Atchison, Topeka & Santa Fe Railway Co. v. United States

Background

In 1914–1915 a railroad provided interstate travel for U.S. Army officers and enlisted men at the government's request. Published schedules showed a through individual fare for the full trip and separate party and individual fares for parts of the route, but no party fare that covered the entire trip. On two trips the railroad had a written contract calling for $12.80 per man; on others there was no special contract. The railroad billed the government; federal accounting officers allowed part of each bill and disallowed the rest. The railroad sued in the Court of Claims; that court upheld the accounting officers’ decisions without opinion.

Reasoning

The key question was which published rate the government had to pay for a through journey requested without a special agreement: the published through individual fare or a constructed lower rate made by combining a party fare for one segment and individual fares for the rest. The Court held the relevant regular tariff for a through service is the through individual fare, reduced by any lawful land-grant deductions. By asking for and accepting the through service without a special arrangement, the United States agreed to that rate. The accounting officers erred by building a new lower rate from segment fares. For trips covered by a written contract, the Court said the contract rate should be compared with the through individual rate (after deductions), and the lower rate governs.

Real world impact

The ruling requires federal payers to use published through individual fares for through transportation unless a different rate was arranged in advance. Railroads and government agencies must compare contract rates to the published through fare, allowing lawful land-grant deductions. The case was sent back to the Court of Claims for recalculation because the record did not show the through individual fare.