Case Name: The Chicago and Northwestern Railway Company, appellants, v. The United States, appellees
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1882-03-06
Citations: 17 Ct. Cl. 435
Docket Number: 
Parties: The Chicago and Northwestern Railway Company, appellants, v. The United States, appellees.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 17
Pages: 435–436

Head Matter:
(15 C. Cls. R., 232; 104 U. S. R., 680.)
The Chicago and Northwestern Railway Company, appellants, v. The United States, appellees.
On the claimants’ Appeal.
The land-gramt raih oad statutes provide that sueh roads shall carry the mail “ at such price as Congress may by law direct,” and that, “ until such price is fixed by law, the Postmaster-General shall have the power to determine the same. ” A subsequent statute aitihorizes the Postmaster- General to malee mail transportation contracts for periods of four years, land-grant roads not being mentioned therein. The Postmaster-General enters into such contracts with land-grant roads. While the contracts a/re still running, Congress direct a reduction in the rate of compensation. The claimants, a land-grant road, protest, but continue to perform the service, and accept the reduced compensation.
The court below decides: (1) That the land-grant railroad statutes are grants and the roads beneficiaries; (2) That an agreement with the Postmaster-General, fixing a rate of compensation for a specific period, must be held to be subject to the power of Congress to interpose and prescribe a different rate; (3) That where the Postmaster-General unites in one contract the statutory obligation to carry themail andthe voluntary obligation to furnish a car suitably fitted, warmed, &c., and Congress order a reduction of the rate, the road may throw up the contract. But if the road continues to perform and accepts the reduced compensation, it must-be deemed to have acceded to the reduction.
The judgment of tlie court below is reversed on the ground that when Congress authorized the Postmaster-General to fix the price by contract within specified maximum rates and for a period of four years, it was an agreement on the part of the United States that the stipulated compensation should not he withheld during that period which it could not refuse to perform without a breach of the public faith, and that the contract was an exercise of the reserved power with an added obligation not to exercise it otherwise for the period agreed on. That the contracts were for four years, and were expressly authorized by law, and therefore valid and binding on the United States as well as upon the railroad company. That the performance by the railroad company of the service required by its contract, notwithstanding the notic.e of the intended reduction of compensation by the Postmastep-General, cannot be construed as a waiver of its rights or an acquiescense in new proposals ; and that, whether it had protested or not.

Opinion:
Mr. Justice Matthews
delivered the opinion of the Supreme Court, March 6, 1882.