Case Name: THE TEXAS AND PACIFIC RAILWAY COMPANY v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1893-05-15
Citations: 28 Ct. Cl. 379
Docket Number: No. 17720
Parties: THE TEXAS AND PACIFIC RAILWAY COMPANY v. THE UNITED STATES.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 28
Pages: 379–391

Head Matter:
THE TEXAS AND PACIFIC RAILWAY COMPANY v. THE UNITED STATES.
[No. 17720.
Decided May 15, 1893.]
On the Proofs.
The controversy grows out of what is known in the Post-Office Department as “ lap service,” i. e., mail service aver the same line hy two companies. The Department apportions the compensation for the whole between the two. The claimant objects. The Department replies declining to pay two companies on the same road at maximum rates and stating the proportion which will be allowed if the claimant continues to perform. The claimant replies “ That the company desires to continué carrying the mails on its trains as suggested hy you.”
I. The statutes regulating the compensation of railroads for mail transportation services do not fix an absolute rate, they fix only the maximum compensation. Eev. Stat., § 4002.
II. Where the Postmaster-General states the terms upon which a mail transportation service may be performed, and a railroad acquiesces and performs, it constitutes an agreement.
HI. A contract entered into, the terms being specified, cannot be changed or modified by the protest of one party.
IV. A suit is a demand and notice of an existing claim, but not a protest against what may occur in the future.
The Reporters’ statement of tbe case:
The following are the facts of the case as found by the court:
I. The Texas and Pacific Eailway Company, a duly organized corporation, operated a line of railroad from Shreveport, La., by Sierra Blanca, Tex., to El Paso, Tex., in all extending over 835 miles, which constituted one of the mail routes of the United States before July 1,1890, numbered 31009, and after-wards numbered 150009.
II. Prior to some time in 1883 the mail service between those points was performed by the claimant company. On the completion of the connecting lines to Sierra Blanca by the Galveston, Harrisburg and San Antonio Eailway Company, owning the road between Sierra Blanca and El Paso, the service by the claimant company was discontinued by an order of the Postmaster-General, notice of which, accompanied by a proposition for future service, was given to the claimant as follows:
“ Post-Office Department,
“Office op the Second Assistant
“ Postmaster-General,
“Eailway Adjustment Division,
“ Washington, D. O., Sept. 15,1883.
“Sir : An order has been made curtailing route 31009 to end at Sierra Blanca (n. o.), decreasing distance 91.5 miles, and pay at the rate of $8,058.40 per annum.
“This course is necessary as the service on route 31039 is to be extended to El Paso, Texas, and the Department objects to paying two companies for service on the same piece of road at the maximum rates per annum..
“If your company is willing the Department will continue the service on your road between Sierra Blanca (n. o.) and El Paso with the understanding that your company will be paid for the service only as much as the weight of mails on your road would increase the pay of the Galveston, Harrisburg and San Antonio Ey. Oo. if all the service was performed by that company.
“Very respectfully,
“E. A. Elmer,
“ Second Asst. P. M. Generat.
“S. Guthrie, Esq.,
“ Agent Texas and Pacific Ry. Oo.,
Washington, D. O.”
The claimant, by its agent, made the following reply:
“Washing-ton, D. C., Sept. 27,1883.
" Sir: Referring to your letter of the 15th instant curtailing route % 31009 I am advised by the geni, transportation manr. that the company desires to continue carrying the mails on its trains between Sierra Blanca and El Paso, as suggested by you.
“Very respectfully,
“S. Guthrie,
“Repg. Mo. Pao. Ry. Go., Opg. Pox. and Pao. Ry.
“Hon. R. A. Elmer,
“ Second Asst. P. M. Gen., Washington, J). 0.”
On September 28, 1883, the Post-Office Department, acting upon said correspondence, restored the service, and gave notice to the claimant by the following letter:
“Post-Office Department,
“Office of the Second Assistant
“ Postmaster-General,
“Railway Adjustment Division,
“ Washington, D. 0., Sept. 28,1883.
“ Sir : An order has been made restoring the service on route 31009, between Sierra Blanca (n. o.) and El Paso, with the understanding that the rate of pay between those points will be as much as the weight of mails will increase the pay of the Galveston, Harrisburgh and San Antonio Ry. Co. if the service was performed alone by that company.
“Very respectfully,
“H. D. Lyman,
uActg. Second P. M. General.
“S. Guthrie, Esq.,
“Agent Texas & Pacific Ry. Go., Washington, D. O'.”
III. After periodical weighing of the mails, as required by law and the regulations of the Post-Office Department,- adjustment orders were issued for payment, to the claimant, compensation in accordance with the terms of the correspondence set out in the preceding finding, one of which orders was as follows:
“No. 13857. 1886. Aug. 26. Pay the Texas and Pacific Railway Company, quarterly, for carrying the mails between Shreveport, La., and El Paso, Texas, from July 1,1886, to June 30,1890, unless otherwise ordered,- at the rate of $125,012.87 per annum, being $127.22 per mile for 19.30 miles, between Shreveport and State Line (n. o.), land grant; $159.03 per mile for 723.92 miles, between State Line (n. o.) and Sierra Blanca, and $81.23 per mile for 91.50 miles, between Sierra Blanca and El Paso, lap service, for transportation. This adjustment is subject to fixture orders and to fines and deductions.
“A. E. STEVENSON,
uActg. Postmaster-General?
IY. No subsequent contract .was made between tbe parties.
November 23,1888, the claimant brought suit in this court to recover the difference between the amount paid by the Department and the maximum authorized to be paid by Revised Statutes, section 4002, as amended, which suit is still pending.
Any claim set up in the present petition for services prior to January 1,1889, is waived by the claimant in its brief.
Y. Thereafter the following additional correspondence took place between the parties at the respective dates of the letters:
“ Washington, D. 0., April 17,1889.
“ Hon. S. A. Whitfield,
“ Second Assistant Postmaster-General:
“ Sir : In the month of August, 1886, the P. M. General made an order by which the mail pay of the Texas & Pacific Railway Co. on route 31009, from Shreveport, La., to El Paso, Texas, for the current contract term ending June 30,1890, was adjusted as follows: For service between Shreveport and State Line, land grant, at 127.22 per mile; for service between State Line and Sierra Blanca, at $159.03 per mile; for service between Sierra Blanca and El Paso, at $81.23 per mile.
J “ The weighing of the mails on this route, from the results of which the pay of said company was adjusted, took place in April and May, 1886. The returns of that weighing showed an average daily tonnage carried in each direction over the whole route of 4,211 pounds, whereupon said company became entitled to the statute rate of $159.03 per mile between State Line and El Paso.
“But over 91.5 miles of that distance, namely, between Sierra Blanca and El Paso, its pay was adjusted at $81.23 per mile. As your petitioner has been advised, another mail route is located upon the same railroad track betweén Sierra Blanca and El Paso.
“ And your petitioner has been paid at the rate of $81.23 per mile between said points, and no more, since July 1,1886, although entitled, as your petitioner believes, to the full statute rate of $159.03 per mile therefor.
“ It must be conceded that the method of adjustment of the pay for services between Sierra Blanca and El Paso is unknown to the law. That it is unjust will be forcibly illustrated by reference to adjustment of pay on the two routes which cover the same railroad between these points, numbered 31009 and 310039.
“ On route 31009 your petitioner carries a daily average tonnage of 4,211 pounds of mail and receives therefor pay at the rate of $81.23 per mile, while on route 31039 the Galveston, Harrisburg, and San Antonio Railway Company carries a daily average tonnage of only 1,218 pounds and receives therefor $94.05 per mile'.per annum.
“Tour petitioner respectfully protests against the continuance of this unjust discrimination, and asks for a modification of the order of adjustment above referred to, so that it’ may be allowed the full statute rate of pay for service between Sierra Blanca and El Paso for the full contract term ending June 30,1890, to wit, $159.03 per mile per annum.
“ Yery respectfully,
Saul. M. Lake,
“ Attorney for the Texas and Pacific By. Co.”
“Post-Office Department,
“Office of the Second Assistant
“ Postmaster-General,
“ Railway Adjustment Division,
“ Washington, D. C., May 16,1889.
“ Sir : In reply to your letter of the 17th ultimo, protesting against the pay as adjusted on that portion of route No. 31009, between Sierra Blanca .and El Paso, Texas, and requesting á modification of the order adjusting the pay for the term from July 1,1886, to June 30, 1890, so as to allow $159.03 per mile for service rendered by the Texas and Pacific Rwy. Co. between said points over the track of the Galveston, Harrisburg and San Antonio Rwy. Co., I have to say that the service was extended from Sierra Blanca to El Paso, Texas, by the Texas and Pacific Rwy. Co. over the tracks of the Galveston, Harrisburg and San Antonio Rwy. Co. with' a full understanding of the manner as to how the pay was to be adjusted. Therefore the Department respectfully declines to accede to your request.
“ If the Texas and Pacific Rwy. Co. is unwilling to continue to accept the compensation as fixed, to which it consented, the Department would like to know it at an early date.
“Yery respectfully,
“S. A. Whitfield,
“ Second Assistant Postmaster- General.
“ Mr. S. M. Lake,
Atty. Texas & Pacific Bwy. Co., Washington, D. C.”
“ Post-Office Department,
“ Office of the Second Assistant
“ POSTMASTER-GENERAL,
“ Railway Adjustment Division,
“Washington, JD. G., Jume 7,1889.
“ Sir : Postal service, as you are aware, was authorized by your line between Sierra Blanca and El Paso, Texas, on the condition that the compensation was to be made for the service under the lap rule,” which was then fully explained.
“ The service was continued until April 17,1889, when your attorney, Mr. S. M. Lake, filed a demand for full compensation, with which this office refused to comply in. letter to him of May 16, 1889. In that letter the Department inquired whether the company intended to persist in its demand. Twenty-one days have elapsed and the Department has not been favored with a reply to its inquiry.
“It is important to the Texas and Pacific Rwy. Co. and the Department that a reply be forwarded without delay. Therefore, the Department will await a reasonable time for a reply from you before taking decisive action in this matter, but as three weeks have already elapsed the answer should not be deferred.
“Very respectfully,
“ S. A. Whitfield,
“Second Assistant Postmaster-Generad.
“ Mr. S. Guthrie,
“ Agent Texas and Pacific Ewy. Go., Washington, JD. G.
Washing-ton, D. C., June 15th, 1889.
“Hon. S. A. Whitfield,
“ Second Asst. P. M. GerSl:
“Sir: I desire to withdraw my letter of the 17 th April, ultimo, asking for a more equitable adjustment of the pay of the Texas and Pacific Railway Company for the transportation of the mails between Sierra Blanca and El Paso, Texas, on route # 31009. I have already explained to you, orally, the cause of the delay in answering your letter of the 16th ultimo.
“As the withdrawal of my letter above referred to will restore the status quo, I trust the pleasant relations heretofore existing between the Department and the company may continue indefinitely.
“Very respectfully, your obedient servant,
‘ « Sam’l M. Lake,
“Atty for the Texas and Pacific Ry. Go.”
VI. The company has continued to carry the mails since the order of September 28,1883, and from time to time has re ceived checks for the amounts due according to accounts stated by the Department upon the basis of that letter.
TIT. If the company is entitled to the maximum rates of compensation mentioned in Eevised Statutes, section 4002, and the amendments thereto, as claimed, then there is due and unpaid, for the service between January 1,1889, and June 30,1892, inclusive, the sum of $23,074.47.
Mr. Samuel F. Phillips and Mr. S. M. Lake for the claimant.
The present contention concerns only compensation for carrying the mail during the period January 1,1889, to June 30, 1892, inclusive, between Sierra Blanca and El Paso; or, in other words, raises the question whether the United States, against the will of the petitioner, could impose upon it during that period the rate of pay known as lap service. (See The Railway Service Gases, 13 C. Cls. E., 199, 205-207.)
The application of the lap-service rate to mail service done by the petitioner from Sierra Blanca to El Paso was duly protested against for all sendee done after November 23,1888, by the bringing of the suit, No. 16,381, still pending, to recover amongst other things, money which had been withheld from it under that rule. (See Lawson’s Case, 14 O. Cls. B., 332, [101 U. S. B., 164]; Swift Go. Gase, 111 U. S. B., 22; Mixon v. Long, 11 Iredell, 428.)
The mail service done by a railroad company which transports the same average weight of mail from end to end of its route, is presumably the same on every mile. And this is a matter assumed to be true by Section 4002 of the Eevised Statutes, except, of course, so far as some other statute may, for good reason, have modified this: ex. gr. for the land grant part of this route, viz, east of State line.
It is submitted that the petitioner is entitled to receive those normal rates of compensation for such mail service as was required of and done by it betwixt Sierra Blanca and El Paso, from January 1,1889, to June 30, 1892 ; in other words, that the special views of the Department upon lap service do not authorize it to impose upon a protesting railway contractor a less rate of pay for service done by certain instrumentalities and at a certain expenditure than that which service done by it with the same means and at the same cost is to receive at another point upon the same route. The elements of a cal-oulation to ascertain a quantum meruit (as it is submitted, obviously are'the rates per mile determined for the route betwixt State Line and Sierra Blanca) ought not to be varied by considerations like those connected with lap service, unless-this dealing be assented to by both parties.
Compliance by the petitioner subsequently to its protest and demand, with orders of the Post-Office Department in regard to service and compensation, upon route 31009 (or 150009) did. not waive such protest. (14 C. Cls. B., 352, and 111 IT. S. R.,. 22; above.)
Mr. Henry M. Foote (with whom was Mr. Assistant Attorney-General Cotton) for the defendants.

Opinion:
RichardsoN, Ch. J.,
delivered the opinion of the court:
' This suit grows out' of what, in departmental language, is-called "lap service;" that is, distinct service over a trunk line-by two or more railway companies having connecting roads.
The Revised Statutes, section 4002, as amended, authorize- and direct how the Postmaster-General shall adjust compensation to railroad companies for carrying the mails.
" Sec. 4002. The Postmaster-General is authorized and directed to readjust the compensation hereafter to be paid for the-transportation of mails on railroad routes upon the conditions- and at thé rates hereinafter mentioned:
" First. That the mails shall be conveyed with due frequency and speed; and sufficient and suitable room, fixtures, and furniture, in a car or apartment properly lighted and warmed, shall be provided for route agents to accompany and distribute-the mails.
" 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;
a Five hundred pounds, seventy-five dollars;
" One thousand pounds, one hundred dollars;
" One thousand five hundred pounds, onehundred and twenty-five dollars ;
" Two thousand pounds, one hundred and fifty dollars ;
" Three thousand five hundred pounds, one hundred and, seventy-five dollars ;
" Five thousand pounds, two hundred dollars, and twenty-five dollars additional for every additional two tliousandpounds.. The average weight to be ascertained, in every ease, by the ac tual weighing of the mails for such a number of successive working days, not less than thirty, at such times, after June thirtieth, eighteen hundred and seventy-three, and not less infrequently 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."
Amendment by act of July 12, 1876, Ch. 179 (1 Supplement to E. S., 2d ed., p. 110) :
" Be it enacted, die., That the Postmaster-General be, and he is hereby, authorized and directed -to readjust the compensation to be paid from and after the first day of July, eighteen hundred and seventy-six, for transportation of mails on railroad routes by reducing the compensation to all railroad companies for the transportation of mails ten per centum per annum from the rates fixed and allowed by the first section of an act of March 3, 1873, now E. S., § 4002, as above, for the transportation' of mails on the basis of the average weight. "
Amendment by act of June 17,1878, Oh. 259 (1 Supplement to E. S., 2d ed., p. 187, par. 3):
" And provided further, That the Postmaster-General be, and he is hereby, authorized and directed to readjust the compensation to be paid from and after the first day of July, eighteen hundred and seventy-eight, for transportation of mails on railroad routes by reducing the compensation to all railroad companies for the transportation of mails five per centum per an-num from the rates for the transportation of mails, on the basis of the average weight fixed and allowed by the first section of an act [of July 12,1876, Oh. 178, as above]."
Further amendment by act of March 1,1881, Oh. 96 (1. Supplement, 2d ed., p. 319, par. 3) :
" And hereafter when any railroad company fail or refuse to provide railway post-office cars when required by the Post-Office Department, or shall fail or refuse to provide suitable safety heaters and safety lamps therefor, with such number of saws and axes to each car for use in case of accident as may be required by the Post-Office Department, said company shall have its pay reduced ten per centum on the rates fixed in section four thousand and two of the Eevised Statutes, as amended by act of July twelfth, eighteen hundred and seventy-six [as first above set out], and as further amended by the act of June 17, 1878 [as last above set out]."
Where two or more railroad companies run trains over the same tracks, and the Postmaster-General deems that the needs of the mail service do not justify the expenditure of more than the maximum if all the services are performed by one company, it has long been his practice to allow a second company to perform part of the service with the understanding that its compensation should be such per mile as the pay of the first company would be increased if it carried all the mails.
He did so in this case. The following correspondence took place between the parties:
" WASHINGTON, D. C., Sept. 15,1883.
"Sib: An order has been made curtailing route 31009 to end at Sierra Blanca (n. o.), decreasing distance 91.5 miles, and pay at the rate of $8,058.40 per annum. This course is necessary, as the service on route 31039 is to be extended to El Paso, Texas, and the Department objects to paying two companies for service on the same piece of road at the maximum rates.
"If your company is willing the Department will continue (the service on your road between Sierra Blanca .(n. o.) and El Paso with the understanding that your company will be paid for the service only as much as the weight of mails on your road would increase the pay of the Galveston, Harrisburg and. San Antonio By. Co. if all the service was performed by that company.
"Yery respectfully,
"B. A. Elmeb,
" Second Asst. P. Jf. General.
"S. Guthbie, Esq.,
" Agent Texas a/nd Pacific By. Go."
"Washington, D. C., Sept. 37,1883.
"Sib: Beferring to your letter of the 15th instant curtailing route $31909,1 am advised by the geni, transportation manr. that the company desires to continue carrying the mails on its trains between Sierra Blanca and El Paso, as suggested by you.
"Yery respectfully,
"S. Guthbie,
uBepg. Mo. Pac. By. Go., Opg. Tex. and Pac. By.
"Hon. B. A. Elheb,
" See. Asst. P. M. Gen., Washington, D. G."
"POST-OFFICE DEPARTMENT,
"Office of the Second Assistant
" Postmaster-General,
"Bailway Adjustment Division,
" Washington, D. 0., Sept. 28,1883.
"Sir: An order has been made restoring the service on route 31009, between Sierra Blanca (n. o.) and El Paso, with the understanding that the rate of pay between those points will be as much as the weight of mails will increase the pay of the Galveston, Harrisburg and San Antonio Ey. Co. if the service was performed alone by that company.
"Very respectfully,
"H. D. Lyman,
uActg. Second P. M. General.
"S. Guthrie, Esq.,
" Agent Texas a/nd Pacific By. Go., Washington, JD. G.n
These letters, containing an offer on one side and an acceptance on the other, clearly made a contract between the parties, and no other contract was subsequently entered into.
The claimant seeks to escape from the contract on the ground that a protest was made against it.
The business was done and payments were made according to the contract to the satisfaction of both parties until November 23, 1888, when the company brought suit in this court to recover the statute maximum.
On the 17th of April, 1889, the claimant, by its attorney, addressed a letter to the Department, set out in finding v, stating, among other things, that it is " entitled, as your petitioner believes, to the full statute rates," adding " it must be conceded that the method of adjustment of the pay for services between Sierra Blanca and El Paso is unknown to the law," and that it "protests against the continuance of this unjust discrimination and asks ior a modification of the order of adjustment."
It seems to be assumed by the claimant that the statutes fix an absolute rate of compensation, while in point of fact they fix only the maximum below which the Postmaster-General is authorized to make such contracts as he deems the needs of the mail service may justify.
The company was under no obligation to perform this service for any agreed period and could have refused to take the mails at any time. Complaining of the injustice of the contract did not annul it nor make another and different one in its place.
If the company had refused to perform the service the Postmaster-General might have acceded to the claimant's terms, or he might have discontinued the service and have turned the mails over to the Galveston, Harrisburg and San Antonio Railway Company, but he had a right to the option, just as the claimant had the option to carry the mails on the terms agreed upon or to refuse to carry them at all.
The contract could not be changed by complaints and protests.
It would be a novel principle to introduce into the law of contracts that a contractor for continuous service at agreed prices can raise the price by complaining of the injustice of the contract, while still performing the service and regularly taking pay according to contract price.
But the letter of the company was not a protest, such as is admitted to avoid the otherwise legal effect of an act done. It was a mere complaint, terminating with a request for a modification of the order of adjustment.
Nor was the bringing of suit November 23,1888, a protest.
A suit is a demand and notice of an existing claim, and not a protest against what may occur in the future. Such are the decisions cited by the claimant's learned counsel; as, for instance, in the case of Nixon v. Long (11 Iredell, 427), it was held that when one had a cause of action accruing after demand the suing out of a writ for that cause was a-demand. It is nowhere held that a suit for one cause of action is a protest upon which may be founded another suit for subsequent causes even growing out of the same contract, nor sufficient to avoid the legal effect of subsequent receipts of payments according to contract for services thereafter voluntarily performed.
Besides, if that were a -protest such as claimed, it was waived by the letter of the claimant's attorney of date June 15, 1889, set out in finding v, nearly seven months after the institution of the suit, in which he withdraws this letter of April 17, 1889, above referred to, " asking for a more equitable adjustment of the pay," and adding, "as the withdrawal of my letter will restore the status quo, I trust the pleasant relations heretofore existing between the Department and the company may continue indefinitely." .
What was the status quo other than the contract between the parties set out in finding ii, according to which the claimant bas been, paid? It was that or nothing, for there was no other status quo to which those words could refer. The contract was renewed and all complaints and protests, whatever they might have been, were thereby waived.
This is clearly so, because that letter was in reply to two letters from the Department, May 16 and June 7, 1889, in the first of which the company was informed, after stating the facts, that—
"Therefore the Department respectfully declines to accede to your request. If the Texas and Pacific Bailway Company is willing to continue to accept the compensation fixed, to which it consented, the Department would like to know it at an early date."
In the second letter, under date of June 7, referring to letter of May 16, it is said:
"In that letter the Department inquired whether the company intends to persist in its demand. Twenty-one days have •elapsed and the Department has not been favored with a reply to its inquiry. It is important to the Texas and Pacific Bail-way Company and the Department that a reply be forwarded without delay. Therefore the Department will await a reasonable time for a reply from you before taking decisive action in this matter, but as three weeks have already elapsed the answer should not be deferred."
The claimant's attorney a few days later sent his letter, above referred to, in which he withdraws his complaints and protest, restores the status quo, and trusts that the pleasant relations between the parties may continue indefinitely.
The Post-Office Department has proceeded with persistent and commendable efforts to prevent any misunderstanding with the claimant as to the relations between them, and in that we think it has law on its side.
In our opinion the company is bound by the contract set out in finding n and renewed by the correspondence set out in finding v. Having been paid in accordance with the contract, the claimant has no cause of action, and the petition is dismissed.