
    THE LOUISVILLE & NASHVILLE R. R. CO., AND ATLANTIC COAST LINE R. R. CO., LESSEES OF THE GEORGIA R. R. & BANKING CO., DOING BUSINESS AS THE GEORGIA RAILROAD, v. THE UNITED STATES
    [No. A-7.
    Decided May 4, 1925]
    
      On the Proofs
    
    
      Railroad rates; payment T)y disbursing officer; protest. — Where bills: are reduced by a disbursing officer to adjust them to the basis-of 150 pounds of baggage per man without objection by a railroad company, the company can not recover the amount deducted.
    
      Same; settlement by auditor; protest. — Where deductions are made-by the auditor in a.direct settlement on account of the claim of free baggage, and payment is received without objection, the company may recover such deductions.
    
      Same; payment by disbursing officer; subsequent deductions by auditor; Railroad Administration. — Where bills are paid by a disbursing officer as presented and the auditor makes deductions from bills of the Railroad Administration on account of overpayments for alleged free baggage, the company may recover such deductions if they have been refunded to the-Railroad Administration.
    
      The Reporter’s statement of the case:
    
      Mr. F. Garter Pope,for the plaintiffs.
    
      Mr. Louis R. Mehlinger, with whom was Mr. Assistant Attorney General WilUam J. Donovan, for "the defendant... Mr. Perry W. Howard was on the brief.
    The following are the facts as found by the court:
    I. Plaintiffs in this case are corporations duly organized under the laws of the States of Kentucky and Virginia. They have always been loyal to the United States and have never given aid or comfort to its enemies.
    At the time of the transactions hereinafter stated plaintiffs operated and.still operate the properties of the Georgia Railroad & Banking Co. in the State of Georgia, doing-business under the name of the Georgia Railroad, as a common carrier of passengers and freight for hire and reward under tariffs duly published and filed by and in the name of the said Georgia Railroad, and by its connections with its concurrence, with the Interstate Commerce Commission, and making settlement with the United States for Government transportation under the name of the Georgia Railroad.
    II. When the troops and Army impedimenta hereinafter described were transported, there wore 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 wez-e essentially freight and were so to be treated in settlements with carriers for their transportation.
    For many years the Quartermaster General has issued periodically a publication entitled “Manual for Quartermaster Corps,” and the edition thereof published and made effective in December, 1916, and still in full force and effect, contains paragraphs 3391, 3441, 8443, 3445, 3453, 3494, 3498, and 3500, which, amongst others, recognize the clear distinc.tion between public property and equipage or Army baggage on the one hand and the baggage entitled to free transportation, or transportation in the baggage service, on the other hand. A decision of the Comptroller of June 18,. 1918 (24 Comp. Dec. 774), to effect that under the provision of carriers’ baggage tariffs the Government was entitled to one car free for every 26 passengers in the accompanying passenger movement was the first notification that the Government claimed one special baggage car or its equivalent for every 26 soldiers traveling with Army impedimenta. Prior to that decision the Government paid for such impedimenta as freight.
    '"IV. Since the decision of the Comptroller of June ‘18,. 1918, disbursing and accounting officers of the Government', have made settlements with carriers upon the basis that the United States was entitled to one baggage car free for the transportation of its camp equipment and company-property for every 26 officers and enlisted men traveling.
    .V..Prior to January 1, 1917, the plaintiffs and all the-othe'r 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) (a) The fares applicable under this arrangement will be the lawful commercial fares as on file with the Interstate Commerce Commission from starting point to destination at time of movement (see exceptions, Section V), less lawful land-grant deductions properly established, less five per cent (5%), the five per cent allowance not to exceed the maximum allowances or exceptions as specified in Section VI. Government fares so established will apply to all military traffic as described in Section III, including special train and special car movements, as well as individual and party movements (see Section XI).
    “(5) 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 the transportation of excess baggage, collection will be made from the traveler at the regular commercial rate for weight in excess of the free allowance stated. Excess-baggage charges will not be subject to allowances applicable in connection with the fares for tickets under this arrangement. Baggage regulations in other respects than above will be in accordance with the tariff of the initial carrier checking the baggage in each case.
    “(2) Company, battalion, regimental, or Government property is not included in the above.
    Hi H< ❖ “ XX
    “ 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.”
    VI. The interterritorial military arrangement effective July 1, 1916, which was superseded by the similar agreement effective January 1, 1917, referred to in Finding, V, 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. (b) It will procure cooperation on the part of the railroads. (o) 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 troop.s, 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 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 passenger transportation at rates substantially 5 per cent less than it otherwise would have paid.
    VIII. At various times during the year 1917 plaintiffs and other carriers transported a number of movements of United States troops to terminal points on plaintiffs’ 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 what are called Government bills of lading.
    IX. The services were rendered as alleged in the amended and supplemental petitions, and, excluding those items withdrawn from this case by stipulation, plaintiffs, as the Georgia Railroad, rendered their freight bills numbered 48598, 46429, 51650-B, 50220, 49484, 50013, 48586, 49472, 51650-A, 50218, 51405, 48582, 48584, 50011, 48333, and 50011-B to the disbursing officers of the United States Army, based upon the freight tariffs and classifications then in effect.
    X. Plaintiffs’ bills for said services were rendered to the disbursing officers of the Army. Some of plaintiffs’ bills, •which, as a rule, included a number of different bills of lading, were split up, and the settlements and subsequent readjustments involving them were made in various ways, as follows:
    XI. Bills Nos. 50011 and 50011-A were reduced by the disbursing officer before payment in the sum of $1,162.34 to adjust to the basis of an allowance of 150 pounds per man for baggage in accordance with the current rulings of the comptroller, and there was no protest or objection against the deduction. Bill No. 4858A-A was paid by the disbursing officer as rendered, and his payment was not afterwards disturbed. Bill No. 50011-B was treated under serial No. 50011 and payment so made. No deduction was made from bill No. 48582.
    XII. Bills Nos. 51650-B, 51650-A, 51405, 50218, and 48333-A were presented by plaintiffs to the proper disbursing officer and were forwarded by the administrative office to the Auditor for the War Department, who made direct settlement of the same, either by reducing or disallowing them in accordance wtih the ruling of the comptroller that the Government was entitled to have had its military impedimenta moved free at the rate of one baggage car for every 25 men in the troop movement in the sums of $127.20, $4,465.90, $159.79, $205.71, and $484.50, respectively, a total reduction of $5,443.10. The plaintiffs filed a formal protest against the application of the free baggage rule to only one bill, No. 51405, in the sum of $159.79.
    XIII. Bills Nos. 48598, 50220, 49484, 50013, 48586, 49472, and 48333 were paid by the disbursing officer without deduction for free baggage. The Auditor for the War Department in auditing the disbursing officer’s accounts suspended as overpayments by him to plaintiffs certain amounts paid for the transportation of military impedimenta belonging to the Government, upon the ground that the Government was entitled to have had the same moved free at the rate of one baggage car for every 25 men in the troop movement. The auditor afterwards made deductions to cover such overpay-ments from bills of the Eailroad Administration, which in the meantime had taken over the Georgia Eailroad, in the sums of $956.93, $91.79, $110.01, $562.68, $1,241.92, $785.83, and $1,156.92, respectively, a total of $4,906.08.
    The bills declared upon in the amended.and supplemental petitions, other than those referred to in Findings XI, XII, and XIII, have been withdrawn from this suit by stipulations of counsel duly filed.
    
      Plaintiffs did not appeal to tbe Comptroller on any of the settlements, but were aware of his - rulings on other such appeals.
    XIV. When the deductions from the accounts of the Railroad Administration of the Georgia Railroad, referred to in Finding XIII, were made they were charged in the appropriate accounts to plaintiffs on the books of the Railroad Administration, and equivalent credits were given the Railroad Administration on the books of plaintiffs, and the amount deducted was charged thereon against the War Department.
    Under date of December 22, 1923, there Avas a final settlement between the Director General of Railroads and plaintiffs, as lessees of the Georgia Railroad, evidenced by a contract in Avriting, which contained the folloAving provisions :
    “The Louisville and Nashville Railroad Company and Atlantic Coast Line Railroad Company, as joint lessees of the Georgia Railroad, hereby acknowledge payment of the sum of of one hundred fifty thousand dollars ($150,000.00) by the said director general, the receipt whereof is hereby acknowledged, in full satisfaction and discharge' of all claims, rights and demands of every kind and character which the said companies now have or hereafter may have or claim against the director general or anyone representing or claiming to represent the director general, the United States, or the President, growing out of or connected with the possession, use, and operation of said leased property by the United States during the period of Federal control or out of the contract between the parties dated the 18th day of January, 1919; and the said companies 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 between the parties hereto, growing out of the Federal control of railroads, save and except that the following matters are not included in this adjustment and are not affected thereby:
    
      “ Exceptions
    
    *****
    “ 5. Sundry amounts, aggregating nine thousand seven hundred six and 33/100 dollars ($9,706.33), were,deducted from transportation charges due the director general by the War Department and charged back to the corporation by the director general, which deductions were based on aileged overcharges for transportation services to the War Department prior to Federal control. This settlement is without prejudice to the rights of the companies with respect to said alleged claims against the War Department.”
    The deductions from bills of the Railroad Administration referred to in Finding XIII, amounting to $4,906.08, were a part of the $9,706.33 referred to in paragraph 5 of the final settlement contract, as above.
    The court decided that plaintiffs were entitled to recover, in part.
   Cajvcpbblb, Chief Justice,

delivered the opinion of the ■court:

The claims set forth in the petition as amended are reduced by the stipulation of the parties. They are here presented in three aspects.

(1) Some of plaintiffs’ bills were reduced by the disbui’s-ing officer to whom they had been presented to adjust them to the basis of an allowance of ISO pounds per man for baggage in accordance with the rulings of the comptroller. Two ■of these bills were thus reduced in the sum of $1,162.34, and payments in that amount were made, Avhich were received by the plaintiffs without objection or protest.

(2) Others of the bills presented to the disbursing officer were forwarded by him to the Auditor for the War Department for direct settlement, who reduced them in the ■aggregate sum of $5,443.10. These deductions were made •on account of the comptroller’s ruling that the Government was entitled to have its military impedimenta moved free .at the rate of one baggage car to every 25 men in the troop movement. Payments were made on this basis, which were received by the plaintiffs without objection or protest of anj^ kind, except as to one small item, and without appeal to the comptroller. (See Finding XII.)

(3) Other bills had been paid by the disbursing officer without deduction on account of the free-baggage rule mentioned, but when these -reached the auditor he applied the rule and suspended the disbursing officer’s accounts on account thereof in the sum of $4,906.08. Deductions in this sum were made from bills of the Railroad Administration, which in the meantime had taken over the said Georgia Railroad. (See Finding XIII.)

(4) As to the deductions mentioned in paragraph (1), this court has held that where bills as rendered have been paid by the disbursing officer and payment received without protest or objection an action can not be maintained for an additional sum claimed to be due, except a valid excuse for not making the- claim earlier be shown. (See Baltimore & Ohio Railroad Co. case, 52 C. Cls. 468; Oregon-Washington Railroad & Navigation Co. case, 255 U. S. 339.) In the circumstances developed in this case we think the rule stated in those cases is applicable.

(5) As to the deductions made by the Auditor for the War Department on the basis of the comptroller’s ruling, this court has held that this ruling was incorrect. (See Missouri Pacific Railroad Co. case, 56 C. Cls. 341.) The bills having been presented in the amounts properly due and having been improperly reduced by the auditor, the plaintiffs’ right of action in this court is not barred by their failure to protest against the erroneous deductions or to appeal to the comptroller. (See St. Louis, Brownsville & Mexico Railway Co. case, decided by the Supreme Court of the United States April 27, 1925, 268 U. S. 169.)

(6) The plaintiffs are entitled to recover on account of the deductions from the Railroad Administration bills in the sum of $4,906.08. In their settlement with the Railroad Administration these claims were excepted, and the plaintiffs’ right to maintain an action recognized. (See Reading Co. ante, p. 131, and Southern Railway Co. case, ante. p. 156.)

Judgment should be rendered for the plaintiffs in the sum of $10,349.18, and it is so ordered.

Gkah:am, Judge; Hat, Judge; Downey, Judge; and Booth, Judge, concur.  