Case: J. L. LANCASTER AND CHARLES L. WALLACE, RECEIVERS OF TEXAS AND PACIFIC RAILWAY COMPANY, v. THE UNITED STATES
Abbreviation: Lancaster v. United States
Decision Date: 1922-05-22
Docket Number: No. 8-A
Citation: 57 Ct. Cl. 284
Volume: 57
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: J. L. LANCASTER AND CHARLES L. WALLACE, RECEIVERS OF TEXAS AND PACIFIC RAILWAY COMPANY, v. THE UNITED STATES.
Judges: Hay, Judge; Graham, Judge; Booth, Judge; and Campbell, Chief Justice, concur.
Pages: 284–294

Head Matter:
J. L. LANCASTER AND CHARLES L. WALLACE, RECEIVERS OF TEXAS AND PACIFIC RAILWAY COMPANY, v. THE UNITED STATES.
[No. 8-A.
Decided May 22, 1922.]
On the Proofs.
Transportation; Army impedimenta; protest. — Wliere Army impedimenta is transported by a railroad winch, renders its bills to the Government, charging for the transportation at the usual commercial freight rates, and its bills are paid" by the disbursing officer as rendered, and the comptroller subsequently rules that such impedimenta should be transported in baggage cars, one baggage car free for every twenty-five men in the troop movement, and the auditor thereafter passes other bills of said company as correct, but deducts therefrom the difference between the amounts paid by the disbursing officer as freight and the amount that should have been paid in accordance with the ruling of the comptroller, failure to protest such deduction will not operate against a recovery in this court.
The Reporter's statement of the case:
Mr. F. Garter Pope for the plaintiffs.
Mr. Perry W. Howard, with whom was Mr. Assistant Attorney General Robert PL. Lovett, for the defendant.
The following are the facts of the case as found by the court:
I. Plaintiffs are the receivers, duly appointed, qualified, and acting, of the Texas and Pacific Railway Company, a corporation duly incorporated under acts of Congress. At the times of the different transactions hereinafter set forth in these findings of fact they operated and still operate a system of railways in the State of Texas and other States, doing business as a carrier of passengers and freight for hire and reward under tariffs duly filed with the Interstate Commerce Commission by them and their connecting lines, with their concurrence, and published as provided by law.
II. When the troops and Army impedimenta hereinafter described were transported there were in force on all the lines which furnished such transportation special baggage tariffs which covered the territories through which said troops and impedimenta were moved. Said special baggage tariffs provided, in substance and effect, the terms and conditions under which associated travellers travelling on one ticket might become entitled to a baggage car free for the transportation of certain of their effects at the rate of one car free to each (generally) 25 passengers paying full fares.
III. With respect to the articles pertaining to and accompanying bodies of troops, and composed of tents, ambulances, wagons, caissons, ammunition, tools, and other articles peculiar to military impedimenta, and sometimes called company or battalion or regimental “ property ” or “ camp equipment,” it has always been claimed by carriers and conceded by the Quartermaster General of the United States Army that such shipments were essentially freight and were so to be treated in settlements with carriers for their transportation.
For many years the Quartermaster General has issued periodically a publication entitled “Manual for Quartermaster Corps,” and the edition thereof published and made effective in December, 1916, and still in full force and effect, contains paragraphs 3391, 3441, 3443, 3445, 3453, 3494, 3498, and 3500, which, amongst others, recognize the clear distinction between public property and equipage or Army baggage on the one hand and the baggage entitled to free transportation, or transportation in the baggage service, on the other hand. A decision of the Comptroller of June 18,1918, (24 Comp. Dec. 714), to the effect that, under the provisions of carriers’ baggage tariffs, the Government was entitled to one car free for every 25 passengers in the accompanying passenger movement, was the first notification that the Government claimed one special baggage car or its equivalent for every 25 soldiers traveling with Army impedimenta. Prior to that decision the Government paid for such impedimenta as freight.
IY. Since the decision of the Comptroller of June 18, 1918, all disbursing and accounting officers of the Government have made settlements with all carriers upon the basis that the United States was entitled to one baggage car free for the transportation of its camp equipment and company property for every 26 officers and enlisted men traveling.
V. Prior to January 1,1917, the plaintiffs and all the other lines, parties to the Interterritorial Military Arrangements which became effective on that date, were parties to agreements, known, as military agreements, between authorized representatives of the carriers and authorized officers of the War and Navy Departments, which were for the most part similar to and superseded by the. later arrangements.
The said Interterritorial Military Arrangement or contract was entered into between the United States Army, Navy, and Marine Corps and the carriers in the territories of the Central Passenger Association, New England Passenger Association, Southeastern Passenger Association, Southwestern Passenger Association, Trans-Continental Passenger Association, Trunk Line Association, and Western Passenger Association, to become effective January 1, 1917, and to supersede and cancel all previous interterritorial arrangements between the same parties, the material and relevant parts of which are as follows:
“iii.
“ Traffic covered, by this arrangement. — The net fares, allowances, and routes in connection therewith authorized hereunder are applicable exclusively for the transportation of officers, enlisted men, and others connected. with the United States Army, United States IN avy, and United States Marine Corps, for whom the United States Government is lawfully entitled thereto, and when traveling on transportation requests of the issues of the United States Army, United States Navy, and United States Marine Corps, and at the United States Government expense only.
“iv.
“ Net fceres and allowances. — (1) (a) The fares applicable under this arrangement will be the lawful commercial fares as on file with the Interstate Commerce Commission from starting point to destination at time of movement (see exceptions, Section V), less lawful land-grant deductions properly established, less five per cent (5%), the five per cent allowance not to exceed the maximum allowances or exceptions as specified in Section VI. Government fares so established will apply to all military traffic as described in Section III, including special train and special car movements as well as individual and party movements (see Section XI).
“(2>) Proportions will not be used in any case in the construction of fares.
* =!= * * * •
“ When special cars or special trains are furnished hereunder, not less than the minimum number of fares for such special cars or special trains will be required.
“xv.
“ Baggage.— (1) One hundred and fifty (150) pounds of personal effects, properly checkable as baggage, under the tariff of the initial carrier, will be transported without charge for each person. Personal baggage in excess of the free allowance stated when provision for the transportation of the excess baggage is specially made in United States Army, Navy, or Marine Corps transportation requests and is paid for by the United States Government, will be charged for at the regular excess-baggage rate, based upon the net individual fare. When provision is not made in the transportation request for the transportation of excess baggage, collection will be made from the traveler at the regular commercial rate for weight in excess of the free allowance stated. Excess baggage charges will not be subject to allowances applicable in connection with the fares for tickets under this arrangement. Baggage regulations in other respects than above will be in accordance with the tariff of the initial carrier checking the baggage in each case.
“(2) Company, battalion, regimental, or Government property is not included in the above.
“ Termination of arrangement. — It is understood that this arrangement may be terminated at the pleasure of the United States Army, United States Navy, and United States Marine Corps, independently of each other, and the withdrawal from the arrangement of one of these branches of the Gov ernment will in no way affect the operation of the arrangement as to the other branches of the Government electing to continue it; the reservation being made, however, that the carriers may withdraw from the arrangement at their option.”
VI. The Interterritorial Military Arrangement effective July 1, 1916, which was superseded by the similar agreement effective January 1, 1917, referred to in Paragraph V, was endorsed by the comptroller in a letter to the Secretary of War dated May 20, 1916, which, among other things, contained the following:
“9. This agreement is considered advantageous to the Government for the following reasons; (a) It will result in a saving of Government funds. (5) It will procure cooperation on the part of the railroads, (c) It will facilitate the settlement of accounts.”
On March 3, 1917, the Quartermaster General, with the approval of the Secretary of War, ordered copies of said Interterritorial Military Arrangements to be forwarded to different officers throughout the country concerned with the movement of troops, with the statement that “ the new arrangements are along the same lines as the old ones; some disputed points have been cleared up and are therefore published in the new arrangement.”
On September 15, 1917, all department, depot, and camp quartermasters were notified by thé Quartermaster General that;
“ 1. It is desired that all shipping quartermasters be instructed that camp equipment and impedimenta will not be carried as checkage baggage, and that checkable baggage includes only wearing appai'el and related articles ordinarily carried in a trunk by a commercial traveler.”
Copies of said Interterritorial Military Arrangement were distributed to all quartermasters between February 28, 1917, and March 3, 1917.
VII. The said Interterritorial Military Arrangement was in full force and effect, as late as May 20,1920, and its provisions have been observed by the carriers generally. Under the terms of said arrangement the Government has paid for transportation at rates substantially 5 per centum less than it otherwise would have paid.
VIII. At various times during the year 1917 plaintiffs and other carriers transported a number of movements of United States troops to terminal points on plaintiffs’ line. The troops were transported on regular transportation requests at rates substantially five per cent less than the regular tariff rates, and the Army impedimenta was moved as freight on bills of lading issued by the Government.
IX. The services were rendered as alleged in the petition, and plaintiffs, as the last carriers, rendered their bills numbered F 5321, 5571, 5857, 5895, 5956, and 6012 to the disbursing officers of the United States Army, who paid said bills in full; but subsequently the Auditor for the War Department made deductions from other bills of plaintiffs so as to allow for the transportation free of one car of impedimenta for each 25 men in the accompanying passenger movement. But for said deductions plaintiffs would have received more than they did receive on account of said transportation the following sums:
Bill. Amount.
F 5321. $1, 711. 05
5571. 7, 759.92
5857. 392. 53
5895. 192.00
5956. 4,105.25
6012. 828. 00
14,988.75
X.No protest to the auditor against his action in the premises was made in any case except in the adjustment of bills F-5321 and F-5857, protest being made in those instances by the United States Railroad Administration. The subject matter was in controversy between the receivers and the War Department, and various protests were filed with that department against any action that might be taken in reducing to basis complained of in petition, notice being given to that department that the right was reserved to prosecute suit in the Court of Claims.

Opinion:
DowNey, Judge,
delivered the opinion of the court:
The plaintiff company, during 1917, furnished transportation for several movements of troops of the United States and, in connection therewith, moved as freight on Government bills of lading considerable quantities of Government property of the kinds usually accompanying troops and commonly called Army impedimenta. This latter transportation was as freight upon Government bills of lading, and six bills were rendered therefor to Army disbursing officers at the proper rates under applicable freight tariffs and paid as rendered. On June 18, 1918, several months subsequent to the payment of these bills by the disbursing officers, the Comptroller of the Treasury held that the United States was in such cases entitled to one car of impedimenta free for each twenty-five men transported, and pursuant to said decision the auditor, in settling the accounts of the disbursing officers who had made said payments for this transportation, suspended the items of credit claimed on account thereof. Thereafter when other bills of plaintiff company were before the auditor for settlement they were allowed, but deduction was made therefrom of the amount of alleged overpayment on the bills first referred to by reason of the nonapplication of the announced free-baggage-car rule, and upon the making of such deductions the suspensions in the disbursing officers' accounts were relieved by credits thereon of the deductions made. Plaintiff sues for the amount of such deductions, agreed by the parties to be $14,988.75.
The court has already determined adversely to the Government the right to apply to such movements the so-called free baggage car for each twenty-five men rule, and it follows that the settlements as made by the disbursing officers at applicable freight rates were correct and the plaintiff was entitled to receive what it was paid. Mo. Pac. R. R. Co., No. 3 14581, and Ala. & Vicksburg Ry. Co., No. 34597, decided June 13, 1921.
The plaintiff relies upon these cases, but the defendant distinguishes this case upon the question of protest, citing the fact that in the cases cited there were protests against the deductions, whereas it is stipulated in this case that there was no protest or appeal to the Comptroller of the Treasury. Defendant further, referring to the cases of Central of Georgia R. R. Co., No. 34592, and the N., C. & St. L. Ry., No. 34111, concludes that the instant case is on all fours with those cases, and if the court in those cases held or intended to hold that when payment had been accepted without protest action for the amount deducted might still be maintained there was then no defense to this action. In one of the cases referred to there was a protest, but in the other it is not shown that there was. The question then on the part of the defendant is as to the effect of an acceptance of payment made on the subsequent bills, from which the deductions were made without protest, and we are asked to clarify the position of the court in that respect.
Peculiarly, and somewhat illustrative of unwarranted conditions frequently found in records with which we have to deal, counsel have stipulated among other things " that no protests or appeals were made against said deductions." The evidence in the record consists of official certifications from the office of the Auditor for the War Department and the Comptroller General. The Auditor for the War Department in his official report says:
" No protest to the auditor against his action in the premises was made in any case except in the adjustment of bills F-5321 and F-585I, protest being made in those instances by the United States Eailroad Administration. The subject matter, however, appears by the record to have been in controversy between the receivers and the War Department and various protests were filed with that department against any action that might be taken in reducing to basis complained of in petition, notice being given to that department that the right was reserved to prosecute suit in the Court of Claims."
We see no reason why a protest by the Eailroad Administration might not inure to the benefit of the receivers when they are again in control of the railroad and asserting its right by suit; and while, technically, protests against the action of an auditor should be addressed to that official, what more natural than that one unfamiliar with internal governmental methods and representing a railroad company which had furnished a service to the War Department should address its complaints to that department ? It fully in this case met the purpose of a protest, and, in fact, the auditor's office, if that were essential, seems to have been conversant with plaintiffs' attitude in the matter.
We might upon these facts regard the question presented by the defendant as a moot question, but if we can aid counsel in the disposition of such cases by considering the necessity of a protest in avoidance of estoppel against the prosecution of an action in court we are willing to consider counsel's contention on the basis presented.
In connection with the statement that there was no protest is coupled the statement that there was no appeal to the Comptroller of the Treasury, and emphasis is laid upon that fact. While an appeal to the comptroller would have indicated nonacquiescence in the action of the auditor, it is in no manner a prerequisite to jurisdiction in this court. In the B. & O. and Oregon-Washington cases (52 C. Cls. 468; 54 id. 131), of frequent reference, wherein one of the contentions was the futility of appeal to the comptroller, it was said that a claimant need not appeal to the comptroller if it regarded it as a vain thing, and that the doors of this court were always open.
In this case it is to be remembered that the original bills for the services here involved were paid as rendered, that plaintiffs' subsequent bills were not the subject of disallow-ances, but were, in fact, allowed as correct, and that the action complained of was the deduction from the amount correctly allowed on the subsequent bills of an amount held to have been improperly paid on the original bills by disbursing officers. The situation presented is thus somewhat different from that presented if there had been a disallowance of bills as presented, and perhaps bears upon the effect of acceptance of payment without protest.
In case of a partial disallowance by an auditor of an item of an account, the claimant might not accept payment of the amount allowed and have an appeal to the comptroller as to the disallowance. It was so provided in the Dockery Act, and we have suggested the propriety of the application, not of the literal rule but of the principle to the practice in this court; but in such a case as this there was no disallowance of a claim or part thereof. Them was an allowance as to which the claimant had no occasion to protest, but a deduction from the amount of the allowed claim because of a former transaction. There could not, then by analogy be any room for resort in principle to the Treasury rule as to claims disallowed in part and acceptance of payment. The formality of protest remains for consideration.
Used in the sense here involved, and we consider it in no other, it is a word of indefinite import as to form which may find its expression, not in accordance with a prescribed rule, but in various ways. Following a claim through its various stages of presentment, settlement, notice of settlement, and issuance of warrant it is effective at whatever stage it manifests itself after action by the auditor and a separate communication may be the means of its expression. Its purpose is the basis of its necessity, which may be supplied by other circumstances, and its reason is found in the necessities of the accounting branch of the public service.
It has frequently been said by highest authority that there must be an end to accounting. There must be a time when public accounts are to be deemed settled; a time, without reference to statutes of limitations, when it may be assumed that settlements made are final, and it must be as early as circumstances will permit. That ordinarily will occur when, after an auditor's settlement, the allowance made is paid and payment accepted without any action or circumstances repudiating the idea of an acceptance of the settlement as final, and it will be so regarded and estop the assertion of a further claim thereafter for a disallowed part of the claim. The effectiveness, then, of a protest is in its indication of nonacquiescence in the settlement as made and an intention to further assert claimed rights.
There is a distinction to be made in a case such as this because of facts stated. There was no occasion to indicate non-acquiescence in the settlement made, referring, of course, to the auditor's settlement in its accounting sense, for it approved and allowed plaintiff's claims. The direction to withhold a large part of that found and certified to be due the plaintiffs because of a former transaction was such an action as the plaintiffs could not be presumed to have acquiesced in if they asserted their rights with reasonable promptness by suit in this court. The record is indefinite as to' just when these deductions were made, the inference from such facts as appear, taken in connection with known procedure in the auditor's office in such cases and the necessity of awaiting the presentment 'by plaintiffs of other accounts for auditor's settlement before the opportunity for deductions presented itself, indicate that the suit was brought with such reasonable promptness as to repudiate the idea of acuiescence.
Perhaps it should be added that cases with which we have had to deal involving settlements in accordance with established practice, both as to the settlements and their acceptance by the plaintiffs, such as those considered in the B.<& O. and Oregon-Washing ton cases, and others similar in principle, differ materially from this one, wherein the payments originally made were in accordance with usual practice and deductions made under a ruling of the comptroller promulgated after the original payments were' made and announcing a new rule, which, so far as appears, had not been ac-quisced in either by this plaintiff or by other carriers. And this holding as to this particular class of cases need not in any sense modify our holdings as to the general effect of acquiescence in settlements made and failure to promptly assert any further rights claimed.
Judgment for plaintiff in the sum of $14,988.75.
Hay, Judge; Graham, Judge; Booth, Judge; and Campbell, Chief Justice, concur.