The Acts of May 15, 1856, c. 28, 11 Stat. 9; March 3, 1857, c.
99, 11 Stat. 195, and § 13 of the Act of July 12, 1876, c. 179, 19
Stat. 78, providing that mails should be transported over railroads
constructed in whole or in part by aid of land grants at eighty
percent of the authorized price, apply to such transportation by
companies which carry the mail over a leased line which was partly
constructed by such aid, although the transporting company itself
received no land grant aid from the government.
A court does not overlook contentions advanced which are
necessarily untrue if the proposition upon which its decision rests
is true. The statement of such proposition answers opposing
contentions.
The reduction in mail service which the government exacts in
return for land grants for building railroads attaches to all
tracks including those subsequently built, and to all companies
operating thereover.
43 Ct.Cl. 595 affirmed; 41 Ct.Cl. 518 approved.
The facts, which involve the amount of compensation due for
transportation of mail by a railroad company over a railroad
constructed in part by grant of land from the Government, are
stated in the opinion.
MR. JUSTICE McKENNA delivered the opinion of the Court.
The question in this case is the legality of certain deductions
made by the Postmaster General from the amount
Page 217 U. S. 181
which, it is contended, is due appellant for carrying the mails
between Minneapolis, Minnesota, and Sioux City, Iowa, over postal
route No. 121,045. The appellant sought to recover the sum of forty
thousand dollars ($40,000). The Court of Claims gave judgment for
only thirty-three hundred eight-nine dollars and fifty three cents
($3,389.53), rejecting the balance of the claim on the authority of
Astoria & Columbia River Railway Company v. United
States, 41 Ct.Cl. 284.
The controversy turns upon the application of certain acts of
Congress granting parts of the public domain to appellant and to
companies with which it has agreements. The acts provide that the
United States mail shall be transported on such roads at such rates
as Congress may by law direct. Act of May 15, 1856, 11 Stat. 9, c.
28; Act of March 3, 1857, 11 Stat.195, c. 99. Subsequently it was
provided as follows:
"SEC. 13. 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."
Act of July 12, 1876, 19 Stat. 82 c. 179.
The postal route begins at Minneapolis and consists of
land-aided and nonland-aided roads. The following diagram, taken
from the government's brief, though not drawn to any scale of
measurement, exhibits with enough accuracy for illustration the
aided and nonaided parts of the route and the companies which
received aid:
image:a
It will be observed that appellant is the direct beneficiary of
the road from St. Paul south 237.81 miles to a point north from a
place marked as Le Mars. It used the other parts of the route under
the contracts with the other companies, and it is found that, from
some time prior to October 1, 1900, appellant used the tracks of
such other companies to
"form a continuous route for the operation of its mail trains,
made up of its own rolling stock, and controlled and operated by
its
Page 217 U. S. 182
own servants, between Minneapolis and Sioux City, except that
within the last-named city it did not use the station of the
Illinois Central Company, but had a station of its own."
It is also found that appellant operated its trains over the
tracks of the Great Northern Company under a contract in writing
with the predecessor of the latter company, the St. Paul,
Minneapolis & Manitoba Railway Company, and operated its trains
over the Illinois Central Company under a contract with the
predecessor of that company, the Iowa Falls & Sioux City
Railroad Company. By the first contract, appellant is given
"the
Page 217 U. S. 183
right and privilege to run such of its locomotives, engines,
cars, and trains, handled by its own employees, as shall be
reasonably necessary for the efficient and full transaction of its
business to and from the City of Minneapolis, and all points on the
second party's road, east of St. Paul, over the
main track
of the first party, as now constructed."
It was provided that the amount of the monthly rental should be
a sum of money equal to one-twelfth part of the annual interest at
the rate of six and one-half percent per annum on one-half the
value of the property of the first party, which the second party is
entitled to use under the contract. And in addition, such
proportion of cost of maintaining and repairing the properties, "as
the number of wheels per mile" appellant should "run over the said
property or any part thereof, bears to the whole number of wheels
per mile run over the same." It was provided that the earnings of
all local business done by appellant over the railroad should
belong to the party of the first part, but the appellant was not
obliged to do such business. The contract was to continue
twenty-five years.
The contract of the appellant with the Iowa Falls & Sioux
City Railway Company may be said, as far as the question in the
case is concerned, to be substantially the same. Its provision as
to the use of tracks is more comprehensive. It permits also
appellant to do local business, sixty percent of the gross receipts
of which, however, are to be paid to the Iowa Falls Company. There
is a provision for maintenance and repairs, based on car mileage.
The rental stipulated is $450 per mile for the use of each mile of
main track.
It is found that appellant had no part in the construction of
the tracks of the Great Northern Company or of the Illinois Central
Company, and received no benefit on account of their construction
by grants of land or otherwise; that, ever since the construction
of the tracks, the respective companies owning them have operated
trains and transported United States mails over them, and that the
use of the tracks by those companies does not appear to have been
limited by appellants'
Page 217 U. S. 184
using them; that the tracks of the Great Northern Company
between University Switch and St. Paul are a portion of postal
route No. 141,004 between St. Paul and Fargo, North Dakota, and
those belonging to the Illinois Central between Le Mars and Sioux
City are a portion of postal route No. 143,021 between Dubuque and
Sioux City, Iowa. That, prior to October 1, 1900, the Postmaster
General designated the line of railroad between Minneapolis and
Sioux City as postal route No. 141,025, and has maintained it ever
since, and that between that date and September 30, 1906, appellant
has carried mails over such route, but the Postmaster General has
allowed for the whole of the route only eighty percent of the
compensation allowed and fixed by law for similar service for
nonland granted roads. A table of reductions is given, showing the
deductions for the periods mentioned, amounting in all to
$33,301.17.
The contentions of the parties are foreshadowed by the facts
which we have recited. It may be conceded, appellant says, that the
grants of land to the companies to which they were made "completed
contracts between them and the United States," and it may be
further conceded, it is said, "that, by these contracts, privity
was established between the United States and these various
railroad companies." But succession to the obligation of the
contract is denied because appellant
"has not succeeded to the title or any part of the title of
these respective roads, nor has it in any way, directly or
indirectly, received any benefit from the respective grants, or
done any other thing which creates privity of contract between it
and the United States, or which makes it, in the language of the
thirteenth section of the act of 1876, a railroad company 'whose
railroad was constructed in whole or in part by a grant of
land,'"
etc.
This distinction is earnestly insisted on, and is made the
foundation of the argument of the appellant. It makes irrelevant,
it is urged, the consideration of the obligations of the other
companies, and, by overlooking it, the Court of
Page 217 U. S. 185
Claims fell into error in
Astoria & Columbia River Ry.
Co. v. United States, supra, and continued the error in its
judgment in the case at bar. But did the Court of Claims overlook
it? It was urged in
Astoria & Columbia River Ry. Co. v.
United States, as it is urged in this, to justify the
distinction that the "owning and aided companies," to adopt
counsel's designation, are and always have been "ready to perform
all the service due them under the terms of their contract with the
United States," and it seems to us that the Court of Claims did not
misunderstand or overlook the contention. A court does not overlook
a contention because it rests its decision upon a proposition
which, if true, the contention is not true. To bring forward a
proposition upon which the question to be proved depends answers
necessarily opposing propositions. And this is what the Court of
Claims did. It decided that the power reserved to Congress was over
the property, not alone over the companies who owned it, and
extended to every use of it, whether by the owning companies or any
company who received a right from them. That proposition, if true,
necessarily determined the judgment against the Astoria &
Columbia River Railway Company in the cited case. It is opposed to
the proposition decided in that case by the Circuit Court of the
United States for the District of Oregon, and which is relied upon
by appellant in this case. That case was brought by the United
States to enjoin the Astoria & Columbia River Railway Company
for charging for the transportation of army supplies from Portland,
carried by that company over the tracks of the Northern Pacific
Railroad Company, which it used under a contract with the latter
company. The suit was based on the fact that the Northern Pacific
was a land-aided road. The injunction was refused. The court
sustained the contention which was made (and which was repeated in
the Court of Claims and is repeated here), that the power reserved
to Congress attached in effect to the company, not to the property.
The circuit court said:
"The defendant's use of the Northern Pacific Railroad track
Page 217 U. S. 186
between Portland and Goble does not affect the transportation
due from the latter company to the plaintiff. It is still open to
the latter to have its freight carried over every part of the
railroad of the land grant company at fifty percent of the regular
rate. This is the extent of its right. And this right, as already
appears, has not been affected by the use of a part of that
company's track by the defendant company. It is a matter of no
consequence to the plaintiff [United States] how many railroads use
this particular track of the Northern Pacific Company, nor what
their traffic rates are, so long as the latter company continues to
afford all the facilities for transportation over every part of its
road required by the plaintiff."
131 F. 1006.
The order denying application for injunction was pleaded in the
Court of Claims, as it appears from the opinion of the court, as
res judicata of the "subject matter" there involved, and
therefore the full breadth of the contentions of the railroad
company in the circuit court, and of the decision of that court was
considered by the Court of Claims, and all of the elements of
decision and all the distinctions which depended upon them the
court must have taken into account in rendering its decision.
We are brought, then, to the question whether the decision of
the court was right. Certain concessions are made by appellant at
the outset of the argument. It is conceded that the acceptance of
the land grants by the "owned and aided companies" completed a
contract between them and the United States, and that privity was
established between them and the United States. That is, privity
(we use the word, as we presume that counsel does, in the sense of
party for the United States, and the companies are parties, not
successors, to rights or obligations) of contract -- a personal
obligation -- that is, not an obligation which attached to the
property and covered every use of it. This is necessarily what
appellant means, though it is confused in discussion.
Page 217 U. S. 187
Appellant quotes the statute to show that the obligation is on
the
companies, not on the
roads, as follows:
"That railroad companies whose railroad was constructed . . . by
grant of land . . . shall receive only eighty percentum of the
compensation authorized by this act."
And further, it points out, as we have seen, that it has not
succeeded "to the title or any part of the title" of the roads, nor
"directly or indirectly receives any benefit from the respective
grants." And finally it urges that, if appellant
"is a mere licensee, owing no contractual duty as a corporate
individual to the government, owning no railroad property which is
pledged to the government as security for the performance of any
duty, and operating its trains on the joint track in such manner as
to interfere in no wise with its licensor in the transaction of its
business and the performance of its contractual duty to the
government, it is difficult to understand how appellant can be held
to fall within the terms of the thirteenth section of the act of
1876, or why it does not stand upon the same footing as any other
company without privity with the United States."
This is stating by paraphrase the simple proposition that there
is a contract only between the United States and each of the aided
companies, in which such company "has bound itself" [we quote from
appellant's brief] "to operate trains for the transportation of the
government business." And "whenever," appellant says,
"one of these companies shall fail to perform its duty, whatever
relief the United States may be entitled to must be sought by
appropriate proceedings directed against the delinquent
company."
Appellant joins to this as a concession that the "railroad
property" of an aided company "is pledged to secure the
performance" of its obligation. In what way is not pointed out, or
how the security can be availed of.
The opposite contention to that of appellant is therefore what
it was decided to be by the Court of Claims -- that the obligation
is upon the property of an aided company, and
Page 217 U. S. 188
attaches to all of the uses of the property, whether by the
"owned and aided companies" or any other company. We concur with
the decision of the Court of Claims, and we think further
discussion is not necessary except to notice some of the reasons
urged against the decision.
We have noticed and commented on one concession of appellant.
Another is made, which we quote with its qualifications, as
follows:
"We do not contend that a land-aided road can be sold, either in
whole or in part, so as to avoid its obligations to the government.
To this extent we concede that the obligation runs with the
railroad aided by land grant, but the act does not say that
companies permitted simply to run trains on the road shall suffer
reductions. They receive no aid from the grant, and are neither
within the terms or the reason of the statute."
Of course, the statute did not deal with other companies or with
deductions. It would be very strange if it had. It either imposed a
service on the companies or on the road as well. If on the
companies alone, there would necessarily be exclusion of all
others. If on the roads as well, it would comprehend all that used
them. If a difference in degree of use, or a participation in the
use by other companies than the aided ones, had been intended, it
would have been expressed. The concession as to the effect of the
sale or lease of the road is fatal. As we have already said, the
obligation is either upon the aided companies, to be enforced by
remedies against them, or it is on the property as well, and if on
the property, necessarily on it by whatever company or person it is
used.
It is further contended in the brief filed for the Great
Northern that the condition of earning its grant was the building
of a single track, and it or its grantors, it is said, has provided
several. It has, therefore, it is further said, "a surplus of track
capacity, and, by contract, permits the Omaha [appellant] and other
companies to run their trains over its tracks." To this it is only
necessary to reply that the service that the government reserved
was coextensive with
Page 217 U. S. 189
the road as constituted under the grant, and attached to as many
tracks as should be used.
Again it is urged that, if the Omaha company had built its own
road, there would be no assertion of a right to deduct from its
mail pay, and that it is to run over the Great Northern, the latter
not being made thereby less useful or efficient, is for its purpose
equivalent to building its own road. An answer to this is contained
in what we have said. We may add, however, that the appellant no
doubt considered the advantages and disadvantages of the
alternative presented before making its selection, but it could not
have supposed, nor can we admit, that it could lessen rights in
property because it could acquire like property for itself.
Union Pacific v. Chicago &c Ry. Co., 163 U.
S. 564, and
Lake Superior & Mississippi R. Co.
v. United States, 93 U. S. 442, are
cited as authorities against our conclusion. We content ourselves
by saying that they have not that effect. On
United States v.
Astoria Company, 131 F. 1006, we have commented.
Judgment affirmed.