Case Name: The Union Pacific Railroad Company, appellants, v. The United States, appellees
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1879-01-27
Citations: 14 Ct. Cl. 587
Docket Number: 
Parties: The Union Pacific Railroad Company, appellants, v. The United States, appellees.
Judges: 
Reporter: United States Court of Claims Reports
Volume: 14
Pages: 587–588

Head Matter:
(13 C. Cls. R., 401; 99 U. S. R., 402.)
The Union Pacific Railroad Company, appellants, v. The United States, appellees.
On the claimants’ Appeal.
The Pacific railroad acts provide that as every section of twenty miles is “completed” by a company and accepted by the President, the government shall loan its bonds to the amount of $16,000 a mile, and issue patents for certain public lands granted as a subsidy. The bonds are to constitute a second mortgage on the roads. Prom the time a road is “completed” five per centum of its “net earnings” is to be annually applied toward their payment. When the last section of the claimants’ road is built bonds are issued, bid patents for the lands are withheld. The claimants now bring their action for freight moneys due them. The defendants seels to recover by way of counter-claim the five per centum of net earnings. The principal questions in the case are, when ivas the road “completed” and what constitute “net earnings.”
The court below holds: (1) That it was not the purpose of the Pacific Pail-road Act 1864 (13 Stat. L., 358, § 10), to postpone the payment of the “five per centum of the net earnings” of the roads until the first-mortgage debt of the companies should be paid; (2) That the legal obligation of the companies to pay the five per centum of their net earnings was not eusx>ended when the priority of the government’s lien upon the roads was subordinated by the act of 1864, but remains in full effect as between the government and the companies, though it may be otherwise as between the first mortgagees and the government; (3) That when the fact of completion of a twenty-mile section of a road was ascertained and declared in the way prescribed by law, the fact must be regarded as finally settled. It could not be changed by the Executive and cannot be re-examined by the judiciary; (4) That there was but one completion of a road within the contemplation of the statutes, and that was when the last section was completed by a eonrpany and accepted by the President in the manner prescribed by law; (5) That when the last section of a road w&s“ completed and equipped” within the meaning of section 4 of the act of 1864, the entire road was “completed” within the meaning of section 6, so as to entitle the government to have the “five per centum of the net earnings” of the road annually applied from that time to the payment of the bonds loaned to the company; (6) That the claimants, having demanded and received government bonds and lands on the representation that each section of the road was “completed and equipped in all respects as required ” by the statute, are estopped from denying the fact of the completion of the entire road; (7) That in determining what are the “net earnings” of the Pacific railroads, the interest j>aid on the first-mortgage bonds issued for the construction of the road cannot be deducted from the gross earnings as a part of the expense of ojierating the road; (8) That the expenditures of the Pacific railroads in regard to lands received from the government but not connected with the business of the roads cannot be deducted from the gross earnings in the ascertainment of the “net earnings” ; (9) That interest cannot be recovered by the government upon the five per centum of net earnings. Judgment for the defendants. The claimants appeal.
The judgment of the court below is affirmed, except as to certain details of what constitute net earnings.
Mr.-, Sidney Bartlett for tbe appellant.
Mr. Attorney-General Bevens and Mr. Joseph K. McCammon for,tbe United States.

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