CENTRAL BRANCH UNION PACIFIC RAILROAD.

While the United States is named as a defendant in the bill of complaint to foreclose the mortgage on the Central Branch Union Pacific Railroad, no subpoena, citation, or other process was served upon it, nor did it appear as a party, and is, therefore, not barred by said decree of sale and might still redeem the property or cause its resale on account of its subsidy lien.

This railroad, in accepting the assignment of the rights and franchises of the Hannibal and St. Joseph Railroad Company, and the grant of lands, bonds, etc., conferred by act of Congress in aid of its construction, succeeded also to, and had imposed upon it, all the obligations, limitations, and conditions with reference to the application of compensation for services for the Government toward the payment of these subsidy bonds.

One-half of the compensation due from time to time for the services rendered by this road for the Government should be withheld and applied upon the bonds issued by the United States in aid of its construction, notwithstanding the foreclosure and sale of the same.

DEPARTMENT OF JUSTICE,

March 20, 1899.

SIR: I have the honor to acknowledge the receipt of your communication of the 10th instant, requesting my opinion, in substance, as to whether the Treasury Department should recognize the validity of the foreclosure sale of Central Branch Union Pacific Railroad, and pay in money for transportation service for the Government over that road, instead of applying such compensation, in whole or in part, upon the subsidy debt of that company to the United States.

Historically, the case is this: The Central Branch Union Pacific Railroad Company is but another name for the corporation chartered by the laws of Kansas by the name of the Atchison and Pikes Peak Railroad Company, and thus authorized to construct a railroad and telegraph line from Atchison, Kans., westward in Kansas, a distance of 100 miles. The change of name to the present one of Central Branch Union Pacific Railroad Company was by act of the legislature of Kansas of January 1, 1867.

The Hannibal and St. Joseph Railroad Company of Missouri is one of the Pacific railroad companies named in the Pacific railroad acts of Congress of July 1, 1862, and later acts; and by section 13 of said first-named act, was author

ized to extend its roads from St. Joseph via Atchison, for a distance of 100 miles westward from the Missouri River, and to there connect with a line forming part of the continuous line from the Missouri River to the Pacific Ocean, contemplated by said acts of Congress. And, by this act, the same grants of bonds and lands per mile, for this 100 miles, right of way, and other privileges were made to this company, as in the case of the Union Pacific Railroad Company, for its main line.

On June 9, 1863, the Hannibal and St. Joseph Railroad Company assigned all its rights under this act, so far as related to this 100 miles of railroad, to the Atchison and Pikes Peak Railroad Company, above mentioned, having, within the time prescribed, filed its acceptance of the provisions of said act, as therein required.

Under this assignment the Atchison and Pikes Peak Railroad Company, at first under that name, and afterwards under its present name of Central Branch Union Pacific Railroad Company, and under and in pursuance of said acts of Congress, and subject to the terms and provisions thereof, constructed the line of railroad and telegraph thus authorized, from Atchison, 100 miles westward in Kansas, to Westerville, and received in aid of such construction the lands and bonds and the other benefits provided by said acts, which subsidy bonds amounted to $1,600,000, of which $640,000 were issued before this change of name and the residue thereafter, and the issue and delivery of which bonds, under section 5 of the act of July 1, 1862, constituted a mortgage upon the whole of said railroad and telegraph line and properties, but subordinate to the liens of the mortgage next mentioned.

On May 1, 1865, and prior to said subsidy bonds, the Atchison and Pikes Peak Railroad Company executed its mortgage upon the whole of said 100 miles of railroad and telegraph and properties, to secure the payment of $1,600,000 of its thirty-year 6 per cent bonds, and default being made of their payment, suit to foreclose said mortgage and sell all of said properties was commenced in the circuit court of the United States for the district of Kansas, and on February 7, 1898, a final decree was entered therein directing the

sale of all said properties, and which sale was made, and was confirmed by said court June 27, 1898, and a deed was made shortly thereafter conveying the whole property to the purchasers, and the property is now owned and operated by the corporation for whom the purchase was made.

The proceeds of this sale were not sufficient to pay any part of the subsidy claim of the Government, which remains unpaid.

While the United States is named as a defendant in the bill of complaint in this suit, yet no subpoena, citation, or other process was issued or served upon it, nor did it appear or become a party in the case, and is, therefore, not barred by said decree or sale; and if the whole property were of sufficient value to pay any considerable portion of this subsidy claim beyond the amount due on said first mortgage and costs, the United States might still redeem the property or cause its resale on account of its subsidy lien, but, as I understand, it is not.

The question is whether, under these circumstances, this foreclosure and sale transferred the railroad and telegraph line and property, discharged from the various obligations, conditions, and requirements provided by these acts of Congress as to the operation and use of this property, and especially the requirement that a portion or the whole of the amounts due from time to time from the Government for transportation service over this road and telegraph shall be applied in part payment of the subsidy bonds.

The answer to this depends mainly upon the proper construction of various portions of these acts of Congress, in the light of their obvious purpose and object, and upon whether these provisions merely created a personal obligation upon the company constructing the railroad and telegraph under these acts, and receiving the grants of bonds, lands, and other benefits in aid thereof, or whether, on the other hand, these requirements extended also to the property itself and its use, in whosesoever hands it might be.

In the first case the purchaser, whether at a forced or voluntary sale, would take the property free and discharged from these requirements; in the second the purchaser would take the property subject to these provisions, and

would be as much bound to comply with them as was the original company. A glance at these provisions will help

to an answer.

The object, intent, and purpose of this Pacific Railroad legislation are obvious, and are also expressed in these acts.

Besides the general benefit to the nation and the people resulting from the opening up to settlement, cultivation, and use of this vast domain of the United States west of the Missouri River, there were certain other objects and purposes intended to be secured by these acts, and expressed therein, and provision therefor made. Some of these were of a permanent character, of indefinite duration, and the provisions for their attainment are equally permanent; and some had relation to a certain object, and the provisions for its attainment continue until that end is reached.

Among the former are, as expressed in the title to the act approved July 1, 1862 (12 Stat., 489), and in other acts upon this subject, "to aid in the construction of a railroad and telegraph line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes.”

The provisions requiring these companies to furnish communication and transportation over these lines when required, and giving to the Government a preference in the use of the railroad and telegraph lines for communication and transportation, and at rates not to exceed those paid by private persons for like services; and the requirement that these railroad and telegraph lines shall be kept constantly in repair and use, and that the whole line of the respective railroads and telegraphs and the branches (of which the road here in question is one) shall be operated, as far as the Government and the public are concerned, as one continuous line of railroad and telegraph; the provision that any other railroad company may connect its road with those authorized by these acts, upon just and fair terms; the provision that whenever the net earnings of a railroad and telegraph line exceed 10 per cent the Congress may reduce the rates to be charged; and the provisions intended to prevent a monopoly, requiring the companies to permit connections of other telegraph lines and to afford facilities for tele

graphing over railroad lines of telegraph-all these and other requirements and provisions of these acts of Congress are clearly permanent in character, of indefinite duration, and are not discharged by any alienation of the property, but go with it into whosesoever hands it may go, and are equally obligatory upon every owner.

Of the other class, those intended to secure an object not necessarily permanent, and which, therefore, continue only until that end is attained, are those relating to the repayment of the vast sums advanced by the United States in aid of the construction of these railroad and telegraph lines and branches thereof; such as the provision of section 5 of the act of July 1, 1862, that the issue and delivery of these bonds shall, ipso facto, constitute a first mortgage upon the railroad and telegraph line and property; that in section 6, that the grants of lands, bonds, etc., are upon the condition that the railroad companies shall pay these bonds at maturity; that in section 6, after the roads are completed at least 5 per centum of the net earnings shall be annually applied in payment of these bonds and interest, and the provision of section 6, here in question, that, "all compensation for services rendered for the Government shall be applied to the payment of said bonds and interest until the whole amount is fully paid."

By section 5 of the act of July 2, 1864 (13 Stat., 356), this was amended so as to require but one-half of such compensation to be thus applied.

By section 13 of the act of July 1, 1862, before referred to, the Hannibal and Saint Joseph Railroad Company was authorized to construct and operate this railroad from Atchison 100 miles westward in Kansas, "upon the same terms and conditions, in all respects," as are provided for the Union Pacific Railroad Company. This is, in substance, the usual form of expression adopted in these Pacific railroad acts, for granting to the several other railroad companies the same benefits, privileges, and immunities that are conferred upon the Union Pacific Railroad Company by this act and the acts amendatory of and supplemental thereto, and for imposing upon them the same obligations, limitations, and conditions. And there can be no question that