NORTHERN PACIFIC RAILWAY CO. v. UNITED STATES.

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT.

No. 400. Argued January 13, 1947.-Decided March 3, 1947. 1. Section 321 (a) of the Transportation Act of 1940 provides that commercial rates shall be applicable to transportation of property for the United States, excepting "military or naval property of the United States moving for military or naval and not for civil use." Held: The property involved in each of the five classes hereinafter described, which at the time of the shipments in 19411943 was property of the United States, was within the exception and hence entitled to land-grant rather than commercial rates. Pp. 250-255.

(1) Copper cable consigned to a naval officer for use in the installation of degaussing equipment (a defense against magnetic mines) on a cargo vessel, being built by a shipbuilding company under contract with the Maritime Commission, according to plans whereby the vessel would be convertible into a military or naval auxiliary. The degaussing specifications were prepared by the Navy, which also furnished all material and bore the cost. The vessel was delivered in 1941 and was operated as directed by the Maritime Commission or the War Shipping Administration. Pp. 251, 255.

(2) Lumber for use in the construction of a munitions plant which was being constructed for the Government by contractors under Army supervision. Pp. 251, 255.

(3) Lumber for the construction of pontons by a contractor under a contract with the Marine Corps. The product was either shipped overseas in connection with military or naval operations or used in the training of combat engineers. Pp. 251, 255.

(4) Bowling alley equipment destined for a naval air base under construction on public land reserved for Navy use. The equipment was intended to be used for recreation by the civilian construction crew, and, upon completion of construction, by the Navy. In fact it was used only by servicemen. Pp. 252, 255.

(5) Liquid paving asphalt consigned to the Civil Aeronautics Authority for use in constructing runways at an airport in Alaska under a program approved by a joint cabinet board as being

necessary for the national defense. Work was commenced by a civilian contractor, and, after the shipment had moved, was taken over by the Army which thereafter had full control of the field. Pp. 252, 255.

2. Although the shipment of asphalt was to a civilian agency (the Civil Aeronautics Authority), it was nevertheless "military or naval" property within the meaning of § 321 (a). Pp. 252–253. 3. "Military or naval" property within the meaning of § 321 (a) is not limited to property shipped by or under control of the Army or Navy, nor to property procured by those departments. P. 253. 4. The exception prescribed by § 321 (a) is not confined to property for ultimate use directly by the armed forces. P. 253.

5. Within the meaning of § 321 (a), an intermediate manufacturing phase can not be said to have an essential "civil" aspect, when the products or articles involved are destined to serve military or naval needs. It is the dominant purpose for which the manufacturing or processing activity is carried on that is controlling. P. 255. 6. Doubts as to the meaning of a statute which operates as a grant of public property, or as a relinquishment of a public interest, should be resolved in favor of the Government and against the private claimant. P. 257.

7. Section 321 (a), though enacted in the interests of the railroads, continues land-grant rates in a narrower category, and is to be construed in favor of the Government and against the railroads. Pp. 257-258.

156 F.2d 346, affirmed.

Petitioner brought suit against the United States under the Tucker Act to recover the difference between commercial rates and the land-grant rates which it received for the transportation of government property. The District Court gave judgment for the United States. 64 F. Supp. 1. The Circuit Court of Appeals affirmed. 156 F.2d 346. This Court granted certiorari. 329 U. S. 701. Affirmed, p. 258.

Lorenzo B. da Ponte argued the cause for petitioner. With him on the brief was Marcellus L. Countryman, Jr.

Robert L. Werner argued the cause for the United States. With him on the brief were Acting Solicitor Gen

Opinion of the Court.

330 U.S.

eral Washington, Assistant Attorney General Sonnett, Philip Elman, Paul A. Sweeney, Oscar H. Davis and Hubert H. Margolies.

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

This is a companion case to United States v. Powell and United States v. Atlantic Coast Line R. Co., decided this day, ante, p. 238. This case, like those, involves the construction of the provision of § 321 (a) of the Transportation Act of 1940 which entitles "military or naval property of the United States moving for military or naval and not for civil use" to land-grant rates. Petitioner was a land-grant road, 13 Stat. 365, 370, and for years carried government property at land-grant rates. 43 Stat. 477, 486, 10 U. S. C. § 1375. It qualified to receive the higher rates authorized by § 321 (a) of the Transportation Act of 1940 by the timely filing of the required release of landgrant claims pursuant to § 321 (b) of the Act.1

The shipments in controversy were made over petitioner's railroad on government bills of lading in 1941, 1942, and 1943. They were admittedly government property at the time of carriage. Petitioner submitted its bills to the Government at the published commercial tariff rates. The United States, claiming that under § 321 (a) of the Transportation Act each shipment was entitled to move at land-grant rates, deducted the difference between the commercial rates and the landgrant rates. Petitioner thereupon brought this suit under the Tucker Act to recover the deducted sums. The District Court entered judgment for the United States on the

1 This release was followed by a settlement of the litigation before this Court in United States v. Northern Pacific R. Co., 311 U. S. 317. See United States v. Northern Pacific R. Co., 41 F. Supp. 273; S. Doc. No. 48, 77th Cong., 1st Sess.

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Opinion of the Court.

claims here involved. 64 F. Supp. 1. of Appeals affirmed. 156 F. 2d 346. on certiorari.

The Circuit Court

The case is here

The shipments involved five types of property:

Copper cable.-Copper cable was transported to Tacoma, Wash., for use in the installation of degaussing equipment (a defense against magnetic mines) on a cargo vessel being so built that it might readily be converted into a military or naval auxiliary. The work was done by a contractor under contract with the Maritime Commission. The degaussing specifications were furnished by the Navy, which also furnished the equipment and bore the cost. The vessel was delivered in 1941 and was operated as directed by the Maritime Commission or the War Shipping Administration. Whether it operated as a cargo vessel or as a military or naval auxiliary does not appear.

Lumber for construction of munitions plant.—In 1942 the Twin Cities Ordnance Plant was being constructed in Minnesota by contractors under the supervision of the Army. The plant was government owned and Army sponsored. Army officers were procuring agents for the lumber used in the construction. Petitioner transported lumber for use in the construction. The plant was completed in 1943 and manufactured ammunition for the armed forces.

Lumber for construction of Marine Corps pontons.Petitioner in 1943 carried fir lumber to a plant in Minnesota to be treated, kiln-dried, milled, and manufactured by a contractor into parts of demountable floating bridges required to move military personnel and war vehicles across water barriers. The construction was under a contract with the Marine Corps. The manufactured product was either shipped overseas in connection with military or naval operations or was used in connection with the training of combat engineers.

Opinion of the Court.

330 U.S.

Bowling alleys for Dutch Harbor.-Petitioner moved bowling alley equipment to Seattle, Washington, for reshipment to the Naval Air Base, Dutch Harbor, Alaska. The Navy had entered into a contract for the construction of an air base at Dutch Harbor on public land reserved for Navy use. The purchase and installation of the bowling alleys were pursuant to that contract and were approved by the Navy officer who had supervision and control of the construction program. The recreational facilities, which included the bowling alleys, were planned for initial use by the civilian construction crew and then, when construction work was ended, by the Navy. But in fact they were used only by members of the armed forces.

Liquid paving asphalt for Cold Bay, Alaska, uirport.— In 1942 petitioner moved liquid paving asphalt to Seattle, Washington, for reshipment to Alaska. The asphalt was for use in constructing runways at an airport at Cold Bay under a program of the Civil Aeronautics Authority approved by a joint cabinet board as being necessary for the national defense. Work was commenced by a civilian contractor and, after the shipment had moved, was taken over by the Army which thereafter had full control of the field.

*

In four of the above instances the property was consigned to an army or navy officer; in the fifth, the shipment of liquid paving asphalt, the Civil Aeronautics Authority was the consignee. And as we have said, the property in each case was at the time of shipment property of the United States. The question remains whether within the meaning of § 321 (a) it was "military or naval" property and, if so, whether it was "moving for military or naval" use.

There is a suggestion that since the shipment of asphalt was to a civilian agency, the Civil Aeronautics Authority, it was not "military or naval" property. The theory is