United States v. Southern Oregon Co.

• Decision Date: 12 July 1915
• Docket Number: 3701.
• Citation: 225 F. 560
• Parties: UNITED STATES v. SOUTHERN OREGON CO.
• Court: U.S. District Court — District of Oregon

225 F. 560

UNITED STATES v. SOUTHERN OREGON CO.

No. 3701.

United States District Court, D. Oregon.

July 12, 1915

This is a suit on the part of the general government to have forfeited to it substantially the entire land grant made by Congress, of March 3, 1869, to the state of Oregon to aid in the construction of a military wagon road from Roseburg, in Douglas county, to Coos Bay, in Coos county. The grant is of the odd-numbered sections to the extent of three sections on each side of the line of the road, with indemnity limits of six miles.

Among the provisions of the first section of the act are these 'Provided, that the lands hereby granted shall be exclusively applied to the construction of said road and to no other purpose, and shall be disposed of only as the work progresses: Provided further, that the grant of lands hereby made shall be upon the condition that the lands shall be sold to any one person only in quantities not greater than one quarter section, and for a price not exceeding two dollars and fifty cents per acre.'

Section 2 provides that 'The lands hereby granted to said state shall be disposed of by the Legislature thereof for the purpose aforesaid, and for no other.'

Section 5 provides that when the Governor of the state shall certify to the Secretary of the Interior that 10 continuous miles of said road are completed, then a quantity of the land granted not to exceed 30 sections, may be sold, and so on from time to time, until said road shall be completed; completion being required within five years, with a further provision that, if not completed within that time, the lands remaining unsold shall revert to the United States.

Section 6 requires that the Surveyor General shall cause the lands granted 'to be surveyed at the earliest practical period after said state shall have enacted the necessary legislation to carry this act into effect.' 15 Stat. 340, 341.

On October 22, 1870, the Legislative Assembly of the state of Oregon, by an act thereof, granted to the Coos Bay Wagon Road Company all lands, right of way privileges, and immunities as granted to the state by the act aforesaid, 'for the purpose of aiding said company in construction the road mentioned and described, in said act of Congress, upon the conditions and limitations therein prescribed. ' Laws 1870, p. 40.

On June 18, 1874, Congress passed a supplemental act, providing for the issuance of patents to the lands granted, to the state of Oregon, on compliance with the terms of the original act unless the state 'shall by public act have transferred its interests in said lands to any corporation or corporations, in which case the patents shall issue from the General Land Office to such corporation or corporations upon their payment of the necessary expenses thereof Provided, that this shall not be construed to revive any land grant already expired nor to create any new rights of any kind except to provide for issuing patents for lands to which the state is already entitled.' 18 Stat. 80, c. 305 (Comp. St. 1913, Sec. 4871).

The road was completed within the time limited, and in due course patents were issued by the general government to the Coos Bay Wagon Road Company. Prior to May 31, 1875, the company sold divers small tracts of the land, aggregating 6,963 acres, and on that date it entered into a contract with one John Miller to sell and convey to him 96,676.96 acres of the granted lands. In pursuance of the contract, the company conveyed to Miller, on the same date, 35,534 acres by deed, and the wagon road by another deed. Subsequently Miller conveyed to Collis P. Huntington, Charles Crocker, Leland Stanford, and Mark Hopkins, and they later, by mesne conveyances, to Wm. H Besse, who, on December 29, 1883, conveyed to Russell Gray, and he, in turn, on January 5, 1884, conveyed to the Oregon Southern Improvement Company, an Oregon corporation. In further pursuance of the Miller contract, the Road Company, on January 7, 1884, conveyed the remaining 61,143.37 acres to Wm. H. Besse, who, on June 4th following, conveyed to the Oregon Southern Improvement Company. The property was at about the same time conveyed by the Improvement Company by certain trust deeds to secure certain bonds, which deeds were later foreclosed, and the property sold at master's sale and conveyed to the Southern Oregon Company, the defendant, also an Oregon corporation.

Subsequent to May 31, 1875, 4,470 acres of the lands have been sold to individuals, namely, 8 sales by the Road Company, 6 by Crocker, 2 by the Improvement Company, and 14 by the defendant company. Other than these, no lands of the grant have been sold either in large or small tracts.

The testimony in the case indicates that the holders have, almost from the inception of the grant, evinced a purpose not to sell in quantities not exceeding 160 acres to any one person, or for a price not exceeding $2.50 per acre. Indeed, the sales made by the Road Company, the patentee, are in derogation of the terms of the grant as it respects quantity, and the subsequent holders have steadily refused, with rare exceptions, to sell in compliance with the terms of the grant; and the defendant, the present holder, does now refuse so to dispose of the lands, claiming to be the owner of the entire fee-simple interest therein, freed of any obligations whatsoever to the government respecting them.

Clarence L. Reames, U.S. Atty., of Portland, Or., Constantine J. Smyth, Sp. Asst. Atty. Gen., of Omaha, Neb., and Fred. C. Rabb, Sp. Asst. Atty. Gen., of Portland, Or.

Dolph, Mallory, Simon & Gearin, of Portland, Or., for defendant.

WOLVERTON, District Judge (after stating the facts as above).

The government is seeking a forfeiture of this grant, on the ground that the clause requiring the land to be sold in quantities not greater than 160 acres to any one person, and for a price not exceeding $2.50 per acre, constitutes a condition subsequent, and that there has been a breach of the condition. The defendant insists that the proviso, alluding to this provision in the grant, is repugnant to the grant, because a limitation on the right of alienation, and therefore void. The position is sought to be substantiated by reason of the alleged fact that the lands could not be sold in 160-acre tracts for any price. The testimony does tend to show that, up to perhaps 15 years ago, there was slack sale for the lands in any quantities. It cannot be asserted, however, that since that time by far the greater proportion of the granted lands could not have been sold in strict conformity with the provisions of the grant. The defendant company having declined and refused so to dispose of its lands, there has been a positive noncompliance with the letter of the grant.

These contentions, both of the government and of the defendant, have been put to rest, contrary to the views of counsel, by the Supreme Court, in the case of Oregon & California Railroad Co. et al. v. United States, 238 U.S. 393, 35 Sup.Ct. 908, 59 L.Ed. . . ., originating in this court and involving the construction of similar provisions contained in grants of like character, in a very able and exhaustive opinion by Mr. Justice McKenna. The contention of the defendant there was in reality slightly different from that made here; it being that the provisos constituted restrictive and unenforceable covenants; but, for all practical purposes, it must be considered the same as here. At least, the reasoning and consideration of the Supreme Court reaches and disposes of both phases of the position advanced. I may be pardoned if I quote extensively from the opinion, for it seems to dispose of every aspect of the contentions stated.

'Congress, therefore,' says the court, 'had under consideration remedies for violations of the provisions of the act and adjusted them according to what it considered the exigency. As a penalty for not completing the road as prescribed Congress declared only for a reversion of the lands not then patented, for not maintaining it in repair and use Congress reserved the right temporarily to sequester the road, and yet for a violation of the provision for sale to settlers it is urged that Congress condemned to forfeiture, not only the lands then unpatented, but those patented. Mark the difference. Was noncompletion of the road of less consequence than settlement along its line?--not necessarily complete settlement, but any settlement-- the refusal, it might be, of the acceptance of a single offer of settlement, or even, as it is contended, of making provision for settlement, being of greater consequence and denounced by more severe penalty than the declared conditions, that is, assent to the act, completion of the road, and its maintenance. This is difficult, if not impossible, to believe.

'It appears, therefore, that the acts of Congress have no such certainty as to establish forfeiture of the grants as their sanction, nor necessity for it to secure the accomplishment of their purposes, either of the construction of the road or sale to actual settlers; and we think the principle must govern that conditions subsequent are not favored, but are always strictly construed, and where there are doubts whether a clause be a covenant or condition, the courts will incline against the latter construction, indeed, always construe clauses in deeds as covenants rather than as conditions, if it is possible to do so. 2 Washburn on Real Property, 4. And this because 'they are clauses of contingency on the happening of which the estates granted may be defeated.' And it is a general principle that a court of equity is reluctant to (some authorities say never will) lend its aid to enforce a forfeiture.

'By this conclusion do we leave the provisos meaningless and the...