did not examine the contents of said boxes, the same being closed and nailed up so as to exclude a view of the contents, and that they were duly branded by him as containing plug tobacco. The circuit court does not find that this was negligence, and we are not prepared here to say on this slight statement, as matter of law, that it was negligence. But if it were negligence we are of opinion that it was not such as would relieve the sureties from an obligation to the United States voluntarily assumed by them, that 110 boxes containing 11,928 pounds of plug tobacco should be delivered by their principal in New York. The very purpose of their bond was to secure the United States against the fraud of their principal, and the fraud was committed by him, in the very matter which the bond was designed to guard against. To say that the carelessness of the revenue officer made this fraud easier of accomplishment, can be no release of the sureties from their obligation. Some rules prescribed by the Internal Revenue Bureau for the guidance of these officers in reference to transportation of tobacco in bond, are annexed to the brief of the plaintiffs in error. They are not made a part of the record by bill of exceptions or otherwise, and are not, we think, matter for our judicial cognizance. If they were, we see nothing in them to change the opinion we have formed without them, that the judgment of the circuit court holding the sureties liable on their bond was right. It is, therefore, affirmed. THE DUBUQUE & SIOUX CITY RAILROAD COMPANY and The Illinois Central Railroad Company, Plffs. in Err., บ. ALFRED W. RICHMOND et al. (See S. C., 19 Wall., 584-590.) Contract for elevator-validity of. 1. A contract by which an elevator company agreed to erect a building at Dubuque for receiving, storing and delivering all grain that should be received by cars of a railroad company, and by which the railroad company agreed that the elevator company should have the handling of all through grain and receive one cent per bushel therefor, is not repugnant to the commercial power of Congress, as exercised in the passage of the Acts of June 15, 1866, and July 25, 1866, nor in contravention of the public policy established thereby. 2. It was never intended that the power should be exercised so as to interfere with private contracts, not designed at the time they were made to create impediments to commercial intercourse among the States. U. S. 216. ants in error, claiming to be the successors in interest of the Dubuque Elevator Co., upon certain contracts between that Company and the D. & S. C. R. R. Co. The nature of this contract appears in the opinion. The District Court rendered a decree in favor of the complainants. An appeal was taken to the Supreme Court of the State, where judgment was rendered for the complainants for $73,186, with costs, without prejudice to complainants' claim for damages after May 1, 1870. It seems that this was the second action upon the same contract and between the same parties, the former having been an action at law and also resulting in favor of the present defendants in error. See 26 Ia., 191. In the present action the defendants set up the former judgment in bar, and the principal question decided by the district court was, whether or not the agreement sued upon was entire or severable. The Supreme Court of the State also decided the point relied upon by the plaintiffs in error, that the contract was in conflict with the Federal Constitution and certain Acts of Congress. See 15 Wall. 3, 21 L. ed., 118, report of motion to dismiss this case. The plaintiffs in error own and operate the Illinois Central Railroad, which is situated in the State of Illinois, with its western terminus at Dunleith; and operate under the above lease the Dubuque & Sioux City Railroad, which is situate in the State of Iowa, with its eastern terminus at Dubuque. The two roads are connected by the Dubuque Bridge, and being under the same management and control, practically constitute one through line. Prior to the construction of the said bridge, the connection was made by ferry-boats, loaded cars being then, as they are now, transferred without any rehandling of freight. The term "through grain" as used in the contract sued on, means grain consigned to Chicago or other points east of Dubuque. Large quantities of "through grain" were shipped over the Dubuque & Sioux City Railroad, and without being given to the elevator for handling, were passed through Dubuque without unloading, and on, to destinations in Illinois and beyond, in the same cars into which the grain was originally loaded, there being no handling of such grain between the points of shipment and the places of destination. The cost of transferring grain through the elevator, including wastage, was much greater than by the mode adopted by plaintiffs in error; the difference was accorded to shippers by a reduction of the rates of transporta tion. The defendants in error claimed that the passage of this grain through Dubuque, without delivery to them for handling in their elevator, was a breach of the contract entitling them to handle all through grain at a compensation of one cent per bushel, and demanded payment to that extent for all such grain. Payment being refused, this suit was brought for the recovery of damages. The claim of the defendants in error was based exclusively upon their alleged right to handle and pass through their elevator all grain shipped in the State of Iowa on the line of the Dubuque & Sioux City Railroad, and destined for points in Illinois or beyond. The alleged breach of contract was stated in peti tion of defendants in error in the state court in these words, viz.: "That the defendants are daily receiving through grain as aforesaid, and are daily passing the same through Dubuque without permitting plaintiffs to have the handling of the same at their elevator as aforesaid, and without paying plaintiffs_therefor." The plaintiffs in error denied each and every allegation in the petition, and averred that defendants in error had been paid in full for all the grain which they were entitled to handle under and by virtue of said contract, and so far as the through grain was concerned (which is the only subject in controversy here), relied at the final hearing in the state court on the propositions, that the parts of the contract sued up on were in conflict with the section of the Constitution of the United States which confers on Congress the power to regulate commerce among the States; with the Act of June 15, 1866, entitled "An Act to Facilitate Commercial, Postal and Military Communication among the Several States;" and with the Act of July 25, 1866, entitled "An Act to Authorize the Construction of Certain Bridges and to Establish them as Post-roads;" and that the said parts of said contract were void because they are in contravention of the public commercial policy of the country, as established by said legislation. The propositions were considered by the state court, and denied. Messrs. James F. Wilson and Geo. W. McCrary, for plaintiffs in error: It is not difficult to ascertain from the face of the Act itself, that the purpose of its passage was well expressed in its title "to Facilitate Commercial, Postal and Military Communication among the Several States." Therefore, whatever stood in the way of railroad companies possessing connecting lines of roads, whether the connections were made directly by joined tracks, or indirectly by means of bridges, boats or ferries, from affording continuous lines of transportation for passengers or freight passing from one State to another, was removed out of the way. Continuous lines of transportation make communication between the States more easy and less difficult, "freer from difficulty and impediment, and lessen the labor of transit." In direct furtherance of this plainly expressed policy, Congress passed the Act of July 25, 1866, 14 Stat. at L., 244, entitled "An Act to Authorize the Construction of Certain Bridges, and to Establish them as Post-roads." See, also, Act, June 30, 1860, 16 Stat. at L., 170; Act, July 14, 1870, Ibid., 275; Act Mar. 3, 1871, Ibid., 473; Act, Mar. 3, 1871, Ibid., 600; Act, Mar. 5, 1872, Sess. L. of Cong., p. 16; Act, Apr. 1, 1872, Ibid., 31; Act, May 11, 1872. Ibid., 93; Act, May 15, 1872, Ibid., 113; Act, May 17, 1872, Ibid., 116; Act, May 25, 1872, Ibid., 163; Act, June 4, 1872, Ibid., 227. By these enactments Congress was looking to something higher and of greater public imporThe argument of this case will be facilitated tance than the mere convenience of railroad by condensing the errors assigned into one gen-corporations. It was establishing a policy for eral proposition, viz.: That the contract sued upon in this action is repugnant to the commercial power of Congress as exercised in the passage of the Acts of June 15, 1866, and July 25, 1866, and in contravention of the public policy established thereby. 1. The Constitution of the United States confers on Congress the power "To regulate commerce with foreign nations and among the several States." This power is vested in Congress exclusively, and every state law, contract of corporations or agreement between individuals, which affects commerce with foreign nations and among the States must be held subordinate and yield to it whenever conflict occurs. McCulloch v. Md., 4 Wheat., 316; Gibbons V. Ogden, 9 Wheat., 1; Brown v. Md., 12 Wheat., 419; Passenger Cases, 7 How., 283; Cooley v. Wardens, 12 How., 299; Pa. v. Wheeling & B. Bridge Co., 18 How., 421, 15 L. ed. 435; Crandall v. Nevada, 6 Wall., 35, 18 L. ed. 745; Bk. v. Fenno, 8 Wall., 533, 19 L. ed. 482; Com. v. Knox, 6 Mass., 77; Blanchard v. Russell, 13 Mass., 14; Story, Const., 4th ed., pp. 2-22, and n., Story Confl. L., 3d ed., sec. 545, and ch. 19. In the exercise of its constitutional power, Congress passed "An Act to Facilitate Commercial, Postal and Military Communication among the Several States," approved June 15, 1866, 14 Stat. at L., 66. This Act of Congress had its origin in a contest between the Delaware & Raritan Bay R. R. Co., of N. J., and the Camden & Amboy R. R. Co., of said State. See, 1 N. J. Sess. L. for 1854, p. 387; Reports Com. House Reps., 1st sess., 28th Cong., report 31; Cong. Globe, Part (1st sess., 38th Cong.), p. 2261. the promotion of the commercial interests of the country. This policy was in aid of the one contained in the Act of June 15, 1866, which pronounced the formation of continuous lines for transportation of freight and passengers among the States to be its chief end. The effect of this legislation has been to supplement the means of forming connections enumerated in that Act, so that its practical reading now is, "That every railroad company in the United States, whose road is operated by steam, its successors and assigns, be, and is hereby authorized to carry upon and over its roads, boats, bridges and ferries, and over such bridges as, by any Act of Congress, it is entitled to use, all passengers, troops, government supplies, mails, freight and property on their way from any State to another State, and to receive compensation therefor, and to connect with roads of other States, so as to form continuous lines for the transportation to the place of destination." No one can doubt what the rule of public commercial policy thus established is, nor question its wisdom. The policy is, through lines of transportation for passengers and freight passing from one State to another, the abolition of unnecessary changes, delays, breaking of bulk, and attendant wastage, costs, charges and loss of time. These were to end, so far, at least, as the means at the command of railway companies could be utilized to effect that result. Commerce was to be facilitated. This rule was established, not merely for the benefit of railroad companies, for their convenience and greater profit, but for the advancement of the interests of the great and constantly augmenting interstate commerce of the country, and of everyone connected therewith, either as passen ger or shipper or producer or consumer of things transported. II. The contract under which this case arises is repugnant to this rule of public commercial policy. The plaintiffs in error claim, that, by virtue of the rule of public commercial policy, hereinbefore stated, they had the right to transport grain over their railroads, boats, bridges and ferries, and over the bridge constructed across the Mississippi River between Dubuque, Iowa and Dunleith, Illinois, connecting their two roads terminating at the eastern and western termini of said bridge, passing from Iowa to Illinois, or some other State, without delivering the same to the defendants in error, to be run through their elevator at a charge of one cent, per bushel, and that being possessed of the right to so transport said grain as to afford it a "continuous line of transportation to the place of destination," they are not bound to impose on it the unnecessary tax of one cent a bushel, by paying the same to the defendants in error, and then charging it over against the grain, as they would have the right to do. For, inasmuch as they own their own roadway, and have a right to transport thereon, they may add the elevator charge to the charge for transportation, without further authority. Case of the State Freight Tax, 15 Wall., 274, 21 L. ed. 161. This position is denied by the defendants in error. Their averment reduced to its real meaning is this: "Every carload of grain shipped over the railroad of plaintiffs in error, from the State of Iowa, to some other State, must, on its arrival at Dubuque, be stopped and run up to the Dubuque elevator, there to be unloaded, the grain run through the elevator, be reloaded, and pay one cent a bushel for the service rendered before it can be allowed to pass across the Mississippi River and on to its destination; and that in any event the one cent a bushel must be paid." The practical operation and effect of the contract are opposed to this policy, and constitute a restraint upon interstate commerce. III. The refusal of the plaintiffs in error to recognize the pretended obligation of the contract sued on, is in obedience to law. IV. The Illinois Central Railroad Company had no power to assume the contract entered into between the Dubuque and Sioux City Railroad Company and the Dubuque Elevator Company, relative to through grain. V. The Act of June 15, 1866, did not confer a mere privilege on railroad companies which they may exercise or not, at their pleasure. A careful examination of the Act in question will conclusively show that Congress meant to effect, by its passage, a much more important end than the creation of a privilege which railroad companies might play with at will. for transportation of all passengers, troops, government supplies, mails, freight and property on their way from one State to another; and to effect this object, selects railroad corporations created by the several States, grants to them powers which they did not before possess, and authorizes them to make such connections as will afford continuous transportation for the things enumerated to their places of destination. 4. It authorizes railroad companies, rendering transportation services in pursuance of its provisions, to receive compensation therefor, the statutes and judicial decrees of the several States to the contrary notwithstanding. VI. The Fifth Amendment to the Constitution of the United States, which prohibits the taking of private property for the public use without just compensation, does not apply to this case. Messrs. J. M. Griffith, Platt Smith and D. N. Cooley, for defendants in error: 1. This court will not entertain a point of error assigned at large on the body of the Constitution. Farney v. Towle, 1 Black, 350, 17 L. ed. 216; Hoyt v. Sheldon, 1 Black, 518, 17 L. ed. 65; Maxwell v. Newbold, 18 How., 511, 15 L. ed. 506. 2. Suppose, for the sake of argument, that the contract sued upon is in contravention of law and public policy, the Acts of Congress mentioned in the assignment of errors give no right to protection from the consequences of a contract made in violation thereof. Walworth v. Kneeland, 15 How., 351; Udell v. Davidson, 7 How., 769. 3. Plaintiffs in error do not show themselves to be within the purview of or entitled to the privilege conferred by the Acts of Congress mentioned in the assignment of errors. 4. The Acts of Congress can afford no protection, because the record shows that the breach of contract, for which damages are avoided in this suit, occurred before the plaintiffs in error availed themselves of the privilege conferred by the Acts, if they ever have so availed themselves. 5. The Acts of Congress do not annul or render void the contract sued upon. Mr. Justice Field delivered the opinion of the court: The original agreement between the Dubuque and Sioux City Railroad Company and the Dubuque Elevator Company, made on the 22d of August, 1860, and the supplemental agreement made between them of the 2d of January, 1861, are to be considered together as forming one contract. By that contract the Elevator Company on its part stipulated, among other things, to erect on land leased from the Railroad Company situated at Dubuque in the State of Iowa, a building suitable for receiving, stor 1. Its title declares its object to be to facili-ing, delivering and handling all grain that tate commercial, postal and military communication among the several states. 2. The preamble asserts the particular power which was to be given effect by the passage of the Act, "the power to regulate commerce among the several States." 3. The Act, confining itself strictly to interstate commerce, provides for continuous lines should be received by the cars of the Railroad Company not otherwise consigned, and to make such additions to the building from time to time, as the business of the Company might require; to receive and discharge at Dubuque for the Company all through grain, by which was meant all grain transmitted by the terms of shipment through that place to some point beyond, at one cent a bushel, and make no charge for storage, unless the grain was in store more than ten days, and then only at certain specified rates; and at the end of fifteen years, the terms of the lease, to renew the contract for another fifteen years or, at the option of the Railroad Company, accept payment for its building, machinery and other property used in conducting its business. And the Railroad Company on its part stipulated, that it would not erect a similar building for receiving, storing, delivering and handling grain at Dubuque, or lease to any others the right to erect any such building; that the Elevator Company should have the handling at Dubuque of all through grain, and be paid one cent a bushel for receiving and discharging the same, and the compensation designated for storage when it exceeded ten days. The Elevator Company erected the buildings required, sufficient and suitable for the purposes intended, and have always been ready to carry out its stipulations. On the 13th of September, 1867, the Dubuque and Sioux City Railroad Company leased its road and other property to the Illinois Central Railroad Company. In this lease the Illinois Company expressly assumed the contract mentioned, made with the Elevator Company, and soon afterwards entered into possession of the leased property and commenced transferring grain from Dubuque across the Mississippi River, which had been brought to that point in the cars of the Dubuque and Sioux City Railroad Company, but it did not regard the stipulations of the contract with the Elevator Company, or only partially performed them; grain was shipped through Dubuque without being delivered to or handled by that Company, and without payment of the charges to which it claimed to be entitled under the contract; and the present suit was brought to enforce the contract in future, and recover damages for its past violation. There is no question about the power of the Dubuque and Sioux City Railroad Company to make the contract in controversy with the Elevator Company; and if there were any, it would not be one within our province, upon the present appeal, to decide. The Railroad Company was obliged to discharge the grain it carried in its cars at the terminus of its road; and in securing the use of an elevator it provided the least expensive and the most expeditious mode for that purpose. The period for which the contract should be made, like other contracts for service, was one which rested in the discretion of the Companies. No rule of law limited the period of its continuance. The occurrence of subsequent events, rendering it of more or less value to either of the parties, could not af fect its validity or justify any violation of its provisions. The plaintiffs in error contend-we quote their own language-"that the contract sued on in this action is repugnant to the commercial power of Congress, as exercised in the passage of the Acts of June 15, 1866, and July 25, 1866, and in contravention of the public policy estab589*] lished *thereby." The Act of Congress of June 15, 1866,, 14 Stat. at L., 66, authorized every railroad company in the United States, whose road was operated by steam, and its successors and assigns, to carry upon and over its road, boats, bridges and ferries, all passengers, troops, government supplies, mails, freight and property, on their way from one State to another State, and to receive compensation therefor, and to connect with roads of other States so far as to form continuous lines for the transportation of the same to their place of destination. The Act of July 25, 1866, 14 Stat. at L., 244, authorized the construction of certain bridges over the Mississippi River, and among others a bridge connecting Dubuque with Dunleith, in the State of Illinois, and provided that the bridges, when constructed, should be free for the crossing of all trains of railroads terminating on either side of the river, for reasonable compensation. These acts were passed under the power vested in Congress to regulate commerce among the several States, and were designed to remove trammels upon transportation between different States, which had previously existed, and to prevent the creation of such trammels in future, and to facilitate railway transportation by authorizing the construction of bridges over the navigable waters of the Mississippi. But they were intended to reach trammels interposed by state enactments or by existing laws of Congress. They were not intended, even if it were competent for Congress to authorize any such proceeding, to invade the domain of private contracts, and annul all such as had been made on the basis of existing legislation and existing means of interstate communication. Contracts, valid when made, continue valid and capable of enforcement, so long, at least, as peace lasts between the governments of the contracting parties, notwithstanding a change in the conditions of business which originally led to their creation. The power to regulate commerce among the several States was vested in Congress in order to secure equality and freedom in commercial intercourse against discriminating state legislation; it was never intended that the power should be exercised so as to interfere [*590 with private contracts not designed at the time they were made to create impediments to such intercourse. The argument of the plaintiffs in error would lead to the abrogation of all contracts of the Iowa Railroad Company which might prove from subsequent events to be more onerous than contracts made after such events had happened. A contract, for example, for the supply of coal for the engines of the Company, made upon terms which were at the time reasonable, might be felt to be very hard and oppressive, if, before its termination, the discovery of new fields of coal in the vicinity of the road should reduce the market price of the article one half. To assert that the enforcement of a contract of this kind would be repugnant to the commercial power of Congress, because the expenses of transportation would be less if the contract were annulled, would not be more extraordinary than the position assumed by the appellant in the present case, and would be equally entitled to consideration. When counsel speaks of the public policy established by the Acts of Congress mentioned, he must mean nothing more than that the Acts were intended to facilitate commercial intercourse among the States. Undoubtedly such was the case, and it is of great public interest that such intercourse should be free and untram- | to the jury, and charged them substantially in melled. But if comparisons may be made with accordance with the position taken by the derespect to a subject of this nature, we should fendant, and told the jury that to authorize a say that the observance of good faith between second sale so as to charge the defendant in this parties, and the upholding of private contracts, action, it must be shown that he was legally put and enforcing their obligations, are matters of in default for non-compliance, and that this was higher moment and importance to the public not the case, as the deed tendered the defendant welfare, and far more reaching in their conse- was not such as he was bound to accept. quences. Decree affirmed. 598*] *UNITED STATES, Plff. in Err. v. GEORGE JONAS. (See S. C. 19 Wall., 598-605.) Construction of Act for sale of land—approval of Secretary, when necessary. 1. The Act of Mar. 3, 1863, by which the Solicit or of the Treasury is authorized to sell, with the approval of the Secretary of the Treasury, certain lands of the U. S., operated as a repeal in that respect of the Act of 1830. His The question, therefore, for decision is, whether the approval of the Secretary of the Treasury was necessary to the sale or transfer of the property in question; and if so, whether it was incumbent on the plaintiffs to produce this approval when the deed was tendered, in order to put the defendant in fault, so as to subject him to suit. compel the purchaser in this case to comply It is quite apparent that the law will not with the terms of sale and accept the deed offered, unless the Solicitor of the Treasury, who made the sale and executed the deed, has undoubted authority to do both these things. This officer was created by Act of Congress of 29th of May, 1830, 4 Stat. at L., 602, and among the duties assigned to him by the 1st section is the charge of property conveyed to the United States in payment of debts, with power to sell and dispose of the same. It may be that it was the intention of Congress that the important Argued Mar. 18, 1874. Decided Mar. 30, 1874. powers thus conferred should be exercised indeIN ERROR to the Circuit Court of the United pendently of the Secretary of the Treas- [*603 2. In no case could there be a sale without the approval of the Secretary of the Treasury. approval is a condition precedent, without which the Solicitor has no authority whatever to act. 3. The purchaser may require some written evidence of this approval, or he may refuse to accept the deed. [No. 227.] States for the District of Louisiana. tiff in error. Mr. P. Phillips, for defendant in error. the court: It appears by the record in this case, that certain real estate in New Orleans, acquired by the United States in payment of a debt due it, was advertised to be sold, and at the sale adjudicated to the defendant in error as the highest bidder, who, when the deed was offered, refused to take it and comply with the terms of the sale. A second sale was then advertised, and the property sold to another person for a sum less than that of the first sale, and this suit was brought to recover the difference. There was a trial by jury, and under the charge of the court a verdict for the defendant, and the writ of error seeks to obtain a reversal of that judgment. The main point of the controversy is, whether the consent and approval of the Secretary of the Treasury is necessary to authorize the sale and conveyance of property acquired by the United States, under judicial proceedings or otherwise, in the collection of debts. The defendant took the position that it was, and contended that he was not in default because the deed tendered to him was defective, as it did not bear on its face, or by means of papers connected with it, written evidence that the Secretary of the Treasury authorized and approved the sale. On the contrary, the plaintiffs contended and asked the court so to instruct the jury, that the law did not require "a tender to defendant as a part of the proof of title, the written approval or consent of the Secretary of the Treasury to sale or transfer of property in any form, in order to convey a complete title." This proposition the court declined to submit ury, although it is clearly the policy of the law to hold the head of the department responsible mental functions which pertain to it. for the proper administration of the governIt is, however, not necessary to consider the point, because the Act of the 3d of March, 1863, 12 Stat. at L., 740, to "prevent frauds on the revenue and provide for the certain and speedy collection of claims in favor of the United States," 12 Stat. at L., 737, has not only in terms placed the Solicitor of the Treasury in subordination to the Secretary in the matter of selling the property of the United States taken in payment of debts, but has deprived him of the power of selling at private sale at all-a power liable to abuse, and which the interests of the Government require should not be confided to any one. In the 9th section of this Act the Solicitor is authorized to sell, with the approval of the Secretary, and not then except at public sale, on three months' notice of the time, place and terms of sale, advertised in some newspaper published in the vicinity of the property. It is clear that this latter Act was intended to qualify and limit the powers given by the Act of 1830. It covers the whole subject of the disposition of lands acquired for debts due the Government, and embraces new and salutary provisions in relation to their sale, and shows clearly that Congress, instead of conferring additional powers, intended to limit those already conferred. Such being the case, the latter Act must operate as a repeal pro tanto of the Act of 1830. It is urged that the two Acts can be reconciled if the latter one is confined to unproductive property, but neither the letter nor spirit of this Act would warrant any such interpretation. It is true the sale or lease for a limited period of unproductive lands is provided for, but the same provisions apply to other property obtained by the Government in payment of debts due it. Indeed, no good reason can be assigned why the 177 |
