
    THE EASTERN RAILROAD COMPANY v. THE UNITED STATES.
    [No. 13967.
    Decided January 12, 1885.]
    
      On the Proofs.
    
    A railroad carries the mails from July 1, 1874, to June 30, 1877, under a formal written contract, and from July 1, 1877, to June 30,1881, under an implied contract. On the 1st July, 1878, the Postmaste'r-Gen-eral reduces the compensation 5 per cent., pursuant to the Act 17th June, 1878 (20 Stat. L., 140).
    I.Under the decisions of the Supreme Court (104 U. S. R., 680, 687) a statute ordering a reduction of railway compensation did not extend to an existing valid contract. But where the service was rendered under an implied contract, and the railroad continued after notice to perform and to accept without objection the reduced compensation, it thereby consented to a modification of its existing contract relations with the government.
    II.The statutes relating to the duration of mail-transportation contracts, and to compensation for railway service (Rev. Stat., §§ 3943, 3956, 3970,4002; Act 2d July, 1876, 19 Stat. L., 79, § 1), do not prescribe a period of time as the term of such contracts, nor fix a rate of compensation as the consideration for such services; they merely designate a maximum which the Postmaster-General cannot exceed.
    III.An order of the Po'stmaster-General stating the compensation to be allowed for mail transportation service “from July 1,1877, to June 30, 1881 {unless otherwise ordered),” does not create a binding contract for the period named.
    
      The Reporters statement of the case:
    The following are the facts of the case as found by the court:
    I. For some years immediately before June 30, 1877, the ■claimant had carried the mails of the United States on each of the routes named in the petition, under several written contracts, which expired on that day and were in the following form:
    “ This article of contract, made the 31st day of March, in the year one thousand eight hundred and seventy-four, between the United States of America (acting in this behalf by the Postmaster-General) and the Eastern Railroad Company, by John Wooldrige, its president, and Frank Jones and J. W. Johnson, as sureties, witnesseth:
    
      “ That whereas the said railroad company has been accepted,, according to law, as contractor for conveying the mail on route No. 615, from Boston (Mass.), by Maplewood, Linden, Olifton-dale, Saugus Centre, Saugus, and Linn Common (n. o.), to West Lynn Depot (n. o.) and back, by railroad, twelve times a week, by a schedule satisfactory to the department, at ñve hundred dollars per year, being at the rate of $50 per mile per annum, for and during the term beginning January 1st, eighteen hundred and seventy-four, and ending June thirty, eighteen hundred and seventy-seven:
    “ Now, therefore, the said Eastern Railroad Company, as contractor, and the said Frank Jones and J. W. Johnson, as sureties, do, jointly and severally, undertake, covenant, and agree with the United States, and do bind themselves—
    “ 1st. That the mail (including British, Canada, and other foreign mails) shall be conveyed in a secure and safe manner, free from wet or other injury, in a separate and convenient car, or apartment of a car, suitably fitted up, furnished, warmed, and lighted, under direction of the Post-Office Department and to the satisfaction of the Postmaster-General, or of his authorized agent, at the expense of the contractor, for the assorting and safe-keeping of the mails, and for the exclusive use of the department and its mail agent, if the department shall employ such agent; and such agent is to be conveyed free of charge. When there is no agent of the department, the railroad company shall designate a suitable person upon each train, to be sworn, to receive and take charge of the mails, and of way-bills accompanying and describing them, and duly deliver the same. And the mail shall be taken from and delivered into the post-offices at the ends of the route; and also from and into the intermediate offices on the route, or that may hereafter be established on the route, provided the latter are not over one-quarter of a mile from a depot or station, or from the railroad track when no station has been established. *
    “ 2d. That if the company shall run a regular train of passenger cars more frequently than is required by the contract to carry the mail, the same increased frequency shall be given to the mail, and without increase of compensation, and the like as to the increase speed of the mail trains, if desired by the Postmaster-General.
    “ 3d. That the company shall convey, free of charge, all mailbags and post-office blanks; and also all accredited special agents of the department, on exhibition of their credentials.
    “ 4th. That the company shall not, by itself nor by its agents, transmit, nor be concerned in transmitting, commercial intelligence more rapidly than by mail, nor carry out of the mail any letters not inclosed in postage-stamped envelopes, except such as may have relation solely to some article at the same time conveyed.
    
      “ 5th. Thatin every case of failure to perforin the trip (unless it is shown that the same was not caused by misconduct, neglect, or want of proper shill) there may be a forfeiture of the pay for the trip ; and a failure to arrive at the end of the route, so as to lose the connection with a depending mail, shall be considered as equal to a whole trip lost, unless the detention or delay be the result of unavoidable causes.
    “ 6th. That the company shall be subject to ñne for failure to take or deliver a mail, or any part of a mail; for suffering the mail to be wet or otherwise injured, or lost, or destroyed, unless it shall appear that such failure, or other incident, as aforesaid, was not caused by misconduct, neglect, or want of proper skill on the part of the company or its officers.
    “ 7th. That the company shall be answerable for the adequacy of the means of transportation; for the faithfulness, ability, and diligence of its agents; and for the safety, due receipt, and delivery, as aforesaid, of the mails.
    “ 8th. That the company will collect quarterly, if required by the Postmaster-General, of postmasters on the route, the balances due from them to the United States on their quarterly returns, and faithfully render an account thereof to the Postmaster-General in the settlement of its quarterly accounts, and will pay over to the Auditor of the Treasury for the Post-Office Department, on the order of the Postmaster-General, all balances remaining in its hands.
    “ 9th. That the Postmaster-General may discontinue or curtail the service, in whole or in part, whenever the public interests, in his judgment, shall require such discontinuance or curtailment for any cause; he allowing, as a full indemnity to the contractor, one month’s extra pay on the amount of service dispensed with, and a procompensation for the amount of service retained and continued.
    “10th. The said United States covenant with the said company''to pay, as aforesaid, at the rate aforementioned, quarterly, in the months of November, February, May, and August, or in the preceding months, at the option of the department.
    “Provided, always, that this contract shall, in all its parts, be subject to the terms and requisitions of an act of Congress passed the twenty-first day of April, in the year one thousand eight hundred and eight, entitled ‘An act concerning public contracts.’
    “ In witness whereof the said Postmaster-General has caused the seal of the Post-Office Department to be hereto affixed, and has attested the same by his signature ; and the said railroad company, by its president and sureties, have hereunto set their hands and seals the day and year set opposite their names, respectively.
    “John A. J. Creswell,
    “ Postmaster-General.
    
    
      “ Signed, sealed, and delivered by the Postmaster-General in the presence of—
    “Jno, B. Ford.
    “ Eastern Railroad Company,
    “By Jno. Wooldridge,
    “ President, Sept. 28, 1874.
    “ And by the other parties hereto in the presence of— “Aaron Osborne,
    “Louis R. Emery,
    “ Witnesses.
    
    “Signed this 28 day of Sep., 1874.
    “Frank Jones, [seal.]
    “ Signed this 28 day of Sep., 1874.
    “J. W. Johnson, [seal.]
    “ SuretiesP
    
    II. The claimant was paid according to the terms of said contract to and including June 30, 1877.
    Prior to February 1, 1877, the Postmaster-General sent to claimant for each route named in the petition a “railroad-distance circular,” and prior to April 16,1877, a “ railroad-weight circular,” which were in form as follows:
    “ RAILROAD-DISTANCE CIRCULAR.
    “U. S. Post-Ofeice Department,
    “ Contract Office,
    » “Washington, November 27, 1876.
    “ Sir : To obtain accurate information for the use of this department with regard to length and location of the Eastern Railroad (Portland, Me., to Portsmouth, N. H.), the Postmaster-General requests that you will have inserted in the annexed tabular form the following items, viz.: In column 1, the distance from station to station; in column 2, a list of all the stations, in the order in which they follow each other; in column 3, opposite each station, the official name of the post-office at ornear such station; and in column 4, opposite each post-office, the distance, if any, between the post-office and the station. State fractions of a mile by decimals, either tenths or hundredths. Be pleased to have the statement verified by the engineer of the road or other competent officer, and returned to this office.
    “Yery respectfully, &c.,
    “ Thos. J. Brady,
    ’ “ Second Assistant Postmaster-General.
    
    “To Samuel 0. Lawrence, Esq.,
    “ Pres’t Pastern B. B. Go., Boston, Mass.”
    
    
      "‘ RAILROAD - WEIGHT CIRCULAR.
    
      “(Under acts of Congress o/1873,1875, 1876.)
    “U. S. Post-Oeeice Depaetment,
    “ Oeeice oe Second Assistant P. M. G-eneeal,
    “ W ashington,-, 187-.
    “Sie: By act of Congress approved March 3,1873, the Post-inaster-General is ‘ authorized and directed to readjust the compensation hereafter to be paid for the transportation of mails on railroad routes upon the conditions and at the rates hereinafter mentioned, to wit:
    ‘“That the mails shall be conveyed with due frequency and speed j that sufficient and suitable-room, fixtures, and furniture, in a car or apartment properly lighted and warmed, shall be provided for route agents to accompany and distribute the mails.
    “ ‘And that the pay per mile per annum shall not exceed the following rates, namely: On routes carrying their whole length an average weight of mails per day of two hundred pounds, fifty dollars; five hundred pounds, seventy-five dollars; one thousand pounds, one hundred dollars; one thousand five hundred pounds, one hundred and twenty-five dollars; two thousand pounds, one hundred and fifty dollars; three thousand five hundred pounds, one hundred and seventy-five dollars; five thousand pounds, two hundred dollars; and twenty-five dollars ■additional for every additional two thousand pounds, the average weight to be ascertained, in every case, by the actual weighing of the mails for such a number ofisuccessive working days, not less than thirty, at such times, after June thirtieth, eighteen hundred and seventy-three, and not less frequently than once in every four years, and the result to be stated and verified in such form and manner as the Postmaster-General may direct.’
    “By the same act, also, it is provided ‘that additional pay may be allowed for every line comprising a daily trip each way of railway post-office cars, at a rate not exceeding twenty-five dollars per mile per annum for cars forty feet in length, and thirty dollars per mile per annum for forty-five-feet cars, and forty dollars per mile per annum for fifty-feet oars, and fifty dollars per- mile per annum for fifty-five to sixty feet car: And provided also, That the length of cars inquired for such post-office railway-car service shall be determined by the Post-Office Department, and all such cars shall be properly fitted up, furnished, warmed, and lighted for the accommodation of clerks to accompany and distribute the mails.’
    “By act of Congress approved March 3,1875, the Postmaster-General is directed to have the mails weighed ‘ by the employees of the Post-Office Department,’ and to ‘ have the weights stated and verified to him by said employees, under such instructions as be may consider just to tbe Post-Office Department and tbe railroad companies.’
    “By act of Congress approved July 12, 1876, section 1, the Postmaster-General is ‘authorized and directed to readjust the compensation to be paid from and after tbe 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.’
    “And by section 13 of the act of July 12,1876, it is directed ‘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.’
    “ To obtain such a statement as the law requires of the amount of mail matter conveyed, employees of the Post-Office Department are instructed to weigh all the through mails and way mails which may be conveyed, outward and inward, to and from each station on your road, route No. 9, between Portland and Portsmouth, for thirty consecutive working days, commencing on the 16th of April, 1877.
    “And you are requested to employ some competent person or persons, duly sworn to make correct returns, to unite with the employees of the department in the weighing and in the certification of the returns thereof.
    “The result of the weighing you will please state in the annexed tabular form, placing in column 1 the distance from station to station ; in column 2, a list of the stations, commencing with the first above named — the initial point — proceeding in the order in which the stations follow each other from that point, and ending with the last above named — the terminus; in column 3, under the head ‘Received,’ the weight of the mails conveyed to each station by trains bound out}card; in column 4, under the head ‘ Sent,’ the weight of the mails conveyed from each station by trains bound outward; in column 5, under the head ‘ Received,’ the weight of the mails conveyed to each station by trains bound inward; and in column 6, under the head of ‘ Sent,’ the weight of the mails from each station by trains bound inward. Trains bound outward are those running from the initial point toward the terminus; trains bound inward are those running from the terminus toward the initial point. Opposite the first station in the list there will be no weight entered in column 3, as there can be no mail conveyed to that station by trains bound outward; opposite the last station in the list there will be no weight entered in column 4, as there can be no mail conveyed from that station by trains bound outward ; opposite the last station in the list there will be no weight entered in column 5, as there can be no mails conveyed to that station by trains bound inward; and opposite the first station in the list there will be no weight entered in column 6, as there can be no mail conveyed from that station by trains bound inward. The footings of columns 3 and 4 will balance each other, as they will each show the whole amount of mails conveyed over the route by trains bound outward; and the footings of columns 5 and 6 will balance each other, as they will each show the whole amount of mail conveyed over the route by trains bound inward.
    
    “A convenient arrangement will be to place a correct scale on each car conveying mails; weigh all through and way mail matter as it comes on the car at each station, and credit the station with the amount under the head ‘ Sent,’ outward or inward, as the case maybe; weigh all through and way mail matter again as it is put off the car at each station, charging the station with the amount under the head ‘ Received,’ outward or inward, as the case may be. Mail matter coming on the route from another route should be credited to the station at which it comes on, under the head Sent,’ outward or inward, as the case may be; and mail matter passing off the route to another route should be charged to the station at which it passes off, under the head ‘ Received,’ outward or inward, as the case may be. The statement will thus be in the nature of an account kept by the railroad with the stations, in which account the stations will be debited with the amount of mails ‘received’ off the railroad and credited with the amount of mails ‘sent’o» the railroad. Memoranda of the daily weights should be kept, and the final results only stated in tlie printed form.
    “Careful attention to all the directions above given will save the department and the company much trouble.
    “ You are requested, also, to prepare and return herewith a statement showing—
    “ 1. The rate of speed (in miles per hour) with which the mails .are conveyed on the route.
    “2. The inside dimensions (in feet and inches), fixtures, and furniture of the car or apartment provided exclusively for railway post-office clerks or route agents to accompany and distribute the mails.
    “ 3. The number of times per week the mails are carried in each direction, and the number of times they are accompanied by railway post-office clerks or route agents — the run outward from the initial point to the terminus and inward from the terminus to the initial point constituting together one time or one round trip. In case more frequent service is performed on one portion of the route than on another, a minute description of the frequency on each portion will be necessary.
    “ Some competent officer of your company will certify, under-oath, to the accuracy of the statements, and return them to this-office. The information herein sought is indispensable in order to a proper adjustment of the rate of pay.. Please acknowledge-the receipt of this circular.
    “Very respectfully, your obedient servant,
    “ Thos. J. Brady, .
    “ Second Assistant Postmaster-General.”
    
    The information requested by said circulars was duly furnished.
    III. The Postmaster-General thereupon, on the 20th of December, 1877, readjusted the compensation to be paid for carrying the mails over each route, and transmitted to the Sixth-Auditor an order therefor in the following form:
    “ Authorize the Auditor of the Treasury for the Post-Office-Department to pay the Eastern Railroad Company, quarterly y for carrying the mail between-and-, from July 1,. 1877, to June 30, 1881, at the rate of $-per annum (being, $-per mile per annum), unless otherwise ordered, subject. to fines and deductions.
    “ Dec. 20, 1877.
    “ Brady.”
    On the same day, December 20, 1877, the Postmaster-General also sent to claimant a circular notice of adjustment of pay for each route in the following form:
    “ POST-OEEICE DEPARTMENT,
    “ Oeeice oe the Second Assistant
    Postmaster-General,
    “ Washington, I). O., Peo. 20,1877.
    
      “ Sir : The compensation for the transportation of mails, &c.y on your road, route-, between-and-, has been fixed from July 1, 1877, to June 30, 1881 (unless otherwise ordered), under acts of March 3, 1873, July 12, 1876, upon returns showing the amount and character of the service for thirty days commencing April 16, 1877, at the rate of-per annum, being $-per mile for —— miles.
    “ Very respectfully, &c.,
    “Thos. J. Brady,
    “ Second Assistant Postmaster-GeneraL
    
    “ To John Hornby, Esq.,
    “ Master of Transportation Pastern R. R. Go.,
    
    “ Boston, MassP
    
    
      The compensation so fixed was the maximum authorized by said act of 1873 (R. S., § 4002), as amended by said act of 1876.
    IY. Thereupon the following- correspondence took place between the parties, on the dates thereto attached:
    [Eastern Railroad Company. Department of transportation. John Hornby, master transportation.]
    “Boston, Dee. 29,1877.
    “ Hon. Thomas J. Beady,
    “ Second A$H Postmaster-General, Washington, D. G.:
    
    “ Dear Sir : We beg to acknowledge receipt of twelve (12) inclosures, being the statements of allowance of compensation for carrying the mails on routes 9, Portland to Portsmouth; 1015, Wolfsboro’June, to Wolfsboro’; 1016, Portsmouth and Dover; 3001, Boston and Portsmouth; 3002, Boston and West Lynn Depot; 3003, Salem and Rockport; 3004, Salem and Marblehead; 3005, Salem and Lawrence; 3007, East Salisbury and Amesbury; 3008, Wenham and Essex; 3009, Lynn and Marblehead; 3010, Wakefield and Peabody. We have not yet received the notice of adjustment of pay on route 260 (1014 new), Brock’s Crossing to North Conway.
    “ Will you kindly inform us of the basis upon which the adjustment is made in the case of routes 9, 3001, 3003, 3004, and 3009 ?
    “ Respectfully,
    “ J. Hornby, M. TP
    
    “ January 3,1878.
    “ Sir : In reply to your favor of the 29th ultimo, I beg leave to say that the pay on route 3001, between Boston and Portsmouth, is fixed as follows, viz : For 9,271 pounds per day, $253, less 10 per cent.,=$227.70; for two daily lines of railway post-office cars, $50; second daily line of route agents’ apartments, $10=$227.70-+$50=$277.70+$10=$2S7.70 per mile for 57.28 miles. On. route 3003, Salem to Rockport, the pay is fixed for a weight of mails 265 pounds, with the accompaniments prescribed by law, at $55, less 10 per cent.,=$49.50 per mile for 20.69 miles. On route 3004, between Salem and Marblehead, pay is fixed for a weight of mails of 258 pounds per day, at $54, less 10 per cent.,=$48.60 per mile, 4.49 miles. On route 3009, between Lynn and Marblehead, the pay is fixed for a weight of mails of 421 pounds per day, at $68, less 10 per cent.,=$61.20. On route 9, between Portland and Portsmouth, the pay is fixed for an average weight of mails per day of 7,950 pounds, at $236, less 10 per cent.,=$212.40, and for two daily lines of railway post-office cars, $50, making an agrégate pay at $262.40 per mile.
    “ Very respectfully,
    “Thos. J. Brady,
    “ Second AssH P. M. GenH.
    
    “ J. Hornby, Esq.,
    “ Master Transportation Pastern Railroad,
    
    “ Boston, Mass.”
    
    “ Boston, January 4,1878.
    “ Hon. Thomas J. Bbady,
    “ Second AsH Postmaster-General, Washington, JD. G.:
    
    “Dear Sir : We are in receipt of notice of adjustment of pay on route 1014, Brock’s Crossing to North Conway and return.
    “ Thanks for same.
    “ We are at a loss to know on what basis the adjustment is made on this route (1014), as well as upon routes 9, 3001,3003, 3004, and 3009, and would feel obliged if you would send us the formula used.
    “ Respectfully,
    “ J. Hornby, M. TP
    
    “Boston, Jan’y 8,1878.
    “ Hon. Thomas J. Brady,
    “ Second AsH P. M. General, Washington, D. O. ;
    “ Dear Sir : Tour favor of the 3d instant is at hand, for which we are under obligations.
    “At page 135, Postal Laws and Regulations, referring to the compensation, it is specified : ‘ On routes carrying tlieir whole length an average weight of mails per day of two hundred pounds, fifty dollars; five hundred pounds, seventy-five dollars; one thousand pounds, one hundred dollars; ’ and so on up to five thousand pounds. We are still at a loss to know the basis on which the compensation is computed upon the excess iceight on any one rate.
    
    “For instance, how is the rate per mile computed on 9,271 pounds per day; 265 pounds per day; 258 pounds per day ?
    “ We see that the law provides for 200 pounds per day, 500 per day, &c., but there is no provision for the fractional parts, which have evidently been considered by you in fixing the compensation.
    “ Would it be troubling you too much to ask the favor of the formula used in the computation ?
    “ Respectfully, yours,
    “ J. Hornby, M. TP
    
    “January 9, 1878.
    “ Sir : In reply to your favor of the 8th instant, I beg leave to say that your quotation of the law is correct. Tou will notice that $25 is allowed for the 300 pounds added to200 pounds, making $75 for 500 pounds; and $25 for 500 pounds added to 500 pounds, making $100for 1,000 pounds; and add at the same rate to 2,000pounds, making $150 for 2,000 pounds; and $25 additional for the next addition of 1,500 pounds, making $175 for 3,500 pounds; and $25 additional for the next 1,500 pounds, making $200 for 5,000 pounds; and $25 additional for each succeeding addition of 2,000 pounds. If thelaw were construed literally there would be no allowance for the intermediate weights between 200 and 500 pounds, &c., &c. It has been decided by the law officer, however, that the department could allow for fractional intermediate weights a pro rata of the amount fixed for the whole intermediate weights.
    “ Thus, for 258 pounds per day the process (in dollars) would be thus: For 200 pounds, $50; for 58 pounds excess, 58x25= 1,450=300=$4+, making $54 per mile, less 10%=$48.60. “
    “ For 9,271 pounds the pay for 5,000 pounds is $200; for the next two additions of 2,000 pounds, $25 each, $50; for the 27 L pounds, 271x25=6,775=2,000= $3+, making $2.53 per mile, less 10%=227.70.
    “ Very respectfully,
    “Thos. J. Beady,
    “ Second, AsH Postmaster- General,
    
    “ John Hobnby, Esq.,
    
      "Master Transportation Eastern B. B., “Boston, Mass
    
    “ Boston, January 18,1878.
    “Hon. Thos. J. Beady,
    
      “Second AsH P. M. Gen’l, Washington, I). O. :
    
    “Deab Sie: We beg to acknowledge receipt of your favor of 3d inst., containing explanation of the mode in which compensation is fixed on the several routes mentioned.
    “There seems to be some discrepancy in the matter of the weights as returned to us and as allowed by the department, and we therefore send you herewith copies of the same as received from the weighers here. The largest difference will be noted on route 3001. — weight as allowed by the department, 9,271 pounds per day; as per weighers’ returns herewith inclosed, 11,121 pounds per day. It may be that we have not the correct method of arriving at the daily average. We have taken the sum of the outward and inward weights divided by the 30 days for the daily average.
    “ Will you kindly instruct us on this point?
    “Respectfully,
    “ J. Hobnby, M. T.”
    
    > “ Janhaey 21,1878.
    “ Sie : Your favor of the 18th instant, with statement of the weight of mails on route 3001,'between Boston and Portsmouth, &c., has been received.
    
      “ In reply I have to say that the calculation made by you does not give the average weight of mails per day carried the whole of the route, as the law requires. It shows the whole weight carried any distance.
    “The weights returned by you are substantially the same as those upon which the pay is adjusted. The average weight of mails per day carried the whole length of a route cannot be obtained, as you will readily see upon reflection, by the method adopted by you.
    “ A copy of the returns on route 3001, and the process whereby the average weight of mails per day is obtained, are sent to you in another envelope by this day’s mail. These will enable you to understand the operation without difficulty.
    “The department will with pleasure furnish any further information that you may desire.
    “Very respectfully,
    “Thos. J. Rrady,
    “ Second AsH P. M. Gend.
    
    “John Hornby, Esq.,
    “ Master Trans. Pastern lí. B., Boston, Mass.”
    Y. The Postmaster-General, on the 12th of July, 1878, readjusted the compensation to be paid to the claimant for the transportation of the mails on said routes from July 1,1878, in accordance with the act of June 17,1878, ch. 259 (1 Supplement to R. S., 359), and issued orders therefor as to each route in the following form:
    “Authorize the Auditor to decrease the pay of the Eastern Railroad Company for carrying the mails between-and -from July 1,1878, to June 30,1881, at the rate of-per annum, leaving the pay from that date -per annum (being-per mile), being a reduction of five per centum from the rates fixed for weight of mails, in accordance with the act of June 17,1878.
    “ July 12,1878. “ French.”
    On the same day he caused a circular to be sent to the claimant in relation to each route in the following form:
    “ Readjustment of pay for mail service on railroad routes, under aet of Congress of June 17, 1878.
    “Post-Office Department,
    “Office of the Second Assistant Postmaster-General,
    “ Washington, I>. C., July 12, 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-nine, and for other purposes, approved June 17,1878, contains the following proviso, namely:
    “ ‘That the Post-master-Gen eral 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 on railroad routes by reducing the compensation to all railroad companies for the transportation of mails jive 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 seventy-seven, and for other purposes,” approved July twelfth, eighteen hundred and seventy-six.’
    “Therefore, please take notice that the Auditor of the Treasury for this Department has been directed to decrease the pay of your company for the conveyance of the mails on route 9, between Portland'and Portsmouth, from July 1, 1878, to June 30, 1881, $558.19 per annum, leaving the pay from t.he first-named date $13,233.55 per annum, being a reduction of five per centum from the rates fixed for weight of mails in accordance with the provision of the act of June 17, 1878, above quoted. “Very respectfully, your obedient servant,
    “ Jno. L. Feench,
    
      “Act’g Second Assistant Postmaster General.
    
    “ To A. P. Rockwell,
    
      “Pres. Pastern B. B. Oo., Boston, Mass.”
    
    VI. May 9,1879, the claimant made the following application:
    “Washing-ton, May 9,1879.
    “Hon. Thos. J. Beady,
    
      “2cl Ass’tP. ill. Gen’l:
    
    “ Sib : In behalf of the Eastern R. R. of Massachusetts, I beg to call your attention to the fact that owing to the greatly increased business on mail service east of Portland the weight of mails between Portland and Boston is very greatly increased, and justice requires that a reweighing of those mails should be ordered.
    “ The same reasons which are mentioned in my letter of this date showing the necessity of reweighing the mails from Portland to Augusta, on the Maine Central Railroad, apply to this service on the Eastern Railroad, as the mails go directly from the Maine Central Railroad over the Eastern Railroad to Boston and the West and South.
    “ In behalf of the Eastern R. R., and at the request of its president, I make this application, and ask for a reweighing of the mails on that portion of their service between Portland and Boston.
    “ 1 am, very respectfully, your ob’t serv’t,
    “Geo. E. B. Jackson.”
    ThePostmaster-General, in response to the foregoing request, directed a reweighing of the mails on routes No. 9 and 3001, which resulted in orders, dated August 26, 1879, considerably increasing the amounts previously ordered, but still 5 per cent, less than they would have been under the order of December 20,1877, set out in finding III, unaffected by the reduction made by the order of July 12, 1878, set out in finding Y.
    The orders of August 26, 1870, were in form following:
    “ Modify order of July 12,1878,-, so as to pay the Eastern R. R. Co. for mail service between-and-from July 1,1879, to June 30,1881, at the rate of-per annum, being-per mile for transportation of the mails on-miles, and-per annum, being $— per mile for use of R. P. O. cars on same distance. All under act of June 17, 1878, in accordance with new returns and subject to fines and deductions.
    “Aug. 26, 1879. “Hazen.”
    YII. The claimant carried the mails on all the thirteen routes from July 1, 1877, to June 30,1881 (both inclusive), and re- . ceived payment therefor according to the orders of the Postmaster-General, to wit, from July 1, 1877, to June 30,1878, according to the orders and notice of December 20, 1877, set out in finding III, and from July 1, 1878, to December 30, 1881, according to said orders as modified by the orders of July 12, 1878, set out in findiug YI, and by the order of August 26,1879, set out in finding YII.
    It does not appear that the claimant protested against or objected to the readjustments made by the Postmaster-General as set out in the foregoing findings, nor to the payments made in accordance therewith, before commencement of this action.
    YIII. The difference between the amounts actually paid to the claimant under all of said orders and that which it would be entitled to under the orders of December 20, 1877, set out in finding III, if the subsequent orders making a reduction of 5 per cent, are not binding upon the company, is as follows :
    On all the routes from July 1, 1878, to June 30, 1879. $1,730 36
    On routes 9 and 3001 from July 1, 1879, to June 30, 1881 . 3,156 10
    On the other routes from July 1, 1879, to June 30,1881. 1,040 10
    Total 5,926 56
    
      
      Mr. Oreen B. Baum, Mr. A. J. Willard, and Mr. 8. M. Lake for the claimant:
    Where the Postmaster-General proposes to a railroad company to enter into a contract for carrying the mail by said road, and asks to be furnished with such information as will enable him to determine the proper compensation to be paid for the service required, and such information is furnished by the company, and the Postmaster-General thereupon adjusts the pay per annum for a term of four years, and informs the railroad company thereof, and the railroad company accepts the terms offered and enters upon the performance of the service as required by the Postmaster-General, and it turns out that the negotiation was conducted by letters on both sides, and it does not appear that there was an understanding that a more formal contract was to be entered into and executed, the government and the company are both bound by the terms to be gathered from such instruments in writing and such acts as show acceptance or performance by either or both parties.
    The evidence is as clear that it was the intention of the Postmaster-General to contract for a term of four years as it is that he intended to contract at all. His instructions to the Auditor to pay, and his letters to claimant, conclusively show that it was his intention to make contracts with claimant to carry the mails over all of said routes for a. term of four years, beginning July 1, 1877, and ending June 30, 1881; and the evidence shows that it was the intention of claimant and that it did accept the terms offered by the Postmaster-General. This appears from the correspondence in regard to the adjustment of the pay, the performance of the service, and the acceptance of pay in accordance with said terms.
    
      Mr. John 8. Blair (with whom was the Assistant Attorney-General) for the defendants:
    The reason for dispensing with the written contract and for the insertion of the expression unless otherwise ordered” is obvious, when it is remembered that Congress a year previous had ordered a reduction, and it was held that the act was imperative until existing contracts had expired. (See Opinions of Attorney-General, vol. 15, 182.)
    
      The case differs from the Chicago and Northwestern (104 IT. S., 680), because no law had imposed upon claimant the duty of carrying the mail, as was the case with the land-grant roads. (See Bradley v. United States, 13 O. Gis. R., 166, 176; affirmed by Supreme Court, 98 U. S., 104, 117.) The fact is the company accepted the orders of 1878 in precisely the same manner as they accepted the originally orders of 1877 and the readjusting orders of 1879. If the acquiescence in the original orders and performing work thereunder was sufficient to transform these orders into a contract binding on both parties, the similar acquiescence in 1878 was of equal force in constituting orders of 1878 a modification of that contract.
   Richardson, J.,

delivered the opinion of the court:

By section 1 of the Act of March 3, 1873, oh. 231 (now Revised Statutes, § 4002), Congress directed the Postmaster-General to readjust the compensation thereafter to be paid for the transportation of mails on railroad routes, not to exceed certain rates, according to distances and weight, to be ascertained not less frequently than once in every four years, as therein specified.

Thereafter, by written contracts between the parties, one of which is set out in finding I as a form of all of them, dated March 31, 1874, but not executed until September 28, 1874, the claimant corporation, with two sureties, agreed to carry the mails over the thirteen routes mentioned in the petition, at the prices and upon the terms therein specified, for a period of three and a half years, from July 1, 1874, to June 30, 1877.

By the Act of July 12, 1876, ch. 179 (1 Supplement to Rev. Sfcat., 226, and 19 Stat. L., 78), Congress authorized and directed the Postmaster-General to readjust the compensation to be paid from and after July 1, 1876, to all railroad companies for the transportation of mails 10 per cent, per annum from the rates fixed and allowed by the previous statute.

Some time during the latter part of the year 1876 or the first part of the year 1877, aud before the expiration of said written contract, the Post-Office Department, by the usual distance and weight circulars set out in finding II, called upon the claimant for the information necessary to the readjustment of compensation in the manner required by law. This information was duly furnished.

On the 20th of December, 1877, the Postmaster-General readjusted the compensation to be paid the claimant from July 1, 1877 (the day following the expiration of the written contract), fixing the amount at the maximum authorized by Revised Statutes, § 4002, reduced 10 per cent, by the Aot of July 12,1876 (Supplement to Rev. Stats., 225). He thereupon issued to the Sixth Auditor an order, and gave the claimant notice in the following form:

“ Authorize the Auditor of the Treasury for the Post-Office Department to pay the Eastern Railroad Company, quarterly, for carrying the mail between-and-, from July 1, 1877, to June 30, 1881, at the rate of $-per annum (being $-per mile per annum), unless otherwise ordered, subject to fines and deductions.
“ Brady.
“ Deo. 20, 1877.”

Of this order notice was immediately given to the claimant, as follows :

Post-Oeeioe Department,
Oeeice oe the Second Assistant Postmaster-General,
“ Washington, D. G., Deo. 20, 1877.
Sir : The compensation for the transportation of mails, &c., on your road, route-, between-, has been fixed from July 1,1877, to June 30, 1881, (unless otherwise ordered), under acts of March 3,1873, July 12, 1870, upon returns showing the amount and character of the service for thirty days commencing April 16, 1877. at the rate of $-per annum, being $-per mile for-miles.
“ Very respectfully, &o.,
Thos. J. Brady,
“ Second Assistant Postmaster- General.
■“ To John Hornby, Esq.,
"Master of Transportation Pastern R. R. Go.,
Boston, Mass.”

Although the Act of July, 1876, required the compensation under the readjustment and reduction of 10 per cent, to be from and after July 1, 1876, the claimant was paid the unreduced rates according to the terms of the written contracts until June 30, 1877, when the contracts expired by their own limitation, and there is no controversy in relation to such payment.

Nor is there any controversy as to payment for the service for the next succeeding year from July 1,1877, to June 30,1878, which was made in accordance with the order of December 20, 1877.

But Congress, on the 17th of June, 1878, having authorized and directed the Postmaster-General to readjust the compensation to be paid from and after July 1,1878, for transportation of mails on railroad routes by reducing the same 5 per cent, per annum from the rates allowed by the previously existing laws, the Postmaster-General gave orders of reduction accordingly for each of the routes, in the following form, under date of July 12, 1878:

Authorize the Auditor to decrease the pay of the Eastern Railroad Company for carrying the mails between-and -from July 1,1878, to Juue 30,1881, at the rate of $- per annum, leaving the pay from that date $-per annum (being $-per mile), being a reduction of five per centum from the rates fixed for weight of mails in accordance with the act of June 17,1878.
“ FRENCH.
“ Juey 12,1878.”

Theclaimant was immediately notified of this order, as set out in finding V, and was regularly paid in accordance with its terms from July 1, 1878, to June 30, 1881, without protest or objection until this action was brought in 1883, so far as it appears by the findings.

The claimant now denies the right of the Postmaster-General to make the 5.per cent, deduction from the previously established rates for its service during the three years from July 1, 1878, insisting that at the time of the passage of the act of

1878, and the Postmaster-General’s order thereunder, it had a contract at the former rates which did not expire until June 30, 1881, and which was not and could not be affected by said act and order, and this action is brought to recover the amount of deduction made thereby.

The cases of the Chicago and Northwestern Railway Company and the Chicago, Milwaukee and, Saint Paul Railroad Company v. The United States (101 U. S. R., 680, 687) are relied upon as authoritatively settling the law that the reduction acts of 1876 and 1878 were not intended to and did not apply to previously existing time contracts which had not expired when the acts were passed, and this is unquestionably so.

The only question of law involved in the ease is, therefore, whether or not the parties were under contract in relation to mail transportation over these routes to June 30, 1881, as alleged by the claimant and denied by the defendants.

Two distinct views are presented on behalf of the claimant, both leading to the same result.

1. It is urged that when, on the 1st day of July, 1877, the railroad company entered upon the service of carrying the mails furnished by the Post-Office Department, an implied contract arose between the parties that the service should be continued for the term of four years at the rates alleged to have been established and fixed by the Act of March 3, 1873, ch. 231, § 1 (17 Stat. L., 558, and Revised Statutes, § 4002), as amended by the act of 1870, July 12, § 1 (Supplement to Rev. Stat., 224, and 19 Stat. L., 79), independently of any other action of the Postmaster-General than that of ascertaining the weights and distances mentioned in the statutes.

This view is founded upon the theory that it is to be presumed from the nature of the service, and is a proper inference from the language of the acts of Congress. In this we cannot concur.

Section 4002 of the Revised Statutes, from the act of 1873, does not establish an absolute rate of compensation, necessarily alike to all railroads, for mail transportation, but fixes máxi-mums which are not to be exceeded, leaving the Postmaster.General a discretion to make contracts at less rates if he should be able to do so. On that point the language of the section is clear — “the pay per mile shall not exceed the following rates.” It is urged that this language is controlled by the preceding words of the section, “The Postmaster-General is authorized and directed to readjust the compensation hereafter to be paid for the transportation of mails on railroad routes upon the conditions and at the rates hereinafter mentioned.” In our opinion the rates there referred to are any rates which the Postmaster-General may contract for, notexceeding those thereinafter mentioned.

While the statutes more than imply that the Postmaster-General may make contracts for carrying the mails, they nowhere require such contracts to be for any specific term of time. At most they only prohibit the making of them for more than four years, or other less periods in special cases. (Revised Statutes, §§ 3970, 3943.) That it is not the uniform practice of the Post-Office Department to make four years’ contracts with railroad companies is shown by the fact that the written contracts of the claimant, which expired just before the time to which the present controversy relates, as set out in finding I, were for three and a half years.

The time-contract system contemplated by the statutes, while it leaves much to the discretion of the department, is put under many regulations, as to advertising for proposals and other matters, one of the most important of which, if not expressly declared is so recited and implied as perhaps to be obligatory, is the requiring of sureties for the performance of the obligations of contractors. (Rev. Stat., §§ 3945, 3940, 3947, 3951.)

Section 3942 and the previous acts from which that section was drawn relieve the Postmaster-G-eneral from the duty of advertising for bids when entering into time contracts with railway companies, but in other respects the general statutes apply to railroad companies and other contractors alike.

Whether or not since the passage of that law the department has made anytime contracts with railway companies without sureties we are not informed, but it apiiears by finding I that the time contracts of the present claimant with the Post•master-G-eneral, up to the period to which the present controversy relates, were in writing, and with sureties for the faithful performance of its obligations.

When, therefore, on and after July 1, 1877, the claimant went on performing mail-transportation service like that provided for by the terms of the time contracts, with sureties, which had expired the day previous, we do not think that an implied contract arose by which the Postmaster-General agreed to employ the claimant without sureties, for the term of four years or for any other period of time. Such an implication would be inconsistent with the spirit, if not the language, of the statutes, and with the practice of the department in putting time contracts in writing and requiring sureties from the contractors for the faithful performance of their obligations.

Much reliance on the part of the claimant is placed upon the opinion of the Supreme Court in the case of Railway Company v. United States (101 U. S. R., 543). But in that case no question was involved as to whether or not there was a contract for a definite period of time! That action was brought by the United Sta tes against a railroad company to recover a tax imposed by statute on “every * * * corporation owning * * * any railroad * * * engaged or employed in * * * transporting the mails * * * upon contracts made prior to August 1, 1866.” The court say :

“ No express contractfor carrying the mails was proven, but •since the service for which the compensation was paid began before August 1, and was continued without interruption for the whole term in question, the court below implied a contract prior to that time. This, we think, was right. Had payment been refused and suit brought against the United States in the Court of Claims to recover for the service rendered, there could be no doubt about the right to recover, notwithstanding the jurisdiction of that court is confined to suits on contracts (Salomon v. United States, 19 Wall., 17); and this not alone because the service had been rendered, but because it is to be presumed that when the company commenced the transportation it had been agreed that payment should be made for what was done?

So in this case it is to be presumed that when the company 'commenced the transportation of the mails, July 1, 1877, it had been agreed that payment should be made for what was done and nothing more. So long as the Postmaster-General furnished the mails and the claimant continued to carry them an implied contract existed, which might be terminated at any time by either party. The implied compensation was the reasonable worth of the service, and that might be measured by the previous dealings of the parties for like service and the statutes regulating the same. The maximum rate fixed by statute would no doubt be considered the reasonable and implied compensation until the Postmaster-General should make other terms, with the concurrence, express or implied, of the claimant.

On the 12th of July, 1878, the Postmaster-General ordered a reduction to be made for service after the first of that month of 5 per cent, from the rates previously paid, in accordance with an act of Congress passed June 17, 1878 (Supplement to R. S., 359). Immediate notice of this order was given to the claimant, and no objection was made to it. This order and notice constituted an offer on the part of the Postmaster-General, which the claimant might decline or accept at its pleasure. Having thereafter continued the service for three years and received the reduced compen sation without objection, the company must be held to have accepted the offer of the Postmaster-General modifying the previously existing implied contract relations between them.

2. Another view urged for the claimant is that the order of the Postmaster-General to the Sixth Auditor of December 20r 1877, with notice thereof to the claimant on the same day, accepted and acted upon • by the latter, constituted a written contract for four years from July 1, 1877, to June 30, 1881, binding on both parties. But this is refuted by the language of both the order and notice, wherein, although that period of time is mentioned, it is followed by the significant qualifying words “unless otherwise ordered.” It is evident from this phraseology that it was contemplated that the Postmaster-General might deem it proper to make changes in the order, either by reducing the compensation below the maximum authorized by statute or otherwise modifying it, and full power was thus reserved for him to do so. It is insisted on behalf of the claimant that the words “unless otherwise ordered” were intended to apply only to the results of reweighing the mails, which might be ordered as frequently as the Postmaster-General chose to so direct, and which, under the statute, might necessitate a change in the amount of compensation. But we find no such limitation or restriction in either the order or notice. In the one the words are placed near the end of the order, followed only by the expression “ subject to fines and deductions,” and in the other, the notice, they stand immediately after the specification of time. In both we think that they apply to all the terms of the written papers.

When the Postmaster-General, on the 12th of July, 1878, ordered and gave notice of the proposed reduced rate, as required by the act of June 17, 1878 (Supplement to R. S., 359), he did only what he had a right to do by the power reserved to him in his previous papers. In this the claimant silently acquiesced, submitted to it without objection for nearly two years after the whole service had been performed and paid for at the reduced rate.

On the authority of the Chicago and Northwestern Railway Company v. United States (104 U. S. R., 680) it is insisted that the continuance of service without protest or objection by the claimant after notice of the proposed reduction has no bearing on the rights of the parties. We do not think the decision of that case applies to the present controversy. There was a written unexpired time contract between the parties, and neither its existence nor the meaning of its terms was in dispute. The only question at issue was whether Congress and the Postmaster-General had the power, under the statute, arbitrarily to reduce the compensation before the expiration of the term of the contract. The Postmaster-General, by direction of Congress, notified the company of such reduction, and the latter continued to perform the service thereafter without objection. The court held that, the company being bound by contract to perform the service until the end of the term, a continuance of such performance after receipt of the notice of reduction was no admission of the validity of the Postmaster-G-eneral’s wrongful act and no acquiescence therein, but was merely performance of its contract obligations, for which it was entitled to the contract compensation. The force and effect of a law of Congress was in controversy, and that was not to be determined by acts of the claimant which were performed in compliance with its contract obligations, and not necessarily in acquiescence of the Postmaster-General’s order.

Here the contract relations of the parties are in dispute, and the effect of the statute is not in controversy. The only question involved in this case is whether or not there existed a time contract at all, either by implication or by the proper construction of written papers.

When the extent of an implied contract or the meaning of the language of a written contract are in controversy, the intention of the parties becomes all important. Their acts at the beginning and during the term of the contract, acquiesced in on both sides, the claims and construction set up by one party and not denied by the other, go very far to explain, if they do not actually establish by way of estoppel, the actual contract between them as well as its proper interpretation. (Otis v. The United States, 19 C. Cls. R., 467.)

The present claimant having no clear and definite time contract was bound to take notice of the Postmaster-General’s offer of future compensation, and its acts at the time amount to an acceptance of his offer.

The judgment of the court is that the claimant has no cause of action, and the petition must be dismissed.

Deaee, Ch. J., sat in this case, but took no part in the decision.  