118 U.S. 394 (1886), Santa Clara County v. Southern Pac. R. Co.

Citation:118 U.S. 394, 6 S.Ct. 1132, 30 L.Ed. 118
Party Name:COUNTY OF SANTA CLARA v. SOUTHERN PAC. R. CO. [1] PEOPLE OF THE STATE OF CALIFORNIA v. CENTRAL PAC. R. CO. SAME v. SOUTHERN PAC. R. CO.
Case Date:May 10, 1886
Court:United States Supreme Court

Page 394

118 U.S. 394 (1886)

6 S.Ct. 1132, 30 L.Ed. 118

COUNTY OF SANTA CLARA

v.

SOUTHERN PAC. R. CO. 1

PEOPLE OF THE STATE OF CALIFORNIA

v.

CENTRAL PAC. R. CO.

SAME

v.

SOUTHERN PAC. R. CO.

United States Supreme Court.

May 10, 1886

In Error to the Circuit Court of the United States for the District of California.

[6 S.Ct. 1132] These several actions were brought--the first one in the superior court of Santa Clara county, California, the others in the superior court of Fresno county, in the same state--for the recovery of certain county and state taxes claimed to be due from the Southern Pacific Railroad Company and the Central Pacific Railroad Company under assessments made by the state board of equalization upon their respective franchises, road-ways, road-beds, rails, and rolling stock. In the action by Santa Clara county the amount claimed is [6 S.Ct. 1133] $13,366.53 for the fiscal year of 1882. For that sum, with 5 per cent. penalty, interest at the rate of 2 per cent. per month from December 27, 1882, cost of advertising, and 10 per cent. for attorney's fees, judgment is asked against the Souther Pacific

Page 395

Railroad Company. In the other action against the same company the amount claimed is $5,029.27 for the fiscal year of 1881, with 5 per cent. added for non-payment of taxes and costs of collection. In the action against the Central Pacific Railroad Company judgment is asked for $25,950.50 for the fiscal year of 1881, with like penalty and costs of collection. The answer in each case puts in issue all the material allegations of the complaint, and sets up various special defenses, to which reference will be made further on. With its answer the defendant, in each case, filed a petition, with a proper bond, for the removal of the action into the circuit court of the United States for the district, as one arising under the constitution and laws of the United States. The right of removal was recognized by the state court, and the action proceeded in the circuit court. Each case, the parties having filed a written stipulation waiving a jury, was tried by the court. There was a special finding of facts, upon which judgment was entered in each case for the defendant. The general question to be determined is whether the judgment can be sustained upon all or either of the grounds upon which the defendants rely.

The case as made by the pleadings and the special finding of facts is as follows:

By an act of congress approved July 27, 1866, the Atlantic & Pacific Railroad Company was created, with power to construct and maintain, by certain designated routes, a continuous railroad and telegraph line from Springfield, Missouri, to the Pacific. For the purpose--which is avowed by congress--of facilitating the construction of the line, and thereby securing the safe and speedy transportation of mails, troops, munitions of war, and public stores, a right of way over the public domain was given to the company, and a liberal grant of the public lands was made to it. The railroad so to be constructed, and every part of it, was declared to be a post route and military road, subject to the use of the United States for postal, military, naval, and all other government service, and to such regulations as congress might impose for restricting the charges for government transportation. By the eighteenth section of the act, the Southern Pacific Railroad Company,--a corporation previously organized under a general statute of California passed May 20, 1861, (St. Cal. 1861, p. 607,)--was authorized to connect with the Atlantic & Pacific Railroad at such point, near the boundary line of that state, as the former company deemed most suitable for a railroad to San Francisco, with 'uniform gauge and rate of freight or fare with said road;' and in consideration thereof, and 'to aid in its construction,' the act declared that it should have similar grants of land, 'subject to all the conditions and limitations' provided in said act of congress, 'and shall be required to construct its road on like regulations, as to time and manner, with the Atlantic & Pacific Railroad.' 14 St. p. 292, §§ 1, 2, 3, 11, 18. In November, 1866, the Atlantic & Pacific Railroad Company and the Southern Pacific Railroad Company filed in the office of the secretary of the interior their respective acceptances of the act.

By an act of the legislature of California, passed April 4, 1870, to aid in giving effect to the act of congress relating to the Southern Pacific Railroad Company, it was declared that 'to enable the said company to more fully and completely comply with and perform the requirements, provisions, and conditions of the said act of congress, and all other acts of congress now in force, or which may hereafter be enacted, the state of California hereby consents to said act; and the said company, its successors and assigns, are hereby authorized to change the line of its railroad so as to reach the eastern boundary line of the state of California by such route as the company shall determine to be the most practicable, and to file new and amendatory articles of association; [6 S.Ct. 1134] and the right, power, and privilege is hereby granted to, conferred upon, and vested in them to construct, maintain, and operate, by steam or other power, the said railroad and telegraph line mentioned in said acts of congress, hereby confirming to and vesting in the said company, its successors and assigns, all the rights, privileges, franchises, power, and authority conferred upon, granted to, or vested in said company by the said acts of congress, and any act of congress which may be hereafter enacted.'

Subsequently, by the act of March 3, 1871, congress incorporated the Texas Pacific Railroad Company, with power to construct and maintain a continuous railroad and telegraph line from Marshall, in the state of Texas, to a point at or near El Paso, thence through New Mexico and Arizona to San Diego, pursuing, as near as might be, the thirty-second parallel of latitude. To aid in its construction, congress gave it, also, the right of way over the public domain, and made to it a liberal grant of public lands. The nineteenth section provided 'that the Texas Pacific Railroad Company shall be, and it is hereby, declared to be a military and post road; and for the purpose of insuring the carrying of the mails, troops, munitions of war, supplies, and stores of the United States, no act of the company nor any law of any state or territory shall impede, delay, or prevent the said company from performing its obligations to the United States in that regard: provided, that said road shall be subject to the use of the United States for postal, military, and all other governmental services, at fair and reasonable rates of compensation, not to exceed the price paid by private parties for the same kind of service, and the government shall at all times have the preference in the use of the same for the purpose aforesaid.'

The twenty-third section of that act has special reference to the Southern Pacific Railroad Company, and is as follows:

'Sec. 23. That, for the purpose of connecting the Texas Pacific Railroad with the city of San Francisco, the Southern Pacific Railroad Company of California is hereby authorized (subject to the laws of California) to construct a line of railroad from a point at or near Tehacapa Pass, by way of Los Angeles, to the Texas Pacific Railroad, at or near the Colorado river, with the same rights, grants, and privileges, and subject to the same limitations, restrictions, and conditions, as were granted to said Southern Pacific Railroad Company of California by the act of July 27, 1866: provided, however, that this section shall in no way affect or impair the rights, present or prospective, of the Atlantic & Pacific Railroad Company, or any other company.'

Under the authority of this legislation, federal and state, the Southern Pacific Railroad Company constructed a line of railroad from San Francisco, connecting with the Texas & Pacific Railroad (formerly the Texas Pacific Railroad) at Sierra Banca, in Texas: and, with other railroads, it is operated as one continuous line (except for that part of the route occupied by the Central Pacific Railroad) from Marshall, Texas, to San Francisco. It is stated in the record that the Southern Pacific Railroad Company of California, since the commencement of this action, has completed its road to the Colorado river, at or near the Needles, to connect with the Atlantic & Pacific Railroad, and that with the latter road it constitutes a continuous line from Springfield, Missouri, to the Pacific, except as to the connection, for a relatively short distance, over the road of the Central Pacific Railroad Company.

On the seventeenth of December, 1877, the said Southern Pacific Railroad Company, and other railroad corporations then existing under the laws of California, were legally consolidated, and a new corporation thereby formed under the name of the Southern Pacific Railroad Company, the present defendant in error, 59.30 miles of whose road is in Santa Clara county and 17.93 miles in Fresno county.

On the first of April, 1875, this company was indebted to divers persons in large sums of money advanced to construct and equip its road. To secure [6 S.Ct. 1135] that indebtedness, it executed on that day a mortgage for $32,520,000 on its road, franchises, rolling stock, and appurtenances, and on a large number of tracts of land, in different counties of California, aggregating over 11,000,000 acres. These lands were granted to the company by congress under the abovementioned acts, and are used for agricultural, grazing, and other purposes not connected with the business of the railroad. Of those patented, 3,138 acres are in Santa Clara county, and 18,789 acres in Fresno county. When these proceedings were instituted, no part of...

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