
    THE ASTORIA AND COLUMBIA RIVER RAILROAD COMPANY v. THE UNITED STATES.
    [No. 25489.
    Decided March 19, 1906.]
    
      On the Proofs.
    
    The claimant operates a through line between Astoria and Portland, Oregon. A part of the line is over the track: of a land-grant road belonging to the Northern Pacific Railway. The question in the case is whether the claimant’s service, so- far as it extends over the land-grant part of the line, shall, be at land-grant rates under the act of 2d July, 1864, and the act of 27th February, 1893.
    I.The restrictions and conditions of the Act M July, 186!¡. (13 Stat. L., p. 365), and the Act 27th February, 1893 (27 Stat. L., p. 483), concerning freight rates to be charged the Government by land-grant roads extend not only to the original land-aided company, but to any other company carrying Government freight over such a roadway.
    II.A railroad company operating a through line in part over its own track and in part over the track of a land-aided road carries Government freight over the land-aided portion of its own line subject to the conditions of the land grant, which neither the claimant nor the officers of the Government can change.
    III. A lease of a portion of a land-aided road must be taken subject to the conditions of the grant imposed upon the lessor. Two . railroads can not by their contracts practically defeat the conditions imposed by the grant. The statute authorizing the grant is notice to the lessee.
    IV. Where a nonland-grant road operates a through line, in part over a land-grant road, the Government has the right to send goods over the entire line, and the nonaided road must transport them at land-grant rates, though it never received a benefit from and was a stranger to the grant; and the Government can not be compelled to reship and transfer the freight at the point of junction to the land-grant road.
    
      V. Where a bill in equity praying an injunction was based on the refusal of a railroad to transport Government supplies at the rate prescribed by Congress over a portion of the route which was a land-grant road, and the defendants’ answer denied the equities and the bill was dismissed accordingly, the decision did not render the case res judicata.
    
    
      The Reporters’ statement of the case:
    The following are the facts of the case as found by the court:
    I. The claimant is a citizen of the United States, duly incorporated under the laws of the State of Oregon, and ever since October 10, 1896, it has owned a line of railroad from Astoria to Goble, in the State of Oregon, a distance of 61.18 miles, which was built by-it without aid from the United States by grant of lands or otherwise.
    II. The Northern Pacific Railway Company, a corporation duly incorporated under the laws of the State of Wisconsin, now owns and operates, and from a time prior to October 10, 1896, has owned and operated, a line of railroad from Portland to Goble, in the State of Oregon, a distance of 39.40 miles, and thence to Tacoma, in the State of Washington. In the construction of said road between Portland, and Tacoma the Northern Pacific Company received aid from the United States by the grant of lands authorized by act of Congress approved July 2, 1864 (13 Stat. L., 365), but the claimant had no part in its construction and did not receive any benefit from the lands so granted.
    III. On October 10, 1896, claimant and the Northern Pacific Railway Company entered into a contract providing for the operation by claimant of its trains over the track of the Northern Pacific Company between Goble and Portland, making for claimant a continuous line between Astoria and Portland, which contract is still in force and is in the words and figures following, to wit:
    “This agreement, made this tenth' day of October, A. D. 1896, between the. Northern Pacific Railway Company, a corporation organized under the laws of Wisconsin, hereinafter called the Pacific Company, and the Astoria and Columbia River Railroad Company, a corporation organized under the laws of Oregon, hereinafter called the Astoria Company, witnesseth :
    “ Whereas the Astoria Company is authorized to construct and operate a railway between Astoria and Portland, in the State of Oregon, which line is being built from Astoria to Goble, and if constructed from Goble to Portland would parallel the line of the Pacific Company between these points, and the same can be connected with the present line of the Pacific Company at Goble so as to make a continuous railway from Astoria to Portland, obviating such parallel construction between Goble and Portland, to the mutual advantage of both parties hereto:
    “ Therefore, in consideration of the premises and the mutual agreements herein stated, the parties agree as follows:
    “ The Pacific Company vyill, on demand of the Astoria Company, within a reasonable time, construct a connection between its railway 'and that of the Astoria Company at Goble at a point marked ‘A’ on the map hereto attached, in such a manner as to admit of safe and rapid transfer of trains from one line to the other; and on demand the Astoria Company will pay the whole cost of such connection and the cost of maintaining and operating the same during the term of this agreement.
    “ The Astoria Company shall have the right to use said connection and the main 'tracks, switches, side tracks, water tanks, turntables, stations, grounds, and all the railway property and appurtenances of the Pacific Company between said connection and the connection of the Northern Pacific tracks and the tracks of the Northern Pacific Terminal Company, at or near Wilson street in Portland — that is, between the points marked ‘A’ and ‘ B ’ on the. map hereto attached — [omitted] for the purpose of running its own trains and locomotives run by its own employees over the same, but excepting from the tracks which the Astoria Company has the right to use the inclined tracks at Goble leading to the transfer and railroad ferry of the Pacific Company.
    “ The valuation of the property, the right to use which is hereby granted, is agreed to be, at the date of this contract, for the purpose of computing rental thereunder, the sum of $961,675.00, and there shall, also, for the purpose stated, be added to the present valuation from time to time, the cost of all additions and improvements to the said property, including additional tracks, bridges, viaducts, and protective appliances which may be necessary or desirable to provide between the said points ‘A’ and ‘ B.’ The cost of such additions and improvements shall be found by taking the sums actually expended therefor, with six per cent interest from the several dates of expenditures to the date ivhen they are added to the valuation. And the Astoria Company shall have a right to use all additions made to said property between the points £A’ and£ B.’ But provided, however, that if the Pacific Company shall build additional side or spur tracks leading to industries for traffic and commercial purposes which are not required for the operation of trains over the leased railway, the Astoria Company shall have the option to use said additional side and spur tracks or not. In case it shall elect to use the same the cost thereof shall be added to the valuation under this article, and the operating expenses and maintenance thereof shall be taken into account under Article IV of this contract; but if it shall elect not to use the same the cost thereof shall not be added to the valuation, nor shall the operating expenses and maintenance thereof be included in the accounts presented under Article IV of this contract.
    “ The Astoria Company will pay to the Pacific Company from the date when this agreement takes effect, as hereinafter fixed (whether it uses said property or not), and during the full term of this contract a monthly rental equal to one-twelfth of two and one-half per cent per annum on the valuation of the property as herein determined. Payment of rental is to be made on or before the twenty-fifth day of each month for the preceding month at the office of the Pacific Company, in St. Paul, Minnesota, or Portland, Oregon, in gold coin of the United States of the present weight and fineness-.
    “ In addition to the rental the Astoria Company will also pay to the Pacific Company, at the same place, on or before the twenty-fifth day of each month for the preceding month, its proportion of the amount disbursed by the Pacific Com-i pany in keeping up, repairing, renewing, replacing, and operating its tracks and other property covered by this agreement, including the wages of flagmen, switchmen, one train dispatcher and employes, roadmasters, and section men, and all other servants and employes employed upon the property hereby covered.
    “ It being agreed, however, that as to salaries of station agents the proportion due from the Astoria Company shall be and is fixed at one-fourth part of the whole, instead of the proportion according to wheelage as in other cases herein provided.
    “ The sum to be paid by the Astoria Company shall be that proportion of the amount so disbursed by the Pacific Company during the calendar month, which the number of wheels the Astoria Company shall run over the leased track (or any part thereof) during said month shall bear to the whole number of wheels run over the tracks (or any part thereof) during the month by all parties using the same. On or before tire fifteenth day of each month the Astoria Company will render to the Pacific Company, at its office in St. Paul, a statement of the number of wheels so run by it during the preceding month, and the Pacific Company will then, on or before the fifteenth day of the month, render to the Astoria Company, at its office in Portland, or Astoria, Oregon, a statement of the total number of wheels so run over the same during the same month and of the sum due from the Astoria Company under this article, which sum the Astoria Company will pay on or before the twenty-fifth day of the same month.
    “ The use of said railway and other property by the Astoria ' Company shall be in common with the Pacific Company and such other parties as it has admitted, or may admit, to the use thereof; and the use thereof and movement of trains over the same shall be under time-cards, rules, and regulations of the Pacific Company, to be made and changed from time to time by its proper officers, but the same shall be just and reasonable, without discrimination between the parties. The rights herein granted to the Astoria Company shall be used solely for its own business, and nothing herein shall authorize the Astoria Company, tinder cover hereof, or otherwise, to use, or permit any other railway company or line of railway to have the benefit of using, for the -business of such other company or line any of the rights hereby granted.
    “ The Pacific Company hereby assumes all risk of and liability for injury or damage to its own property or property in its custody, or to persons other than passengers and train crews, upon trains of the Astoria Company, or to the property of parties other than the parties to the contract which shall be occasioned by trains, cars, or locomotives of the Pacific Company, or by its operations upon the property covered by this contract, whether arising from any act or omission, fault, or neglect of the Pacific Company, its officers, managers, agents, or servants while engaged in the business of the Pacific Company on the property covered by this agreement, or from any act or omission, fault or neglect of the common servant or agent of both parties under this agreement, and will indemnify and keep harmless the Astoria Company, its successors and assigns, against any and all claims, demands, loss, damage, or injury on account thereof; but neither the Astoria Company nor the Pacific Company shall be entitled to hold the other to any liability for injury or damage arising from any act, omission, fault, or neglect of a common servant or agent of both parties under this agreement.
    “ The Astoria Company hereby assumes all risk of and liability for injury or damage to its own property or property in its custody, or to.persons other than passengers and train crews, upon trains of the Pacific Company, or to the property of parties other than the parties to this contract which shall be occasioned by the trains, cars, or locomotives of the Astoria Company, or by its operations upon the prop • erty covered by this contract, whether arising from any act or omission, fault, or neglect of the Astoria Company, its officers, managers, agents, or servants, while engaged in the business of the Astoria Company, on the property covered by this agreement, or from any act, omission, fault, or neglect of the common servant or agent of both parties under this agreement, and will indemnify and keep harmless the Pacific Company, its successors and assigns, against any and all claims, demands, loss, damage, or injury on account thereo f.
    “ The assumption of risk and liability and the indemnity as aforesaid by each of the parties hereto shall extend to and include all injury or damage caused or occasioned by its trains, cars, or locomotives by reason of or growing out of defects in the tracks, structures, culverts, apparatus, appliances, and property covered by this agreement, or growing-out of the absence or insufficiency of fences, signboards, gates, cattle guards, or other instrumentality or thing: but if the Pacific Company shall fail to repair any defects in the tracks, bridges, culverts, switches, apparatus, appliances, fences, signboards, gates, cattle guards, or other instrumen-talities within a reasonable time after notice in writing from the Astoria Company so to do, then the Astoria Company may repair such defects or put in such structures, appliances, and instrumentalities at the cost and expense of the Pacific Company. And in case any action or suit should be brought against either of the parties hereto growing out of any damage, risk of, and liability for what has been' assumed by the other party hereto under the provisions of this article, said other party will, upon notice thereof to it in writing by the party sued, assume and attend to the defense thereof at its own cost and save and keep harmless the party sued from all expense, counsel fees, and costs.
    “ It is agreed that for the purpose of this article all agents and servants of the Pacific Company whose salary or wages are included in the expense to which the Astoria Company is to contribute under this agreement shall be deemed common agents and servants,
    
      “ In case of failure on the part of the Astoria Company to make any payment within the time fixed by this agreement, and default for a period of sixty days thereafter, this agreement, at the option of the Pacific Company, may be declared null and void, and may be terminated, and such voidance or termination of the agreement shall not impair the right of the Pacific Company to recover amounts then due under the agreement, or damages from nonperformance of the same up to that time or thereafter by the Astoria Company.
    “ The Astoria Company shall have no right to- carry any passengers or freight or transact any business locally between Goble and Portland, inclusive, and intervening stations, but it shall have a right, in addition to through business, to transport passengers and freight between Goble, Portland, and intervening stations and stations on its own line. If the Astoria Company shall, however, be compelled by law to transact any local business forbidden to it by the provisions of this article, it shall account to and pay over to the Pacific Company, on demand, ‘the whole gross revenue received therefrom.
    “ The Astoria Company’agrees that it will give the Pacific Company, from time to time, as favorable terms, arrangements, and rates in regard to traffic or trackage rights over the line of the Astoria Company between Goble and Astoria as it may hereafter and from time to time give to any other railroad line or company.
    “Any and all questions that may arise touching the construction of this agreement, or the rights of the parties hereunder, or concerning the business, or manner or mode of transacting the business to be carried on under the provisions hereof, upon which the parties hereto can not agree, shall be submitted to the decision and award of a board of three .disinterested persons, one to be selected by each party to this agreement. If either party shall refuse or neglect to select an arbitrator on its part within ten days after written notice from the other, of its appointment of an arbitrator on its part, the arbitrator so appointed by the party giving such notice may and shall select and appoint a disinterested person to act as arbitrator for and on behalf of the party so notified and refusing or neglecting to appoint, and the two thus appointed, or appointed by agreement and selection of the parties themselves, shall select a third arbitrator, and the board so chosen by either method shall hear and determine the matter in controversy, and the decision and award of such board shall be furnished to each party in writing. The decision and award of such board or any two of them shall be binding and conclusive upon the'parties with respect to the matters submitted to and decided by them.
    
      “Any difference or controversy that may arise between the parties as to the construction and carrying out of this agreement, or the rights of the parties hereunder, or the transaction of business provided for hereby, shall not interrupt the performance of this agreement or the continuance of business hereunder. Such business shall continue to be transacted and settlements and payments made hereunder in the same manner in which the same had been transacted and made prior to the arising of such difference or controversy, or in case no practice with reference to controverted matters shall have been established, then in accordance with the claim of the Pacific Company with respect thereto, until the matter in difference shall be determined by arbitration, as hereinbefore provided; and thereupon such restitution or payment shall be made by the respective parties as may be required by the decision of the arbitrators.
    “ This agreement shall be binding upon the successors and assigns of ekeh party, as if the -words, successors and assigns ’ were used in each covenant hereof, and the benefits of this contract shall inure to the respective successors and assigns of each party as fully as if ‘ successors and assigns ’ were mentioned in each covenant hereof.
    “ This agreement shall go into effect on the first day of June, 1898, or at such earlier date as may be fixed by the Astoria Company, and after the agreement takes effect it shall be in force ninety-nine years from that date.
    IV. During-the existence of said contract the claimant has operated and still operates its trains, composed of its own rolling stock and controlled by its own servants, between Astoria and Portland, using its own track between Astoria and Goble and the track of the Northern Pacific Company between Goble and Portland, and the Northern Pacific Company has operated and still operates its own trains on said track between Goble and Portland, as on other parts of its lines, its use of the same not being affected by claimant’s said use of it.
    V. Claimant, since said contract has been in effect, has done much transportation of freight and passengers for account of the United States between Portland and Astoria or other points on its own line, and for this service it has rendered bills to the proper accounting officers of the United States calculated at the rates due from private persons for similar transportation; but such accounting officers have refused and failed to pay such bills, claiming that a deduction of 50 per cent should be made from such parts of the several amounts as were earned or were assumed to have been earned on said land-aided track of the Northern Pacific Railway Company, and claimant has declined to receive and has not received in payment of said bills- the lesser amounts so calculated. At said full rates the aggregate amount so earned by claimant is $-. The amount due said company in excess of such rate is $-.
    
      Mr. Benjamin Garter and Mr. Samuel A. Putman for the claimant:
    We think the error of the Government in this matter is obvious. The act making the grant to the Northern Pacific Company provides that the road shall be subject to the use of the United States for Government purposes and that Congress may fix the rate of compensation.
    The use of a portion of the road by the claimant under the conditions set out above does not in any degree interfere with or impair the Government’s enjoyment of all the rights and privileges secured to it by the granting act. The Northern Pacific having retained all the local business between Goble and Portland operates between these points the same number of trains upon which the Government can at all times transport its troops and property as if the claimant did not use the road. So long as the Northern Pacific preserves the power to serve the Government to the full extent required of it, it is free we insist to make what lawful use it deems proper and profitable of the residue of its property, whether it be by carrying freight and passengers in its own trains or by permitting others to carry them over the road in their trains. In this case the claimant has not received any benefit from the Government for which an abatement of its rates should be made; the Government need not deal with claimant for service over this portion of the route and if it elects to do so for its 'own profit and convenience there is no imaginable reason why it should not pay the full rates paid by the public for like service.
    Congress, we submit, has taken this very just view of the matter, for in' the.act- of Feburary 27, 1893, above quoted, fixing the ratio of .deduction the burden is placed upon the railroad company which has received the aid and not upon the roadbed or railroad itself. It is placed upon the company that received the benefit and not upon the company, or person doing business with it and in part using its property. That- this is the consistent purpose of Congress is shown also by the act of July 12, 1876 (19 Stat. L., 78), providing as follows:
    “ Sec. 13. That railroad companies whose railroad was constructed in whole or in part by a grant of land 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.”
    The courts also have uniformly taken the view of the question for which we contend whenever it has in any form come before them. The identical question here presented has in fact already been decided.
    In the summer of 1904 the United States filed a bill in the Circuit Court of the United States for the District of Oregon seeking to enjoin and restrain this claimant from refusing to carry Government property at land-grant rates between Goble and Portland. Judge Bellinger, of the court, in a very well-considered opinion (reported in 131 Fed. Rep., 1006), refused the injunction, and dismissed the bill on grounds which go to the merits of the entire controversy, saying that claimant’s use of a part of the track of the Northern Pacific did not affect the transportation due from that company to the Government, and that bo long as this is so it is a matter of no consequence to the Government how many railroads use this particular track. The Government did not appeal from this decree.
    The Lake Superior and Mississippi Railroad Company’s case (rej)orted iff 93 U. S., 442, and 15 C. Cls. R., 126), involved a question close akin to this one. The question there was the construction of a granting act which provided that the road should remain a public highway for the use of the United States, free from tolls or other charges. It was contended by the Government that the company must do Government business without compensation. The court held that the Government was entitled to the free use of the roadbed only, and must pay the company a fair compensation for the transportation.
    In reviewing the case Justice Bradley traces the history of the phrase “ free from all tolls or other charges,” showing that it was taken from acts granting aid to turnpikes and canals and was embodied in the railroad act at a time when it had not been determined whether the company owning the road would operate its own vehicles or would permit the public to operate vehicles upon it for a toll.
    The act here sought to be construed is of later date and in it the grant is made directly to and the obligation to furnish the carriages and motive power placed upon the company itself. But surely, so long as the company fulfills this obligation, nothing in this act prevents it from permitting another company to use its road and exacting from the latter the same compensation as it would exact for the use of an unaided road. And nothing in the act obliges a company taking such trackage rights to assume a land-grant burden for which it has received no benefit either by grant of lands from the Government or by diminution of its rental by its lessor company. As well might the Government impress a vehicle passing by chance on an aided turnpike and compel it to perform Government service at reduced compensation because it was using an aided road.
    This court had before it a question of like nature in the Railway Mail Service cases (13 C. Cls., 199), where the Government contend that only one post route could exist and one compensation ■ for postal service could be allowed upon a given piece of railroad track, which was used by the.trains of more than one company. The court did not sustain this contention.
    The case of Union Pacific Railway Qomycmy v. Chicago, etc.> Railway Co. (163 TJ. S., 564) was a bill filed by the Eock Island Company against the Union Pacific to compel a specific performance of a trackage contract similar to the contract in this case, by which the Pacific ■ Company had agreed that the Eock Island should operate its trains over certain track belonging to the Pacific Company. The latter company defended, among others, upon the ground that the contract if put in force would disable the company from performing its charter obligations to the Government.
    This legislation and these decisions are, we insist, in entire harmony with the contention of the claimant in this case.
    The Northern Pacific has received the only aid given to anyone in the construction of this road and upon it rests all the obligation resting upon anyone to serve the Government at any other than full rates of compensation. ■ This obligation it is now and at all times has been perfectly able and ready to perform.
    The claimant has received no benefit from the Government in respect of this road, nor has the Government suffered any injury by reason of the claimant’s use of these tracks, and we are unable to see the slightest reason, moral or contractual, why the Government should seek to require service of it upon this or any portion of its Astoria-Portland route upon any terms except those applicable to other unaided railroad companies.
    
      Mr. Philip M. Ashford (with whom was Mr. Assistant Attorney-General Van OrsdeT) for the defendants:
    In order to determine this question it is necessary to construe, to some extent, the act of July 2, 1864 (13 Stats. L., 365). By the terms of said act certain gentlemen therein named, together with all such other persons as might become associated with them in;the enterprise, were created and erected into a corporate body to be known as the “ Northern Pacific Eailroad Company.” There was granted to said corporation, its successors and assigns, for the purpose of aiding in the construction of a railroad and telegraph line from Lake Superior to Puget Sound on the Pacific coast by the “ northern route ” certain public lands therein specified and described. Numerous provisions were made in said act for the management of said corporation. Certain privileges with reference to the location of the roadbed, the right of way therefor, the right to take timber, earth, and stone from the public lands for use in the construction of the same, etc., were granted. Obligations were imposed upon said corporation with reference to its treatment of settlers. It was also required to proceed with the construction of the road within a certain time and to complete the same within a limited time. All these provisions and conditions are enumerated and specified in sections l'to 10, inclusive. Then occurs a provision in section 11 wholly separate and apart from the matter of incorporation, management, and control of the “ Northern Pacific Railroad Company,” to wit, that the railroad or any part thereof thus constructed by the said corporation — ■ '
    “ shall be a post route and a military road subject to the use of the United States for postal, military, naval, and all other Government service and also subject to such regulations as Congress may impose restricting the charges for such Government transportation.”
    By virtue of the provisions contained in said section there is vested in the United States a perpetual right to have its mail, troops, supplies, and whatever other freight it may desire to have transported, carried over said railroad thereof or any part upon such terms and conditions as the Congress of .the United States may elect. By the enactment of said section this right then and there became a “ covenant running with the land,” so to speak. It was not merely an obligation imposed upon the Northern Pacific Railroad Company, but a provision that the “ railroad ” to be constructed by said company should forever thereafter be subject to the exercise of the right and power reserved to the Congress of the United States by said section — that is to say, the power to regulate the rates for Government service. It follows as a logical sequence that whatever freight is carried over said “ railroad 'or any part thereof ” for the United States must be carried subject to the terms and conditions prescribed by the Congress, whether carried by the Northern Pacific Railroad Company, the Northern Pacific Railway Company, its successors, assigns, or lessees.
    The claimant can enjoy no greater right in the property than its lessor, for, as Judge Cooley says:
    “ The power to lease does not imply the power to transfer greater rights than the lessor himself - possesses. McMillan v. Railroad Go., 16 Mich., 79-102.)”
    
      “The lessee of a railroad is subject to all the provisions and limitations of the lessor’s charter and also.to the same general provisions of law which were applicable to the lessor. (Cyclopedia of Law, vol. 23, p. 787, cases cited.)”
    From these principles, which are so well established that it seems unnecessary to elaborate them, the conclusion is deducible, if indeed it is not irresistible, that the lease from the Northern Pacific Company to claimant must have read into it the charter condition found in section 11 of the act of 1864, and the general provision of the law found in the thirty-first and thirty-second Statutes at Large, above quoted. In other words, it must be assumed that claimant, when it arranged for a joint use of that part of the “ Northern Pacific Eailroad ” between Portland and Goble, understood that any freight it might carry for the United States over said track must be done for not more than 50 per cent of the public rates between said points.
    What the court in the Ldlce Superior, etc., Railroad case decided was that Congress did not mean by the terms of the act of Congress granting aid to the construction of the railroad to compel the transportation of Government property or troops absolutely free of charge. No such question arises in the case at bar and it is not seen how the decision supports the contention of the claimant here or even sheds any light upon the issue raised. The case of the Union Pacific Company v. Chicago, etc., Company, in . 163 United States, 564, is a much stronger case for claimant, but it must be borne in mind that this latter case was an equity proceeding to compel specific performance of a contract which the Union Pacific Company was seeking to avoid on the grounds that the execution and performance of the contract in question prevented or at least interfered with the discharge of the charter duties of the Union Pacific Company, and that the making of the contract was ultra vires. The court simply decided that the making of the contract was not ultra vires, arnd that it did not take away from" the Union Pacific Company its full control of its road nor did it interfere in any way with the discharge of its duty to the public. The court therefore ordered the performance of the contract. No question arose in said, case as-to the rights and obligations to the public of the lessee company — the Chicago, Eocli Island and Pacific — which stood in the same relation to the Union Pacific Company as the claimant corporation stands to the Northern Pacific Company. Nothing having been decided therefore with relation to the rights, duties, and obligations to the public of the lessee company, there is no precedent in the case cited and no light to be obtained therefrom.
    This is an important question. The Government is constantly shipping freight and troops from or through Portland to Fort Stevens which it is practically compelled to Lave transported by the claimant corporation. The differences of opinion between the officers of the United States and the officers and agents of the claimant are irreconcilable. It therefore becomes necessary in order that the business of the respective parties to this case should be smoothly and harmoniously conducted that a judicial determination of this question be had. Besides, other instances of a similar kind are likely to arise from other quarters.
   Peelle, Ch. J.,

delivered the opinion of the court:

The claimant herein, a corporation, organized under the laws of the State of Oregon, owned and operated during the rendition of'the services herein claimed for, and still owns and operates, a line of railroad between Astoria and Goble, with several branches, all in said State of Oregon. From Goble to Portland, in said State, a distance of 39.40 miles, the claimant, during the same period, under the contract of lease therefor with the Northern Pacific Eailway Company (successor to the Northern Pacific Eailroad Company), operated and still operates its trains over the track of said Northern Pacific Eailway Company, a road aided in its construction with lands of the United States, granted under the provisions of the act of July 2, 1804 (13 Stat. L., 365). ■The action is to recover the full tariff rates for transporting-military supplies over the land-aided portion of said road.

The reason stated for the contract between the two companies, as set forth in the preamble thereto, was that the claimant company had obtained authority to construct and operate a railroad between Astoria and Portland, in the State of Oregon, which line was then being constructed from Astoria to Goble, and, if constructed from Goble to Portland, would parallel the line of said Pacific Company; that it would be to the mutual advantage of both companies for the Astoria Company to connect at Goble with and operate its trains over the line of the Northern Pacific Company ; hence the contract.

By Article II it was provided:

The Astoria Company shall have the right to use said connection and the main tracks, switches, side tracks, water tanks, turntables, stations,' grounds, and all the railway property and appurtenances of .the Pacific Company between said connection and the connection of the Northern Pacific tracks and the tracks of the Northern Pacific Terminal Company, at or near Wilson street, in Portland — that is, between the points marked ‘A5 and 1 B ’ on the map hereto attached — for the purpose of running its own trains and locomotives run by its own employees over the same, but excepting from the tracks which the Astoria Company has the right to use the inclined tracks at Goble leading to the transfer and railroad ferry of the Pacific Company.”

Then, after reciting the valuation of the property as the basis of rental to be paid by the claimant company, including a proportionate share of the salaries of station agents, it is provided by Article V as follows:

“ The use of said railway and other property by the Astoria Company shall be in common with the Pacific Company and such other parties as it has admitted, of may admit to the use thereof; and the use thereof and movement of trains over the same shall be under time cards, rules, and regulations of the Pacific Company, to be made and changed from time to time by its proper officers, but the same shall be just and reasonable, without discrimination between the parties. The rights herein granted to the Astoria Company shall be used solely for its own business, and nothing herein shall authorize the Astoria Company, under cover hereof, or otherwise, to use, or permit any other railway company or line of railway to have the benefit of using, for the business of such other company or line, any of the rights hereby granted.” .

Then, after stating the risk each company assumes in the operation of its trains for injury to persons and property and the annulment of the contract at the option of the Pacific Company on the failure of the claimant company to pay the rent agreed upon, it is provided by Article VIII as follows:

“ The Astoria Company shall have no right to carry any passengers or freight or transact any business locally between Goble and Portland, inclusive, and intervening stations ; but it shall have a right, in addition to through business, to transport passengers and freight between Goble, Portland, and intervening stations and stations on its own line. If the Astoria Company shall, however, be compelled by law to transact any local business forbidden to it by the provisions of this article, it shall account to and pay over to the Pacific Company on demand the whole gross revenue received therefrom.”

The further provisions of the contract refer to the method of adjusting disputes between the companies, and the contact concludes with Article XIII, as follows:

“ This agreement shall go into effect on the 1st day of June, 1898, or at such earlier date as may be fixed by the Astoria Company, and after the agreement takes effect it shall be in force ninety-nine years from that date.”

Pursuant to the act of July 2, 1864, sufra, the road for which the lands were granted, including that portion of the road from Goble to Portland, was constructed. The grant was accepted, and the road was constructed on the conditions, among others, set forth in section 11 of the act, which reads as follows:

“ Sec. 11. And be it further enacted,, That said Northern Pacific Eailroad, or any part thereof, shall be a post route and a military road, subject to the use of the United States, for postal, military, naval, and all other Government service, and also subject to such regulations as Congress may impose restricting the charges for such Government transportation.”

Stronger language than that could not have been employed to establish a post route and military road subject to the use of the Government for the purposes therein stated. The railroad thus established as a post route and military road was, in unmistakable terms, made subject to such regulations restricting the charges for transportation thereon as Congress might impose, and was clearly intended to apply to any carrier regularly operating trains over said railroad or any part thereof.

In conformity with that section the act of February 27, 1893 (27 Stat. L., 483), making appropriations for the support of the Army, contained the following proviso:

“Provided further, That in expending the money appropriated-by this act, a railroad company which has not received aid in bonds of the United States, and which obtained a grant of public land to aid in the construction of its railroad on condition that such railroad should be a post route and military road subject to the use of the United States for postal, military, naval, and other Government services, and also subject to such regulations as Congress may impose restricting the charge for such Government transportation, having claims against the United States for transportation of troops and munitions of war and military supplies and property over such aided railroad, shall be paid out of the moneys appropriated by the foregoing provision only on the basis of such rate for the transportation of such troops and munitions of Avar and military supplies and property as the Secretary of War shall deem just and reasonable under the foregoing provision, such rate not to exceed fifty per centum of the compensation for such Government transportation as shall at the time be charged to and paid by private parties to any such company for like and similar transportation; and the amount so fixed to be paid shall be accepted as in full for all demands for such service.”

Similar provisions have been inserted in like appropriation acts from year to year ever since, including 31 Stat. L., 907; 32 Stat. L., 517 and 938; 33 Stat. L., 270 and 837.

There is no controversy but that the statutory regulation limiting the charges for the transportation of troops and military supplies over said road applies to the Northern Pacific Railway Company, but the contention of the claimant is that, although under the contract aforesaid the claimant’s use of the road betiveen Goble and Portland Avas, arid is, “ in common with the Pacific Company and such other parties as it has admitted or may admit to the use thereof,” still, as the Northern Pacific Company has, by the terms of the contract, reserved to itself the local business between those stations, it has not thereby lessened its power to serve the Government in the transportation of troops and such military supplies as may be required of it.

In other words, the contention is that while the Northern Pacific Company is subject to such regulations limiting charges for the transportation of troops and military supplies for the Government, it may, by leasing a portion of its railroad to another carrier over ivhich to operate its trains for a period of ninety-nine years thereby exempt such lessee from the conditions imposed on the lessor by section 11 of the granting act.

If this be true, then it follows that .the Northern Pacific Company may lease different portions of its railroad, branches, and appurtenances thereto, to as many different carriers (willing to connect with its line), and thereby practically defeat the conditions imposed respecting the rates fixed for Government transportation; or it might lease its entire road, rolling stock, and equipment, reserving to itself the right only to transport Government troops and supplies.

In such case it would not be enough to say that because the Northern Pacific Company has reserved to itself the local business along such leased portions of its railroad, or the right to perform the Government sendee, therefore it has not disabled itself from complying with the conditions imposed upon it. Its obligation to the public is imposed in the main by public policy, while its duty to the Government is regulated as well by the statute which created and aided it in the construction of the railroad; and its successors, assigns, and lessees are bound by the conditions imposed by the granting act.

A further answer to the claimant’s contention is that the claimant carried the freight. If the claimant was not subject to the conditions of the grant, it was not obligated to carry such freight, but having carried the freight over the land-grant road, it did so subject to the conditions of the grant, which neither the claimant nor the Government officers could change.

The Northern Pacific Eailroad Company, the lessor or predecessor of the Northern Pacific Eailway Company, ivas a corporation created by the act granting the land for the construction of its railroad or roadway, and was subject to the conditions prescribed in the act, among which ivas that the “ railroad, or any part thereof, shall be a post route and military road, subject to the use of the United States ” for Government service at such rates or charges as Congress may impose. And Congress, by the provisions in the appropriation acts referred to, have exercised their right to fix the maximum charges for the transportation of troops and military supplies over said road at 50 per cent of the rates charged to and paid by private parties for like transportation for such service.

The right to the use of the railroad by the Government as a post route and military road is a right annexed to and forms a part of the grant, in the nature of a covenant running with the land — the" roadway — and that right can not be waived or separated from the railroad without the consent of Congress by appropriate legislation.

Grants of land by Congress for the construction of railroads are not only conveyances, but are laws, subject to the same rules of construction as other legislative acts. (Missouri Pacific R. R. Co. v. Kansas Pacific R. R. Co., 97 U. S., 491, and Barney v. Winona R. R. Co., 117 U. S., 228.)

The grant by the act of July 2, 1864, to the Northern Pacific Railroad Company of the right of way through the public lands and to every alternate odd-numbered section of such lands on either side of the line of said railroad, within the limits therein prescribed, was to aid in the construction of said railroad “ to secure the safe and speedy transportation of the mails, troops, munitions of war, and public stores over the route of said line of railroad ” to the Pacific coast at such rates as Congress might impose.

It does not appear to have been in the mind of Congress, and certainly was never expressed in legislation, that the Government was to engage in the business of owning and operating trains and rolling stock with which to transport over said railroad its troops and supplies. If it had been, there would have been no necessity for the provision in section 11 making such service subject to the regulations of Congress restricting the charges therefor.

As the right to the use of the railroad by the Government for such transportation is reserved by- Congress, it is manifest that the regulations restricting charges therefor must apply to any carrier transporting troops and supplies for the Government over said railroad. Otherwise the regulations Avould be inoperative.

When the Northern Pacific Company leases a portion of its roadway, as in the present case, such lease, it must be held in the absence of any waiver by. Congress, is taken subject to the conditions of the grant imposed upon the lessor. This would certainly not be controverted if the lease extended to the whole line of the land-aided railroad. In such case it would seem to require no argument or citation of authorities to show that the lessee would-take not only subject to all the provisions and limitations of the granting act, but to the laws enacted thereunder applicable to the lessor as. well; that .is to say, in case the Northern Pacific Company should lease all of its right, title, and interest in and to said railroad, the granting act, with all its provisions aiicl limitations, would as a matter of law be incorporated in such lease, and the lessee would be bound thereby, as was the Northern Pacific Railway Company, successor to the Northern Pacific Railroad Company. (See Union Pacific Railroad Co. v. Mason City and Fort Dodge Railroad Co., 199 U. S., 160.)

This being true, by whom and ivhere shall the line be drawn exempting the lessee from the performance of Government service at the rate prescribed for transportation over said railroad? The Government, like any other shipper, is entitled to select its own carrier, and in case .of connecting lines it has the right to direct the particular route over which its troops and supplies shall be shipped. In accepting the lease, as well as in the performance of the service for the Government, the claimant was bound to know that the railroad, owned and operated by the Northern Pacific Railway Company between Goble and Portland was a land-aided railroad, subject to the use of the Government as a post route and military road, at the rates for transportation theretofore established by Congress.

The claimant in the main bases its contention on the cases of the Lake Superior and Mississippi River Railraod Co. v. The United States (93 U. S., 442); The Union Pacific Railway Co. v. Chicago Railway Co. (163 U. S., 564); and the Railway Mail cases (13 C. Cls. R., 199),

The first of the cases cited arose under the act of May 5, 1866 (13 Stat. L., 64), making a grant of public lands to the State of Minnesota to aid in the construction of a railroad. By section 5 of the act respecting the road to be constructed it was provided:

“ That said railroad shall be and remain a public highway for the use of the Government of the United States, free from all toll or other charge, for the transportation of any property or troops of the United States.”

By section 7 of the same act it ivas provided:

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

In respect to section 5, first above quoted, being the only one involved in that action (the court saying “the case turns upon the construction that should be given ” thereto), it was held by a divided court.that while the provision secured to the Government the use of the road for the transportation of its troops and supplies free from all toll or other charges it did not carry with it the right to the free service of the carrier operating such road. That is to say, while by the statute the Government ivas entitled to the use of the roadway and all fixtures and appurtenances forming a part of the road free from toll or other charge for such transportation, the carrier performing such service was -entitled to be paid therefor by the Government the regular rates for such service, less certain deductions for the use of the roadway.

It will be observed that the statute construed in that case is quite different from the one in the present case. Here the statute expressly provides that the railroad so constructed shall not only be a post route and a military road subject to the use of the Government, but shall be subject to such regulations as Congress may impose .restricting the charges therefor; and such regulations restricting charges would certainly apply to the carrier or company owning- or operating its trains and rolling stock over- and in connection with the roadway and not to the roadway independent oí such carrier.

In comparing the conditions in the granting act in that case with those in other acts .Requiring the transportation of mails, troops,.and supplies by companies owning or operating the railroads so constructed the court said:

“ It is not without significance, in this connection, that in other grants, ivhen Congress intended to provide for transportation being performed by the railroad company, explicit and proper language is used for that purpose. As in the case of the Union Pacific Eailroad Company, chartered by Congress July 1,1862, where it is enacted -that the company shall transmit disjiatches over its telegraph lines, transport mails, troops, and munitions of war, supplies, and public stores, upon its railroad for the Government whenever required to do so by any Department thereof, and that the Government shall at all times have the preference in the use of the same for all the purposes aforesaid, at fair and reasonable rates of compensation, not to exceed the amount paid by private parties for the same kind of service. (12 Stat., 493.) In this case compensation ivas provided for. In other cases the transportation was to be furnished without charge. After the discussion in 1865, before referred to, Congress made several grants of land, with the express reservation that the Government property should be transjiorted over the roads concerned at the cost, charge, and expense of the company owning and operating the same, when required by the United States so to do, using language entirely different from that under consideration in the cases now before the court. See acts of 1866 (14 Stat., 95, 237, 241, 290, 338, 549).”

In some of the acts cited above the grants are on condition that the troops aild military supplies of the United States shall be transported over the road so constructed “ at the cost, charge, and expense of the corporations or companies owning or operating the same when so required by the Government ” (pp. 95, 214, 338), while the other acts referred to provide tha' such transportation shall be without cost to the Government when required by the. Government or any Department thereof (pp. 290, 338, 549).

It will thus be observed that the conditions imposed by the several acts referred to by the court are, in substance, the same respecting the transportation of troops and military supplies over said roads by the corporations owning or operating the same free of cost to the Government.

In response to the contention of the Government in that case that the term “ railroad- ” should include the equipment of the road and the free use of the locomotives and cars of the 'company as well as the track, the court said: ,

“ No doubt the word, as used in certain connections and in particular charters and instruments, may properly have a wider latitude of signification, so as to include the equipment and rolling stock as accessory to the track, constituting together one incorporated mass or corpus of property as the subject-matter of the particular enactment or disposition. It is not our purpose to question the propriety of this view in the cases and for the purposes to which it may be applicable. But where, as in the laws under review, the railroad is referred to throughout in its character as a road, as a permanent structure, and designated and required to be a ‘ public highway,’ it can not, without doing violence to language and disregarding the long-established usage of legislative expression, as shown in the previous part of this opinion, be extended to embrace the rolling stock or other personal property of the railroad company.”

It can hardly be doubted that if the provisions of section 7 in the granting act in that case had been under consideration a different result would have been reached, for that section provides—

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

Before that decision was rendered Congress, by the act of July 12, 1876 (19 Stat. L.., 78, 82), making appropriations for the service of the Post-Office Department, by section 13 thereof provided: “ 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 80 per centum of the compensation authorized by this act.”

It would hardly be contended that the language there used would not apply to the assignee or lessee of a company whose railroad had been constructed in whole or in part by a land grant made by Congress; and if not, then such company, its assigns, 'or lessees could be required to transport the mail under the direction of the Post-Office Department at the price Congress there fixed.

In the present case both classes of transportation are included in the same section, i. e., postal and military, as well as all other Government sendee, and all such service is made “ subject to such regulations as Congress may impose restricting the charges ” therefor.

In the case of the Union Pacific Railway Company v. Chicago, etc., Railway (supra), the question involved was as to the right of the Union Pacific Company to enter into contracts with other companies for running arrangements, including the use of its tracks, and it was held by a divided court that such contracts were within the powers of the Union Pacific Company, and that in making such contracts it parted with no franchise and had not disabled itself from discharging its duty to the jiublic, the court among other things saying:

“ What it agreed to do was to let the Eock Island enjoy such use of the bridge and track as it did not need for its own purposes. This did not alien any property or right necessary to- the discharge of its public obligations and duties, but simply widened the extent of the use of its property for the same purposes for which that property was acquired, to its own profit, so far as that use was concerned, and in furtherance of the demands of a wise public policy.”

In the present case the right of the Northern Pacific Company to contract Avith the claimant company for the use of its road between Goble and Portland is not controverted. And, to apply Avhat is said in the case last cited to the present case, the Northern Pacific Company, by it? contract Avith the claimant company, “ Avidened the extent of the hse of its property for the same purposes for Avhich that property was acquired,” i. e., “ to its OAvn profit, so far as that use Avas concerned, and in furtherance of the demands of a Avise public policy.” Certainly, “ the demands of a wise public policy ” require that Avlien the Government desires to ship troops or supplies by the claimant company from Fort Stevens or from xlstoria to. Portland by the way of Goble it shall have the right to do so at such rates over the land-aided portion of said road as the Congress may prescribe, without being compelled to reship or transfer such property at Goble to the Northern Pacific Company.

In The Railway Mail Service eases (13 C. Cls. R., 199) the question was, whether the railroad company carrying mails over the track of another company by means of its own engines, cars, servants, etc., was entitled, in its dealings with the Post-Office Department, to have such hired track considered as part of its own road when another company was at the same time performing mail service on' the same track. The court held that it was, among other- things saying: “As between a railway company and the public, its service begins with its starting point, whether on its own or hired track. The service is as completely its own upon the hired track as upon its own proper rails, and it is a matter of indifference whether the right to use the rail comes from ownership, or from a lease of the roadbed, or by virtue of hiring an easement over the track.'” And so in the present case, it is a matter of indifference to the Government, whether the road it has aided to construct is operated by the company to whom the lands were granted, or by its assigns or lessees, the Government is entitled in either case to the transportation of its troops and supplies over such road at the rates prescribed by Congress.

But the claimant contends that the subject-matter here involved passed to final judgment before a court of competent jurisdiction without fraud or collusion, and therefore the question is res judicata. In support of that contention the claimant relies upon the proceedings in the circuit court of the .United States for the district of Oregon, wherein a bill in equity for an injunction ivas filed on behalf of the United States by the district attorney for that district against the claimant herein as defendant. (131 Fed. Rep., 1006.)

An examination of the bill in the certified transcript before us shows that the suit was for an injunction based on the alleged refusal of the Astoria and Columbia River Railroad Company to receive and transport supplies for the Gov-eminent over said road between Portland and Goble, and particularly a box of Government supplies delivered to said company at Portland January 25, 1904, for shipment from Portland to Fort Stevens via Goble and Astoria, at the rates prescribed by Congress for Government service over the land-aided portion of said road. To the bill thus filed said company filed its answer, denying that it had at any time refused or that it still refuses to receive or that it would refuse to receive and transport Government supplies between Portland and Goble because of the reduced rates prescribed therefor by Congress, but admitted that it had refused and still refuses to receive and transport such supplies for the Government or anyone else between those points on the ground that its contract with the Northern Pacific Railway Company would not permit it to do so; that no tariff rate had been established by it between Portland and Goble, but that its rate from Portland via Goble to Astoria, or from Goble to Astoria or Fort Stevens, was 25 cents per hundred pounds, and at that rate it would have received and transported the box of Government freight referred to; but the officers and agents of the United States refused to pay said rate.

The refusal of said company to receive and transport the box of Government supplies, it will be observed, was because of the lease contract aforesaid between it and the Northern Pacific Railroad Company; that its rate from Portland to Astoria and Fort Stevens by way of Goble was the same as from Goble to Astoria and Fort Stevens, and hence no charge was included therein for transportation between Portland and Goble. The bill was based on the refusal of the company to transport Government supplies between Portland and Goble at the rates prescribed by Congress, and on that ground an injunction was sought restraining1 said company from so doing. But as said company, by its answer under oath, denied that it had refused to receive and transport freight over its road from Portland to Goble because of such reduced rate or because of any other rate or cause other than its contract with the Northern Pacific Railroad Company, the bill was dismissed on the ground that it appeared to the court that the equities were with the defendants.

From the order dismissing the bill no appeal was taken, but aside from the question as to whether, in such case, an appeal would lie, the Government refused to acquiesce in the decision and still refuses to abide thereby. The decision of the court, so far as the transcript before us discloses, was based on the bill and answer. The merits of the controversy were not gone into further than to determine whether the injunction would lie.

"We must hold that for the reasons given the claimant is not entitled to recover for the transportation of troops and siipplies over the tracks of the Northern Pacific Railway Company between Portland and Goble in excess of the rates prescribed therefor by Congress, and in that respect its petition is dismissed.

For any amount otherwise due for such transportation judgment will be suspended until the amount due has been ascertained. When, on motion therefor, judgment will be entered.  