Source: https://caselaw.findlaw.com/us-supreme-court/290/127.html
Timestamp: 2019-04-24 19:02:42+00:00

Document:
BUTTE A. & P. R. CO. v. U. S.
[290 U.S. 127, 128] Mr. Daniel M. Kelly, of Butte, Mont., for petitioner.
[290 U.S. 127, 130] The Attorney General and Mr. Harold M. Stephens, Asst. Atty. Gen., for the United States.
This action was brought by the United States, on August 23, 1929, in the federal court for Montana to recover the sum of $487,116.31 paid to Butte, Anaconda & Pacific Railway Company, on March 26, 1925. The payment was made pursuant to a certificate of the Interstate Commerce Commission for that amount, issued March 20, 1925, and addressed to the Secretary of the Treasury. Deficit Settlement with Butte, Anaconda & Pacific Ry., 94 I. C.C. 617. The Secretary, after receiving from the Comptroller General his certificate approving the payment, issued a warrant for that sum and transmitted it [290 U.S. 127, 133] to the Treasurer of the United States. The Treasurer paid the railway.
The action is brought to recover money paid by mistake. The charge is that the money was paid, because, in 1925, the officials misconstrued the word 'deficit,' so as improperly to extend the scope of section 204. That is a charge, not of mistake, but of error of judgment-a judgment necessarily exercised in the performance of the duties of office. Neither the Commission in issuing the certificate, nor the Secretary of the Treasury, the Comptroller General, or the Treasurer, when co-operating to make the payment, labored under any mistake of fact; or overlooked any applicable rule of law; or was guilty of any irregularity in proceeding. Moreover, if the word 'deficit' was misconstrued, the error was not due to inadvertence. Ever since the enactment of Transportation Act 1920, it had been recognized that the construction to be given the word 'deficit' presented a difficult and important question. In 1920, before hearing those interested, the Commission attributed to the word the meaning now contended for by the government. Protests against its then interpretation led the Commission to set, in 1921, a public hearing for the consideration solely of that question. 2 Counsel for many railroads participated and submitted briefs. On February 7, 1922, the [290 U.S. 127, 135] Commission stated its conclusion in an elaborate report. In the matter of the construction of the word 'deficit' as used in Paragraph (a) of section 204 of the Transportation Act, 1920, 66 I.C.C. 765. The rule there announced was consistently acted upon for over two years and a half. Under it, the Commission issued certificates to 71 carriers, including that here attacked. 3 Then there was a change in the membership of the Commission. On October 17, 1925, it overruled, in Deficit Status of Bingham & Garfield Railway Co., 99 I.C.C. 724, its earlier decision; and in March, 1927, instituted against Butte, Anaconda & Pacific Railway Company the proceeding to revoke the certificate on which payment had already been made. 4 Obviously, 'mistake ... there was none, but merely a revision of judgment in respect of matters of opinion.' United States v. Great Northern Railway, 287 U.S. 144, 151 , 53 S.Ct. 28, 30.
The United States claims that the money can be recovered because it was a disbursement made without the authority of Congress. The argument is that the Commission had no authority to issue a certificate, and the financial officers of the government had no authority to pay money, except to a carrier which had suffered a 'deficit' in operations during the period of federal control; that, properly construing that word, the railway had not suffered a 'deficit'; and that, having received the money which the officials were not authorized to pay, the railway must restore it, since in dealings with the government one is bound, at his peril, to know the limits of the authority of its agents. We have no occasion to determine which of the Commission's interpretations of the word 'deficit' is the correct one. For we are of [290 U.S. 127, 136] opinion that the government cannot recover the money paid in 1925, even if the Commission erred in attributing to the word 'deficit' the meaning then acted on.
The decision was on the merits. The case is no different than it would have been, if the Commission had erred in any other ruling on a matter of law; or in a finding strictly of fact; or in some finding as to maintenance, depreciation, or value-determinations called findings of fact but which rest largely in opinion. In making those decisions the Commission would necessarily act in a quasi judicial capacity. If it misconstrued the term 'deficit,' it committed an error; but it did not transcend its jurisdiction. Since Congress has not provided a method of review, neither the Commission nor a court has power to correct the alleged error after payment made pursuant to a certificate. The government cannot recover, because, when Congress, by section 204, imposed the duty to certify to the Treasury the amounts severally due to carriers, it required the Commission-and hence authorized it-to determine whether the claimant was entitled to relief.
Claims under section 204 were filed by 461 carriers. 6 Each claimant inisisted that it had suffered a 'deficit.' The controverted question of construction discussed in this case is whether, by the use of the word 'deficit,' Congress intended that compensation should be paid to those carriers only which had suffered an actual (red-ink) loss in operation or intended to put all the short lines into as good a position as they would have been in if the Director General had retained possession throughout federal control. If 'deficit' be held to mean actual loss in operation, many of these carriers would receive nothing, as they had earned net income, although at a rate less than during the 'test period.' But it might prove upon investigation of the accounts that some carriers who had vainly claimed compensation on the basis of lessened income as compared with the 'test period' were entitled to compensation because they had actually suffered a (red-ink) loss in operation. Compare Deficit Status of Fairport, Painesville & Eastern R.R. Co., 124 I.C.C. 323; Id., 145 I.C.C. 684. This is true, because, while on the face of the accounts there appeared to have been net income, it might prove that there was, during the period, an operating loss, by reason of the fact that the carrier had failed to make the proper maintenance and depreciation charges. Where the right to compensation depends upon the propriety of the maintenance and depreciation [290 U.S. 127, 139] charges, it may be impossible to determine, until the completion of the investigation into the accounts, whether the carrier is entitled to relief. Compare Great Northern Ry. v. United States, 277 U.S. 172 , 48 S.Ct. 466; Continental Tie & Lumber Co. v. United States, 286 U.S. 290 , 52 S.Ct. 529; United States v. Great Northern Ry., 287 U.S. 144 , 53 S.Ct. 28.
While section 204 granted a bounty, it conferred a right, and constituted the Commission a quasi judicial tribunal to adjudicate claims thereunder. Thus it was called upon to pronounce a formal judgment on rights asserted. A decision adverse to the carrier on any one of the suggested questions of construction might compel dismissal of the claim;17 thus relieving the Commission of the necessity of inquiring whether a deficit had been suffered. But it does not follow that such a decision would determine an issue of jurisdiction. Under this legislation, whether a [290 U.S. 127, 142] claimant seeking 'relief has the requisite standing is a question going to the merits, and its determination is an exercise of jurisdication.' Compare General Investment Co. v. New York Central R.R., 271 U.S. 228, 230 , 46 S.Ct. 496, 497. Though it were charged that the Commission erred in so dismissing the claim, the carrier could not by mandamus compel it to proceed with the inquiry. See U.S. ex rel. Abilene & Southern Ry. Co. v. Interstate Commerce Commission, 56 App.D.C. 40, 8 F.( 2d) 901; Cripple Creek & Colorado Springs R.R. Co. v. Interstate Commerce Commission, 56 App.D.C. 168, 11 F.(2d) 554; U.S. ex rel. Empire & S.E. Ry. Co. v. Interstate Commerce Commission, 59 App.D.C. 391, 45 F.(2d) 293; Interstate Commerce Com. v. U.S. ex rel. Arcata & Mad River R.R. Co., 62 App.D.C. 92, 65 F.(2d) 180. Compare Interstate Commerce Commission v. U.S. ex rel. Humboldt Steamship Co., 224 U.S. 474 , 32 S.Ct. 556; Louisville Cement Co. v. Interstate Commerce Commission, 246 U.S. 638 , 38 S.Ct. 408.
Under section 204, the Commission exercises functions broader than those customarily conferred upon auditing or disbursing officers. It sits as a special tribunal to hear and determine the claims presented. Compare Work v. U.S. ex rel. Rives, 267 U.S. 175, 182 , 45 S.Ct. 252; Great Northern Ry. v. United States, 277 U.S. 172, 182 , 48 S.Ct. 466. It renders a judgment upon a full hearing. In deciding any one of the enumerated questions of construction, as in other rulings of law or findings of fact, the Commission may err. The victim of the error may be either the carrier or the government. Although the decision on the question of construction be favorable to the carrier, it may still fail to secure compensation, because there was, in fact, no deficit, whatever meaning be given to that word. On the other hand, an erroneous decision in favor of the carrier, on any of those questions, may result in the issue of a certificate and the payment thereunder of money which should not, and but for the error would not, be made. Since authority to pass upon the meaning of the word 'deficit,' and [290 U.S. 127, 143] upon each of the other questions of construction, is essential to the performance of the duty imposed upon the Commission, and Congress did not provide a method of review, we hold that it intended to leave the government, as well as the carrier, remediless whether the error be one of fact or of law. Compare United States v. Great Northern Ry., 287 U.S. 144 , 53 S.Ct. 28. The rule declared in Wisconsin Central Railroad Co. v. United States, 164 U.S. 190 , 17 S.Ct. 45; Grand Trunk Western Ry. Co. v. United States, 252 U.S. 112 , 40 S.Ct. 309, is not applicable here. The decision in Continental Tie & Lumber Co. v. United States, 286 U.S. 290 , 52 S.Ct. 529, is not inconsistent with this view.
[ Footnote 1 ] The term 'federal control' means, in this connection, the period from December 28, 1917, to March 1, 1920, during which the possession, use, control, and operation of railroads and systems of transportation were taken over or assumed by the President. Proclamation of December 26, 1917, 40 Stat. 1733.
[ Footnote 2 ] See Annual Report of Interstate Commerce Commission for 1921, pp. 21, 22; for 1922, p. 34.
[ Footnote 3 ] Annual Report of Interstate Commerce Commission for 1923, pp. 13, 14.
[ Footnote 4 ] Annual Report of Interstate Commerce Commission for 1925, pp. 24, 25.
[ Footnote 6 ] Annual Report of Interstate Commerce Commission for 1929, p. 11.
[ Footnote 7 ] In Deficit Claim of Manitou & Pike's Peak Ry., 79 I.C.C. 1, Id., 94 I.C.C. 767, Deficit Status of Glenfield & Western R.R. Co., 150 I.C.C. 39, and in Deficit Status of Massillon Belt Ry. Co., 154 I.C.C. 1, it was held the term had a broader significance than 'common carrier'; that it meant a carrier which might be utilized by the government in the prosecution of the war; that, by this term, Congress intended to differentiate between railroads (common carriers) with reference to their utility and necessity as a part of the transportation system of the country; and that freight transportation, rather than passenger transportation, was considered a test of this utility and necessity. The claims were dismissed because these carriers did not meet the test erected.
[ Footnote 8 ] In Deficit Claim of Manitou & Pike's Peak Ry., 94 I.C.C. 767, 773, the claim was dismissed, among other reasons, because it was not shown that the competition was of such a character that the short line suffered, through diversion, loss of traffic that otherwise might have moved over its line.
[ Footnote 9 ] In Deficit Claim of Manitou & Pike's Peak Ry., 94 I.C.C. 767, 773, it was held also that, although the carrier joined in through passenger rates with railroads under Federal control, it was not within this phrase, because there was not such a connection as would permit the regular and general transfer of freight. Compare In Matter of Final Settlement with the Nevada-California-Oregon Ry., under section 204 of the Transportation Act, 1920, 71 I.C.C. 548; Deficit Settlement with Nevada County Narrow Gauge R.R., 90 I.C.C. 75, where it was held that there may be a connection between a broad gauge and a standard gauge railroad within the meaning of paragraph (a).
[ Footnote 10 ] Compensation was denied as not having been so operated. In the Matter of the Application of the Allegheny & South Side Railway Co., etc., 71 I.C.C. 90; Deficit Status of Northern Liberties Ry., 72 I.C.C. 265; Deficit Status of Scottdale Connecting R.R., 124 I.C.C. 101; Deficit Status of Calumet, Hammond & South Eastern R.R. Co., 154 I.C.C. 229; Deficit Status of Gideon & North Island R.R. Co., 158 I.C.C. 329; Deficit Status of Mississippi & Western R.R., 175 I.C.C. 486, 489; Deficit Status of Elk & Little Kanawha R.R. Co., 180 I.C.C. 10.
[ Footnote 11 ] Deficit Settlement with Cripple Creek & Colorado Springs R.R. Co., 82 I.C.C. 129; Id., 90 I.C.C. 271.
[ Footnote 12 ] In Deficit Status of United States & Canada R.R.-Grand Trunk, Lessee, 76 I.C.C. 455, it was held that, although this carrier made separate returns to the Commission which showed a deficit, compensation was not recoverable; the part of the system in the United States being but a small portion of that of the controlling Canadian corporation. Compare Deficit Status of Duluth, Winnipeg & Pacific Ry. Co., 76 I.C.C. 689-a part of the Canadian Northern System.
[ Footnote 13 ] The Commission held that Congress could not have intended to grant compensation in such cases, although section 204 did not in terms exclude carriers in intrastate commerce. Deficit Status of Empire & Southeastern Ry. Co., 117 I.C.C. 609. Many claims were dismissed on this ground. See, e. g., Deficit Status of Rural Valley R.R., 131 I.C.C. 509; Deficit Status of Dexter & Northern R.R., 138 I.C.C. 25; Deficit Status of Kentucky, Rockcastle & Cumberland R.R., 138 I.C.C. 27; Deficit Status of Eureka Hill Ry., 138 I.C.C. 29; Deficit Status of Pine Bluff & Northern Ry., 145 I.C.C. 251; Deficit Status of Massillon Belt Ry. Co., 154 I.C.C. 1.
[ Footnote 14 ] Deficit Status of West Virginia Northern R.R. Co., 82 I.C.C. 431.
[ Footnote 15 ] See Deficit Status of Calumet, Hammond & Southeastern Ry., 154 I.C. C. 229; New York & Pennsylvania Ry. Co., Deficit Claim, 162 I.C.C. 796; Arcata & Mad River R.R. Co., Deficit Status, 162 I.C.C. 641; Crittenden R. R. Co., Deficit Claim, 166 I.C.C. 548; Deficit Status of Elk & Little Kanawha R.R. Co., 180 I.C.C. 10.
[ Footnote 16 ] See Deficit Status of Abilene & Southern Ry., 72 I.C.C. 333; Id., 79 I.C.C. 547; Deficit Status of Duluth, Winnipeg & Pacific Ry., 76 I.C.C. 689; Deficit Status of United Ry., 86 I.C.C. 661.
[ Footnote 17 ] Of the 461 claims filed, 180 in all were dismissed by action of the Commission. Annual Report of the Interstate Commerce Commission for 1931, p. 10.

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