Source: https://supreme.justia.com/cases/federal/us/251/326/
Timestamp: 2019-04-23 02:45:17+00:00

Document:
"the average weight . . . be ascertained, in every case, by the actual weighing of the mails for such a number of successive working days, not less than thirty [by Act of March 3, 1905, c. 1480, 33 Stat. 1082, 1088, increased to ninety] at such times . . . not less frequently than once in every four years, and the result be stated and verified in such form and manner, as the Postmaster General may direct."
(1) The rates specified are the maxima, and the act leaves it discretionary with the Postmaster General to fix lower rates in contracting with railroads. Holmes, J., p. 251 U. S. 329; Pitney, J., p. 251 U. S. 335.
divisor as was done when the six-day routes predominated. Holmes, J., p. 251 U. S. 331.
The statute prescribes that the aggregate weight for the weighing period shall be divided by the number of "working days" -- meaning weekdays -- included in the period, but this is directory only, so that a failure of the Postmaster General to follow this method strictly in fixing rates will not render his action void. Pitney, J., pp. 251 U. S. 335-337.
The provision of the Act of July 12, 1876, c. 179, 19 Stat. 79, reducing the compensation "ten percentum per annum from the rates fixed and allowed," and the similar provision of the Act of March 2, 1907, c. 2513, 34 Stat. 1212, refer to the statutory maximum rates, and did not impair the discretion of the Postmaster General to fix lower rates. Holmes, J., pp. 251 U. S. 330, 251 U. S. 333; Pitney, J., p. 251 U. S. 338.
So also of the like provision in the Act of June 17, 1878, c. 259, 20 Stat. 142. Pitney, J., p. 251 U. S. 338.
The former practice of the Postmaster General of allowing the railroads the full statutory rates and average weights derived through a divisor excluding Sundays was an exercise of his discretion in determining the pay, and not an interpretation of the statutes as requiring that the pay be so determined. Holmes, J., p. 251 U. S. 332.
Rejection by Congress of amendments requiring the divisor to be the number of weighing days is not an interpretation of the existing law as forbidding that method. Holmes, J., p. 251 U. S. 333.
Prior to the Act of July 28, 1916, c. 261, 39 Stat. 429, railroad companies which had not been aided by grants or otherwise were free to refuse to carry the mails at rates offered. Pitney, J., p. 251 U. S. 339.
Railroad companies which receive and transport the mails and accept the compensation with knowledge that it is readjusted under a rule insisted upon by the Postmaster General, whereby the whole number of days in the weighing period, including Sundays, is used as a divisor in obtaining the average weights, cannot afterwards repudiate their contracts and claim a larger compensation because the weekday divisor was not employed, as directed by the statute. Pitney, J., p. 251 U. S. 339.
The same considerations apply to land grant railroads, under duty to carry the mail at the prices fixed by law, and which by statute are to receive a certain percentage of the pay authorized in other cases, it not appearing that the Postmaster General acted arbitrarily or discriminated against them, or fixed the pay at noncompensatory amounts. Pitney, J., p. 251 U. S. 340.
MR. JUSTICE HOLMES announced the judgment of the Court and delivered the following opinion, concurred in by the CHIEF JUSTICE and Justices BRANDEIS and CLARKE.
"that when the weight of mail is taken on railroad routes, the whole number of days included in the weighing period shall be used as a divisor for obtaining the average weight per day."
This, of course, diminishes the average weight and therefore the pay of the railroads. They deny the authority of the Postmaster General to make the change, and sue for the additional sum that, under the old practice, they would have received.
17 Stat. 283, 309, Rev. St. § 3998, and § 4002. The language plainly showed and the decisions have established that the Postmaster General, if it seemed to him reasonable, could refuse to pay the maximum and insist upon some lesser rate as a condition of dealing with a road. Atchison, Topeka & Santa Fe Railway Co. v. United States, 225 U. S. 640, 225 U. S. 649.
"the pay per mile per annum shall not exceed the following rates, namely: on routes carrying their whole length an average weight of mails per day of two hundred pounds, fifty dollars; five hundred pounds, seventy-five dollars,"
without imposing any downward limit as to the money rates is wholly withdrawn from his judgment in the preliminary stage of determining the basis to which the money rates are to be applied.
"The average weight to be ascertained in every case by the actual weighing of the mails for such a number of successive working days, not less than thirty at such times"
"the average weight [i.e., of course, the average weight for the year] shall be ascertained by the actual weighing of the mails for such a number of successive working days not less than ninety,"
&c., the increase in the number of days manifestly being for the purpose of more nearly hitting the average for the whole time. The statutes do not mention the divisor to be used in order to get the average desired. In 1873, mails were not carried on Sundays except over a comparatively small proportion of routes, and therefore six was the fairest single divisor.
Now, on the other hand, it is said that the mileage of the seven-day routes is much greater than that of the six days. Therefore, now to weigh for Sundays as well as other days and to divide by seven is the fairest single rule that can be found.
But it is said that, when an average is directed to be reached by weighing for, say thirty working days, it is implied that you are to get the average by using the number of working days on which the mails were weighed as a divisor, that working days mean week days, and that, if in fact Sundays are used as working days, the divisor is not affected, because the statute only contemplated six for a week. But the supposed implication of the statute disappears when it is remembered that the average wanted is not the average for the weighing days only, but the average for the year. It is plain, too, that whether "working days" be read to mean week days or the days on which work was done, in fact the statute contemplates the working days and the weighing days as identical, and therefore affords no ground for demanding the advantage of a dividend of seven and a divisor of six, which is what the railroads want.
rates, and which therefore there could be no reason for withholding, beyond the express words of the act at the other end. It is true that, in 1884, an assistant attorney general gave an opinion that any departure from the practice would defeat the intention of the law and cause no little embarrassment, and that, thereafter, an order made by a previous Postmaster for taking the number of weighing days as the divisor was revoked. But the letter of the Postmaster General thus answered merely stated what had been the practice as to the divisor, and asked whether it was in violation of law. It did not state that the Post Office considered itself bound to follow that way. The order that was revoked only purported to affect seven-day routes, and is of little or no importance to the question before us now.
It is said that the rate was fixed by the Act of March 2, 1907, c. 2513, 34 Stat. 1205, 1212, if not before, by a reduction to "five percentum less than the present rates" on certain routes. But, as we have stated we understand this to mean a reduction of the rates fixed by statute -- that is, the maximum rates. We do not understand it to refer to rates specifically allowed. It is not likely that Congress considered the latter in detail.
"have the weights stated and verified to him by said employees under such instructions as he may consider just to the Post Office Department, and the railroad companies."
Possibly this might be construed to recognize the power now in dispute, but this suggestion also we are content to leave on one side. We also leave unconsidered the great difficulties that the railroads encounter in the effort to show that their conduct did not amount to an acceptance of the Postmaster General's terms within the decision in New York, New Haven & Hartford R. Co. v. United States, ante, 251 U. S. 123. The construction of the statutes disposes of all the cases without the need of going into further details.
MR. JUSTICE DAY and MR. JUSTICE VAN DEVANTER dissent. MR. JUSTICE McREYNOLDS took no part in the decision of the cases.
* The docket titles of these cases are: Northern Pacific Railway Company v. United States, No. 109; Seaboard Air Line Railway v. United States, No. 132; New York Central & Hudson River Railroad Company v. United States, No. 133, and Kansas City, Mexico and Orient Railway Company of Texas v. United States, No. 232.
MR. JUSTICE PITNEY, with whom concurred MR. JUSTICE McKENNA.
I concur in the affirmance of the judgments of the Court of Claims in these cases, but upon grounds somewhat different from those expressed in the opinion of MR. JUSTICE HOLMES.
"authorized and directed to readjust the compensation hereafter to be paid for the transportation of mails on railroad routes upon the conditions and at the rates hereinafter mentioned: . . . Second. That the pay per mile per annum shall not exceed the following rates, namely: on routes carrying their whole length an average weight of mails per day of two hundred pounds, fifty dollars; . . . five thousand pounds, two hundred dollars, and twenty-five dollars additional for every additional two thousand pounds, the average weight to be ascertained, in every case, by the actual weighing of the mails for such a number of successive working days, not less than thirty at such times, . . . and not less frequently than once in every four years, and the result to be stated and verified in such form and manner as the Postmaster General may direct."
In my opinion, the rates of pay per mile per annum were maximum rates, and the Postmaster General had a discretion to contract at less if the railroads agreed; but, under § 210 of the Act of June 8, 1872, c. 335, 17 Stat. 283, 309; Rev.Stats. § 3997, he was under a duty to arrange the routes into classes according to the size of the mail, and the speed, frequency, and importance of the service, "so that each railway company shall receive, as far as practicable, a proportionate and just rate of compensation, according to the service performed."
"the average weight to be ascertained, in every case, by the actual weighing of the mails for such a number of successive working days, not less than thirty,"
premium upon inefficiency, for evidently if the Sunday train were cut off, we should virtually have the same mails less frequently carried, and therefore with a higher daily average, and therefore a higher pay basis than in the case where the seventh train was run and the greater accommodation rendered. The present method gives no additional pay for the additional seventh train, but the other method would cause a reduction on account of better service, and practically would operate as a fine on all those roads carrying the mails daily, including Sunday."
The Act of March 3, 1905, c. 1480, 33 Stat. 1082, 1088, changed the minimum weighing period so as to require the inclusion of at least ninety, instead of thirty, successive working days, but made no other change. Under this act, 105 calendar days necessarily were included in the weighing period in order to take in 90 successive working days. In my opinion, this act, like that of 1873, by fair construction required that the week day divisor be employed. And so it was officially construed until 1907.
But, while I regard this method of determining the average weight to have been prescribed, and not left to the discretion of the Postmaster General, still I think the statute in this respect was only directory, and not mandatory. Considering the provision in its relation to the context and subject matter, it will be seen to be but an aid to the making of fair contracts within the maximum rates allowed, and an aid to the Postmaster General in fixing the rate of compensation upon land grant routes, and in so arranging routes that each railway company shall receive a proportionate and just rate of compensation according to the service performed. Hence, it seems to me that a failure strictly to comply with the prescribed method of ascertaining the average weight did not, of itself, render the action of the Postmaster General ultra vires and void.
"That when the weight of mail is taken on railroad routes the whole number of days included in the weighing period shall be used as a divisor for obtaining the average weight per day."
While I regard it as embodying an erroneous view of the statute, this is not sufficient, in my opinion, to vitiate a contract voluntarily made by a railway mail carrier based upon a calculation of average weight made and known to have been made in conformity with the order. All the present claims originated after the promulgation of the order, and arose out of the carriage of mails under arrangements made with the Postmaster General after express notice of its provisions.
"by reducing the compensation to all railroad companies for the transportation of mails five percentum per annum from the rates for the transportation of mails, on the basis of the average weight fixed and allowed,"
"by making the following changes in the present rates per mile per annum for the transportation of mail on such routes, and hereafter the rates on such routes shall be as follows,"
the effect of impliedly repealing that part of the Act of 1873 (Rev.Stats. U.S. § 4002) "shall not exceed," etc., from which alone, in my view, the Postmaster General derived any serviceable discretion about readjusting the compensation.
Therefore, he still had liberty of action within the maximum rates prescribed. And the railroad companies, other than such as had been aided by grants of lands or otherwise, were free to carry the mails at rates offered, or refuse them, as they chose. Eastern R. Co. v. United States, 129 U. S. 391, 129 U. S. 396; Atchison, Topeka & Santa Fe Ry. v. United States, 225 U. S. 640, 225 U. S. 650; Delaware, Lackawanna & Western R. Co. v. United States, 249 U. S. 385, 249 U. S. 388; New York, New Haven & Hartford R. Co. v. United States, ante, 251 U. S. 123.
Furthermore, by § 212 of the Act of June 8, 1872, c. 335, 17 Stat. 283, 309; Rev.Stats. § 3999, if, because of the refusal of the railway companies, the Postmaster General was unable to make contracts at a compensation "not exceeding the maximum rates," or for what he deemed a reasonable and fair compensation, he was at liberty to use other means of carriage.
From the findings of the Court of Claims, it appears that in all of these cases there were express contracts, and I concur in the view of that court (53 Ct.Cls. 258, 308, 315, 318, 319) that the contracts arose not out of the Distance Circular, in which the Postmaster General specially called notice to Order No. 412, and to which some of the claimants responded with protests, more or less explicit, that they would not be bound by that order, but arose out of what subsequently happened. The Postmaster General in every case informed the protesting carriers that he would not enter into contract with any railroad company excepting it from the operation of any postal law or regulation. The mails were weighed and the average weight ascertained in accordance with Order No.
412, as all the claimants had been notified would be done; thereafter, the Postmaster General, upon the basis of the weight thus ascertained, caused the maximum statutory rate to be calculated, issued orders naming certain amounts thus arrived at as the compensation for the service, and gave notice in proper form to the carriers specifying in terms the readjusted pay that would be allowed, "subject to future orders and to fines and deductions." Thereafter, the carriers received and transported the mails as offered, periodically accepted compensation in accordance with the readjustment notices, and proceeded thus without further objection or protest until the end of the respective quadrennial periods. In short, although in some cases they declared they would not consent to the ascertainment of average weights on the basis of Order No. 412, they did not insist upon their objection in the face of the Postmaster General's declaration that he would not accede to it. Had they refused to carry the mails on the terms proposed, he might have exercised his discretion as to the rate of pay per mile, so that, instead of agreeing to give them, as he did, the maximum pay based on the average weight ascertained under Order No. 412, he might have acceded to their contention by employing the week day divisor, but have carried into effect his own view as to the amount that ought to be allowed by reducing the rate of pay per mile. Or, as already shown, he might have refused to make the contracts, and have proceeded under § 3999.
I deem it clear, therefore, that the claimants in fact accepted the Postmaster General's offers as contained in the readjustment notices by proceeding to perform the prescribed service in accordance therewith and accepting the compensation due to them therefor. And so the Court of Claims held, 53 Ct.Clms. 258, 308, 313, 315, 318, 319.
"carry the mail at such prices as Congress may by law provide; and, until such price is fixed by law, the Postmaster General may fix the rate of compensation."
The Seaboard Air Line makes no point of this, but in behalf of the Northern Pacific it is contended that claimant, not being in the position of a free agent, ought not to be regarded as having voluntarily accepted the terms proposed by the Postmaster General. But the effect of the findings is that it did so accept, and this result cannot be overturned by raising an argument about the circumstances that went to make up the evidence upon which the findings were based, and the present contention amounts to no more than this.
"That railroad companies whose railroad was constructed in whole or in part by a land grant made by Congress on the condition that the mails should be transported over their road at such price as Congress should by law direct shall receive only eighty percentum of the compensation authorized by this Act,"
of the power and discretion conferred upon him by this legislation, and so long as he exercised this power and discretion reasonably, not fixing a noncompensatory rate or otherwise acting arbitrarily, the carrier was concluded by his action. There is no finding that he acted arbitrarily; on the contrary, he had in support of Order 412 a considered opinion of the Attorney General under date September 27, 1907 (26 Ops.Atty.Gen. 390), and, so far as appears, he treated the land grant routes like others, not reducing them below the eighty percentum contemplated by § 13 of the Act of 1876 or otherwise violating the statutes. There is no finding nor any contention that the amounts allowed them were not compensatory, and, upon the whole, it seems to me that, although he erred in failing to apply the week day divisor to the weighings, this did not render the readjustment based thereon wholly void or permit the carrier, after transporting the mails and accepting the stated compensation without further objection, afterwards to treat the readjustment orders as nullities.
MR. JUSTICE McKENNA concurs in this opinion.

References: § 3998
 § 4002
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 210
 § 3997
 § 4002
 v. 
 v. 
 v. 
 v. 
 § 212
 § 3999
 § 3999
 § 13