Case ID: us-ct-cl_20/html/0523-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SAINT PAUL AND DULUTH RAILROAD COMPANY v. THE UNITED STATES.
    (18 C. Cls. R., 405; 112 U. S. R., 733.)
    
      On the claimants Appeal.
    
    The Lake Superior and Mississippi Bailrcad Company, a land-grant road, having a contract with the Postmaster-General for carrying the mails when the act of July 12,1876, reducing the compensation for such, service by such roads, was passed, the Postmaster-General, thereafter, during the term of the contract, retained the amount of such reduction from the contract rate.
    The company afterwards failed, and all its assets and franchises jjassed, under a decree of foreclosure of a mortgage, to the claimant, who- • now sues to recover the amount so_ retained from its mortgagor or assignor.
    After the transfer of the assets and franchises of the Lake Superior Company, by the foreclosure of said mortgage, the claimant corporation continued to carry the mails according to the terms of said contract with its assignor, and from the contract rate of pay deductions were in like manner made and retained by the Postmaster-General, under the acts of July 12,1876, and June 17, 1878. The claimant now sues to recover the deduction thus retained.
    
      The court, below decides—
    (1.) On the authority of the decision of the Supreme Court in other land-grant railroad cases (104 U. S. R., 680, 687), the acts of Congress reducing the compensation of land-grant companies for carrying the mails do not apply to contracts previously made.
    (2.) Whether an accrued claim against the United States passes to the purchaser of all the assets and franchises of a failed railroad company, under a decree of foreclosure of a mortgage, notwithstanding the provisions of Rev. Stat., § 3477, making void all assignments of claims against the United States, before the issuing of a warrant for payment, quere. The judges are divided in opinion.
    (3.) A contract made with a railroad company for carrying the mails is annulled by the provisions of Rev. Stat., § 3737, upon the foreclosure of a mortgage of all its assets, and the' sale thereof to a new company; and such new company, the purchaser, cannot maintain an action thereon against the United States.
   The opinion of the court below is affirmed, the Supreme Court holding that both sections of the Revised Statutes (§§ 3477, 3737) were applicable to the case.

Mr. Justice Matthews delivered the opinion of the Supreme Court, January 5, 1885.