Union Pacific Railroad v. Mason City & Fort Dodge Railroad

Background

A local rail company called the Mason City Company sued the Union Pacific Railroad company to get the right to use a bridge over the Missouri River and its approaches at Omaha. A prior Supreme Court decision had held that contracts and federal laws required the bridge owner to allow other railroads to cross for reasonable payment. Lower courts awarded Mason City the joint use of the bridge and approaches, and the present Union Pacific owner appealed, arguing the earlier statutory ruling was not binding and that a foreclosure sale freed it from those duties.

Reasoning

The Court rejected the Union Pacific’s arguments. It said the earlier opinion’s reading of the statutes was a valid part of the court’s judgment, not mere comment. The Court read the 1871 law as incorporating the general 1866 rule that bridges built under those acts should be open to trains of roads terminating at the river, up to capacity, for reasonable compensation. The Court also held that a later buyer at a foreclosure sale did not wipe out these public obligations. Because the company had accepted statutory privileges and benefits tied to a national public project, it must accept the statutory burdens as well.

Real world impact

The result is that Mason City and similarly situated railroads can use the bridge and approaches on payment of reasonable compensation, and current owners cannot evade those duties by relying on a prior foreclosure sale. The Court noted that if the decree’s wording seems to reach private spur tracks the lower court may correct that language on proper application.