1886 is constitutional and legal; that under section 9 of the act of 1866 power is expressly reserved to congress to forfeit, and that such power exists even if no such reservation was intended to be made; that the mortgage act of 1871 is only declarative of the right to mortgage, and its purpose was to remove all doubt of that right, and thus aid the company in obtaining funds with which to construct the road; that the mortgagees took only the title vested in the company by the terms of the granting act, subject to the right of the United States to forfeit, and that the rights or equities of the mortgagees are not now for the consideration of this court. Plaintiff admits that if no right to forfeit had been reserved, and no consequences of a breach declared in the granting act, the right to forfeit would exist; but contends that, with the consequences of the breach expressly declared, these alone can ensue from a breach and exclude the right to forfeit. Plaintiff also insists that the government failed to comply with its part of the contract, as expressed in the grant, in reference to Indian titles, and that this failure of the grantor is largely responsible for the delay of construction by the grantee, and that the forfeiture act should not have been passed. Plaintiff further contends that the provisions of the mortgage act of 1871 show clearly that it was not the intention of congress to reserve the power to forfeit in the act of 1866, and, further, that the mortgage act created a new contract, extending expressly the term within which the grantee was to complete construction, and that under its provisions contracts have been made which are violated by the forfeiture act of 1886.

This court in the case of Railroad Co. v. Esquibel, 5 N. M. 123, cited and relied on by counsel for the defendant in error, held that "time was of the essence of the contract," and in construing a clause VOL. 7 N. M.-24

in the Texas Pacific act, similar to section 9 of the grant act of 1866, declared that the clause was for the benefit of the government, and not of the company. The purpose for which this grant was made is repeatedly declared in the different sections of the act; that is, "to aid in the construction of a road, to secure the safe and speedy transportation of the mails, troops, munitions of war, and public stores to the Pacific coast." Section 20 of the act provides that to "better accomplish" the objects thereof, namely, "to promote the public interest and welfare," etc., and to "secure to the government at all times the use and ben

efit of the same [railroad and telegraph lines] for postal, military and other purposes, congress may at any time, having due regard to the rights of said Atlantic & Pacific Railroad Company, add to, alter, amend, or repeal this act." What stronger reservation could be desired? Are we to say, in the face of the provisions of sections 9 and 20, that the legislature and the courts are to have "due regard for the rights of the grantee, and no regard whatsoever for the rights of the United States or of the public, and shall not consider the public welfare, which is expressly declared to be the object for which this enormous grant was made? Are we to say that the congress of the United States intended to create a corporation, give it the breath of everlasting life, grant to it sovereign powers of eminent domain, endow it with a princely estate vaster than a kingdom of the old world, and set it above the laws, above the courts, above the people, above the government, making the "thing" greater than its creator? It is true that "a corporation created by the legislature, and endowed with certain powers and functions and property, the legislature reserving no interest in that which is given them, and no control over the succession of persons who form the corporation, or over the exercise of their functions, such a corporation is a private

corporation, to whom a franchise has been given by a grant which is an executed contract, and that any deprivation of their property, or any disturbance or denial of their rights and functions, impairs the obligations of contracts." 3 Pars. Cont. 531; College v. Woodward, 4 Wheat. 519. It is also "a settled rule. of construction that public grants are to be construed strictly," and, where the public interest is concerned, "any ambiguity in the terms of the contract must operate against the company and in favor of the public." Richmond R'y Co. v. Louisa R'y Co., 13 How. 81. Chief Justice TANEY said: "The continued existence of a government would be of no great value if, by implications and presumptions, it was disarmed of the powers necessary to accomplish the ends of its creation, and the functions it was designed to perform transferred to the hands of privileged corporations." Charles River Bridge v. Warren Bridge, 11 Pet. 584; also 2 Inst. 496; Canal Co. v. Wheeley, 2 Barn. & Adol. 792. In the case of Northern Pac. R'y Co. v. Traill Co., 115 U. S. 601, 6 Sup. Ct. Rep. 201, section 20 of the act creating the Northern Pacific Railroad Company, exactly similar to section 20 of the act under which the plaintiff company received its grant, was held to reserve to the United States the power to pass an act declaring that no land granted to the company should be conveyed, although earned, until the expense of survey of such lands had been paid by the company. It was urged that this last act was unconstitutional, upon the same ground as taken in the case at bar, and, indeed, it was so held by the supreme court of Minnesota; but the supreme court, by Justice MILLER, held that section 20 "conferred this power on congress," by which not only was the grantee divested of its lands, but the taxing power of a municipal government denied.

Did congress, by the mortgage act of 1871, extend the time during which the road might be completed?

ty to mortgage after breach of condition.

It is strongly contended that this was the intent, and is the effect, of the act in question. There is some GRANT of authori- ambiguity in the proviso of the act, and, there being necessity for judicial construction, it is our duty, as we conceive it, to consider the proviso in question together with the entire act, as well as the granting act to which it refers. It is urged that the company possessed the power to mortgage its franchises, property, lands, etc., before this declaration by congress. This may be true, but there was evidently some doubt upon the subject. Power was granted them expressly to sue and be sued, etc., and they were "vested with all the powers, privileges, and immunities necessary to carry into effect the purposes of this act as herein set forth." As shown from the record, the company had incurred a debt in 1871, were compelled to secure funds, and the act was passed. It is reasonable to presume that it was passed at the request of the company. Now, if it was the intention of congress to do something more than affirm the right to mortgage; if it was conscience stricken at the failure of the government to comply with its contract, as is urged-why was not a plain, direct declaration to this effect made? Why was the only intimation to this effect contained in the act the following: "Provided, that if the company shall hereafter suffer any breach of the conditions of the act above referred to, under which it is organized, the rights of those claiming under any mortgage," etc., "shall extend only to so much thereof [lands] as shall be coterminous with, or appertain to, that part of the said road which shall have been constructed at the time of the foreclosure of said mortgage?" When this act was passed the company was in default. It had "suffered a breach" in having constructed in five years only thirty-four miles of road; and, from the terms of the act, it is apparent that congress intended to assure capitalists that no advantage

would be taken then of this breach, hence the use of the word "hereafter." If it was intended to grant further and indefinite time to the company in which to construct the road, why was the expression used, "hereafter suffer any breach of the conditions of the act above referred to under which it is organized?" Was this not clearly and distinctly a recognition and reaffirmance of the conditions under which the company acquired its grant, with an assurance that no advantage would be taken of the breach already suffered? Did not congress suppose, as a matter of course, that any mortgage would contain a condition of foreclosure upon breach of condition of the grant as well as upon failure to pay interest? Was this not done in the mortgages by the terms of which the party of the first part binds itself to construct the road with due diligence, and the second party reserves power to take possession and foreclose for any breach of the conditions of the mortgage? Would not any court construe "due diligence" in this case to mean within the time limited in the granting act? It has been strongly urged that up to the present time the mortgages could not have been foreclosed. This contention is not sustained by the facts as shown in the record. To sustain the contention of plaintiff, we must not consider any portion of the mortgage act except the last four words of the proviso. We must not consider at all the granting act. We must not look to the evident intention of the mortgagor and mortgagee, and their construction of the act. We must give the four words, standing alone, referred to, a strained construction, which would result in divesting the United States of forty-odd millions of acres of land forever, or at least during the pleasure of the mortgagees, without promoting in any sense the object for which the grant was made; and we must declare unconstitutional an act of congress, passed after mature deliberation, careful investigation, and with