Corvallis & E.R. Co. v. Benson

• Decision Date: 20 February 1912
• Citation: 121 P. 418,61 Or. 359
• Court: Oregon Supreme Court
• Parties: CORVALLIS & E.R. CO. v. BENSON, Governor, et al.

121 P. 418

61 Or. 359

CORVALLIS & E.R. CO. v. BENSON, Governor, et al.

Supreme Court of Oregon

February 20, 1912

Appeal from Circuit Court, Marion County; Wm. Galloway, Judge.

Action for an injunction by the Corvallis & Eastern Railroad Company against Frank W. Benson, as Governor, and others constituting the State Land Board, as a board of commissioners for the sale of school and university lands. Action dismissed and temporary injunction dissolved, and plaintiff appeals. Reversed, and decree entered for plaintiff.

The Legislative Assembly of 1874 passed an act, approved October 24th of that year, entitled "An act to provide for the construction of the Willamette Valley & Coast Railroad." The first section of that act reads as follows: "That there be and is hereby granted to the Willamette Valley &amp Coast Railroad Company, or its assigns, all the tide and marsh lands situated in said county of Benton, and also the right to take from the lands adjacent to the line of said road, timber, stone, water, and other material necessary to the construction of said road, provided that the said company shall within thirty days after the passage of this act file with the Secretary of State their acceptance of said grant and of all the terms of each and every part of this act and of all the conditions herein contained to be performed by such company, and that upon the filing of said acceptance, as aforesaid, the company shall have become invested with and in absolute title to said land aforesaid as afterward to be set apart and designated, and shall in consideration thereof be bound by all the provisions of this act hereinafter contained and set out."

By an elaborate scheme, set out in subsequent sections of the act the company was authorized to mortgage each 10 miles of its road as completed and reported upon by commissioners appointed by the Governor, which mortgage should be a lien in favor of the bondholders upon all the property of the company, including the lands granted by the act, and should run to the Secretary of State as trustee for the bondholders. In the second section, it was laid down that when the commissioners, provided for in the act, reported that 10 miles of road had been equipped and established "then the Governor of the state shall cause the land herein granted to be surveyed, designated and set apart for the benefit of said company." Laws 1874, p. 52.

By an amendatory act, approved October 14, 1878, Laws 1878, p. 1 the feature of mortgaging the property to the Secretary of State for the benefit of the bondholders was eliminated. The time for the completion of the road from Yaquina Bay to Corvallis was extended for six years from the date of the approval of the act, with the further condition that, if said company should fail to complete and equip the road from Corvallis to tidewater on Yaquina Bay "within said six years, then and in that case said act shall become void and the property and rights granted to said company shall become forfeited to the state." The amendatory act provided that on acceptance of the grant, in the terms of the act within 30 days after approval "the said company shall have and become invested with the title to said land thereby granted to be set apart and designated as in this act provided, and shall, in consideration thereof, be bound by all the provisions of this act." The Legislative Assembly of 1885, by an act approved February 5th of that year (Laws 1885, p. 5), passed an act entitled "An act to re-enact and amend an act, approved October 24, 1874, entitled 'An act to provide for the construction of the Willamette Valley & Coast Railroad,' as amended by the act approved October 14, 1878, entitled 'An act to amend an act entitled "An act to provide for the construction of the Willamette Valley & Coast Railroad," approved October 24, 1874,' and to confirm the right of said railroad company under the said acts." The first section of the latter act states, in substance, that the act of October 24, 1874, as amended by the act of October 14, 1878, should be and was thereby re-enacted with the amendments specified in the act. Section 2 of the act of 1885 reads thus: "That section 5 of said act, approved October 24, 1874, as amended by the said act approved October 14, 1878, be, and the same is hereby amended so as to read as follows: 'Section 5. That the time for the completion of the said Willamette Valley & Coast Railroad, by said railroad company, from tide water on Yaquina Bay to the city of Corvallis in Benton county, Oregon, be and the same is hereby enlarged and extended for seven years from October 14, 1878.' " Section 3 of the act of 1885 reads thus: "That the title of said railroad company to lands mentioned in said act be, and the same is ratified and confirmed, and this state hereby expressly waives all rights reserved under said acts and nothing therein contained and no failure to comply with any of the provisions thereof shall be construed to have worked a forfeiture of any of the grants, rights, privileges or immunities granted, or intended to be granted, in either of said acts subject to the following provisions." The provisos alluded to exclude land within the boundaries of the grant which had been patented by the state or the United States to other parties prior to January 1, 1885, and also eliminate certain particularly described tracts of land on Yaquina Bay. By an act filed in the office of the Secretary of State February 23, 1909 (Laws 1909, p. 221), the Legislative Assembly of that year repealed the granting section 1 of the original act, approved October 24, 1874, and section 3 of the act approved February 5, 1885, waiving the forfeiture of the rights reserved under the acts to which allusion has already been made.

In its complaint, the plaintiff alleges its corporate existence, the official character of the defendants, and their duties as the public land board, and avers that it is the successor by mesne conveyances to the title of the Willamette Valley & Coast Railroad Company in the tidelands mentioned in the act of 1874. It narrates the history of the legislation already alluded to, in detail, and its acceptance of the grant made by the terms of the several acts of the Legislature, stating that the company accepted the grant of 1874 on the 11th day of November of that year, and that the grant of 1878 was accepted on November 7th of that year. The latter acceptance is admitted by the defendants, and they also concede that on February 3, 1884, the Governor of the state appointed a commission to examine the 10 miles of road constructed at that time, and that on the 9th of the same month the commissioners reported that they had examined it and found it completed in all respects as provided by the act. The complaint further avers that the defendants claim the state of Oregon is the owner of a tract of 1.45 acres, set out by metes and bounds, and that they are intending to sell the same in the name of the state of Oregon, and will do so, unless restrained by an order of the court; that these lands are included within the tidelands described in the act already mentioned; and that if the defendants should sell the same it would put a cloud on plaintiff's title, to its irreparable injury. A general demurrer to the complaint was overruled by the circuit court, whereupon the defendants answered. After certain admissions, the second paragraph of the answer reads thus: "Deny all the material allegations of paragraphs 3, 4, 5, 6, 7, 8, 12, 13, 14, 15, 16, 17, 18 of the complaint, except as hereinafter expressly admitted or qualified."

The answer affirmatively recites that the tract of 1.45 acres is situate on the shore of Alsea Bay, an arm of the sea, and lies between ordinary high tide and ordinary low tide; that it belongs to the state of Oregon by virtue of her sovereignty; that the state is the owner thereof, holding the same in trust for its people for purposes of navigation fisheries, and commerce; and that the state has no authority to sell or convey the lands, or any portion thereof, or any right or interest therein, except for the purpose for which it holds said lands in trust, as aforesaid. The history of the legislation alluded to in the complaint is substantially repeated by the answer. The defendants allege that the lands are unsurveyed; that they lie without the meander line of the United States surveys along the shore of the bay; that they have never been surveyed, designated, or in any manner set apart by the Governor of the state, or by any other authority, for the use or benefit of the company; that no portion of the lands described in the complaint is used or occupied by the plaintiff company for any purpose whatsoever; that the same is not within their right of way; and that it is at least 10 miles south of the western terminus of the plaintiff's railroad. The answer concludes with this allegation: "That prior to the commencement of this suit one C.R. Evans applied to purchase said tract of tideland mentioned and described in paragraph 5 of plaintiff's complaint herein, for the purpose of diking the same and building thereon docks, warehouses, etc., in aid of commerce and navigation of said water of said Alsea Bay; that it is necessary to pass over these tidelands, in order to reach the deep water of Alsea Bay, and to build and construct on the same wharves or other structures at which boats may land, and load and unload passengers and freight, and defendants are about to sell said small tract, which is only a small portion of the tidelands of said Alsea Bay, and the shore thereof, for the purpose of securing the construction thereon of said improvements for the purpose to aid the navigation of said bay and the commerce of the country adjoining said bay,...