Case ID: us-ct-cl_14/html/0125-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Dayis, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Chicago, Milwaukee and Saint Paul Railroad Company v. The United States.
    
      On the Proofs.
    
    
      Congress grant lands to the State of Wisconsin in trust to aid in the construction of a railroad, upon condition that the mail he transported over the road at such price as Congress may prescribe. The State passes a statute authorizing its officers to deed the lands to a railroad company when certain conditions shall he complied with. The lands are never deeded to the company, hut are diverted to reimburse certain farmers who mortgaged their farms to aid in the construction of the road. The enterprise having failed, the claimants purchase the rights of the prior corpoi-ation and construct the road. The diversion of the land is with their consent and that of Congress. The claimants having carried the mail, the Post-Office Department insists that theirs is a “land-grant road,” and the compensation subject to the deduction made in such cases. Also, that the contract rate is subject to a general reduction of 10 per cent, made by a subsequent act of Congress.
    
    I.If land granted by Congress in trust to the State of Wisconsin to he applied to the construction of a railroad he subsequently diverted to another purpose with the consent of Congress (viz, to the paylnent of debts contracted by individuals in a futile attempt to build the road), so that the company which in fact constructs the road never derives a benefit from the land, they will not be bound by a condition in the original statutory grant that the mail shall be carried at such rates as Congress or the Post-Office Department may prescribe.
    II.When Congress grant land in trust for a specific purpose, viz, to aid in the construction of a railroad, and subsequently pass a statute authorizing the land to be diverted to an entirely different purpose, the government will be estopped from claiming the benefit of a condition annexed to the original grant.
    III. A railroad which did not receive or participate in public lands granted by Congress to a State for railroad purposes is not a “ land-grant road,” within the meaning of the Act 12th July, 1876 (19 Stat. L., 82, § 13).
    IV. Congress cannot by a legislative act vary the terms of a contract made under due authority of law for a term of time by duly authorized agents of the government.
    
      V.The Revised Statutes (é 3956) authorize contracts for carrying the mail for a period of not more than four years; and this provision is not controlled or limited hy those of §§ 3679, 3752.
    VI.Where a mail contract authorizes the government to discontinue the service at any time, in whole or in part, allowing the contractor one month’s extra pay, and Congress during the term of the contract enact that the Postmaster-General shall deduct 10 per cent, from the compensation allowed to all railroads for carrying the mail and the contractors continue to carry the mail without objection, it will be held that the statute was in effect a notice under the contract that the service would be discontinued under the old rates and continued, if at all, under the new rates.
    VII.Though a statute order a reduction in the rates allowed for mail transportation, and direct that the reduction take effect from the beginning of the current fiscal year, nevertheless the statute will not operate retroactively as-a notice to existing contractors.
    
      The Reporters’ statement of tbe case:
    Tbe following are tbe facts as found by tbe court:
    I. On tbe lltb October, 1S56, tbe State of Wisconsin granted by statute to tbe La Crosse and Milwaukee Eailroad Company •all tbe interest and estate then present or prospective of tbe State in and to any of tbe lands granted by tbe United States to tbe State of Wisconsin by tbe act of June 3, 1856, for tbe purpose of aiding- in tbe construction of a railroad from Madison or Columbus, by way of Portage City, tp tbe Saint Croix Eiver or Lake, between townships 25 and 31, and from’ tbence to tbe west end of Lake Superior and to Bayfield; and directed tbe governor of tbe State, whenever twenty miles of said road should be completed, to certify tbe same to tbe Secretary of tbe Interior, and to execute and deliver to tbe said company, on behalf of tbe State and under its great seal, whenever it should become entitled to any of said lands, a deed in fee-simple of any and all to which it should become entitled. The said grant was made on condition that the land should be exclusively applied in the construction of tbe road for which it was granted and selected, and should be disposed of onlj- as the work progressed, and should be applied to no other work whatever.
    II. A part of the road of said company as, constructed by them, namety, 61.6 miles thereof, between Portage and Tomah, was upon the line contemplated by and set forth in said act of June 3, 1856; but so much of the railroad contemplated ■by said act as was north and west of Tomah. and so much as was south and east of Portage were never constructed by them. They laid claim to so much of the lands granted by the act of June 3, 1856, as were applicable to three sections of twenty miles each of said road between Portage and Tomah, which they said had been constructed by them in conformity with the provisions of said act and with the provisions of the act of the State of Wisconsin.
    On the 28th December, 1857, the then governor of the State of Wisconsin certified to the Secretary of the Interior that the .said company was authorized to construct the railroad on the line set forth in the act of June 3, 1850, and that it had constructed forty miles on what is now the line between Portage and Tomah, and that the same was a part of the line mentioned in said act; but his successor in office, on the 4th February, 1858, informed the Secretary that there were grave doubts whether the said company had fulfilled the conditions which would entitle it to the certificate, and requested him not to issue to it patents for any of the lands granted by the act of June 3, 1856. In pursuance of this request all action in the matter was suspended by the General Land Office of the United States and the Department of the Interior. The said company has never had patents for any part of said lands, and has never received a deed of any part thereof from the State of Wisconsin, and has never become possessed of any part thereof.
    III. The road of said company, as constructed by them, contained many miles of railroad in addition to the said 61.6 miles; but, with the exception of said 61.6 miles, no part of their road was upon the line contemplated by said act of June 3, 1856. After the completion of the road to Tomah, repeated applications were made by said company to the governor of Wisconsin to grant the necessary certificate to the Secretary of the Interior to enable the said company to obtain said lands, and to withdraw his objections to the granting of patents on the certificate made by his predecessor; but he at all times refused to comply with such request, on the ground that the said company was not entitled to said certificates for the reason that it had not complied with the conditions of the act of the legislature of the State of Wisconsin in conferring said grant upon said company, in that it had not commenced the construction of said road at Madison and at Columbus, and in that it had not built and constructed tbe roads from Madison to Portage City and from Columbus to Portage City. Said company also applied to tbe Department of tbe Interior at Washington, on proof of tbe completion of said road from Portage City to Tomah and tbe refusal of tbe governor to certify thereto, to grant said lands to said company without further action of tbe governor of Wisconsin; to which application tbe Secretary of tbe Interior made tbe following reply by letter addressed to tbe president of the company:
    “Tour inquiries relate to tbe railroad ‘ from Madison, byway of Portage City, to tbe St. Croix Eiver or Lake,’ tbe location of which, under tbe law of Congress of June 3,1856, has heretofore been made and accepted as tbe basis of the adjustment of tbe grant to tbe State, so far as pertains to said road; and I have to inform you in reply that tbe certificate of Governor Bashford, dated tbe 28th of December, 1857, has.been filed in this department that forty continuous miles of said road have been completed, extending from tbe intersection at Portage City, in tbe county of Columbia, westwardly to a point on said road four and miles east of tbe depot at New Lisbon, in tbe county of Juneau.
    “You have also inquired whether, upon tbe refusal of tbe governor of tbe State of Wisconsin to furnish certificates of tbe completion of any section or sections of said road of the length of twenty continuous miles, this department will receive other evidence of tbe fact of such completion.
    “By tbe location of tbe route or liue of road which has been accepted by tbe State and tbe United States as tbe basis for tbe severance of tbe lands falling to tbe State from those reserved to tbe United States, tbe granted lands are vested with a condition that tbe lands shall be disposed of by tbe State in a particular manner. (See sec. 4 of tbe act of Congress.)
    “Should any section or sections of tbe line of said road of twenty continuous miles be completed and tbe governor fail or refuse to certify to such completion, bis failure or refusal would not be tbe basis of any action of this department at any time prior to tbe expiration of ten years; for by tbe last clause of tbe 4th section of tbe law of Congress it is enacted that ‘'if said roads are not completed within ten years * * tbe land unsold shall revert to tbe United States.’
    “Tour remaining inquiry wiE be answered by tbe remark that tbe proper certificate of tbe governor of tbe State respecting tbe completion of ‘any twenty continuous miles’ of tbe road will be received and filed in reference to tbe specific ‘twenty continuous miles’ of tbe road which may be described in such certificate.
    “ Premising that it is not tbe practice of tbe department to respond to general inquiries, or to inform parties, wbo may have an interest, in advance wbat will be its action under certain supposed or probable circumstances, these opinions are expressed to you in view of tbe state of facts nowpxisting in tbe particular ease communicated to tbis department and tbe General Land Office verbally and in writing' by tbe governor of tbe State of Wisconsin and by yourself as. tbe president of tbe company, whose railroad over tlie located route ¿rom Madison, by way of Portage City, to tbe St. Croix Eiver or Lake, is now in process of construction.”
    IY. By a deed of trust dated December 31, 1856, tbe said company mortgaged their road and its rolling-stock, and—
    
      “ All and singular tbe lands granted or intended to be granted to said railroad company under and by virtue of said act of Congress and tbe act of tlie legislature of Wisconsin hereinbe-fore mentioned, so far as tbe said lands pertain or are applicable to tbe construction of said roads from Madison, by way of Portage City, to tbe St. Croix Eiver or. Lake, estimated to be about one million of acres of land, * * as fully and as amply as tbe same might be conveyed if tbe said railroad bad been already constructed and equipped, and tbe particular lands granted by Congress and tbe legislature, so far as tbe same were applicable to tbe construction of said road from Madison to St. Croix Eiver or Lake, bad already been designated and conveyed to said railroad company.”
    Tbe grantees in tbe deed were Green C. Bronson, James T. Soutter, and Shepherd Knapp, trustees, and the debt which it was proposed to secure by tbe mortgage was an issue of tbe bonds of tbe company not to exceed ten millions of dollars.
    On tbe 8th of July, of 1859, tbe said trustees made application to tbe Secretary of tbe Interior for patents for lands applicable under tbe act of June 3,1856, to said completed sections between Portage and Tomah. In their said application they said:
    “ Congress granted tbe land to tbe State of Wisconsin, tbe State granted to tbe railroad company, .and tbe company to tbe trustees. The equitable, if not tbe legal, title is in them in trust for tbe bondholders.”
    To tbis application tbe Secretary made a reply, from which tbe following is an extract:
    
      “ Several of tbe matters to which my attention is thus invited were before me in August, 1858, and under date of tbe 5th of that month I addressed a communication to N. P. Stanton, esq., tbe president of tbe La Crosse and Milwaukee E. E. Co., wbicb explains tbe position of tbis department in reference to tbe controvers3 between tbe executive of tbe State and the railroad company. A copy of that communication is inclosed for your information. It seems to be unnecessary to add much to what is there said in order to reply to all your propositions. It is deemed proper, however, to remark, that the act of Congress of June 3,1856, which is the basis of the action of this department in the case, has made a grant or grants to the State of Wisconsin, and it has been the uniform practice in adjusting similar grants in the General Land Office to transact the business directly with the State authorities and with them alone.
    “ Parties who seek the recognition or completion of the title of the State to any particular lands must therefore obtain the intervention of the State officers; and it is not necessary for us to entertain or consider questions which arise upon State legislation concerning the lands: questions which appear to be more appropriate for the State authorities or the courts. This position is more manifestly proper when it is considered that in the received construction of existing laws of Congress a patent is entirely unnecessary to assure the title of the State to any of the lands granted by Congress for aid in constructing railroads. These grants are accepted by the States with conditions, and so long as those conditions are complied with by the States, the title of a State to any granted tracts will be duly respected by ■all the officers of this department.”
    The said trustees never received patents for any part of said lands, and have never received a deed for any part thereof from the State of Wisconsin, and never became possessed of any part thereof.
    V. There being a default in the payment of interest on said mortgage debt, a suit was instituted in the district court of the United States for the district of Wisconsin for the foreclosure of the mortgage. At the January term, 1S62, a decide was entered in said suit for the sale of the property and estate conveyed by said deed of trust, and the same, including all the said lands described in the same language set forth iii Finding IV, were sold at public auction to William Wallace Pratt and William. Henry White, they being the highest and best bidders therefor, and a good and sufficient deed to convey to said purchasers the property and estate so mortgaged, sold, and purchased, including the said lands described as aforesaid, was executed and delivered to them on the 5th day of May, 18G3. But the said purchasers never received patents for any part of said lands, and never received a deed for any part thereof from the State of Wisconsin, and never became possessed of any part thereof.
    VI. The claimants are a corporation, dulj' organized under the laws of tbe. State of Wisconsin. On tlie 5th. day of May, 1803, said Pratt and White, by deed duly executed and delivered, conveyed to the claimants all the said railroad and other property and estate so purchased by them, and also, by words of description in all respects similar to those set forth in Finding IV, all the said lands so purchased by and conveyed to them. The claimants entered into possession of the said railroad and have since controlled and operated .it, first under their corporate name of the Milwaukee and Saint Paul Bailway Company, and subsequently and still under the corporate name in which the^ sue in this action; but they have never become possessed of the said lands, or of any part thereof, or of any proceeds therefrom, and they have never received any patents for any part of said land, nor any deed from the State of Wisconsin of any part thereof.
    On the 20th day of June, 1863, they made application in writing to the then governor of Wisconsin, setting forth that they had succeeded, by virtue of the foreclosure of said mortgage, to all the right and title which was conveyed by said mortgage to said Bronson, Soutter, and ICnapp, trustees in the lands granted by Congress by the act of June 3, 1856, and by the aforesaid act of the legislature of the State of Wisconsin, of October 11, 1856, to the said La Crosse .and Milwaukee Bailroad Company, and requesting him to issue to tliem the proper certificates for the land to' which they had thereby become entitled by virtue of said trust-deed, said foreclosure proceedings, and said purchase. In response thereto the governor answered that he had examined the matter, and was of the opinion that the construction of said act of Congress and of the legislature of Wisconsin was correctly made by his predecessor, aud that he adhered thereto, and refused to grant to the claimants the necessary certificate to obtain said lands, and refused to recognize their right thereto, for the reason that they had not complied with the terms of said grant.
    VII. On the 6th of March, 1868, the State of Wisconsin, in order that parties who had given mortgages to aid in the construction of the La Crosse and Milwaukee Bailroad and the Milwaukee and Horicon Bailroad might receive all the benefits .which they could from said lands, gave its consent that the, said lands might be used, donated, and applied to and for the use and benefit of said mortgagors; and also named certain commissioners wbo should be authorized to receive, take, hold, bargain, grant, sell, and convey all the lands granted by the said act of June 3, 1850, and convert them into money at such times and on such credits as should best subserve the interests of such parties, and incorporated the Wisconsin Bailroad Farm Mortgage Land Company for these purposes.
    On the 15th September, 1868, Congress having in the mean time authorized the State fo dispose of the lands due the State for the portion of the road already completed for the benefit of the said Wisconsin Bailroad Farm Mortgage Land Company, the claimants executed and delivered to the said Land Company a deed in the words and figures following, to wit:
    “This indenture, made this 15th day of September, A. D. 1808, between the Milwaukee & St. Paul Bailway Company, of the first part, and the Wisconsin Bailroad Farm Mortgage Land Company, party of the second part, witnesseth:
    “Whereas the Congress of the United States, by an act granted June 3d, 1850, entitled ‘An act granting public lands to the State of Wisconsin to aid in the construction-of railroads in said State,’ granted to the State of Wisconsin certain lands to aid in the construction of a railroad from Madison or Columbus (by the way of Portage City) to the St. Croix Biver or Lake;
    “And whereas the legislature of said State of Wisconsin subsequently passed an act, approved October 11,1856, entitled ‘An act to grant certain lands to the La Crosse and Milwaukee Bailroad Company, and to execute the trust created by an act of Congress entitled “An act granting public lands to the State of Wisconsin to aid in the construction of railroads in said State,” approved June 3, 1856,’ by which said State of Wisconsin granted to the La Crosse and Milwaukee Bailroad Company all of said lands so granted by the said Congress of the United States to the said State of Wisconsin for the purpose of aiding in the construction of a railroad from Madison or Columbus, by the way of Portage City, to the St, Croix Biver or Lake, between townships 25 and 31,'and from there to the west end of Lake Superior and Bayfield, together with all and singular the rights, privileges, and immunities, either present or prospective, conferred, or intended to be conferred, by the said act of Congress;
    “And whereas said La Crosse and Milwaukee Bailroad Company, after the passage of said last-mentioned act and on the same day, duly accepted the same by a resolution adopted by the board of directors of said company, a copy of which, certified by the secretary of said company under its corporate seal, was on the same d,ay deposited in the office of tlie secretary of state;
    “And whereas the said La Crosse and Milwaukee Bailroad Company afterwards, and on the 31st day of December, A. D. 1856, for tb,e purpose of borrowing money to enable it to build said railroad, issued its bonds, secured by a deed of trust executed by said railroad company, covering its line of proposed road from Madison, by way of Portage City, to tbe St. Croix River or Lake, and in and by said deed of trust said La Crosse and Milwaukee Railroad Company conveyed to Green C. Bronson, James T. Soutter, and Sbepberd Knapp, trustees 'therein named, all such interest as said railroad company bad then acquired, or might thereafter acquire, in all tbe lands granted to said railroad company by tbe said act of tbe legislature of tbe State of Wisconsin, approved October 11th, 1856, entitled ‘An act to grant certain lands to tbe La Crosse arid Milwaukee Railroad Company, and to execute tbe trust created by an act of Congress entitled “An act granting certain lands to tbe State of Wisconsin to aid in tbe construction of railroads in said State,” approved June 3d, 1856,’ so far as tbe lands granted by said act of tbe legislature are applicable to tbe construction of tbe road of said railroad company from Madison, by way of Portage City, to tbe St. Croix River or Lake;
    “And whereas tbe La Crosse and Milwaukee Railroad Company subsequently built and completed sixty-one miles of said railroad, to wit, from Portage City to Tomah, in tbe State of. Wisconsin, but never received any title to or conveyance of said lands, or any portion thereof, except as above specified;
    “And whereas tbe party of tbe first part subsequently, and in tbe year one thousand eight hundred and sixty-four, built and completed twenty-eight miles of said railroad from Columbus to Portage City, in the State of Wisconsin, but never received any title to or conveyance of any of said lands except as above recited;
    “And whereas said La Crosse and Milwaukee Railroad Company subsequently made default in tbe payment of the interest on said bonds so as aforesaid issued by said La Crosse and Milwaukee Railroad Company, and secured by said deed of trust so as aforesaid given by said last-named company to said Greene C. Bronson, James T. Soutter, and Sbepberd Knapp, trustees; and thereupon said trustees filed their bill of complaint for tbe foreclosure of said deed of trust in tbe district court of tbe United States for tbe district of Wisconsin on tbe 5th day of December, 1859, wherein said trustees were named as complainants and tbe said La Crosse and Milwaukee Railroad Company and others as defendants; and a subpoena to appear and answer in said cause was duly issued out of and under tbe seal of said court, commanding said defendants, on. a certain day therein named, to be and appear in said court and answer said bill of complaint, which was duly 'served upon defendants in said bill named; and that thereupon such proceedings were bad in said court that a decree of foreclosure and sale of said deed of trust was made; and by virtue thereof the marshal of tbe United States for tbe district of Wisconsin, on tbe 25tb day of April, 1863, sold and conveyed all the interest of the La Crosse and Milwaukee Railroad Company in and to said lands to William II. White and William Wallace Pratt, which sale was afterwards duly confirmed by the circuit court of the United States for the district of Wisconsin, to which last-named court the jurisdiction of said cause had been transferred by operation of law;
    “And whereas the said William EL White and William Wallace Pratt subsequently, and on the 5th day of May, 1863, by indenture of deed, conveyed to said Milwaukee and St. Paul Railway Company, the party of the first part, all the right, title, and interest which they had acquired by virtue of said marshal’s sale, of, in, and to all the lands so as aforesaid granted by Congress to the State of Wisconsin, and by the said act of October 11th, 1856, granted to said La Crosse and Milwaukee Railroad Company:
    “Now, therefore, the said party of the first part, in consideration of one dollar to it in hand paid, the receipt whereof is hereby acknowledged, has granted, quitclaimed, and released, and by these "presents does grant, quitclaim, and release, unto the said party of the, second part, and to its successors and assigns forever, all the right, title, interests, or claims of the said party of the first part of, in, and to the whole and every part of the lands so as aforesaid granted by the Congress of the United States to the State of Wisconsin to aid in the construction of railroads in said State by the act approved June 3d, 1856, and by the said State of Wisconsin granted to the said La Crosse and Mil-Avaukee Railroad Company by an act to grant certain lands to the La Crosse and Milwaukee Railroad Company, and other purposes, appiwed October 11th, 1856.
    “In testimony whereof the party of the first part has caused its corporate seal to be hereto affixed and these presents subscribed by the president and attested by its secretary the day and year first aboAm Avritten.
    “ For the Milwaukee and S’t Paul Railway Company,
    “By ALEXANDER MITCHELL,
    
      “President.
    
    “Attest:
    [L. S.J
    “ALANSON CARY,
    
      “Secretary.
    
    “In presence of— “John W. Caey. “John Johnston.”
    YIII. On the first day of July, 1875, the United States entered into a written contract with said claimants, whereby the claimants agreed to convey the United States mail 0Aer route 25002, from Milwaukee to La Crosse, on said railway, tAvelve times per AA’eek each way, for the period of four years from July 1,1875, for tbe consideration of $244 per mile per annum, including $25 per mile per annum for railway post-office cars, wbicli said amount tbe United States agreed to pay for said sendee. Tbe said road between Portage and Tomab formed then and still forms a part of said route 25002.
    Tbe following is one of tbe provisions of tbe said contract:
    u 9tb. That tbe Postmas ter-General may discontinue or curtail tbe service, in whole or in part, whenever tbe public interests, in bis judgment, shall require such discontinuance or curtailment for any cause, be allowing, as a full indemnity to the contractor, one month’s extra pay on tbe amount of service dispensed with, and a pro rata compensation for tbe amount of service retained and continued.”
    IX. Tbe claimant has kept and performed said contract on its part since July 1, 1875, and transported tbe mail as therein provided, except that tbe United States discontinued railway post-office cars from Portage to La Crosse, thereby reducing tbe ■compensation to be paid for that distance $25 per mile per an-num, to wit, to $219 per mile per annum.
    Tbe compensation agreed to be paid by tbe Postmaster-General in tbe contract of July 1, 1875, was calculated on tbe basis of tbe conditions and at tbe rates prescribed in tbe act of Congress approved March 3, 1873, chapter 231, entitled “An act making ajipropriations for tbe service of tbe Post-Office Department for tbe year ending June thirtieth, eighteen hundred and seventy-four.”
    From July 1,1876, to January 31, 1878, inclusive, tbe Postmaster-General has paid tbe claimant at tbe rate of $157.68 per mile per annum for tbe portion of route 25002 lying between Portage and Tomab.
    Tbe sum of $157.68 per mile per annum for weight of mails between Portage and Tomab was reached by first reducing tbe compensation named in tbe contract of July 1,1875, viz, $219 per mile per annum, ten per centum per annum, and then allowing eighty per centum of tbe whole pay after such reduction, because that portion of route 25002, it was claimed, was a railroad, constructed in whole or in part by a land grant made by Congress on the condition that tbe mails should be transported over their road at such price as Congress should by law direct.
    X. If tbe defendants are entitled to make no deductions from tbe contract rates, then there is still due tbe claimants tbe sum of $5,980.74 for tbe service performed from July 1, 1876, to January 31,1878, botli inclusive.
    If tbe defendants are entitled to deduct from tbe contract price tbe ten per centum mentioned in section 1 of tbe act of July 12,1876, and no more, for said service from July 1, 1876, to January 31, 1878, botb inclusive, then there is still due tbe claimants for sucb service $3,844.75.
    If tbe claimants are entitled to make sucb deduction only from tbe 12tb day of July, 1876, then there is still due tbe claimants for sucb service $3,888.75.
    If tbe defendants are entitled to deduct from tbe contract price tbe said ten per centum and also tbe twenty per centum mentioned in tbe 13th section of said act of July 12, 1876, then tbe claimants are not entitled to recover anything.
    
      Mr. John W. Gary for the claimant.
    Tbe road in question is not a land-grant railroad, or a railroad constructed in whole or in part by a land grant made by Congress, on tbe condition that tbe mails should be transported over said road at sucb price as Congress should by law direct.”
    There can be no pretence that this case is within the terms.' of tbe statute of July 12,1876. Section 13 of that act only applies to sucb roads as were constructed in whole or in part by a land grant. No land grant has ever gone to this road. Not one foot of land was ever granted to it from any grant made by Congress. No part of it was built from any sucb fund, as no sucb fund was ever received. Congress made a grant to tbe State. Tbe State promised to give it to tbe company building this road on certain conditions, but they never did give it or any part of it, tbe State claiming that tbe conditions were never-fulfilled by tbe company-. But whether fulfilled or not tbe company did not get the lands, consequently tbe road was not built in whole or in part by any sucb grant. It is not, therefore, within tbe terms of tbe statute, and there was no authority for withholding any part of our pay on any sucb ground. Tbe fact that this La Crosse Company bad a conditional promise of tbe grant and built its road over a portion of tbe land-grant line does not make it a land-grant road if it never got tbe grant. Tbe line belonged to tbe La Crosse Company before tbe grant was made by Congress.
    
      Tbe grant was only to pass to tbe La Crosse Company on tbe performance of tbe conditions prescribed by the State. These conditions were never complied with.
    Tbe La Crosse Company never earned this grant. It was never given to them and no part of tbe road in question was constructed by a land grant made by Congress, and therefore there was no authority for withholding any part of our pay under said contract.
    The question now before the court is not whether the State was right or wrong in withholding these lands from the La Crosse Company. The State did withhold them on the pretext stated, and the Dnited States Government when appealed to sanctioned the act of the State and refused to grant any relief. After five years’ persistent effort to obtain the lands, the company gave up the pursuit and abandoned all claim. It is now too late for the Government, either State or National, to change ground and say that the La Crosse Company did earn.and were entitled to these lands, but we wrongfully refused to recognize their claim and deprived them of all benefit of the grant, and we now acknowledge our error, and claim that the company shall be subjected to all the burdens of the grant for orm profit and advantage, although we wrongfully deprived it of all benefits arising therefrom.
    
      Mr. J. K. MoGcmmon (with whom was the Assistant Attorney-General) for the defendants.
    After the repeal of the grant of lands which applied to the railroad from Madison and Columbus to Portage and from Tomah to Saint Croix, and the granting of these lands to other companies, there was no excuse for the withholding of these lands from the company by the State from Portage to Tomah. The building of the road on the remaining portion of the route, that is, from Portage to Tomah, was completed, and the conditions of the grant thereby observed. It therefore would seem as if the company could have enforced its right, title, and interest in the lands against the State at any time before the act of legislature of March 6,1868.
    As recited in the Wisconsin act of March C, 1868, owners of farms and other lands in the State mortgaged the same to aid in building the La Crosse and Milwaukee Railroad, and because •of tbe foreclosure of tbe mortgage on tbe road wbicb secured tbeir loans tbey suffered great injury. Tbe money of tbe mortgagors of farms aided in tbe building of tbe La Crosse and Milwaukee Eailroad Company, which became tbe property of tbe claimant, entitled to all tbe benefits arising from tbe grant of lands from tbe United States, and under obligation to perform all tbe conditions attached to tbe grant. As successor of tbe La Crosse and Milwaukee Eailroad, it was competent for •the claimant to release all claim to tbe land in favor of tbe mortgagors, and by doing so tbe claimant was enabled to make some restitution to a portion of tbe bondholders who bad mortgaged tbeir farms for tbe purpose of raising money to loan, by transferring its own title and interest in tbe lands to tbe parties named.
    This is tbe first point proving that tbe claimant is a railroad ■constructed in whole or part by a land grant, because of tbe benefits derived from tbe grant of lands by tbe act of 1856, and inuring to tbe La Crosse and Milwaukee Eailroad Company and its successors. Tbe second arises from tbe provision of tbe act of tbe legislature of March G, 1868, wherein tbe claimant is relieved from paying taxes on its road and traffic on account of its being tbe owner of said lands, or tbe successor to tbe grantee or donee of said lands, so granted by Congress to aid in tbe construction of tbe railroad. Section 6 of tbe act of the legislature of Wisconsin of 1856 provided for tbe payment to tbe State of 4 per centum of tbe company’s gross earnings in lieu of taxes, and tbe State bad a lien upon tbe road to secure tbe payment of tbe four per centum. From tbe year 1856 to the passage of tbe act of 1868, above referred to, tbe company was either paying tbe four per centum of gross earnings or tbe State bad a lien upon tbe road for tbe same, and therefore tbe act of 1868 relieved it from a large expenditure because and on account of tbe relinquishment by tbe company of its title and interest in tbe lands.
    So when by that act tbe claimant agreed to release all claims it bad to tbe lands to tbe mortgagors of farms and other lands, who mortgaged tbe same to aid in building tbe La Crosse and Milwaukee Eailroad, and, further, upon tbe condition that tbe State of Wisconsin should relinquish its right to tax tbe claimant as owner of tbe lands, the consideration for tbe transfer of title to tbe mortgagors, or tbe Wisconsin Eailroad Farm Mortgage Land Company, was ample and valuable.
   Dayis, J.,

delivered tbe opinion of tbe court:

The nature of tbe title which tbe State of Wisconsin acquired by tbe act of June 3,1850, is settled by tbe decision of tbe Supreme Court in Schulenberg v. Harriman (21 Wall., 44):

“The act passed a present interest in tbe lands designated. * * Tbe power of disposal and tbe provision for tbe lands reverting both imply what tbe first section in terms declares, that a grant is made; that is, that tbe title is transferred to tbe State. It is true that tbe route of tbe railroad, for tbe construction of which tbe grant was made, was yet to be designated, and until such designation tbe title did not attach to any specific tracts of land. Tbe title passed to sections to be afterwards located. When the route was fixed, tbe locationbecame certain, and tbe title, which was previously imperfect,, acquired precision and became attached to tbe land. * * * The provision in tbe act, that all lands remaining unsold after ten years shall revert to tbe United States if tbe road be not then completed, is no more than a provision that tbe grant shall be void if a condition subsequent be not performed. * * * It is settled 'law that no one can take advantage of tbe non-performance of a condition subsequent annexed to an estate in fee but tbe grantor or bis heirs, or tbe successors of tbe grantor if tbe grant proceed from an artificial person; and if they do not see fit to enforce their right to a forfeiture on that ground, tbe title remains unimpaired in tbe grantee.”

But this grant, though made in fee and defeasible on condition subsequent, was also in trust—

“ For tbe purpose of aiding in tbe construction of a railroad from Madison or Columbus by tbe way of Portage City to tbe St. Croix Eiver or Lake, between townships twenty-five and thirty-one, and from thence to tbe west end of Lake Superior and to Bayfield. * * Tbe lands hereby granted to said State shall be disposed of by said State only in manner following; that is to say, that a quantity of land, not exceeding one bun-, dred and twenty sections, and included within a continuous length of twenty miles of road, respectively, may be sold, and when tbe governor of said State shall certify to tbe Secretary of tbe Interior that any twenty continuous miles of either of said roads are completed, then another like quantity of land hereby granted may be sold, and so, from to time, until said roads are completed.”

To tins trust tbe foEowing condition was attached:

“ That tbe United States mail shall be transported over said roads, under the directions of tbe Post-Office Department, at such price as Congress may bylaw direct: Provided, That until sucb price is fixed by law tbe Postmaster-General shall have the power to determine the same.”

This condition was intended to attach, and could only attach, to a railroad which the trustee should construct or cause to be constructed in whole or in part by the use of the property conveyed in trust.

The State executed the trust thus reposed in it by conferring upon the La Crosse and Milwaukee Eailroad Company, a preexisting corporation, whose proposed railroad would pass over 61.G miles of the route contemplated by Congress, the further right to construct the Congressional road and receive the benefit of the land grant; but the measures taken by the State to transfer the land grant to the company differed radically from those taken by Congress to pass the lands to the State. Congress made a statutory grant inprcesenti; but the State, although declaring that the rights granted by Congress were thereby granted to the company, enacted that the title to the lands should vest in said company only as the governor of the State should certify to the Secretary of the interior that a section of twenty miles was completed so as to admit of running regular trains over it; and it further made it the duty of the governor, “ in his official capacity and in behalf of the State and under the great seal thereof, to execute and deliver to the La Crosse and Milwaukee Eailroad Company, whenever it should by virtue of the provisions of the act be entitled to any of said lands, a deed in fee-simple of any of the lands to which said company should be entitled.”

It is manifest that the railroad company did not acquire title by the mere passage of the statute, as did the State of Wisconsin. By the completion of a section, according to the terms of the act, they acquired a right in equity to demand legal title from the State; but the State clearly proposed to keep within itself the legal title until its governor should execute and deliver the deed or deeds contemplated by the act.

That it was the trustees’ duty to retain such control over the trust property as would enable it to enforce the application of it to the object of the trust in the manner contemplated by Congress is i>lain. Whether the State used the power which it thus retained justly or unjustly, wisely or unwisely, toward the La Crosse and Milwaukee Eailroad Company and toward their privies in estate, among whom are the claimants, is not for us to determine. We are to be governed by tbe undisputed facts that after tbe La Crosse and Milwaukee Eailroad Company bad constructed 61.6 miles of railroad on tbe line projected by Congress, and under tbe authority derived from tbe statute wbicb tbe State bad enacted to carry out tbe trust wbicb it bad assumed toward Congress, tbe State refused to give tbe company tbe benefit of tbe trust property; and that neither that company nor any of its privies in estate has ever received tbe least direct benefit from tbe trust. On tbe contrary, after repeated efforts on tbe part of that company and of tbe trustees of their mortgage and of tbe claimants to secure some benefit from it, tbe claimants finally acquiesced in a different disposition of tbe trust property made by tbe State for tbe benefit of other parties with tbe consent of Congress, tbe creator of tbe trust.

Tbe defendants contend that tbe new disposition of tbe property is in fact an equitable execution of tbe original trust, and that they are therefore still entitled, to tbe benefit of tbe condition attached to it. We will consider this proposition.

It seems that tbe farmers along tbe line of the La Crosse and Milwaukee Eailroad and tbe farmers along tbe line of a railroad from Milwaukee to Iloricon bad subscribed to tbe stock or bonds of those respectives companies, and bad paid their subscriptions by mortgages on their farms. In tbe commercial crash of that time tbe Iloricon road went down as well as tbe La Crosse road. While tbe railroad investments of tbe farmers turned out badly, tbe mortgages remained on their farms. In tbe reorganization tbe claimants.became proprietors both of tbe La Cross road and of tbe Iloricon road. On behalf of its citizens, tbe State proposed to tbe claimants that it should apply tbe old La Crosse land grants to recoup tbe losses of tbe farmers on tbe lines of both roads. Congress having assented to this diversion of tbe trust property, tbe claimants gave their consent to it, and, apparently in order to quiet title, executed a quitclaim deed of all their interest in tbe lands to a corporation representing the owners of tbe mortgaged farm lands.

It was argued by tbe defendants that, as tbe road was constructed in part by tbe mortgage subscriptions of tbe farmers, this is in fact such an equitable appbcation of tbe lands to tbe construction of tbe road as entitles tbe government to the benefit of tbe provision of tbe act of June 3, 1856, relative to postal rates.

We are unable to see bow these lands, when used with the consent of Congress for the payment of old debts contracted by individual subscribers to the stock or securities of a railroad company, can be regarded as either directly or remotely “ exclusively applied in the construction of the road for which they were granted and selected,” which is what the trust calls for. It seems to us that they are used to indemnify persons in Wisconsin who had made bad investments in railways within its-borders, and for no other purpose. Being so used with' the assent of the United States, the latter are estopped from now claiming that they are applied to the uses named in the act of 1850. Even on tire defendant’s theory that the lands were indirectly used in the construction of a railway, it was a irse for the construction of the Horicon road as well as the La Crosse road, and was so far a violation of the provisions of the act of 1850.

We are therefore of opinion that no portion of the claimants’' road was constructed in whole or in part by a land grant within the meaning of section 13 of the Act July 12, 1870 (19 Stat. L., 82), and that for this reason the defendants are not entitled to deduct twenty per cent, from the contract price due the claimants for carrying the mails. This makes it unnecessary for iis to consider the further question raised by the claimants, whether the provisions of said section 13 apply to pre-existing contracts made with land-grant roads.

The defendants further contend that they are in any event entitled, under the provisions of the first section of said act of July 12, 1870, after the 1st day of July, 1870, to deduct ten per cent, from the contract price for carrying the mails. That section requires the Postmaster-General to readjust the compensation to be paid from and after the 1st July, 1870, for transportation of mails on railroad routes by reducing the transportation to all railroad companies for the transportation of mails ten per centum per annum from the rates fixed and allowed in the first section of the act of March 3,1873. It is found, as a fact, that the rates in the-claimants’ contract were calculated on the basis of the conditions and at the rates prescribed in said act of 1873. We are therefore called upon to-decide -whether the rates named in the claimants’ unexpired contract could be affected by the arbitrary act of the defendants alone.

We are all of opinion that when a contract for a term of time is made under due authority of law by duly-authorized agents-of the United States, the United States cannot by their own legislative act vary the terms of the contract in their own favor without the assent of the other party. If there were no other-question involved, it would not be necessary to go further with this branch of the case. The contention of the defendants, however, goes beyond'this. They maintain, first, that the contract was not authorized by statute; and, second, that by the terms of the contract they were authorized to change the rate in the manner in which it was done.

It is enacted in the Bevised Statutes by section 3956, that no contract for carrying the mail shall be made for a longer term than four years; and by section 3679 that no department of the Government shall involve the Government in any contract for the future payment of money in excess of appropriations made by Congress for that fiscal year; and by section 3732 that, with the exception of certain contracts in the War and Navy Departments, no contract shall be made unless the same be authorized by law, or be under an appropriation adequate to. its fulfillment.

The contract between the claimants and the defendants was-made on the 8th September, 1875,. for a term of four years, in accordance with an extensive usage in the Post-Office Department. It was undoubtedly authorized by section 3956 of the Bevised Statutes, unless, as contended by the defendants, that section is explained, controlled, and limited by the provisions of sections 3679 and 3752.

Section 3679 was taken by the revisers from the seventh section of the Legislative, Executive, and Judicial Appropriation Act, July 12, 1870 (16 Stat. L.-, 251); section 3732, from the tenth section of the Sundry Civil Act, March 12, 1861 (12 Stat. L., 220). The provisions of section 3956 are to be found in the-two hundred and fifty-sixth section of the Act to revise, consolidate, and amend the statutes relating to the Lost-Office Departmentr June 8,1872 (17 Stat. L., 315). This being the later act, and being a revision of all pre-existing laws relating to the Post-Office Department, its provisions undoubtedly at the time of its passage controlled those of prior statutes, even if apparently in conflict with it.

Before tbe enactment of tlie Eevisecl Statutes the Postmaster-G-eneral bad, therefore, authority to contract for carrying the mails on a railroad route for four years. We think that the Bevised Statutes made no change in the pre-existing law in this respect. The contract with the claimant was one authorized by law, and its term is for four years unless sooner terminated under its own provisions.

The ninth article of that contract authorized the Postmaster-General to discontinue the service in whole or in part at any time, allowing as a full' indemnity to the contractor one month’s extra pay on the amount of service dispensed with, and a pro rata compensation for the amount of service retained and continued.

The act of July 12,1876, was a public act, of which the claimants were bound to take notice. The statutory directions to the Postmaster-General were also a notice to the claimants that the service would be discontinued under the old rates, and would be continued, if at all, under the new rates. After this notice the claimants were at liberty to stop carrying the mails; in which case the defendants would have been obliged either to continue to pay the old rates or to terminate the contract and pay the month’s extra pay.

The claimants, however, made no objection to the notice contained in the statute; and, so far as appears in this case, continued to render the service under the new law without dissent or protest. We must presume that they acquiesced in its provisions and accepted the change which it made in their contract.

The reduction, however, can only be made for the period subsequent to July 12, 1876, the day when the notice was given. For all service up to that date the claimants are entitled to pay at the contract rates; after that time at such rates less ten per cent. They are therefore entitled to judgment for the sum of $124.48 for the balance due them for services performed at the old rates, and $3,761.51 for the balance due them for service at the new rates up to and including January 31, 1878.