United States v. New Orleans Pac. Ry. Co. (Three Cases), 248 U.S. 507 (1918)
United States v. New Orleans Pac. Ry. Co. (Three Cases), 248 U.S. 507 (1918)
507
39 S.Ct. 175
63 L.Ed. 388
Mr. Assistant Attorney General Francis J. Kearful, for the United states.
[Argument of Counsel from page 508-509 intentionally omitted]
Messrs. Mark Norris, of Grand Rapids, Mich., F. G. Hudson, of Monroe,
La., and H. H. White, of Alexandria, La., for appellees.
[Argument of Counsel from page 509-510 intentionally omitted]
Mr. Justice VAN DEVANTER delivered the opinion of the Court.
These suits are so related that they may be disposed of in a single opinion.
Three tracts of land in Vernon parish, Louisiana, each containing 160 acres, are
in controversyone in each suit. All are in odd-numbered sections within the
limits of the grant of March 3, 1871, to the New Orleans, Baton Rouge &
Vicksburg Railroad Company (16 Stat. 573, c. 122)one being within the
primary and two within the indemnity limits. All were patented under the grant
and after-wards sold by the patentee, the purchasers paying a fair price.
Through successive sales the title under the patents was passed along to other
purchasers. Whether the latter shall be decreed to hold the title in trust for
certain homestead claimants whose claims are founded on settlements
antedating the issue of the patents, and also the definite location of the road, is
the matter in controversy.
The suits were brought by the United States, the defendants being the patentee
and the present holders of the title under the patents. The relief prayed was that
the patents be canceled, or, if that be not done, that the homestead claimants be
decreed to be the equitable owners and that a trust in their favor be declared and
enforced. Of these alternative prayers, the latter was better suited to the case
stated. By leave of the court the homestead claimants intervened, set forth their
claims, alleged that the patentee and all the purchasers took the title with full
notice of their claims, asserted that the title was held in trust for them and
sought relief accordingly. Various defenses were set up in the answers, such as
the lapse of the period prescribed for bringing suits to cancel patents, laches on
the part of the homestead claimants and good faith on the part of the
purchasers. On the final hearing the District Court entered a decree for the
defendants in each of the suits, and this was affirmed in the Circuit Court of
Appeals. 235 Fed. 841, 846, 149 C. C. A. 153, 158. The District Court did not
make any specific finding of fact or assign any particular reason for its decree,
and the Circuit Court of Appeals rested its decision on three grounds: (a) That
in so far as the suits sought a cancellation of the patents they were barred
because not brought within the time prescribed by law; (b) that, if a trust had
arisen in favor of the homestead claimants, its enforcement was a matter in
which the United States was without interest or concern; and (c) that, if such a
trust had arisen, it had become unenforceable by reason of inexcusable laches
on the part of the homestead claimants.
3
The grant of March 3, 1871, was made to the New Orleans, Baton Rouge &
Vicksburg Railroad Company, 'its successors and assigns,' to aid in the
construction of a railroad from New Orleans to Shreveport, and embraced all
the odd-numbered sections of public land within 20 miles (the primary limits)
on each side of the road, subject to enumerated exceptions, one of which
excluded any land to which a pre-emption or homestead claim may 'have
attached' at the time the line of the road was definitely located. In lieu of the
excepted lands others in odd-numbered sections within prescribed indemnity
limits were to be selected. Whenever, and as often as, 20 consecutive miles of
road were completed and put in running order patents were to be issued for the
lands opposite to and coterminous with that portion of the road. The entire road
was to be completed within five years. Within two years the company was to
designate the 'general route' of the road and to file a map of the same in the
Department of the Interior. There was no provision directly calling for a map
showing the definite location of the road, but that such a map was to be filed
was plainly implied.
The general route of the road was designated on a map filed and accepted in
November, 1871. The Secretary of the Interior, complying with an express
provision in the granting act, then caused the odd-numbered sections within the
primary limits to be withdrawn from entry and sale. That withdrawal became
effective in December, 1871, and included the tract in controversy in No. 166.
The Secretary also ordered a like withdrawal of the odd-numbered sections
within the indemnity limits, but as the granting act did not authorize, but in
effect prohibited, their withdrawal, this part of the order was of no effect.
Southern Pacific R. R. Co. v. Bell, 183 U. S. 675, 22 Sup. Ct. 232, 46 L. Ed.
383.
5
No part of the railroad was constructed by the original grantee, and on January
5, 1881, it transferred the grant to the New Orleans Pacific Railway Company.
At that time this company had a line of completed railroad extending from New
Orleans to Whitecastle in the direction of Shreveport, and thereafter, during the
years 1881 and 1882, it constructed, completed and put in running order, the
road from Whitecastle to Shreveport. It also filed with the Secretary of the
Interior, on November 17, 1882, a map showing the definite location of the part
of the road opposite the tracts now in controversy, and the map was accepted.
The road as completed was examined and accepted, and the company was
recognized by the Secretary of the Interior, the Attorney General and the
President, as rightly entitled to patents for the lands falling within the terms of
the grant and lying opposite the road from Whitecastle to Shreveport.
Thereafter, in 1885, patents for a large part of the lands were issued to the New
Orleans Pacific Railway Company, the assignee of the grant. Other lands
remained as yet unpatented. About that time this company's rights under the
grant were persistently questioned by persons who insisted that the grant was
not assignable, that all rights under it were extinguished when the road was not
constructed within the five years prescribed therefor, and that in any event a
forfeiture could and should be declared for the failure to comply with that
condition, although the road had been completed in the meantime. Because of
this the Secretary of the Interior, although not acceding to the insistence,
suspended the issue of patents and called the matter to the attention of
Congress, saying in that connection that the company had
'* * * purchased a portion of a line of a railroad already built from New Orleans
to Whitecastle, a distance of 68 miles; as to this portion of the road the company
waived claim to the land granted. The residue of the road, from Whitecastle to
Shreveport, was built by the company upon the belief of the full validity of
their right to the land granted, and without this benefit of the grant the road
would not have been built. The government railroad examiner reports the road
substantially built and equipped, and it would not appear to comport with good
faith to those who invested their money on the basis of the grant to take
advantage of any technical defect, if such exists, in the transfer to the company.
I would, therefore, respectfully suggest for the consideration of Congress the
propriety of passing an act curative of defect, if any exists, in the transfer to the
New Orleans Pacific Company, and vesting the title, originally granted to the
New Orleans, Baton Rouge & Vicksburg Rail road Company from Whitecastle
to Shreveport, in the New Orleans Pacific road.'
8
With the matter thus brought to its attention Congress passed the Act of
February 8, 1887,1 c. 120, 24 Stat. 391. By its first section a part of the grant,
with which we are not here concerned, was declared to be forfeited and was
restored to the public domain. By its second section the part of the grant on the
west side of the Mississippi river opposite to and coterminous with the road
from Whitecastle to Shreveport, which was constructed by the New Orleans
Pacific Railway Company as assignee of the grant, was confirmed to that
company save as it was declared in a proviso
'that all said lands occupied by actual settlers at the date of the definite location
of said road and still remaining in their possession or in possession of their heirs
or assigns shall be held and deemed excepted from said grant and shall be
subject to entry under the public land laws of the United States.'
10
By this section the map of November 17, 1882, was required to be treated as
the 'definite location' of the part of the road opposite the lands now in
controversy. By the third section the confirmation in the second was
conditioned on the acceptance by the company of the provisions of the act. The
fourth section is not material here. The fifth section authorized the Secretary of
the Interior to make all needful rules and regulations for carrying the act into
effect. The sixth section confirmed the patents already issued to the company,
but with the express qualification that
11
'The Secretary of the Interior is hereby fully authorized and in structed to apply
the provisions of the second, third, fourth, and fifth sections of this act to any of
said lands that have been so patented, and to protect any and all settlers on said
lands in all their rights under the said sections of this act.'
12
The company duly accepted the provisions of the act and in that way assented
to and became bound by every provision in itthe unfavorable as well as the
favorable. The provisions of special importance here are the proviso in section
2 and the latter part of section 6. By one all lands occupied by actual settlers at
the time of the definite location of the road and remaining in their possession,
or that of their heirs or assigns, were 'excepted from said grant' and made
'subject to entry under the public land laws'; and by the other the Secretary of
the Interior was authorized and instructed to apply the same rule to all lands for
which patents already had been issued, and to protect all settlers on such lands
in their rights under the act.
13
It does not admit of any doubt that these provisions, when accepted, became
applicable to all the unpatented lands and to such of the patented lands as had
not then been sold by the company. Whether they also became applicable to
such of the patented lands as were sold theretofore is a question which will be
considered presently.
14
Of the lands in suit, 80 acres were both patented and sold before the act was
passed or accepted, 280 acres were patented before the act was passed and sold
after it was accepted, and 120 acres were both patented and sold after the
acceptance. Thus all but 80 acres came certainly within the reach of the two
provisions as accepted. The 80 acres, as to which the question is left open for
the moment, are part of the tract in controversy in no. 166.
15
As before stated, the part of the road opposite these lands was definitely located
November 17, 1882. At that time there was an actual settler on each of the
160acre tracts. In each instance the settler had the qualifications named in the
homestead law, was expecting to acquire the title under that law, had placed on
the land a habitable dwelling in which he and his family were living, had
cleared, fenced and was cultivating several acres and was asserting a claim to
the entire tract. The settler in No. 164 continued his residence, occupancy and
cultivation until 1896, when he died, and thereafter his widow continued the
occupancy and cultivation, either personally or through tenants. The settler in
No. 165 continued his residence, occupancy and cultivation to the time of the
hearing in the District Court. And the settler in No. 166 continued his
residence, occupancy and cultivation until 1885, when he sold his
improvements and possessory right to another, who had the requisite
qualifications and wished to acquire the title under the homestead law. The
assignee then settled on the tract and thereafter resided thereon with his family
and continued the occupancy and cultivation begun by his assignor. While in
No. 164 the widow, and in No. 166 the assignee, succeeded to the rights of the
original settler, we shall speak of all the claims as if the original settlers were
the present claimants.
16
The existence and extent of these claims were well known among the people of
the neighborhood, and the improvements and evidences of inhabitancy and
cultivation on each tract were such that any one purchasing under the land grant
would be charged with notice of the nature and extent of the settler's claim.
17
The settlers applied at the local land officeone in 1888, one in 1890 and the
17
The settlers applied at the local land officeone in 1888, one in 1890 and the
other in 1896to make homestead entries of the lands and the railway
company opposed their applications. Hearings were had and the contests
ultimately were determined in favor of the settlersone in 1893, one in 1896
and the other 1898. The decision in each contest was to the effect that the
proofs established the right of the settler to receive the title under the proviso in
section 2 and the latter part of section 6. All the lands had then been patented,
and the settlers were advised by the regulations which the Secretary of the
Interior had adopted, as also by the decisions in the contests, that the land
department would secure a relinquishment of the outstanding title for their
benefit. 5 L. D. 688. In 1892, before the contests were decided, the company
and the trustees of its land grant had filed the following stipulation with the
Secretary of the Interior. New Orleans Pac. Ry. Co., 15 L. D. 576:
18
'That in cases where patents have issued to said railway company for lands
which have been or may hereafter be adjudged by the Commissioner of the
General Land Office to have been in the possession of actual settlers at date of
the definite location of said railway company's road, and title is in said railway
company, said railway company and said trustees agree to make without delay
conveyance thereof to the United States; and where such lands have been sold
by said railway company to third persons, said railway company undertakes to
recover title thereto without delay and convey the same to said settlers or to the
United States, and the said trustees undertake to join in such conveyances and
to do all acts necessary on their part to enable the railway company to carry out
this agreement and stipulation.'
19
After the contests were decided the land department called on the company to
reconvey or surrender the title, but this was not done; and the Secretary of the
Interior requested the Attorney General to institute judicial proceedings to
secure for the settlers the protection promised in the act of 1887, which the
company had accepted. Acting on this request the Attorney General, on
February 27, 1901, brought a suit in the name of the United States against the
railway company and others to cancel and annul the patents to these and many
other lands similarly situated. Various obstacles were encountered in the
prosecution of that general suit, one being that the purchasers from the
company were not made parties, and on January 21, 1915, while that suit was
still pending, the Attorney General brought the suits with which we are now
concerned.
20
As the patents were issued before, and the suits were brought more than five
years after, the Act of March 2, 1896, c. 39, 29 Stat. 42 (Comp. St. 49014903), the prayer that the patents be canceled must be put out of view, and the
alternative prayerthat the title under the patents be declared to be held in trust
The right of the United States to maintain the suits is questioned on the ground
that the enforcement of the asserted trust is a matter in which the United States
is without interest or concern. Were the premise tenable, the conclusion would
follow as of course. But the premise is not tenable. A pecuniary interest in the
relief sought is not essential; it is enough if there be an interest or concern
arising out of an obligation to those for whose benefit the suits are brought.
United States v. San Jacinto Tin Co., 125 U. S. 273, 285, 286, 8 Sup. Ct. 850,
31 L. Ed. 823; United States v. Beebe, 127 U. S. 338, 8 Sup. Ct. 1083, 32 L.
Ed. 121; United States v. American Bell Telephone Co., 128 U. S. 315, 367, 9
Sup. Ct. 90, 32 L. Ed. 450; Heckman v. United States, 224 U. S. 413, 439, 32
Sup. Ct. 424, 56 L. Ed. 820. By the act of 1887 the United States undertook to
invest settlers coming within the provisions of that act with the title to the lands
in their possession, and also 'to protect' them in that right. This meant that they
were to receive a clear title. The act charged the Secretary of the Interior with
the duty of adopting appropriate measures to that end, and when other means
failed he invoked the aid of the Attorney General, who brought these suits.
Through them the United States seeks to fulfill its obligation under the act to
the settlers, and in this it has the requisite interest or concern.
22
When the United States sues to enforce a public right or to protect a public
interest the defense of laches is not available; but when the suit, although in the
name of the United States, is brought for the benefit of a private person his
laches may be interposed with like effect as if he were suing. United States v.
Beebe, supra. Applying this view, the court below reached the conclusion that
the settlers had been guilty of such laches as would bar them from the relief
sought. We are unable to concur in that conclusion. The occupancy of the
settlers was both peaceable and continuous and gave notice of their equitable
rights. Their claims were asserted before the land department, were the subjects
of hearings and appeals, and were by it sustained. The land officers,
conformably to the published regulations, undertook to secure a restoration of
the outstanding title, and to that end the suit of 1901 was brought. The settlers
were justified in believing that their rights were being protected, as was
required by the act of 1887. No attempt was made to disturb their occupancy or
to assert any right against them. We therefore think it properly cannot be said
that they were guilty of any such laches as precluded them from obtaining relief
in equity. As a general rule, one who is in peaceable possession under an
equitable claim does not subject himself to a charge of laches for mere delay in
resorting to equity to establish his claim against the holder of the legal title
where the latter manifests no purpose to disturb him or to question his claim.
Ruckman v. Cory, 129 U. S. 387, 389-390, 9 Sup. Ct. 316, 32 L. Ed. 728. We
think that rule is applicable here.
23
On the merits, we are of opinion that the act of 1887, as accepted by the
company, operated to exclude from the grant and to subject to these settlement
claims all the lands in controversy, patented and unpatented, save the 80 acres
which are yet to be specially noticed. In so far as these lands were patented it
became the duty of the railway company to surrender the title, and in so far as
they were unpatented the act forbade the issue of patents to the company for
them. Intending purchasers were bound to take notice of the occupancy of the
settlers, and this, with the act of 1887, which was a public law, renders
untenable the claim that those who hold the title under the patents have the
status of bona fide purchasers. In these circumstances the settlers, whose claims
come within the proviso in section 2 and the latter part of section 6, are entitled
to have a trust in their favor declared and enforced.
24
The situation as to the 80 acres which were both patented and sold before the
act of 1887 was passed is not the same. Under an express provision of the act of
1871 they were withdrawn from entry and sale while they were yet vacant and
unclaimed, and the withdrawal was still in force in 1885, when they were
patented. No valid claim to them could be initiated by settlement or otherwise
in the presence of the withdrawal. Hamblin v. Sestern Land Co., 147 U. S. 531,
536, 13 Sup. Ct. 353, 37 L. Ed. 237; Wood v. Beach, 156 U. S. 548, 15 Sup. Ct.
410, 39 L. Ed. 528; Spencer v. McDougal, 159 U. S. 62, 15 Sup. Ct. 1026, 40
L. Ed. 76. They were part of an odd-numbered section within the primary limits
and opposite a 20-mile section of the road which was constructed, completed,
put in running order and accepted by the President before they were patented.
In other words, they were lawfully patented and when the company sold them,
in 1886, it had the right to do so. The purpose of the granting act in directing
that patents be issued as each section of twenty miles of road was completed
was to enable the company to sell the lands and realize on the grant. In these
circumstances the purchase was bona fide and the purchaser took the full title.
It follows that before the act of 1887 was passed the 80 acresdescribed as the
S. 1/2 of N. W. 1/4 of section 3, township 3 N., range 7 W., L. M.had passed
into hands where they were not within the reach of the act or the company's
acceptance. The fact that this land was sold before the act was passed seems
not to have been brought to the attention of the land departmentprobably
because the purchaser was not a party to the contest proceedings.
25
The contention is made that the portions of that act which are material here do
not embrace lands within the indemnity limits, but only those within the
primary limits. A survey of the entire act shows that the contention is without
merit.
26
27
28
The general history of the grant, together with the executive and legislative
action relating to it, up to the date of this act, is set forth at length in the
following: Senate Report No. 711, 47th Cong., 1st Sess.; 17 Op. A. G. 370;
Senate Ex. Doc. No. 31, 48th Cong., 1st Sess.; House Report No. 1556, 48th
Cong., 1st Sess.; House Ex. Doc. No. 1, pt. 5, p. 43, 49th Cong., 1st Sess.;
House Report No. 2698, 49th Cong., 1st Sess.; House Ex. Doc. No. 1, pt. 5, p.
49, 49th Cong., 2d Sess.