State of Wyoming v. United States

• Decision Date: 28 March 1921
• Docket Number: No. 257,257
• Citation: 41 S.Ct. 393,255 U.S. 489,65 L.Ed. 742
• Parties: STATE OF WYOMING et al. v. UNITED STATES
• Court: U.S. Supreme Court

255 U.S. 489

41 S.Ct. 393

65 L.Ed. 742

STATE OF WYOMING et al.

v UNITED STATES.

No. 257.

Argued Oct. 6 and 7, 1920.

Decided March 28, 1921.

Messrs. John W. Lacey and D. A. Preston, both of Cheyenne, Wyo., for appellants.

Mr. Assistant Attorney General Nebeker, for the United States.

[Argument of Counsel from pages 490-493 intentionally omitted] Mr. Justice VAN DEVANTER delivered the opinion of the Court.

This is a suit by the United States to establish title in it to 80 acres of land and to the proceeds of oil taken therefrom. The District Court rendered as decree dismissing the bill on the merits, which the Circuit Court of Appeals reversed (United States v. Ridgely, 262 Fed. 675), and the defendants bring the case here.

One of the defendants, the state of Wyoming,¹ claims under a lieu selection, made in 1912, and the other defendants under a lease from the state, made in 1916. It is against the selection and the lease that the United States seeks to establish title.

By the Act of July 10, 1890, c. 664, § 4, 26 Stat. 222, Congress granted to the state for the support of common schools certain lands in place (sections 16 and 36 in each township), with exceptions not material here; and by the Act of February 28, 1891, c. 384, 26 Stat. 796, amending §§ 2275, 2276, Rev. Stat. (Comp. St. §§ 4860, 4861), the state was invited and entitled, in the event any of the designated lands in place after passing under the school grant should be included within a public reservation, to waive its right thereto and select in lieu thereof other lands of equal acreage from unappropriated nonmineral public lands outside the reservation and within the state. See California v. Deseret Water, etc., Co., 243 U. S. 415, 37 Sup. Ct. 394, 61 L. Ed. 821; Payne v. New Mexico, 255 U. S. 367, 41 Sup. Ct. 333, 65 L. Ed. ——. Other laws of general application (sections 441, 453, 2478, Rev. Stat. [Comp. St. §§ 681, 699, 5120]) required that the selections be made under the direction of the Secretary of the Interior.

In 1907 a tract in place which had passed to the state under the school grant was included within a public reservation, called the Big Horn National Forest. On April 4, 1912, the state—through its Governor, Joseph M. Carey, and its Land Commissioner, S. G. Hopkins—filed in the proper local land office a selection list waiving its right to that tract and selecting in lieu thereof other land of the same area from public lands within the state and outside the forest reserve. The land so selected included the 80 acres now in controversy. At that time the state had a perfect title to the tract in the reserve and the land selected in lieu thereof was vacant, unappropriated, and neither known nor believed to be mineral. The list fully conformed to the directions on the subject issued by the Secretary of the Interior and was accompanied by the requisite proofs and the proper fees. Notice of the selection was regularly posted and published, proof thereof was duly made and the state paid the publisher's charge. Thus, as the Circuit Court of Appeals said, 'the state did everything necessary to show a perfect title to the land relinquished and perfect relinquishment thereof to the government, and everything that was required either by statute or regulation of the Land Department' in selecting the lieu land instead of the relinquished tract.

No objection was called forth by the notice and in regular course the local officers transmitted the list and other papers to the General Land Office with a certificate stating that no adverse filing, entry or claim to the selected land was shown by the records in their office and that the filing of the list was allowed and approved by them. The list remained in the General Land Office awaiting consideration by the Commissioner for up wards of three years. In the meantime, on May 6, 1914, two years after the selection, the selected land, with other lands aggregating more than 88,000 acres, was included in a temporary executive withdrawal as possible oil land under the Act of June 25, 1910, c. 421, 36 Stat. 847 (Comp. St. §§ 4523-4525). On April 29, 1915, the Commissioner, coming to consider the selection, declined to approve it as made and called on the state either to accept a limited—surface right—certification of the selected land or to show that it still was not known or believed to be mineral. The state declined to accede to either alternative and insisted that its rights should be determined as of the time when the waiver and selection were made and that, applying that test, it became invested with the equitable title to the selected land two years prior to the temporary withdrawal and at a time when that land plainly was neither known nor believed to be mineral. The Commissioner thereupon ordered the selection canceled,—not because it was in any respect objectionable when made, but on the theory that he was justified in rejecting it by reason of the subsequent withdrawal and subsequent oil discoveries in that vicinity. The state appealed to the Secretary of the Interior, and, on October 25, 1916, he affirmed the Commissioner's action.

In the meantime, on May 24, 1916, the state had given to the defendant Ridgely a lease permitting him to drill the selected land for oil, and the lease had been assigned to the defendant oil company. There was no oil discovery, nor any drilling, on the selected land up to the time the lease was given; but thereafter the oil company began drilling and at large cost carried the same to discovery and successful production. This was four years after the selection.

The question presented is whether, considering that the selection was lawfully made in lieu of the state-owned tract contemporaneously relinquished, and that nothing remained to be done by the state to perfect the selection, it was admissible for the Commissioner and the Secretary to disapprove and reject it on the ground that the selected land was withdrawn two years later under the Act of June 25, 1910, and still later was discovered to be mineral land; that is, to be valuable for oil. Or, putting it in another way, the question is whether it was admissible for those officers to test the validity of the selection by the changed conditions when they came to examine it, instead of by the conditions existing when the state relinquished the tract in the forest reserve and selected the other in its stead.

In principle it is plain that the validity of the selection should be determined as of the time when it was made, that is, according to the conditions then existing. The proposal for the exchange of land without for land within the reserve came from Congress. Acceptance rested with the state and of course would be influenced and controlled by the conditions existing at the time. It is not as if the selection was merely a proposal by the state which the land officers could accept or reject. They had no such option to exercise, but were charged with the duty of ascertaining whether the state's waiver and selection met the requirements of the congressional proposal and of giving or withholding their approval accordingly. The power confided to them was not that of granting or denying a privilege to the state, but of determining whether an existing privilege conferred by Congress had been lawfully exercised; in other words their action was to be judicial in its nature and directed to an ascertainment and declaration of the effect of the waiver and selection by the state in 1912. If these were valid then—if they met all the requirements of the congressional proposal, including the directions given by the Secretary—they remained valid notwithstanding the subsequent change in conditions. Acceptance of such a proposal and full compliance therewith confer vested rights which all must respect. Equity then regards the state as the owner of the selected tract and the United States as owning the other; and this equitable ownership carries with it whatever of advantage or disadvantage may arise from a subsequent change in conditions whether one tract or the other be affected. Of course the state's right under the selection was precisely the same as if in 1912 it had made a cash entry of the selected land under an applicable statute, for the waiver of its right to the tract in the forest reserve was the equivalent of a cash consideration. And yet it hardly would be suggested that the Commissioner or the Secretary on coming to consider the cash entry could do otherwise than approve it, if at the time it was made the land was open to such an entry and the amount paid was the lawful price.

The conclusion which we deem plain in principle is fully sustained by prior adjudications. In Benson Mining Co. v. Alta Mining Co., 145 U. S. 428, 431, 12 Sup. Ct. 877, 878 (36 L. Ed. 762), which presented the question of when under the public land laws a right to the land becomes vested, it was said:

'When the price is paid the right to a patent immediately arises. If not issued at once, it is because the magnitude of the business in the Land Department causes delay. But such delay, in the mere administration of affairs, does not diminish the rights flowing from the purchase, or cast any additional burdens on the purchaser, or expose him to the assaults of third parties.'

And again (145 U. S. 432, 12 Sup. Ct. 879. 36 L. Ed. 762):

'It is a general rule, in respect to the sales of real state that when a purchaser has paid the full purchase price his equitable rights are complete, and there is nothing left in the vendor but the naked legal title, which he holds in trust for the purchaser. And this general rule of real estate law has been repeatedly applied by this court to the administration of the affairs of the Land Department of the government; and the ruling has been uniform, that whenever, in cash sales, the price has been paid, or, in other cases, all the conditions of entry performed, the full equitable title has...