Northern Pacific Railway Company v. United States

PETITIONER: Northern Pacific Railway Company
RESPONDENT: United States
LOCATION: Hazlehurst Manufacturing Company

DECIDED BY: Warren Court (1957-1958)

CITATION: 356 US 1 (1958)
ARGUED: Jan 07, 1958 / Jan 08, 1958
DECIDED: Mar 10, 1958

Facts of the case


Media for Northern Pacific Railway Company v. United States

Audio Transcription for Oral Argument - January 07, 1958 in Northern Pacific Railway Company v. United States

Audio Transcription for Oral Argument - January 08, 1958 in Northern Pacific Railway Company v. United States

M.L. Countryman Jr.:

-- what I was saying at adjournment yesterday afternoon, Northern Pacific land grant amounted to approximately 39 and a half million acres.

All of this acreage has at all times been for sale and as fast as the sentence could be induced to the company and as purchasers could be found, the land had been sold.

So that at the time the complaint was filed in May, 1949, the company had sold all but approximately 2,700,000 acres.

In the sales of these lands, the traffic clauses were ever used where the lands were agriculture in character or were grazing lands.

But in the case of lands which were valuable solely for their natural resources such as timber, minerals, coal and iron and the like.

Traffic clauses were used from the beginning of the character that I have explained.

Because those natural resources had a special value to the Northern Pacific and not to obtainable market price and that Northern Pacific have a transportation agency.

It had railroad to transport these commodities to market to resume the transportation business.

Earl Warren:

May I ask you Mr. Countryman?

What is the relationship between the Northern Pacific Railway Company and the Northwestern Improvement Company?

M.L. Countryman Jr.:

The Northwestern Improvement is wholly on subsidiary.

Originally incorporated under the laws of New Jersey and later transferred to Delaware, it's organized as a New Jersey corporation in 1897 to takeover lands that were subject to Missouri division mortgage of the old company in order to keep them up to (Inaudible).

Earl Warren:

Are all the lands of the Northern Pacific Railway Company of this character in -- in the ownership of the Improvement Company?

M.L. Countryman Jr.:

No, Your Honor, relatively small proportion of the lands are in ownership of the Improvement Company.

Earl Warren:

Why -- why is the differentiation?

M.L. Countryman Jr.:

The Improvement Company took over only these lands that were subject to the Missouri division mortgage.

Those were in -- principally in North Dakota and they're practically old and sold to agricultural lands.

Very little remained in Northwestern Improvement Company ownership although I think the Improvement Company did have some timberlands in Montana.

And as I've stated to yesterday, the Improvement Company has at all times has been treated as the department of the railroad.

The land department of the railroad is the land department of the Improvement Company.

And this -- well it doesn't appear in the record, we are now in the process of dissolving the Improvement Company.

Of the lands that had been sold, only 2,144,000 acres were timberlands subject to traffic clauses and all but about 218,000 acres of that 2,144,000 were sold prior to 1910, 900,000 acres were sold to warehouses in 1900 and the traffic clauses in that contract expired in 1915.

The Railway Company as I say had an interest in land -- in the natural resources and when the lands containing coal or iron which I might say were included in the grant were sold.

Generally, the minerals were accepted and reserved to the company.

If other minerals were suspected to be present, a reservation of minerals is also made so that in 1949, the Railway Company had about -- had mineral rates in about six and a half million acres of land.

In all leases of it are mineral rights or timberlands or cutting timber or for removal of natural resources.

They have included the traffic clause providing that the lessee with ship products over our line upon which were equal to those of any competitors and when the destination to be reached by our land.

William J. Brennan, Jr.:

Are the -- are the clauses coterminous with the periods of the leases?

M.L. Countryman Jr.:

I beg Pardon?

William J. Brennan, Jr.:

Are the clauses, the traffic clauses coterminous with the leases?