seal.] Howard Potter. [seal.]

Francis Skiddy. [seal. ]

Attest:

Theodore T. Johnson, *Secretary.*

Signed, sealed, and delivered by Pacific Mail Steamship Company and Howard Potter and Francis Skiddy, in presence of—

Richard B. Irwin.

III. Under said contract of October 16,1866, seven steamships were, from time to time, inspected and accepted for that service, according to the terms of said contract, to wit, the Colorado, Great Republic, China, Japan, America, Alaska,- and Constitution, and under the contract made pursuant to section 3 of the act of June 1, 1872,‘the steamships City of Tokio and City of Peking were inspected and accepted.

IV. On the 1st day of April, 1875, the steamship City of Tokio began the performance of service under the contract of ■October 16,1866, and made three round trips, as follows: Commencing at San Francisco April 1,1875, July 1, 1875, and November 1, 1875, for which the claimant has been paid in full under and in accordance with the terms of the contract.

*36Y. TJuder said contract, and in accordance therewith, the service of carrying the mails was begun by the departure of the steamship Colorado from San Francisco, January 1, 1867, but the full regular monthly service was not begun until June 3,1868. Between these two dates there had been *eight*round trips omitted, and deductions therefor from the stipulated compensation had been made. Commencing with the round trip begun June 3,1868, the regular monthly departures on or about the jfirst day of each month were established and continued uninterruptedly until the close of the contract term.

YI. Payment was made by the. United States for all of the round trips fully completed prior to the 31st day of December, 1876.

YII. On the 1st day of November, 1876, the steamship Alaska began a round trip, which was duly completed by her arrival home, at San Francisco, on the 20th day of January, 1877.

On the 2d day of December, 1876, the steamship City of Tokio began a round trip, which was duly completed by her arrival home, at San Francisco, on the 10th day of February, 1877.

On both the outward and the homeward voyages of these vessels they carried the United States mails.

These two round trips have never been paid for in whole or in part.

*Mr. James S. Saville*for the claimant:

1. The contract requires twelve round trips per annum “for a contract term of ten years,” to be paid for “at the rate of $500,000 per annum.”

2. An outward and inward voyage constituted a round trip, and each, trip was to be begun on the 1st of each month at San Francisco, and the return trip was to begin at Hong-Kong on the 15th of the next month.

3. The length of the route was 14,100 nautical miles. The average speed required was 200 nautical miles per day. The time required to make the round trip was, therefore, including stoppages, two and a half months.

4. The first voyage was begun January 1,1867, and completed March 20,1867. The twelfth was begun December 4,1867, and completed February 20,1868, or in the second year of the contract. Each year’s history is the same.

*375. Tbe nature of the service required this, and the appropriations by Congress and payments by the Department recognized it for the first nine years of the term. No distinction is permitted between the last year of the term and the first. The phrase “contract term of ten years” has no bearing on this point. It simply means ten such years of service as will secure the full amount of service that the contract calls for. It simply contemplates payment as for ten years of service, but requires more than ten calendar years of service to be performed. The same amount was appropriated for the last as for the first year, and this alone furnishes the key to the meaning of the law and contract. Nothing in the contract suggests a time at which each round trip was to be completed, except that it should be “ in due course,” and that payment should be made for the service only “when performed.”

6. Congress appropriated $5,000,000 for the service, or just enough to pay for one hundred and twenty round trips, and but for the erroneous act of the Treasury in carrying the balance to the surplus fund before the contract expired, this case would never have been presented here.

7. The act of June 1,1872, is a continuation of the act of February 17,1865, and a vessel accepted under the former was available for service under the latter.

*Mr. John S. Blair*(with whom was *Mr. Thomas*Simons, Assistant Attorney-General) for the defendants.

OPINION. .

Davis, J.,

delivered the opinion of the court:

The claimants contracted with the defendants to transport mails monthly, in round trips, for ten years, between San Francisco, the Sandwich Islands, China, and Japan, which contract was soon modified by releasing them from the obligation to touch at the Sandwich Islands in the round trip. They sue in this action to recover for two round trips in which the transportation was begun before the expiration of ten years from the day when the service under the contract commenced, but was not finished until after the expiration of ten years from that day. The question which we are to decide is, whether these services were performed within the contract term.

*38By tbe *Act of February*17, 1865 (13 Stat. L., 430), tbe Postmaster-General was authorized to contract for tbe carriage of these mails—

> fiy means of a monthly line of first-class American sea-going steamships ** * **and to contract for said service for a term of not more than ten years, to commence from the day the first steamship shall depart from the port of San Francisco with the mails for China.

The *Act of February*18,1867 (14 Stat. L., 394), authorized tbe change respecting tbe Sandwich Islands. With this exception there was no legislation affecting the rights of the parties under the contract. The contract which the Postmaster-General made with the claimants conformed to the act of 1865, and is-to be construed in accordance with the power which it conferred upon him.

The act clearly calls for a monthly service. The contract term for this service begins with the departure of the first vessel from San Francisco. The service is to consist in each case of a round trip; the term is for ten years. If we find the meaning of each of these terms, we shall solve the issues in this case.

A monthly trip is a trip once each calendar month. Two-trips begun in the same calendar month would not be a technical compliance with the contract. In case of a common carrier it is generally a trip on a given day of a month, announced beforehand for the convenience of the public. Ordinarily, and for a like reason, too, the monthly trips are so arranged as to make the periods intervening between them approximately equal.

A round trip is a trip from the port of departure to the same port on return. In the service sued for the round trips were from San Francisco to Japan and China and back. This trip, in the ordinary course of navigation, takes about seventy days, a fact which must have been known to Congress and to the contracting parties.

The contract calls for “ twelve round trips per annum,” to be performed by means of “a monthly line”; and the term “ten years” must be so construed as to permit this to be done. But it is a physical impossibility to begin twelve trips in twelve successive months, and to complete them as twelve round trips of seventy days each in the same twelve months. At least two of the trips must run over into the next year. Congress, therefore, must have intended that the voyages begun *39in tbe last months of the year in which the contract was to expire should be within the contract, although prolonged into another year.

This disposes of the main question between the parties. The counsel for the Government has suggested a further difficulty as to one of the voyages.

TJnder the *Act of June*1,1872 (17 Stat. L., 201), a further contract was made with the claimants for the performance of other and additional mail service on the same line. This act called for the construction of new vessels of a different class for the performance of the other service. The Tokio was one of these new vessels accepted under the Act of 1872, but it also performed the service in the last round trip, under the old contract, sued for in this action. It is contended that no recovery can be had under the contract for this service, because it was not performed in a vessel accepted under the act of 1865.

The Act of 1865 required the service tobe performed in “first-class American sea-going steamships”—

> constructed of the best material and after approved models, with all the modern improvements adapted to sea-going steamships of the first class, and subject to inspection and survey by an experienced naval constructor to he detailed for that purpose by the Secretary of the Navy.

The Act of March 2,1872, provided, as to the service under that act, that it should be performed “upon the same conditions and limitations as prescribed by existing acts of Congress” in relation to the service under the Act of 1865, and further called for steamships which should be of not less than four thousand tons register each, and built of iron, and their engines and machinery should be wholly of American construction, and should be so constructed as to be readily adapted to the armed naval service of the United States in case of war; and that before acceptance the officers by whom they were inspected should report to the Secretary of the Navy and the Postmaster-General whether that condition had been complied with. This act clearly called for all the conditions required by the'Act of 1865, and superadded other conditions. Hence, a vessel accepted under this act more than came within the requirements of the Act of 1865. Such was the practical construction which the Government put upon the contract; for the findings show that the claimants have been paid for three round trips made by the Tokio under the old contract.

Judgment will be entered for the claimants for $83,333.33.