Grand Trunk Western Railway Co. v. United States 55 Ct. Cl. 513

GRAND TRUNK WESTERN RAILWAY COMPANY v. THE UNITED STATES.

[53 C. Cls., 473 ; 252 U. S., 112.]

Judgment was rendered in favor of the defendants in the court below. On appeal the judgment was affirmed, and the Supreme Court decided:

In settling with a railroad company under its current contract for mail transportation, the Postmaster General may deduct over-payments made under earlier contracts without waiting for their amount to be ascertained by suit.

The right of the United States to recover such overpayments is not barred by time.

The rule that a long-continued construction of a statute by a department of the Government should not readily be changed to the injury of parties who have relied upon it in contracting with the Government, does not apply to a long-continued practice of making overpayments, due to mistake of fact.

The obligation to carry the mail at the rates fixed by Congress attaches to a land-aided railroad like an easement or charge; a company purchasing under foreclosure takes the road with notice of the obligation; and its duty to perform is not affected by the fact that it received none of the land and obtained no benefit from the grant.

Where a railway-aid grant is made by act of Congress to a State with the provision that over the railway to be aided the mail shall be transported at such price as Congress may by law direct, a company which before completion of its road applies to the State for the land to aid in such completion, receives the State’s patent therefor, reciting that such is the purpose, and *514expressly assents to the terms and conditions of the granting act and proceeds to dispose of the land, is subject to the duty imposed, whether it was in fact aided by the grant in building its road or not; nor is its successor in any better position to question this effect of accepting. the grant when it acquires the first company’s property through a foreclosure to which that company’s interest in such lands was made subject as after-acquired property covered by the mortgage.

Where lands granted as railway-aid lands by Congress to a State are accepted by a railroad company and aid in the construction of its railroad, the obligation to carry the mails, as'stipulated in the granting act, attaches to the road so aided, however disproportionate the aid to the cost of construction, and this notwithstanding the company, in accepting the land and assuming the burden, may have relied upon other lands applied for at the same time and included in the same State patent, but which it lost through decisions of the State courts holding them inapplicable to its road under the granting act and the State law passed in pursuance of it.

In such case the obligation respecting the mails can not be escaped upon the ground that the contract between the company and the State, resting on an entire consideration, in part illegal, was void, where the United States was not a party to the contract and where its reversionary title was relinquished by Congress to the State.