
    SOUTHERN PACIFIC CO. v. THE UNITED STATES
    
    [No. B-368.
    Decided May 11, 1925]
    
      On the Proofs
    
    
      Railroad rates; land-grant deductions. — A railroad company can not by the voluntary publication of a rate not required by law deprive the Government of its right to land-grant deductions.
    
      The Reporter’s statement of the case:
    
      Mr. William R. Harr for the plaintiff. Mr. Oharles li-li ates was on the briefs.
    
      Mr. Heloer H. Rice, with whom was Mr. Assistant Attorney General William J. Donovan, for the . defendant.. Messrs. George H. Foster and Joseph H. Sheppard were on the brief.
    The following are the facts as found by the court:
    I. Plaintiff is a corporation duly organized under the laws-of the State of Kentucky, and as such corporation now is and was during all the times hereinafter mentioned, engaged as. a. common carrier in the transportation of passengers and freight in and through various States of the United States.. Part of the lines operated by plaintiff was constructed with, the aid of grants of land by the United States.
    II. Under acts of Congress granting lands in aid of railroads and acts of Congress regulating the expenditure of appropriations by the United States for Army transportation over such land-grant railroads, so far as same may be-applicable, said land-grant railroads were required to transport troops and munitions of war and property of the-United States at not exceeding fifty per centum of the rates-paid by private parties for the same kind of service.
    III. At and prior to the times when the services hereinafter mentioned were-performed, the railroad companies of the United States generally, including plaintiff, had severally agreed with the Quartermaster General of the United States Army (subject to certain exceptions not necessary here to be stated) to accept, for the transportation of property of the United States moved by the Quartermaster’s Department, United States Army, and for which the United States Government was lawfully entitled to reduced rates over land-grant roads, the lowest net rates lawfully available as derived through deductions account of land-grant distance from a lawful rate filed with the Interstate Commerce Commission applying from point of origin to destination at time of movement.
    IY. During the years 1916 and 1911, and within six years of the filing of this suit, the War Department of the United States made a number of shipments of horses, wagons, tents, and other Army impedimenta by railroad, as more particularly set forth in the schedule marked “ Plaintiff’s Exhibit A,” annexed to the petition herein, and made part hereof by reference, said shipments being made in connection with the movement of troops between like points.
    Said shipments were all made upon the usual Government form of bill of lading prescribed by the Comptroller of the Treasury (14 Comp. Dec. 967, 969-971), calling for payment upon presentation by the last carrier of the accomplished bill of lading.
    Y. There is no proof that a shipping order preceding the bill of lading ivas given in any of the cases of transportation here involved. The bills of lading were prepared by the representatives of the defendant and presented to the representatives of the plaintiff for signature.
    YI. The tariff in force on plaintiff’s line at the time of the said movement, open to the public at large, was Western Classification No. 54, I. C. C. No. 12, and neither camp equipage, military impedimenta, nor company property was specifically embraced therein.
    At the time of the transportation herein involved plaintiff had on file with the Interstate Commerce Commission and in effect a duly published tariff, not required by law to be published, as follows:
    “ Item 378, Supplemental 9, Pacific Freight Tariff Bureau Exception Sheet No. 1-E, agent F. W. Gomph’s I. C. C. 252.
    “Applies only on property of the United States Government moving under Government bills of lading.
    
      “Military impedimenta, equipment, and supplies. — On camp equipage and impedimenta, including livestock, carloads, minimum weight 30,000 pounds per car, either when accompanying troops or without troops, when handled by passenger train or expedited train service, the net cash rates will be assessed on basis of one and one-half times class A rates, without any deductions for land-aid or land-grant roads, in territory where tariffs providing class A rates are governed by Exceptions to Western Classification, Pacific Freight Tariff Bureau Exception Sheet No. 1-E (I. C. C. No. 252, I. C. C. No. 122 of F. W. Gromph, agent), supplements thereto and reissues thereof. Effective July 16, 1916, in Supplement No. 9
    
    There is no proof on the question of the reasonableness of this rate, for the transportation furnished the United States was entitled to the lowest rate open to the public for like transportation under similar conditions. There is no proof of any other than the above rate applicable to the shipments; nor is there any proof that this rate was known to the defendant’s representatives at the time they were made, or that there was any express understanding or agreement between them and the representatives of the plaintiff that the shipments were to be made upon the basis of this tariff.
    VII. Plaintiff’s bills for the aforesaid transportation were duly presented to the defendant, which, through its accounting officers, refused to pay for said transportation at the aforesaid net cash rate claimed by plaintiff and allowed and paid plaintiff for said transportation at a certain lesser rate, to wit, class B rate, Western Classification, applicable only to emigrant movables, moved by ordinary freight trains, with land-grant deductions.
    VIII. All of the claims mentioned were stated on the form prescribed by the Comptroller, with certificate by the plaintiff that the amount claimed was correct and just, that the services had been rendered as stated, that payment therefor had not been received, and that the rates charged were not in excess of the lowest rates available for the Government based on tariffs effective at the date of service. All the claims were settled by- certificate addressed to the Secretary of the Treasury by the Auditor for the War Department. These settlements were made during the period from June 4, 1917, up to and including April 29, 1918
    
      IX. In the case of the payment of each of said bills the plaintiff protested to the accounting officers against settling said bills on the basis of emigrant movables rate and accepted payment under protest. The form of the protest in each case does not appear.
    X. The facts as to each case of transportation here involved and the basis of settlement in each are as follows:
    
      (a) Bill F 44371 B-L WQ, 358, March 1, 1917, covered a shipment of one car of impedimenta and one car of wagons and equipment. Plaintiff stated the account in the amount of $1,053, applying one and one-half times class A, minimum weight 30,000 pounds per car, without deduction for land grant, and which amount is correct on that basis. The Auditor for the War Department, denying that this movement was covered by the exception sheet referred to (Finding VII), made payment in the sum of $415.29, based in part on classification by analogy to emigrant movables. Expedited service was requested and furnished.
    (5) Bill F 43771 B/L WQ 333, February 7, 1917, covered a shipment of 14 cars, consisting of 8 cars of horses, 2 cars of company property, 1 car of forage, and 1 car of baggage. Plaintiff stated the account in the amount of $7,375, applying one and one-half times class A, minimum weight 30,000 pounds per car, without deduction for land grant as for passenger-train service. The correct amount on this basis is $6,844.50, plus $4.00 for sanding, making a total of $6,848.50. One car in this shipment was billed as a car of free baggage. Payment was made by the Auditor for the War Department on the 13 other cars in the amount of $1,757.23, based in part only on classification by analogy to emigrant movables. Expedited service was requested and furnished.
    
      (c) Bill F 48597 B/L WQ 49, August 27, 1917, covered a shipment of one car of impedimenta. Plaintiff stated the account in the amount of $355.42. This movement was an ordinary freight movement, and the plaintiff now contends for the total gross charge of $744 on the basis of 30,000 pounds, minimum weight, at $2.58 per cwt., as per Transcontinental Freight Bureau Government Rate Circular 51-B, rule No. 5, effective August 1, 1917. Payment was made by the Auditor for the War Department in the sum of $172.44, based in part only on rating by analogy to emigrant movables. The difference between the amount originally claimed and the amount allowed by the auditor is $182.98, which amount is due the plaintiff. There is no proof of said circular 51-B, rule No. 5, or its provisions. Expedited service was not requested or furnished as to this shipment.
    
      (d) Bill F 45843 B/L WQ, 524, May 18, 1917, covered a movement of 11 cars of horses, 11 cars of wagons, 9 cars of company property, and 1 car of forage. Plaintiff stated the account in the amount of $17,374.50, applying one and one-half times class A, minimum weight 30,000 pounds per car, without land-grant deduction as for passenger-train service, which amount is correct on that basis. Payment was made by the Auditor for the War Department in the sum of $5,615.34, based in part only on rating by analogy to emigrant movables. Expedited service was requested and furnished as to this shipment.
    
      (e) Bill F. 47798 B/L WQ 494, May 5, 1917, covered a shipment of 4 cars of impedimenta and 1 car containing three horses. Plaintiff stated the account in the amount of $2,632.50, applying one and one-half times class A, minimum weight 30,000 pounds per car, without deduction for land grant as for . passenger-train service, which amount is correct on that basis. Settlement was made by the Treasury Department in the sum of $807.99, based in part only on application by analogy to emigrant movables. Expedited service was requested and furnished as to this shipment.
    
      {f) Bill F. 48076 B/L WQ 211, July 31, 1917, covered a less-than-carload shipment of ordnance stores, tent poles, stores, small-arms ammunition, and trunks. Plaintiff stated the account in the amount of $50.36 on rates other than the one and one-half times class A rate. This movement was handled as an ordinary freight movement, and no expedited service claimed. Settlement was made by the Treasury Department in the sum of $46, based in part on rating bj analogy to emigrant movables. There is admittedly due the plaintiff on this shipment $4.36.
    
      (</) Bill F. 52649 B/L WQ 63, November 17,1916, covered a shipment of one car of escort wagons and two cars of horses. Plaintiff stated the account in the amount of $634.50, applying one and one-half times class A, minimum weight 30,000 pounds per car, without deduction for land-grant as for passenger-train service, which amount is correct on that basis. Settlement by the Treasury Department was made in the sum of $247.97, based on tariff rates rather than the one and one-half times class A or the emigrant movables rating. Expedited service was not requested or furnished as to this shipment.
    
      (h) Bill F. 47970 B/L WQ 909, May 10, 1917, covered a .shipment of 2 cars of company property, 1 car of supplies, 1 car of horses, 6 cars of ambulances, 7 cars of auto trucks. Plaintiff stated the account in the amount of $10,144.42, applying one and one-half times class A, minimum weight 30,-000 pounds per car, without deduction for land-grant as for passenger-train service, which amount is correct on that basis. Expedited service was not requested or furnished .as to this shipment. Settlement Avas made by the Treasury Department in the sum of $3,040.22, based in part only on rating by analogy to emigrant movables.
    
      (i) Bill F. 42696% B/L WQ 102, November 9, 1916, covered a shipment of one carload of trunk lockers boxed. Plaintiff erroneously stated the account in the amount of $138.91, based on 3rd class rates, there being no expedited service involved. Plaintiff uoav contends for the gross rate of $391.07, applying the 2nd class rating as per Western Classification No. 54,1. C. C. 12, by analogy to trunks, a net rate of $159.31. Settlement Avas made by the Treasury Department in the sum of $83.51, based on rating by analogy to emigrant movables rate. The difference between said net rate and the amount originally claimed is $75.80, which .amount is due the plaintiff.
    
      (j) Bill F. 42725 B/L WQ 252, December 21, 1916, covered a shipment of 2 cars of wagons, 4 cars of guns, caissons, and limbers, 1 car of forage and company property, 1 car company property, and 2 cars of horses. Plaintiff stated the account in the amount of $1,347.58, based on a regular tariff rating other than one and one-half times class A. Plaintiff now contends for total gross charges, $5,265.00, based on rating of one and one-half times A, minimum weight 30,000 pounds per car, without deduction for land grant. Settlement was made by the Treasury Department in the sum of $1,150.63, based in part only on a rating by analogy to emigrant movables. The difference between the amount originally claimed and the amount paid in settlement is $196.95, which amount is due the plaintiff. No expedited service was requested or furnished.
    
      (k) Bill F. 43173 B/L WQ 236A, December 23, 1917, covered a shipment of 2 cars of company property, and 1 car of forage. Plaintiff stated the account in the amount of $1,444.50, applying one and one-half times class A, minimum weight 30,000 pounds per car, without land-grant deduction as for passenger-train service, which amount is correct on that basis. Settlement was made by the Treasury Department in the sum of $421.12, based in part only on rating by analogy to emigrant movables. Expedited service was rendered as to this shipment. It does not appear that it was requested.
    
      (,l) Bill F 43772 B/L WQ 249, December 20,1916, covered a shipment of 2 cars of horses, 2 cars of company property, 1 car of forage, and 5 cars of guns, caissons, and limbers, 1 car of wagons. Plaintiff stated the account in the amount of $5,297.50, applying one and one-half times class A, minimum weight 30,000 pounds, without deduction for land-grant as for passenger-train service, which amount is correct on that basis. Settlement was made by the Treasury Department in the sum of $1,517.68, based in part only upon analogy to emigrant movables. Expedited service was rendered as to this shipment. It does not appear that it ivas requested.
    
      (m) Bill F 43774 B/L WQ 236, December 13, 1916, covered a shipment of 4 cars of guns; caissons, and limbers, 3 cars of wagons, and 2 cars of horses. Plaintiff stated the-account in the amount of $4,334.50, applying one and one-half times class A, minimum iveight 30,000 pounds, without deduction for land-grant as for passenger-train service, which amount is correct on that basis. Settlement was made by the Treasury Department in the sum of $1,316.76, based. in part only on rating analogous to emigrant movables rate. Expedited service was rendered in the case of this shipment. It does not appear that it was requested.
    (») Bill F 48823 B/L WQ 33, October 19, 1917, covered a shipment of 1 car of clothing, trunk lockers, and barrack bags. Plaintiff stated the account in the amount of $498.02 based on the 1st class rates, there being no expedited train service involved. Settlement was made by the Treasury Department in the sum of $426.76, based on application of emigrant movables rate. The auditor now contends that this movement should have the rating of class B, total charges amounting to $196.83. No expedited service was requested or furnished as to this shipment.
    
      (o) Bill F 48599 B/L WQ 44, August 27, 1917, covered a shipment of 1 car of impedimenta weighing 11,142 pounds. Plaintiff stated the account in the amount of $212.25 based on rating other than one and one-half times class A. Plaintiff now contends for gross charges of $774.00, based on 30,000 pounds minimum, as per Transcontinental Freight Bureau Government Rate Circular 51-B, rule No. 5. Settlement was made by the Treasury Department in the amount of $163.96, based on rating by analogy to emigrant movables. As to this shipment expedited service was not requested or furnished. The difference between the amount originally claimed and the amount paid in settlement is $48.29, which amount is due the plaintiff.
    
      (p) Bill F 49183 B/L WQ 266, September 8,1917, covered a shipment of 6 cars of company property and 2 cars of horses and mules. Plaintiff stated the account in the amount of $3,240, applying one and one-half times class A, minimum weight 30,000 pounds, without deduction for land grant as for passenger-train service, which amount is correct on that basis. Settlement was made by the Treasury Department in the sum of $1,133.24, based in part only on rating by analogy to emigrant movables. Expedited service was not requested or furnished in this case.
    In all of the above cases the auditor held that the movements did not fall within the exception sheet referred to in Finding VII; that the rate claimed was erroneous for the reason that the property was not covered by Western Classification No. 54,1. C. C. 12, and that thus there was no specific; rate for the property; and applied the emigrant movables, rate by analogy as being the only one in his opinion applicable to the shipments.
    The court decided that plaintiff was entitled to recover, in part.
    
      
       Appealed.
    
   GRaham, Judge,

delivered the opinion of the court:

This suit is brought to recover balances claimed by the plaintiff to be due on account of transportation charges on 16 different shipments of Government property, alleged to have been illegally deducted by the Auditor for the War Department from the plaintiff’s bills as presented for payment. These shipments were made at different times between June 19, 1917, and May, 1918, and in most of the cases the points of origin and destination were different.

As to each of the 16 shipments the Auditor for the War Department, on presentation of plaintiff’s bills, held that the rate claimed therein did not apply to the shipment; that there were no published rates applicable to the character of goods shipped, and by analogy applied the emigrant movables rates in each case, the application of which rate was erroneous. The plaintiff protested at the time of payment in each case against the settlement on the basis of this rate. All the shipments moved on the form of bill of lading prescribed by the Comptroller of the Treasury for general use throughout the Government service, and each claim was stated on the form so prescribed, with a certificate by plaintiff that the account was correct and just, and that the service had been rendered as stated, that payment therefor had not been received, and that the rate charged was not in excess of the lowest rate available for the Government based on tariffs effective at the date of service.

So that at the outset we find that the payments made to the plaintiff were not the payments to which it was entitled; that is to say, the payments on the basis of emigrant movables rate were not proper, and we have left for consideration what, as shown by the findings, was a proper rate, under all the circumstances, to be charged by and paid to the plaintiff for the services rendered.

The plaintiff presented its bills, and is claiming recovery, on the basis of a special cash rate without land-grant deduction, and, as it appears from the findings that there is no proof of any other applicable rate, the plaintiff’s recovery must be, if at all, on the basis of this special rate. Plaintiff claims that it was entitled to charge and be paid the rate named in its original bills by reason of a special contract with the Government for expedited and special service under a tariff, which it had published prior to the shipments, specially applicable to the transportation of the particular kind of goods shipped and the service rendered. The Government is entitled under the law to the lowest rate open to the public for transportation of similar property, less land-grant deductions. - If the plaintiff had a contract for a higher rate, it must establish its contract by proof as full and satisfactory as that required for the establishment of any other contract to hold the Government liable.

The case of Illinois Central R. R. Co. v. United States (58 C. Cls. 182), involved a shipment by ordinary passenger train of Government impedimenta. The plaintiff there had filed a special tariff rate for transporting of Government impedimenta on the basis of net cash. It based its recovery upon an implied contract growing out of the publication of the rate, upon the theory that the publication was constructive notice to the Government. There was no attempt to prove actual notice. The court held that a rate of this character applicable specially to the Government was not required by law and was not the legal rate referred to in the statute; that, not being a legal rate, it was in effect no rate at all; that the mere publication of such a rate was not constructive notice to the Government, and therefore there could be no recovery upon the implied contract growing out of such publication and the. rendering of the service. In other words, it was held that the railroad could not, by merely publishing such a rate, avoid the right of the Government to land-grant deductions.

In the present casej while the court has found that in some instances there was no expedited service requested or furnished, in others that there was expedited service but no request for it, and in still others that expedited service was requested and furnished, there is no proof in any instance of an express contract; that is, there is no proof of an understanding between the representatives of the Government and the representatives of the railroad that this special rate should apply to the shipments. The plaintiff bases its claim for recovery upon constructive notice to the Government of this rate and an implied contract to pay it. The rate is the same in principle and effect as that relied upon in the Illinois Central Railroad case, supra, except that in this case it was made to apply to special and expedited service. But this does not affect the legality of the proposition to hold the Government on an implied contract. The plaintiff in its brief states its position as follows:

“ Clearly, when, with notice of this rate, the Government requested the plaintiff to transport military impedimenta, equipment, and supplies by special trains, a contract must be implied on. the part of the Government to pay the rate specified in said tariff.”

But there is no other notice shown of the rate than its mere publication, and under authority of the Illinois Central Railroad case, supra, plaintiff can not recover on the basis of constructive notice by publication. Plaintiff can not by the voluntary publication of a rate not required by law deprive the Government of its right to land-grant deductions where these deductions apply. The mere publication of a schedule of rates to be applicable to Government property does not prevent the application of land-grant deductions. Where the application of such schedule is sought .and land-grant deductions are objected to, the carrier must show such a state of facts as will reasonably remove the shipment from the operation of the rule that land-grant deductions must be made. Where it relies upon a special contract it must establish it by proper and satisfactory proof. If it relies upon an implied contract, it musí prove all of the facts necessary to create an implication of contract, and the burden of this proof is upon the carrier. The plaintiff has failed to establish the necessary contract, and can not recover on the basis of the special rate claimed.

It is unnecessary to review the cases previously decided by this court where the carrier has been relieved of land-grant deductions. They were fully reviewed by the court in the Illinois Central Railroad case, supra, where the court said :

“It is manifest that each of the cited cases was decided upon the facts peculiarly applying to it, and without any .attempt to lay down a principle applicable to all alike.”

The plaintiff in this case bases its claim for recovery upon the rate fixed by the special tariff, and has not proved or attempted to prove the applicability of any other rate. While the auditor was in error in settling the bills involved ■on the basis of the emigrant movables rate, as heretofore held in this court and admitted in this case, there is not sufficient data to enable the court to determine either the proper classification for these shipments or the land-grant deductions. Certain sums shown by paragraphs (c), (f), (i), (,j), and (o) of Finding X the plaintiff is entitled to recover. These were due to mistakes made in the settlement in each case, as shown in the finding mentioned, and in none of them is there involved any of the questions discussed and passed upon above. The aggregate of these sums is $198.38, for which judgment should be entered for the plaintiff, and it is so ordered.

Hay, Judge; DowNey, Judge; Booth, Judge; and Campbell, Chief 'Justice, concur.  