Denver Pacific Railway Co. v. United States

Citations

• 14 Ct. Cl. 589

Syllabus

<p>On the defendants Appeal.</p> <p>The Pacific railroad act of 1862, authorizes a locmin government bonds of $16,000 a mile to the Kansas Pacific Bailroad, and imposes a statutory mortgage as security for such advances on the whole road. It also authorizes the govei'nment to withhold futurefreight-moneys earned by theroadin carrying mails, ^c., and appl y them to the payment of the bonds. The eompany fail to complete the road. The transfer act of 1869 is passed authorizing a transfer of the franchise and rights to acquire public lands from the Kansas Pacific to the Denver Bailroad Company, as to that unbuilt portion of their route lying between Denver and Cheyenne. The Denver Company complete this portion of the route, receiving no part of the government loan. Subsequently they earn freight-moneys in carrying the mails, $-c. The government refuses to pay, and insists that it has the right to apply the earnings of the Denver road upon the bonds loomed the Kansas Pacific. The claimants deny that their road is subject to the statutory mortgage, and bring their action.</p> <p>Tlie court below liolds: (1) That the right of the government under the Pacific Bailroad Acts 1862, 1864 (15 Stat. L., 489; 13 id., 356) to withhold freight-moneys earned in carrying the mails, &c., and apply them to the payment of the bonds loaned the companies to aid them in the construction of the roads, is not a condition attached to the franchise nor an obligation springing- out of the land-grants conferred upon the companies, but simply a specific mode of payment upon the mortgage created by those statutes; (2) That the Denver Pacific Bailway Transfer Act 1869 (15 Stat. L., p. 324, § 1), wherein it authorizes the transfer of the Kansas Pacific Railroad’s franchises and right of way between Denver and Cheyenne, to the Denver Railway Company, but provides that the grant be “subject to all the obligationspertaining to said part of its line,” must be construed to relate to corporate obligations