United States v. Missouri, Kansas & Texas Railway Co.

delivered the opinion of the court.

This is a suit in equity by the United States for the cancellation of certain patents for lands in Allen County, Kansas, of date respectively November 3,1873, March 19,1875, August

The institution of such a suit as this was recommended by the Secretary of the Interior in a communication addressed to the Attorney General under date of June 10, 1886. 4 Land Decisions, 573, 578 ; 5 Land Decisions, 280, 481. The present suit was not, however, brought until after the passage of the act of Congress of March* 3, 1887, .requiring the immediate adjustment by the Secretary of the Interior, in accordance with the decisions of this court, of all unadjusted land grants made by Congress to aid in the construction of railroads. 24 Stat. 556 , c. 376. That act made it the duty of the Attorney General to commence and prosecute suits for the cancellation of all patents, certification or other evidence of title issued for public lands, and to restore the title to the United States in all cases of lands appearing — upon the completion of such adjustments or sooner — to have been “ erroneously certified or patented, by the United States, to or for the use or benefit of any company claiming by, through or under grant from the United States, to aid in the construction of a railroad,” if such company neglected or failed, upon demand by the Secretary of the Interior, to relinquish or reconvey to the United States all such lands, whether within granted or indemnity limits. {Sections 1 and 2.)

The act also provided that a bona fide settler whose homestead or preemption entry had been erroneously cancelled on account of any railroad grant, or the withdrawal of public lands from market, should, upon application, be reinstated in all his rights and allowed to perfect his entry, by complying with the public land laws, provided he had not located another entry in lieu of the one so erroneously cancelled, or voluntarily abandoned his original entry ; and if a settler did not, within a reasonable time to be fixed by the Secretary of the Interior, make his application to be reinstated, all such unclaimed lands were required to be disposed of under the public land laws, with priority of right to bona fide purchasers, if any; then to bona fide settlers residing thereon. (Section 3.(

It was further provided that where a company had sold to citizens of the United States, or to persons who had declared their intention to become such citizens, as a part of its grant, lands not conveyed to or for its use, such lands being the numbered sections prescribed in the grant, and being coterminous with the constructed parts of the road, and where the lands so sold, were excepted from the operation of the grant to the company, it should be' lawful .for the Iona fide purchaser thereof from the company to make payment to the United States at the ordinary Government price for like lands, and thereupon patents should issue therefor to him, his heirs or assigns. All lands were excepted from these provisions which at the date of such sales were in the bona fide occupation of adverse, claimants under the preemption or homestead laws of the United States, and whose claims and occupation had not since been voluntarily abandoned; as to which excepted lands

Demurrers to the bill having been sustained, 37 Fed. Rep. 68 , and the suit dismissed, the United States .prosecuted the present appeal.

The lands in dispute are of two classes: 1. .Sum-numbered sections that are within the original ten-mile or place limits of the Leavenworth, Lawrence and Fort Gibson Railroad Company, subsequently ■ named the Leavenworth, Lawrence and Galveston Railroad Company, and to be hereafter, in this opinion, referred to as the Leavenworth Company. Those sections are also within the indemnity limits of the Missouri, Kansas and Texas Railroad Company, originally named the Union Pacific Railroad Company, Southern Branch, and to be hereafter referred to as the Missouri-Kansas' Company, 2. Sbm-numbered sections within the common indemnity limits of both roads.

No question is presented in this case as to the outnumbered sections within either the place or the indemnity limits of the Leavenworth road.

In respect to each of the above classes of lands, the bill alleges that rights had attached under the homestead and preemption laws in favor of settlers; some, before the passage of the act, to be presently referred to, under which the Missouri-Kansas Company claims, and others after that date, but before the selection of such lands, by the direction, of the Secretary of the Interior, as indemnity lands for that company;

But the principal question raised by the demurrer is whether the Missouri-Kansas Company was entitled, under any circumstances whatever, to make up losses or deficiencies, occurring-in its place limits, from even-numbered sections within either, the place or indemnity limits of the Leavenworth road. This.

The grant made by the act of March 3, 1863, was of every alternate section of land, designated by odd numbers for ten sections in width on each side, in aid of the construction of the following roads and each branch thereof: First, a railroad and telegraph from the city of Leavenworth, Kansas, by the way of Lawrence and the Ohio City crossing of the Osage River, to the southern line of the State in the direction of Galveston Bay, in Texas, with a branch from Lawrence by the valley of the Wakarusa River to the point on the Atchison, Topeka and Santa Fé Railroad, where that road intersects the Neosho River; Second, a railroad from the city of Atchison, Kansas, via Topeka, to the western line of that State, in the direction of Fort Union and Santa Fé, New Mexico, with a branch where the latter road crosses the Neosho, down said Neosho Yalley to the point where the road, first named, (the Leavenworth road,) enters the Neosho Yalley. In respect to each road and branches, it was provided that “ in case it shall appear that the United States have, when the lines or routes of said road and branches are definitely fixed, sold any section or any part thereof granted as aforesaid, or that the right of preemption 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 shalLbe 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 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 rights of preemption or homestead settlements, have attached as aforesaid ; which lands thus indicated by odd numbers, and selected by direction of the Secretary of the Interior as aforesaid, shall be held by the State of Kansas for the use and purpose aforesaid : Provided, That the land to be so selected shall, in no

The second section of the act provided that “ the sections and parts of sections of land which, by such grant, shall remain to the United States, within ten miles on each side of said road and branches,” [that is, the ¿íxm-numbered sections within the place or granted limits,] “shall not be sold for less thorn, double the minimum price of the public lands when sold / nor shall any, of said lands become subject to sale at private entry until the same shall have been fast offered at public sale to the highest bidder, at or above the increased'minimum price, as aforesaid: Provided, That actual and bona fide settlers, under the provisions of the preemption and homestead laws of the United States, may, after due proof of settlement, improvement, cultivation and occupation, as now provided by law, purchase the same at the increased minimum price, aforesaid: And provided, also, that settlers on any of said reserved sections, under the provisions, of the homestead law, who improve, occupy and cultivate the same for a period of five years, and comply with the several conditions and requirements of said act, shall be entitled to patents for an amount not exceeding-eighty acres each, anything in this act to the contrary notwithstanding.”

The State of Kansas, by an act approved February 9, 1864, accepted the above grant, upon the terms and conditions prescribed by Congress; and gave the benefit of it, in respect to the railroad and telegraph first mentioned in the act of 1863, to the Leavenworth Company; and in respect to the other railroad and telegraph, to the Atchison, Topeka and .Santa Fé Railroad Company, formerly the Atchison and Topeka Railroad Company, to be hereafter referred to as the Atchison Company.

By the act of July 1, 1864, Congress granted to Kansas, to

The above acts of Congress of 1863 and 1861 were accepted; and thereafter, by writing, of date March 19, 1866, the Atchison Company sold, assigned and transferred to the Union Pacific Railroad Company, Southern .Branch, a corporation of Kansas — the Missouri-Kansas Company — all the rights, titles, interests, franchises, privileges, immunities and liabilities held, acquired, possessed and enjoyed for constructing, maintaining, operating and enjoying a railroad, from a point at or near Fort Riley down the Neosho Yalley to where the Leavenworth road might enter the Neosho Yalley; “which rights, titles, interests, franchises, authorities, immunities and liabilities accrued to and became vested ” - in the assignor company “ by virtue of its acceptance of the provisions of the act of the .legislature of- the State of Kansas; ” the assignee company agreeing to perform all the duties, and to meet all the obligations and liabilities, assumed by the other company in respect to the said road.' This assignment was ratified by a joint resolution of the legislature of Kansas passed February 27, 1867.

The act of July 26, 1866, provided, among other things, that for the purpose of aiding the Union Pacific Railroad Company, Southern Branch, [the Missouri-Kansas Company,]- a corporation organized under the laws of the State of Kansas, to construct and operate a railroad from Fort Riley, Kansas, 'or near said militarys reservation, thence down the valley of

The contention of the government is, that the lands in dispute— the ew;;-numbered sections within both the place limits

A reservation clause, such as the one in the act of 1866,. first-appeared in the act of Congress of September 20, 1850,.grant-ing lands to the State of Illinois in aid of the construction of what is now the Illinois Central Railroad, é Land Decisions, 575. Congress, by an act passed March 2, 1827, had made a similar grant in aid of the construction of the Illinois and Michigan Canal, with a reservation of each alternate section .to the United States. In order that the canal might have the full benefit of the lands covered by the grant of 1827, the following clause was inserted in the act of 1850 ; “ And provided fy,riher, That any and all lands reserved to the United -States by- the act entitled ‘ An act to grant a quantity of land to the

Having regard to the words and the conceded object of the reservation clause, we are of opinion that the position of the Government, in respect to the évm-numbered sections, within the ten-mile or place limits of the Leavenworth road, is -well taken. The grant, in the act of 1863, was of every alternate-section of land designated by odd numbers, for ten sections in width on each side of the road, with the right, in case of loss of lands, within the place limits, from any of the specified causes, to select indemnity lands (not, generally, from the public lands of the United States, but) from “the public lands _of the United States nearest to tiers of sections above specified,” that is, nearest to • the tiers of sections in place limits, and

The defendants insist,' however, that they were not “reserved to the United States” within the meaning of the act of 1866. It is true, they were not reserved to aid in the con-' struction of the Leavenworth road, or for any specified object of internal improvement. But the act of 1866 does not restrict the objects of the reservation to works o.f internal improvement. If the reservation in question was by Congress, or other competent authority, for any purpose whatever, then the. lands so reserved were excluded from the operation of the act of 1866. Now, it is clear that the ¿yen-numbered sections,within the place limits-of the Leavenworth road, were reserved by the act of 1863, for purposes distinctly declared by Congress,’and which might be wholly defeated if the Missouri-Kansas Company were permitted to take them as indemnity lands under the act of 1866. The requirement in the second section of the act of 1863, that the “ reserved sections ” which “remain to the United States,” within ten miles on each side of the Leavenworth road, “shall not be sold for less than double the minimum price of the public lands when sold,” nor be subject to sale at private entry until they 'had been offered at public sale to the highest bidder, at or above the increased minimum price; the privilege given to actual Iona fide settlers,' under the preemption and homestead laws, to purchase those lands at the increased minimum price, after due proof of settlement, improvement, cultivation and occupancy ; and the right accorded- to settlers on such sections under the homestead laws, improving, occupying and cultivating the same, to have patents for not exceeding eighty acres each, are inconsistent

As the natural result of the construction of the road aided would be an increase in the market value of the reserved sections remaining to the United States, within the place limits of the Leavenworth road, those sections were not left to be disposed of under the general laws relating to the public domain. But, in order that the government might get the benefit of such increased value, and thereby reimburse itself to some extent for the lands granted — the title to which vested in the State or the company upon the definite location of the line of the road, and, by relation, as of the date of the grant, — the act of 1863 made special provisions in reference to those reserved sections, and thereby, and for the'accomplishment of particular purposes expressly declared, segregated them from the body of the public lands of the United States. Béing thus devoted to specified objects, they were reserved to the United States, and could not be selected by the State either. under the act of 1863 or under that of 1866 for other and different objects. They could not be selected as indemnity lands under the act of 1863, because the lands to be selected under that act were restricted to «¿¿-numbered sections; nor under the act of 1866, because, at the date of its passage they were reserved for the special purposes indicated in the second section of the act of 1863.

It follows that the Missouri, Kansas and Texas Railroad Company was not entitled, in virtue of the act of 1866, to have indemnity lands from the «wim-numbered sections within the place limits of the Leavenworth road. The issuing of patents to it for such lands was unauthorized by law.

But we are of opinion that, in respect to the ew«ra-numbered sections within the indemnity limits of the Leavenworth road, that is, outside of ten and within twenty miles of its line, the case stands upon wholly different grounds. We cannot assent to the suggestion that they also were reserved by the act of 1863, and excluded from the operation of the act of 1866. •

. This conclusion finds support in the peculiar language of the act of 1866 allowing selections by the Missouri-Kansas Company of indemnity lands within twenty miles of its road, to be made from “the public lands of the United States nearest to the sections above specified,” that .is, nearest to the ¿^-numbered sections within the place limits. Many acts of Congress, making grants of public lands iñ aid of the construction .of railroads, have restricted the selection of indem

In our judgment — omitting for the present’any consideration of the rights alleged to have been acquired by individuals under the homestead and preemption laws in the lands in dispute, and looking at the case only as between the United States and the Missouri-Kansas Company — there is no escape from the conclusion that the ewew,-numbered sections within the indemnity limits of the Leavenworth road,-not being set apart by the act of 1863 for any specific purpose, and being also nearest to the granted sections within the place limits of the Missouri-Kansas Company, were not, by that act, reserved to the United States within the meaning of the act of 1866, and, therefore, — if no rights had attached to them before their selection with the approval of the Secretary of the Interior • — = could have been legally selected as indemnity lands for that company.

We say, prior to such selection and approval, because as to lands which may legally be taken for purposes of indem

For the reasons stated, we adjudge.that the selection of even-numbered sections within the indemnity limits of the Leavenworth road, to which rights of homestead and preemption laws had not attached, to indemnify the Missouri-Kansas Company for losses in its place limits, and the issuing to it of patents therefor, , was not without authority of law.

We have indicated, however, that the question as to the right of the Missouri-Kansas Company, for purposes of indem

■ The bill, after stating that the Government was unable, at the commencement of the suit, to specify what portions and tracts of land have been settled upon and occupied by actual Iona fide settlers, as aforesaid, for which patents should be issued, and asking permission to make proof thereof, proceeds to allege that the Missouri-Kansas Company on the- — -day of March, 1867, filed its map of definite location in the Department of the Interior; that the Commissoner of the General Land Office, by letter under date of March 19, 1867, directed the receiver and register of the local land office at Humboldt, Kansas, where the above-mentioned lands were subject to be taken under the homestead and preemption laws, to reserve from sale, location or entry of any kind, all the land outside of a line ten miles from the line-of location of the said Missouri-Kansas Company; and on and after April 3,1867, the date of the receipt of the above order at the local office, said lands were by them thereafter unlawfully reserved from sale, location or entry; that the lands so withdrawn-from sale, location and entry, include numerous tracts described in the patents in question; and that on and after April 3, 1867, said register and receiver each unlawfully proclaimed and made known their refusal* to permit any citizen or settler to do any act to procure any title to any of such lands under any law, and they each refused to do or permit to be done by any citizen or settler any act requiring their official action or sanction to procure a right or title to them.

Notwithstanding this — the bill further alleges- — a large number of citizens of the United States, each over the age of twenty-one years, and otherwise having all the qualifications required by said homestead. and preemption laws, both prior

If the facts are as thus alleged, it is clear that the Missouri-, Kansas Company holds patents to land both within the place and indemnity limits of the Leavenworth road which equitably belong to bona fide settlers who acquired rights under the homestead and preemption laws, which were not lost by reason of the Land Department having, by mistake or an erroneous interpretation of the statutes in question, Caused patents to be issued to the company. The case made by the above admitted averments of the bill is one of sheer spoliation upon the part of the company of the rights of settlers, at least of those whose rights attached prior to the withdrawal of 1867; whether of others, it is not necessary, at this time, to determine. It is true that the bill is not as full as it might have been in respect to the persons who are alleged to have acquired superior rights under the homestead and preemption law, or as to the particular tracts of land they claimed or occupied, or as to the dates when such homestead and preemption rights respectively accrued. And if application had been made for a bill of par

That the case, as now presented, is one of equitable cognizance, we do not doubt. This question must be determined with reference to the equity jurisdiction of the courts of the United States, and not by reference to the remedies given by the local law. As to some of the lands, so far as we can judge by the averments of the bill, the United States has a direct interest in them. As to others, it is under an obligation to claimants under the homestead and preemption laws to undo the wrong alleged to have been done by its officers, in violation of law, by removing the cloud cast upon its title, by the patents in question, and thereby enable it to properly administer these lands, and to give clear title to those whose rights, under those laws, may be superior to those of the railway company. A suit, therefore, to obtain a decree annulling the patents in question, so far as it is proper to do so, was required by the duty the Government owed as well to the

In United States v. San Jacinto Tin Co., 125 U. S. 273 , 286, which was a suit by the United States to set aside a patent alleged to have been improperly issued, and in which the right of the Attorney General to bring such a suit was denied, this court held that such an action could be maintained where it appeared that there was an obligation on the part of the United States to the public, or to any individual, or where.it bad any interest of its own. In the recent case of United States v. Beebe, 127 U. S. 338 , 342, it was said: “And it may now be accepted as settled that the United States can properly proceed by bill in equity to have a judicial decree of nullity and an order of cancellation of a patent issued in mistake, or obtained by fraud, where the Government has a direct interest, or is under an obligation respecting the relief invoked. . . . Even if it had not been thus authoritatively settled, it would have been difficult, upon principle, to reach any other conclusion. The public domain is held by the Government as part of its trust. The Government is charged with the duty and clothed with the power to protect it from trespass and unlawful appropriation, and, under certain circumstances, to invest the individual citizen with the sole possession of the title which had till then been common to all the people as the beneficiaries of the trust. If a patent is wrongfully issued to one individual which should have been issued to another, or if two patents for the same land have been issued to two different individuals, it may properly be left to the individuals to settle, • by personal litigation, the question of right in which they alone are interested. But if it should come to the knowledge of the Government that a patent has been fraudulently obtained, and that such fraudulent patent, if allowed to stand, would work prejudice to the interests or rights of the United States, or would prevent the Government from fulfilling an obligation incurred by it, either to the public or to an individual, which personal litigation could not remedy, there would be an occasion which would make it the duty of the Government to institute judicial proceedings to vacate such patent.

Much was said at the bar as to the bearing upon the present case of the decision in Kansas City &c. Railroad v. The Attorney General, 118 U. S. 682 . That was a suit by the United States to cancel certain patents issued to the Missouri-Kansas Company for lands selected, under the direction of the Secretary of the Interior, to indemnify that company for losses by reason of previous appropriations or sales of lands in place limits. It appears from the record of that case that the lands', so selected and patented, were cc&Anumbered sections within the overlapping indemnity limits ‘ of the grants made by the above acts of 1863 and 1866. As the Atchison and Leavenworth Companies were equally entitled, under the act of 1863, to obtain indemnity from the oi&Anumbered sections, within their, respective overlapping indemnity limits; as the Atchison Company assigned its rights, under the acts of 1863 and 1861, to the Missouri-Kansas Company; and as it was shown that the Leavenworth Company had relinquished its right, title and interest in the lands involved in that suit, to the Missouri-Kansas Company; nothing, it would seem, stood in the way of the selection of the above cxAi-numbered sections as indemnity lands for the latter company; provided, the assignment by the Atchison Company to the Missouri-Kansas

Only one other matter,, referred to in the bill, is of sufficient consequence to require notice. -The demurrers were general for the want of equity; and as what we have said leads to a reversal of the decree, it is unnecessary to express an opinion as to that part of the bill alleging that the Missouri-Kansas Company had, before the bringing of this suit, December. 5, 1887, received patents for 252,929.14 acres, more or less, in excess of what it was or is entitled to receive. We adopt this course because the paragraph of the bill relating to this alleged excess is not sufficiently full and explicit to justify a consideration, at this time, of the question it attempts to raise. Besides,

The decree is reversed and the cause rema/nded with directions to overrule the several demurrers to the bill, am.d to require answers from the defendants, and for other proceedings not inconsistent with this opinion.