The Denver Pacific Railway and Telegraph Company is not liable
for the debt incurred by the Kansas Pacific Railway Company on
account of subsidy bonds, and although it is bound to perform the
government service stipulated by the Pacific Railroad acts at the
rates therein prescribed, and is subject to their provisions, so
far as they are applicable to it, no part of the compensation due
it for such service can be retained by the United States.
The facts are stated in the opinion of the Court.
MR. JUSTICE BRADLEY delivered the opinion of the Court.
The decision in this case is controlled by
United States v.
Kansas Pacific Railway Company, supra, p.
99 U. S. 455. By
virtue of the Act of March 3, 1869, 15 Stat. 324, the latter
company, under the name of the Union Pacific Railway Company,
Eastern Division, was
"authorized to contract with the Denver Pacific Railway and
Telegraph Company, a corporation existing under the laws of the
Territory of Colorado, for the construction,
Page 99 U. S. 461
operation, and maintenance of that part of its line of railroad
and telegraph between Denver City and its point of connection with
the Union Pacific Railroad, which point shall be at Cheyenne, and
to adopt the roadbed already graded by said Denver Pacific Railway
and Telegraph Company as said line, and to grant to said Denver
Pacific Railway and Telegraph Company the perpetual use of its
right of way and depot grounds, and to transfer to is all the
rights and privileges, subject to all the obligations, pertaining
to said part of its line."
By the same act it was further enacted as follows:
"SEC. 2. And be it further enacted, that the said Union Pacific
Railway Company, Eastern Division, shall extend its railroad and
telegraph to a connection at the City of Denver, so as to form with
that part of its line herein authorized to be constructed,
operated, and maintained by the Denver Pacific Railway and
Telegraph Company, a continuous line of railroad and telegraph from
Kansas City, by way of Denver, to Cheyenne."
"
* * * *"
"SEC. 3. And be it further enacted, that said companies are
hereby authorized to mortgage their respective portions of said
road, as herein defined, for an amount not exceeding $32,000 per
mile, to enable them respectively to borrow money to construct the
same; and that each of said companies shall receive patents to the
alternate sections of land along their respective lines of road, as
herein defined, in like manner and within the same limits as is
provided by law in the case of lands granted to the Union Pacific
Railway Company, Eastern Division:
provided that neither
of the companies hereinbefore mentioned shall be entitled to
subsidy in United States bonds under provisions of this act."
The arrangement which was thus provided for and authorized,
having been made between the two companies, and each having
constructed its particular portion of the road, the government
claims that the subsidy bonds granted to the Kansas Pacific Railway
Company upon the first 393 15/16 miles of its road, are a lien upon
the whole line to Cheyenne, no matter who built it, if built under
the authority and powers given to that company, and that five
percent of the net earnings of the entire line are applicable to
the payment of said bonds.
Page 99 U. S. 462
In
United States v. Kansas Pacific Railway Company,
supra, p.
99 U. S. 455, we
held that the lien of the bonds referred to only extends to the
road in respect of which they were granted, and not to the
extension of it west of the one hundredth meridian. Of course that
decision controls the present case.
Other reasons might be assigned why the Denver Pacific Railway
and Telegraph Company is not liable to pay the five percent in
question, but it is unnecessary to adduce them. The company is
bound, of course, to perform the government service stipulated for
by the sixth section of the act of 1862, being paid therefor at the
rates therein prescribed; and is bound by such other provisions of
the act of 1862 and the various supplementary and amendatory acts,
as are applicable to it.
Judgment affirmed.
NOTE -- At a subsequent day of the term, MR. JUSTICE BRADLEY
remarked:
"Since delivering the opinion in this case, our attention has
been called to the fact that, whilst affirming generally the
judgment of the court below, we did not expressly pass upon the
question of the right set up by the government to retain one half
of the amount of compensation due from it to the claimant for the
transportation of mails and other public property. This point was
not overlooked in rendering our judgment in the case. We cannot
conceive on what principle the retention can be claimed, since the
object of retaining the compensation for such services, or any
portion thereof, as expressed in the sixth section of the act of
1862, was to apply the amount so retained to the debt due to the
government for subsidy bonds granted to the companies that should
receive the same. But the claimants in this case received no such
bonds, and we decided that neither the company, nor its railroad or
property, is liable in any way for the payment of any debt incurred
for such bonds received by the Kansas Pacific Railway Company.
Consequently there is no room for the application of the right of
retention in this case, and the judgment of the Court of Claims was
properly rendered for the whole amount of such compensation
due."