United States v. Chicago, Milwaukee St Paul, Railway Company

• Decision Date: 17 October 1910
• Docket Number: No. 11,11
• Citation: 54 L.Ed. 1015,218 U.S. 233,31 S.Ct. 7
• Parties: UNITED STATES, Appt., v. CHICAGO, MILWAUKEE, & ST. PAUL, RAILWAY COMPANY
• Court: U.S. Supreme Court

218 U.S. 233

31 S.Ct. 7

54 L.Ed. 1015

UNITED STATES, Appt.,

v CHICAGO, MILWAUKEE, & ST. PAUL, RAILWAY COMPANY.

No. 11.

Argued April 26, 27, 1910.

Decided October 17, 1910.

Mr. Barton Corneau for appellant.

Mr. Charles e. Vroman for appellee.

Mr. Justice Harlan delivered the opinion of the court:

By an act approved March 3d, 1887, chap. 376 (amended by act of February 12th, 1896, chap. 18, and by act of March 2d, 1896, chap. 39), Congress provided for the adjustment of land grants theretofore made in aid of the construction of railroads, and for the forfeiture of unearned lands, and for the relinquishment or reconveyance to the United States of lands which had been certified or patented to or for the use of any railroad company. 24 Stat. at L. 556; U. S. Comp. Stat. 1901, p. 1895; 29 Stat. at L. 6, 42, U. S. Comp. Stat. 1901, pp. 1596, 1603.

If, upon completing such adjustment, it appeared that, from any cause, lands had been erroneously certified or patented by the United States, to or for the use of a railroad company, by, through, or under grant from the United States, to aid in the construction of a railroad, then it became the duty of the Secretary of the Interior to demand the relinquishment or reconveyance of such lands to the United States, whether within granted or indemnity limits; and if such demand was not complied with by a named time, then the Attorney General was to institute the necessary proceedings to cancel all patents, certificates, or other evidence of title issued for such lands, and to restore the title to the United States. Provision was made for the protection, by patents, of purchasers in good faith from the grantee company, and the Secretary of the Interior was required to demand, on behalf of the United States, 'payment from the company which has so disposed of such lands of an amount equal to the government price for similar lands;' and if payment was refused, within a time named, 'the Attorney General was to institute suits against the company for such amount.' Ibid.

Under the authority of that act, the present suit was brought by the United States in 1903. It relates to about 4,300 acres of lands in Kossuth, Palo Alto, and Dickinson counties, Iowa, which, the United States alleges, were erroneously patented (in 1880) to the defendant railway company. That company sold the lands to purchasers in good faith, and refuses to account to the United States for the proceeds of such sales.

The relief asked is a decree compelling the railway company to account for such proceeds, and declaring such indebtedness to be a lien upon all funds in its hands realized from the above sales. The company took issue with the government by answer, but before the cause was heard, the material facts were stipulated by the parties. The circuit court dismissed the bill, and its judgment was affirmed by the circuit court of appeals.

In order that the grounds upon which the lower courts proceeded may fully appear, the circumstances under which the defendant railroad company became connected with the lands must be stated.

By an act passed May 12th, 1864, chap. 84, Congress, in aid of the construction of certain railroads, granted to the state of Iowa, for the use and benefit of the McGregor Western Railroad Company, 'every alternate section of land designated by odd numbers for ten sections in width on each side of said roads; but, in case it shall appear that the United States have, when the lines or routes of said roads are definitely located, sold any section or any part thereof, granted as aforesaid, or that the right of pre-emption or homestead settlement has attached to the same, or that the same has been reserved by the United States for any purpose whatever, then it shall be the duty of the Secretary of the Interior to cause to be selected, for the purposes aforesaid, from the public lands of the United States nearest to the tiers of sections above specified, so much land in alternate sections, or parts of sections, designated by odd numbers, as shall be equal to such lands as the United States have sold, reserved, or otherwise appropriated, or to which the right of homestead settlement or pre-emption has attached, as aforesaid, which lands thus indicated by odd numbers and sections, by the direction of the Secretary of the Interior, shall be held by the state of Iowa for the uses and purposes aforesaid: Provided, That the lands so selected shall in no case be located more than twenty miles from the lines of said roads: Provided, further, That any and all lands heretofore reserved to the United States by any act of Congress, or in any other manner by competent authority, for the purpose of aiding in any object of internal improvement or other purpose whatever, be, and the same are hereby, reserved and excepted from the operation of this act, except so far as it may be found necessary to locate the route of said roads through such reserved lands, in which case the right of way shall be granted, subject to the approval of the President of the United States.' 13 Stat. at L. 72. The provisions of this act were duly accepted by the state in 1866. Laws of Iowa, 1866, chap. 42, p. 189.

The McGregor & Western Railroad Company failed to comply with the conditions of the above act. Thereupon, all lands and rights to land granted to it by the act of 1864 (the lands now in dispute being part of those so granted) were 'absolutely and entirely resumed by the state of Iowa,' by an act of February 27th, 1868, which declared that 'the same be and are as fully and absolutely vested in the state as if the same had never been granted to said railroad company.' Laws of Iowa, 1868, p. 20. The state then, by an act of March 31st, 1868, gave the benefit of the grant for the road in question to the McGregor & Sioux City Railway Company, which accepted the terms prescribed by that act. Laws of Iowa, 1868, chap. 58, p. 70. But that company also failed to comply with the terms of the grant, and the lands and rights of lands granted were again resumed by the state, and afterwards were passed upon certain terms and conditions to the Chicago, Mil- waukee, & St. Paul Railway Company, by an act passed February 27th, 1878. The latter company accepted the provisions of that grant, and, in recognition of its rights, the United States, in 1880, patented to the state for the benefit of that company the following lands, covered by the act of 1864: 320 acres in Dickinson county, by patent of April, 1880; 3754.81 in Kossuth and Palo Alto counties. These lands embraced all sued for except two tracts aggregating 200 acres in Kossuth county, to which the present defendant asserted no title. Laws of Iowa, 1878, chap. 21, p. 18. Upon compliance with the terms and conditions prescribed in that act, the governor of Iowa was authorized to patent and transfer to the present defendant, the Chicago, Milwaukee, & St. Paul Railway Company, the lands mentioned in the act of Congress of 1864.

In 1864 and 1869 maps of definite location, designating the line of said road in Iowa, as indicated in the act of 1864, were filed in the office of the Commissioner of the General Land Office.

It is alleged in the bill of complaint that, at the date of such definite location, all the lands the proceeds of the sale of which the government now claims, by which were within the 10-mile or place limits of the railroad, were covered by existing claims of record in the office of the Commissioner of the General Land Office, consisting of homestead entries, pre-emption declaratory statements, warrant locations, etc., and were pending before the Department of the Interior for adjudication. If that were true, then, by the very terms of the act of Congress, the lands in question would have been excepted from the grant of 1864. But the defendant denied in its answer that such fact existed, and it does not appear from the evidence that any homestead entry, pre-emption, declaratory statement, or warrant location had been made prior to the definite location of the line of the railroad. On the contrary, it was stipulated in the case that prior to and on August 30th, 1864,—which was after the passage by Congress of the original granting act, and was the date of the filing of the plat of definite location of the road,—none of the lands described in the bill of complaint had been covered by any homestead entry, pre-emption, declaratory statement, or warrant location or other existing claims of record in the office of the Commissioner of the General Land Office. In that view, and if this were the whole case, then, beyond all question, the law would be in favor of the railway company; for the grant of 1864 was one in praesenti for the purposes therein mentioned, and according to the settled doctrines of this court, the beneficiary of the grant was entitled to the lands granted in place limits which had not been appropriated or reserved by the United States for any purpose, or to which a homestead or pre-emption right had not attached prior to the definite location of the road proposed to be aided. The grant plainly included odd-numbered sections, within 10 miles on each side of the road, which were part of the public domain, not previously appropriated or set apart for some specific purpose at the time of the definite location.

But the government insists that before the passage of the act of 1864 these lands had been reserved by what was done under or in execution of what is known as the swamp land act of September 28th, 1850 [9 Stat. at L. 519, chap. 84, U. S. Comp. Stat....