Wisconsin Central Railroad v. United States

Mr. Chief Justice Fuller,

after stating the case, delivered the opinion of the court.

Appellant contends that it was not subject to the eighty per cent rate, and hence that it is entitled to recover both the *202items disallowed by the Court of Claims; and also that, even if this position be untenable, it should not have been charged with amounts which had already been settled and paid under the view that the company was not so restricted, and should have been awarded the'sum of $12,532.43 withheld.

The act of 1864 expressly provided that the grant was made upon “ the same terms and conditions as are contained in the act granting lands to said State to aid in the construction of railroads in said State, approved June three, eighteen hundred and fifty-six,” and that act contained in its fifth section the following: “ That the United States mail shall be transported over said roads under the direction of the Post Office Department at such price as Congress may by law direct, provided that until such price is fixed by law, the Postmaster General shall have the power to determine the same.”

But it is argued that the “ terms and conditions ” referred to do not embrace the terms and conditions prescribed by section 5, because the general subject-matter of every other section of the act of -1856 was expressly reenacted, and therefore it must be inferred that Congress intended to express in the act of 1864 all the terms and conditions which were imposed upon the grant thereby made; or that, in any event, the words should be limited to the terms and conditions of section 1 of the act of 1856.

The difficulty is that to hold that all the terms and conditions imposed upon the grant were specifically expressed in the act of 1864 itself would be to render the reference to the act of 1856' meaningless and to eliminate, by interpretation, the words “upon the same'terms and conditions as are contained in ” that act; and we are of opinion that the explicit language of the statute cannot thus be done away with.

The existence- of terms and conditions in the act of 1856 left wholly unmodified by the reenactments of the act of 1864 preclude the argument that the words so used áre without meaning; and, moreover, the settled rule is that statutes granting privileges or relinquishing rights of the public are to be strictly construed against the grantee..

Reference to the two acts will show that the changes in the’ *203new grant rendered necessary some modification of the first and third provisos of the first section and of sections 2, 3 and 4 of the act of 1856 (which embody some, but not all, of the terms and conditions), and they were accordingly reenacted in homologous provisos and sections of the act of 1864, but as the second proviso of section 1 and section 5 required no modification they were not reenacted, and the terms and conditions contained therein were carried forward by reference.

Thus for the first proviso of section 1 of the act of 1856, the .first proviso of the third section of the act of 1864 was substituted in order to enlarge the fifteen-mile limit to twenty, and section 6 of the act of 1864 was substituted for the third proviso in order to provide for the exclusion of mineral lands from the grant. So the second section of the act of 1856 was reenacted in the fourth section of the act of 1864 to change the six miles on each side of the road to ten; and section 3 of the act of 1856 was reenacted in section 8 of the act of 1864 to provide for the difference between the patenting to the State under the earlier act and the patenting direct to the companies under the last act, while section 4 of the act of 1856 was reproduced in section 1 of the act of 1864-with the alterations rendered necessary, not only by the change in patenting, but by the increased dimensions of the grant. The fact that the provision for the free transportation of troops and property of the United States, contained in section 3 of the first act, appeared substantially unchanged in the eighth section of the last act is of no significance, as the purpose of the reenactment had' no relation to that requirement. The second proviso of section 1 and section 5 of the act of 1856 were not reenacted manifestly because no change was required, and the provision of section 3 of the act of 1864 that the grant should be subjected to the same terms and conditions as the grant by the act of 1856, dispensed with the necessity of repetition. G-iving this operation to the plain language of" that provision, as we must, involves no inconsistency in respect of the terms and conditions contained in the provisos and sections which were reenacted, since the reenactment was due to the necessity of modification arising *204under the new grant and- indicated no intention to withdraw any of the original terms and conditions.

An intention to surrender the right to demand the carriage of the mails over the subsidized roads at reasonable charges would be opposed to the policy established by well-nigh uniform Congressional legislation on the subject, and although there ihay have been departures from that policy in a few instances, under exceptional circumstances, none of them justify the contention that such departure was intended here.

We think it follows, also, that there is no room for concluding that the words “the same terms and conditions as are contained in” the act of 1856, should be confined to the terms and conditions contained in the first section of that act, or rather in its second proviso, as the first and third provisos were reenacted. The three provisos of the granting section of the act of 1856 did not embody all the terms and conditions imposed on that grant, and as the grant of the act of 1864 was subjected to the same terms and conditions as those of the prior act, and it was as true of the reenacted sections as it was of the reenacted provisos, that they were alike reenacted to adapt the last act to the changes in the extent and manner of the new grant, we regard the suggestion which would restrict the words used to the second proviso and exclude the fifth section as obviously inadmissible.

Nor are we able to concur in the view that the general policy of the act of 1864 was inconsistent with the imposition of the duty of transporting the mails. The argument is that the grant of 1856 was not sufficiently favorable to induce the building of the roads and that, .therefore, Congress in 1864 deemed it proper and necessary to make a more favorable grant and did so in part by dispensing with this duty, but this will not do, for the inducements were made greater by adding, two-thirds more land, and at the same time it was expressly provided that the increased grant should be subject to the same terms and conditions as the earlier one. We find nothing in the record to give color to the suggestion that in addition to the increase of the grant Congress intended to surrender the.rights of the government in respect of mail *205transportation. Wisconsin Central Railroad v. United States, 159 U. S. 46.

Some reliance is placed by appellant on departmental construction, but we may dismiss that contention with the observation that we do not consider the true construction as doubtful, and that ithe departmental construction referred to was neither contemporaneous nor continuous. United States v. Alabama Southern Railroad, 142 U. S. 615; United States v. Healey, 160 U. S. 136.

We agree entirely with the Cqurt of Claims that the terms and conditions imposed on this grant embraced the condition that the mail should be carried at such rates as Congress might fix, and that section 13 of the act of July 12, 1876, c. 179, 19 Stat. 78, was applicable. The item of $16,343.48 was properly disallowed as was also the item of $12,532.43, unless the latter was recoverable by reason of some ground of objection to its extinguishment by the application of the sums unlawfully paid to and received by the company.

And as to that it is insisted that such application cannot be made because it was not competent for the Postmaster General to withhold the moneys, thus paid without authority of law, as the previous directions to make the payments were decisions binding on the department; because the payments were voluntarily made on due consideration and deliberation and the accounts settled; and because no counterclaim was filed.

The Postmaster General in directing payment of compensation for mail transportation, under the statutes providing the rate and basis thereof, does not act judicially, and whatever the conclusiveness of executive acts so far as executive departments are concerned, as a rule of administration, it has long been settled that the action of executive officers in matters of account and payment cannot be regarded as a conclusive determination when brought in question in a court of justice. United States v. Harmon, 43 Fed. Rep. 560, by Mr. Justice Gray; S. C. 147 U. S. 268; Hunter v. United States, 5 Pet. 173; United States v. Jones, 8 Pet. 387; United States v. Bank of Metropolis, 15 Pet. 377.

*206In the latter case, which was a suit upon negotiable drafts accepted by the Postmaster General (the authority to do so being assumed for the purpose of the case), and which was decided after the passage of the act of July 2, 1836, c. 270, 5 Stat. 80, 83, whose seventeenth section was carried forward as section 4057 of the Revised Statutes, Mr. Justice "Wayne, delivering the opinion of the court, discussed the power of a succeeding Postmaster General to revise the action of his predecessor as to credits, as follows:

“The third instruction asked the court to say, among other things, if the credits given by Mr. Barry, were for extra allowances, which the said Postmaster General was not legally authorized to allow, then it was the duty of the present Post1 master General to disallow such items of credit. The successor of Mr. Barry had the same power, and no more, than his predecessor, and the power of the former did not extend to the recall of credits or allowances made by Mr. Barry, if he acted within tho scope of official authority given by law to the head of the department. This right in an incumbent of reviewing a predecessor’s decisions, extends to mistakes in matters of fact arising from errors in calculation, and to cases of rejected claims, in which material testimony is afterwards discovered and produced. But if a credit has been given, or an allowance ■made, as these were, by the head of a department, and it is •alleged to be an illegal allowance, the judicial tribunals of the country must be resorted to, to construe the law under which the allowance was made, and to settle the rights between the United States and the party to whom the credit was given.

“ It is no longer a case between the correctness of one officer’s ■judgment and that of his successor. A third party is interested, and he cannot be deprived of a payment on a credit so given, but by the intervention of a court to pass upon his right. No statute is necessary to authorize the United States to sue •in such a case. The right to sue is independent of statute, and it may be done by the direction of the incumbent of the department. The act of 2d July, 1836, entitled ‘An act to change the organization of the Post Office Department,’ is only affirmative of the antecedent right of the government *207to sue, and directory to the Postmaster General to cause suit's to be brought in the cases mentioned in the seventeenth section of that act. It,also excludes him from determining, finally, any case which’ he may suppose to arise under that section. Ilis duty is to cause a suit to be brought. Additional allowances, the Postmaster General- could make under the forty-third section of the act of March 2, 1825 (3 Story, 1985); and we presume it was because allowances were supposed to have been made contrary to that law, that the seventeenth 'section of the act of 2d July, 1836, was passed. In this last, the extent of the Postmaster General’s power in respect £o allowances, is too plain to be mistaken.

“We cannot say that either of the sections of the acts of 1825, and 1836, just alluded to, covers the allowances made by Mr. Barry to Reeside. But if the Postmaster General thought they did, and that such a defence could have availed against the rights of the bank to claim these acceptances, as credits in this- suit, the same proof which would have justified a recovery in an action by the United States, would have justified the rejection of them as credits when they are claimed as a set off.”

The view thus indicated that executive decisions in cases like the present are not binding on the courts has been repeatedly affirmed and steadily adhered to. Gordon v. United States, 1 C. Cl. 1; McElrath v. United States, 12 C. Cl. 201 Duval v. United States, 25 C. Cl. 46; Steele v. United States, 113 U. S. 128; United States v. Burchard, 125 U. S. 176; United States v. Stahl, 151 U. S. 366. And it has been often applied in the instance of the improvident issue of patents: United States v. Stone, 2 Wall. 525 ; United States v. Minor, 114 U. S. 233 ; Mullan v. United States, 118 U. S. 271; Wisconsin Railroad Co. v. Forsythe, 159 U. S. 46.

In Steele v. United States, the Navy Department in contracting with the claimant for certain work upon vessels, delivered to him certain old materials at the agreed price of $2000, which was considerably less than the true value. In his suit for payment on thé contract it was contended that the delivery of these materials to "him at an agreed price was *208without warrant of law, and that the materials having been disposed of should be accounted for by the claimant at their true value. This contention was sustained, and this court said: “ The fact that the account of the appellant tvas settled by the officers of the Navy Department, by charging him with the value of the old material at $2000, is no bar to the recovery of its real value by the government. The whole transaction was illegal, and appellant is chargeable with knowledge of the fact.”

In United States v. Burchard, the claimant, an engineer officer, retired October 26, 1874, and entitled .to half sea pay, was paid from said date up to April 1, 1878, at a higher rate, whereby he received $425 in excess of that allowed by law,

• his pay at that rate being passed from time to time by both the disbursing officers in the Navy Department and by the accounting officers. After April 1, 1878, he was paid at a lower rate, which this court held to be the legal rate. He brought suit for the difference after 1878, and the government counterclaimed for the $425 paid to him prior to that time. His petition was dismissed, and the court held the government could recover the overpayment, for the prior period. . Mr. Chief Justice Waite, speaking for the court, observed that in no event was he entitled to more than half sea pay, and that all over that which he got was by a mistake of the accounting officers, and said: “ It only remains to consider whether the amount which has thus been paid, or as much thereof as is embraced in the counterclaim, can be recovered back in this action, and we are of the opinion that it can. The action was brought by Burchard to recover a balance claimed to be due on pay account from the date of his. retirement. He had been paid according to his present claim until April 1, 1878, and consequently there was nothing to complain of back of that date. But in reality the account had never been closed, and was always open to adjustment. Overpayments made at one time by mistake could be corrected and properly charged against credits coming in after-wards. His pay was fixed by law, and the disbursing officers of the department had no authority to allow him any more. *209If- they did, it was in violation of the law, and he has no right to keep what he thus obtained. Whether the government can in any case be precluded from reclaiming money which has been paid by its disbursing and accounting officers under a mistake of law, is a question which it is not now necessary to decide any more than it was in McElrath v. United States, 102 U. S. 426, 441, when it was suggested. This is a case where the disbursing officers, supposing that a retired officer of the navy was entitled to more than it turns out the law allowed, have overpaid him. Certainly under such circumstances the mistake may be corrected.”

In United States v. Stahl, the claimant, a naval officer, upon a difference of opinion as to the law, had been overpaid in the grade then occupied by him, and sued for a deficiency claimed to exist in his previous grade. This court sustained his contention as to the previous grade, and held that he had been entitled in that grade to the increased compensation, but'that the excessive payments which had been made to him in the latter grade should be deducted from any sum which might be found due him in the former.

In Mullan v. United States, a suit to vacate a patent which' had been granted for certain coal lands, the court held that the mistake was one of law, but that nevertheless it having been committed and the patent given for lands which the land officers were not authorized to patent, the patent could be annulled by the court. And Mr. Chief Justice Waite said : “ It is no doubt true that the actual character of the lands was as well known at the Department of .the Interior as it was anywhere else, and that the Secretary approved the lists, not because he was mistaken about the facts; but because he was of opinion that coal lands were not mineral lands within the meaning of the act of 1853, and that they were open to selection by the State; but this does not alter the case. The list was certified without authority of law, and, therefore, by a mistake against which relief in equity may be afforded. As was said in United States v. Stone, 2 Wall. 525, 535: ‘The patent is but evidence of a grant, and the officer who issues it acts ministerially and not judicially. If he issues a patent for *210land- reserved from sale by law, such patent is void for want of authority. But one officer of the land office is not competent to cancel or annul the act of his predecessor. • That is a judicial act, and requires the judgment of a court.’ ”

In Wisconsin Central Railroad Co. v. Forsythe, which was an action of ejectment to recover certain lands claimed to have been included within its grant, but which defendant insisted were outside of its grant and subject to private entry, this court said: “ But further, it is urged that this question of title has been determined in the land department adversely to the claim of the plaintiff. This is doubtless true, but it was so determined, not upon any question of fact, but upon the construction of the law; and such matter, as we have repeatedly held, is not concluded by the decision of the land department.'’

As a general rule, and on grounds of public policy, the government, cannot be bound by the action of its officers, who must be held to the performance of their duties within the strict limits of their legal authority, where by misconstruction of the law under which they have assumed to act, unauthorized payments are made. Whiteside v. United States, 93 U. S. 247; Hawkins v. United States, 96 U. S. 689, and cases before cited. The question is not presented as between the government and its officer, or between the officer and the recipient of such payments, but as between the. government and the-recipient, and is then a question whether the latter can be allowed to retaih the fruits of actions not authorized by láw', resulting from -an erroneous conclusion by the agent of the government as to the legal effect of the particular statutory law under or in -reference to which he is proceeding.

Séction Í057 of the Revised Statutes reads: “In all cases where money has been paid out of the funds of the Post Office Department under the pretence that service had been performed therefor, when, in fact, such service has not been performed, or as additional allowance for increased service actually rendered, when the additional allowance exceeds'the sum which, according to law, might rightfully have been allowed therefor, and in all other cases where money of the department has been paid to any person in consequence of fraudulent representa*211tions, or by the mistake, collusion or misconduct of any officer or other employe in the postal service, the Postmaster General shall cause suit to be brought to recover such wrong or fraudulent payment or excess, with interest thereon.”

Undoubtedly the wrord “mistake,” as used in this section, includes an erroneous conclusion in the Construction or application of a statute. And, this being so, as the duty is devolved on the Postmaster General to cause suit to be brought where money has been illegally paid by reason of misconstruction or misapprehension of the applicable law, it follows that he must be regarded as empowered to reconsider prior decisions to determine whether such a mistake has been committed or not. If in his judgment money has been paid without authority of law and he has money of the same claimant in his hands, he is not compelled to pay such money over and sue to recover .the illegal payments, but may hold it subject to the decision of the court when the claimant sues. United States v. Carr, 132 U. S. 644; Gratiot v. United States, 15 Pet. 336; Steele v. United States, United States v. Burchard, United States v. Stahl, supra. And in that way multiplicity of suits and circuity of action are avoided.

It is unnecessary to go into a discussion of the. exceptions which may exist between private parties to the rule that moneys paid through mistake of law cannot be recovered back.

This branch of the' case was disposed of by the Court of Claims on the authority of Duval v. United States, 25 C. Cl. 46. It was there held that “the items of the several statements upon which the Sixth Auditor certifies balances, due for carrying the mails ordinarily, and in the absence of special circumstances, may be regarded as running accounts, at least while the parties continue the same dealings between themselves ; and that money paid in violation of law upon balances certified by the accounting officers generally may be recovered back by counterclaim or otherwise where no peculiar circumstances appear to make such recovery inequitable and unjust.” The mistake was, indeed, treated as one of fact, the Post Office officials erroneously assuming through oversight that the *212road in question had not been aided by grants of land, but the governing principle in the case before us is the same.

Reference was made to Barnes v. District of Columbia, 22 C. Cl. 366, 394, wherein it was ruled, Richardson, C. J., delivering the opinion, that “ The doctriné that money paid can be recovered back when paid in mistake of fact and not of law does not have so general application to public officers using the funds of the people as to individuals dealing ivith their own money where nobody but themselves suffer for their ignorance, carelessness, or indiscretion, because in the former case the elements of agency and the authority and duty of officers, and their obligations to the public, of which all persons dealing with them are bound to take notice, are always involved.” We concur in these views, and are of opinion that there is nothing on this record to take the case out of the scope of the principle that parties receiving moneys illegally paid by a public officer are liable ex ceguo et bono to refund them.

The petition sets forth, among other things, that the Postmaster General wrongfully and unlawfully, withheld the $12,532.43 out of moneys due petitioner, which was, therefore, entitled to recover the full amount ; and to each and every allegation of the petition the government interposed a general traverse. It is now said that a counterclaim or set off should have been pleaded, but the record does not disclose that this objection was raised below, while the findings of' fact show that the entire matter was before the court for, and received, adjudication. Moreover, it has been repeatedly held that the forms of pleading in the Court of Claims are not of so strict a character as to require omissions of this kind to be held fatal to the rendition of such, judgment as the facts demand. United States v. Burns, 12 Wall. 246, 254; Clark v. United States, 95 U. S. 539, 543; United States v. Behan, 110 U. S. 338, 347; United States v. Carr, 132 U. S. 644, 650.

Judgment affirmed.