United States v. New Orleans Pac Ry Co

• Citation: 248 U.S. 507,63 L.Ed. 388,39 S.Ct. 175
• Decision Date: 27 January 1919
• Docket Number: Nos. 164-166,s. 164-166
• Parties: UNITED STATES et al. v. NEW ORLEANS PAC. RY. CO. et al. (three cases)
• Court: U.S. Supreme Court

248 U.S. 507

39 S.Ct. 175

63 L.Ed. 388

UNITED STATES et al.

v NEW ORLEANS PAC. RY. CO. et al. (three cases).

Nos. 164-166.

Argued Dec. 10 and 11, 1918.

Decided Jan. 27, 1919.

Mr. Assistant Attorney General Francis J. Kearful, for the United states.

[Argument of Counsel from page 508-509 intentionally omitted] Messrs. Mark Norris, of Grand Rapids, Mich., F. G. Hudson, of Monroe, La., and H. H. White, of Alexandria, La., for appellees.

[Argument of Counsel from page 509-510 intentionally omitted] Mr. Justice VAN DEVANTER delivered the opinion of the Court.

These suits are so related that they may be disposed of in a single opinion. Three tracts of land in Vernon parish, Louisiana, each containing 160 acres, are in controversy—one in each suit. All are in odd-numbered sections within the limits of the grant of March 3, 1871, to the New Orleans, Baton Rouge & Vicksburg Railroad Company (16 Stat. 573, c. 122)—one being within the primary and two within the indemnity limits. All were patented under the grant and after-wards sold by the patentee, the purchasers paying a fair price. Through successive sales the title under the patents was passed along to other purchasers. Whether the latter shall be decreed to hold the title in trust for certain homestead claimants whose claims are founded on settlements antedating the issue of the patents, and also the definite location of the road, is the matter in controversy.

The suits were brought by the United States, the defendants being the patentee and the present holders of the title under the patents. The relief prayed was that the patents be canceled, or, if that be not done, that the homestead claimants be decreed to be the equitable owners and that a trust in their favor be declared and enforced. Of these alternative prayers, the latter was better suited to the case stated. By leave of the court the homestead claimants intervened, set forth their claims, alleged that the patentee and all the purchasers took the title with full notice of their claims, asserted that the title was held in trust for them and sought relief accordingly. Various defenses were set up in the answers, such as the lapse of the period prescribed for bringing suits to cancel patents, laches on the part of the homestead claimants and good faith on the part of the purchasers. On the final hearing the District Court entered a decree for the defendants in each of the suits, and this was affirmed in the Circuit Court of Appeals. 235 Fed. 841, 846, 149 C. C. A. 153, 158. The District Court did not make any specific finding of fact or assign any particular reason for its decree, and the Circuit Court of Appeals rested its decision on three grounds: (a) That in so far as the suits sought a cancellation of the patents they were barred because not brought within the time prescribed by law; (b) that, if a trust had arisen in favor of the homestead claimants, its enforcement was a matter in which the United States was without interest or concern; and (c) that, if such a trust had arisen, it had become unenforceable by reason of inexcusable laches on the part of the homestead claimants.

The grant of March 3, 1871, was made to the New Orleans, Baton Rouge & Vicksburg Railroad Company, 'its successors and assigns,' to aid in the construction of a railroad from New Orleans to Shreveport, and embraced all the odd-numbered sections of public land within 20 miles (the primary limits) on each side of the road, subject to enumerated exceptions, one of which excluded any land to which a pre-emption or homestead claim may 'have attached' at the time the line of the road was definitely located. In lieu of the excepted lands others in odd-numbered sections within prescribed indemnity limits were to be selected. Whenever, and as often as, 20 consecutive miles of road were completed and put in running order patents were to be issued for the lands opposite to and coterminous with that portion of the road. The entire road was to be completed within five years. Within two years the company was to designate the 'general route' of the road and to file a map of the same in the Department of the Interior. There was no provision directly calling for a map showing the definite location of the road, but that such a map was to be filed was plainly implied.

The general route of the road was designated on a map filed and accepted in November, 1871. The Secretary of the Interior, complying with an express provision in the granting act, then caused the odd-numbered sections within the primary limits to be withdrawn from entry and sale. That withdrawal became effective in December, 1871, and included the tract in controversy in No. 166. The Secretary also ordered a like withdrawal of the odd-numbered sections within the indemnity limits, but as the granting act did not authorize, but in effect prohibited, their withdrawal, this part of the order was of no effect. Southern Pacific R. R. Co. v. Bell, 183 U. S. 675, 22 Sup. Ct. 232, 46 L. Ed. 383.

No part of the railroad was constructed by the original grantee, and on January 5, 1881, it transferred the grant to the New Orleans Pacific Railway Company. At that time this company had a line of completed railroad extending from New Orleans to Whitecastle in the direction of Shreveport, and thereafter, during the years 1881 and 1882, it constructed, completed and put in running order, the road from Whitecastle to Shreveport. It also filed with the Secretary of the Interior, on November 17, 1882, a map showing the definite location of the part of the road opposite the tracts now in controversy, and the map was accepted. The road as completed was examined and accepted, and the company was recognized by the Secretary of the Interior, the Attorney General and the President as rightly entitled to patents for the lands falling within the terms of the grant and lying opposite the road from Whitecastle to Shreveport.

Thereafter, in 1885, patents for a large part of the lands were issued to the New Orleans Pacific Railway Company, the assignee of the grant. Other lands remained as yet unpatented. About that time this company's rights under the grant were persistently questioned by persons who insisted that the grant was not assignable, that all rights under it were extinguished when the road was not constructed within the five years prescribed therefor, and that in any event a forfeiture could and should be declared for the failure to comply with that condition, although the road had been completed in the meantime. Because of this the Secretary of the Interior, although not acceding to the insistence, suspended the issue of patents and called the matter to the attention of Congress, saying in that connection that the company had——

'* * * purchased a portion of a line of a railroad already built from New Orleans to Whitecastle, a distance of 68 miles; as to this portion of the road the company waived claim to the land granted. The residue of the road, from Whitecastle to Shreveport, was built by the company upon the belief of the full validity of their right to the land granted, and without this benefit of the grant the road would not have been built. The government railroad examiner reports the road substantially built and equipped, and it would not appear to comport with good faith to those who invested their money on the basis of the grant to take advantage of any technical defect, if such exists, in the transfer to the company. I would, therefore, respectfully suggest for the consideration of Congress the propriety of passing an act curative of defect, if any exists, in the transfer to the New Orleans Pacific Company, and vesting the title, originally granted to the New Orleans, Baton Rouge & Vicksburg Rail road Company from Whitecastle to Shreveport, in the New Orleans Pacific road.'

With the matter thus brought to its attention Congress passed the Act of February 8, 1887,¹ c. 120, 24 Stat. 391. By its first section a part of the grant, with which we are not here concerned, was declared to be forfeited and was restored to the public domain. By its second section the part of the grant on the west side of the Mississippi river opposite to and coterminous with the road from Whitecastle to Shreveport, which was constructed by the New Orleans Pacific Railway Company as assignee of the grant, was confirmed to that company save as it was declared in a proviso——

'that all said lands occupied by actual settlers at the date of the definite location of said road and still remaining in their possession or in possession of their heirs or assigns shall be held and deemed excepted from said grant and shall be subject to entry under the public land laws of the United States.'

By this section the map of November 17, 1882, was required to be treated as the 'definite location' of the part of the road opposite the lands now in controversy. By the third section the confirmation in the second was conditioned on the acceptance by the company of the provisions of the act. The fourth section is not material here. The fifth section authorized the Secretary of the Interior to make all needful rules and regulations for carrying the act into effect. The sixth section confirmed the patents already issued to the company, but with the express qualification that——

'The Secretary of the Interior is hereby fully authorized and in structed to apply the provisions of the second, third, fourth, and fifth sections of this act to any of said lands that have been so patented, and to protect any and all settlers on said lands in all their rights under the said sections of this act.'

The company duly accepted the provisions of the act and in that way assented to and became bound by every provision in it—the unfavorable as well as the favorable. The provisions of special importance here are the proviso in section 2 and the latter part of section 6. By one all lands occupied by actual settlers at the time of the definite...