BARRY 'D. MISSOURI) K. &I T. RY. CO.
829
BARRY tI. MISSOURI,
K.& T. Ry.
CO.
et at!
(Oircuit Go'Urt, 8. D. New York. May 12,1888.) 1. RAILROAD COMPANIES-BONDS AND MORTGAGES-EXCHANGE 0l1' BONDs.
Where provision is made for retiring a series of secured income bonds of a railroad, and .issuing new bonds in exchange, the bonds surrendered to be , held by a trust company uncanceled until all are retired, a bondholder whG under does not consent to render his bonds is not entitled, in an the mortgage, to claim for interest due him more of the income than hIS share would have been had no bonds been surrendered. In an accounting in favor of income bondholders of a railroad. if the company has seen fit to pay a higher rate of interest than needful upon prior in· cumbrances, it cannot charge the difference against the income to the injury of the bondholders in direct contravention of the provil!ions of the mortgage securing the income bonds.
2.
BAllE-AcCOUNTING.
8.
BAHE.
Held that, under the particular facts of this case, an allowance made by the mortgagor to a connecting road for a diversion of earnings should be rejected from the expense account in ascertaining income applicable to the payment of interest.
In Equity. J. A. Davenport, for complainant. Winslow S. Pierce, Jr., for defendants. WALLACE, J. This cause is here upon exceptions filed by the railway company and the Mercantile Trust Company to the master's report. By the interlocutory decree of April 26, 1886, it was. adjudged that the complainant and the other owners of income mortgage bonds created by the railway company were entitled to an account of the net earnings of the company for each six months from April 1, 1876, the date of the mortgage; and the railway company was accordingly directed to account before· the master, in order to ascertain how much the complainant and others similarly situated should receive from the company as owing for intereSt earned upon the, bonds. The decree directed the master to charge the company with its gross earnings and income derived from all the property covered by the. mortgage since the execution of the mortgage, and to credit the company with its operating expenses, its expenses for keeping the property in repair, and the sums paid, or which it was liable to pay, for interest upon prior incumbrances, and. for taxes and assessments. Upon the accounting thus directed, the master found and reported that the net earnings of the company which should have been applied to the payment of interest upon the bonds, after rejecting the items which the company had sought without right to charge against income, amounted October 1, 1886, to $3,547,012. By the exceptions filed the railway company complains that the master improperly disallowed 1wo items charged against earnings in the income account,-...one for interest upon prior incumbrances actually paid by the company) and J S1le
2'l Fed.
·. l.
"830 the ot?er for. expenses the form of an to InternatIOnal &6-root' 'Northern i.aii'Way .Company fur' earnmgs dIverted from .that ' . . . ' " " , ,. '. .." WIthout repeatmg the opmion expresseU at the hearing of the exceptions .why the first item waspropedy the m!:l$ter, it is suffioient for present purposes to state that,'if the railway company has ·n, fit.t.o. pay a .. .. ..raJe o.f 'pri()l'incumbrances th.a.n it ',W'#s liable to payby,jts agreement with the owners of these incum',bniUC6S, it cannot the difference against the income. to the detriment of the income bondholders, in direct co'titravention of the, agre().·between thep01:npany and theincome.bondholders recited in the inoomemortgage. itemWa$,;in effect, themaster, although his mling was in form only a refusal to permit the railway company to delay the accounting by the issuing of a commission to produce testimony to ahow,the particulllrsand details of the item. The refusal was put gro'und, pyib,e master, that the)temought not to be allowed as a charge against net earnings under the terms of the mortgage, if all the particulars and d-etails sougbt to be proved were proved. It appears that June 1,1881, five years after the execution of the income mortgage, the railway company leased the railway of the International & Great Northern Railway Company forthe term of 99, years,and soon after acquired all the stock of tbat company, except 300 of the 10,000 shares, and,since that tiinelhasoperated the leased railway. After the interlocutory:decreein tbiscause, compelling the railway company to render an account of its and apparently several montbsafter the accounting before the master had commenced, Mr. Gould, who was then president of both railway companies, directed a credit to be made on the books of the Missouri, Kansas & Texas Railway Company in favor of the International & Great Northern Railway Company, as follows: "AIlowanceto Internationill & Great Northern Railway Company on adjustments of ean;lings diverted from their company's line to the Missouri, Kansas ,& Texas Railway, $743,899j" and the same item was charged against income in the income aooount. This allowance seems to have been the result of a conference between Mr. Gould and tbe treasurer of the Missouri, KanSflS & Texas Railway Company. According to the testimony of the, treasurer, .the allowance was made on his suggestion, and concurred in by Mr. Gould, upon the theory that the earnings of the International & Great Northem RailWaY Company were only equal to its fixed charges,and would "have been more than its fixed charges had it been allowed to control its business in its own interest exclusive of connectionswith anyotherr.oadj and the amount allowed was the difference between fixed chargesanl:loperating expenses, whioh' had been advanced to it by,the Missouri, Kansas & Texas Railway Company. There was enoughjprobably, in the origin and ,history of this item, to justify the _master in treating it as am,ere matter of book-keeping, or as one manufactured for the purpose of the accounting, and destitute of any real foundation; but he placed his ruling upon the ground that by the terms
BARRY f.MISSOURI, K. ,\' T. RY. CO.
831
of the income mortgage such It disbursement would nut fall within the category of expenses incurred in operating and keeping in repair the 786 miles of road covered by .themortgage, and therefore was not a proper charge,againstincome. In this he was clearly correct, and the ruling is fully approved. The master excluded the Mercantile Tru.st Company, the holder of coupons and scrip certificates representing $2,028,007 of u.npaid interest, fromdproving its claim against the fund, and ruled that the fund should be, distributed whoUy to other holders of coupons and scrip. The correctness of this ruling is questioned by exceptions filed in behalf of that corporation, and also by the railway company. It appears that in November, 1883, the railway company resolved upon a plan for exchanging the income mortgage bonds for the bonds of a general consolidated mortgage created December 1, 1880. By the terms of the resolutions or the board of directors embodying this plan, it was provided that aU income bonds offered for exchange should be deposited: with the Mercanas security for the tile Trust Company as trustee, and held new bonds until all the income bonds· should be retired j and that the coupons and scrip certificates for unpaid interest upon the bonds offered for exchange should ,be retired at 60 percent. of their face value, flat, payable in the new bonds. At the time of the hearing before the master, the greater part of. the income bonds, with coupons attached representing $1 ;307 ,205 unpaid interest, had been exchanged with the company for the new bonds, p\ilrsuant to this plan, and were deposited with the Mercantile Trust ComplUly, and held by it uncanceledj. and scrip certificates to the.amount of $715,630 had also been exchanged for the ,new bonds, and were deposited with the Mercantile Trust Company, and beld by it uncanceled. The scrip certificates represent overdue interest coupons, which were detached from the bonds' at the time· oftbe exchange; and the coupons are those which were attached to the bonds at the. time of the exchange, and have matured subsequently. The theory upon which the master ruled that these coupons and scrip certificates should not be allowed to share in the interest fund earned by the railway com. pany was that they had been paid and satisfied by the railway companYt the exchange being in legal effect a payment and satisfaction. According. to his view, the holders of coupons. aud certificates who did not exchange them for new bonds are entitled to the whole interest fund until they have received their 6 per cent. annual payments. It is quite immaterialwhetber the securities excluded from sharing in the interest fund are to be regarded as belonging to the Mercantile Trust Company, and treated as held in trust by tbat corporation for the benefit of the income bondhqlders who have consented to exchange their bonds for the new bonds, or whether they are regarded as really belonging to the rail.; way company, and treated as held for its benefit by the trust company. The essential question is whether the railway company must pay over to the holdet'S of outstanding. coupons and· certificates, the whole interest frind, or enough of it to render them 6 per cent. interest, with interest upon interest, by way of damages,. or whether it must pay to. them. only
832
FEDERAL REPORTER.
such proportion as the amount of their respective coupons and certificates bears to allthe interest payable by the terms of the income mortgage. It seemS plain that the holders of income bonds, or of coupons or Cel· tifica.tes representing unpaid interest on the bonds, who did notconseot to surrender them in exchange for neW bonds, are not entitled to any la.rger share of the interest fund than they would be if Done of the original issue of bonds,or no coupous or scrip certifica.tes, had ever been surrendered. It was competent for the railway company, in carrying out its scheme of refunding, to agree with the holders of income bonds, coupons, or certificates that, upon their exchange of their securities for new bonds, those surrendered should not be deemed paid, but should he kept alive to protect them against any enlarged clailns ofnon-assenting holders; and, if such an agreement was made, the surrendered securities are to be regarded as held in trust by the trust company for the benefit of those who surrendered them. Ordinarily suchan agreement, or some other arrangement for the protection of those w'hosurrender securities, having a prior lien for securities secured bya junior mortgage, is one of the features of the refunding schemes of corporations. The rights of non-assenting bondholders cannot be prejudiced by any action on the part of the corporation and assenting bondholders in substituting new bonds for old; but it has sometimes been supposed that, if the refunding plan should assume the form of a ·paymentof the old bonds, and an exchange of new bonds in satisfaction, the holders of old bonds might acquire a priority which they did not have originally. Thus, in the case of Ames v. Railroad Co., 2 Woods, 206; the railway company had executed a mortgage to secure a limited numbetof bonds, and Mterwards executed another mortgage on the same property to secure a latgernumber of bonds, which recited that the holders of the bonds secured by the first mortgage had agreed to surrender the same, and receive in substitution therefor new bonds to be secured by the first mortgage;'fls modified by the second mortgage; and all the bonds secured by the first mortgage except 20 were exchanged for bonds secured by the second. Upon foreclosure the holders:of the 20 bonds claimed that they were entitled to be paid out of the proceeds of the mortgaged property in prefereneeto the holders of the new bonds, who had surrendered their old bonds in exchange, so that the proceeds which would have been divided among 2,825 bonds, the number originally secured by the first mortgage, should be first appropriated to pay the 20 bonds which had not been surrendered. But the court held that, while- those holders who had not surrendered their bonds were entitled to have their rights preserved unaffected by what had taken place, equity would be.done hy giving them such part of the proceeds of the sale as they would have been entitled to if the new bonds and mortgage had never been executed; in other words, that they were entitled to 20.2825 of the proceeds of the sale, and no more. In that however, the court placed some emphasis upon the circumstance that there was an express understanding between the corporation and those bondholders who consented totbe exchange that the first mortgage should stand for the benefit of the new
BARRY
V.
MISSOURI,
K. & 1'.
RY.
833
bonds. But suppose there is no express understanding between the corpOration and assenti.ng bondholders that the original security is to be kept alive for their protection, how are the rights of non-assenting bondholders enlarged by the surrender or payment of part of the bonds originally covered by the mortgage? No new contract is made with them by which their rights or their original liens are amplified. If it becomes necessary to enforce their mortgage, complete equity is done them if they are awarded the same share of the proceeds of the property which they would have received if no bonds had surrendered. If, by the terms of the contract, the whole property covered by a mortgage created to secure an issue of bonds is pledged to each bondholder, then, indeed,he may rightfully insil:it that he shall not be deprived of the fruits of his pledge by any subsequent dealings between the mortgagor and other bondholders to which he has not assented; and consequently he could reasonably claim that, if part of the debt to the payment of which the property was originally pledged has been extinguished, the proceeds of the property, in case of a foreclosure must be applied to pay the balance before any other appropriation can be' made of them. But such is not the contract implied between a bondholder and a mortgagor when the mortgage purports to secure a series of which his bond is one. The contract is that he shall receive the proratn share of the whole security which his bond bears to the whole series. In Claflin v. Railroad Co., 4 Hughes,' 12, 8 Fed. Rep. 118, certain mortgage bonds had been acquired by the corporation in refunding operations, and the question arose whether the company, after having acquired them, could keep them alive, and reissue them, so that they would carry with them their original mortgage lien. Chief Justice WAITE, in deciding the case, said: "As against other bondholders secured by the same mortgage, I cannot believe there is a doubt of the power of the company to put ou t and keep out the entire issue up to the time the bonds became due. The contract with the individual bondholder was no more than that he shall have his due proportion of the security the mortgage on its face implies." Where a mortgage is security for the whole number of a series of bonds, in a distrihution of the proceeds of the sale of the mortgaged property each bond carries only a fractional interest in the proceeds of the property, to he ascertained "by the proportion which its amount bears to the whole amount secured; and the holder of such a bond has no interest in the question whether holders of other bonds have title or not. Hodges' Appeal, 84 Pa. St. 359. There is no principle in the law of corporations or of mortgages which forbids a corporation that has issued a series of mortgage bonds from purchasing part of them back, and reissuing them again before their maturity, when the financial interests of the corporation will be thereby ptomoted, unless the organic law of the corporation prohibits the exercise of such a power. If it is lawful for the corporation to do this, it is wholly immaterial whether it pays money upon such a purchase, or exchanges other bonds instead. And if it should destroy the bonds purchased, and issue duplicates, not intending to extinguish the debt evidenced by the bonds, the lien of the mortgage would v.34F.no.11-53
834:
. FEDERAL REPORTER,
not be affected by the substitution of the new bonds. ;Watkins v. Hi)}" 8 Pick. 522; Pomroy v. Rice, 16 Pick. 22; Brinck.erlwff v. Lansing, 4 Johns. Ch. 65; Dana v. Binney. 7 Vt:501. Of course, payment with intent to extinguish the debt would extinguish the lien. In the present case the railway company intended that the income bonds exchanged for llew bonds should remain with the trust company uncanceled until all the income bonds should be retired, and the resolutions embodying the refunding scheme distinctly provides for this; and. although the language of the re,solution, with reference to the coupons and scrip certificates representing the interest on the bonds, stated that they were to be "retired at sixty per cent. of their face value" in new bonds, it cannot be doubted that the company did not intend them to be canceled. They were not canceled, but were deposited with the trustee, as were the bonds. It is conceded that the bonds were kept alive upon the exchange, and it is difficult to see how the slight difference of phraseology employed to describe the mode of retiring the coupons and scrip certificates can work any substantial difference in the effect of the transaction as to them. The coupons and certificates are nothing more than evidence of the promise contained in the bonds for the payment of interest. The lien of the income bondholders upon the income of the company for the payment of their interest cannot extend beyond the contract of hypothecation as evidenced by the bonds and the mortgage when read together. The lien of coupon or certificate holders.is but the lien the bondholders have for interest. The income mortgage was created. to secure a :Series of bonds for the sum of $1 ,000 each, amounting in $10,000,000. Each bOhd contains a promise to pay the the bearer from the net or surplus earnings of the r&ilway company interest semi-sIlllually at the rate of 6 per cent. per.annum; and recites that the whole series of bonds are secured by the mortgage, and that the income of the property covered by the mortgage is to the payxnent of the interest thereon. Manifestly the contract between each bondholder and the railway company authorized the latter to issue 10,000 bonds. It iS81so manifest that the railway company only bound itself to pay interest to each bondholder to the extent of his proportion of its semi-annual income. Consequently the railway company would satisfy its obligation to each holder of a 81,000 bond by paying him one tenthousandth part of its annual net income as interest on his bond. If this is a correct view of the contract between the company and the bondholder, it is obvious that neither the rights of the bondholder would be enlarged, nor the obligation of the railway company changed, by any increase or decrease in the amount of bonds issued. If the company had issued but 5,000 of the 10,000 bonds, or if it had issued the whole number, and had then called· in and purchased some of them, and then put them out again, it would have made no difference in the rights of an individual bondholder. So, if the exchange of bonds is deemed equivalent to a payment of those surrendered, as well 'as of .the coupons and certificates, the bondholders of outstanding bonds, coupons, or certifi-· cates occuPl' no different 1'elation to the interest fund, and have no larger
SIOUX CITY
&. ST.
R.
cO.
'U.UNITED STATES.
835
lien upon it,than before. The fallacy' oithe position of the ant, and the other holdereof COUptlUS arid scrip not surrendered, is in the notion that by the contract of hypothecation the whQle incolD e of the railway company, to the of 6 per cent. annually, was pledgeclto the payment of the interest upon each bond. If this were true, and the claims of some of those who were originally entitled to share in the income fund had been extinguished by payment, the residue ,of the fund would inure to those whOse claims remain unsatisfied; But the contract was that the cOmpany should distribute the income ratably among 000 bond$'fot $1,000 each, so as to pay each bondholder his share. This share constitutes the whole interest of the holders of outstauding coupons or certificates in the income fund. The report is recommitted to the master to ascertain the rights of the parties to the fund in accordance with these views.
SIOUX OITY
&
ST.
P., R. Co.
'V.
UNITED STATES.
((Jireuit Oourt, N. D. 1011!a,
w: D.
May Term,lSSS.)
1.
PuBLIC liA;ND8....:..JURISDICTION; 011' CoURTlI TO DETERMINE TITLES.
The question of qetermining whether certain land is open for settlement or whether it has passed under a railroad grant, is one which requires the exer· cise of judicial power and discretion on part of the officers of the land department,wit4 which the courts of the United States cannot interfere by injunCtion or otherwise. Act Congo March 8, l887,providingthat in certain cases suit may be brought against th,eUnited States, does not give the courts the right to interfere by injunction or otherwise with the action of the departme,nts in matters requiring the exercise of judicial, as distinguished from ministerial, duties. The persons named as seeking to pre-empt the land claimed by complainants under a railroad grant are necessary parties to a bill to enjoin the United 8tates land-omcers from allowing the proof to be made or acted upon requisite to the completion of the entries made by such persons.
8..uut--lNJUNCTION-AGAINST DEPART.MENT OF LAND OFFICE.
a.
SAME-BILL FOR INJUNCTION-PARTIES.
In Equity. Bill to setne title to land. Motion for preliminary injunction. J. H. « a. M. Swan, for complainant. T. P. Murphy, U. S. Dist. Atty., for defendant. SRIRAS, J. The bill filed in this case avers that by the act of congress of May 12, 1864, there was granted to the state of Iowa every alternate section of land designated by odd numbers for 10 sections in width on each side of a projected line of railroad to be built from Sioux City to the Minnesota state line, with a provision that all lands already sold or granted by the United States within such sections should be made good bv sections to be taken from the lands of the United States nearest to the designated sections; that by an act of the general assembly of the
836
:B'EDERAL REPORTER.
state of Iowa, approved April 3, 1865, the lands granted to the state for the purpose named were in turn granted to the complainant company, which had undertaken the constrnction and operation of the line of railway designated in the act of congress; that the company proceeded with the construction of the named line of railway, and have built and maintained the same from the Minnesota. state line to Le Mars, Iowa, from which point the trains all pass over the line operated by the Illinois Central Railroad Company to Siollx City. The bill further recites at length the various proceedings taken by the company, whereby it is averred it became entitled to demand and receive under the act of congress a total of 320,000.acres of land. It is also averred that there was not found within the 10-mile limit sufficient lands to make up the total quantity to which thl;' company was entitled, so that the company became entitled to demand 133,202.20 acres as indemnity land, the same to be selected from those lying nearest to the lO-inile limit. The bill further describes sp.ecifically 720 acres of land, which it is averred are worth over and less than $10,000, and are charged to be part of the lands of which :the company has become the owner by reason of the grants already ;named, it bejngcharged, however, that on the 24th day of March, 1884, Ithe state of Iowa, disregarding the rights of complainant, illegally and iwrongfully relinquished to the United States the lands in question, and [that the United States, through its officers, the secretary of the interior, ,the commissioner of the general land-office, and the officers of the local Iland-office at Des Moines, Iowa, in disregard of the rights of complain'ant,have opened said lal;lds to settlement and entry under the homeIstead, timber culture,and pre-emption laws of the United States, and Ihave permitted certain named ,individuals to file pre-emption claims upon and are permitting said par,specified portions of said 720 acres of ities to complete and perfect their proofs under laws, and that unless restrained, the said officers willissue receipts, patents, land other evidence of title to said parties, thereby casting a cloud UpOll 'complainant's title, and compellingoomplainant to bring a multiplicity of suits for protection of its 'Based upon this bill, a motion is now made 'asking the issuance of a temporary injunction restraining the commissioner of the general land-office, and the officers of the landoffice at Des Moines, from allowingtbe proof to be made or acted upon neceilsary for the completion of the entries made by the parties named in the bill. Jurisdiction in the courUo entertain the bill is predicated upon the act of congress approved March 3, 11387. Whether this is one of the class of cases which come within the provisions of the act, and of which the circuit court can entertain jurisdiction, is a question which has not been discuslled, and which will not be considered or determined at the present time. Assuming, however, for the purposes of the present application, that jurisdiction exists, should the motion for the temporary junction be granted? It will 1:le noticed that the only defendant to the bill is the United States. The individual pre-emptors, although named in the bill, are not made partii;ls thereto, nor are the officers of the genem!
SIOUX CITY & ST. P. R. CO. V. UNITED STATES.
and local land-offices. The ultimate question presented for determination by the averments of the bill is whether the lands in question passed, under the act of congress and of the general assembly of Iowa, to the complainant, or whether they still remain part of the unappropriated lands of the United States, therefore open to entry by pre-emption and homesteaders. This is a question which requires for its determination the examination and construction of the act of congress, of the.acts of the general assembly of the state of Iowa these lands, and of the acts done, and work of construction performed by complainant, and the examination of the question calls for the exercise of judicial power on part of the officers of the land department. Unless the act of congress of March 3, 1887, confers the right upon the court to control in advance and direct the action of the land department, when called upon to act judicially, it is well settled that the power so to do, either by mandamus or injunction, does not exist. In the case of Gainesv. Thompson, 7 Wall. 347, this question was exhaustively considered, the authorities bearing thereon being fully cited. The distinction between purely ministerial acts, in regard to which the officers of the department bave no discretion, and those which require tbe exercise of judgment and discretion, is clearly defined, and, the latter class of duties, it is declared that "certain powers and duties are confided to those officers, and to them alone, and however the courts may, in ascertaining the rights of parties in suits properly before them, pass upon the legality of their acts, after tbe matter has once passed beyond their control there exists no power in the courts, by any of its processes, to act upon the officer so as to interiere with the exercise of that judgment while the matter is properly before him for action. The reason for this is that the law reposes this discretion in him for that occasion, and not in the courts. The doctrine, therefore, is as applicable to the writ of injunction as it is to the writ of mandamus." See, also, Litchfield v. &gister, 9 Wall. 575. On the question of the extent· and character of the functions exercised by the officers of the land department in determining whether certain llIn.ds are open to entry, and whether given parties are entitled to patents see Johnson v. Towsley, 13 Wall. 72; Shepley v. Cowan, 91 U. S. 330: Moore v. Robbins, 96 U. S. 530; Craig v. Leitensdorfer, 123U. S. 189,8 Sup. Ct. Rep..85. Do the provisions of the act of March 3,1887, change the rule recognized and announced in these cases, and confer upon the courts of the United States the power to control the officers of the department in the exercise of their judgment in determining whether certain lands are or are not open to settlement, and whether certain indi. viduals bave met the requirements of the several laws providing for the entry of lands'? It seems to me tbat the matter is too plain for nrgu· ment or elaboration. So radical a change in the relations between Ule courts and departmental. bl'anches of the government cannot Ll: IJl'erlicated on anything less than an express declaration by the power, and certainly none such is found in the act of congress in questiOn. The mere fact that the act provides that in cet tn,in cases suits may be brought against the United States docs ),ot tAnd to show that it was the
',.838
, purpose of cOl'lgres$,to bestow upon the courts the right to interfere by " injunction or oth.erwisewith the action of the departments in matters · .requiring theexercisE;l ofjudicial, as distinguished from ministerial, duties. The fact that great injury may. be caused, not only to the complainaBt, but to the settlers upon these lands, and to the region in which , the lands are situated,by throwing them open to settlement while the , title thereto is in dispute,cannot becol1sidered in determining the ques· tion presented by this motion. It might not be difficult to convince any · one who has any knowledge of the lamentable evils entailed upon the , community and the settlers themselves by the action of the land department in throwing open the lands upon the Des Moines river to settlement when the title was in dispute, of the unwisdom of inviting settlers to occupy lands which are claimed under. specific grants from thegovernment without first having the question of title determined by the su· preme court; but .the certainty of the evils resulting from such action on the part of the department cannot be urged asa reason why the court should usurp ajurisdiction not cOllfer:red upon it.. In the case of Litchfield v. Register. supra, it was held to be a fatal objection to the bill that the persons asserting their rights as legal pre-emptors were not made parties thereto·. Any objection, good upon the final hearing, may be urged against the granting of a temporary injunction; and, as already stated. the individuals seeking to .pre-empt the lands in the bill described are named in the bill, but are not made parties thereto, and, as is held in the casejust cited, they are in fact the real parties to the controversy. Motion for injunction is therefore refused. o
DENVER
& R.G. R. Co. "'.
UNITED STATES,
(two cases.)
(Oircuit Oourt, D. Oolorado. 1.
May 10. 1888.)
PUBLIC LANDS-LICENSE TO RAILROADS TO CUT TIMBER.
Act Congo June 8,1872, (17 U. S. St. at Large. 339,) granted to the D. & R. G. R. Co. the right to take stone, timbe!".. etc., from public lands for the con· struction '!tud repair of its railwaY"jrovided it was completed within five years from its passage; and in case 0 .d,llfault the act was to be null and as to the'unnnished portion of the roa'4.' This act was amended to change the five years to ten. By act Congo March 3; 1875. a general grant to railroads was made, similar to the special grant of the act of 1872, except that it limited the right to material.to .that necessary for the construction alone. Held, .that the D. & R. G. R. Co. was entitled to the 'priVileges of both acts. -PLACE OF USE.
,
For the rights gran..ted under the. general act of 1875; the portions of the D. . & R. G. R. built before and after June 8. 1882, are .to be treated as one . ""road, and timber can be .taken from the entire line for the construction of ; any portion of the line provided for in -the original organization.
a
SAME.