R. Cas.

Union Pac. Ry. Co. v. C., R. I. & P. Ry. Co.

regarded as incidental to, or consequential upon, those things which the legislature has authorized, ought not, unless expressly prohibited, to be held by judicial construction to be ultra vires." Navigation Co. v. Hooper, 160 U. S. 514, 525, 16 Sup. Ct. 379; Attorney General v. Railway Co., 5 App. Cas. 473, 478; Brown v. Winnisimmet Co., 11 Allen, 326, 334.

Taking up the contract with the Rock Island Company, what is the nature of the undertaking of the Pacific Company? In several places in this instrument, it is called a "lease," and the parties are called "lessor" and "lessee"; while, on the other hand, in the record of the proceedings of the executive committee of the Pacific Company and of its stockholders, it is called an agreement granting trackage rights" between Council Bluffs and South Omaha. But what it was styled by the parties does not determine its character or their legal relations, and in its interpretation the rule applies that "the court is not only at liberty, but required, to examine the entire contract, and may also consider the relations of the parties, their connection with the subject-matter of the contract, and the circumstances under which it was signed." Chicago, R. I. & P. Ry. Co. v. Denver & R. G. R. Co., 143 U. S. 596, 609, 12 Sup. Ct. 479.

In Thomas v. Railroad Co., 101 U. S. 71, 79, MR. JUSTICE MILLER stated the real question to be" whether the railroad company exceeded its powers in making the contract, by whatever name it may be called, so that it is void.'

And MR. JUSTICE BREWER, in his opinion on circuit, observed: "Neither the form of expression on the one hand, nor the name on the other, is conclusive. We must see what rights and privileges were in fact granted, what burdens and obligations assumed.'

The contract provided that the Pacific Company hereby lets the Rock Island Company into the full, equal, and joint possession and use of its main and passing tracks. The possession here spoken of was such possession as the Rock Island Company would have

Union Pac. Ry. Co. v. C., R. I. & P. Ry. Co.

(N. S.)

when its engines, cars, and trains were running over the tracks. The company had no possession before its trains came on the tracks, or after they had run off of them; and while its trains were on the tracks, its possession was only of the particular part occupied temporarily while running over them. Moreover, all trains were to be moved under the direction of an officer of the Pacific Company. The Rock Island trains, coming upon a Pacific track, immediately passed from the control of the Rock Island Company into that of the Pacific, and its officials were subjected to the orders of the Pacific's officers. And throughout the whole contract there does not appear to be a single provision which looks to any actual possession by the Rock Island of any of the Pacific property beyond that which was involved in its trains being run over the tracks under the direction of the other company. The contract in this regard was really an agreement for trackage rights, for running arrangements,-a "terminal contract with compensation on a "mileage" or "wheelage basis," rather than a lease.

The Pacific Company, in its answer, said that it had offered and now offered to accept and transport all the cars and trains of the complainant, freight and passenger, to and from all points on the line of the said defendant described in said supposed contract, and thereby enable the complainant to maintain its business at Omaha and South Omaha, and to carry on exactly the same business that it could have carried on by the operation of its own trains by its own engines and by its own employees, as provided for in said supposed contract; and it says that it has offered, in the utmost good faith, to perform this service, immediately and at all times, for the said complainant, at a reasonable compensation, to be fixed in any fair, usual, and ordinary manner. It thus appears that the Pacific Company could do what it had contracted to do, and that the contention resolves itself into the proposition that there is a fundamental legal difference between authorizing the Rock Island to haul its trains with its own engines, and

R. Cas.

Union Pac. Ry. Co. v. C., R. I. & P. Ry. Co.

agreeing to haul them with the Pacific Company's engines, though in either event they were to be moved under the train dispatchers of the Pacific Company,—a difference we find ourselves unable to admit.

*

In Chicago, R. I. & P. Ry. Co. v. Denver & R. G. R. Co., 143 U. S. 596, 618, 12 Sup. Ct. 479, the Rio Grande Company had granted to the Rock Island Company the use of its terminal facilities at Denver, and it insisted that it could more conveniently handle the Rock Island trains with its own engines and crews than with those of the Rock Island. But this court, speaking through MR. JUSTICE BROWN, said: "It is obviously necessary to the harmonious working of the two systems that the general control and management of the yard should remain with the defendant; but it is not easy to see why that control may not be as well exercised over two switching crews belonging to two different companies as over two crews belonging to the same company. ** It occurs to us that it would cause fully as much inconvenience to transfer the control of trains from the employees of one company to those of another, as such trains enter or leave the terminal yard, as it would be to permit the switching of such trains within the yard by the hands that brought them in or were to take them out. It appears that yards have been jointly operated in this manner in such large railway centers as Kansas City, Toledo, and Chicago without serious difficulty. We think that the same rule should also be applied to those employed in handling the freight. With reference to this, the decree of the court below provided that the plaintiff had a right to employ its separate switching crews and operate its own switching engines in the yards of the defendant company, under the sole and absolute supervision, direction, and control, however, of the yardmaster or other properly constituted officer or agent of the defendant, and subject to the orders and instructions of such yardmaster, etc., and in this there was no error."

Such being the nature of the contract, a contract frequently made between railroad companies, upon

(N. S.)

Union Pac. Ry. Co. v. C., R. I. & P. Ry. Co.

what reasonable ground should it be held invalid as an unlawful assumption of power?

The evidence shows that, between the bridge and South Omaha, some of the most thickly populated and densely settled portions of the city of Omaha are situated; that five railroads, engaged in transcontinental traffic, do their terminal business there, taking up and setting down passengers, collecting, unloading, and delivering freight; that a large part of the territory is filled with the tracks of the Union Pacific and Burlington Companies, and that there is scant room, if any, for another company, with the many tracks required for terminal business; that the whole territory is very valuable, densely populated, and filled with tracks; and that at South Omaha are stockyards and packing industries of great extent, furnishing the companies a vast volume of freight, and compelling the building of many tracks. If it were true that railroad companies. could not, ordinarily, without the aid of a statute, grant running facilities over their tracks, even when such an arrangement would not interfere with their business, the application of so rigorous a rule to defeat a contract, as between the parties, in respect of tracks in the congested parts of large cities, where the entire use of them is not required by their owners, does not seem reasonable. It is well said by SANBORN, J., speaking for the circuit court of appeals: "Courts cannot be blind to the fact that every railroad company cannot have entrance to our great cities over tracks of its own, or to the fact that railroad companies do, and every public interest requires that they should, make proper contracts for terminal facilities over the roads of each other."

Power of Railroad

We think that it would be carrying the doctrine of ultra vires much too far to deny absolutely the competency of a railroad company, being a public highway, whose use is common to all citizens, to contract to give another running rights over its tracks without express statutory authority, and that, under proper circumstances,

Corporation to Allow Joint Use of Tracks.

R. Cas.

Union Pac. Ry. Co. v. C., R. I. & P. Ry. Co.

such a contract may well be held within its implied.

powers.

In Lake Superior Ry. Co. v. U. S., 93 U. S. 492, MR. JUSTICE BRADLEY adverts to and comments on the fact that, in England and in this country, railroads, when first constructed, were by the legislatures and the people regarded and treated as public highways for the use of all who had occasion to run their vehicles thereon and this is certainly so far true, in modern acceptation, that, being for the common use of the public, their owners are ordinarily competent to make contracts which will subserve such use,

But the determination of the existence of the power to grant running rights in this instance does not rest on these considerations alone. For the provisions of the Pacific Railroad acts relating to the bridge over the Missouri river, its construction and operation, imposed on the Pacific Company the duty of permitting the Rock Island Company to run its engines, cars, and trains over the bridge and the tracks between Council Bluffs and Omaha, and we think that South Omaha was included.

The original charter of 1862 required the construction of the Pacific road from the east bank of the river, and so impliedly authorized the company to bridge it, and the amendatory act of 1864 expressly gave the corporation authority "to construct bridges over said Missouri river." The bridge contemplated was for the company's use, as a part of its road, and no provision was made for other roads or other business, nor were any special means provided for the construction of the bridge.

In 1871 several roads had been built from the East to Council Bluffs, and others were building, and roads. were in process of construction in Nebraska, with Omaha as their termini.

The Omaha Bridge act (16 Stat. 430) was then passed, by which, for the more perfect connection of any rail