Case Name: J. L. LANCASTER AND CHARLES L. WALLACE, RECEIVERS OF THE TEXAS & PACIFIC RAILWAY, v. THE UNITED STATES
Court: United States Court of Claims
Jurisdiction: United States
Decision Date: 1924-12-01
Citations: 60 Ct. Cl. 80
Docket Number: No. C-112
Parties: J. L. LANCASTER AND CHARLES L. WALLACE, RECEIVERS OF THE TEXAS & PACIFIC RAILWAY, v. THE UNITED STATES
Judges: 
Reporter: United States Court of Claims Reports
Volume: 60
Pages: 80–91

Head Matter:
J. L. LANCASTER AND CHARLES L. WALLACE, RECEIVERS OF THE TEXAS & PACIFIC RAILWAY, v. THE UNITED STATES
[No. C-112.
Decided December 1, 1924]
On the Proofs
Railroad* rates; land-grant ded/u.ctions; equalizing agreements; 50 per cent deduction. — Where a nonland-grant railroad company enters into equalizing agreements with railroads organized under the act of July 28, 1866, and becomes subject to land-grant deductions of 100 per cent, it comes within the purview of the act of October 6, 1917, 40 Stat. 361, reducing such rate to a 50 per cent basis during the war with Germany and Austria-Hungary.
Same; combinations of fares. — Through fares for the transportation of United States troops constructed by using combinations of fares upon places other than those agreed upon between the railroad companies and the Government are unauthorized, and the plaintiff may recover for any deduction made from its bills by using such combinations.
Same; tourist sleepers. — Where it is - customary to furnish tourist sleepers for transporting United States troops long distances, and such cars were furnished by a railroad company and used by the Government in transporting troops from El Paso, Texas, to Hobolcen, New Jersey, and the rates charged were provided for by a tariff in force on the lines used, such railroad company is entitled to recover the rates charged..
Statute of limitations; Transportation Act of 1920. — The three years’ limitation contained in section 424 of the transportation aet of February 28, 1920, 41 Stat. 491, 492, runs from the date of the approval of the act, and is applicable to suits against the United States in the Court of Claims. See Dupont v. Davis, 264 U. S.. 456.
The Reporter's statement of the case:
Mr. F. Garter Pope for the plaintiffs. Mr. Wm. E. Linden was on the briefs.
Messrs. George H. Foster and Joseph H. Sheppard, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant. . . ■
The following are the facts as found by the court:
I. Plaintiffs are the receivers, duly appointed, qualified and acting, of the Texas & Pacific Railway, a corporation organized under acts of Congress of the United States, and have always been loyal to the United States and have never voluntarily aided or abetted its enemies.
For many years plaintiffs have operated a line of railways in the State of Texas and other States formerly operated by the said corporation, doing business as a common carrier of passengers and freight for hire and reward under tariffs issued by themselves and their connections duly published and filed with the Interstate Commerce Commission according to law.
No part of the lines of plaintiffs’ railway was constructed by the aid of the grants of lands by the United States but plaintiffs have equalized their rates with and, as connecting carriers, have sold transportation over lines so aided and over other lines also equalizing with the land-aided lines.
II. At various times prior to the dates of the transportation hereinafter referred to, plaintiffs, in common with other railroad carriers of the United States, entered into agreements with the Government of the United States on the subject of fares and allowances for the transportation of military traffic, the said agreements being variously entitled Inter- territorial Military Arrangements, Interterritorial Military Agreements, Western Military Arrangement, etc. The said ageements were executed on behalf of the carriers by the duly authorized agents of the Southwestern, Transcontinental, and Western Passenger Associations, the Central Passenger Association, the New England Passenger Association, the Southeastern Passenger Association, and the Trunk Line Association, and on behalf of the United States by the Quartermaster General of the Army, United States War Department, the. Chief of the Bureau of Navigation, United States Navy Department, and the quartermaster, United States Marine Corps. All of said agreements, which were in effect during the periods hereinafter referred to and at the dates of the transportation herein described and referred to, contained certain provisions relative to the construction of net fares and allowances and the use of party fares. One of the said agreements, designated Western Military Arrangement, dated April 1, 1916, effective July 1, 1916, contained the following provisions:
“(9) Party fares (where authorized) apply for parties traveling together on one party ticket.
“(a.) Party fares may be used as factors in constructing through net fares to and from Central Trunk Line, Southeastern and New England territories, in the understanding that the basing points shall be Chicago, St. Louis, Memphis, Vicksburg, and New Orleans only. Neither two or more party fares, nor a party fare and an individual fare, east or west of the gateways named, may be combined in establishing a basing fare to or from the basing point. Party fares used to and from basing points must be authorized as one through party fare to or from such basing points, as the case may be. A party fare or an individual fare, published as one through fare to or from the basing points named, may, however, be combined with authorized individual fares east or west of such points in making through net fares between the eastern and western territories described, except that where through fares of like class are published they shall be used in all cases in establishing through net fares. All fares used in establishing net fares must be lawfully on file with the Interstate Commerce Commission.
“(d) In the construction of net military fares having origin and destination within the territory west of and including Chicago, St. Louis, Memphis, Vicksburg, and New Orleans, party fares to or from St. Louis and Kansas City only may be combined with party fares to and from those gateways only, and party fares to and from St. Louis to and from those gateways only. Two or more party fares nor a party fare and an individual fare, on either side of St. Louis and Kansas City, may not be combined in establishing the basing fare to or from St. Louis or Kansas City.
“(c) Net fares established in combinations made under sections (a) and (b) apply via usual one-way ticketing routes carrying short-line fares, or via routes specifically equalizing net fares so made,-but shall be restricted to usu-¡ ally traveled routes for military trafile from starting point to destination.
“(d) Where party fares are used in the territories and upon the bases outlined in sections (a) and (b) herein the same shall be net cashed in the usual way via rate-making gateway only, but where such fares are used for any part of the distance in the territory west of Chicago, St. Louis, Memphis, Vicksburg, and New Orleans, under sections (a) and (b) herein, the 5 per cent allowance to the Government shall not apply to any part of the through fare or proportion, either party or individual fare factor, so far as western carriers are concerned.
“(e) The intent of this agreement is that where through fares are published no combinations of fares whatsoever are to be made, except as specified in sections (a>) and (b) herein.”
Another of the said agreements, designated Interterri-torial Military Arrangement, dated December 28, 1916, effective January 1,19T7, contained the following provisions:
“For military trafile moving from territory east of Chicago, St. Louis, Memphis, Vicksburg, and New Orleans, to territory west thereof, or vice versa, authorized party fares to and from the gateways named may be used in the construction of through net fares, in the understanding that the basing points will be Chicago, St. Louis, Memphis, Vicksburg, and New Orleans only.
“Neither two or more party fares, nor a party fare and an individual fare east or west of the gateways named, may be combined in establishing a basing fare to or from the basing point. Any party fare used to or from the basing points named must be authorized as one through party fare to or from such basing points, as the case may be. A party fare or an individual fare published as one through fare to or from the basing points named may, however, be combined with authorized individual fares east or west of such points in making through net fares between the eastern and western territories described, except that where through fares of like class are published they shall be used in all cases in establishing through net fares; all fares used in establishing net fares must be iaAvfully on file with the Interstate Commerce Commission.”
III. By an act of Congress approved July 28, 1806, 14 Stat. 338, it was provided that railroad lines accepting aid of grants of land under the terms of said act should transport the troops and property of the United States free of charge, and several of the lines over which the transportation hereinafter mentioned passed either accepted grants of lands under the terms of said act or equalized their rates with said lines; but by the act of Congress approved October 6, 1917, 40 Stat. 361, it was provided:
Land-grant railroads organized under the act of July 28, 1866, chapter 300, shall receive the same compensation for transportation during the existing war emergency of property and troops of the United States as may be paid to land-grant railroads organized under the land-grant act of March 3, 1863, and the act of July 27, 1866, chapter 278, for such transportation during said emergency.
Bailroads organized under the land-grant act of July 28, 1866, transported Government troops and property free, and those organized under the acts of March 3, 1863, and July 27,1866, transported Government troops and property for 50 per centum of commercial rates.
IY. During the year 1917, beginning with March 22, 1917, plaintiffs, at the requests of the duly authorized officers of the United States Army, furnished transportation from El Paso, Tex., on plaintiff’s lines in Western Passenger Association territory to points on other lines in said Western Passenger Association territory and in other passenger association territories, as shown in the appendix attached to the petition and by reference made a part of this finding. Some of said transportation occurred during the period between April 6, 1917, and October 6, 1917, and plaintiffs in rendering their bills for said transportation calculated the land-grant deductions at 100 per cent of the proportions accruing on the land-grant mileage constructed under the act of-July 28, 1866,-and in every instance based their charges upon the fares due under the ter;ms of said military agreements: ■
The details of each item are as follows:'
Bill T-15Ó5. 1,022 men from El Paso, Tex., to- Macon, Ga., in March, 1917. Correct fare, $32.98. Plaintiffs were paid $28.38, a difference of $4.60 per man. - Plaintiffs originally claimed $34.08 and payment was made at net fare of $28.38 by the Auditor for the War Department on the basis of combination of individual and party fares over Pecos, Tex., Shreveport, La., and Vicksburg, Miss. Plaintiff accepted the auditor’s settlement, under protest, but did not appeal to the comptroller for a revision thereof. After the lapse of considerably more than three years, a supplemental bill was sent to the General Accounting Office and was disallowed. No further action was taken by the carrier on this bill until this suit was instituted. Six years lacking one day elapsed between the date of the transportation and the date on which suit was brought, the petition having been filed on the last day of the six-year period. The difference for 1,022 men at $4.60 per capita is $4,701.20.
Bill T-1598. 38 men from El Paso to Little Bock, Ark., in May, 1917. Correct fare $25.67. Plaintiffs were paid $23.61. Bate adjusted by Auditor for War Department to $23.17 by deduction of 44 cents per capita, or $16.72, from an unsettled account of the United States Bailroad Administration, on combination of individual and party fares over Pecos, Shreveport, and Texarkana. It do ~,s not appear that plaintiffs reimbursed or accounted to the United States Bail-road Administration for said deduction and they concede that their claim on this item is confined to the difference between the $23.61 received by them and the $25.67 due under the act of October 6, 1917. Appeal was taken to the comptroller from the deduction by the auditor and the auditor’s action was affirmed. Subsequently, supplemental bill for the difference under the act of October 6, 1917, was filed and disallowed and reconsideration of the accounting officer’s action was subsequently denied by the Comptroller General. Difference for 38 men at $2.06, $78.28. ■
Bill T-1606. 24 officers and 1,854 men, El Paso to Gettysburg, Pa., May 28, 1917. Correct fare, first class $43.95 and second clas,s $41.89. Plaintiff’s billed the first-class transportation at $41.85 and the second-class at $39.78, the rates due under the military agreements, with land-grant deductions over the Missouri Pacific line at 100 per cent. Plaintiff’s bill was paid in full by disbursing officer. The Auditor for the War Department reduced the .second-class rate to $39.36 and deducted the sum of $858.95 from an unsettled account of the United States Railroad Administration. It does not appear that plaintiffs reimbursed the United States Railroad Administration or accounted to it for'said deduction and plaintiffs concede that their claim is confined to the differences between the rates paid to them and the rates due from the change in land grant under the act of October 6, 1917. For the,se differences plaintiffs rendered their supplemental bill to the auditor, which was disallowed for the reason that the original settlement had been made the subject of adjustment by the accounting officers of the Government. Difference for 24 officers, first class at $2.10, $50.40; and 1,854 men, second class at $2.11, $3,-911.94 — -total $3,962.34.
Bill T-1610. 18 men from El Paso to Chattanooga, Tenn., in May, 1917. Correct fare due under the military arrangements $31.16, amount paid $29.92. Plaintiffs originally claimed $29.72, rate due under military arrangements with land-grant deductions account of free lines at 100 per cent, which was paid by disbursing officer. Subsequently, plaintiffs rendered their bill at $31.16 on account of land-grant difference under the act of October 6, 1917, and the original .settlement having been made by a disbursing officer, the accounting office took jurisdiction of said bill and allowed the sum of 20 cents per capita additional in settlement of June 5, 1918, upon the same basis applied in settlement of bill T-1598, from which plaintiffs had appealed and which appeal was decided against them on April 30, 1919. It does not appear that plaintiffs appealed this particular settlement. Difference for 18 men, at $1.24 — $22.32.
Bill T-1645. 1 man and 33 men from El Paso to Lytle, Ga., in June, 1917. Correct fare $31.48 per capita. Plain tiffs billed the single fare at $80.02 and 33 fares at. $29.72 to Chattanooga, the rates due under the military agreements with land grant for free lines computed at 100 per cent, plus $15 for special car, Chattanooga to Lytle for the 33 men. The papers were forwarded to the Auditor for War Department, who made settlements on the basis of $30.02 for one man as claimed, and $27.92 per capita for the party of 33 men, upon the basis of the combination of individual and party fares and ignoring the increases under the act of October 6, 1917. Plaintiffs protested this settlement, and submitted their supplemental bill based upon the fares computed under the military agreements and the act of October 6,1917, which was dismissed on the ground of no jurisdiction under the act of July 31, 1894. Differences, 1 man $1.46; 33 men at $3.56, $117.48 — total, $118.94.
Bill T-1735. 10 officers, first class, and 1,153 enlisted men, second class, El Paso to Washington, D. C., in August, 1917, routed over lines equalizing with land-grant lines of the Missouri Pacific Bailroad from Texarkana to St. Louis. Correct fare under military agreements, $44.12 for first class and $41.76 for second class. Plaintiffs billed at $42.25 and $39.79, respectively, and payment was made at said rates in part by the disbursing officer and in part by the Auditor for War Department. Subsequently, plaintiffs rendered their supplemental bill for differences under the act of October 6, 1917 (which is all there is now claimed on this item), and said supplemental bill was disallowed by the Auditor for the War Department on the ground that the original transactions had been in part the subject of an auditor’s settlement. The Comptroller General had also ruled, on January 23, 1918, that the increased fares arising under the act of October 6, 1917, did not apply to equalizing lines. Difference, $1.87 on 10 fares, $18.70, and $1.97 on 1,153 fares, $2,271.41 — total, $2,290.11.
Bill T-1649. 12 officers, first class, and 1,622 enlisted men, second class, El Paso to Hoboken, N. J., in July, 1917, routed over lines equalizing with Missouri Pacific’s land-grant line. Correct fares under military agreements, $45.46 on first class and $43.65 on second class. Plaintiffs billed at $43.47, for first class and $41.66 for second class and pay- meat- was effected at these- rates by the disbursing officer off the Army and by the: Auditor:, for War Department on a supplemental bill.. Subsequently, plaintiffs filed a supplemental bill for additional compensation under the-act of October 6, 1917, which was disallowed on the same grounds assigned to the disallowance of supplemental bill on the transportation covered by plaintiffs’ bill T-1735. Plaintiffs’ claim is confined entirely to the differences accruing under the act of October 6, 1917, and these differences are as follows: Twelve fares at $1.99, $23.88, and 1,622 fares at $1.99, $3,227.78 — total, $3,251.66.
Bill T-1733. 12 officers, first class, and 552 men, second class, from El Paso to Jersey City, N. J., in August, 1917, routed over lines competing with Missouri Pacific land-grant lines. Correct fares under military arrangements, $45.46 first class, and $43.65 second class. Plaintiffs claimed $43.47 per capita first class and $41.66 per capita' second class, under the military agreements with land-grant computed at 100 per cent deduction on account of equalization with Missouri Pacific line and their claim on said basis and at said rates was paid in part by the disbursing officer and in part by the Auditor for the War Department on a supplemental bill, said supplemental bill covering men additional to those paid for by the disbursing officer. Subsequently, plaintiffs filed supplemental bill for additional compensation under the act of October 6, 1917, and the said bill was disallowed for the same reasons assigned for the disallowance of supplemental bills T-1735 and T-1694. Plaintiffs’ claim on this item is confined entirely to the difference on account of land grant under the act of October 6, 1917, and is as follows: Twelve fares at $1.99, $23.88, and 552 fares at $1.99, $1,098.48 — total $1,122.36.
V. On June 2, 1917, plaintiffs and their connecting lines transported 28 officers, first class, and 2,543 enlisted men, second class, from El Paso, Tex., to Hoboken, N. J., routed over lines equalizing with the-Missouri Pacific land-grant lines, for which they claimed, in their bill 1649, $43.47 for the first-class and $41.66 for the second-class transportation. Payment was made by the disbursing officer of the, Army by applying a rate of $37.80 to the second-class trans-: pórtatibn, and this action was affirmed by the Auditor for War Department for the reason that the net fare as paid by the disbursing officer had been established in accordance with the provisions of the Interterritorial Military Arrangement. The question of the correct rate under military arrangements turns upon the applicability of Toledo, St. Louis & Western tariff, I. C. C. No. 1690, in effect January 4,191?, and canceled June 15, 1917, which tariff is stipulated to be the tariff relied upon by the accounting officers of the defendants in computing their proposed rates on the second-class transportation.
The differences between the amounts paid plaintiffs and the correct amounts’ due under said military agreements (provided equalizing carriers are entitled to the benefit of the act of October 6, 1917) on the basis of the- application of said Toledo, St.'Louis and Western tariff, would be for 28 first-class fares at $1.99, $55.72, and 2,-543 second-class fares at $3.79 ($41:59 minus $37.08), $9,637.97 — ;total, $9,-693.69, and, on the basis of the nonapplication of 'said’tariff would be for 28 first-class fares at $1.99, $55.72, • and 2,543 second-class fares at $5.85, $14,876.55 — total, $14,932.27. Subsequent to the action of the auditor in disallowing plaintiffs’ original supplemental bill, plaintiffs filed another supplemental bill which took into consideration the increase in rates due to the act of October 6, 1917, and said second supplemental bill was disallowed on the same grounds assigned for the' disallowance of supplemental bills T-1735, T-1694, and T-1733, as shown in Finding IV.
Plaintiffs’ claim is based upon the application of Bio Grande tariff No. 130, which was in effect at the time of the movement upon which their fares claimed on bill T-1694 were also based and the correctness of which is conceded (provided the equalizing lines be entitled to same rates as the lines specifically referred to in the act of October 6, 1917), so that if the Toledo, St. Louis and Western tariff be inapplicable, the correct rates under the military agreements would be $45.46 first class and $43.65 second class. On the other hand, if said Toledo, St. Louis and Western tariff be applicable, then the correct first-class rate under the military agreements would be $45.46 and the correct second-class rate would be $41.59 after allowing for the increase under the act of October 6, 1917, as contended by-defendants’ accounting officers.
The said Toledo, St. Louis and Western tariff, I. C. C. No. 1690, was a joint passenger tariff of one-way second-class party fares from East St. Louis, Ill., and St. Louis, Mo., to New York City. Said tariff contained no provision making it applicable to any intermediate or adjacent points, but it is specifically stated therein that “ This tariff applies from East St. Louis, Ill., and St. Louis, Mo., to New York, N. Y.” The said tariff named an adult rate for parties of 10 or more of $14.55, and contained a provision that “ Fares named herein apply to second-class accommodations and tickets sold at these fares will be accepted in coaches and chair cars, but not in parlor or sleeping cars.”
The troops transported for the Government did not go to New York, N. Y., but to Hoboken, N. J. They did not ride in coaches or chair cars, but in tourist sleeping cars.
The court decided that plaintiffs were entitled to recover, in part.

Opinion:
MEMORANDUM BT THE COURT
There are four questions of law presented for consideration in this case.
(1) The plaintiffs' railroad was not a land-grant road, but was a party to an equalizing agreement by which it agreed to transport Government property on the same terms as land-grant railroads. The accounting officers refused to allow plaintiffs the benefit of the 50 per cent land-grant rate under the act of October 6, 1917, 40 Stat. 361, and made deduction for land grant at the rate of 100 per cent. Plaintiffs are entitled to recover the difference under the decisions in Baker, Receiver, v. United States, 56 C. Cls. 336, and St. Louis, Brownsville & Mexico Ry. Co. v. United States, 58 C. Cls. 619.
(2) The accounting officers, in computing rates for the transportation of United States troops by plaintiffs from El Paso, Tex., to points east of the Mississippi River, used combinations of party fares with individual fares, and thus constructed through fares on points west of the Mississippi River not authorized by the military agreement in force between the railroad company and the Government. The plaintiff is entitled to recover the difference between such rates and the rates allowed by said agreement. Atchison, Topeka & Santa Fe Ry. Co. v. United States, 256 U. S. 205; Illinois Central R. R. Co. v. United States, 58 C. Cls. 593.
(3) The defendant contends that one item of the claim, bill T-1505, is barred by the statute of limitations of three years imposed by section 424 of the transportation act of February 28, 1920, 41 Stat. 491, 492. The transportation for which claim was made by this bill was rendered March 22,1917; this suit was brought March 21,1923, and this court has held that the provision of the transportation act relied on applies, and the item of $4,701.20 is barred. Schaff, Receiver of Missouri, Kansas & Teneas Ry. Co. & Texas, v. United States, 59 C. Cls. 318. The rule of the Atchison, Topeka & Santa Fe case, 58 C. Cls. 583, as to laches, is not applicable here.
(4) A large number of United States troops were transported by plaintiffs from El Paso, Tex., to Hoboken, N. J. These troops were transported by plaintiffs and connecting carriers in tourist sleepers from starting point to destination, and transportation was charged for at rates fixed for such service by a tariff in force on plaintiffs' line at the time of the movement, Rio Grande tariff No. 130. The accounting officers applied the Toledo, St. Louis & Western tariff, I. C. C. No. 1690, which was canceled June 15, 1917, 13 days after the transportation. This was a one-way joint passenger tariff of second-class party fares from St. Louis, Mo., and East St. Louis, Ill., to New York City, and gave lower rates than the tariff used by plaintiffs in making out their bill, but it stipulated that " Fares named herein apply to second-class accommodations and tickets sold at these fares will be accepted in coaches and chair cars, but not in parlor cars or sleeping cars." The Government claims that tourist sleepers were not requested, or, at least, not proven to have been requested. They were, however, furnished and used; they were the customary equipment for such travel and it is unreasonable to assume that the Government requested or would have used anything less suitable.