Louisville & Nashville Railroad v. United States

Background

A railroad company that operated several lines, including two supported by land grants, carried large numbers of Army and Navy officers and enlisted men on government transportation requests from 1911 to 1917. The carrier’s published fares included both individual passenger rates and lower party (group) rates for ten or more people. Some tariffs said party fares required cash when tickets were issued and disallowed land‑grant deductions; others did not. The railroad sent tickets and bills to government disbursing officers, sometimes charging individual rates with land‑grant deductions and sometimes charging party rates without deductions. Government accounting officers applied the party rates with a 50 percent land‑grant deduction. The railroad protested and sued to recover the difference; a lower court denied recovery.

Reasoning

The core question was whether the Government could use public party rates and whether it had to pay cash up front. The Court relied on the statute that requires land‑grant lines to carry military personnel at rates not exceeding fifty percent of what private parties would pay for like transportation. Because party rates were open to the public, the Government could use them with the statutory 50 percent deduction. The Court also held the railroad waived any cash‑in‑advance requirement by issuing tickets and billing the Government, and noted that the Government’s regular practice is to issue requisitions and have accounting officers audit and pay bills.

Real world impact

The decision means rail carriers carrying troops must accept the 50 percent land‑grant deduction when the Government uses public party rates. Carriers who issue tickets and submit bills cannot later demand cash up front. The judgment against the railroad was affirmed.