Miller v. United States
Headline: Court upholds the Government’s reserved right to discontinue an Alaska mail contract, rejects contractor’s damages claim, and allows the Post Office to cut service with one-month indemnity, leaving relief to Congress.
Holding: The Court held that the written contract and incorporated postal regulations clearly let the Postmaster General discontinue the Alaska mail contract and that no judicial relief was available because no bad faith was alleged, so damages belong to Congress.
- Allows Post Office to discontinue mail contracts under reserved contractual power.
- Blocks judicial damages for contractors absent allegations of bad faith.
- Leaves economic hardship relief to Congress, not the courts.
Summary
Background
In 1905 the Post Office advertised for bids to carry the mail on a 428-mile Alaska route from Valdez to Eagle. John B. Crittenden won the 1906 contract at $46,000 per year, and John Miller, originally a surety for Crittenden, later advanced money, formed a partnership, and on May 1, 1908 became the approved subcontractor. Miller spent large sums to equip and supply the route, which involved extreme hardship. The Postmaster General issued an order August 11, 1908 discontinuing the contract effective September 30, 1908 and paid one month’s indemnity. Miller sued for $51,736.00 in damages, claiming loss from the early termination; the lower court dismissed his claim and the case reached this Court.
Reasoning
The Court asked whether the written contract and the postal regulations it incorporated allowed the Government to discontinue the service and then re-contract the route, and whether Miller alleged bad faith. The Court found the contract and advertisement plainly reserved the Postmaster General’s power to discontinue service and to arrange other contracts for the route. The petition did not allege fraud or bad faith. The Court concluded that hardship alone did not nullify the clear contractual reservation and therefore no judicial award could be made.
Real world impact
The decision confirms that contractors and their sureties must accept express contract terms and incorporated postal rules, even when service is difficult or costly. When the Government reserves the right to discontinue, affected contractors cannot get judicial damages absent allegations of bad faith; any relief for such economic hardship must be sought from Congress.
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