Section 4 of the Act of March 3, 1887, 24 Stat. 556, for the
adjustment of forfeited railroad grants providing for issuing
patents under the conditions specified for lands sold by the
grantee company to purchasers in good faith, has no reference to
any unearned lands purchased after the date of the act from a
company to which they had never been certified or patented,
although such company might have acquired an interest in them had
it completed its road. Nor can one who purchased unearned
Page 194 U. S. 477
lands from a grantee company whose grant was made by Congress
through the state in which its road was to be built be regarded as
a purchaser in good faith within the meaning of the act of 1887,
when the purchase was made after the passage of the act and after
the state had, by legislative enactment, resumed its title to the
lands and then relinquished them to the United States on account of
the failure to complete its road.
The facts are stated in the opinion of the Court.
MR. JUSTICE HARLAN delivered the opinion of the Court.
This cause is before us upon questions certified by the circuit
court of appeals pursuant to the Judiciary Act of March 3, 1891, c.
517, 26 Stat. 826.
The controlling facts in the extended statement sent up by the
judges of the circuit court of appeals, as the basis of the
questions propounded, are these:
By an Act approved May 12, 1864, c. 84, Congress made a grant of
lands to the State of Iowa for the purpose of aiding in the
construction of a railroad from Sioux City to the south line of
Minnesota at such point as the state might select; the lands to be
held subject to the disposal of its legislature, for that purpose
only. Upon the completion of each section of ten consecutive miles
of road, it became the duty of the Secretary of the Interior to
issue to the state patents for one hundred sections for the benefit
of the constructing company, and so on, until the road was
completed, when the whole of the lands granted were to be patented
"
to the state for the uses aforesaid, and none other." 13
Stat. 72, §§ 1, 2, 3.
If the road was not completed within ten years from the
acceptance of the grant by the constructing company, then the lands
granted and not patented were to "revert to the state" for the
purpose of securing the completion of the road within such time,
not exceeding five years, and upon such
Page 194 U. S. 478
terms as the state should determine -- the lands not in any
manner to be disposed of or encumbered except as the same were
patented under the provisions of the act, and upon the failure of
the state to complete the road within five years after the above
ten years, then the lands undisposed of were to "revert to the
United States." § 4.
The state accepted the grant, April 3, 1866, upon the conditions
prescribed by Congress, and authorized the Sioux City & St.
Paul Railroad Company, a Minnesota corporation, to construct the
road. The company entered upon the work of construction, and
completed only five sections of ten miles each, receiving the full
amount of land to which it was entitled by reason of such
construction.
In consequence of the failure of the railroad company to
complete the construction of the road, the state declared, by an
Act approved March 16, 1882, that, in respect of all lands and
rights to land granted or intended to be granted to that company,
they
"are herebby absolutely and entirely resumed by the State of
Iowa, and that the same be and are absolutely vested in said state
as if the same had never been granted to said company."
Before the passage of that act the state, through its executive
officers, ascertained by computation that the railroad company had
received conveyances for all lands it was entitled to receive under
the terms of the grant, and that the state then held legal title to
85,457.41 acres pertaining to the grant, no part of which had then
or ever since been earned by the company. The land in question here
was a part of those unearned lands.
Subsequently, by an act which took affect April 2, 1884, the
state relinquished to the United States all its right, title, and
interest in the lands which, by the above act of 1882, were
declared vested in the state.
The land here in dispute, being section 9, township 95, north of
range 42, west of the fifth principal meridian, in O'Brien County,
Iowa, was open and unoccupied when the above Act of April 2, 1884,
was passed. In 1885, Sands settled
Page 194 U. S. 479
upon it, erected thereon a house, and made improvements with a
view of establishing a homestead, in accordance with the laws of
the United States. He has continuously since resided upon the land,
claiming it as a homestead. Shortly after he settled upon it, he
made application to enter it as a homestead, but his application
was rejected; for what reason rejected, does not appear.
Later, by an Act approved March 3, 1887, Congress provided for
the adjustment of land grants made by Congress to aid in the
construction of railroads, and for the forfeiture of unearned
lands. 24 Stat. 556, c. 376.
The first section of that act provided for the immediate
adjustment, in accordance with the decisions of this Court, of each
of the railroad land grants which then remained unadjusted. The
second section provided for the recovery by the United States of
the title to lands 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. That section made it the duty of the
Secretary of the Interior to demand from such company a
relinquishment or reconveyance to the United States of all such
lands, whether within granted or indemnity limits, and, if the
demand was not complied with, then it became the duty of the
Attorney General to institute suit against the company. The third
section provided that homestead or preemption entries of
bona
fide settlers, which were found to have been erroneously
cancelled, may be perfected upon compliance with the public land
laws and certain conditions, and the settler reinstated in his
rights. If the settler did not renew his application within a
reasonable time, to be fixed by the Secretary of the Interior, then
all such unclaimed lands were to be disposed of under the public
land laws -- according a priority of right to
bona fide
purchasers of the unclaimed lands, if any, and if there be no such
purchasers, then to
bona fide settlers residing
thereon.
Page 194 U. S. 480
The fourth section, upon the construction of which the present
case mainly depends, is in these words:
"§ 4. That as to all lands, except those mentioned in the
foregoing section, which have been so erroneously certified or
patented, as aforesaid, and
which have been sold by the grantee
company to citizens of the United States, or to persons who
have declared their intention to become such citizens,
the
person or persons, so purchasing in good faith, his heirs or
assigns, shall be entitled to the land so purchased, upon
making proof of the fact of such purchase at the proper land
office, within such time, and under such rules, as may be
prescribed by the Secretary of the Interior, after the grants,
respectively, shall have been adjusted, and patents of the United
States shall issue therefor, and shall relate back to the date of
the original certification or patenting, and the Secretary of the
Interior, on behalf of the United States, shall demand payment from
the company, which has so disposed of such lands, of an amount
equal to the government price of similar lands, and in case of
neglect or refusal of such company to make payment, as hereafter
specified, within ninety days after the demand shall have been
made, the Attorney General shall cause suit or suits to be brought
against such company for the said amount:
Provided, That
nothing in this act shall prevent any purchaser of lands
erroneously withdrawn, certified, or patented as aforesaid from
recovering the purchase money therefor from the grantee company,
less the amount paid to the United States by such company, as by
this act required. . . ."
24 Stat. 556, c. 376.
As showing the nature of the title of the state under the act of
1864, reference may here be made to a suit brought by the United
States against the Sioux City & St. Paul Railroad Company,
under which company, as will presently appear, the appellant
claims. By the final decree in that case, the title of the United
States was quieted as to certain lands situated in Dickinson and
O'Brien Counties, and claimed by the railroad company under the act
of 1864. In the
Page 194 U. S. 481
opinion in that case, which was decided here October 21, 1895,
the court said:
"Another contention is, that, upon the issuing of the patents of
1872 and 1873 to the state for the use and benefit of the railroad
company, the title vested absolutely in the company, and the lands
were thereby freed from restraints of alienation, from conditions
subsequent, or from liability to forfeiture. In support of this
contention reference is made to
Bybee v. Oregon &
California Railroad, 139 U. S. 663,
139 U. S.
674,
139 U. S. 676-677;
Van
Wyck v. Knevals, 106 U. S. 360;
Wisconsin
Central Railroad v. Price County, 133 U. S.
496;
Deseret Salt Co. v. Tarpey, 142 U. S.
241;
St. Paul & Pacific Railroad v. Northern
Pacific Railroad, 139 U. S. 1,
139 U. S.
6. But these are cases, as an examination of them will
show, in which the grant was directly to the railroad company, or
in which the act of Congress required that the patents for lands
earned should be issued, not to the state, for the benefit of the
railroad company, but directly to the company itself. In the case
now before us, the statute directed patents to be issued to the
state for the benefit of the company. So that, until the state
disposed of the lands, the title was in it, as trustee, and not in
the railroad company.
Schulenberg v. Harriman, 21
Wall. 44,
88 U. S. 59;
Lake Superior
Ship Canal &c. Co. v. Cunningham, 155 U. S.
372.
See also McGregor &c. Railroad v.
Brown, 39 Ia. 655;
Sioux City & St. Pail Railroad v.
Osceola County, 43 Ia. 318, 321. In the case last named, the
Sioux City Company was relieved from the payment of taxes upon some
of the lands patented to the state for its benefit, upon the ground
that the legal title was in the state, and the lands for that
reason were not taxable. The question is altogether different from
what it would be if patents for these lands had been issued, or if
the state had conveyed them directly to that company."
Sioux City & St. Paul Railroad v. United States,
159 U. S. 349,
159 U. S. 363.
It was there adjudged that the railroad company had received
2,004.89 acres more than, in any view of its rights, should have
been awarded to it.
After the decision of that case the Secretary of the
Interior,
Page 194 U. S. 482
under date of November 18, 1895, published a circular, in which
he declared the land here in controversy and other like land
subject to disposal by the Land Department. This was after the
above application by Sands to enter this land as a homestead.
Subsequently, on the 10th of March, 1896, Sands renewed his
application for the land in question as a homestead. That
application was contested in the local land office by the present
appellant, who asserted a right to the land in virtue of a
purchase of it
from the Sioux City & St. Paul
Railroad Company on June 21, 1887, and in virtue of the
provisions of the fourth section of the above adjustment Act of
March 3, 1887. She had never resided upon the land in controversy,
or cultivated the same, or in any manner attempted to comply with
the homestead laws of the United States for the purpose of
obtaining a title under them. This contest was determined at the
local office in favor of Sands, that office finding that he had, by
virtue of his settlement of, and continued residence upon, and
cultivation of, the land, and by full compliance with the homestead
laws of the United States, become entitled to a patent. That
decision was confirmed by the Commissioner of the Land Office. But,
upon appeal to the Secretary of the Interior, the decisions of the
local land office and of the Commissioner were reversed, and Sands'
application to enter the land as a homestead was rejected.
Thereupon the present suit was commenced by Sands, charging that
the officers of the General Land Office, proceeding under the
decision of the Secretary, were about to issue, or had issued, a
patent to the present appellant solely in virtue of her alleged
purchase on June 21, 1887, from the Sioux City & St. Paul
Railroad Company, after the passage of the adjustment Act of March
3, 1887, and in virtue of its fourth section. Sands, alleging that
such action, if taken, would be unlawful and contrary to law,
prayed that the Commissioner be required to accept his proof
showing settlement upon and continuous cultivation of the land for
the period of five years or more, and that the patent
Page 194 U. S. 483
to appellant Knepper be either declared null and void, or for a
decree declaring that she holds the legal title in trust for
him.
Such is the case made by the statement by the judges of the
circuit court of appeals, who propound to this Court the following
questions:
"First. In view of the provisions of the act of Congress of May
12, 1864, by virtue of which the land in controversy was granted to
the State of Iowa, did the action which was subsequently taken in
manner and form aforesaid by the governor and legislature of the
State of Iowa operate as a final adjustment of the grant, so far as
the Sioux City & St. Paul Railroad Company was concerned, and,
by virtue of its being so adjusted, exempt or except the grant in
question from the provisions of the adjustment Act of March 3,
1887?"
"Second. In view of the terms of the granting Act of May 12,
1864, and the action subsequently taken in manner and form
aforesaid by the State of Iowa, acting through its governor and
legislature, can Elmira Knepper, the appellant, be esteemed a
purchaser in good faith or a
bona fide purchaser of the
land in controversy, within the meaning of the fourth section of
the adjustment Act of March 3, 1887, as against John A. Sands, the
appellee, who was in the open possession of the land in
controversy, and had erected valuable improvements thereon, in
manner and form aforesaid, when said purchase was made?"
We have seen that the appellant claims an interest in the lands
here in question in virtue of a purchase made by her from the
railroad company, June 21, 1887, after the passage of the
adjustment Act of March 3, 1887. But what interest had the company
at that time in these particular lands constituting a part of the
85,457.41 acres of unearned lands, no part of which the company
earned or could have earned except on account of road actually
constructed by it? For such road as the company had constructed,
lands had been conveyed to it, and there never was a moment
according to the record, when the company could have rightfully
demanded from the state
Page 194 U. S. 484
a conveyance or patent for the lands here in dispute or for any
of the unearned lands. The legal title to the lands granted by the
act of 1864 was, first in the United States, next in the state
(
Sioux City &c. Railroad v. United States, above
cited), but never in the company until a conveyance to it by the
state. The state could only have conveyed lands to the company in
consideration of constructed road, and subject to that condition
the company undertook to construct the road. When it abandoned the
work of construction, it lost the right to claim lands except for
such road as it had previously constructed. The state therefore
properly resumed, as by the act of 1882 it did resume, after the
company's default, such title to the unearned lands as it had
before authorizing the company to construct the road. The state,
after thus resuming the title, could have used the unearned lands
to aid in the construction of that portion of the road which the
railroad company failed to construct. But it did not do so, and
hence, by the Act of April 2, 1884 -- eighteen years after it
accepted, in 1866, the grant of 1864, and the completion of the
road having been abandoned -- the state, by statute, formally
relinquished to the United States all its right, title, and
interest in the unearned lands pertaining to the Sioux City &
St. Paul Railroad Company. This statute was, perhaps, unnecessary,
as, by the act of 1864, the title to the unearned lands granted by
that act was to revert to the United States after the expiration of
fifteen years from the acceptance of the grant without the
completion of the road. But the relinquishment by the state saved
the necessity, if there was a necessity, of formal proceedings,
legislative or judicial, by the United States, to reinvest itself
with full title. Thus, the title to the unearned lands was put back
into the United States. So that, when the adjustment act of 1887
was passed, the title of the United States to the unearned lands,
including the particular lands here in dispute, was complete and
perfect. No interest then remained in the state or in the railroad
company requiring an adjustment; for, as stated, the state had
Page 194 U. S. 485
relinquished all its claim, and the railroad company had
received all the lands it was entitled to demand for constructed
road. When, therefore, Congress made provision in the fourth
section of the act of 1887 for the protection of those who, in good
faith, had purchased from any "grantee company," to whom lands had
been erroneously certified or patented, it could not have intended
to refer to purchases made from the railroad company, after that
act took effect, of lands originally certified or patented to the
state, and not to the railroad company, and the legal title to
which was in the United States at the date of the passage of the
act. A chief purpose of the act of 1887 was to declare forfeited
unearned lands, and restore them to the public domain, and not to
give third parties and speculators an opportunity to purchase such
lands from companies which had defaulted in the work of
construction, and to whom the state had never conveyed, and thereby
obtain a preference over actual settlers in possession. The policy
of the government has always been favorable to actual settlers. As
late as
Ard v. Brandon, 156 U. S. 537, it
was said that "the law deals tenderly with one who, in good faith,
goes upon the public land with a view of making a home thereon."
See also Northern Pacific Railroad v. Amacker,
175 U. S. 564;
Moss v. Dowman, 176 U. S. 413;
Rector v. Gibbon, 111 U. S. 276;
Nelson v. Northern Pacific Railway, 188 U.
S. 108,
188 U. S.
123.
We are of opinion that the fourth section of the adjustment act
of 1887 has no reference to any unearned lands purchased after the
date of that act from a company to whom they had never been
certified or patented, although, if it had kept its engagement with
the state, and completed the road in due time, it could have
acquired an interest in them, and that, as the state, by
legislative enactment, had resumed the title it acquired from the
United States, and afterwards relinquished its interest to the
United States -- all before the passage of the adjustment act --
the appellant could not, within the meaning of the act, and after
its passage, have become a purchaser in good faith of the lands
here in dispute. The sale by the railroad
Page 194 U. S. 486
company to the appellant was a sale of something it did not
possess -- a mere device to bring its purchaser within the
provisions of the adjustment act of 1887, when that act was never
intended to apply to such a case.
We therefore answer the second question in the negative, and
omit, as unnecessary, any answer to the first one.
It will be so certified.