
    READING COMPANY v. THE UNITED STATES
    
    [No. 34747.
    Decided January 5, 1925]
    
      On the Proofs
    
    
      Railroad rates; free baggage; military impedimenta. — A railroad company transports military impedimenta prior to Federa? control of railroads, and the Railroad Administration collects the compensation and credits it to the railroad; the auditor in auditing the disbursing officers’ accounts disallows as over-payments certain compensation for transporting of military impedimenta on the alleged ground that it should have been moved free of charge, and deducts the alleged overpayments from bills of the Railroad Administration; the Railroad Administration makes good said deductions from moneys in its hands belonging to the railroad company. Held, that the railroad company may recover compensation from the United States for the transportation of such military impedimenta.
    
      Same; restatement of T>ül at class D; payment Tmj disbursing officer received without protest. — Where a bill for transportation of Government property is presented by a railroad company to a disbursing officer who refuses to pay it, and the said bill is restated by the company at class D, and compensation is received by it at that rating without protest or objection, ■said railroad company can not recover any additional compensation.
    
      The Reporter's statement of the ease:
    
      Mr. F. Garter Pope for the plaintiff'. Mr. W. L. Kinter and Dudley <& Miehener were on the briefs.
    
      Messrs. Lisle A. Smith and A. A. MeLcmghlin, with whom was Mr. Assistant Attorney General Robert H. Lovett, for the defendant.
    The following are the facts as found by the court:
    I. This suit was brought by the Philadelphia & Reading Railway Co., which has since been reorganized and its name changed to the Reading Company. Wherever the word “ plaintiff ” is used in these findings of fact it will be understood to refer to the Philadelphia & Reading Railway Co.
    The plaintiff was and its successor is a corporation duly incorporated under the laws of the State of Pennsylvania. At the times of the different transactions hereinafter set forth in these findings of fact it operated, and its successor still operates, a system of railways in the State of Pennsylvania 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 it and by its connecting lines, with its 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 travelers traveling 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 Avere so to be treated in settlements Avith 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, Avhich, 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 transporation in the baggage service, on the other hand. A decision of the comptroller of June 18, 1918 (24 Gomp. Dec. 714), to effect that, under the provisions of carriers’ baggage tariffs the Government Avas entitled to one car free for every 25 passengers in the accompanying passenger moA^ement, was the first notification that the GoA’ernment 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, accounting officers of the Government have made settlements 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 25 officers and enlisted men traveling.
    Y. Prior to January 1,1917, the plaintiff 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, Transcontinental 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:
    “ 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 Navy, 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.
    
      '■'•Net fares and allowances.— (1) (ai) 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, Sec. V), less lawful land-grant deductions properly established, less 5 per cent (5%), the 5 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 Sec. XI).
    “(6) 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.
    * $ $ $ $
    “ 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 transportation of excess baggage, collection will be made for 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 Government 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.”
    YI. The interterritorial military arrangement effective July 1, 1916, which was superseded by the similar agree ment effective January 1, 1917, referred to in Finding Y, was indorsed 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. (&) It will proc'ure cooperation on the part of the railroads. (<?) 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 the Quartermaster General that:
    “1. It is desired that all shipping quartermasters be instructed that camp equipment and impedimenta will not be carried as checkable baggage, and that checkable baggage includes only wearing apparel 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 tban it otherwise would have paid.
    VIII. At various times during the year 1917 plaintiff and other carriers transported a number of movements of United States troops to terminal points on plaintiff’s lines. The troops were transported on regular transportation requests at rates substantially 5 per cent less than the regular tariff rates, and the Army impedimenta was moved as freight on bills of lading issued by the Government.
    IN. The plaintiff, at the time the military impedimenta in question here was moved, had on file with the Interstate Commerce Commission a tariff entitled “ Southwestern Lines Classification Exceptions and Rules-Circular No. 1-G, F. A. Leland’s I. C. C. 1137,” Item 146-D, which reads as follows:
    
      
    
    The said tariff also provided classifications for the different articles composing said shipments, and in addition thereto the following:
    “class d
    “Emigrants’ movables, not for sale or speculation, prepaid (see note).
    “ Note. — The term. ‘ emigrants’ movables ’ will apply to the property of an intending settler only and will include tools and implements of calling, including hand and foot power machines, but not including machinery driven by steam, electricity, gas, gasoline, compressed air, or water, other than agricultural implements; second-hand store fixtures of merchants; second-hand vehicles, not including self-propelled vehicles, hearse, and similar vehicles, livestock, trees and shrubbery, lumber and shingles, fence posts; one portable house K. D., seeds for planting purposes, food for livestock while in transit, and household goods not to exceed two pianos, but does not include general merchandise, acids, drags, explosives, matches, paints, or inflammable oils, nor any articles, whether herein enumerated or not, which are intended for sale or speculation.
    $ $ $ ‡ ‡
    “ Household goods and emigrants’ movables, including old or used furniture, prepaid:
    “When the value of the shipment exceeds ten (10) dollars per hundred (100) pounds and the consignor so states (subject to notes 1 and 3) (C. L. min. wt. 12,000 lbs.) (subject to Rule 27, L. C. L., Class 1%; C. L., Class 1).
    “When the value of the shipment does not exceed ten (10) dollars per one hundred (100) pounds and*the consignor so states (subject to notes 2 and 3) (C. L. min. wt. 12,000 lbs.) (subject to rule 27).”
    Notes 1 and 2 referred to set out the contract the shipper was to execute according to the value of the shipment, rule 27 prescribed the terms upon which cars of special size would be furnished, and note 3 specified the contents of shipments of household goods and emigrant movables substantially the same as western classification.
    X. The plaintiff, as the last carrier, rendered its bills for the transportation of freight as described in Finding VIII to the disbursing quartermaster of the United States Army. Pending the settlement of said bills the plaintiff’s railroad was taken over by the Government on January 1,1918, under the act of August 29, 1916, 39 Stat. 619, 645, and the President’s proclamation of December 26, 1917, and, accordingly, came under the control, management, and operation of the United States Railroad Administration, by which agency its operation and control were continued until March 1, 1920, 41 Stat. 457. To whom the amounts referred to in this finding were paid by the disbursing officer is set out hereafter in Finding XI.
    Bill 1-73, B. L. WQ. 9651, was originally stated by plaintiff in the sum of $23,536.70, and was corrected and restated by plaintiff in the sum of $18,835.92. The sum of $85.60, feeding charges, was stricken out, by whom not shown, and the bill was paid by the disbursing officer in the sum of $18,750.32. The classification of the military impedimenta in the original bill and the restated bill was the same, and no part of the difference between the amounts stated in the original and restated bill was due to change from Class A, net cash, to Class D.
    Bill 6629-30-31 (erroneously stated by plaintiff as bill 74-76), B. L. WQ,-5216,' was originally stated by plaintiff in the sum of $1,018.50 on the basis of Class A, net cash, rating for military impedimenta and was restated by plaintiff in the sum of $657.65 on the basis of Class D with land-grant deduction, in which amount it was paid by the disbursing officer.
    Bill 77 (alias 6658-68), B. L. WQ.-6008, was originally stated by plaintiff in the sum of $3,482.06 and was restated in the sum of $2,609.67, by whom not shown; it ivas after-wards corrected by plaintiff to the sum of $2,134.66, which was paid by the disbursing officer. No part of the difference in amount between the original and corrected bill was due to a change from Class A, net cash, to Class D, with land-grant deduction on military impedimenta.
    Bill 78, B. L. WQ.-9997, was originally stated by plain’tiff in the sum of $179.40 on the basis of Class D on military impedimenta with land-grant deduction, and was paid in that amount by the disbursing officer.
    Bill 79-80-82-83 (alias bill 79-80), Bs. L. WQ-10247, WQ.-10305, WQ-10306, was originally stated by plaintiff in the sum of $1,695.60 on the basis of Class A, net cash, on military impedimenta, and was restated by plaintiff in the sum of $633.01 on the basis of Class D, with land-grant deduction, in which amount it was paid by the disbursing officer.
    Bill 81, B. L. WQ-10308, was originally stated by plaintiff in the sum of $423.90 on the basis of Class A, net cash, on military impedimenta, and was corrected to the sum of $189.71, by whom not shown; it was afterwards corrected by plaintiff to the sum of $194.93 on the basis of Class D, with land-grant deduction, in which amount it was paid by the disbursing officer.
    Bill 84, B. L. WQ-9991, was originally stated by the plaintiff in the sum of $499.53 on the basis of Class A, net cash, on military impedimenta, and was restated by plaintiff in the sum of $255.57 on the basis of Class D, with land-grant deduction, in which amount it was paid by the disbursing officer.
    Bill 86-88-85-87-88-90 (alias bills 85, 86, 87, 88, and 88-90), Bs. L. WQ-8502 and WQ-8505, was originally stated by plaintiff in the sum of $1,482.42 on the basis of Class D on military impedimenta, with land-grant deduction, in which amount it was paid by the disbursing officer.
    Bill 92-100, B. L. WQ-8510, was originally stated by the plaintiff in the sum of $1,516.90, in which amount it was paid by the disbursing officer; no claim for freight charges for transportation of military impedimenta is made by plaintiff. There is no satisfactory evidence produced to show that this bill was ever presented in any larger amount.
    Bill 100-103, inclusive (alias bills 101, 102, 103), -Bs. L. WQ,-8504, WQ-8503, and WQ-8511, was originally stated by plaintiff in the sum of $1,271.70 on the basis of Class A, net cash, on military impedimenta, and was restated by plaintiff in the sum of $741.21 on the basis of Class D, with land-grant deduction, in which amount it was paid by the disbursing officer.
    Bill 104, 100-103, inclusive (alias bill 104), B. L. WQ.-8512, was originally stated by plaintiff in the sum of $423.90 on the basis of Class A, net cash, on military impedimenta, and was restated by plaintiff in the sum of $268.78 on the basis of Class A, with land-grant deduction, in which amount it was paid by the disbursing officer. No articles comprising military impedimenta were involved.
    The difference between the amounts stated by plaintiff in its original bills at Class A, net cash, rates on military impedimenta, $4,909.23, and afterwards restated by plaintiff without protest, at Class D rates, with land-grant deductions, $2,482.37, amounts to $2,426.86.
    XI. Restated bill 6629-30-31 (alias bill 74-76), B. L. 5216, for $657.65 was paid by the disbursing officer directly to the plaintiff on June 20, 1917; all the other restated bills referred to in Finding X, amounting to $26,157.20, were paid as restated by the disbursing officer to the Director General of Railroads beginning February 4, 1918, and ending June 14, 1918, pursuant to General Order No. 17, and were credited on the Railroad Administration books to the account “Individuals and Companies,” and were not credited to the plaintiff. For alleged overpayments made by the said disbursing officer on some of said bills the Auditor for the War Department, in auditing the said disbursing officer’s accounts, disallowed the same, and on February 28, 1920, deducted $794.92 for land-grant and $462.27 for car rent from Railroad Administration bills, a total of $1,257.19 (about which no question arises herein), which the Railroad Administration deducted from the $26,157.20 paid to it on corporate bills and retained, leaving a balance in the hands of the Railroad Administration for transportation prior to Federal control of $24,900.01.
    The auditor in auditing the disbursing officer’s accounts of the said corporate bills on February 11, 1920, disallowed $10,853.71 as an overpayment by the disbursing officer as aforesaid to the Railroad Administration on the ground that the Government was entitled to have had its military impedimenta moved free in that amount under a ruling of the comptroller, and thereupon the auditor deducted that amount from a pending account of the Railroad Administration for services by the latter. The Railroad Administration repaid itself by deducting this amount, $10,853.71, from the said balance on hand, $24,900.01, leaving a balance of $14,046.30.
    General Order No. 17 is attached to these findings as Appendix “A,” and is made part of this finding by reference thereto.
    XII. On February 24, 1920, General Order No. 66, effective February 29,1920, was issued by the United States Railroad Administration for the purpose of outlining the method to be followed in the separation of the accounts of the Railroad Administration and the different railroads under its control when the railroads should be returned to their owners, which provided, among other things, that—
    “Seo. 5 (a). * * * If during the period of Federal operations amounts representing overcharge freight claims paid out of Federal funds, affecting traffic, the revenues from which were included in corporation revenue or credited to it as lay-over revenue on the Federal books, or amounts representing loss and damage claims paid out of Federal funds, chargeable to the period prior to Federal control, were carried on the Federal books in suspense accounts pending adjustment thereof with other carrier corporations, or pending receipt of additional information wherewith to dispose of the amounts carried, and such amounts are carried in suspense account as of February 29, 1920, they shall be charged to the corporation. Such amounts shall on the Federal books be charged to the account ‘ (Name of corporation) — Corporate transactions,’ and on the corporate books should be charged to an appropriate suspense account and credited to the account ‘TJ. S. Government — Corporate transactions.’ ”
    Copy of General Order No. 66 is attached to these findings as Appendix “ B ” and is made part hereof by reference.
    XIII. At different times from April 21, 1920, to July 15, 1920, inclusive, the auditor deducted from other Railroad Administration bills $3,382.33, upon the ground that the disbursing officer had overpaid corporate bills in that amount when the military impedimenta should have been transported free by plaintiff under tariffs in force, at the rate of one baggage car free for every 25 men in the troop movement. The Railroad Administration paid itself for the amount so deducted out of the balance of the funds in its hands paid on plaintiff’s bills, $14,046.30 (see Finding XI), leaving a balance of such funds still in the hands of the Railroad Administration of $10,663.97. This balance of $10,663.97 was credited by the Director General of Railroads to plaintiff in August, 1920, on Railroad Administration journal entry 489 through General Order No. 17 account, entitled “ P. & R. Ry Co., assets, Dec. 31,1917, collected.”
    When the transportation service was rendered the plaintiff charged on its books against the War Department the said amount of its bills, $26,157.20, which includes the said sum of $1,257.19 mentioned in Finding XI, and about which there is no controversy. If said sum of $10,663.97 be credited on the said bills, the amount deducted by the auditor, $14,236.04, remains as a charge.
    XIV. On August 25,1920, a complete settlement was made between the War Department and the Director General of Railroads of all unsettled accounts for transportation furnished by the Railroad Administration to the War Department between January 1,1918, and March 1,1920, the period of Federal control of railroads, and the amount paid by the War Department to the Railroad Administration in such settlement was $38,169,294.39.
    On August 26, 1920, the comptroller of the Railroad Administration issued, with the approval of the Director General of Railroads, Accounting Circular 152, which reads:
    
      “To each earner the properties of which were wruier Federal control at the termination thereof at midnight February <&9, 1980:
    
    “A settlement has been made between the War Department and the Director General for all unpaid charges for passenger and freight transportation service, including Pullman fares and demurrage charges, rendered by the Director General.
    “Accounting officers are directed to close into an account, styled ‘ War Department transportation charges,’ all unpaid accounts against the War Department carried in the Federal books covering such transportation service and to discontinue rendering Federal bills against the War Department for services of this nature.
    “ The account, ‘War Department transportation charges,’ shall be closed into the administration ledger control account and reported as a special item on Form AC 512-A in the same manner as prescribed in Accounting Circular 82 for reporting other items transferred to the administration ledger control account.’ Record of the balance so transferred shall be kept in the Federal accounts in such detail that it may be readily audited by representatives of the Railroad Administration.
    “ Special attention is directed to the fact that the settlement above referred to involves the War Department only; that it does not include amounts due for the construction of tracks, service at cantonments, etc.; and does not include bills rendered in the Federal accounts for transportation service performed prior to Federal control.
    
      “Unpaid bills carried in the Federal accounts against the War Department, for transportation service performed prior to Federal control, shall not be closed into the account, ‘War Department transportation charges,’ but instead shall be charged to the corporation through the account ‘(Name of corporation) — Corporate transactions.’ Such charges against the corporation, when reported on Settlement Statement Form AC 510, shall be allocated to the quarter in which the corporation was originally credited with the amount, or bill was stated in the accounts.”
    XY. The final account of the final settlement between the Director General of Railroads and the plaintiff reads as follows:
    “United States Railroad Administration, Director General of Railroads. — Comparison of claim submitted by the Philadelphia & Reading Railway Co., including the Atlantic City Railroad Co., Catasauqua & Fogelsville Railroad Co., The Chester & Delaware River Railroad Co., Middle-town & Hummelstown Railroad Co., The Gettysburg & Plarrisburg Railway Co., The North East Pennsylvania Railroad Co., Perkiomen Railroad Co., The Philadelphia & Chester Valley R. R. Co., The Philadelphia, Newton & New York R. R. Co., Pickering Valley Railroad Co., The Port Reading Railroad Co., Reading & Columbia Railroad Co., The Rupert & Bloomsburg R. R. Co., Stony Creek Railroad Co., The Tamaqua, Hazelton & Northern R. R. Co., The Williams Valley Railroad Co., The Philadelphia Grain Elevator Co., The Delaware River Ferry Co. of New Jersey, with books of the central administration .adjusted to March 31, 1922.
    
      
    
    
      
      
    
    “ I hereby certify that this is a correct copy.
    “(Signed) L. J. Teacx,
    “Comptroller, U. 8. B. B. A.”
    
    The balance of $10,668.97 credited to plaintiff in August, 1920, was paid to plaintiff in the final settlement account above in the account “Assets December 31, 1917, collected.” The deduction for free baggage, $14,236.04, did not enter into the said account.
    XYI. When final settlement was effected, an agreement was entered into on June 30, 1922, between James C. Davis, Director General of Railroads and agent of the President, acting on behalf of the United States and the President, and the Philadelphia & Reading system of railroads, through its president, the material parts of which read as follows:
    “The said Director General hereby acknowledges payment of the sum of eight million dollars ($8,000,000) by the said companies, the receipt whereof is hereby acknowledged, in full satisfaction and discharge of all claims, right, and demands of every kind and character which the said Director General or anyone representing or claiming to represent the Director General, the United States, or the President now has or hereafter may have or claim against the said companies or any of them growing out of or connected with the possession, use, and operation of- the companies’ property by the United States during the period of Federal control, or out of the contract between the parties dated the 18th day of February, 1920, and the said companies both jointly and severally hereby acknowledge the return to and receipt by them of all their property and rights which they are entitled to, and further acknowledge that the Director General has fully and completely complied with and satisfied all obligations on his part, or on the part of the United States or the United States Railroad Administration, growing out of Federal control.
    “ The purpose and effect of this instrument is to evidence a complete and final settlement of all demands of every kind and character as betiveen the parties hereto growing o'ut of the Federal control of railroads * *
    The said agreement is attached to these findings as Appendix “ G ” and is made a part hereof by reference thereto.
    XVII. In pursuance of the authority contained in section 1 of the act of March 21, 1918, 40 Stat. 451-453, known as the Federal railroad control act, the Director General of Railroads on February 18, 1920, entered into an agreement with the Philadelphia & Reading Railway Co. and its 18 affiliated companies, the material parts of which read:
    
      SECTION 2. — PROPERTY TAKEN OYER
    “ Sec. 2. Tbe railroads and systems of transportation of the company and of its said affiliated companies of which the President has taken over possession, use, control, and operation shall be considered as including:
    
      “(a) The following roads and properties:
    . # Hi Hi ❖ Hi ❖ H:
    “(S) All materials and supplies on hand at midnight December 31, 1917.
    “(c) All balances in the account or accounts representing the total of ‘net balance receivable from agents and conductors’ and-‘net balance due from agents, pursers, and stewards ’ as of midnight December 31, 1917.
    “Section 4. — Operation and accounting during Federal control.
    “ Sec. 4. (a) All amounts received by the director general under paragraph (c) of section 2 hereof and all other amounts, whether received from the companies in cash or collected or realized upon by him from current operating assets belonging to the companies or arising from railway or water-line operations prior to midnight of December 31, 1917, shall be credited by him to the companies; and the director general shall, to the extent of the cash so received or realized, pay and charge to the companies all expenses arising out of railway or water-line operations prior to January 1, 1918, including reparation claims, and unless objected to by the company may pay and charge to the companies any of such expenses, including reparation claims, in excess of the cash so received or realized. Balances of the above accounts shall be struck quarterly on the last days of March, June, September, and December of each year, and the cash balance found on such adjustments to be due either party shall be then payable, and if not paid shall bear interest at the rate of 6 per cent per annum, unless the parties shall agree upon a different rate; except that the rate of interest on any portion of a balance found due to the companies which is derived from cash in bank to the credit of the companies on interest shall be adjusted in each case independently of this contract as the parties may agree.
    “(6) Railway and water-line operating expenses, reparation and other claims, hire of equipment and joint facility rents shall be allocated with reference to the time when incurred as between the period prior and subsequent to midnight of December 31, 1917, and as between the period of Federal control and the period subsequent thereto. Railway and water-line operating revenues shall be allocated as between the period prior and subsequent to midnight of December 31, 1917, in accordance with the established accrual practices of the companies; except that where prior to midnight of December 31, 1917, the companies’ part of a service on through business had been completed or carload lots on their own lines had reached destination, the revenue of the companies for such service shall be allocated to them; but as to classes of traffic where in the opinion of the director general such allocation will involve undue delay or undue absorption of accounting labor such revenues shall be allocated in accordance with the established accrual practices of the companies. Like methods of accruing and allocating such revenues shall be used at the end of Federal control.
    
      “(c) * * *
    
      “(d) Cash receipts or disbursements and other items arising out of transactions which do not enter into or form a part of those used in determining the companies’ standard return shall not be received or paid by the director general unless such transactions are negotiated or conducted by his order for account of the companies and with the consent of the company. When moneys are so received or paid by the director general in connection with such corporate transactions they shall be credited or charged to the companies. There shall be an accounting of the amounts due by or to any of the parties under this paragraph at the end of each quarter year of Federal control, and the amount so found due shall be then payable, and if not paid shall bear interest as provided in paragraph (a) of this section.
    “SECTION 9. — FINAL ACCOUNTING
    “Sec. 9. (a) * * *
    
      “(b) At the end of Federal control the director general shall return to the companies all uncollected accounts received by him from them and also materials and supplies equal in quantity, quality, and relative usefulness to that of the materials and supplies which he received, and to the extent that the director general does not return such materials and supplies he shall account for the same at prices prevailing at the end of Federal- control. To the extent that the companies receive materials and supplies in excess of those delivered by them to the director general they shall account for the same at the prices prevailing at the end of Federal control and the balance shall be adjusted in cash.”
    
      Copy of tbe agreement between the Director General of Railroads and the Philadelphia & Reading Railway Co. and affiliated companies, dated February 18, 1924, is made part of this finding by reference thereto.
    The court decided that plaintiff was entitled to recover, in part.
    
      
       Appealed.
    
   Campbell, Chief Justice,

delivered the opinion of the court:

This case has been before the court several times. At one time it was decided against the plaintiff, who made a motion for a new trial. Pending that motion a considerable number of other cases were submitted, while still others were awaiting hearing, all of which involved the general question of the effect to be given settlements between the Director General of Railroads and the railroad companies. That being one of the questions in this case, the court referred this and other submitted cases of similar kind to a special commissioner for a full examination and report, authorizing him to take and hear additional evidence that might be adduced and to make a report of his findings and the evidence. This the special commissioner has done. In the order of reference it was provided that upon the coming in of the commissioner’s report the parties in each of the cases, within a stated time, could file exceptions to any of his findings or conclusions. In the instant case exceptions were filed. The case has been heard upon the report, exceptions thereto, and the record. Those exceptions by both parties are overruled and the report of the special commissioner is confirmed. As required by the rules, the court has made findings of fact based upon this report and the evidence. The facts now found are materially different from those developed in former hearings, and so far as the question of the director general’s settlement is concerned present a substantially different case from that made in the earlier hearings. It becomes necessary to review them.

The petition was filed December 8, 1920, by the Philadelphia & Reading Railway Co., which rendered the transportation services out of which the matters here involved arose. The Reading Company, as the successor of this plaintiff company, has been substituted as party plaintiff. This-substitution arose after the services were rendered and after all the questions involved in the case had arisen, but for brevity the term plaintiff will be used as inclusive of the original party, the Philadelphia & Beading Bailway Co.

For transportation services rendered for the Government by the plaintiff’s companies bills were rendered in due course' by the carrier to the proper disbursing officers. These bills were rendered long prior to the date of the passage of the railroad into Federal control in December, 1917, but payments of them had not been made at that time. It was. while the plaintiff company’s properties were being oper ated by the Director General of Bailroads that checks of the disbursing officer to the amount of $26,157.20 were drawn by this officer payable to the Philadelphia & Beading Bailway Co., and intended to be in payment for the transportation services mentioned. The director general had utilized the services of the administrative and accounting officers of the railroad companies in large degree by retaining them in his service. Whether because of this condition or because the collection of such outstanding bills as these came within the contemplation of the law or the understanding of the parties, the proceeds from the checks went into the director general’s accounts. The proceeds arising from the operation of the roads during Federal control became the property of the United States. Act of March 21, 1918, section 12, 40 Stat. 457; Dupont Co. v. Davis, 264 U. S. 456. Debts due the carriers at the time Federal control began occupied a different position. No question has been or can be raised as to his right to receive the payment at the time it was made. At that time, however, the agreement between the director general and the railroad companies that was authorized by the act of March 21, 1918, 40 Stat. 451, had not been executed. For this reason, probably, the method of making entries on the books under specific accounts was held in abeyance. While the collection of the items appeared in proper form, there was at the time no specific credit given on an account with the plaintiff.'

After Federal control began the director general presented bills to the accounting or disbursing officers for transportation services rendered the Government by him upon plaintiff’s lines. In the meantime, and before the director general’s bills had been audited for payment, it was determined by the Auditor for the War Department in his audit of the disbursing officer’s accounts that this officer had overpaid plaintiff’s bills in the checks issued as stated and collected by the director general. The claim of the auditor, was based upon a decision of the Comptroller of the Treasury that in the movement of troojis of the Government the-carriers were required to furnish free transportation of impedimenta on the basis of one car for each 25 men. The amount of this supposed overpayment was $14,236.04, and as a means of correcting it the course adopted by the accounting officers was to withhold payments of amounts due upon the director general’s bills for services on plaintiff’s lines until these withheld amounts equaled the amount of the supposed overpayment on plaintiff’s bills. The director general’s bills were accordingly underpaid from time to time or deductions were made from them to the amount of $14,-236.04. While such a course, if unobjected to and allowed to stand, would reimburse the Government to the extent of the supposed overpayment on plaintiff’s bills, it would accom-. plish this result at the expense of the director general’s bills unless credit be given him in a like amount against the sum he received upon plaintiff’s account. As a matter of fact, as hereinafter stated, the director general did account for the net sum remaining after deducting from the amount of the collected checks the amount of the underpayments of or deductions from his own bills. In this connection it may be observed that one of the important differences between the facts now found and those in the former hearings is that contrary to what appeared formerly when the disbursing officer’s checks for plaintiff’s bill were received there was in fact no entry made of credit to plaintiff company, nor was a charge or debit made upon the books against plaintiff for the underpayments of the director general’s bills. The matter, so far as actual book entries are concerned, was in abeyance, except, as already stated, the fact of the receipt of the proceeds of the checks properly appeared in the director general’s books. It was not until the 18th day of February, 1920, within a few days of the date fixed for the termination of Federal control, that an agreement such as was authorized by the act of March 21, 1918, was entered into between the director general and the plaintiff (the Philadelphia & Reading and affiliated companies). This agreement mentions the properties taken under Federal control and does not expressly name uncollected assets of the companies arising out of transactions occurring or services rendered prior to Federal control. There is at least, however, an implied recognition of them in the provision of the agreement relative to the accounting by the director general for all amounts received by him “ in cash or collected * * * by him from current operating assets belonging to the companies,” and also in the requirement that at the end of Federal control the director general shall return to the companies all uncollected accounts received by him from them, as well as by other provisions of the agreement and the act under- the authority of which it ivas made.

On the 80th day of June, 1922, an agreement, designated final settlement, was entered into between the director general and plaintiff’s companies. Its declared purpose was to evidence a complete and final settlement of “ all demands of every kind * * * as between the parties * * * growing out of the Federal control of railroads,” except some specified matters not material here. On or about August 25, 1920, preceding the final settlement mentioned, a settlement had been made between the War Department and the director general of all unsettled accounts for transportation furnished during the period of Federal control, the War Department paying him the sum of more than thirty-eight millions of dollars."

By the petition here filed, as above stated, in December, 1920, recovery is sought for the amounts alleged to have been deducted from plaintiff’s bill because of the comptroller’s ruling (24 Comp. Dec. 774) relative to free transportation of impedimenta accompanying troop movements,the petition also claiming additional amounts which it is alleged the disbursing quartermaster deducted from its bills “as if the shipments had consisted of emigrant movables under current rulings of the comptroller.” These two general classes of claims will be considered separately.

1. As to the right to a deduction from plaintiff’s bills for services rendered prior to Federal control because of the comptroller’s ruling to the effect that the Government was entitled to a free car for each 25 men (24 Comp. Dec. 774), this court has in several cases held the opposite view to be correct. The Government has accordingly been required to pay sums disallowed by the accounting officers upon the theorjr mentioned. If, therefore, the sum of the items involved in this branch of the case, namely, $14,236.04, had been deducted from plaintiff’s bills and Federal control had not intervened theré can be no question that plaintiff would be entitled to recover the amount of the deduction. See Missouri Pacific R. R. Co., 56 C. Cls. 341. Under the facts'" now appearing from the findings we think that the right of recovery is unimpaired by the intervention of Federal control or by the settlement between the parties relative to Federal control. To make plain our views on this question may involve some repetition of facts already stated and we repeat them for the further reason that facts appear in some other cases of this class that may call for a differentiation^ of this case. The items in plaintiff’s bills involved in this 1 case were for services rendered prior to Federal control. They were not paid to plaintiff, but checks for them were collected by the director general amounting to $26,157.20. Included in this amount is $1,257.19, concerning which there is no controversy, and there remains after deducting it $24,900.01. These collections by the director general were during the year 1918, between the dates February 2 and June 12, and, therefore, were prior to the decision of the comptroller mentioned (24 Comp. Dec. 774), rendered June 18, 1918. These dates are important in considering the effect to be given the action of the director general in crediting plaintiff with the difference between his collection in 1918 of plaintiff’s bills and the amounts subsequently-withheld from his own bills by the accounting officers under the operation of the comptroller’s ruling. Owing no doubt to the great number of bills coming before them during the periods in question the accounting officers did not conclude the auditing of the director general’s bills for transportation by him over plaintiff’s lines until long after the payment on plaintiff’s bills had been made, but on June 18, 1918, the decision of the comptroller had been rendered. Whilst these collections of plaintiff’s bills were made in 1918, and before this decision, it was not until divers times during 1920 that the director general’s bills were subjected to the stated underpayments or deductions. In the meantime he held the proceeds of the collections subject to a proper accounting with plaintiff. That decision was, of course, controlling upon the accounting officers and reasonably enough the director general would not seek to question it. If he did not accept the comptroller’s views he manifestly would take upon himself the burden of establishing the contrary. The natural thing for him to do was to leave the matter where the action of the accounting officers placed it and hold himself responsible to plaintiff for what remained after applying the accounting officer’s claim. This course would not prevent plaintiff subsequently asserting .its claim against the Government for the amount withheld, but would leave the plaintiff and the Government free to settle their own differences. And as bearing further on the reasonableness of this course by the director general, it may be noted that it was after the transactions mentioned had occurred — after the collections by him and the subsequent underpayments of or deductions from his own bills— that this court decided that the ruling of the comptroller was erroneous. See Missouri Pacific Railroad Co. case, supra, decided June 13, 1921. Thus the ruling of the comptroller, until authoritatively held erroneous by the courts, was binding upon the parties concerned during the times involved in the collections and in the underpayments or deductions, and there was no legal duty upon the director general to question its correctness so far as these items were concerned. When notified, as already stated, that he had been overpaid „by the disbursing officer on plaintiff’s bills, and while he yet had in possession and control the collections, not having paid them over to plaintiff, he could with perfect propriety accede to the demand for a return of the supposed overpayments. See Story on Agency (9th ed.), par. BOO; Cary v. Curtis, 3 How. 236, 249.

If it were necessary to find that the companies in whose right the collection was made had acquiesced in or ratified the director general’s action in submitting to the deduction from his own accounts in order to reimburse the Government for the supposed overpayments, it would seem that such a finding would be supported by the fact that after the underpayments or deductions were made the plaintiff brought this suit in which it treats these deductions as though made from its own accounts. We are not left in uncertainty as to what occurred with reference' to these items of collection when the preliminary statements of accounts incident to the final settlement and the settlement itself were concluded in June, 1922. The facts definitely show that in the class of items called corporate transactions there was credited to plaintiff an item of $10,663.91, which is the exact difference between the entire amount collected, as already stated, $24,900.01, upon plaintiff’s bills and the underpayments or deductions from the director general’s bills. These “corporate transactions” were of things occurring prior to Federal control. It thus is certain that the director general had accounted to the plaintiff for the balance in his hands of his collection of the plaintiff’s bills mentioned. The Government having made itself whole by underpaying, or deducting from the director general’s bills the supposed overpayments on plaintiff’s bills, and the director general having accounted to plaintiff only for the balance, it is manifest that the plaintiff is the only person who can complain. It now treats the deductions as made from its own bills, and this is the effect of what was done. It sues to recover the amount of these deductions, which, as stated above, amount to $14,236.04, and we think it should recover this sum.

2. The other items of claim set up in the petition arise out of alleged deductions from plaintiff’s bills made by the disbursing officer before paying any part of them. It is claimed not only that the deductions were improper but that they were made before the checks already mentioned were issued. The facts show, however, that bills were presented to the disbursing officer stated according to certain tariff charges, which that officer notified plaintiff he was not authorized to pay. Thereupon the plaintiff’s bills were voluntarily restated upon the basis of Class D rates, and as thus restated the bills were paid without objection or protest by plaintiff. This branch of the case is controlled by the decided cases. See Oregon-WasMngton R. R. Co., 255 U. S. 339; 54 C. Cls. 131. Baltimore & Ohio R. R. Co., 52 C. Cls. 468.

The plaintiff should have judgment for the items involved in the first branch, $14,236.04, but as to those in tire second branch, the petition should be dismissed. And it is so ordered.

GRAham, Judge; Hat, Judge; DowNet, Judge; and Booth, Judge, concur.  