United States v. Northern Pac. Ry. Co. , 30 F.2d 655 ( 1929 )

VAN VALKENBURGH, Circuit Judge.

Defendant in error, plaintiff below, brought suit against the United States of America, defendant below, to recover the sum of $1.60— the difference between a net per capita fare of $33.09, claimed by the plaintiff for transporting two members of the United States Marine Corps from St. Paul, Minn., to Seattle, Wash., and a net per capita fare of $32.-29, 'paid for the transportation and accepted by the railroad company under protest. This suit is the result of a disagreement between the parties as to the proper computation of land grant deductions from the commercial fare over the route traveled. The case was tried upon an agreed statement of facts. The court ruled in favor of the railroad and entered judgment accordingly. In the stipulation as to the facts it was agreed that the Northern Pacific Railway Company is a corporation organized and existing under the laws of the state of Wisconsin, and is engaged in the operation of various lines of railroad into and through the states of Wisconsin, Minnesota, North Dakota, Montana, Idaho, Washington, and Oregon, and is a common carrier of freight and passengers. It maintains its principal operating and business offices in the city of St. Paul in the state of Minnesota.

“The plaintiff is the successor in title and interest to the properties of the Northern Pacific Railroad Company, a corporation which was created by ‘An act granting lands to aid in the construction of a railroad and telegraph line from Lake Superior to Puget’s Sound, nn the Pacific Coast, by the northern route.’ .By said act, approved July 2, 1864 (13 Stat„ 365), the Northern Pacific Railroad Company was ‘authorized and empowered to lay out, locate, construct, furnish, maintain, and enjoy a continuous railroad and telegraph line, with the appurtenances, namely, beginning at a point on Lake Superior, in the state of Minnesota or Wisconsin; thence westerly by the most eligible railroad route,, as shall be determined by said company, within the territory of the United States, on a line north of the forty-fifth degree of latitude to some point on Puget’s Sound, with a. branch, via the valley of the Columbia river, to a point at or near Portland, in the state of Oregon,’ etc.

“The Northern Pacific Railroad Company, as authorized by the Act of July 2,1864, was- . required to be ‘constructed in a substantial and workmanlike manner, with all the necessary draws, culverts, bridges, viaducts, crossings, turnouts, stations, and watering places, and all other appurtenances, including-furniture, and rolling stock, equal in all respects-to railroads of the first class, when prepared for business.’ For the construction of the-proposed railroad and telegraph, the Northern Pacific Railroad Company was granted ‘the right of way through the public lands to-the extent of two hundred feet in width on each side of said railroad where it may pass-through the' public domain, including all necessary ground for station buildings, workshops, depots, machine shops, switches, side tracks, turntables, and water stations.’ It was also granted certain alternate sections-of land on each side of the right of way ‘for the purpose of aiding in the construction of said railroad and telegraph line to the Pacific Coast, and to secure the safe and speedy transportation of the mails, troops, munitions of war, and publie stores, over the route-of said line of railway.’ The act further provided ‘that said Northern Pacific Railroad, 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’ with the further provision ‘that the said company shall not charge the government higher rates than they do individuals for like transportation and telegraphic service.’ ”

The original line of railroad under the Act of July 2,1864, was from Ashland, Wis., on the shores of Lake Superior, through Brainerd, Minn., and Meeker, Wash., to Tacoma, Wash., on Puget’s Sound. Later a line of railroad, now owned and operated by the Northern Pacific Railway Company, was eonstrueted between St. Paul, Minn., and Brainerd, Minn., intersecting the original line at the latter point; this line, prior to its acquisition by plaintiff, had been constructed by various corporations and the portion thereof between Watab and Brainerd had been granted lands in aid of that construction. The plaintiff company also operates by lease over a land grant railroad between St. Paul and Minneapolis, a distance of 8.23 miles. In the year 1890 the Northern Pacific Railroad Company, plaintiff’s predecessor, purchased a line of railroad from Meeker, Wash., a point on its original line, to Seattle, Wash. The total line of railroad between St. Paul and Seattle, through Brainerd, Minn., and Meeker, Wash., contains 1,962.21 miles of road, of which 1,-855.67 miles were constructed by aid of grants of lands subject to the conditions hereinabove stated as to government transportation, the ratio of land grant to the total length of the road being 47.285 per cent. We quote from paragraph 8 of the agreed statement o£ facts:

“After the construction of the original line between Ashland, Wis., and Tacoma, Wash., and the construction of the line from St. Paul to Brainerd as set forth above, a cutoff lino was constructed in 1889 from Little Palls, Minn., to Staples, Minn., a distance of 33.90 miles, as compared with the route between Little Palls and Staples via Brainerd, a distance of 60.64 miles. Since the construction of this short line between Little Palls and Staples, the route via Brainerd has been used for local traffic exclusively; the through traffic from St. Paul to the Pacific Coast being routed via the shorter line between Little Palls and Staples. In the year 1890 the Northern Pacific Railroad Company, plaintiff’s predecessor, acquired by purchase a line of railroad from Meeker, Wash., a point on its original line, to Seattle, Wash., and in .1902 plaintiff constructed a cut-off from Palmer Junction, Wash., to East Auburn, Wash., which has since been used for transcontinental train service instead of the original mileage from Palmer Junction via Meeker, Wash., and has reduced the mileage from Palmer Junction to Seattle, Wash., to 44.3 miles, instead of 64.20 miles. By the use of the cut-offs between Little Palls and Staples and between Palmer Junction and East Auburn, the distance traveled by through trains from St. Paul to Seattle is only 1,914.-57 miles, of which 1,761.43 miles is land-aided mileage.”

The ratio of land grant to the total length of the road computed by this route is 46.001 per cent. From the foregoing it will be seen that the mileage traversed by through trains between St. Paul, Minn., and Seattle, Wash., has been reduced from the original mileage by 47.64 miles and the land grant mileage by 94.24 miles. Pursuant to tbe power to regulate charges for government transportation conferred by the Act of July 2, 1864, Congress haá provided that the rate for such transportation shall not exceed 50 per cent, of the full amount of compensation computed on the basis of .the tariff or lower special rates for like transportation performed for tlio public at largo. Under Joint Military Passenger Agreement No. 2, effective July 1, 1924, the government is entitled to an additional 3 per cent, reduction from the rates charged the public at large. The contentions of the parties respecting the proper deductions to the government from the commercial fare is thus stated in the stipulation of facts:

“The sum of $33.09 claimed by plaintiff for the transportation services furnished each of tlie above mentioned soldiers represents the deduction from the commercial fare of $63.16, or 50 per cent, of of said fare, or 46.001 per cent, of said faro, less a further undisputed deduction of 3 per cent. The sum of $32.29, paid by defendant in each instance, represents the deduction of 47.285 per cent, from said fare of $63.16, and the deduction of 3 por cent, above mentioned, and is computed by taking the proportion of aided mileage to total mileage from St. Paul to Seattle, via plaintiff’s lines of railroad through Brainerd, Minn., and Meeker, Wash., such total distance being 1,962.21 miles, of which 1,855.67 miles were constructed by aid of grants of public lands as hereinbefore sot forth. If plaintiff is entitled to recover, the amount due is $1.60.”

The situation with respect to transportation, due to the cut-offs between Little Palls and Staples, and between Palmer Junction and East Albany, is thus stated in paragraph 9 of the stipulation:

“During all of the times herein mentioned plaintiff has maintained all of its land grant lines of railroad including those contained in its alternate routes between St. Paul and Seattle via Brainerd, Minn., and Meeker, Wash., in suitable condition for its use and for use as post and military routes, and has furnished passenger train service thereover and over its entire system which has been and is suitable and adequate for serving the public. The passenger train service maintained by plaintiff! via Brainerd and Meeker was not and is not designed for the accommodation of continuous through travel from St. Paul to Seattle, and was and is an inferior class of service for such through travel, and is not suitable and adequate for the use of defendant in the transportation of troops from St. Paul to Seattle. The travel time via the shorter route is 59 hours and 40 minutes. The travel time via the longer route is 99 hours and 45 minutes, with four transfers in route.”

The contention of the government is that, .by the construction of these cut-offs and the withdrawal of through trains and fares over the longer route, the railroad has, in effect, established a lieu line, and has as effectually closed the longer route to through government traffic as if the rails along that route had been removed. It is therefore claimed that the United States is entitled to deduction from the through commercial fare from St. Paul to Seattle on the basis of the land grant ratio established when the railroad line between these points was first constructed and the grants of public land were made.

In reaching his conclusion the trial judge was undoubtedly influenced by the consideration that the route from St. Paul to Seattle is not in its entirety the original line constructed from Ashland, on the shore of Lake Superior, to Tacoma, a point on Puget’s Sound. He says:

“The original line of the Northern Pacific was from Ashland, Wis., on Lake Superior, to Tacoma, Wash., on Puget Sound. Only that portion of it between Staples and Palmer Junction constitutes any part of the original land grant route of the plaintiff to the Coast. The line of the old and defunct Western Railroad Company from Watab to Brainerd is the only part of that government aided road used by the plaintiff for its through route. To reach Seattle, after the line to Tacoma was built, it constructed or obtained a line from Palmer Junction, via Auburn, to Seattle, without aid of the government, so that it has a through route, not originally a government aided single system, but composed partly of lines of government aided road and partly of nonaided lines, which it has built or bought. If the Gregory-Staples or the Palmer Junction-Auburn cut-off was a mere straightening out of the original Northern Pacific land grant system, I would think that the government’s position was correct, and that the through route was an alternate route established for reasons of economy or more efficient operation; but, under the circumstances, I am unable to so hold. If there was'no line from St. Paul to Staples, or to Brainerd, if the original through route was St. Paul to Duluth via the old government aided St. Paul & Duluth line, and thence to Auburn over the government aided Northern Pacific line, if the plaintiff had constructed a cut-off from St. Paul to Staples without aid, and had routed its through travel over that line, and thence to Seattle, could it be claimed with any show of reason that that was a mere alternate or lieu route and that the government was entitled to base the deduction from the through fare on the proportion of land grant mileage to non-land grant mileage of the original route ? It seems to me that no such contention could be sustained, and, on principle, the situation presented is identical.”

But it is conceded that parts of the system, as now composed, were constructed by various corporations, of which the defendant is now the successor, charged with all the obligations of its predecessors ; that the plaintiff below maintains its principal operating and business offices in the city of St. Paul; that all the through traffic of the Northern Pacific Railway Company to the Pacific Coast starts at St. Paul, with Seattle, Wash., as its point of destination. Since the establishment of the line from Carlton, Minn., to St. Paul, and that from St. Paul to Brainerd, on the line as originally constructed, St. Paul has been accepted as the eastern terminus of the line contemplated by the Act of July 2, 1864; and the route from St. Paul tci Seattle, via Brainerd and Meeker, for-more than 30 years has been treated by both government and railroad as a route subject to land grant deductions under the provisions of that act.

We may, therefore, lay aside all question as to the effect of the substitution, if it be such, of St. Paul and Seattle as the termini of the land grant aided line under consideration. The railroad concedes that it is under obligation to apply the percentage of 47.285 to fares for government transportation over the route from St. Paul to Seattle via Brainerd, Minn., and Meeker, Wash. It remains only to consider the effect upon such fares of the Little Falls-Staples and Palmer Junction-Auburn cut-offs, by which the land grant mileage is reduced by 94.24 miles. The trial court concedes that, if these cut-offs are to be regarded as “a mere straightening out of the Northern Pacific land grant system,” the position of the government is a correct one. The word “straightening,” as used, is synonymous with “shortening.” Throughout record, briefs, and argument it is stated repeatedly that the cut-offs made have shortened the route between St. Paul and Seattle. To the extent that they have reduced'the distance between these two points, they have had a straightening effect. In this view, which seems sound, they are in no sense additions, which, when constructed without government aid, do not carry land grant obligations. United States v. Kansas Pac. R. Co., 99 U. S. 455, 25 L. Ed. 289; United States v. Central Pac. R. Co., 118 U. S. 235, 6 S. Ct. 1038, 30 L. Ed. 173.

But defendant in error insists that there lias been thus created a new route, which is additional to those required to be established and maintained under the Land Grant Act. To this we are unable to accede. According to the stipulated facts, what is termed the old line, via Brainord and Meeker, is used for local traffic exclusively, while the so-called “new line” carries all the through traffic “from St. Paul to the Pacific Coast.” It thus appears that, except by this latter route, through carriage by the Northern Pacific to the entire Pacific Coast is abandoned. It is true that the old line is still in partial operation. The government may slill transport its troops by means of “an inferior class of service,” “not suitable and adequate” for its use in the transportation of troops from St. Paul to Seattle, if it is willing to consume 99 hours and 45 minutes, with four transfers on route, as against 59 hours and 40 minutes, without transfer, by the shorter route. Is this the service contemplated by the act, which demanded a railroad of the first class, and under which the government granted, not only an ample right of way through the public domain, covering nearly 2,000 miles, including- all necessary ground for station buildings, workshops, depots, machine shops, switches, side tracks, turntables and water stations, but also a vast acreage in alternate sections of land on each side of: the right of way? And this grant was made for the expressed purpose of securing- “safe and speedy transportation of the mails, troops, munitions of war and public stores over the route of said line of railway.” In closing the Brainerd-Mctiker route to through carriage, the defendant in error has, in effect, abandoned its land-aided line to that extent. For its own convenience in competition with other roads, and perhaps for other reasons, it has shortened its line by 47.64 miles and over the lino thus shortened or straightened it routes all its through traffic. By this almost nominal modification of route it deprives the United States of one of the most important considerations for its grant, to wit, speedy, through transportation to the coast, unless it accepts fare reductions not in harmony with the legislation as construed by the parties to the contract over a long period. It is true that the through fare, owing to competition, is not constructed strictly on a mileage basis, but on the shortest mileage between St. Paul and Seattle, by combining the short routes of the competitive roads. But such reduced rates are open to the government, with the same ratio of reduction. Louisville & Nashville R. Co. v. United States, 273 U. S. 321, 47 S. Ct. 365, 71 L. Ed. 661.

The amount at stake in the case at bar is inconsiderable, but the principle involved is far-reaching in its potential consequences. If the slight deviations from the recognized land grant route, brought about by these cutoffs, be accepted as the establishment of a new route, partially absolved from land grant reductions in fares, it would be easy, under the rule thus laid down, by degrees to whittle away the reserved rights of the government. By analogy the language of the Supreme Court of Wisconsin in Attorney General v. West Wisconsin Railway Co., 36 Wis. 466-495, has application:

“It would be a strange disposition of the bounty of the United States, and of the state, for the endowed company to build 20 miles of road and receive corresponding 20 miles of grant; take up the 20 miles of road built, build other 20 miles of road, and receive other 20 miles of grant; take that up in turn, and so on to the end; absorbing- the whole grant and leaving no vestí go of road in the route of the grant. This the defendant can do, if it can without legislative authority take up one mile of the land grant road built. The acceptance of the franchise, in any case, involves a public trust; in this ease it involves a public trust upon valuable consideration, in addition to the consideration of the franchise. We apprehend that the bare statement of the scope of the proposition is sufficient to show it as deficient in morality as in logic.”

The construction placed upon this and like situations by the executive officers of the government is thus stated in the stipulation of facts:

“The accounting officers of the United States have held since 1888 that, where a land grant route is established and made subject to land grant deductions for government transportation, an alternate route thereafter established by the same company is subject to deduction on account of land grant according to the land grant ratio established upon the original completion of the road. The principle was originally stated by Second Comptroller of the Treasury in decision of April 17, 1888, as follows: 'If a railroad have a line between two points aided in whole or in part, and subsequently acquire a new line or lines, nonaided, between those same points, the account for government transportation, when performed over the new line or lines, shall be stated in the same proportion •of aided to nonaided miles as though the transportation were over the original line.’ Digest Second Comp. Dec. 1160.

“This rule has been uniformly observed in the settlement of accounts for government transportation of property and troops of the United States, and has been applied in the settlement of accounts for transportation' rendered the government where through service has been rendered by a shorter line substituted in whole or in part for the longer aided and original line. The accounts for service between St. Paul and the Pacific Coast have been uniformly settled by the government accounting officers for more than 30 years on the basis of the through rates applicable for through service, whether rendered over the original aided line or over the shorter substituted line with the deductions therefrom at the ratio determined in accordance with the original aided mileage, but until shortly prior to the protests of plaintiff set out in the preceding paragraph there were in effect via Brainerd, Minn., and via Duluth, Minn., and via Meeker, Wash., the same through fare from St. Paul to Seattle as via the direct route. The application of the through fare via the longer routes was canceled by the United States Railroad Administration during federal control, and was not in effect at the time the transportation service in question was rendered, and a through fare via these longer routes could be constructed by a combination of loeal fares only. The combination fares were substantially higher than the through fare applicable over the direct route.”

It was not until the transportation of the Marines upon which this suit is based that the railroad made protest against the position taken by the government. The fact that, for a portion of the time, the fare from St. Paul to Seattle was the same by both routes, does not alter the principle. In 1915 the ratio of land grant to total mileage for which the government contends was approved by the railroad through a letter of its comptroller to the Auditor of the War Department. March, 1925, in a hearing before the joint congressional ■ committee on the investigation of the Northern Pacific land grants, counsel for defendant in error made the following statement:

“It is a recognized ruling of the Comptroller’s office, acquiesced in by all railroads, that where a land grant route is established and made subject to land grant deductions for the transportation of mails and freight of the government and an alternate route is thereafter established by the same company, that the alternate route is subject to the same land grant deductions as the original, and it is my understanding that that has been enforced uniformly in connection with the Northern Pacific.”

The president of the Northern Pacific, at the same hearing, stated the understanding of his road regarding land grant deduction for government transportation to the same effect. These statements were made long after the protests of the road respecting the transportation of these two Marines, to which reference has been made. They are important as evidencing a consistent construction of the 'obligations of the carrier under the Act of July 2,1864, by both railroad and government over a long period of years.

“The' contemporaneous construction of a statute by those charged with its execution, especially when it has long prevailed, is entitled to great weight, and should not be disregarded or overturned except for cogent reasons, and unless it be. clear that such construction is erroneous.” United States v. Johnston, 124 U. S. 236, loc. cit. 253, 8 S. Ct. 446, 455 (31 L. Ed. 389); United States v. Finnell, 185 U. S. 236, 244, 22 S. Ct. 633 (46 L. Ed. 890); United States v. Sweet, 189 U. S. 471, 23 S. Ct. 638, 47 L. Ed. 907. This rule is reinforced when the opposing party has acquiesced in the construction for a like period.

For the reasons stated, the judgment below is reversed, and the case is remanded for further proceedings in accordance with the views expressed in this opinion.