An indemnity grant, like the residuary clause in a will,
contemplates the uncertain and looks to the future, and what the
party entitled may elect to select depends upon the state of the
lands at the time of selection.
Ryan v. Railroad Company,
99 U. S. 382.
Under the main line grant made to the Southern Pacific Railroad
Company by the Act of July 27, 1866, c. 278, § 18, 14 Stat. 292,
the company can select lieu lands within the primary limits of the
grant made to the Atlantic & Pacific Railroad Company by § 3
of
Page 223 U. S. 566
the same act and forfeited under the Act of July 6, 1886, c.
637, 24 Stat. 123.
Southern Pacific Railroad Co. v. United
States, 168 U. S. 1,
distinguished.
Where selections are made after a decision of this Court, the
selections will not be declared illegal at the instance of the
government if its claim is inconsistent with the position taken by
it in the earlier case.
The facts, which involve rights of the Southern Pacific Railroad
Company under its Main Line Grant to lands within the overlap of
the primary limits of the Atlantic and Pacific Railroad Company
land grant, are stated in the opinion.
Page 223 U. S. 569
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a bill brought by the United States to quiet title and
cancel patents and for an accounting as to lands lying within the
indemnity limits of the grant made to the Southern Pacific Railroad
Company by the Act of July 27, 1866, c. 278, § 18, 14 Stat. 292,
known as the main-line grant, and within the primary limits of the
grant made to the Atlantic & Pacific Railroad Company by § 3 of
the same act. The Atlantic & Pacific road forfeited its grant
(Act of July 6, 1886, c. 637, 24 Stat. 123), and thereafter the
Southern Pacific selected the parcels in question as indemnity
under its main-line grant. The rights of the Southern Pacific under
this grant were not subordinated to those of the Atlantic &
Pacific under the same statute, as they were by its branch-line
grant of 1871, considered in our last decision, but, in case of
conflict, each road took half within the conflicting place limits.
Southern Pacific Railroad Co. v. United States,
183 U. S. 519. The
special grounds for the decision between the same parties in
168 U. S. 168 U.S.
1, followed in the case preceding this, do not exist here.
Therefore, the circuit court and the circuit court of appeals held
that the state of the lands at the time of selection determined the
right, with an accidental exception that we shall explain. 167 F.
510. Both parties appeal, the United States from the
Page 223 U. S. 570
decision on the main point, the Southern Pacific from what
concerns the excepted lands.
The government argues that, as the lands selected lay within the
primary limits of the Atlantic & Pacific, they cannot have been
contemplated as possibly falling into the indemnity lands of the
other road. It refers to an intimation in
Southern Pacific
Railroad Co. v. United States, 189 U.
S. 447,
189 U. S. 452,
made with regard to the branch-line grant and to lands within the
place limits of the Southern Pacific but for the paramount right of
the Texas Pacific, that, as the indemnity grant was "not including
the reserved numbers," "it might be argued" that those words
excluded the secondary claim to the same lands by way of indemnity
after a forfeiture of the Texas Pacific grant. It suggests that
Ryan v. Railroad Co., 99 U. S. 382,
relied on for the ground of decision below, concerned land which
the United States was claiming at the time of the indemnity grant,
and which it ultimately acquired, and that its authority should be
limited to such a case. But we are of opinion that these arguments
ought not to prevail.
An indemnity grant, like the residuary clause in a will,
contemplates the uncertain and looks to the future. What a railroad
is to be indemnified for may be fixed as of the moment of the
grant, but what it may elect when its right to indemnity is
determined depends on the state of the lands selected at the moment
of choice. Of course, the railroad is limited in choosing by the
terms of the indemnity grant, but the so-called grant is rather to
be described as a power. Ordinarily no color of title is gained
until the power is exercised. When it is exercised in satisfaction
of a meritorious claim which the government created upon valuable
consideration, and which it must be taken to have intended to
satisfy (so far as it may be satisfied within the territorial
limits laid down), it seems to us that lands within those limits
should not be excluded simply
Page 223 U. S. 571
because, in a different event, they would have been subject to a
paramount claim. It seems to us, in short, that
Ryan v. Central
Railroad Company supra, should be taken to establish a general
principle, and should not be limited to its special facts. As to
the suggestion in
189 U. S. 189 U.S.
447,
189 U. S. 452,
the words "not including the reserved numbers" refer primarily at
least, to the numbers reserved from any part of the grant by the
terms of the act, and the suggestion was made only as to a claim of
indemnity from lands in and adjoining a strip to which the title
under the primary grant failed. Whether there was anything in it in
any aspect we need not consider now. It certainly cannot affect
this case.
A more delicate question is presented by the appeal of the
Southern Pacific. It is this: a part of the lands in controversy
were not only within the main line indemnity limits of the Southern
Pacific and the primary limits of the Atlantic & Pacific, but
also within the indemnity limits of the Southern Pacific
branch-line grant. It is agreed that they were embraced in the
decree against the right of the Southern Pacific under its
branch-line grant in
168 U. S. 168 U.S.
1, and the argument is that the matter is
res judicata, on
the ground that a decree or judgment is binding as to all
media
concludendi, and that the former decree established the right
of the United States to this land.
Dowell v. Applegate,
152 U. S. 327;
United States v. California & Oregon Land Co.,
192 U. S. 355,
192 U. S. 358.
But the selections in this case were made after the decree in
168 U. S. 168 U.S.
1, and if the matter were at large, it would seem a strong thing to
hold an adjudication conclusive not only as to existing titles
under the grant in controversy, but as to merely possible sources
of title in the future under a different and distinct grant. We
shall not discuss that question, however, or consider just how far
the decisions have gone. The Solicitor General candidly agreed that
the government should not and would not rely upon this
Page 223 U. S. 572
ground if it had taken a position inconsistent with it in the
earlier case, and it seems to us plain that it did so, and
expressly deprecated any reference in that case to the rights under
the main-line grant.
It appears that the bill in
168 U. S. 168 U.S. 1
was brought, or at least tried, as a bill to quiet title against
claims of the Southern Pacific under the branch-line grant, and
that, during the litigation on that question, there was pending
another bill to quiet title under the main-line grant, being the
one before this Court in
183 U. S. 183 U.S.
519. It is said, and we do not understand it to be disputed, that
in oral argument and printed brief before the circuit court of
appeals, the counsel for the government repeated that title under
the main-line grant was not involved, and that, if that question
ever arose, there would be pleadings and proof upon it. The Court,
in its decision (
168 U. S. 168 U.S.
1,
168 U. S. 29)
stated the claim of the Southern Pacific to be under the Act of
1871 (the branch-line grant). Again, in the case between the same
parties in
183 U. S. 183 U.S.
519,
183 U. S. 533,
the Court said that it was not adjudged in the former cases that
the Southern Pacific had no title to any real estate by virtue of
the Act of 1866, and although it also said that, of course, the
decrees were conclusive as to the title to the property involved in
them, still, in view of the conduct and disposition of the cause as
to the branch-line grant, if for no other reason, we think that it
would be inequitable for the United States now to rely upon the
decree in that cause as conclusive upon the parties in this. It
follows that, as the present decision was in favor of the United
States with regard to the last-mentioned lands, it must be reversed
(No. 129), and that, otherwise (No. 128), it stands affirmed.
Decree reversed.