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United States v. Central Pacific Railroad Company (99 U.S. 449)/Opinion of the Court

This was an action by the United States against the Central Pacific Railroad Company, to recover five per cent of the net earnings of the railroad belonging to said company, from the sixteenth day of July, 1869, the date at which it is alleged that the said railroad was completed, to the thirty-first day of October, 1874. The road extends from the termination of the Union Pacific Railroad, at or near Ogden in the Territory of Utah, to the waters of the Pacific; and was constructed under the provisions of the Pacific Railroad Act of July 1, 1862, and the several acts supplementary thereto. It was originally constructed by two corporations of California, namely, the Central Pacific Railroad Company of California, and the Western Pacific Railroad Company; which companies, however, accepted the terms of the said acts of Congress, received subsidies from the government under the same, and were finally consolidated into one corporation under and by virtue of the said acts, by the name of the Central Pacific Railroad Company, which succeeded to all the rights and duties under said acts of Congress which belonged or appertained to the original companies.

On the trial, a jury was waived, and the court found the facts specially; and upon such findings gave judgment for the defendant. The United States brought a writ of error, and the case is now here for review.

The case, in all material respects, involves the same questions which have just been disposed of in the case of Union Pacific Railroad Company v. United States, supra, p. 402. The same subsidies were granted to the companies in this case, and upon the same terms and conditions, as in that of the Union Pacific Railroad Company; the same acts of Congress, in the main, applying to both. The claim of the government is founded upon that clause in the sixth section of the act of July 1, 1862, which declares that 'after said road is completed, until said bonds and interest are paid, at least five per centum of the net earnings of said road shall also be annually applied to the payment thereof.' The allegation of the government is, that the railroad was completed on the sixteenth day of July, 1869; and that the net earnings of the road from that time to the thirty-first day of October, 1874, amounted to the sum of $36,732,702. The defendant denies the allegations of the bill; and the principal issue at the trial was, the time of the completion of the road. The conclusion of the court from its findings of fact was, that the road was not completed until the first day of October, 1874, and, hence, that the government was not entitled to recover.

It is unnecessary to review all the findings. The course of proceedings was in all respects similar to what took place in the case of the Union Pacific Railroad Company: similar reports of completed sections by the company under the oath of its president, similar examination and reports of commissioners, and similar acceptances by the President of the United States. The seventh finding of the court is as follows:--

'VII. That as each section of twenty miles or more of the road was constructed, the president of the company filed a statement, under oath, in pursuance of the statute, to the effect that the section, describing it, had been completed as required, specifying the particulars in the language of the statute, and asking that the commissioners appointed under the statute might be notified, and that they might examine and report upon such section. Upon a favorable report by the commissioners, the President accepted the section provisionally, and issued to the company the bonds authorized by the statute. This was the course of proceeding till 1868, when it was found that the government might advance all the subsidies upon a road only provisionally accepted in sections, and have no security for its absolute completion, as a whole, up to the standard of a first-class road. The question of the propriety of this course was submitted to the Attorney-General, who rendered an opinion on Sept. 5, 1868, which was to the effect that the course before pursued by the government was in accordance with the law, and that the President had authority to appoint commissioners to review that portion of the road which had been accepted provisionally, and to refuse a final acceptance of the road as a whole until all the deficiencies should be supplied, and that sufficient subsidies might be withheld, or other guaranties required of the company to secure absolute completion. The opinion is reported in 12 Op. Att'y-Gen., at page 477, and is referred to and made a part of this finding. The President thenceforth acted upon this opinion of the Attorney-General, and accepted each section when provisionally completed, leaving the question of the absolute completion of the road, as a whole, to be determined upon examination and report of commissioners to be specially appointed for that purpose.'

This opinion had respect both to the Union Pacific and the Central Pacific roads.

The court then finds that on the 25th of September, 1868, the President, in pursuance of the opinion of the Attorney-General, appointed a commission of civil engineers to examine the entire road, so far as then provisionally completed, and report upon it in accordance with instructions to be furnished by the Secretary of the Interior; that these commissioners made their report on the 14th of May, 1869, pointing out many particulars in which the road as constructed failed to come up to the standard of a first-class road, and estimating that to supply such deficiencies would require a further expenditure of $4,493,380; that the Secretary suspended the grant of lands to the company until further orders, and required it to deposit with the Secretary of the Treasury $4,000,000 of its first-mortgage bonds, to secure the proper completion of the road, under a similar agreement to that made by the Union Pacific Railroad Company; that on the 11th of May, 1869, the connecting rail uniting the Central and Union Pacific railroads was laid, and soon thereafter regular through passenger and freight trains were placed upon the roads between San Francisco and Omaha, and have run regularly between said points ever since; and that on the sixteenth day of July, 1869, and ever since, said roads have been in fact operated as railroads, and have been able to carry, and have in fact carried, all passengers, freights, mails, troops, supplies, and munitions of war offered for transportation between the eastern terminus of the Central Pacific Railroad and the Pacific Ocean. The fourteenth finding is as follows:--

'XIV. That on July 15, 1869, the Secretary of the Interior transmitted to the President the report, dated May 15, 1869, of the commissioners appointed to examine and report upon a section of twenty and three-tenths miles of the Central Pacific Railroad, this being the last section constructed by said defendant. In his letter transmitting said report to the President for his action, the Secretary says: 'I respectfully recommend the acceptance of the same, and that bonds be issued to the company thereon in accordance with the agreement made with the company, which is to the effect that they deposit their first-mortgage bonds with the Secretary of the Treasury to such amount as may be deemed necessary to secure the ultimate completion of the road agreeably to the provisions of the act approved July 1, 1862.'

'Recommendations in all respects similar to the last had been made by the Secretary of the Interior to the President as to the reports made upon the several preceding sections of the roads, and a similar approval was indorsed thereon by the President. Upon the same day, July 15, 1869, the Secretary of the Interior made a similar recommendation as to the section-commissioner's reports upon the last sections of the Union Pacific Railroad, in which he recommends a similar provisional acceptance of the section, and adds: 'Provided, however, that no bonds or patents shall in any event be issued until such security shall be deposited with the Secretary of the Treasury necessary to secure the ultimate completion of the road, agreeably to the acts mentioned in my letter to you of the 27th of May last.'

'This recommendation was approved by the President, and the Secretaries of the Treasury and Interior directed to carry the same into effect. These constitute the last conditional acceptances of sections as provisionally completed.'

By the twenty-fourth and twenty-fifth findings it is found as follows:--

'XXIV. That in pursuance of the provisions of said acts of Congress hereinbefore mentioned, and at the time of the construction, equipment, and provisional acceptance, as hereinbefore stated, of each and every section of said railroad by either of said railroad companies, the plaintiff issued and delivered to the said Central Pacific Railroad Company of California and to its assignee, the Western Pacific Railroad Company (where the latter was entitled thereto under said acts), except as in these findings otherwise indicated, when some portions were temporarily withheld as security for the ultimate completion of the road, bonds of the United States of $1,000 each to the amount of forty-eight of said bonds per mile for each such section for one hundred and fifty miles eastwardly from the western base of the Sierra Nevada mountains, and thirty-two of said bonds per mile for all of said railroad constructed east of said last-mentioned point, and sixteen of said bonds per mile for all of said railroad constructed west of the western base of the Sierra Nevada mountains.

'XXV. That between the first day of July, 1862, and the twenty-seventh day of January, 1870, this plaintiff, in pursuance of said acts of Congress, caused to be issued and delivered to said railroad companies, in the mode and manner and at the times herein set forth, all except five of said $1,000 bonds. That the bonds so delivered by plaintiff to said companies amounted in the aggregate to the sum of $27,850,620.'

It was further found that, in pursuance of the joint resolution of Congress, passed April 10, 1869 (as in the case of the Union Pacific Railroad Company), the board of eminent citizens referred to in that case, on the third day of November, 1869, made their report respecting the Central Pacific roads, in which they stated that the amount required to supply deficiencies and complete the work up to the required standard had been reduced since the last commissioners' report from $4,498,380, to $576,650; and the Secretary of the Interior thereupon modified his former order suspending the issue of patents to lands so as to allow patents for one half the lands to be issued, and soon after allowed the withdrawal of said first-mortgage and other bonds, still retaining as security the other half of the lands.

It thus appears that the work of the Central Pacific roads went on pari passu with the Union Pacific, and on the same terms and conditions; and that the roads were completed, the subsidy bonds received, and the collateral securities for the ultimate supply of deficiencies given up at the same time in each case.

We do not propose to repeat the views which have already been expressed in the case of the Union Pacific Railroad Company. Our conclusion, with regard to the time of completion of the road is the same in this case as in that. As this is the only question raised by the record, it is unnecessary to add any thing further. The question of the amount of earning, and expenditures, and of net earnings deducible therefrom, was not reached by the court below, and is not presented to us for the expression of any opinion. But as we have indicated our views in the other case, as to the principles on which the amount of net earnings is to be ascertained, and in what manner they are to be paid, the court below, on a re-trial, will be governed by our opinion in that case.

The judgment of the Circuit Court will be reversed, and the cause remanded for a new trial; and it is

So ordered.

MR. JUSTICE STRONG and MR. JUSTICE HARLAN dissented.


text: Talk:United States v. Central Pacific Railroad Company (99 U.S. 449)/Opinion of the Court

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United States v. Kansas Pacific Railway Company

ERROR to the Circuit Court of the United States for the District of Kansas.

The facts are stated in the opinion of the court.

The Attorney-General and Mr. Joseph K. McCammon for the plaintiff in error.

Mr. John P. Usher and Mr. S. W. Sanderson, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.


text: Talk:United States v. Kansas Pacific Railway Company


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United States v. Kansas Pacific Railway Company/Opinion of the Court

This case was a suit brought in the court below by the United States against the Kansas Pacific Railway Company, to recover five per cent of the net earnings of the road belonging to that company from the time of the completion thereof, alleged to be the second day of November, 1869, to the thirty-first day of October, 1874; the said five per cent being claimed under the last clause of sect. 6 of the Pacific Railroad Act, passed July 1, 1862, which has already received consideration in the cases of the Union Pacific and the Central Pacific Railroad Companies, supra, p. 402, p. 449. The cause was tried by the court, the facts were specially found, and the conclusion arrived at that nothing was due to the government upon the alleged claim; and judgment was rendered for the defendant.

The Kansas Pacific Railway Company was originally chartered in 1855, by the Territory of Kansas, under the name of the Leavenworth, Pawnee, and Western Railroad Company, mentioned in the ninth section of the act of 1862, and afterwards, in 1863, received the name of the Union Pacific Railway Company, Eastern Division, and finally, in 1869, that which it now bears. By the section referred to, it was authorized to construct a railroad and telegraph line from the Missouri River, at the mouth of the Kansas River, so as to connect with the Union Pacific at the initial point on the one hundredth meridian, 'upon the same terms and conditions in all respects as are provided in this act for the construction of the railroad and telegraph line first mentioned' (that is, the Union Pacific).

The company accepted the terms of the act, and proceeded to construct its road, receiving subsidy bonds therefor at the rate of $16,000 per mile for the whole length of its road to the one hundredth meridian, being 393 15/16 miles; all of which bonds were delivered as the work progressed. The road was completed to Sheridan, 405 miles west from the Missouri State line (the point of commencement), on the second day of November, 1869, which is the date at which the government alleges that the road was completed. The authority of the company to extend its road west of the one hundredth meridian was derived from the ninth section of the act of 1864, which declared as follows:--

'And provided further, that any company authorized by this act to construct its road and telegraph line from the Missouri River to the initial point aforesaid, may construct its road and telegraph line so as to connect with the Union Pacific Railroad at any point westwardly of such initial point, in case such company shall deem such westward connection more practicable or desirable; and in aid of the construction of so much of its road and telegraph line as shall be a departure from the route hereinbefore provided for its road, such company shall be entitled to all the benefits and be subject to all the conditions and restrictions of this act: Provided further, however, that the bonds of the United States shall not be issued to such company for a greater amount than is hereinbefore provided, if the same had united with the Union Pacific Railroad on the one hundredth degree of longitude; nor shall such company be entitled to receive any greater amount of alternate sections of public lands than are also herein provided.'

It thus appears that whilst the company was authorized to extend its road west of the one hundredth meridian, if it saw fit so to do, it was entirely in its option; and if it did, it was not to expect, or have, any subsidy of government bonds for such extension. It is found by the court that the company actually extended its road westward as far as Denver, 245 miles beyond the one hundredth meridian; but did not complete the same to that point, so as to be accepted by the President, until the 19th of October, 1872.

A material question in this case is, whether the whole line to Denver, or only the line which the company was first authorized to construct (which terminated at the one hundredth meridian), is liable to the lien for the government subsidy, and the payment of five per cent of net earnings. If only the latter, then the time of completion was that which is claimed by the government, namely, the second day of November, 1869; but the net earnings liable to the claim of five per cent would be only those produccd on the first 393 15/16 miles, or if these cannot be ascertained, then a pro rata amount of the whole net earnings of the road.

From a careful examination of the statutes relating to this subject, we are of opinion that, whilst, as to its entire line, the company, in the words of the ninth section of the act of 1864, is 'entitled to all the benefits and subject to all the conditions and restrictions of the act;' and is bound to furnish transportation and telegraphic accommodations to the government on the usual terms; yet that the subsidy bonds granted to the company, being granted only in respect of the original road, terminating at the one hundredth meridian, are a lien on that portion only; and that the five per cent of the net earnings is only demandable on the net earnings of said portion. This deduction, we think, is clearly demonstrated by the words of the fifth section of the act of 1862, which creates the government lien for the payment of the subsidy bonds. Those words are that 'the issue of said bonds and delivery to the company shall ipso facto constitute a first mortgage on the whole line of the railroad and telegraph, with the rolling-stock, fixtures, and property of every kind and description, [and] in consideration of which said bonds may be issued.' It is the road and appurtenances, in consideration of which, or in respect of which, the bonds are issued, that is subjected to the lien. This can apply, in the present case, only to the first 394 miles of the defendant's road. And as the lien only applies to this portion, the stipulation for payment out of net earnings cannot reasonably be applied to any other portion of the line.

This view is strengthened by the terms of the third section of the act of March 3, 1869, authorizing the defendant company to assign and transfer to the Denver Pacific Railway and Telegraph Company that portion of its line between Denver and Cheyenne. By that section, the said companies were authorized to mortgage their respective portions of said road (referring to the extension of the Kansas Pacific from the one hundredth meridian to Denver, and thence to Cheyenne) to the amount of $32,000 per mile; a privilege which would hardly have been conceded if the lien of the government bonds was deemed to extend over those portions of the line.

The result of this conclusion is, that only such part of the annual net earnings of the road as are due to the first 393 15/16 miles are in any event subject to the payment of the five per cent in question.

But inasmuch as the court below, in estimating the net earnings, credited the company for expenditures which are not allowable according to the principles announced by us in the case of the Union Pacific Railroad Company; and as, upon a proper accounting, it may appear that, in some years, the defendant company realized a sufficient amount of net earnings from its first 394 miles of road to pay the interest on the first-mortgage bonds, and leave a surplus applicable to the five per cent payable to the government, it will be necessary to reverse the judgment, in order that a new trial may be had between the parties. It is proper, however, before concluding, that we should indicate our opinion with regard to certain classes of expenditures on which the government and the company are at issue.

The former insists that certain items should be excluded from the account which are claimed by the latter to be legitimate. These items are designated in Schedule C, annexed to the findings of the court below, and are as follows:--

First. 'Depreciation account, or expense not charged up.' This is explained to be the amount necessary to put the road in proper repair, but which was not actually expended for that purpose. We are clearly of opinion that it is not a proper charge. Only such expenditures as are actually made can with any propriety be claimed as a deduction from earnings.

Secondly. 'Construction account, or improvements and additions to track,' &c. This item, according to what we have said in the Union Pacific Railroad case, ought to be allowed.

Thirdly. 'Equipment account, or replacing and rebuilding rolling-stock, machinery,' &c. This item should also be allowed as an expenditure properly chargeable to the earnings of the road, when actually paid out of the earnings and not raised by the issue of bonds or stock.

Fourthly. 'Real estate purchased for depot grounds, &c., and expenses of same.' This item is a proper charge if actually paid out of the earnings, and not raised by bonds or stock.

Fifthly. 'Expenses of land department.' This item is not allowable.

Sixthly. 'Interest on funded debt prior to government lien.' For the reasons expressed in the case of the Union Pacific Railroad Company, this item is not allowable, though the interest annually accruing on the first-mortgage bonds issued upon the first 393 15/16 miles of the road is payable out of the net earnings before the five per cent due the government.

Seventhly. 'Fifty per cent government earnings withheld.' This, as explained in the previous opinion, is not allowable to be charged as an expense.

The judgment of the Circuit Court will be reversed, and the cause ordered to be remanded for a new trial; and it is

So ordered.


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Page:Decline and Fall of the Roman Empire vol 1 (1897).djvu/450

376 fertile country of Atropatene. Its principal city, in the same situation perhaps as the modern Tauris, was frequently honoured with the residence of Tiridates; and, as it sometimes bore the name of Ecbatana, he imitated, in the buildings and fortifications, the splendid capital of the Medes. IV. The country of Iberia was barren, its inhabitants rude and savage. But they were accustomed to the use of arms, and they separated from the empire barbarians much fiercer and more formidable than themselves. The narrow defiles of Mount Caucasus were in their hands, and it was in their choice either to admit or to exclude the wandering tribes of Sarmatia, whenever a rapacious spirit urged them to penetrate into the richer climates of the South. The nomination of the kings of Iberia, which was resigned by the Persian monarch to the emperors, contributed to the strength and security of the Roman power in Asia. The East enjoyed a profound tranquillity during forty years; and the treaty between the rival monarchies was strictly observed till the death of Tiridates; when a new generation, animated with different views and different passions, succeeded to the government of the world; and the grandson of Narses undertook a long and memorable war against the princes of the house of Constantine.

The arduous work of rescuing the distressed empire from tyrants and barbarians had now been completely achieved by a succession of Illyrian peasants. As soon as Diocletian entered into the twentieth year of his reign, he celebrated that memorable æra, as well as the success of his arms, by the pomp of a Roman triumph. Maximian, the equal partner of his power, was his only companion in the glory of that day. The two Cæsars had fought and conquered, but the merit of their exploits was ascribed, according to the rigour of ancient maxims, to the auspicious influence of their fathers and emperors. The triumph of Diocletian and Maximian was less magnificent, perhaps, than those of Aurelian and Probus, but it was dignified


text: Talk:United States v. Kansas Pacific Railway Company/Opinion of the Court


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United States v. Denver Pacific Railway Company

APPEAL from the Court of Claims.

The facts are stated in the opinion of the court.

The Attorney-General and Mr. Joseph K. McCammon for the appellant.

Mr. John P. Usher and Mr. S. W. Sanderson, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.


text: Talk:United States v. Denver Pacific Railway Company


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United States v. Denver Pacific Railway Company/Opinion of the Court

The decision in this case is controlled by United States v. Kansas Pacific Railway Company, supra, p. 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, 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 road-bed 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:--

'SECT. 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.'

* *  *  *  *

'SECT. 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 per cent of the net earnings of the entire line are applicable to the payment of said bonds.

In United States v. Kansas Pacific Railway Company (supra, p. 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 per cent 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.


text: Talk:United States v. Denver Pacific Railway Company/Opinion of the Court


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Railway Company v. Alling Denver and Rio Grande Railway Company

APPEALS from the Circuit Court of the United States for the District of Colorado.

These causes involve the conflicting claims of two railroad corporations-the Denver and Rio Grande Railway Company and the Ca non City and San Juan Railway Company-to occupy and use the Grand or Big Ca non of the Arkansas for railroad purposes. For the sake of brevity, the former will be hereafter designated as the Denver Company, and the latter as the Ca non City Company.

The Denver Company was incorporated in the year 1870, in conformity to the laws of the then Territory of Colorado. Its object, expressed in the articles of incorporation filed in the proper office of the Territory, was to locate, construct, operate, and maintain certain railway and telegraph lines; viz., the Denver and Rio Grande Railway, the Denver and Southern Railway, the South Rark Railway, the Western Colorado Railway, the Morena Valley Railway, the San Juan Railway, the Gallesto Railway, and the Santa Rita Railway. The general route of each line was designated in the articles of incorporation. That of the main line-the Denver and Rio Grande Railway-was as follows:--

'Commencing at Denver, Colorado Territory, thence running up the valley of the South Platte River, on the southeast side thereof, to a point at or near the mouth of Plum Creek; thence up the valley of Plum Creek, to a point at or near the forks of East Plum Creek and West Plum Creek; thence up the main east branch of Plum Creek Valley to the lake in township 11, range 67 west, on the east of the ridge dividing the waters of Plum Creek and Monument Creek; thence down the valley of Monument Creek to a point at or near the junction of the valleys of the Monument and Fountain qui bouille, or to a point in the Fountain Valley, below the mouth of the Monument, if the detailed survey shall determine the latter to be the most eligible; thence by the valley of the Fountain or across its west tributaries to such a point on the Arkansas River at or above Pueblo as may be found upon a detailed survey to be the most eligible for intersecting the same; thence up the valley of the Arkansas to a point at or near Ca non City; thence continuing up the valley of the Arkansas through the Big Ca non of the same to a point at or near the mouth of the Arkansas River; thence by the valleys or the adjoining slopes of the Arkansas River and of Pueblo Creek to the summit of the divide between the waters of the Arkansas and the San Luis Park (known as Poncho Pass); thence by the most eligible route in a general southerly direction down the San Luis Valley to the valley of the Rio Grande del Norte; thence in a general southerly direction, by the particular route which may be determined upon by a detailed survey to be most eligible, down the valley of the Rio Grande to the southern boundary of Colorado; thence continuing down the valley of the Rio Grande, on either side of the river, as may be found expedient, or crossing from one side to the other when desirable, to El Paso, in the State of Chihuahua, with the privilege of consolidating or uniting with and operating any connecting railway in the Republic of Mexico.'

The remaining seven roads are, or were intended to be, branches or feeders of the main line.

By an act of Congress, approved June 8, 1872 (17 Stat. 339), 'the right of way over the public domain, one hundred feet in width, on each side of the track, together with such public lands adjacent thereto as may be needed for depots, shops, and other buildings for railroad purposes, and for yard-room and sidetracks, not exceeding twenty acres at any one station, and not more than one station in every ten miles, and the right to take from the public lands adjacent thereto stone, timber, earth, water, and other material required for the construction and repair of its railway and telegraph line,' was granted and confirmed unto the Denver Company, its successors and assigns. The act describes the company as a corporation created under the incorporation laws of the Territory of Colorado, and grants, ratifies, and confirms to it all the rights, powers, and franchises conferred by those laws on corporations created thereunder for constructing and operating railroad and telegraph lines, for the extension and operation of its railway and telegraph lines in and through any contiguous territory of the United States, to the northern boundary line of Mexico, subject to the conditions and requirements of the territorial statutes so far as the same were applicable and not inconsistent with the laws of the United States. The act, also, gave to the company the rights, powers, and privileges conferred upon the Union Pacific Railroad Company by sect. 3 of the act of July 2, 1864. But the rights thus granted and conferred were accompanied by the proviso that the company should complete its railway to a point on the Rio Grande as far south as Santa Fe, within five years after the passage of the act; and complete each year thereafter fifty miles additional south of that point.

By an act approved March 3, 1875 (18 id. 576), that of June 8, 1872, was corrected by adding thereto a proviso, which was declared to have been omitted by mistake of the copyist. That proviso enacts, among other things, that the 'Denver and Rio Grande Railway Company is hereby recognized as a lawful corporation from the date of its incorporation under the laws of Colorado, and all the powers, privileges, and franchises by said laws conferred upon said company are hereby expressly ratified, confirmed, and legalized as existing from the said date of incorporation.'

On the same day, Congress passed an act 'granting to railroads a 'right of way through the public lands of the United States." 18 Stat. 482. It grants that right to any railroad 'company duly organized under the laws of any State or Territory, except the District of Columbia, or by Congress, which shall have filed with the Secretary of the Interior a copy of its articles of incorporation, and due proofs of its organization under the same, to the extent of one hundred feet on each side of the central line of said road; also the right to take from the public lands adjacent to line of the road, material, & c., necessary for the construction of the road, and grounds for station buildings, depots, machine-shops, side-tracks, turn-outs, and water station,' & c.

The second section provides:--

'That any railroad company whose right of way, or whose track or road-bed upon such right of way, passes through any ca non, pass, or defile, shall not prevent any other railroad company from the use and occupancy of said ca non, pass, or defile, for the purposes of its road, in common with the road first located, or the crossing of other railroads at grade. And the location of such right of way through any ca non, pass, or defile shall not cause the disuse of any wagon or other public highway now located therein, nor prevent the location through the same of any such wagon road or highway where such road or highway may be necessary for the public accommodation; and where any change in the location of such wagon road is necessary to permit the passage of such railroad through any ca non, pass, or defile, said railroad company shall, before entering upon the ground occupied by such wagon road, cause the same to be reconstructed at its own expense in the most favorable location, and in as perfect a manner as the original road: Provided, that such expenses shall be equitably divided between any number of railroad companies occupying and using the same ca non, pass, or defile.'

Section 4 declares that any railroad company desiring to secure the benefits of that act shall, 'within twelve months after the location of any section of twenty miles of its road, if the same be upon surveyed lands, and, if upon unsurveyed lands, within twelve months after the survey thereof by the United States, file with the register of the land-office for the district where such land is located, a profile of its road; and upon the approval thereof by the Secretary of the Interior,' the same was required to 'be noted upon the plats in said office, and thereafter all such lands over which such right of way passes should be disposed of subject to such right of way.' All rights thereby granted to be forfeited as to any section located but uncompleted within five years after such location.

On Feb. 15, 1877, Alling, Locke, and Megrue became incorporated under the laws of Colorado as 'The Ca non City and San Juan Railway Company,' with a capital stock of $100,000, for the purpose of constructing and maintaining a railroad from Ca non City, thence up the valley of the Arkansas River throught the Grand Ca non thereof, thence, by the most practicable route, following that river to South Arkansas post-office in Lake County, Colorado. The articles of incor poration were filed in the office of the Secretary of State of Colorado, Feb. 19, 1877. The Secretary of the Interior, in an official communication, declared, June 22, 1877, his approval of the proofs of organization filed by that company, and of the map showing the line of its road for a distance of twenty miles.

Congress, March 3, 1877, passed an act amending that of June 8, 1872, so as to read that the Denver Company should have ten years, from the passage of the original act, to complete its road as far south as Santa F e, in default of which, as to the unfinished part of it, the rights and privileges granted should be null and void.

The Ca non City Company filed, April 20, 1878, its complaint against the Denver Company, in the Third Judicial District Court of Colorado, Fremont County, claiming that it had complied, in all respects, with the act of Congress of March 3, 1875, and acquired a prior right to construct its road through the Grand Ca non, one hundred feet on each side of its line as surveyed in 1877, and charging that the defendant was interfering with the construction of its road upon that line.

In accordance with the prayer of the bill, an injunction was granted by the State court restraining the defendant from interfering with its further operations in the ca non. That suit, upon the petition of the defendant, was, April 22, 1878, removed into the Circuit Court of the United States for the District of Colorado.

The Denver Company, April 27, 1878, filed its bill in the latter court, against Alling and others, who are designated in the charter of the Ca non City Company as its trustees for the first year, and against the Atchison, Topeka, and Santa F e Railway Company, charging that the Ca non City Company was not a legally constituted corporation; that the individual defendants, wrongfully claiming to be such corporation, had, by force, occupied the Grand Ca non, and were proceeding to locate their road upon a line in that ca non which the complainant had surveyed in 1871-72, and upon which it had made preparations to resume active work on the 19th of April, 1878; that, although it was in the occupancy of the narrow portion of the ca non, where only one road could be located, the defendants threatened by force to drive away its engineers and servants then working in said ca non, and thereby dispossess it of its located line and grade in the narrow part of said ca non; that the defendants were aided and abetted in said course by the Atchison, Topeka, and Santa F e Railway Company, who, seeking to build a road from Pueblo, by the valley of the Arkansas, and through said ca non, had to that end confederated with the defendants to compel the complainant to abandon the extension of its railway as authorized by its charter and the act of Congress. The complainant, by its bill, claimed an exclusive right of way through the Big Ca non, upon the line of its survey, and one hundred feet upon each side of its road, and to that effect relief was asked by final decree. In that suit a temporary injunction was granted against the Ca non City Company, restraining it from occupying or attempting to occupy the Big Ca non, and from, in any way or manner, constructing or attempting to survey, locate, or construct their line of railroad through the ca non, which, for the purposes of that suit, was taken and decreed to begin at what is known as the 'Point of Rocks,' at the mouth of the ca non, and extending to the twelve-mile bridge. That injunction was subsequently modified and limited in its operation to that part of the ca non known as the Royal Gorge, and the defendant was allowed to enter upon that part of the ca non and grade the same for a railroad, but not to lay ties or rails on any part thereof until the future order of the court.

In the suit instituted by the Ca non City Company, the Denver Company filed a cross-bill, setting up substantially the same facts as in its original bill against Alling and others, and a decree was rendered, which, among other things, recognized the prior right of the former to proceed in the construction and operation of its road through the Grand Ca non, without interference or obstruction, in any way, by the Denver Company, but with liberty to the latter to exhibit its bill in any court of competent jurisdiction to compel the Ca non City Company to so change, locate, and construct its road as to permit the convenient and proper location by the Denver Company of its own road, or to compel the Ca non City Company to permit the Denver Company to occupy the track and readway of the former company, if at any point in that defile it should be impracticable to conveniently lay down or safely operate two distinct lines of railway. From that decree the Denver Company appealed, and it also appealed from the decree in its own suit, dissolving the preliminary injunction granted to it, and dismissing its bill.

The case was submitted on printed arguments by Mr. John P. Usher, Mr. Hanson A. Risley, and Mr. James Grant for the appellants, and by Mr. H. M. Teller and Mr. Charles E. Gast for the appellees.

The motions, made after the submission of the case, which are mentioned in the opinion of the court, were argued by Mr. Sidney Bartlett and Mr. E. R. Hoar in support of them, and by Mr. Lyman K. Bass and Mr. James Grant, contra.

MR. JUSTICE HARLAN, after stating the case, delivered the opinion of the court.


text: Talk:Railway Company v. Alling Denver and Rio Grande Railway Company


text:
Railway Company v. Alling Denver and Rio Grande Railway Company/Opinion of the Court

A preliminary question, presented for our consideration, must be first disposed of.

These causes were determined in the Circuit Court, by final decree, Aug. 24, 1878. Upon stipulation between the parties they were submitted here on the 10th of January last. On the 20th of January it was represented to this court, in proper form, that the Pueblo and Arkansas Valley Railroad Company owned a railroad which, with its branches and extensions, is a continuation, in Colorado, of the line of the Atchison, Topeka, and Santa F e Railroad Company in Kansas; that certain contracts and arrangements had, with the consent of the appellees in both suits, and after the filing of that stipulation, been entered into between the Denver Company, the Atchison, Topeka, and Santa F e Railroad Company, and the Pueblo and Arkansas Valley Railroad Company, and had been in part executed after the filing of the printed arguments herein; that by said contracts and arrangements the Atchison, Topeka, and Sante F e Railroad Company had taken a lease of all the constructed lines of the Denver Company for thirty years from Dec. 1, 1878, and was then in the possession of and operating them; had purchased and received all the railroad supplies and materials of that company; had purchased and transferred to a trustee for its use a majority of all the shares of the capital stock of that company, with an agreement providing for a further purchase and ownership of the remainder of them, and with the further agreement that the Pueblo and Arkansas Valley Railroad Company and the Atchison, Topeka, and Sante F e Railroad Company should have the selection of a majority of the directors of the Denver Company, the other third being selected by the bondholders of the latter company; that those contracts and agreements were made with the intent and design of ending all controversies, and especially all competitive construction of railroad lines, between the Denver Company on the one part, and the Atchison, Topeka, and Santa F e Railroad Company and the roads operated by it, including the Pueblo and Arkansas Valley Railroad Company, on the other part; that, by reason of the premises, the Atchison, Topeka, and Santa F e Railroad Company, in its own right, and in connection with the Pueblo and Arkansas Valley Railroad Company, had become and was equitably the owner and entitled to the control of all the affairs, suits, interests, and property of the Denver Company, and especially to the discontinuance of all litigation hostile to the interests of the Atchison, Topeka, and Santa F e Railroad Company and the Pueblo and Arkansas Valley Railroad Company. Upon these grounds the Pueblo and Arkansas Valley Railroad Company (the present name of the Ca non City Company), and Alling and others, appellees, moved the court that the stipulation for the submission of these causes, upon printed arguments, be cancelled and discharged, such printed arguments withdrawn from the files, and the appeals dismissed. Upon the part of the Atchison, Topeka, and Santa F e Railroad Company a motion was submitted that it be allowed to intervene and take charge of these suits in the name of the Denver Company, and appear by its solicitor, on behalf of the appellants, that it may give consent, of record, to the dismissal of the appeals. The trustee referred to in the alleged contracts gave his consent to the motions, and their hearing was set for the 20th of March, this court, in the mean time, suspending any action upon the appeals. At that date the Denver Company appeared by its attorneys and resisted each motion.

Upon the hearing of the motions it appeared, among other things, that on the first day of March, 1879, the Denver Company had issued 85,000 shares of stock, of which the plaintiffs in the motions claimed to own or control a bare majority,-42,510 shares. It was also shown that, at a meeting of the directors of the Denver Company, held on Feb. 7, 1879, a quorum being present, resolutions were unanimously adopted, declaring that these motions were hostile to the interests of that company; that the claims of the Atchison, Topeka, and Santa F e Railroad Company and the Pueblo and Arkansas Valley Railroad Company were unfounded, and their assertion for the fraudulent purpose of depriving the Denver Company, its stockholders and creditors, of valuable rights, interests, and property, without compensation. The resolutions instructed the president and the attorneys of the company not only to oppose these motions, but, by all legal means, prevent the dismissal of these appeals, or the intervention herein for any purpose of any company or person not a party to the record. They were also required to prosecute the appeals in this court with the utmost diligence. At the argument of the motions, copies of all the contracts, resolutions, and writings relied upon by the respective parties were submitted for our examination. Upon careful consideration of the suggestions of learned counsel, we do not doubt that it is our duty to decline any expression of opinion as to the effect or proper construction of the numerous documents which, it is claimed, give the plaintiffs in the motions the right to have the appeals of the Denver Company dismissed. It is apparent that there are serious differences among the stockholders of that company, not only as to its general policy in the future, but as to the validity and interpretation of the contracts and writings under which the Atchison, Topeka, and Santa F e Railroad Company and the Pueblo and Arkansas Valley Railroad Company claim to be equitably the owners, and entitled to the control of the affairs, property, and suits of the Denver Company. We cannot now enter that field of controversy. The present appeals are being prosecuted to final judgment by order of the directors or trustees of the appellant corporation. To them, by law, is committed the management of the property and concerns of the corporation. In all litigation involving the action of the corporation they are its representatives in court. In the discharge of their duties they represent not only the stockholders, but the bondholders and creditors, of the company. Their right, while in the exercise of their legitimate functions, to manage the affairs and suits of the company, ought not to be controlled or interfered with by this court, by reason of any thing which appears upon the pending motions. Upon their responsibility as directors and trustees they insist that these causes shall proceed to final judgment, in accordance with the stipulation heretofore made by the parties to the appeals. If, in prosecuting them to final judgment, they violate any trust committed to their hands, or any agreement which is binding upon the corporation and the minority stockholders, remedy may be sought in some court of original jurisdiction, into which, upon proper pleadings, all persons interested may be summoned. No such proceeding has been instituted, so far as we are informed, and we do not fell at liberty, upon the suggestion of strangers to the decrees appealed from, to go behind the official action of the board of directors or trustees, and, in plain disregard of their wishes, and their directions to counsel, dismiss the appeals, and thereby refuse to consider questions regularly presented for our determination.

The motions are, therefore, denied, and we proceed to an examination of the cases upon their merits, premising that our present duty is limited to a determination of the rights of the parties as they existed when the final decrees were rendered, and as they are manifested in the records before us. If, since these decrees were entered, the Atchison, Topeka, and Santa F e Railroad Company, or the Pueblo and Arkansas Valley Railroad Company, have, by valid contract, acquired a controlling interest in the property, rights, and affairs of the Denver Company, that interest can be asserted by appropriate proceedings, and will not be affected by any thing we may determine upon the issues presented by these appeals.

The several acts of Congress upon which the Denver Company and the Ca non City Company rest their respective claims to priority of right in the Big or Grand Ca non are cited, and the history of the organization of both companies given in the statement of the case. But there are other facts of an important character to which attention will be called in the course of this opinion.

The first question, upon the merits, necessary to be considered is, as to the proper construction of the act of June 8, 1872. In its determination, however, we should not overlook what had previously transpired in the history of the company to which was granted, by that act, a right of way over the public domain. In January and February, 1871, very shortly after its articles of incorporation were filed in the proper office of the Territory, the Denver Company caused a survey to be made of the route through the Grand or Big Ca non of the Arkansas, for the purpose, as declared by the engineer who conducted it, of retaining control of the ca non for that company. That survey, extending through the entire length of the ca non, is described by him as a 'close preliminary;' that is, a line very near location, without an actual location of the curves. But the location of the curves, he testifies, could have been made in his office away from the ca non. With that exception, he pronounces it to have been a complete survey. The line thus surveyed was marked by stakes every hundred feet, numbered consecutively, and at points where it seemed necessary, a plus or stake between the hundred feet was added. Of the work then done, a map and profile were made and returned to the chief engineer of the company, and estimates sent to its general manager. Upon the occasion of that survey, or shortly thereafter, employees of the company, under the direction of its engineer, removed several hundred yards of material, graded several hundred feet at the upper outlet of the ca non, and put up a retaining wall ten to fifteen feet high, and about one hundred yards in length. In January, 1872, the survey was continued west of the ca non for a distance of four or five miles. While these surveys were being made, the company was employed in the construction of its road from Denver to Pueblo, and completed it to the latter place, within a few days after, or about the date of the passage of the act of June 8, 1872. It may also be stated, in this connection, that it completed its road from Pueblo to Labran, within eight miles of Ca non City, about the 1st of October, 1872, and to Ca anon City in July, 1875. All this was consistent with a purpose, upon the part of the Denver Company, to avail itself ultimately, and within the time prescribed by law, of the granted right of way through the Grand Ca non.

Of what the company had done, prior to the passage of the act of 1872, towards effecting the objects of its incorporation, Congress, it is fairly to be presumed, was not uninformed. It was aware, we must also presume, of the routes designated in the charter of the company, for the main road and its several branches, all so connected as to constitute, when completed, an extended railway system for that entire region. That Congress was so informed is quite clearly indicated by the terms employed in the act of 1872. That act must, therefore, receive the same construction which would be adopted had it contained a full or detailed description of the routes of the main line and branches. In this view, and having due regard to all the circumstances and condition of the company, when the act was passed, we do not doubt that the intention of Congress was to grant to the company a present beneficial easement in the particular way over which the designated routes lay, capable, however, of enjoyment only when the way granted was actually located, and, in good faith, appropriated for the purposes contemplated by the charter of the company, and the act of Congress. When such location and appropriation were made, the title, which was previously imperfect, acquired precision, and by relation took effect as of the date of the grant. The settled doctrines of this court would seem to justify that conclusion. Railroad Company v. Smith, 9 Wall. 95; Schulenberg v. Harriman, 21 id. 44; Leavenworth, Lawrence, & Galveston Railroad Co. v. United States, 92 U.S. 733; Missouri, Kansas, & Texas Railway Co. v. Kansas Pacific Railway Co., 97 id. 491.

It is here suggested by counsel for the Denver Company that the surveys made in the Grand Ca non in 1871 and 1872 constituted, without further action on its part, a sufficient location and appropriation of at least that part of the designated route. To this proposition we cannot yield our assent. The right of way through that pass was not, in itself, and separate from the right of way along the whole route, of any special value, except the company surveyed its line and located its road east and west of that defile. The grant was an entirety as to the right of way over all the lands lying on the route designated in the charter of the company, and it would be unreasonable to say that, as to a particular part of that route, a mere preliminary survey was in itself equivalent to a fixed location of the road and an appropriation of the way granted, while as to another part of the general route a similar survey would not be an appropriation of the way granted, unless followed by actual occupation and use for railroad purposes. Any such construction of the statute must be held altogether inadmissible.

When was there, then, an appropriation by the Denver Company of the Grand Ca non within the principle we have stated? In 1877 and 1878 it became evident that that pass was of vital importance to any company desiring to reach the trade and business of the country beyond it, whether to the west, northwest, or southwest. Discoveries then recently made of mineral wealth in Western Colorado gave it immense pecuniary value in railroad circles, since, as the evidence tends, to establish the occupancy of the Royal Gorge of the Grand Ca non by one line of railroad would practicaly exclude all competing companies from using it for like purposes, except upon such terms as the first occupant might dictate. From the date of the survey made in 1872, down to April 19, 1878, the record furnishes no evidence that the Denver Company actually occupied that defile for any purpose whatever. On that day, however, Congress having extended the time to ten years from the date of the original act within which to complete its road as far south as Santa F e, that company did, by its agents, occupy the narrow portion of the ca non known as the Royal Gorge, with the avowed intention of constructing its road upon the line of the surveys made in 1871 and 1872. But during the night of April 19, 1878, the board of directors of the Ca non City Company were convened, and Robinson and Strong, the chief engineer and manager, respectively, of the Atchison, Topeka, and Santa F e Railroad Company, were elected to the same positions in the Ca non City Company. They made preparations to take immediate possession of the ca non in behalf of the last-named company. Evidence of their diligence and activity in that direction is found in the fact that on the morning of the 20th, as early as four o'clock, a small squad of their employees, nine or ten in number, under the charge of an assistant engineer, swam the Arkansas River, and in the name of their company took possession of the ca non. Under the circumstances, it is not material that they failed to find a rival force in the ca non at such an unseasonable hour. That squad was followed the same day by a large and overpowering force of workmen under the control of Robinson. These movements were succeeded by a suit instituted the same day, in the State court, in the name of the Ca non City Company against the Denver Company, in which an injunction was obtained restraining the latter from occupying or attempting to occupy the ca non for railroad purposes, or from interfering with the Ca non City Company in the construction of its own road therein.

The last-named company now insists that it has the prior right to occupy and use the ca non for its line of road. In support of this claim, it contends that the other company had lost whatever rights it acquired in the ca non through the imperfect survey of 1871 and 1872, by its long inaction after the construction of the road to Ca non City, and by its failure, within a reasonable period, to follow up those surveys by actual location and occupancy for railroad purposes. The conduct of the Denver Company, it is urged, evinced a settled purpose upon its part to abandon its grant of a right of way through that ca non. The answer to all this seems very obvious.

The surveys of 1871 and 1872, although defective in some particulars, and not equivalent to an actual location or appropriation of the way, were quite as complete and extended as the survey which the Ca non City Company caused to be made in 1877. The evidence shows, beyond all question, that when the latter survey was made there was seen in the ca non all or very many of the stakes which the engineer of the Denver Company had put there in 1871 and 1872. Those who made the survey in 1877 undoubtedly knew when, by whom, and for what purpose those stakes had been there placed. Nor had they sufficient reason to suppose that the Denver Company had finally abandoned its purpose of constructing a road through the ca non. We have already referred to the completion of the road from Denver to Pueblo, and from Pueblo to Ca non City, by July, 1875. In 1873, the Denver Company commenced the construction of one of its branches,-the Denver and Southern Railway. Commencing at Pueblo, it completed that road to Cucharas, fifty miles from Pueblo, by February, 1876; to Garland, sixty miles from there, by August, 1877; and to the valley of the Rio Grande, by July, 1878. After July, 1875, the company, it is true, suspended active work upon the line west of Ca non City. But the cause of such suspension, as its officers testify, was the widespread depression in business and financial circles, and the belief, shared by all interested in the prosperity of the company, that the extension of the line southward from Pueblo gave promise of quicker returns and more immediate results in every way. They state that it was the purpose of the company to resume work upon its line through the ca non as soon as the necessary means therefor could be obtained, and that there was no intention at any time to abandon the route west of Ca non City. Their delay in the construction of the road west of Ca non City and through the Grand Ca non seems to have been in the interest of the stockholders they represented, and not inconsistent with an honest purpose, within the period fixed by law, to meet the objects for which Congress granted to it the right of way. Its surveys of 1871-72, followed by an occupancy of the ca non on the 19th of April, 1878, in advance of the Ca non City Company, for the purpose of constructing its road through that defile, was, in our judgment, a final appropriation of the way granted by Congress. The Denver Company then, if not before, came into the enjoyment of the present beneficial easement conferred by the act of June 8, 1872, and was entitled to have secured against all intruders whatever privileges or advantages belonged to that position.

But the important question remains as to the effect of the act of March 3, 1875, granting the right of way through the public lands of the United States to any railroad company duly organized under the laws of any State or Territory, except the District of Columbia, or by the Congress of the United States. The explicit language of that act leaves no doubt as to its object. It declares 'that any railroad company whose right of way, or whose track or road-bed upon such right of way, passes through any ca non, pass, or defile, shall not prevent any other railroad company from the use and occupancy of said ca non, pass, or defile, for the purposes of its road, in common with the road first located, or the crossing of other railroads at grade.' At the date of that act the road of the Denver Company, as we have seen, had not been located through the Grand Ca non of the Arkansas. But it had a subsisting grant of a right of way through that defile. According, therefore, to the act of March 3, 1875, the Ca non City Company, if it belonged to the class described in the first section of the act, might, for the purposes of its road, occupy and use that ca non in common with the Denver Company.

Upon this branch of the case, the first contention of the latter company is that the Ca non City Company was not 'duly organized' under the laws of Colorado, and, therefore, by the terms of the act of March 3, 1875, was not entitled to its benefits. But this objection is not well taken. The articles of incorporation filed by that company seem to be in substantial compliance with the statutes of Colorado. This objection need not be further considered.

But its right to claim the benefit of the act of March 3, 1877, is impeached upon the further ground that it was not organized in good faith, for the purpose of constructing a road for itself, but was the mere instrument of the Atchison, Topeka, and Santa, F e Company, by whom the real work of construction through the ca non was carried on. It is not to be doubted, under the evidence, that the Atchison, Topeka, and Santa F e Railroad Company is the active power behind all the movements made in the name of the Ca non City Company for the occupation of the ca non, and that the former company, or some of its stockholders, were deeply interested in the success of the movement to drive the Denver Company from the Grand Ca non. But the Ca non City Company is none the less a railroad company, duly organized under the laws of Colorado. It is, therefore, embraced by the very letter of the act of March 3, 1875. We are unable to perceive upon what sound principle the courts can go behind its regular and lawful organization, and exclude it from the rights granted by that act, because in the prosecution of its work it derives assistance or accepts aid from another corporation, with which it may choose to share the benefits secured under the act of Congress.

Our next inquiry is as to the extent to which the rights of the Denver Company were affected or modified by the act of March 3, 1875. When that act was passed, its grant of the right of way by the act of June 8, 1872, had not been acted upon as to the Grand Ca non of the Arkansas. There had not been, on March 3, 1875, an actual location of its line through that defile, nor any occupancy thereof, in good faith, for the purpose of constructing its road. The five years originally given to that company, within which to complete its railway to a point on the Rio Grande as far south as Santa F e, expired on the 8th of June, 1877. Before, however, the expiration of that period, the time was extended to ten years from the passage of the original act. Now, it is solely by reason of such extension that the Denver Company had the right, on the 19th of April, 1878, to take possession of the Grand Ca non, and prepare for the final location and construction of its road through that pass. When, therefore, it accepted the benefits of the act of March 3, 1877, it must be held to have assented to the provisions of the act of March 3, 1875, whereby it was declared, in the interest of the public, that any other railroad company duly organized under the laws of any State or Territory might use and occupy the ca non, for the purpose of its road, in common with the road first located. At the time of the passage of the act of March 3, 1875, Congress had become convinced of the importance to the country, and particularly to the Western States, of preserving ca nons, passes, and defiles in the public domain for the equal and common use of all railroad companies organized under competent State or territorial authority, and to which might be granted by national authority the right of way. We may well presume that the extension of time accorded to the Denver Company by the act of March 3, 1877, would not have been given except subject to the conditions contained in the act of March 3, 1875. This conclusion renders it unnecessary that we should, in this case, consider whether Congress might legally have subjected the Denver Company, without its consent, to the provisions of the act of March 3, 1877, had that company actually located and constructed its road in or through the Grand Ca non within five years after the passage of the act of June 8, 1872.

It results from what we have said, that the court below erred in enjoining the Denver Company from proceeding with the construction of its road in the Grand Ca non. The decree, as entered, can only be sustained upon the assumption that the Ca non City Company had by prior occupancy acquired a right superior to any which the Denver and Rio Grande Railway Company had to use the ca non for the purpose of constructing its road. But that assumption, we have seen, is not sustained by the evidence, and is inconsistent with the rights given by the acts of Congress to the Denver Company. The Denver Company should have been allowed to proceed with the construction of its road unobstructed by the other company. Where the Grand Ca non is broad enough to enable both companies to proceed without interference with each other in the construction of their respective roads, they should be allowed to do so. But in the narrow portions of the defile, where this course is impracticable, the court, by proper orders, should recognize the prior right of the Denver and Rio Grande Railway Company to construct its road. Further, if in any portion of the Grand Ca non it is impracticable or impossible to lay down more than one road-bed and track, the court, while recognizing the prior right of the Denver Company to construct and operate that track for its own business, should, by proper orders, and upon such terms as may be just and equitable, establish and secure the right of the Ca non City Company, conferred by the act of March 3, 1875, to use the same road-bed and track, after completion, in common with the Denver Company.

The decrees in these causes are, therefore, reversed, with directions to set aside the order granting an injunction against the Denver and Rio Grande Railway Company, and also the order dissolving the injunction granted in its favor, and dismissing its bill. By proper orders, entered in each suit, the court below will recognize the prior right of that company to occupy and use the Grand Ca non for the purpose of constructing its road therein, and will enjoin the Ca non City and San Juan Railway Company, its officers, agents, servants, and employees, from interfering with or obstructing that company in such occupancy, use, and construction. It may be that, during the pendency of these causes in the court below, or since the rendition of the decrees appealed from, the Ca non City and San Juan Railway Company has, under the authority of the Circuit Court, constructed its road-bed and track in the Grand Ca non or in some portion thereof. In that event, the cost thus incurred in those portions of the ca non which admit of only one road-bed and track for railroad purposes may be ascertained and provided for in such manner and upon such terms and conditions as the equities of the parties may require.

The court will make such further orders as may be necessary to give effect to this opinion.


text: Talk:Railway Company v. Alling Denver and Rio Grande Railway Company/Opinion of the Court


text:
Montgomery v. Samory

ERROR to the Circuit Court of the United States for the District of Louisiana.

The facts are stated in the opinion of the court.

Mr. Thomas Hunton for the appellant.

Mr. Philip Phillips and Mr. Henry C. Miller, contra.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: Montgomery v. Samory


text: Talk:Montgomery v. Samory

title: Talk:Montgomery v. Samory


text:
Montgomery v. Samory/Opinion of the Court

Courts and jurists everywhere agree that the title to real estate is governed by the laws of the place where it is situated, the universal rule being that the title to such property can only be acquired, passed, or lost according to the lex loci rei sitoe. Story, Confl. Laws (6th ed.), sect. 424; Wharton, Confl. Laws, sect. 273.

Enough appears in the record to show that the father of the minor plaintiff owned the property in controversy, and that he being indebted to the defendant in the sums expressed in the four promissory notes referred to in the transcript, executed to his creditor the two mortgages under which the defendant claims that he ultimately acquired his title to the premises. Under the law of Louisiana, where the property is situated, the mortgages imported a confession of judgment for the amount which they were executed to secure, less what should be paid before breach of condition.

Default of payment having subsequently been made, the mortgagee filed his petition in the third district court, praying that the mortgagor might be summoned to answer and that he should be decreed to pay the amount of the debt secured, with mortgage privilege upon the property described in the mortgages. Process was issued, and the sheriff returned 'not found,' and that the mortgagor was out of the State. Due proceedings followed, which were that the mortgagee filed a supplementary petition setting forth the return of the sheriff, and prayed that a curator ad hoc might be appointed, and that he should be served with a proper citation. Pursuant to the prayer of the petition, the court made the requested appointment, and the curator having been duly served, appeared and filed an answer. Hearing was had, and judgment was entered for the mortgagee in accordance with the prayer of the petition.

Two years later the mortgagor filed his petition in the court, complaining that the judgment had been rendered against him without his having been previously cited to appeal, as the law directs, and prayed for a devolutive appeal, which was seasonably granted by the court. Both parties appeared in the Supreme Court of the State, and the appellant having suggested the death of the mortgagor and that his widow had been confirmed as natural tutrix of her minor child, she, the tutrix, was made a party to the appeal.

More than a year had elapsed from the date of the judgment before the petition for an appeal was filed, but it was obtained under that provision of the code which makes an exception in favor of absentees, to whom a delay of two years is granted. Lambert v. Conrad, 18 La. Ann. 145.

Record proof showed that the mortgagor was an absentee, and the appeal was taken to enable the appellant to contest the point that the service on the curator ad hoc was sufficient to put the rights of the absentee in issue in the foreclosure proceedings. All matters of the kind were necessarily in issue, and the parties having been fully heard, the court affirmed the judgment of the subordinate court.

Pending the appeal, which was devolutive only, the property was sold under an execution issued on the judgment rendered in the court of original jurisdiction, and the mortgagee became the purchaser at the sheriff's sale. By the record it also appears that on the 10th of March of the next year, and before the appeal was determined, the mortgagee and purchaser at the sale applied to the same district court for a monition to protect his title thus acquired, as he was authorized to do under the law and jurisprudence of the State. Rev. Stat. La. 469. Publication as required by law was duly made, and such regular proceedings followed as terminated in a judgment in favor of the mortgagee and purchaser, that the said sale be confirmed and homologated according to law.

Seven years subsequently, to wit, on the 29th of March, 1871, the widow of the mortgagor, as tutrix of the minor plaintiff, filed her petition in the Circuit Court of the United States, praying the court to enter a decree that the title to the property acquired by the 'mortgagee and purchaser at the sheriff's sale is null and void.' Due process was served; and the respondent appeared and filed an exception to the jurisdiction, which having been overruled by the court, the respondent filed an answer, setting up several defences.

Eight peremptory exceptions were also filed by the respondent at a later period. Testimony was not taken by either party, and they, having waived a trial by jury, submitted the cause to the court. Arguments of counsel followed the agreement to submit the cause; and and the court, the district judge presiding, rendered judgment in favor of the plaintiff, holding that the judgment of the Third District Court of the city is null and void. Immediate application for a new trial was made, and the same court, at a subsequent session, the circuit and district judges presiding, granted the application. Leave being granted, the plaintiff filed an amended and supplemental petition, in which she alleged two other grounds of claim: 1. That the property, at the date of the judgment in favor of the mortgagee and at the time of the sale, was in possession of the United States as abandoned property. 2. That there never was any valid or legal seizure of the property.

Four peremptory exceptions were filed by the defendant to the supplemental and amended petition: 1. That it changes entirely the cause of action and the demand set forth in the original petition. 2. That it alters the plaintiff's pleadings and the basis and foundation of the suit. 3. That it is vague and general, without any clear and precise statement of the claim. 4. That it changes the substance of the demand, the ground of claim, and the defence.

Those exceptions were heard separately from the other questions in the case, and having been overruled by the court, the defendant filed what is denominated in the record an exception and answer to the supplemental and amended petition, as follows: 1. That the petition sets forth no cause of action. 2. That the cause of action is barred by the prescription of five years. 3. That the exceptions pleaded to the original petition are a bar to the supplemental petition. 4. That it is not true that the property was in the possession of the United States, as alleged. 5. That the sheriff did legally seize the property, and that the title of the defendant is just and legal.

Formal application was made to set aside the agreement to waive a trial by jury, but it does not appear that it was pressed, and it was never granted. Instead of that, the record shows that the questions involved were reargued by the counsel on each side, and that the court entered judgment that the exceptions filed by the defendant be sustained, and that the plaintiff's suit be dismissed with costs. Exceptions in the usual form as at common law were filed by the plaintiff to the rulings and decisions of the court, and she sued out the present writ of error.

Two errors are formally assigned, to the effect as follows: 1. That the court, in view of the facts alleged in the pleadings, erred in deciding the cause without the intervention of a jury. 2. That the court erred in maintaining the peremptory exception of res judicata, and the peremptory exception that the judgment of the Third District Court confirming and homologating the sale made to the defendant, operates as a complete bar to the plaintiff's claim.

Beyond question, both of these peremptory exceptions were filed before the new trial was ordered; but inasmuch as they were subsequently sustained by the Circuit Court, and are embodied in the bills of exceptions exhibited in the record, they are properly here for re-examination under the present writ of error.

Viewed in that light, it follows that there are three questions presented for decision: 1. Whether the court erred in not submitting the case to a jury. 2. Whether the court erred in holding that the judgment of the Third District Court is conclusive that the sale was made according to law, and that such a judgment cannot be incidentally and collaterally attacked or annulled. 3. Whether the court erred in holding that the judgment of the Third District Court, pursuant to the process of monition, operated as a complete bar to the present suit.

Other questions were litigated in the progress of the suit; but inasmuch as these three are the only ones included in the formal assignment of errors, none other will be much considered.

Peremptory exceptions, in the jurisprudence of that State, are of two classes, of which the first is equivalent in import to a demurrer at common law, and of course must in all cases be adjudged by the court. Somewhat different rules apply in the second class, which, without going into the merits of the cause, show that the plaintiff cannot maintain the action either because it is prescribed or because the cause of action has been destroyed or extinguished. Code of Prac. 1870, art. 345. Such an exception may be pleaded in every stage of the litigation previous to the definitive judgment, but the rule is that it must be pleaded specially, and that sufficient time must be allowed to the adverse party to make defence. Id. art. 346.

Nothing can be plainer in legal decision than the proposition that the two exceptions mentioned were well pleaded in the Circuit Court, as appears by the sixth and seventh articles of the answer which the defendant filed to the suit of the plaintiff. Conclusive support to that proposition is also found in the opinions of the Supreme Court of the State, set forth in the transcript and officially reported. Samory v. Montgomery, 19 La. Ann. 333; Same v. Same, 27 id. 50.

Much discussion of the first assignment of error is unnecessary, for two reasons: 1. Because the issues presented under the peremptory exceptions were issues of law for the determination of the court. 2. Because the parties waived a jury trial by consent, and stipulated that the case should be tried by the court.

Two judgments properly certified were introduced by the defendant in support of his peremptory exceptions, of which the first was the judgment of the Third District Court foreclosing the mortgages, as affirmed in the Supreme Court. Attempt is made to assail that judgment upon the ground that the absence of the mortgagor under the circumstances did not justify the appointment of a curator ad hoc, and the subsequent proceeding which followed that appointment.

Good reasons exist to conclude that the question argued here is the exact question which was presented to the Supreme Court of the State to which the case was appealed from the Third District Court. In disposing of the case the Supreme Court said that the only question presented was whether the mortgagor, at the time the service was made, was an absentee in legal contemplation, to whom a curator ad hoc could be appointed, and contradictorily with whom a suit might be prosecuted and a valid judgment obtained against the absent person. Such is the statement of the judge who gave the opinion, and the facts disclosed confirm the statement and show to a demonstration that the exact question presented here was fully and expressly decided by that court. Samory v. Montgomery, supra.

Proof of a conclusive character is exhibited in the record to show that the parties in this case waived a trial by jury; but it is not necessary to rest the case upon that proposition, as it is clear that the issue presented by the peremptory exception was one of law and not of fact; nor does it make any difference that the parties stipulated that the court should find the facts, as the record shows that the judge presiding when the first judgment was rendered complied with that part of the stipulation. His finding of facts was before the two judges when the new trial was granted, and constituted the foundation of the court's action.

New pleadings were subsequently filed by both parties, which presented issues of law for the determination of the court, arising out of the duly certified copy of the judgment rendered in the Third District Court foreclosing the mortgage as affirmed by the Supreme Court of the State, and the monition judgment of the same court, from which no appeal was ever taken.

Viewed in any light, it is clear that the first assignment of error must be overruled.

Res judicata, as pleaded in the sixth peremptory exception of the defendant, is in substance and effect the same as the plea in bar of a former recovery at common law, in respect to which, in order that it may be a valid defence and incapable of collateral attack, it must appear that the opposite party had notice of the suit, and that the court rendering the judgment had jurisdiction of the case. Judgments, in the jurisprudence of that State, as well as elsewhere, are open to inquiry as to the jurisdiction of the court and notice to the defendant. Christmas v. Russell, 5 Wall. 290; Webster v. Reid, 11 How. 437.

Definitive judgments, where the court has jurisdiction, and due notice is given to the defendant, bear the force of res judicata, and of course are conclusive of the rights of the parties. Civil Code, art. 539.

Jurisdiction of the Third District Court is admitted, and sufficient has already been remarked to show that the defendant was an absentee, and that the notice given to the curator ad hoc was a sufficient compliance with the requirement of law. Decisive proof of that proposition is found in the fact that he went voluntarily out of the jurisdiction, under circumstances that show that he cannot complain of legal proceedings regularly prosecuted against him in his absence. Ludlow v. Ramsey, 11 Wall. 581; University v. Finch, 18 id. 106.

When judgment was rendered for the mortgagee in the Third District Court, the mortgagor appeared and filed a petition for a devolutive appeal to the Supreme Court, which was granted for the reasons set forth in the petition, which plainly showed that the prior action of the court in appointing the curator ad hoc was correct.

Such an appeal does not operate as a supersedeas, and the mortgagee and purchaser of the property in the mean time applied to the clerk of the court, in whose office the deed of sale was recorded, for a monition or advertisement in conformity to an act of the legislature of the State, entitled 'An Act for the further assurance to purchasers at judicial sales,' and praying that the process might to granted requiring all parties alleging any informality or irregularity in the said sale to show cause, if any they had, why the sale should not be confirmed and homologated. Advertisements as required were duly published; and, no opposition appearing, the court rendered judgment that the said sale be confirmed and homologated according to law, as authorized by the legislative act, from which judgment no appeal was ever taken, and the record shows that the said judgment is in full force and unreversed. Waters v. Smith, 25 La. Ann. 515.

Purchasers at judicial sales may protect themselves from eviction of the property so purchased, or from any responsibility as possessors of the same, by pursuing the rules prescribed in that enactment. They must sue out the monition and advertise as required, calling on all persons who set up any right to the property in consequence of any informality or irregularity in the order, decree, or judgment, or in the appraisement, advertisement, or proceedings of the sale, or any defect whatsoever, to show cause within thirty days why the sale so made should not be confirmed and homologated.

Monitions of the kind must state the judicial authority under which the sale took place, and must contain the same description of the property purchased as that given in the judicial conveyance to the buyer, and must also state the price at which the object was bought. Buyers may apply for the process; and the judges of the courts from which the orders, decree, or judgment were issued may grant the same in the name of the State, and affix to it the seal of the court. Thirty days having expired, the party may apply to the judge of the court out of which the monition issued, to confirm and homologate the sale; and, if no cause is shown to the contrary, it shall be the duty of the judge to enter such a judgment or decree.

Provision is also made that the judgment of the court shall be in itself conclusive evidence that the monition was regularly made and advertised; nor shall any evidence be received thereafter to contradict the same, or to prove any irregularity in the proceeding. Evidence to prove any such irregularity is declared to be inadmissible; and the further provision is that the judgment of the court confirming and homologating the sale shall have the force of res judicata, and that it shall operate as a complete bar against all persons, whether of age or minors, whether present or absent, who may thereafter claim the property in consequence of any illegality or informality in the proceeding, whether before or after judgment. Appended to that is the further provision that the judgment of homologation shall in all cases be received and considered as full and conclusive proof that the sale was duly made according to law, in virtue of a judgment or order legally and regularly pronounced in the interest of parties duly represented. Rev. Stat. La. 1870, 469, arts. 2370 to 2376, inclusive.

Irregularities in the suit of foreclosure under which property is sold for breach of condition may be conclusively validated by such proceeding, if the court which rendered the decree had jurisdiction of the case and the record shows that the party defendant was duly notified of the suit; but the better opinion is, that if the court had no jurisdiction in such a case, or if the process was not duly served, the proceeding under the statute authorizing the monition will not cure the defect. Willis v. Nicholson et als., 24 La. Ann. 545; Fix v. Dierker 30 id. 175; Frost v. McLeod, 19 id. 69.

Concede that, and still the concession will not change the conclusion in this case, as the jurisdiction of the court in the foreclosure proceeding is beyond question, and the decisions of the State court prove incontestably that the notice to the curator ad boc was sufficient to support the judgment or decree against the defendant as an absentee from the State.

Apply those rules to the case before the court, and it is clear that the judgment in the monition proceeding affords conclusive proof that the judicial conveyance of the property vested a complete title in the purchaser at the sheriff's sale. Should it be suggested that the judgment rendered in the monition proceeding was subsequent to the appeal from the Third District Court, the conclusive answer to the objection is that the devolutive appeal never operates as a supersedeas. Arrowsmith v. Durell, 21 Law Ann. 295; Walker v. Hays, 23 id. 176; Samory v. Montgomery, 27 id. 50; Code of Prac., arts. 578, 595; Rev. Stat. La., art. 3392.

Tested by these authorities, it is clear that the appeal constituted no legal obstacle to the subsequent jurisdiction of the subordinate court in rendering the judgment in the monition proceeding, from which it follows that there is no error in the record brought here by the present writ of error.

Judgment affirmed.

MR. JUSTICE FIELD and MR. JUSTICE BRADLEY did not sit in this case, nor take any part in deciding it.


text: Talk:Montgomery v. Samory/Opinion of the Court


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United States v. Sioux City and Pacific Railroad Company

ERROR to the Circuit Court of the United States for the District of Iowa.

The facts are stated in the opinion of the court.

The Attorney-General and Mr. Joseph K. McCammon for the plaintiff in error.

Mr. S. Bartlett and Mr. W. I. Hayes, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.


text: Talk:United States v. Sioux City and Pacific Railroad Company


text:
United States v. Sioux City and Pacific Railroad Company/Opinion of the Court

This was an action brought by the United States against the defendant in the court below to recover fire per cent of its net earnings.

The facts of the case were admitted by the parties, and, amongst others, the following:--

'5. That if the amount paid by the company as hereinbefore stated for interest on its first-mortgage bonds during said time should, under the law, be deducted from the receipts of the company in order to ascertain the net earnings thereof, then there were no net earnings during said time; but if, on the other hand, the said payments of interest should not be deducted from the earnings of the road to ascertain the net earnings, then the net earnings of the road during said period amounted to the sum of four hundred and seven thousand seven hundred and ninety-nine 50/100 dollars ($407,799.50).'

It thus appears that, although the company made net earnings to the amount of $407,799.50, during the period covered by the time in respect of which the suit was brought, yet that they were all absorbed by the interest accruing on the first-mortgage bonds. According to the principles laid down in our decision, Union Pacific Railroad Co. v. United States (supra, p. 402), the government cannot claim the five per cent which would otherwise be applicable to its subsidy.

Judgment affirmed.

MR. JUSTICE STRONG and MR. JUSTICE HARLAN dissented.


text: Talk:United States v. Sioux City and Pacific Railroad Company/Opinion of the Court


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Clark v. United States (99 U.S. 493)

APPEAL from the Court of Claims.

The facts are stated in the opinion of the court.

''Mr. Matt. H. Carpenter and Mr. John J. Weed'' for the appellant.

Mr. Assistant Attorney-General Smith, contra.

MR. JUSTICE SWAYNE delivered the opinion of the court.

title: Clark v. United States (99 U.S. 493)


text: Talk:Clark v. United States (99 U.S. 493)