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Union Pacific Railroad Company v. United States, 104 U.S. 662 (1881)

Union Pacific Railroad Company v. United States

104 U.S. 662


1. The sixth section of the Act of Congress of July 1, 1862, c. 120, incorporating the Union Pacific Railroad Company, 12 Stat. 489, constitutes a contract between the United States and the company whereunder the latter, for its service in transporting upon its road, from Jan. 1, 1876, to Oct. 1, 1877, the mails, and the agents and clerks employed in connection therewith, is entitled to compensation at fair and reasonable rates not to exceed those paid by private parties for the same kind of service.

2. The contract is not affected by the sections of the Revised Statutes declaring that the Postmaster General may fix the rate for such service when performed by railroad companies to which Congress granted aid, and he had no authority to insist that it was not binding upon the United States.

3. The company, having been required to perform the contract, lost no rights by a compliance therewith, as it protested against and rejected all illegal conditions attached to the requirement.

This was an action brought by the Union Pacific Railroad Company against the United States to recover compensation alleged to be due for services rendered from Jan. 1, 1876, to Sept. 30, 1877, in the transportation of the mails over its road, and of the employees accompanying them, who were charged with sorting, distributing, and delivering them.

The United States traversed the petition of the company, and set up a counterclaim for five percent upon the amount of the net earnings of the company's road from Nov. 6, 1875, to Nov. 6, 1877.

The Court of Claims was of opinion that the compensation for that service was not to be determined by reference to the Act of July 1, 1862, c. 120, but by the general laws regulating the compensation for similar service by other railway companies. It therefore adjudged and decreed as follows: that whereas the sum of $618,910.54 has been found to be due to the claimant from the defendants for the services alleged in its petition, of which it is entitled to recover a moiety, to-wit, the sum of $309,455.27, pursuant to the act of 2d July, 1864, c. 216, and whereas the sum of $682,032.18 has been found to be due from the claimant to the defendants on the matters alleged in their plea of counterclaim -- therefore the said moiety of $309,455.27 be set off against and deducted from the said sum found to be

Page 104 U. S. 663

due the defendants, and the defendants recover from the claimant the balance remaining, to wit, the sum of $372,576.91.

The company thereupon appealed.

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