State v. Winona & St. Peter Railroad Co.

• Decision Date: 01 January 1875
• Citation: 21 Minn. 472
• Parties: STATE OF MINNESOTA <I>vs.</I> WINONA & ST. PETER RAILROAD COMPANY.
• Court: Minnesota Supreme Court

21 Minn. 472

STATE OF MINNESOTA vs. WINONA & ST. PETER RAILROAD COMPANY.

Supreme Court of Minnesota.

April 22, 1875; May 20, 1875.

Proceeding in the district court for Waseca county, under ch. 1, Laws 1874, to enforce the collection of delinquent taxes against certain lands in that county, being a part of defendant's land grant. Defendant answered, claiming that the lands were its property, and that, by its charter, they were exempt from taxation. See State v. Winona & St. Peter R. Co., ante, p. 315.

At the trial before Lord, J., it was agreed that defendant still held the legal title to the lands, and the only question made was whether a certain contract, the material parts of which are set out in the following opinion, was, in effect, a conveyance of the lands, so as to render them subject to taxation. The court ruled that the lands were properly taxed, and certified the case to this court, under § 120 of the act before cited.

Geo. P. Wilson, Attorney General, for the State.

Wilson & Taylor, for defendant.

GILFILLAN, C. J.

Certain lands, the legal title to which stands in this company, were placed on the tax lists for the year 1873, and taxes levied and assessed thereon. In the proceedings to enforce payment of taxes on real estate remaining delinquent on the first day of June, 1874, for the county of Waseca, the company filed answers as to taxes on these lands, claiming that they are exempt from taxation under § 4, ch. 2, of the act of the legislative assembly of the Territory of Minnesota, entitled, "An act to execute the trust created by an act of Congress, entitled, `An act making a grant of land to the Territory of Minnesota, in alternate sections, to aid in the construction of certain railroads in said territory, and granting public lands in alternate sections, to the State of Alabama, to aid in the construction of a certain railroad in said state,' and granting certain lands to railroad companies therein named," approved May 22, 1857. The lands in question came to this company under this act, and other acts amendatory and supplemental thereto.

The company executed a contract October 31, 1867, with one Danford N. Barney and others. The material parts of this contract are as follows:

"Whereas the said parties of the first part (Barney and his associates) have, at and upon the request of the said party of the second part, (the company,) loaned and advanced large sums of money to the party of the second part, and made, constructed and equipped one hundred and five miles of the railroad of the said party of the second part, in the State of Minnesota, and the said party of the second part is indebted to the said parties of the first part in a large sum of money on account thereof:

"And whereas, the parties have agreed upon the terms of liquidation, settlement and payment of all such indebtedness, and the adjustment of the matters between them, on the terms hereinafter named:" (it then goes on to state how certain portions of the indebtedness have been and are to be paid, and continues:) "And whereas, the said party of the second part is, or claims to be, entitled to have and receive, under the several acts of congress passed in aid of the construction of said railroad, a certain number of acres of land, supposed to be about six hundred thousand acres, for constructing the portion of said railroad now constructed, to wit, one hundred and five miles of railroad:

"Now, therefore, for the residue of the said indebtedness of the said party of the second part to the said parties of the first part, the said party of the second part hath agreed to sell and convey to the said parties of the first part, as many acres of land heretofore granted by congress to the State of Minnesota as the said party of the second part shall receive from said state by reason of the construction of the portion of the Winona & St. Peter Railroad heretofore constructed, to wit: one hundred and five miles thereof, extending westwardly from Winona, excepting and reserving, nevertheless, any and all parts and parcels of such lands, (if any such there be,) which may be necessary for the track of said railroad, or the right of way, or any depot or depot grounds thereof, or any other purpose incidental to the operation of the said railroad, constructed or to be constructed, or any part thereof, which said lands hereinbefore agreed to be sold, shall be conveyed to the said parties of the first part, or as they shall in writing direct, whenever and as soon as the said party of the second part shall obtain the title thereto under such acts of congress. The lands to be conveyed as aforesaid, shall be selected as follows:" (it then proceeds that the lands shall be selected by commencing at Winona, and proceeding westward, taking all the lands along the line of the road, till the number of acres to which the company is entitled for the hundred and five miles is obtained, and proceeds:)

"And the said party of the second part agrees to acquire the title of said lands as fast as it may be permitted to do under said act of congress, and to release and convey to the said parties of the first part, or to such person or persons in such manner, and from time to time, as may be desired by the said parties of the first part, or their counsel, on the request of the said parties of the first part, or a majority of them, and will do any other act and thing necessary and proper to secure the said parties of the first part the said lands, and every part and parcel thereof, and the proceeds thereof, if it shall be hereafter determined that the same shall be sold by the said party of the second part, for the benefit of the said parties of the first part; and until the final arrangement shall be made in reference thereto, the title shall be held by the said party of the second part; and as some time is necessary to enable said parties of the first part to confer and agree upon the details in relation to the holding of the title, and the mode of disposing of said lands, this clause is inserted to express the agreement of the parties in relation thereto. * * *

"And the said party of the second part further agrees, in consideration aforesaid, that it will not, at any time hereafter, encumber, by mortgage or otherwise, the said lands hereinbefore described, and which, by the terms of this agreement, are to be conveyed to the parties of the first part, or as they shall direct.

"And the said parties of the first part further agree that all the expenses of procuring title to such lands, and the expenses of any and all conveyances which shall be made of said lands, shall be paid by the parties of the first part."

There was a stipulation by Barney and his associates to pay all the debts of the company up to November 1, 1867; but as the covenant to convey was not made to depend on that, it is not necessary to quote it.

The lands involved in these proceedings are a part of those described in the contract. After the making of this contract, the lands were conveyed by the state to the company, and they have never been conveyed by the company, nor disposed of, except by this contract, and except that in pursuance of it, they are held for sale, and contracted to be sold, and parcels of them sold by the company, from time to time, as purchasers can be procured. The contract is still in force and unchanged.

As appears from the contract, the entire consideration for the sale of the lands was received by the company before the contract was made. It is therefore a sale of the lands, with a covenant to convey. As it was not executed with the requisite formalities required for conveyances of real estate, the legal title remained in the company; but as the entire consideration had been paid, the equitable title passed to the purchasers, and the...