KERR, District Judge.
The United States brings this action to quiet title to a strip of land 150 feet wide traversing Section 35, Township 58 North, Range 98 West, of the 6th P.M., Park County, Wyoming, and comprising 30.12 acres.
For convenience and brevity the Northern Pacific Railway Company will be referred to as "Railway Company", the Continental Oil Company will be referred to as "Oil Company" and the United States will sometimes be referred to as "Government".
From the pleadings and evidence there emerges a single question: "Who owns the minerals underlying this strip of land?".
The basic facts can be stated and the relevant history briefly told as there appears to be no dispute as to the evidence in the case.
On July 2, 1864, Congress enacted a law (13 Stat. 365) granting to the Northern Pacific Railroad Company, its successors and assigns, for the purpose of aiding in the construction of a railroad and telegraph line to the Pacific coast every alternate section of public land, not mineral, designated by odd numbers, to the amount of twenty alternate sections per mile, on each side of the railroad line.
On August 30, 1890, Congress enacted a law (see Section 945, Title 43 U.S.C.A.) in which it was provided that in all patents for lands taken up after August 30, 1890, under any of the land laws of the United States, or on entries or claims validated by the Act of August 30, 1890, west of the one hundredth meridian that the Government should reserve from the lands patented a right of way thereon for ditches or canals constructed by the authority of the United States.
During the year of 1896 the Northern Pacific Railway Company acquired all of the property rights and interests of its predecessor, the Northern Pacific Railroad Company, including the rights authorized by the Act of July 2, 1864.
On June 17, 1902, Congress passed what is commonly referred to as the "Reclamation Act" (32 Stat. 388). This Act, among other matters, provided in Section 7, from which I quote:
"Sec. 7. That where in carrying out the provisions of this Act it becomes necessary to acquire any rights or property, the Secretary of the Interior is hereby authorized to acquire the same for the United States by purchase or by condemnation under judicial process, and to pay from the reclamation fund the sums which may be needed for that purpose, * * *". (Emphasis supplied.) 43 U.S.C.A. § 421.
Pursuant to the Act of Congress of 1864 the Railway Company selected Section 35 as an indemnity selection and on August 20, 1908, the United States issued its patent to the Railway Company conveying Section 35 in fee but failed and neglected to make a reservation for an easement or right of way for ditches or canals to be constructed by the authority of the United States as authorized by the Act of August 30, 1890.
On October 23, 1916, following considerable correspondence between the Railway Company and the United States, reference to which will be later made in this memorandum, and after the United States had prepared and furnished to the Railway Company a metes and bounds description of the 150 foot strip of land, the Railway Company executed and delivered to the United States a deed in words and figures, as follows:
"Wyoming Division.
"Contract No. 158
Deed No. 21767E.
"Northern Pacific Railway
Company.
"This Deed, made the twenty-third day of October, in the year of our Lord, one thousand nine hundred and sixteen, by the Northern Pacific Railway Company, a corporation of the State of Wisconsin grantor, to United States of America, grantee, Witnesseth:
"The grantor, in consideration of the sum of one dollar ($1.00) unto it paid, in pursuance of the provisions of the Act of June 17, 1902 (32 Stat. 388), the receipt whereof is acknowledged, grants, bargains, sells and conveys unto the grantee and assigns, the following described tracts of land, situate in the County of Park and State of Wyoming, towit:
(Description of premises conveyed.)
"To Have and to Hold the said lands and appurtenances, unto the grantee and assigns, forever.
"The grantor will forever Warrant and Defend the title to the premises.
"In Witness Whereof, the Grantor has caused these presents to be sealed with its corporate seal, and signed by its President the day and year first above written.
"Northern Pacific Railway
Company
"By Jule M. Hannaford
"President.
"(Corp. Seal)
"R. H. Reef
"Assistant Secretary.
"Signed, sealed and delivered
in the presence of
"E. W. Costello
"Russell H. Dick."
(Emphasis supplied.)
As will be observed from an examination of the above Deed, it contained neither exception nor reservation and no language indicating the land was conveyed for right of way or easement purposes only. The form of the deed is in substantial compliance with 66-201, 66-202, Wyoming Compiled Statutes, 1945.
Since the Railway Company rests its defense largely upon the correspondence exchanged between the parties prior to the execution of the deed it is appropriate to quote from the correspondence preceding the issuance of the above deed. On July 6, 1916, the Government advised the Railway Company, as follows:
* * * "An examination of the records of the United States Land Office shows that entry for this land was made subsequent to October 2, 1888, and that it is accordingly subject to the following provision of law:
"`That in all patents for lands hereafter taken up under any of the land laws of the United States or on entries or claims validated by this act west of the one hundredth meridian, it shall be expressed that there is reserved from the lands in said patent described, a right of way thereon for ditches or canals constructed by the authority of the United States.' (Act of Aug. 30, 1890-26 Stat. L., 391.)
"The entries or claims validated by that Act are such as may be asserted under entries made subsequent to October 2, 1888, as held by the Department in the circular of October 5, 1893. (See Vol. 17, p. 521, of the Decisions of the Department of the Interior relating to public lands.)
"It is intended to exercise the right conferred by this law, and to take the necessary right of way across the said lands for the construction and maintenance of the ditch or canal required in connection with the reclamation work authorized under the act of June 17, 1902." * * * (Emphasis supplied.)
On the same day the Government advised the Railway Company in another letter, as follows:
"In the construction of the Shoshone Project the Frannie or Northern Unit is to be developed this season, and in locating and constructing canals it appears that the Frannie Canal will cross Section 35, Township 58 North, Range 98 West, Sixth Principal Meridian, which is shown upon the project records to be in the ownership of the Northern Pacific Railway Company.
"It is the understanding of this office that this was an indemnity selection and as such is subject to the reservation contained in the act of August 30, 1890 (26 Stat., 391) and in such case this office is required to give notice on the form enclosed."
On July 12, 1916, the Railway Company in an inter-office memorandum stated:
"The Courts have decided that patents can only be issued where there is legislative authority for so doing, and that patents issued without such legislative authority are void, so that it may be that this patent may be held to be valid to the extent that congress had authorized its issuance; but, invalid as to that part where there had been a congressional prohibition; that is to say, invalid as to the right of way.
"As we have not sold this parcel of land and the District Counsel states that his understanding is that the government has the right of way, and asks to be advised if he is correct; it seems to me that we may avoid the question in the particular case by offering to give the government the right of way if they will indicate just what the government requires. We should arrange with Mr. Penn so that the easement we have agreed to give him for his oil pipe line will not conflict with the government canal.
"This brings up the question of the desirability of inserting in all our contracts for sale of indemnity lands west of the one hundredth (100th) meridian — an exception of the rights in the United States contained in the Act of August 30, 1890 with reference to ditches and canals regardless of whether our patents contain the reservation or not. We are now inserting such a clause in contracts for the sale of lands patented with the reservation, but the position now taken by the government seems to require us to protect all sales by a reference to the provisions of the Act of 1890." (Emphasis supplied.)
On July 13, 1916, the Railway Company advised the Government, as follows:
"Your letter of July 6th, addressed to Mr. Cooper has been received during his absence on a trip to the Pacific Coast. This is the first intimation that we have had that the Shoshone Project of the Reclamation Service affected in any way this company's property in Section 35-58N-98W. You are correct in stating that the Northern Pacific owns this land. We acquired it by patent dated August 20, 1908, under indemnity selection filed November 28, 1906. We have not sold this property but we have agreed to issue an easement for an oil pipe line thereacross. Whether or not there is conflict with the right of way desired by the Reclamation Service, I cannot say. Am now in communication with the pipe line company for more detailed information
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