The decision of the land department in a contest case is
conclusive in the courts upon all questions of fact.
A patent is a conveyance by the government of the title, and is
conclusive in the hands of the patentee as against every individual
unable to show a superior right, legal or equitable.
The Act of March 3, 1887, 24 Stat. 556, is remedial in its
nature, and, in addition to directing an adjustment with railroad
companies of their land grants, provided for securing the equitable
rights of parties contracting with the companies, and also those of
settlers upon lands within the limits of the grants.
The term "
bona fide purchaser" found in the act is not
used in its technical sense, but only as requiring good faith in
the transactions between the railroad companies and parties
contracting with them in respect to the lands.
One who, for a sufficient consideration, has obtained an option
from a railroad company giving him the right to purchase within a
specified time a large tract of land, and in reliance upon that
option has expended money and labor in securing settlers, may be
regarded as a "
bona fide purchaser" within the scope of
the act, and entitled to the preferential right of purchase given
by § 5.
While a settler is favored in law, the equities of others must
also be considered, and where he places his improvements upon land
with full notice of the superior rights of others thereto, he is
not entitled to be regarded as a
bona fide settler either
within the letter of the statute or within the reach of any
reasonable equities.
This was an action in ejectment commenced on February 15, 1900,
by John P. O'Connor against Jacob Gertgens, in the District Court
of the Sixteenth Judicial District of the State of Minnesota, to
recover possession of the southwest section 9, township 125, range
45 west. The defendant appeared and answered. A trial was had
before the court without a jury, resulting in a judgment for the
plaintiff, which was, on April 4, 1902, affirmed by the supreme
court of the state, 85 Minn. 481, and thereupon this writ of error
was sued out.
Page 191 U. S. 238
The facts are these: the tract was surveyed public land, situate
in the County of Traverse, and lying within the twenty-mile
indemnity limits of the grant to the St. Paul, Minneapolis &
Manitoba Railway Company, as defined by acts of Congress dated
respectively March 3, 1857, 11 Stat.195, c. 99, and March 3, 1865,
13 Stat. 526, c. 105. It, with other lands, was withdrawn from
settlement and entry under the land laws of the United States by
executive withdrawal, dated May 25, 1869. In April, 1885, the
tract, being within the indemnity limits, was, with other tracts,
selected by the railway company as indemnity for deficiencies
claimed to exist within the place limits. These selections were all
finally cancelled on October 23, 1896.
Prior to April 15, 1891, the land was unoccupied, but at that
time, the defendant, being fully qualified as a homestead claimant,
took possession with a view of claiming it as a homestead under the
laws of the United States, has ever since occupied it as his
homestead, and made improvements thereon of the value of $1,200. He
made application at the local land office for a homestead entry,
but it was refused by the local land officials, and such refusal
sustained on appeal by the Commissioner of the General Land Office.
The refusal was on the ground that the land was within the
twenty-mile indemnity limits of the railway company, and had been
selected by the company in 1885, long before the defendant went
upon the land.
In July, 1880, the railway company entered into a written
agreement with the Rev. John Ireland, a citizen of the United
States, by which the company gave him the sole and exclusive right
and authority to place settlers upon and sell to them all the lands
in the counties of Big Stone and Traverse, to which the railway
company might be entitled by virtue of the land grants of March 3,
1857, and March 3, 1865, and which were included within the
indemnity limits of said grants. This contract expired December 31,
1881. On March 30, 1883, the railway company made a new agreement,
which, after referring to the prior contract, contained this
stipulation:
Page 191 U. S. 239
"Now, therefore, the contract herein referred to having expired
on the 31st day of of December, A.D. 1881, and the R. Co. not yet
having acquired title to the lands in question, it is now agreed
between the R. Co. and the Rev. John Ireland that, when title to
these lands are acquired by the R. Co., and notice of the same is
given to Rev. John Ireland, he shall have the privilege and the
right at any time within sixty days of date of said notice of
purchasing for himself or such parties as he may designate, due
regard being had, as stated in supplement to said contract, for
settlers who may have obtained any claim upon such lands previous
to the date of said contract, any or all of the lands included in
said contract, not to exceed the amount of 50,000 acres at uniform
price of four dollars per acre, ten percentum of all receipts from
said lands at the above price to be furthermore paid to the said
Rev. John Ireland, according as the monies are received by the
company, when such lands shall be purchased by Rev. John Ireland or
those whom he may designate, the conditions of sale usual with the
company shall be observed, or at least, the interest upon the
purchase money shall be paid from the date of purchase to the
fifteenth day of December following, when the usual condition shall
be enforced."
This agreement was duly recorded in the office of the register
of deeds of Traverse County, Minnesota. On February 8, 1896,
Ireland made application to the Land Department for leave to
purchase from the government the land in controversy under the
provisions of the fifth section of the Act of Congress of March 3,
1887, 24 Stat. 556, c. 376. This application was contested by the
defendant, but the claim of Ireland was sustained by all the
officials of the Land Department, from the local officers up to the
Secretary of the Interior. A patent was thereupon issued to
Ireland, from whom the plaintiff obtained a conveyance. The Act of
March 3, 1887, was an act directing the Secretary of the Interior
to adjust, in accordance with the decisions of the supreme
court,
Page 191 U. S. 240
the several railroad land grants made by Congress. Section 5,
under which Ireland made his claim, is copied in the margin.
*
MR. JUSTICE BREWER delivered the opinion of the Court.
The patent was issued to Ireland after a contest between him and
the defendant, in which the several officials of the Land
Department, from the local officers to the Secretary of the
Interior, sustained his contention. The decisions of the Land
Department in such contest cases are conclusive upon all questions
of fact.
Burfenning v. Chicago &c. Railway,
163 U. S. 321,
163 U. S. 323,
and cases cited;
Johnson v. Drew, 171 U. S.
93,
171 U. S. 99;
Gardner v. Bonestell, 180 U. S. 362;
De Cambra v. Rogers, 189 U. S. 119. The
patent passed the legal title to Ireland.
Page 191 U. S. 241
It devolved upon the defendant, contesting that title, to show a
superior right, legal or equitable, to the land. Both the trial and
supreme courts of the state decided against the defendant's claim.
We have thus the unanimous conclusions of all the officers of the
Land Department of the United States and of the judges of the
courts of the state, to whom the question could be presented, in
favor of plaintiff's title.
In respect to certain requirements of section 5, under which the
Land Department acted, there is no question. Ireland was a citizen
of the United States. The tract was within the contract made by the
company with him in 1883. It had never been conveyed to the
company, or for its use. It was an odd-numbered section, within the
limits of the grant, and coterminous with a constructed part of the
road. It was excepted from the operation of the grant because of a
defect in the selection of indemnity lands. All these matters being
beyond dispute, there remain open the questions whether the land
could be deemed to have been sold by the company to Ireland, and
whether he was a
bona fide purchaser, and further,
conceding that Ireland comes within the provisions of the section,
whether the equitable rights of the defendant as a homestead
settler are superior.
Was there a sale, and was Ireland a
bona fide purchaser
within the scope of said section? It is contended on the one hand
that these are questions of fact concluded by the decisions of the
Land Department, and on the other that it is the duty of the court
to construe a written instrument, and, as the agreement between the
company and Ireland was in writing, it is a question of law, and
not of fact, whether there was a sale by the company and a purchase
by Ireland. Doubtless whether a transaction evidenced by a written
agreement was a real transaction or a sham, whether it was executed
with a fraudulent intent or in good faith, may present questions of
fact, and, insofar as those questions are involved in this case,
the conclusions of the Land Department are final. We must accept
the agreement between the company and Ireland as
Page 191 U. S. 242
genuine, made in good faith, and supported, so far as it can be,
by all outside facts, such as a sufficient consideration.
It is, however, earnestly contended that there was no sale or
purchase; that the company gave only a mere option, which, though
binding on it, cast no obligations on Ireland. If he wanted to
complete the contract and pay for the land, he might do so. If he
did not, he was under no liability to the company. Strictly
speaking, this contention is correct. Ireland had made no payment
for this land, had made no absolute promise to pay, and it was
optional with him whether he took the land or not. And if it be a
condition of acquiring a right under this section that the party
claiming must either have paid or promised to pay, then Ireland was
not entitled to any benefit therefrom. But we think the section
does not compel such construction. We have more than once held that
the entire statute was remedial in its nature, and must be
construed so as to carry out the intent of Congress and secure to
the parties the intended relief. Primarily, the purpose was to
secure an adjustment of the various land grants in aid of
railroads. Much confusion had existed in the construction and
administration of those grants. There had been conflicting
decisions, and Congress attempted, without displacing vested
rights, to do equity to all parties claiming interests in lands
within these various grants. It did not purpose to merely define
legal rights or prescribe new methods for their enforcement. The
courts were competent under the law, as it stood, without
additional legislation to preserve such rights.
There were three parties whose interests and equities were to be
regarded: first, the railway company, the beneficiary of the grant;
second, parties who had dealt with the railway company in reference
to lands claimed by it to be within the scope of its grant; and,
third, parties who had attempted to secure title under the
settlement laws of the United States. With reference to the railway
company, it is sufficient to say that Congress aimed to limit its
acquisition of title to the
Page 191 U. S. 243
amount of land which it had in fact earned by the construction
of the road, and prescribed that the adjustment with it should be
made in accordance with the rulings of this Court; authorized
actions to recover any lands improperly conveyed to the company, or
if the company had parted with them, the value thereof in
money.
As to those who had dealt with the railway company, its evident
purpose was to secure to them the lands they had contracted for,
insofar as it could be done without trespassing on the rights of
settlers. The scope of section 5 is disclosed by its opening words,
"where any said company shall have sold." In case of a sale,
certain privileges are given upon certain conditions. Nowhere does
it provide as one of those conditions that the company shall have
received full, or indeed any, payment. If there is a sale, it is
sufficient. Why, in a remedial statute, may not the word include a
sale upon conditions -- one in which the proposed buyer has an
election to accept the company's promise? The section does not
attempt to relieve anyone whose transactions with the railway
company were not in good faith. The term "
bona fide
purchaser" is used in the statute; but, as we pointed out in
United States v. Winona &c. Railroad, 165 U.
S. 463,
165 U. S.
480-481, not in any technical sense, but simply as
demanding good faith in the transactions between the individual and
the company. It is true that the parties who in that case had dealt
with the company had in fact purchased and paid value, and it was
unnecessary to consider anything more than the effect of such
transactions. But still it was distinctly held that the term
"
bona fide purchaser" was not intended in any technical
sense, but only as one implying good faith.
In reference to Ireland's actions under his contracts with the
company, the supreme court of the state said (p 488):
"Under his first contract with the railroad company, Ireland
expended large sums of money and devoted a great deal of time to a
colonization enterprise, and the expenditure and labor were kept up
until 1883, large numbers of people being
Page 191 U. S. 244
thereby induced to settle in a new country tributary to the line
of road belonging to the company."
"By it, the company constituted Ireland its mere agent to make
sales of the lands therein scheduled, to receive payments thereon,
and to bind it to convey when its title should be perfected, or to
return the money paid in case it failed to obtain title."
"The agreement of March 30 was wholly different. The agency was
at an end. Ireland was given the right to purchase for himself and
for others 50,000 acres at a stipulated price per acre, and upon
certain terms. The company could not then convey; when it could was
uncertain, and it was agreed that purchasers should not be obliged
to pay any part of the purchase price until it was within the power
of the company to give good title. This was the construction placed
upon the contract by the parties thereto, and it was the rational
and proper one. Ireland proceeded under this contract, as he had
under the first, to secure purchasers for these lands. They became
actual residents, and received contracts for conveyances. He
expended much time and large sums of money in the scheme to
populate the country in question, and his success was very
noticeable."
It is not pretended that what he did under these contracts,
including therein his outlays of time and money, were, under his
last agreement, to be accepted by the company as so much payment
for the land, but these facts are stated to show the
bona
fides of the transaction -- that it was not an attempt by
means of a mere option to facilitate the acquisition of title from
the government to the injury of
bona fide settlers. On the
contrary, Ireland was seeking to bring settlers on these lands, and
thus aiding in carrying out the general purpose of the government
to transform the vacant public lands into homes. Surely a purpose
so in harmony with that of the government and an effort in the way
that he pursued to carry that purpose into effect makes a case
appealing to the favorable consideration of Congress, and is in its
nature essentially
Page 191 U. S. 245
different from a pure speculation in public lands at the expense
of
bona fide settlers. The rulings of the Land Department
have been along the line of a recognition of the fact that attempts
in good faith by a party to obtain from a railroad company for
bona fide settlements lands believed to belong to it or
expected to be acquired by it, present cases which were intended to
be included within the act of 1887, and entitled to its protection.
In re Campbell, 12 L.D. 247; Telford v. Keystone Lumber Co. 18 L.D.
176, 19 L.D. 141; Holton v. Rutledge, 20 L.D. 227; Austin v. Luey,
21 L.D. 507.
It must be borne in mind that the purpose of section 5 was not
relief to the company, but to one dealing with it. Ireland, by his
contract, had obtained rights from the company, even if he had not
assumed obligations to it. The land was the property of the
government, and property to which the company acquired no title,
but, being within the limits of its grant, it had claimed a right,
and contracted with Ireland as though it had or would receive the
title. Section 5 gave to Ireland only a right to purchase this land
from the government -- a preferential right -- paying to the
government its price, no portion of which was to pass to the
railway company, and gave him that preferential right because of
his dealings with the company. He had sought to obtain title to
this land from the company. He had made a contract by which, if the
company acquired title, he could obtain that title, and Congress,
by section 5, simply provided that, having so acted in respect to
this land, he should have a preferential right of purchase. The
company neither gains nor loses. The government receives its price
for the land, and is therefore fully protected, and Ireland
receives that in respect to which he certainly has some equitable
claim of consideration -- a preferential right of purchase.
The third party is the settler under the land laws, and we pass
to consider his status and rights. A settler is, as has often been
said, favored in law, but it does not follow therefrom that he is
the only one whose equities are to be considered.
Page 191 U. S. 246
Congress, by section 5, made provision for his protection --
such provision as it deemed sufficient. While it gave to purchasers
from the railway company a preferential right of purchase, it
excepted therefrom lands which, at the times of such purchase,
"were in the
bona fide occupation of adverse claimants
under the preemption or homestead laws of the United States, and
whose claims and occupation have not since been voluntarily
abandoned."
In other words, it said that no purchaser from the railway
company should have a preferential right of purchasing any lands
which, at the time of his dealings with the railway company, were
in the hands of a
bona fide settler under the laws of the
United States unless such settler should voluntarily abandon his
settlement. As between a purchaser from the railway company and a
settler on the lands, the settler was given the prior right. But
the defendant was not a settler at the time of Ireland's contract,
nor, indeed, until many years thereafter. Neither did he come under
the protection of the second proviso, for, although his settlement
was after December 1, 1882, it was not until long after the passage
of the act.
It is well to look further into his equities. It will be borne
in mind that he did not go upon the land until April, 1891. The
tract was within the indemnity limits of the company's grant, and
was therefore subject to selection. It had been withdrawn from
entry under the land laws, and that fact appeared on the records of
the local land office. It had, in fact been selected by the
company, and that selection had not been cancelled. Ireland's
contract of 1883 was of record in the office of the register of
deeds of the county, and shown on the books of the company. The
defendant applied for leave to enter the lands as a homestead, and
was denied such leave by the local land officers on the ground that
it was within the twenty-mile indemnity limits of the railway
company's grant, and had been selected by the company. He was
charged with knowledge of the act of Congress giving a preferential
right of purchase from the government in case the company's
Page 191 U. S. 147
should in any way fail. Notwithstanding all this, he remained
upon the land, and put his improvements on it, and now claims to be
entitled to the rights of a
bona fide settler. He does not
come within the letter of the statute, nor does he come within the
reach of any reasonable equities. He evidently took his chances on
the possibility of the company's failing to obtain title and a
subsequent failure of Ireland to insist upon his preferential right
of purchase. He went upon the land with full knowledge of all the
facts -- which showed that he had no right to enter -- speculating
upon possibilities which have not been realized, and, having so
speculated, he cannot complain if he suffer the consequences which
often attend the failure of a speculation.
We think the judgment of the Supreme Court of Minnesota was
right, and it is
Affirmed.
*
"SEC. 5. That where any said company shall have sold to citizens
of the United States, or to persons who have declared their
intention to become such citizens, as a part of its grant, lands
not conveyed to or for the use of such company, said lands being
the numbered sections prescribed in the grant, and being
coterminous with the constructed parts of said road, and where the
lands so sold are for any reason excepted from the operation of the
grant to said company, it shall be lawful for the
bona
fide purchaser thereof from said company to make payment to
the United States for said lands at the ordinary government price
for like lands, and thereupon patents shall issue therefor to the
said
bona fide purchaser, his heirs or assigns:
Provided, That all lands shall be excepted from the
provisions of this section 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 have not since been voluntarily abandoned, as to
which excepted lands the said preemption and homestead claimants
shall be permitted to perfect their proofs and entries, and receive
patents therefor:
Provided further, That this section
shall not apply to lands settled upon subsequent to the first day
of December, eighteen hundred and eighty-two, by persons claiming
to enter the same under the settlement laws of the United States,
as to which lands the parties claiming the same as aforesaid shall
be entitled to prove up and enter as in other like cases."
