Case Name: The Denver Pacific Railway Company, appellees, v. The United States, appellants
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1879-01-27
Citations: 14 Ct. Cl. 589
Docket Number: 
Parties: The Denver Pacific Railway Company, appellees, v. The United States, appellants.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 14
Pages: 589–590

Head Matter:
(12 C. Cls. R., 237; 13 id., 382; 99 U. S. R., 460.)
The Denver Pacific Railway Company, appellees, v. The United States, appellants.
On the defendants Appeal.
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.
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 imposed by the original incorporating statutes, and not to the statutory mortgage resting on other parts of the grantor’s line. Therefore the Denver road is not subject to themortgage debt of tbe Kansas Pacific road; (3) That the term “subject to the conditions,” &c., as used in some of the Pacific railroad acts, is properly referable to land and to a mortage; but when this is dropped and the term “ subject to the obligations,” &c., is substituted, the latter is not properly referable to land nor to a mortgage, but to the personal or corporate duties imposed upon the party obligated. Judgment for the claimants. The defendants appeal.
The judgment of the court below is affirmed. The Supreme Court now holds: (1) That the statutory mortgage or lien of the government for bonds advanced to aid in the construction of a road extends no further than the road or portion of a road for the construction of which they were advanced; (2) That the claimants here are hound to perform the corporate services imposed upon the Pacific railroads by the act of 1862, &c., hut are not iiahle to contribute for the mortgage lien on the Kansas Pacific road.
Mr. Attorney-General Devens and Mr. Joseph K. MeOwmmon for the United' States.
Mr. J. P. Usher and Mr. Henry Beard for the appellee.

Opinion:
Mr. Justice Bradley
delivered the opinion of the Supreme Court, January 27, 1879.