Case: The Chicago and Northwestern Railway Company v. The United States; The Winona and Saint Peter Railroad Company v. The Same
Abbreviation: Chicago & Northwestern Railway Co. v. United States
Decision Date: 1879-12
Docket Number: 
Citation: 15 Ct. Cl. 232
Volume: 15
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: The Chicago and Northwestern Railway Company v. The United States. The Winona and Saint Peter Railroad Company v. The Same.
Judges: 
Pages: 232–246

Head Matter:
THE CHICAGO AND NORTHWESTERN RAILWAY CASE.
The Chicago and Northwestern Railway Company v. The United States. The Winona and Saint Peter Railroad Company v. The Same.
On the Proofs.
The land-grant railroad statutes provide that such roads shall carry the mail “ at such price as Congress may t>y law direct,” and that, “until sucli price is fixed by law, the Postmaster-General shall have the power to determine tlie same.” A subsequent statute authorizes the Postmaster-General to malee mail-tramsportation contracts for periods of four years, land-gramt roads not being mentioned therein. The Postmaster-General enters into such_ contracts xoith land-grant roads. While the contracts are still running, Congress direct a reduction in the rate of compensation. The claknamts, a land-grant road, protest, but continue to perform the service, and accept the reduced compensation.
I. The land-grant railroad statutes are in the nature of grants, and the roads which so received public lands are to he regarded as the beneficiaries of a grant.
II. By tlie terms of the grant (Acts 15th May, 3d June, 1856, 11 Stat. L., p. 9, § 5, p. 20, § 5) the mail is to he transported over those roads “ at such price as Congress may Toy law direct,” and, “until such price is fixed l)y lata, the Postmaster-General shall have the pmcer to determine the same.” An agreement with the Postmaster-General, fixing a rate of compensation for a specific period, must he held to he subject to the power of Congress to interpose and prescribe a different rate.
III. The Perised Post-Office Act, 1872 (17 Stat. L., p. 283, U 212, 256, 265), which authorizes tho Postmaster-General to mate mail-transportation contracts generally for periods of four years, does not operate to relieve the land-grant roads from the terms and conditions of their antecedent grants.
IV. But other than mail-transportation services are not subject to the terms of the grant, and may be tho subject of a contract with the Postmaster-General : ex. gr., furnishing a car suitably fitted and warmed; carrying the mails from the train to the post-office, &c.
V. Where tho Postmaster-General unites in one contract the statutory obligation to carry the mail and the 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. Bub if the road continues to perform and .accepts the reduced compensation, it must be deemed to have acceded to the reduction.
VI. When Congress by statute order a reduction of the compensation of existing mail-transportation contracts, the contractors must elect whether they will perform at the reduced compensation, or will treat the service as discontinued. A protest to the Postmaster-General against the reduction effects nothing if they continue to perform.
VII.In the case of mail-transportation contracts, Congress must be deemed the principal, the Postmaster-General their agent, and a statute reducing compensation a notice to the contractors limiting the authority of the agent.
The Reporters’ statement of tbe case:
The contract in this case was in the usual form, and involved no question of construction. The following are the facts as found by the court:
I. The contracts annexed to and forming part of the petition, were executed by the parties for the transportation of the United States mails, as set forth in the petition.
II. The claimants carried th.e mails upon each of the routes prescribed by the contracts, during the term of four years, as required by the terms of the said contracts.
III. The following circulars oyere seat, on the days of their respective dates, by the Second Assistant Postmaster-General, to the claimants:
^Reduction of pay for mail service on railroad routes, under act of Congress of July 12, 1876.
“Post-Oeeice Department,
“ OEEI0E OE THE SECOND ASSISTANT
Postmaster-General,
“Washington, D. (7., October 13,1876.
“Sir: You are hereby notified that the Postmaster-General has issued the following order:
“Post-Oeeice Department,
“ Washington, B. C., Axigust 18th, 1876.
“Whereas the act of Congress entitled 'An act making appropriations for the service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen hundred and seventy-seven, and for other purposes,’ approved July 12, 1876, -contains the following proviso, namely: 'Provided, That the Postmaster-General be, and he is hereby, authorized and directed to readjust the compensation to be paid from and after the 1st day of July, 1876, 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 entitled “An act making appropriations for the service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen hundred and seventy-four, and for other purposes,’ approved March 3d, 1873, for the transjmrtatión of mails on the basis of the average weight.’
“And whereas the Assistant Attorney-General of the Post-Office Dexiartment has advised, with reference to railway service performed under contract with the government,' that when the contract has been made in due form of law with a railroad company for the transx>ortation of the mails for a term not yet expired, sdeh contract is not affected’ by said x>roviso.
“It is hereby ordered that, in making x>ayments for mail service on railroad routes, performed on and after July 1,1876, and not performed under contract made in due form of law, for •a term not yet exx>ired, the Auditor of the Treasury for the Post-Office Department be authorized to reduce the condensation ten per centum per annum from the rates named in orders heretofore issued, the rates so named having been fixed and ■allowed under the act of March 3, 1873. .
“JAMES N. Tyner,
‘ ‘Postmaster- General.
“Order No. 4502. August 18, 1870.
“ Consequently, for mail service performed on and after July 1,1876, on your road, route 23056, between Geneva and Batavia, the compensation will be reduced from $175.00 to $157.50 per annum; of which please take due notice.
‘‘Very respectfully, your obedient servant,
“ J. L. French,
aAcfg Second AssH Postmaster-General.
“To H. II. Porter, Esq.,
"General Manager Chicago imd Northwestern
B. B. Go., Chicago, Ills.”
“Seduction of pay for mail service on land-grant railroads, under act of Congress of July 12,1876.
“ Post-Oeeice Department,
“ Oeeicje oe the Second Assistant
Postmaster-General,
“ Washington, D. C., 20 Oct., 1876.
“Sir: The act of Congress entitled ‘An act making appropriations for the service of the Post-Office Department for the fiscal jrear ending J une thirtieth, eighteen hundred and seventy-seven, and for other purposes,’ approved July 12,1876, section 1, contains the following proviso, namely: ‘Provided, 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 entitled “An act making appropriations for the service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen hundred and seventy-four, and for other purposes,” approved March third, eighteen hundred and seventy-three, for the transportation of mails on the basis of the average weight.’
“The same act also contains the following section:
“ Section 13. 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 per centum of the compensation authorized by this act..’
“Consequently, for mail service performed on and after July 1,1876, on your road, route 25009, between Chicago and Green Bay, the compensation will be reduced from $56,350 per annum (the amount warranted by the latest returns under the act of March 3, 1873) to $45,080 per annum, the reduction amounting to $11,270 per annum, of which the sum of $,-is due to the proviso in. tbe first section, and the sum of $11,270 to the thirteenth section of the act of July 12th, 1876, above quoted.
“Yery respectfully, your obedient servant,
“Thos. J.Ubady,
“Second Assistant Postmaster-General.
“To Albert Keep, Esq.,
“President C\ & N. W. R.R. Go., Chicago, III.”
And circulars similar to the last were sent the claimants as to the remaining contract routes.
IY. On the 18th day of October, 1876, the general solicitor of the. claimants replied by letter to the said circulars, in which letter he stated as follows:
“I desire to call your attention to the fact that the mail service over the road of this company specified in each of said circulars is performed 1 under contracts made in due form of law for a term not yet expired,’ which contracts are on file in the Post-Office Department, and of which we have copies. I presume, therefore, that the reduction specified in said circulars cannot be made in accordance with the opinion of the law department of the Post-Office, and that the existence of the contracts above named has been overlooked.
“ Eoute 23003 is over the Chicago and Northwestern Eail-way, from Chicago to the Mississippi Eiver, 138 miles, and over the Chicago, Iowa and Nebraska Eailroad, from the Mississippi Eiver to Cedar Eapids, 81 miles, and the Cedar Eapids and Missouri Eiver Eailroad to Council Bluffs, 270 miles. Neither the Chicago and Northwestern Bailway, from Chicago to Clinton, nor the Chicago, Iowa and Nebraska Eailroad, from Clinton to Cedar Eapids, is a ‘ road constructed in whole or in part by a land grant made by Congress on the condition that the mails should be transported over it at such price as Congress should by law direct,’ and consequently the law does not require the reduction of twenty per cent, over either of those roads for the transportation of the mails, and such reduction ought not to be made, aside from the question of the violation of an existing contract.
“The Chicago, Iowa and Nebraska, and the Cedar Eapids and Missouri Eiver E. Es. are both leased to the Chicago and Northwestern Bailway Company, but they are both independent organizations, each receiving a certain percentage of the gross earnings of its road for the use thereof, and the Chicago and Northwestern Eailway Company receives a certain percentage of the gross earnings for operating.
“ The rule adopted by your department seems to me to be open to these objections:
“It is a violation of tbe contract now existing, which I am sure the department does not intend to do, and which it has no power to do, according to the opinion of its own legal adviser.”
And on or about tbe 25th day of October, 1876, the said solicitor appeared before the Postmaster-General, and orally protested in behalf of the claimants against the right of the department to inhlee any reduction from the pay as specified in said contracts, and on the 16th day of March, 1877, the said general solicitor of the claimants, acting for them, again protested in wilting as follows:
“The railway company, while admitting that the deduction of twenty per cent, upon compensation for weight of mails upon the laud-grant roads, upon which mails are carried by contract, is in accordance with the construction placed upon the act of July 12,1876, desire to protest against the application of the act in violation of existing contracts; and for the purpose of saving its rights in the premises, it respectfully asks that compensation be paid to it for carrying the mails over the routes above specified, in accordance with the .terms of the contracts, severally, under which the service has been performed.
“Yery respectfully, your obedient servant,
“B. C. Cook,
“ General Solicitor Chicago & Northwestern B. R. Co?
V. On the 29th day of July, 1878, the Second Assistant Postmaster-General sent the following circular to the claimants:
“Readjustment of pay for mail service on railroad routes, tender act of Congress of June 17, 1878.
“ POST-OETTOE DEPARTMENT, OPEICE OE THE
“ Second Assistant Postmaster-General,
“ Washington, T>. C., July 29, 1878.
“Sir: The act.of Congress making appropriations for the service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen hundred and seventy-uine, and for other purposes, approved June 17, 1878, contains the following-proviso, namely:
“ ‘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 by reducing the compensation to all railroad companies for the transportation of mails five per centum per annum 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 entitled “An act making appropriations for the service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen hundred and seveítty-.seven, and for other purposes,” approved July twelfth, eighteen hundred and seventy-six.’
“ Therefore please take notice that the Auditor of the Treas ury for tbis department has been directed to decrease tlie pay of your company for the conveyance of mails on route 23003, between Chicago and U. E. Transfer, from July 1, 1878, to June 30,1879, $2,384.70 per annum, leaving the pay from the first-named date $115,194.30 per annum, being a reduction of five per centum from the rates fixed for weight of mails, in accordance with the provisions of the act of June 17, 1878, above quoted.
“Very respectfully, your obedient servant,
“Thos. J. Beady,
“Second Assistant Postmaster-General.
“ To Albeet .Keep, Esq.,
“Pres. Chicago and Northwestern R. R. Co., Chicago, III.”
And at the same time sent the claimants similar notices as to the said routes between Chicago and Creen Bay and between Fort Howard and Ishpeming.
VI. On the 7 th. day of August, 1878, the general solicitor of the claimants, on behalf of the claimants, replied by letter to said circulars, in which letter he stated as follows:
“ I desire on behalf of this company to respectfully protest against the action of the deiiartment in changing the contract price in each of these cases, and especially to inquire whether it is claimed by the department that it has the right to reduce the contract price over routes where there is no land grant, or whether it is supposed that route 27038 has received a land grant, or whether that part of the route 23003 between Chicago and Cedar Eapids is a land-grant road.
“Yours, respectfully,
“B. C. Cook,
“ General Solicitor R
VII. The railroad from Cedar Eapids to Union Pacific Transfer, a distance of 270 miles, part of said railway mail route between Chicago and Union Pacific Transfer, and the said railroad between Fort Howard and Ishpeming, a distance of 1814 miles, and that portion of the said railroad between Chicago and Green Bay which lies between Fond-du-lac and Green Bay, a distance of 06-J- miles, severally received grants of public lands from the United States to aid in their construction.
VIII. The claimants, during the term of said contracts, were the lessees, but not the owners, of said road between Cedar Eapids and Union Pacific Transfer.
IX. The following sums have been deducted by the Post-Office Department from the amounts agreed to be paid, as speci- fled in the said contracts, and are withheld by the United States from the claiman ts, viz:
“Route 24031, between Fort Hoioanl and Ishpeming.
“ Deduction has been made from the compensation of the company, under the 1st and 13th sections of the act of July 12, 1876, from Jnlyl, 1876, to June 30,1879, at the rate of $4,543.56 per annum, mating, for the period stated, $13,630.68.
“ Deduction has also been made from the compensation of the-company, under the act of June 17,1878, from July 1, 1878, to June 30, 1879, at the rate of $584.17 per annum.
“ Route 25009, betnoeen Chicago and Green Bay.
“Deduction has been made from the compensation of the company, under the 1st and 13th sections of the act of July 12, 1876, from July 1,1876, to June 30,1879, at the rate of $3,537.80-per annum, making, for the period stated, $10,613.40.
“ Deduction has also been made from the compensation of the company, under act of June 17,1878, from July 1,1878, to June 30,1879, at the rate of $454.86 per annum.
“Route 23003, between GMeago and Union Pacific Transfer.
“Deduction has been made from the compensation of the company, under the 1st & 13th sections of the act of July 12, 1876, from July 1,1876, to June 30,1879, attherateof $18,547.70-per annum, making, for the period stated, $55,643.10.
“Deduction has also been made from the compensation of the-company, under the act of June 17, 1878, from July 1,1878, to June 30,1879, at the rate of $2,384.70 per annum.” t
N. During the said term from July 1, 1875, to June 30,1S79, the daily average weight of the mails upon the said route, between Chicago and Union Pacific Transfer, increased sixty thousand six hundred and eight and two-thirds pounds (60,608§ lbs.).
XI. The sum of $876 was deducted by the Post-Office Department from the contract rate of the claimants’ compensation for their services from the 1st to the 12th July, 1876.
Mr. J. F. Farnsioorth for the claimant:
There was no reservation in these contracts of any right by Congress or anybody else to change the rates of compensation or to annual the contracts, nor diminish the services under-them, except the reservation in the ninth clause of the contracts, that the Postmaster-General might discontinue or curtail. the service * * * whenever tbe public interests in bis judgment should require it. There never was a pretense that the u public interests ” required either a “ discontinuance ” or a “ curtailment” of “ the service.” And the claimant was not even given the option of discontinuing the service with “ a month’s extra pay,” or continuing it at reduced rates. The statutes of1876 and 1878, directing the Postmaster-General to reduce compensation on railroad routes, applied only where no contracts were subsisting. The Post-Office Department so constructed and administered it, except to “ land-grant ” roads.
Yet the act of 1878, reducing five per centum, says nothing about “land-grant” roads. The Postmaster-General had the same authority to make contracts for carrying the mail over •“land-grant” as any other roads.
Mr. Joseph K. McCammon (with whom was the Assistant Attorney-General) for the defendants:
Section 13, act of July 12, 1876, is clearly apjdicable to the railroads in question, unless the defendants have waived their rights and powers derived from the charter acts through subsequent acts of Congress, or by the authorized action of the Postmaster-General.
1. Acts of Congress and sections of the Eévised Statutes relating generally to the power of the Postmaster-General to make railroad mail contracts have no application to land-grant railroads. The, claimants, by accepting the acts granting lands, resigned, by the condition cited, such inherent powers as they would have possessed by relegating to Congress and the Postmaster-General the question of the rate and amount of compensation to be paid to them by the defendants for carrying the mails. By these donation acts the claimants never possessed the ordinary power to contract to carry the mails. The determination and fixing of compensation was left to the arbitrary decision of either Congress or the Postmaster-General, and the claimants could not even refuse to carry the mails if the rates were unsatisfactory. It necessarily follows that the Postmaster-General h ad no authority to contract with the claimants. Until Congress fixed the price the Postmaster-General could determine the price, as by the donation acts, or fix the rate of compensation, asby section 4001. Thispower was one-sided entirely, and can hardly be extended to include the right to bind by contract the defendants to pay a certain rate for one year or four years. The claimants here are attempting to enforce contracts which none of the parties had the power to make. It follows that the contracts relied upon are void, and are neither existing nor subsisting contracts.
2. The power to determine the price was only vested in the Postmaster-General until the price was fixed by law. If the reasoning of the first point supra is faulty, in that the power to determine the price may include the power to contract, still section 3956, relating as it does t'o the length of time for which the Postmaster-General could make contracts with railroads in general, cannot govern contracts with land-grant railroads. Instead of four years, with these latter roads the time for which mail contracts could run was indefinite until the price was fixed by law, or, in other words, to the time when Congress fixed the price. This was a limit to the power or the Postmaster-General as to the period of time for which such contracts could be made. The condition contained in section 5 of the acts of 1856 has never been repealed or amended. Section 3956, being not an enabling nor enlarging, but a limiting, general statute, cannot be construed to extend the period of time for which the Postmaster-General is empowered to make contracts with land-grant railroads.
Therefore, both in the original act and the codification a distinction'between railroads in general and land-grant railroads is made. With the former, the Postmaster-General can contract for carrying the mail for a period not longer than four years; with the latter he can only determine or fix the price to be paid, whether by contract or arbitrarily, until the price is fixed by law. Section 3956 Eevised Statutes has application to railroads in general, except as it is limited by section 4001 and the special acts upon which this latter section is based. Congress having fixed a price on July 12, 1876, the contract or determination by the Postmaster-General Avas suspended and abrogated. This whole point is based on the assumption that the Postmaster-General had the power to enter into contracts Avith land-grant railroads. It is only used for the sake of argument, to prove that, eAren if the assumption be correct, the claimants cannot recover in these actions.
As to the act of June 17,1878, reducing the compensation ñve per cent, per annum from tbe rates fixed by tbe act of July 12,1876, if tbe Postmaster-G-eneral had no power to make tbe contracts in controversy, then the compensation could be reduced without violating tbe law.
If be bad power to contract, it was limited as to tbe length of time of running, and would be subsisting only until Congress fixed the price. In either case tbe reduction was legal.

Opinion:
Nott, J.,
delivered the opinion of tbe court:
Tbe material facts of this case are simply these: (1.) That the claimants are tbe owners and lessees of certain land-grant railroads. (2.) That in 1872, Congress; by the Revised Post-Office Act (17 Stat. L., p. 283), authorized the Postmaster-G-eneral to enter into' mail-transportation contracts with railroads, land-grant roads being neither specially included nor excluded from the operation of tbe authority. (3.) That in 1876 the Postmaster-General entered into a number of such contracts with the-claimants in tbe usual form and for the period of four years. (4.) That in 1876, Congress, by statute, reduced the rate of all mail transportation, and made a further deduction in tbe rate of the land-grant roads. (5.) That the claimants protested to-the .Postmaster-General, but continued to perform the contract service and to accept the reduced compensation.
It was lately determined, in the Chicago, Milwaukee and Saint Paul Railroad Case (14 C. Cls. R., 125), that an act of Congress reducing tbe rate of mail transportation may operate as a notice under existing mail-transportation contracts (wherein the government has a right to discontinue the service on notice), but that it cannot operate retroactively. We regard that principle as settled and as controlling the present case if it be applicable to it. There are two matters of fact, however, in which this-case differs from the preceding one; the first of which is that the present claimants' railway was largely, if not entirely, a land-grant road; the second, that when the reduction was made they protested against it to the Postmaster-General.
For the purpose of determining intelligibly their rights as owners or lessees of a land-grant road, we consider the statute under which they acquired a portion of the public lands as a grant, and themselves as beneficiaries under it, who agreed to-its terms and hold subject to its conditions.
The controlling condition which now binds the claimants as to land-grant roads which they own, or as to land-grant roads which they have rented, is this: "That the United States mail shall be transported over said roads, under the direction of the Post-Office Department, at such price as Congress may by law direct: Provided, That until such price is fixed by law, the Postmaster-G-eneral shall have the power to determine the same." (Act May 15, 1856, 11 Stat. L., p. 9, § 5; Act June 3, 1856, ib., p. 20, § 5.)
After such a grant had been made and accepted, it was of' course possible for the parties to rescind it, and by a mutual agreement of like character set it aside and substitute a new contract in its stead j but as there is no act of Congress on the one side thus enacting, and as the grantees on the other side have not reconveyed the lands which they acquired by virtue-of the grant, we must consider the original condition as still being the fundamental agreement between the parties, and the-obligation to carry the mails at such price as Congress may by law direct as being always operative upon the claimants. It is-manifest, therefore, that any agreement entered into by the Postmaster-General for the simple service prescribed by the statute, the transportion of the mail, was nothing more than an exercise of his power to determine the rate of compensation "until such price is fixed by law," and that an agreement made by him for this service for a term of years would be to that extent unauthorized by statute and void. It is likewise manifest that if Congress had authorized the Postmaster-General to-enter into such contracts for this statutory service for a term of years, which is claimed to be the effect of the Revised Post-Office Act, 1872 (17 Stat. L., p. 283, § 212, 256, 265), the agreement, as between the claimants and defendants, considered as contracting parties, would be nudum pactum. The claimants were always bound to do that service at such rate as Congress might by law prescribe; and if they entered into an agreement to do it for a term of years, they undertook nothing more than they were already bound to perform, and gave no consideration which would preclude the other contracting party from changing the rate by fixing the price in the manner prescribed by the still operative terms of the grant. If the provision of the Devised Post-Office Act was applicable to land-grant roads, it must be construed to have been an authority to the Postmas ter-General to fix tbe rate of compensation for periods of four years, instead of for shorter or longer periods, but always subject to the original condition of the grant — that Congress might fix the price for the service by law.
But although the condition of the grant that the claimants should carry the mail over their road at such price as Congress might by law direct continued ever obligatory upon the claimants, there were other obligations which they might assume and other services which they might perform than those prescribed by the grant, and these new obligations and services might be the subject of a contract with the Postmaster-General. Such w.as indeed the case. The contracts upon which the suit is brought imposed duties and obligations beyond the mere transportation of the mails. A separate car or apartment, suitably fitted, warmed, and furnished, was to be provided by the claimants; they were to carry the mails to and from the post-office; they were to transport all agents of the department free; they were to act as collecting agents for the department, receiving the quarterly balance of postmasters along the route, transporting the money and paying it over to the department; and they subjected themselves by their contracts to certain penalties and forfeitures which, they claim, were in excess of any liability imposed upon them by the terms of the grant.
These services and obligations, which might have been the subject of a separate contract, the Postmaster-General combined in the contracts in suit with the statutory obligation of carrying the mail, and but one consideration is expressed for both services, the voluntary under the contract and the involuntary under the grant, and the two are so blended together in the contracts that it is impossible for a court to separate them and say how much of the gross consideration was intended to be for the land-grant railway service and how much for the voluntary obligations and services which the claimants bound themselves to assume and perform. Furthermore, Congress, when dealing with this subject in 1876 (and with full knowledge of the fact that such contracts had been made with the land-grant roads), dealt with the contracts as they existed, and simply directed a reduction of the contract rates as a whole, without fixing in express terms the price which should be paid for the mere service of carrying the mails, as to which their power and discretion were unlimited.
It is therefore, we think, apparent that,, so far as these contracts in this suit are involved, the parties stand in precisely the same plight that they would be in if the roads were not land-grant roads and Congress had prescribed this reduction of the contract rate for all railroads. In other words, the claimants were at liberty to throw up their contracts and receive the one month's pay prescribed in case of discontinuance, and fall back upon the simple sendee of carrying the mail according to the condition of the grant.
But the counsel for the claimants draws a distinction here between this case and that of the Chicago, Milwaukee and Saint Paul Eailroad, inasmuch as it is shown here that the claimants protested against the reduction, while there they apparently acceded to it, and continued to perform without protest.
The answer to this supposed distinction is, we think, twofold. 1st. The protest was given to an agent who had no power to act with discretion in the matter, and whose acts in excess of the statutory notice could not bind his principal. What a man may do by himself he may indeed do by his agent; but it is equally well settled that he cannot be coerced into doing a thing through his agent if he notified the other contracting party that he would not do it, and that his agent had no authority to bind him. Such was the case here. Congress were the principal; the Postmaster-G-eneral was their agent, and notice to him in the face of the statute was not notice that could operate in favor of the claimants or bind the government.
2d. The statute ordering a reduction of the contract rate of compensation (as was held in the Chicago, Milwaukee and Saint Paul Eailroad Case) would operate as a renunciation of the contract, or as a discontinuance of the service under it, unless the other party should assent to the reduction and to that extent enter into a new contract. This was precisely what the claimants did when they continued to perform and accept payment for their services at the reduced rate. The only right which they had when the statute came overriding their contract was to accept the one month's pay prescribed by the contract as liquidated damages for the discontinuance of the service. (Reeside's Case, 8 Wall., 38; Garfielde's Case, 93 U. S., 242.) No protest could save a right which they did not possess, nor change the terms proffered them for performing if they elected to perform. Having made their election, they are bound by it.
But it appears in this case, as in tbe Chicago, Milwaukee and Saint Paul Railroad Case, that tbe statute directing' tbe reduction was to a certain extent retroactive, and to that extent tbe claimants should recover.
Tbe judgment of tbe court is that the claimants recover of tbe defendants tbe sum of $876.
In the case of the Winona and Saint Peter Railroad Company v. The United States, which presents substantially tbe same facts as the preceding case, tbe judgment of tbe court is that the .claimants recover of tbe defendants tbe sum of $147.