A-15941, FEBRUARY 4, 1927, 6 COMP. GEN. 498

A-15941: Feb 4, 1927

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TRANSPORTATION - LAND-GRANT REDUCTIONS THE RIGHT TO DEDUCTION RESERVED BY THE UNITED STATES IN THE LAND GRANT ACTS IS OVER THE PROPERTY AND NOT ALONE OVER THE COMPANY WHICH OWNED THE PROPERTY AND SUCH RIGHT APPLIES TO SERVICES RENDERED THE UNITED STATES OVER LAND-AIDED LINES. EVEN THOUGH RENDERED BY A CARRIER THAT WAS A STRANGER TO THE GRANT. IS REQUIRED TO BE MADE FROM THE EARNINGS OF A COMPANY THAT ACCRUE FOR SERVICE RENDERED OVER A LAND- AIDED LINE ALTHOUGH THE COMPANY RENDERING SUCH SERVICE WAS NOT THE ORIGINAL GRANTEE. THE CARRIER CLAIMED $159.63 FOR TRANSPORTATION OF THE SHIPMENTS FROM DIETZ AND $76.10 ON THAT FROM KLEENBURN AND ALLOWANCE WAS MADE FOR $155.56 ON THE SHIPMENTS FROM DIETZ AND $74.08 ON THAT FROM KLEENBURN.

A-15941, FEBRUARY 4, 1927, 6 COMP. GEN. 498

TRANSPORTATION - LAND-GRANT REDUCTIONS THE RIGHT TO DEDUCTION RESERVED BY THE UNITED STATES IN THE LAND GRANT ACTS IS OVER THE PROPERTY AND NOT ALONE OVER THE COMPANY WHICH OWNED THE PROPERTY AND SUCH RIGHT APPLIES TO SERVICES RENDERED THE UNITED STATES OVER LAND-AIDED LINES, EVEN THOUGH RENDERED BY A CARRIER THAT WAS A STRANGER TO THE GRANT. DEDUCTION, THEREFORE, IS REQUIRED TO BE MADE FROM THE EARNINGS OF A COMPANY THAT ACCRUE FOR SERVICE RENDERED OVER A LAND- AIDED LINE ALTHOUGH THE COMPANY RENDERING SUCH SERVICE WAS NOT THE ORIGINAL GRANTEE.

DECISION BY COMPTROLLER GENERAL MCCARL, FEBRUARY 4, 1927:

THE NORTHERN PACIFIC RAILWAY CO. APPLIED PER LETTER OF SEPTEMBER 11, 1926, FOR REVIEW OF SETTLEMENTS T-11322 AND T-12032, JULY 3 AND 12, 1926, OF BILLS F-4931 AND 4104 FOR TRANSPORTATION OF TWO CARLOADS OF COAL FROM DIETZ, WYO., AND ONE CARLOAD FROM KLEENBURN, WYO., TO MILES CITY, MONT., PER BILLS OF LADING T-674382 AND 674383, AUGUST 12 AND 25, AND T-674384, DECEMBER 18, 1925.

THE CARRIER CLAIMED $159.63 FOR TRANSPORTATION OF THE SHIPMENTS FROM DIETZ AND $76.10 ON THAT FROM KLEENBURN AND ALLOWANCE WAS MADE FOR $155.56 ON THE SHIPMENTS FROM DIETZ AND $74.08 ON THAT FROM KLEENBURN. THE CARRIER IN ITS APPLICATION FOR REVIEW CONTENDS THAT ON ALL SHIPMENTS DESTINED TO POINTS ON ITS LINE EAST OF HUNTLEY, MONT., SETTLEMENT VIA BILLINGS AS MADE RESULTS IN A DOUBLE DEDUCTION ACCOUNT OF THE LAND-GRANT OVER THE SAME PIECE OF TRACK AND IS IN ERROR AND NOT ACCEPTABLE TO IT AND CLAIM IS MADE FOR THE AMOUNTS DISALLOWED.

IT APPEARS THAT THE CHICAGO, BURLINGTON AND QUINCY RAILROAD CO. HAS NO TRACKS OF ITS OWN FROM HUNTLEY, MONT., THROUGH BILLINGS TO LAUREL, MONT., AND THAT IT HAS AN ARRANGEMENT WITH THE NORTHERN PACIFIC RAILWAY CO. WHEREBY IT OPERATES ITS TRAINS OVER THE TRACKS OF THAT COMPANY FROM HUNTLEY TO AND THROUGH BILLINGS.

THE NORTHERN PACIFIC RAILWAY IS A LAND-AIDED RAILROAD FROM ASHLAND, WIS., THROUGH HUNTLEY, BILLINGS, AND LAUREL, MONT., TO PUGET SOUND AND GOVERNMENT SHIPMENTS ARE ENTITLED TO A REDUCTION OF 50 PERCENT FROM THE COMMERCIAL CHARGES ACCRUING OVER SAID RAILROAD.

DIETZ AND KLEENBURN, WYO., ARE POINTS ON THE CHICAGO, BURLINGTON AND QUINCY RAILROAD 138.7 AND 133.7 MILES, RESPECTIVELY, SOUTH OF BILLINGS, MONT., AND THE JOINT RATE FROM THESE POINTS TO MILES CITY, MONT., IS $2.61 PER TON OF 2,000 POUNDS, APPLICABLE OVER THE CHICAGO, BURLINGTON AND QUINCY RAILROAD TO BILLINGS AND THENCE OVER THE NORTHERN PACIFIC RAILWAY TO MILES CITY, PER CHICAGO, BURLINGTON AND QUINCY RAILROAD, TARIFF G.F.O. 6900-G.I.C.C. 16201, APPLICABLE OVER THE CHICAGO, BURLINGTON AND QUINCY RAILROAD TO BILLINGS, THENCE NORTHERN PACIFIC RAILWAY TO DESTINATION. THE JOINT RATE IS DIVIDED 39 PERCENT TO BILLINGS FOR THE CHICAGO, BURLINGTON AND QUINCY RAILROAD AND 61 PERCENT FROM BILLINGS TO MILES CITY FOR THE NORTHERN PACIFIC RAILWAY, AS AUTHORIZED BY SUPPLEMENT NO. 2, ISSUED JUNE 3, 1925, AS EFFECTIVE MARCH 10, 1925, TO CHICAGO, BURLINGTON AND QUINCY RAILROAD, G.F.O. 14613-A. (NORTHERN PACIFIC RAILWAY DIVISION SHEET B- 3130.) IT IS NOTED THAT THIS DIVISION SHEET, PRIOR TO THE DATE OF SUPPLEMENT NO. 2 THERETO, PROVIDED THAT THE PERCENTAGE DIVISIONS APPLIED VIA EITHER HUNTLEY OR BILLINGS BUT THAT AFTER SUPPLEMENT NO. 2 WAS ISSUED THE DIVISIONS APPLIED VIA BILLINGS ONLY AND NO PROVISION WAS MADE FOR A DIVISION OVER HUNTLEY.

IN A CASE DECIDED BY THE COURT OF CLAIMS IN MARCH, 1906, 41 CT.CLS., 284, IT WAS HELD THAT---

WHERE A NON LAND-GRANT ROAD OPERATES A THROUGH LINE IN PART OVER A LAND- GRANT ROAD, THE GOVERNMENT HAS THE RIGHT TO SEND GOODS OVER THE ENTIRE LINE, AND THE NONAIDED ROAD MUST TRANSPORT THEM AT LAND-GRANT RATES, THOUGH IT NEVER RECEIVED A BENEFIT FROM AND WAS A STRANGER TO THE RANT; AND THE GOVERNMENT CAN NOT BE COMPELLED TO RESHIP OR TRANSFER THE FREIGHT AT THE POINT OF JUNCTION TO THE LAND-GRANT ROAD.

THIS PRINCIPLE WAS SUSTAINED BY THE SUPREME COURT OF THE UNITED STATES BY DECISION OF APRIL 4, 1910, 217 U.S. 180, IN WHICH IT WAS HELD THAT THE POWER RESERVED TO CONGRESS IN THE LAND-GRANT ACT WAS OVER THE PROPERTY AND NOT ALONE OVER THE COMPANY WHICH OWNED IT, AND THAT IT EXTENDED TO EVERY USE OF THE PROPERTY AND TO AS MANY TRACKS AS MAY BE USED, WHETHER BY THE OWNING COMPANY OR BY ANY COMPANY WHO RECEIVES A RIGHT FROM THEM.

THE QUESTION AT ISSUE IN THIS CASE IS THE PROPRIETY OF THE DEDUCTION ON ACCOUNT OF LAND GRANT FROM THE COMMERCIAL EARNINGS OR REVENUE ACCRUING TO THE CHICAGO, BURLINGTON AND QUINCY RAILROAD FOR ITS HAUL FROM HUNTLEY TO BILLINGS, MONT., AND FROM THE COMMERCIAL EARNINGS OR REVENUE ACCRUING TO THE NORTHERN PACIFIC RAILWAY FOR ITS HAUL FROM BILLINGS TO HUNTLEY, MONT., OF THE ONE SHIPMENT AND FROM THE FACTS SHOWN BY ROUTING INSTRUCTIONS IN THE APPLICABLE TARIFF AND IN CARRIER'S AUTHORIZED DIVISIONS OF THE JOINT RATE IT IS CLEAR THAT THE PORTION OF THE THROUGH ROUTE AND HAUL BETWEEN HUNTLEY AND BILLINGS EARNS REVENUE FOR EACH OF THE CARRIERS PERFORMING SERVICE IN THE THROUGH ROUTE AND THAT THE DEDUCTION ON ACCOUNT OF LAND GRANT FROM THE PROPORTION ACCRUING TO EACH ROAD RENDERING SERVICE OVER THIS PORTION OF THE THROUGH ROUTE IS CORRECT.

UPON REVIEW OF THE MATTER NO DIFFERENCES ARE FOUND AND THE SETTLEMENT IS SUSTAINED.