United States v. Winona & St. Peter Railroad

after stating the case, delivered the opinion of the court.

These facts appear: First. The railroad company has constructed its road and has earned the land grant. Second. It has received no more land than Congress by the act referred to proposed to grant to aid in the construction of the road. Third. At the time that the lands were certified to the State for its benefit they were not subject to any homestead or preemption entry. They were free from- all’ claims other than those of the railroad company itself, and were, except as subject to such claims, in the fullest sense public lands and within the jurisdiction of the land department. Fourth. Up to March 2, 1885 (when Kansas Pacific Railway Company v. Dunmeyer, 113 U. S. 629 , was decided by this court), the* uniform ruling of the laud department had been that the title to .railroad lands became settled at the time the line of the railroad was surveyed, staked out and marked on the face of the earth, and not at the time of the filing of the map. of definite location in the land department; that a homestead entry, though apparently regular and valid, was open to question by the railroad company, and it shown to have been fraudulent or irregular in inception, or. that it had been abandoned before the right of the company attached, was held not to except the land from the grant; and also that a preemption claim existing at the time of the attaching of a railroad grant, if subsequently abandoned and not consummated — even though in all respects legal and bona fide — did not defeat the grant, but upon the failure of such claim the land covered thereby inured to the grant as of the date when it became effective. Fifth.

It is in the light of these facts that the scope and effect of the legislation of Congress is to be considered and determined. There is certainly much of equity in the contention of the appellees. The railroad company has constructed the road, in aid of whose construction Congress made this grant: Even though retaining all these tracts, it has failed to receive as large an amount of land as.Congress-proposed to.give. With full performance on its side, it has not received all that Congress proffered. Of course, in entering upon its work it took all the chances, of failure of title of any particular tract, and therefore has no legal ground of complaint, and yet it may with reason say that, though it must be content with such lands as the Government at the time of the filing of the map. of definite location could rightfully convey, it ought not to be deprived of any which the Government did convey, .and could convey without wrong to any one, and which were embraced in- the description of the lands which Congress proposed to give. No individual is wronged by permitting this certification to stand; no preemptor or person seeking to enter any tract as a homestead has been deprived of his rights or privileges by virtue of this certification. The land was free from all individual claims. It was within the absolute control of Congress. It belonged to the Government, and it is only in the assertion of a technical rule of construing land grants, first declared by this court' long after the certification, that the Government now asks to ha,ye that' set aside and the title to these lands restored. No fraud or wrong is imputable to the company. No effort to secure a misconstruction by the land department, but only an acceptance of the then settled rule, .of construction and the taking of the lands which, under such construction, it was entitled to receive. Conceding that that construction was. erroneous, yet it was one made by the officers of the department-

The first section of the act of 1887 directs the Secretary of the Interior to adjust all railroad land grants, in accordance with the decisions of this court; and. the second, that upon such adjustment the Attorney General' shall commence the proper proceedings to cancel all patents, certification or other evidences of title erroneously issued. If these two sections were all the legislation of Congress bearing upon the subject it uiight be difficult to sustain the conclusions of the lower' courts, or to deny to the Government the relief sought by this bill, for, by the construction placed upon such railroad grants in Kansas Pacific Railway Company v. Dunmeyer, supra, and other cases, these lands did not pass under the railroad grant because at the time of the filing of the map of definite location they were on the records of the department claimed under homestead and preemption entries. The lapse of time would be no bar, for statutes of limitation cannot be invoiced against the Government:

But these sections are not all the legislation. Congress evidently recognized the fact that notwithstanding any error in certification or patent there might be rights which equitably deserved protection, and that it would not be fitting for the Government to insist upon the letter of the law in disregard of such equitable rights. In the first place, Tt has distinctly recognized the fact that when there are no adverse

Thus, in the act of 1891, it provided that suits to vacate and annul patents theretofore issued should only be brought within five years, and that'as to patents thereafter to be issued such suits should, only'be brought within six years after the date of issue. Under the benign influence of this statute it would matter not what the mistake or error, of the land department was, what the frauds and misrepresentations of the patentee were, the patent would become conclusive as a transfer of the title, providing only that the land was public land of the United States and open to sale and conveyance through the land department. The act of 1896 extended the time for the bringing of suits for patents theretofore issued for .-five years from the passage of that act. It is true that these appellees cannot avail themselves of these limitations because this suit was commenced before' the expiration of the time prbscribed, and we only refer to them as showing the purpose of -Congress tb uphold titles arising under certification or patent by providing that after a certain time the Government, the grantor, therein, should not be heard to question them.

. But limitation was not the only protection given. The act of- 1896, which ' extended the period of limitation, followed such extention with this provision : “-But no patent to any lands held by a bona fide purchaser shall bevácated or annulled, but the right and title of such purchaser is hereby confirmed.” It is true this act was passed after the commencement of this

It is earnestly contended by the Government ..that the present holders of the title are not “ bona fide purchasers”; that that term has a fixed and well-definéd meaning, as announced in the frequent decisions of this and other courts; that, as said in.2 Pom. Eq. Jur. § 745, “.the essential elements which constitute a bona fide purchaser are, therefore, three — a valuable consideration, the absence of notice, and presence of good faith.” ; United States v. California &c. Land Company, 148 U. S. 31 , 42; that while two of these essential elements may be found, to wit, a valuable consideration and the presence of good faith, the third, the absence of notice, is lacking; that all men are.

We-are-unable to agree with this-contention of counsel, for.several reasons : In tile first place, the situation as it ivas ' known to exist makes against any such narrow construction. While instances of such fraudulent' conduct on the part of the State to which the lands were certified, or the company to which the lands were patented, might exist, yet in the nature of things they would be few and hardly worth the special notice of Congress, while on the other hand the fact that there had been a difference between the land department and the courts, one construction obtaining in the former prior to the decisions by the latter, and the further- fact that by this difference of construction many tracts had been erroneously certified or patented, must have been well knowii to Congress, and naturally therefore a subject for its legislation. Further, there was no need of any legislation to protect a “ bona fide purchaser.” This had been settle,d by repeated decisions of this court. United States v. Burlington & Missouri River Rail

But Ave need not rest'on these inferences and presumptions. Other provisions of the acts of 1887 and 3896 make clear the intent of Congress.- Section 3 of the act-of 1887 provides that if the homestead or preemption- entry of any bona fide settler has been, erroneously cancelled on account of any railroad grant it may be reinstated, provided he has not located another claim or made an entry in lieu of the one so cancelled, and also did not voluntarily abandon such entry. By this section Congress provided for a -reinstating of the title of one deprived thereof by an erroneous ruling of the land department, but, at the . same time, limited the right of reinstating to cases in which the original entrymau had not voluntarily abandoned his entry, or had not since that time made-a .new entry. In other words, it Avas limiting the restoration of the title of the original entryman to cases in which he had a continuing and present equitable right to recognition. As- to all' other cases, Congress reserved the determination of -the equities between the Government, the. railroad company and pur

Section 4 of the same act, expressly referring to all other' lands erroneously certified or patented to any railroad company, provides that citizens who had purchased such lands-in good faith should be entitled to the lands so purchased, and to patents therefor issuing directly from the United States, and that the only remedy of the Government should be an action against the railroad company for the Government price-of similar lands. It will be observed that this protection is-not granted to simply bona fide purchasers (using that term in the technical sense), but to those who have one of the elements declared' to be essential to a bona .fide .purchaser, to... wit, good faith. It matters not what constructive notice may be chargeable to such a purchaser if,-in actual ignorance of any defect in the railroad company’s title and in reliance-upon the action of the Government in the apparent transfer of title 'by certification or patent, he has made an honest purchase of the lands. The plain intent of this section is to-secure him the lands, and to reinforce his defective title by a direct patent from the United States, and to leave to the-Government a simple claim for money against the railroad company.. It will be observed that the technical'term, “Juna fide purchaser” is not found in this section, and while it is-provided that a mortgage or pledge shall not be considered a sale so as to entitle the mortgagee or pledgee to the benefit-of the act, it does secure to every one who in good faith has-made an absolute purchase from a railroad company protection to his title irrespective of any errors or mistakes in the certification or patent.

Section 5 of the same act applies to cases in which no-certification or patent.has issued, and yet the lands sold by the railroadcompany are the numbered sections prescribed in'its'grant and coterminous with the constructed portions of its road, and it is there provided that where the lands so sold by the company “ are for any reason excepted from the operation'-'of '-the grant to said.company,” the purchaser may obtain title-directly from the Government by paying to it the Ordinary

We have been referred in the arguments of this and other cases to the debates in Congress, and to the reports of the committees of the two houses to whom'the bills were referred as confirmatory of the conclusions we have reached, but it is unnecessary to consider any of the evidence derived from these sources, if, indeed, it is open to consideration, for the language of the two acts is clear, and fully discloses the intent of Congress. Our conclusion is that these acts operate to confirm the title .to every purchaser from a railroad company of lands certified or patented to or for its benefit, notwithstanding any mere errors or irregularities in the proceedings of the land department, and notwithstanding the fact that the lands so certified or patented were, by the true construction of the land grants, although within the limits of the grants, excepted from their operation, providing that he purchased in good faith, paid value for the lands, and providing, also, that the lands were public lands in the statutory sense of the term, and free from individual or other claims.

If it be suggested that under the scope of these acts, though the suit must fail so far as it is one to set aside and cancel the certification, it may yet be maintained against the defendant railroad company for the value of the lands so erroneously certified, and that the decree should be modified to this extent,

Affirmed.