The changes made in the grants to Wisconsin in the Act of May 5,
1864, to aid in the construction of railroads from those made to
that state by the Act of June 3, 1856, rendered necessary some
modifications of provisos 1 and 3 of § 1, and of §§
2, 3 and 4 of the latter act, and they were accordingly reenacted
in homologous provisos and sections of the act of 1864; but as the
second proviso of § 1 and § 5 of the act of 1856 required
no modification, they were not reenacted, but the terms and
conditions contained therein were carried forward by reference, as
explained in detail in the opinion of the Court.
Statutes granting privileges or relinquishing rights of the
public are to be strictly construed against the grantee.
An intention to surrender the right to demand the carriage of
mails over subsidized railroads at reasonable rates, assumed in
construing a statute of the United States, is opposed to the
established policy of Congress.
The terms and conditions imposed on the grant under which the
plaintiff in error holds embraced the condition that the mail
should be carried at such rates as Congress might fix, and §
13 of the Act of July 12, 1876, was applicable.
The Postmaster General, in directing payment of compensation for
mail transportation, does not act judicially.
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.
The government is not bound by the act of its officers making an
unauthorized payment under misconstruction of the law.
Parties receiving moneys illegally paid by a public officer are
liable
ex aequo et bono to refund them, and there is
nothing in this record to take the case out of the scope of that
principle.
The forms of pleading in the Court of Claims do not require the
right to recover back moneys so illegally paid to be set up as a
counterclaim in an action brought by the party receiving them to
recover further sums from the government.
An Act of Congress of March 3, 1873, 17 Stat. 556, c. 231,
prescribed the rates of compensation for the transportation of the
mails on the basis of the average weight, and by an Act
Page 164 U. S. 191
of July 12, 1876, 19 Stat. 78, c. 179, the compensation was
directed to be readjusted by the Postmaster General as specified on
and after July 1, 1876. Section 13 of this act provided
"that railroad companies whose railroad was constructed in whole
or in part by a land grant made by Congress on the condition that
the mails should be transported over their road at such price as
Congress should by law direct shall receive only eighty percentum
of the compensation authorized by this act."
By an Act approved June 3, 1856, 11 Stat. 20, c. 43, Congress
granted to the State of Wisconsin lands to aid in the construction
of certain railroads northward and northwestward in said state,
ultimately reaching the west end of Lake Superior, the land granted
being every alternate odd-numbered section for six sections in
width on each side of the roads, respectively. Section 5 of this
act provided:
"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."
Some or all of the roads contemplated in this act not having
been constructed, Congress, by Act of May 5, 1864, 13 Stat. 66, c.
80, again granted lands to the State of Wisconsin for three
different general lines of railroad, the line covered by section 3
of the act being the one in controversy. By this act, alternate
odd-numbered sections for ten sections in width, instead of six,
were granted,
"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 3, 1856."
The two acts, the words in each and not in the other being
printed in italics, are as follows:
"Act of June 3, 1856"
Page 164 U. S. 192
"SEC. 1. That there be, and is hereby, granted to the State of
Wisconsin for the purpose of aiding in the construction of a
railroad from
Madison, or Columbus, by the way of Portage City
to the Saint Croix River or Lake between townships twenty-five and
thirty-one, and from thence to the west end of Lake Superior, and
to Bayfield, and also from Fond du Lac on Lake Winnebago, northerly
to the state line, every alternate section of land designated
by odd numbers for six sections in width on each side of said
roads,
respectively."
"But in case it shall appear that the United States have, when
the line[s] or route[s] of said roads [are] definitely fixed, sold
any sections or parts thereof granted as aforesaid, or that the
right of preemption has attached to the same,
then it
shall be lawful for any agent or agents,
to be appointed
by the governor
of said state, to select, subject to the
approval of the Secretary of the Interior, from the lands of the
United States nearest to the tier of sections above specified, so
much land in alternate sections, or parts of sections, as shall be
equal to such lands as the United States have sold or otherwise
appropriated, or to which the right of preemption has attached, as
aforesaid, which lands (thus selected in lieu of those sold and to
which preemption has attached as aforesaid, together with the
sections and parts of sections designated by odd numbers as
aforesaid, and appropriated as aforesaid) shall be held by
the
State of Wisconsin for the use and purpose aforesaid:"
"
Provided that the lands to be so located shall in no
case be further than
fifteen miles from the line of the
roads
in each case, and selected for and
on account of
said roads:"
"
Provided further that the lands hereby granted shall
be exclusively applied in the construction of than road for which
it was granted and selected, and shall be disposed of only as the
work progresses, and the same shall be applied to no other purpose
whatsoever:"
"
And provided further that any and all lands reserved
to the United States by any act of Congress for the purpose of
aiding in any object of internal improvement, or in any manner for
any purpose whatsoever, be, and the same are hereby, reserved
to the United States from the operation of this act,
except so far as it may be found necessary to locate the route of
said railroads through such reserved lands, in which case the right
of way only shall be granted, subject to the approval of the
President of the United States."
"SEC. 2.
And be it further enacted that the sections
and parts of sections of land which,
by such grant, shall
remain to the United States, within
six miles on each side
of said roads shall not be sold or less than double the minimum
price of the public lands when sold; nor shall any of said lands
become subject to private entry until the same have been first
offered at public sale at the increased price."
"SEC. 3.
And be it further enacted, that the said lands
hereby granted
to said state shall be subject to the
disposal of the
legislature thereof, for the purposes
aforesaid, and no other, and the said railroads
shall be
and remain public highways for the use of the government of the
United States free from toll or other charge
upon the
transportation of property or troops of the United States."
"SEC. 4.
And be it further enacted, that the lands hereby
granted to said state shall be disposed of by said state only in
manner following, that is to say that a quantity of land not
exceeding one hundred and twenty sections, and included within a
continuous length of twenty miles of roads, respectively, may be
sold, and when the governor of said state shall certify to the
Secretary of the Interior that any twenty continuous miles of
either of said roads are completed, then another like quantity of
land hereby granted may be sold, and so from time to time until
said roads are completed, and if said roads
are not
completed within ten years, no further sales shall be made, and the
land unsold shall revert to the United States."
"SEC. 5.
And be it further enacted that the United
States mail shall be transported over said roads, under the
direction of the Post Office Department at made, and the land
unsold may, by law, direct,
provided that, until such
price is fixed by law, the Postmaster General shall have the power
to determine the same."
"
Act of May 5, 1864"
"SEC. 1. [This section grants land to aid in the construction of
a railroad from Saint Croix River or Lake or Lake to Lake
Superior.]"
"SEC. 2. [This section grants land to aid in the construction of
a railroad from Tomah to Saint Croix River or Lake.]"
"SEC. 3.
And be it further enacted that there be, and
is hereby, granted to the State of Wisconsin, for the purpose of
aiding in the construction of a railroad from
Portage City,
Berlin, Doty's Island, or Fond du Lac, as said state may determine,
in a northwestern direction, to Bayfield, and thence to
Superior, on Lake Superior, every alternate section of
public land, designated by odd numbers, for
ten
sections in width on each side of said road,
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. But in
case it shall appear that the United States have, when the line or
route of said road is definitely fixed, sold,
reserved, or
otherwise disposed of any sections or parts thereof, granted
as aforesaid, or that the right of preemption
or homestead
has attached to the same,
that it shall be lawful for any
agent or agents
of said state, appointed by the governor
thereof, to select, subject to the approval of the
Secretary of the Interior, from the lands of the United States
nearest to the tier of sections above specified,
as much
public land in alternate sections, or parts of sections,
as shall be equal to such lands as the United States have sold or
otherwise appropriated, or to which the right of preemption
or
homestead has attached as aforesaid, which lands (thus
selected in lieu of those sold and to which
the right of
preemption
or homestead has attached as aforesaid,
together with sections and parts of sections designated by odd
numbers as aforesaid, and appropriated as aforesaid) shall be held
by
said state,
or by the company to which she may
transfer the same, for the use and purpose aforesaid,
provided that the lands to be so located shall in no case
be further than
twenty miles from the line of
said road."
"SEC. 6.
And be it further enacted that any and all
lands reserved to the United States by any act of Congress for the
purpose of aiding in any object of internal improvement, or in any
manner for any purpose whatsoever,
and all mineral lands
be and the same are hereby reserved
and excluded from the
operation of this act, except so far as it may be found necessary
to locate the route of
such railroads through such
reserved lands, in which case the right of way only shall be
granted, subject to the approval of the President of the United
States."
"SEC. 4.
And be it further enacted that the sections
and parts of sections of lands which shall remain to the United
States within
ten miles on each side of said roads shall
not be sold for less than double the minimum price of the public
lands when sold; nor shall any of the said
reserved lands
become subject to private entry until the same have been first
offered at public sale at the increased price."
"SEC. 8.
And be it further enacted that the said lands
hereby granted shall,
when patented as provided in section
seven of this act, be subject to the disposal of the
companies respectively entitled thereto for the purposes
aforesaid, and no other, and the said railroads be, and
shall remain public highways for the use of the government
of the United States, free from
all toll or other charge,
for the transportation of
any property or troops
of the United States."
"SEC. 7.
And be it further enacted that whenever the
companies to which this grant is made, or to which the same may be
transferred, shall have completed twenty consecutive miles of any
portion of said railroads, supplied with all necessary drains,
culverts, viaducts, crossings, sidings, bridges, turnouts, watering
places, depots, equipments, furniture, and all other appurtenances
of a first-class railroad, patents shall issue conveying the right
and title to said lands to the said company entitled thereto, on
each side of the road, so far as the same is completed, and
coterminous with said completed section, not exceeding the amount
aforesaid, and patents shall in like manner issue as each twenty
miles of said road is completed, provided, however, that no patents
shall issue for any of said lands unless there shall be presented
to the Secretary of the Interior a statement, verified on oath or
affirmation by the President of said company and certified by the
Governor of the State of Wisconsin, that such twenty miles have
been completed in the manner required by this act, and setting
forth with certainty the points where such twenty miles begin and
where the same end; which oath shall be taken before a judge of a
court of record of the United States."
"SEC. 9.
And be it further enacted that, if said road
mentioned in the third section aforesaid is not completed
within ten years
from the time of the passage of this act, as
provided herein, no further patents shall be issued to said company
for said lands, and no further sale shall be made, and the
land[s] unsold shall revert to the United States."
"SEC. 5.
And be it further enacted that the time fixed and
limited for the completion of said roads in the act aforesaid of
June three, eighteen hundred and fifty-six, be, and the same is
hereby extended to a period of five years from and after the
passage of this act."
The road constructed upon the line indicated in section 3 of the
act of 1864 was originally that of two companies, which were
afterwards consolidated and became the Wisconsin Central Railroad
Company. These roads were constructed by the Phillips & Colby
Construction Company, who apparently were to have control and
operation of the road until fully equipped and delivered to the
railroad company. The time for completion having been extended,
portions of said roads were completed, equipped, and operated in
1875, and carried mail under the management of the construction
company up to some time prior to December 27, 1877, when notice was
given of the turning over of the roads to the Wisconsin Central
Railroad Company, and from that time the mails have been carried by
that company. Commencing in 1875, and
Page 164 U. S. 198
continuing until July, 1879, the Postmaster General allowed and
paid for the carriage of the mails the customary rates paid to non
land grant companies. Upon the informal opinion of the assistant
Attorney General for the Post Office Department, the Postmaster
General issued an order, June 2, 1880, directing that from July 1,
1879, the pay should only be at the rate provided by Congress for
land-grant roads, namely eighty percent of the full amount. January
26, 1881, upon a reconsideration, orders were issued recalling the
order of June 2, 1880, whereupon the department returned to the
earlier practice and paid full rates for the carriage of the mails
until January 8, 1884, when Postmaster General Gresham again
adopted the construction of June 2, 1880, and applied the same to
the compensation of these roads from and after July 1, 1883, and
that construction has been applied from thence hitherto, and
payment made at the rate of eighty percent of the amount paid non
land grant roads.
In addition to reducing the pay for carrying the mails for the
current and subsequent years, namely, from July 1, 1883, the
Postmaster General restated the account for the carriage of the
mails prior to July 1, 1883, both during the period when they were
carried by the construction company and during the period from
about December, 1877, to July 1, 1883, in which they were carried
by the Wisconsin Central Railroad Company, and deducted out of
moneys which had been earned since July 1, 1883, the excess over
the eighty percent rate which had been paid during the previous
years.
Suit was brought in the Court of Claims May 26, 1887, by the
Wisconsin Central Railroad Company against the United States, to
recover an alleged balance due as compensation for carrying the
mails. The Court of Claims allowed the railroad company $6,448.80,
as being the amount deducted from the claimant's earnings in 1886
and 1887 for payments in excess of the eighty percent rate made to
the construction company while that company was operating the
roads, but the Court of Claims held that Postmaster General
Gresham's construction was correct, and that the claimant was
restricted to the eighty percent rate, and therefore disallowed
the
Page 164 U. S. 199
claim for the money withheld against the excess, and also the
amount of the claim for the period subsequent to July 1, 1883. The
sums which had been paid to claimant in excess of the eighty
percent rate, and which were deducted from subsequently earned pay,
amounted to $12,532.43. The twenty percent subsequent to July 1,
1883, was $16,343.58.
The Court of Claims gave judgment in favor of the Wisconsin
Central Railroad Company for $6,448.80, and the railroad company
appealed. The United States did not appeal.
Page 164 U. S. 201
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
Appellant contends that it was not subject to the eighty percent
rate, and hence that it is entitled to recover both the
Page 164 U. S. 202
items 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 are 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
Page 164 U. S. 203
new 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 7 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. Giving 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
Page 164 U. S. 204
under 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 may
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 as 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
Page 164 U. S. 205
transportation.
Wisconsin Central Railroad v. Forsythe,
159 U. S.
47.
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 the 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 Court 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, 19 Stat. 78, c. 179,
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 F. 560, by MR. JUSTICE GRAY;
s.c., 147 U. S. 147 U.S.
268;
Hunter v. United
States, 5 Pet. 173;
United
States v. Jones, 8 Pet. 175;
United
States v. Bank of Metropolis, 15 Pet. 377.
Page 164 U. S. 206
In the latter case, which was a suit upon negotiable drafts
accepted by the Postmaster General (the authority to do so being
assumed for the purposes of the case), and which was decided after
the passage of the Act of July 2, 1836, 5 Stat. 80, 83, c. 270,
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 Postmaster
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 the 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
Page 164 U. S. 207
to sue, and directory to the Postmaster General to cause suits
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. His 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 3, 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 to 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 defense 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 Ct.Cl. 1;
McElrath v. United States, 12 Ct.Cl. 201;
Duval v. United States, 25 Ct.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
$2,000, which was considerably less than the true value. In his
suit for payment on the contract, it was contended that the
delivery of these materials to him at an agreed price was
Page 164 U. S. 208
without 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 was settled by the
officers of the Navy Department by charging him with the value of
the old material at $2,000 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 afterwards. His pay was fixed by law, and the
disbursing officers of the department had no authority to allow him
any more.
Page 164 U. S. 209
If 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,
102 U. S. 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,
69 U. S. 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
Page 164 U. S. 210
land 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 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. 89, 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 retain the fruits of action not authorized
by law, 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.
Section 4057 of the Revised Statutes reads:
"In all cases where money has been paid out of the funds of the
Post Office Department under the pretense 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
representations,
Page 164 U. S. 211
or by the mistake, collusion, or misconduct of any officer or
other employee 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 word "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
recipient 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 Ct.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
Page 164 U. S. 212
road 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 Ct.Cl. 366, 394, wherein it was ruled (Richardson, C.J.,
delivering the opinion) that
"the doctrine 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 with their own money, where nobody but
themselves suffers 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 aequo 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,
79 U. S. 254;
Clark v. United States, 95 U. S. 539,
95 U. S. 543;
United States v. Behan, 110 U. S. 338,
110 U. S. 347;
United States v. Carr, 132 U. S. 644,
132 U. S.
650.
Judgment affirmed.
MR. JUSTICE PECKHAM dissented on the question of the right of
the government to offset the alleged overpayments prior to July 1,
1883.
