Case: FLINT AND PÈRE MARQUETTE RAILROAD COMPANY v. THE UNITED STATES
Abbreviation: Flint & Père Marquette Railroad v. United States
Decision Date: 1883-04-23
Docket Number: No. 12404
Citation: 18 Ct. Cl. 420
Volume: 18
Reporter: United States Court of Claims Reports
Court: United States Court of Claims
Jurisdiction: United States
Parties: FLINT AND PÈRE MARQUETTE RAILROAD COMPANY v. THE UNITED STATES.
Judges: Drake, Ch. J., was absent when this cause was heard, and takes no part in the decision.
Pages: 420–431

Head Matter:
FLINT AND PÈRE MARQUETTE RAILROAD COMPANY v. THE UNITED STATES.
No. 12404
April 23, 1883.
At a sale under a decree of foreclosure of a mortgage, all the assets and franchises of a land-grant railroad company were purchased by trustees of the bondholders, who organized and became a corporation — the claimants in this case. Among the assets were claims for retainers and deductions made by the Postmaster-General from the contract price for carrying the mails by the company whose assets were so purchased, and the defendants contend that such claims did not pass by the sale.
Held:
Whether accrued claims against the United States pass by the sale of all the assets and franchises of a failed corporation under a decree of foreclosure of a mortgage is not yet settled. The judges are divided in opinion thereon, as in the case of the Saint Paul and Duluth Railroad Case (ante, 405), which see.
The following are the facts found by the court:
I. On the 11th September, 1875, the Flint and Pére Marquette Eailwav Company, which was then a corporation created under the laws of the State of Michigan, and owning and operating a certain railroad within the limits of said State, entered into the following contract, in writing, writh the Post-Office Department:
This article of contract, made the 11th day of September, in the year one thousand eight hundred and seventy-five, between the United States of America (acting in this behalf by the Postmaster-General) and the Flint and Pbre Marquette Railroad Company, by Jesse Hoyt, its president, and Jesse Hoyt and Samuel N, Hoyt, as sureties, wituesseth.:
That whereas the said railroad company has been accepted according to law as contractor for conveying the mail on route No. 24015, from Monroe, Mich., by Grafton, Carleton, Waltz, Belden, New Boston, Romulus, Wayne, Plymouth, Mead’s Mills, Northville, Novi, Wixom, Milford, Highland Station, Clyde, Holly, Stony Run, South Grand Blanc, Grand Blanc, Flint, Mount Morris, Clio, County Line, Birch Run, Blaekmar, Bridgeport Centre, East Saginaw, Jay, Smithvilh; (n. p.), Midland, Averill’s Station, Sanford (n. o.), Bradley, Coleman, Loomis, Clare, Farewpll, Sears, Evarb, Horsey, Reed City, Chase, Summitville, Mivona, Forman, Baldwin, Welden Creek, Ferry ville, and Amber, to Ludington and back, by railroad, 12 times a week, and six additional times a week outward toJHolly, 24 times a week and six additional times a week outward thence to East Saginaw, and 6 times a week the residue, and on branch from Otter Lake Junction (n. o ), by Genesee Village, Rogersville, and Otisville, to Otter Lake and back, by railroad, 6 times a week, and on branch from East Saginaw, by Portsmouth, to Bay City and back, by railroad, 24 times a week and 6 additional times a week outward, or as much oftener as trains may run, by a schedule satisfactory to the Department, at twenty-five thousand seven hundred and fifty-eight and four one-hundredths dollars per year (being at the rate’ of $96 per mile per annum on main line, $40 per mile per annum on 1st branch, and $60 per mile per annum on 2nd branch), for and during the term beginning" Jnlyfirst, eighteen hundred and seventy-five, and ending June thirty, eighteen hundred and seventy-nine:
Now, therefore, the said Flint and Phre Marquette Railroad Company, as contractor, and the said1 Jesse Hoyt and Samuel N. Hoyt, as sureties, do jointly and severally undertake, covenant, and agree with the United States, and do bind themselves—
1st.' That the mail (including British, Canada, and other foreign mails) shall he conveyed in a secure and safe manner, free from wet or other injury, in a separate and convenient car, or apartment of a car, suitably fitted up, furnished, warmed, and lighted, under direction of the Post-Office Department, and to the satisfaction of the Postmaster-General, or of his authorized agent, at the expense of the contractor, for the assorting and safe-keeping of the mails, and for the exclusive use-of the Department and its mail agent, if the Department shall employ such agent; and such agent is to he conveyed free of charge. When there is no agent of the Department, the railroad company shall designate a suitable person on each train, to he sworn, to receive and take charge of the mails, and of way-hills accompanying and describing them, and duly deliver the same. And the mail shall be ta k from and delivered into the post-offices at the ends of the route; and also from and into the intermediate offices on the route, or that may hereafter he established on the route, provided the latter are not over one-quarter of a mile from a depot or station, or from the railroad track when no station has been established.
2d. That if the company shall run a regular train of passenger cars more frequently than is required by the contract to carry the mail, the same in creased frequency shall be given to the mail, and without increase of compensation, and the like as to the increase speed of the mail trains, if desired by the Postmaster-General.
3d. That the company shall convey, free of charge, mail-bags office blanks; and also all accredited special agents of the Department, on exhibition of their credentials.
4th. That the company shall not, by itself nor by its agents, transmit, nor be concerned in transmitting, commercial intelligence more rapidly than by mail, nor carry out of the mail any letters not inclosed in postage-stamped envelopes, except such as may have relation solely to some article at the same time conveyed.
5th. That in every case of failure to perform the trip that the same was not caused by misconduct, neglect, or want of proper skill) there may be a forfeiture of the pay for the trip; and a failure to arrive at the end of the route, so as to lose the connection with a depending mail, shall be considered as equal to a whole trip lost, unless the detention or delay be the result of unavoidable causes.
6th. That the company shall be subject to fine for or liver a mail, or any part of a mail; for suffering the mail to be wet or otherwise injured, or lost, or destroyed, unless it shall appear that such failure, or other incident as aforesaid, was not caused by misconduct, neglect, or want of proper skill on the part of the company or its officers.
7th. That the company shall be answerable for the adequacy means of transportation; for the faithfulness, ability, and diligence of its agents; and for the safety, due receipt, and delivery as aforesaid of the mails.
8th. That the company will collect quarterly, if required by mastei’-General, of postmasters on the route the balances due from them to the United Statts on their quarterly returns, and faithfully render an account thereof to the Postmaster-General in the settlement of its quarterly accounts, and will pay over to the Auditor of the Treasury for the Post-Office Department, on the order of the Postmaster-General, all balances remaining in its hands.
9th. That the Postmaster-General may discontinue or curtail the service, in whole or in part, whenever the public interest, in his judgment, shall require such discontinuance or curtailment for any cause; he 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.
10th. The said United States covenant with the said company pay as aforesaid, at the rate aforementioned, quarterly, in the months-of November, February, May, and August, or in the preceding months, at the option of the Department.
Provided always, that this contract shall, in parts, the terms and requisitions of an act of Congress passed the twenty-first day of April, in the year one thousand eight hundred and eight, entitled “An act concerning public contracts.”
Inwitness whereof the said Postmaster-General has caused Post-Office Department to be hereto affixed, and has attested the same by his signature; and the saidrailroad company, by its president and sureties, have hereunto set their hands and se^ls the day. and year set opposite their names, respectively.
Signed, sealed, and delivered by the Postmaster-General in the presence of—
J. W. MARSHALL,
Acting Postmaster-General.
Flint and Pfere Marquette Railroad Company.
Signed this 8th day of Dec., 1875, by—
Jessb Hoyt, Prest. [Affix seal of Co.]
II. The said Flint and Pere Marquette Eailway Company performed tbe service as required by the contract during its entire term.
III. The following circulars were sent on the days of their respective dates by the Second Assistant Postmaster-General to the proper officers of the Flint and -Pere Marquette Eailway Company:
A.
Seduction of pay for mail service on land-grant railroads tender act of Congress of July 12, 1876.
P'ost-Obbiob Department,
Office of the Second Ass’t Postmaster-Gen'l,
Washington, P>. C., Oct. 20, 1876.
Sir: The act of Congress entitled “An act making appropriations for the service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen hundred and seventy-seven, and for other purposes,” approved July 12, 1876, section 1, contains the following proviso, namely:
“Provided, That the Postmaster-General be, and he is hereby, authorized and directed to readjust the compensation to be paid from and after the first of July, eighteen hundred and seventy-six, for transportation of mails on railroad routes, by reducing the compensation to all railroad companies for the transportation of mails ten per centum per annum from the rates fixed and allowed by the first section of an act entitled ‘An act making appropriations forjhe service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen hundred and seventy-four, and for other purposes,’ approved March third, eighteen hundred and seventy-three, for the transportation of mails on the basis of the average weight.”
The same act also contains the following section:
“Sec. 13. That railroad companies whose railroad was constructed, in whole or in part, by a land grant made by Congress on the condition that the mails should be transported over their road at such price as Congress should by law direct, shall receive only eighty per centum of the compensation authorized by this act.”
Consequently, for mail service performed on and after July 1, 1876, on your road, route 24015, between Monroe and Ludington, and on branches, the compensation will be reduced from $25,758.04 per annum (the amount ■warranted by the latest returns under the act of March 3,1873) to $20,875.67 per annum, the reduction amounting to $4,882.37 per annum, which is due to the thirteenth section of the act of July 12, 1876, above quoted.
Very respectfully,
Thos. J. Brady,
Second Ass’i Postmaster-General.
To H. C. Potter, Esq.,
G-en’l Mang. Mint and Fere Marquette B. B.,
East Saginaw, Mich.
B.
Post-Office Department,
Office of the Second Assistant Postmaster-General,
Railway Adjustment Division,
Washington, D. G., Nov. IQth, 1876.
Sir : Your favor of the 30th ultimo has been received, and the advice of the law office of the Department is requested, in a letter of this date, upon the proposition you submit as to confining the reduction of pay under the 13th section of the act of July 12,1876, to that portion of your road between Flint and Ludington, instead of applying it to the whole route No. 24015, between Monroe and Ludington. On receipt of his answer any further action which may appear necessary will be taken, of which due notice will be given to your company.
Very respectfully,
Thos. J. Brady,
Second Ass’t P. M. Gen’l.
G. W. Ledlie, Esq.,
Auditor Flint §• Píre Marguetie B’w’y,
East Saginaio, Mich.
C.
March 31, 1877.
Sir: No reduction of pay for mail service having been made on the land-grant portion of route No. 24015 (Flint to Ludington) under the first section of the act of Congress of July 12, 1876, in accordance with the advice of the law officer of the Department, the order of Dec. 29, 1876, is rescinded, and the order of Dec. 4, 1876, modified, so as to fix the pay of the Flint and Pbre Marquette R. R. Company on said route from July 1, 1876, as follows;
From Monroe to Flint, 83.12 miles, $96 per mile.
From Flint to Ludington (land-grant), 171.17 miles, $69 per mile.
Branch 1, 14.53 miles, $40 per mile.
Branch 2,12.75 miles, $60 per mile.
Making the total annual pay, $21,156.99.
Very respectfully, &c.,
-Tiios. J. Brady,
Second Ass’t P. M. General.
Henry C. Potter, Esq.,
Gen’l Manager Píre Marquette B. B., East Saginaio, Mich.
D.
Post-Office Department,
Office of the Second Assistant Postmaster-G-eneral,
Railway Adjustment Division,
Washington, D. G., April 11th, 1877.
Sir : In reply to yours of the 17th instant, protesting against the reductions which have been made in the compensation on that portion of your road endowed with a grant of land, viz, between Flint and Ludington, because of the existence of a contract, I have to say that a similar case having been presented it was referred by this office to the Assistant Attorney-General, who advises that “notwithstanding aland-grantrailroad company may perform the service performed by it under a contract with the Government, it is still subject to the deduction from its compensation directed to-be made under the provisions of the act of July 12. 1876.”
Very respectfully,
Thos. J. Brady,
Second Ass’i P. M. Gen’l.
H. C. Potter, E«<p,
Gen’lMang. Plint and Pére Marquette'R’w’y Co.,
Past Saginaw, Mich.
E.
Readjustment of pay-for mail service on railroad routes under act of Congress of
June 17, 1878.
Post-Office Department,
Office of the Second Ass’t Postmaster-General,
Washington, D. C., July 2, 1878.
Sir : The act of Congress mating appropriations for the service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen-hundred and seventy-nine, and for other purposes, approved June 17, 1878,. contains the following proviso, namely:
“ That the Postmaster-General be, and he is hereby, authorized and directed to readjust the compensation to be paid from and after the first day of July, eighteen hundred and seventy-eight, for transportation of mails on railroad routes, by reducing the compensation to all railroad companies for-the transportation of mails five per centum per annum from the rates for the-transportation of mails on the basis of the average weight fixed and allowed by the first section of act entitled ‘An act making appropriations for the-service of the Post-Office Department for the fiscal year ending June thirtieth, eighteen hundred and seventy-seven, and for other purposes/ approved July twelfth, eighteen hundred and seventy-six.”
Therefore, please take notice that the Auditor of Treasury for this Department has been directed to decrease the pay of your company for the conveyance of the mails on route 24015, between Monroe and Ludington, and: branches, from July 1, 1878, to June 30, 1879, $591.56 per annum, leaving the pay from the first-named date |20,565.43 per annum, being a reduction- of five per centum from the rates fixed for weight of mails, in accordance with the provision of the act of June 17, 1878, above quoted.
Very respectfully, your obedient servant,
Thos. J. Beady,
Second Ass’t Postmaster-General.
To H. C. POTTBK,
Gen’l Mang. Flint a/nd Pere Marq.uette JR. R., East Saginaw, Mich.
IV. The said company was paid the contract price for Car-Tying the mails, except that the following deductions were made therefrom: From Julyl, 1876, to June 30, 1879, under Act of July 12,1876, $13,803,15 •, from July 1, 1878, to June 30, 1879, under Act of June 17,1878, $591,56; total, $14,394.17. The said sum of $14,394.17 has never been paid by the defendants.
V. On the 1st day of June, 1872, the Flint and Pére Marquette Eailway Company executed and delivered to Orapo, Pierce, and Eogers, trustees, a trust-deed upon the railway and property of the company to secure the payment of certain bonded indebtedness, said trust-deed being known as the consolidated trust-deed, and the bonds therein mentioned being known as the consolidated bonds, sometimes called the consolidated sinking-fund bonds. The said trustees filed their original bill against the said railway company on the 27th day of June, A. D. 1879, in the circuit court of the United States for the eastern district.of Michigan, praying for the appointment ■of a receiver to take charge of said road and property conveyed by said deed, and to enforce the provisions of said deed, and a receiver was thereupon appointed;
VI. On the 21st day of August, A. D. 1879, the said railway oompany executed a supplemental trust-deed to the same trustees, the granting part of which is as follows:
whereof is hereby acknowledged, has granted, bargained, sold, remised, released, conveyed, and confirmed, and by these presents does grant, bargain, •sell, remise, release, convey, assign, transfer, and confirm, unto the said parties of the second part, and to the survivor or survivors of them, his or their successor or successors, and to his or their assigns forever, as joint tenants, and not as tenants in common, in trust as hereinafter expressed, all and singular the property of the said party of the first part hereto of every name and nature, including all its real estate within the State of Michigan, and all its pex-sonal estate wheresoever the same may be situate; also including all choses in action and all claims and demands whatsoever, and also all claims against the State or against the United States, and all •claims against any department of either the State of Michigan or of the United States, and also all equitable rights and remedies, and all equitable claims and demands -whatsoever against all and every person or persons whomso-. ■ever, including incorporeal rights, property, and franchises from whatever source derived or obtained, and all the hereditaments and appurtenances thereunto belonging or in anywise appertaining, or that may hereafter thereto belong or appertain.
# # # if ' if if #
Except as shown by said supplemental deed, it does not appear that any claims against the United States or against any Department of the United States were embraced in any deed or conveyance to said trustees.
VIL A supplemental suit was commenced in the circuit ■court of the United States for the eastern district of Michigan against said railway company for the foreclosure of the supplemental trust-deed, and a decree was'had in said suits, of which -the following are extracts:
First. That the said Flint and Pfere Marqnálte Railway Company has made •default in the performance of the agreements contained in the consolidated trust-deed mentioned in the pleadings, and that said the trustees in said ■consolidated trust-deed (being tbe complainants, Crapo, Pierce, and Rodgers) are entitled to the aid of this court in tbe premises, and to have the said railroad as consolidated, as stated in said bill, sold, with all its property, rights, franchises, and privileges, including things in action and equitable rights of every name and nature, subject to the prior claims in the ■pleadings mentioned.
**>#«*■*#
Fifth. That the said defendant pay to said complainants, Crapo, Pierce, and Rogers, the sum of one million seven hundred and sixty-six thousand three hundred sixty-eight and dollars, with interest thereon from May 1st, 1880, together with the taxable costs in this cause, and shall, also pay the amount in default for sinking fund, as provided in said consolidated trust-deed, on or before the 27th day of June, in the year of our Lord one thousand eight hundred and eighty; and in default thereof the said railroad of the said defendant, constituting its entire lino of railway in the State of Michigan, and all and singular the depot buildings, engine-houses, and other buildings and improvements and constructions thereon, and also all and singular the rails and superstructure of said road and- all-and singular the locomotives, engines, and rolling stock of every kind and description, as well as the tools, materials, implements, utensils,’ and other personal property which may have been procured for and used upon the said railway; and also all and singular the rights, privileges, franchises, tenements, hereditaments, and appurtenances thereto belonging or in anywise appertaining, and all and ■singular the property of the said Flint and Pbre Marquette Railway Company of every name and nature, including all its real estate within theState of Michigan, and all its personal estate wheresoever the same may be situate, and also all choses in action, and all claims and demands whatsoever, against any person or persons or corporation, or against the State or ' the United States; and also all equitable rights and remedies, and all claims- and demands whatsoever, whether at law or equity, against all and every person or persons whomsoever, including incorporeal rights, property, and franchises from whatever source derived or obtained, and all hereditaments- and appurtenances thereunto belonging, or in anywise appertaining, shall-be sold by or under the direction of Henry M. Campbell, a master in chancery of this' court, who is hereby appointed a special master commissioner for that purpose; provided, that there shall be excepted from said sale the lands included in the land grant made by the United States and the State of Michigan to aid in the construction of the said Flint and Pbre Marquette Eailway, and also excepting from said sale moneys due or to grow due 01-heretofore collected from the sale of lands or timber from the lands embraced, in said land grant, but such sale shall include the right to call land-grant trustees to account as herein otherwise provided. That such sale shall be-made at the front door of the general offices of the Flint and Pere Marquette Eailway Company, in the city of East Saginaw, in the State of Michigan,, at any time after the said 27th day of June, in the year of our Lord one thousand eight hundred and eighty. That the said special master commissioner shall give notice, according to the course and practice of this court, of the time and.place of such sale. That such notice shall be published at least once in each week for not less than six successive weeks in the Detroit Post and Tribune, a newspaper published in the city of Detroit, and also in Saginaw Courier, a newspaper published in East Saginaw, in the State of Michigan; and at such sale the complainants or any of theparties to. this suit, or interested therein, may become the purchaser.
•¥ » if if if 4* if
'Ninth. Forthwith, after the confirmation of said sale, the said special master commissioner shall execute and deliver to the purchaser or purchasers, or his or their assigns, a deed of the property so sold, describing, the same as in this decree, which deed shall refer to this decree and shall state that the purchaser takes the property subject to all prior liens, claims,, and rights, as in this decree and in said order of conformation stated, and thereupon the purchaser or purchasers, his or their assigns, shall be let into possession of the-property so purchased; and the receiver is hereby directed, upon production of a certified copy of the order confirming the-report of sale, together with the deed of the special master commissioner as aforesaid, to deliver and transfer possession of the said railroad and all the'property embraced in said deed, so far as the same is in his custody and control, to the grantee or grantees named in such deed; but such grantee or grantees shall take such property and the possessioii thereof subject to an-adjustment and satisfaction of all the accounts of the receiver, and all debts-created by him which have been or may be approved by the court. All further directions are hereby reserved, and any of the parties to be at liberty to apply to the court as they may be advised.
VIII. The said property was thereupon, on the 18th day of August, 1880, sold in pursuance of the decree, and purchased by Henry A. V. Post and others, as a committee in trust for the holders of bondsj pursuant to a scheme for reorganization before then agreed upon. And thereupon said committee so purchasing, with their associates, organized the claimant company to take charge of, manage, and operate the railroad and property sold. And thereupon a deed of conveyance was made of the said property directly to the claimant, by order of the court.
The following is a copy of the order of the court under which the said deed was made to the claimants: •
At a session of the circuit court of tlie United States for the eastern district of Michigan, continued and held pursuant to adjournment, at the district court-room in the city of Detroit, on Tuesday, the twenty-first day of September, in the year one thousand eight hundred and eighty.
■ Present, honorable Henry B. Brown, district judge.
‘OlxvbR Prescott, William W. Crapo, Andrew^ G. Pierce, and Publius V. Rogers, trustees, complainants, I’S. The Flint & Pirn® Marquette Railway Company, defendant. ■ - -
2550. In equity. Original and supplemental bills.
In this cause, on reading and filing the report of Henry M. Campbell, master in chancery, and special master commissioner, appointed by the decree heretofore made inthis cause to make'tke sale of the property therein mentioned, from which it appears that the property directed to be sold by said •decree was sold on the lath day of August, 1880, and that Henry A. V. Post, Loum Snow, jr., Francis Hathaway, HenryJH. Fish, and Abram G. Brower became the purchasers, they being the highest bidders therefor, and purchasing as a committee in trust for the holders of bonds, pursuant to a scheme for reorganization before then agreed upon, and that said purchasers had paid to the said special master'commissioner the amount bid at such sale; on motion of W. L. Webber, “solicitor for the complainants, it is ordered that the said sale and said report and all things therein contained be, and they are hereby, ratified and confirmed.
And on reading and filing the'petition of said purchasers at said sale, from which it appears that such purchasers, pursuant to the scheme for reorganization aforesaid, have associated with themselves the pers ns named in said petition, and that said purchasers and their said associates have organized a corporation by the name of the Flint and Pbre Marquette Railroad Company, to take charge of, manage, and operate the railroad and property sold pursuant to said decree and purchased as aforesaid, said petition praying that- the said special master commissioner may make a deed upon said sale direct to the said corporation thus formed for the pur-' pose aforesaid:
On like motion, it is ordered that the said special master commissioner make a deed and conveyance of the property sold by him under such decree, and purchased as aforesaid, as prayed in such petition, such deed to run to the said Flint and Pbre Marquette Railroad Company, the corporation-organized by the said purchasers and "their associates as aforesaid, and such deed shall refer to the decree under which the sale was made, and shall state that the grantee therein named takes the property subject to the incumbrances, terms, and conditions mentioned in said decree and in this order.
And, on like motion, it is further ordered that it he referred to Henry M. Campbell, a master of this court, to inquire and report the compensation which should be awarded for their services in this’cause, to the receiver, and to the counsel engaged therein, and also what compensation should be awarded to the trustees, saidCrapo, Pierce, and Rogers, for their services as such, and that the master report thereon, with his opinion.
It is further ordered that Henry C. Potter, the receiver appointed in this cause, render his account as such receiver, made up and computed to the close of the month of September, instant, and that said receiver surrender and deliver possession of the property embraced in the master’s deed to be given as hereinbefore mentioned, to the said Flint and Pere Marquette Railroad Company on the first day of October, proximo, at the beginning of said day, the said company to take the same and hold subject to the payment of such sums for the debts created by the receiver, and for expenses connected with or growing out of this suit, as the court shall order.
It is further ordered that the said Henry M. Campbell, special master commissioner, deliver of all the bonds and coupons which were paid into his hands by the purchasers under said sale, and which are now on deposit at the Merchants’ National Bank, as stated in said report, to the said Cra.po, Pierce, and Rogers, trustees orto their solicil or, that the same may be can-celled, and that the money which was paid by such purchasers on said sale, and which is now on deposit iu the said bank, as stated in said report, shall continue on deposit as aforesaid, subject to the order of this court.
It is further ordered that any of the parties he at liberty to apply for further.directions as they may he advised, and that the said Henry M. Campbell, master as aforesaid, make report concerning the matters hereinbefore referred to him with all convenient speed.
Henry B. Brown,
District Judge.
Mr. John F. Farnsworth for the claimants.
Mr. John 8. Blair (with whom was Mr. Thomas Simons, Assistant Attorney-General) for the defendants :
The assignment of this claim, although apparently by operation of law, bad for its foundation the very thing prohibited by section 3477 Revised Statutes, to wit, a conditional assignment by the party with whom the defendants had contracted.

Opinion:
OPINION.
Davis, J.,
delivered the opinion of the court:
The Flint and Pere Marquette Railway Company, on the 11th September, 1875, entered into a contract with the Postmaster-General for transmitting the mails for a term of four years, with conditions similar in all respects to those in the contract with the Lake Superior and Mississippi Eailroad Company, referred to in the opinion just read, in the case of the Saint Paul and Duluth Eailroad Company (ante, 405).
After the passage of the Acts of July 12, 1876, ch. 179, § 13 (Suppl. Bev. Stat., 226, and 19 Stat. L., 79), and June 17,1878, ch. 259, par. 4 (Suppl. Eev. Stat.,'359, and 20 Stat. L., 140), reduction were made in the pay for the service, in conformity with the provisions of those statutes respectively. The whole amount of such reduction was $14,394.17.
On the 21st day of August, 1879, after the whole service had been rendered, the Flint and Peré Marquette Eailway Company was in default on its mortgage bonds, and a suit had been commenced for the foreclosure of the mortgage, and a receiver had been appointed in that suit. On that date the compa'ny executed a supplemental deed to the trustees under the original mortgage, by which was conveyed, among other things—
all claims against the State or against the United States, and all claims against any department of either tlie State of Michigan or of the United States.
The decree of foreclosure directed the sale of the property covered by the original mortgage and the property covered by the supplemental mortgage. The purchase at the sale was made by trustees on behalf of the bondholders, by whom a new company was organized under the law. of the State of Michigan, which was called the Flint and Pere Marquette Eailroad Company, instead of the Flint and Pore Marquette Eailway Company. This company was recognized by the court, and the deed was by order of the court made directly to the new company, instead of to the trustees who had purchased on their behalf. The claimant is that company, and claims as assignee of the old company under that deed.
These facts do not appear to differ in any essential respect from those in the first branch of the case of the Saint Paul and Duluth Eailroad Company, just passed upon (ante, 405). The three judges who heard this case are divided here as they were there, and the same reasons which led them then to enter judgment for the defendant on the first branch of that case induces them here to order the entry of—
Judgment. — That the claimants' petition be dismissed.
Drake, Ch. J., was absent when this cause was heard, and takes no part in the decision.