1. The Northern Pacific Railroad Act of July 2, 1864, G. 217, 13
Stat. 365, and the Joint Resolution of May 31, 1870, 16 Stat. 378,
embodied a proposal that, if the company would bring about the
construction and operation of the railroad, desired for the
advantage of the government and the public, it should receive in
return the land comprehended by the granting provisions of the
legislation. P.
256 U. S.
63.
2. By the company's acceptance of this proposal, followed by
construction and operation of the railroad and acceptance of the
railroad by the President, the proposal was converted into a
contract, entitling the company to performance by the government.
P.
256 U. S.
64.
3. The provision relating to indemnity land was as much a part
of the grant and contract as the one relating to land in place, and
the right of the grantee to land within the indemnity limits in
lieu of land lost within the place limits was intended to be a
substantial right such as is protected by the due process clause of
the Constitution. P.
256 U. S.
64.
4. Assuming that the land applicable as indemnity remaining
within the indemnity limits was not enough to make up for
unsatisfied losses in the place limits, the government could not
deprive the company's successor of its right to such land by
setting it aside for forest purposes. Pp.
256 U. S.
64-66.
5. The rule that, under such a grant, no right of the railroad
company to land within the indemnity limits attaches to any
specific tract until the company has selected it applies as between
the company and settlers under the homestead and preemption laws
(the continued operation of which within the indemnity limits the
granting act itself provides for), and applies also as between the
company and the United States when the lands available for
indemnity exceed the losses, but it has no application as between
the company and the United States if the lands available for
indemnity are insufficient for that purpose. P.
256 U. S.
65.
6. The question whether lands remaining within the indemnity
limits
Page 256 U. S. 52
were sufficient to satisfy losses in the place limits was
primarily for the Land Department to decide. P.
256 U. S.
67.
7. But, where the Department, without deciding this question,
reserved part of the indemnity lands for forest purposes, and
afterwards inadvertently issued a patent therefor to the railroad
company upon its selection,
held that the question could
be determined in a suit brought later by the government against the
company to set the patent aside, but only upon a clear showing of
the facts, since the decision might conclude both parties as to
other lands as well as those immediately involved. P.
256 U. S.
67.
8. A report of the Commissioner of the General Land Office on
the adjustment of a railroad land grant showing a deficiency is not
enough to establish the existence of such deficiency unless shown
to have been approved or consented to by the Secretary of the
Interior, since, under the adjustment Act of March 3, 1887, the
supervision of the adjustment was specially devolved upon the
Secretary. P.
256 U. S.
67.
9. A stipulation that all the lands received by the Northern
Pacific Company under its grant and all that it was possible for it
to receive thereafter, whether as place or indemnity lands, did not
equal the sum total of all the odd-numbered sections within the
primary or place limits
held not enough to establish a
deficiency, since the measure of the grant might be less than the
aggregate of the odd-numbered sections within the place limits, due
to partial overlapping with another like grant (
Southern
Pacific R. Co. v. United States, 183 U.
S. 519), or to deductions under § 6 of the granting act
if the route followed the general line of another railroad with a
prior grant, and of the presence or absence of such conditions, the
courts could not take judicial notice. P.
256 U. S.
68.
10. The existence of such a deficiency when the government
withdrew the lands in controversy is not established by a finding
by the Secretary of the Interior that a deficiency existed six
years later. P.
256 U. S.
69.
264 F. 898 reversed.
The case is stated in the opinion,
post, 256 U. S.
58.
Page 256 U. S. 58
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
This is a suit by the United States to cancel a patent issued to
the railway company for 5,681.76 acres of land in Montana, the
asserted ground for such relief being that the land officers issued
the patent through inadvertence and mistake. The company prevailed
in the district court and in the circuit court of appeals, 264 F.
898, and the United States brought the case here.
The lands in question are within the indemnity limits of the
land grant made to the Northern Pacific Railroad Company by the Act
of July 2, 1864, c. 217, 13 Stat. 365, as modified and supplemented
by the joint resolution of May 31, 1870, 16 Stat. 378, and were
selected and patented as indemnity for lands lost within the place
limits. The rights and obligations of the original railroad company
arising out of the grant have long since passed to the present
railway company, and there is no need here for distinguishing one
company from the other.
The grant was made for the declared purpose of "aiding in the
construction" of a proposed line of railroad from Lake Superior to
Puget Sound and Portland, Oregon,
Page 256 U. S. 59
and "to secure the safe and speedy transportation of the mails,
troops, munitions of war and public stores" over such line. It was
expressed in present terms -- "there be, and hereby is, granted" --
and was of "every alternate section of public land, not mineral
designated by odd numbers" within prescribed place limits on each
side of the line excepting such sections or parts of sections as
should be found to have been otherwise disposed of, appropriated,
or claimed or occupied by homestead settlers, or preempted prior to
the definite location of the line.
Nelson v. Northern Pacific
Ry. Co., 188 U. S. 108. As
indemnity for any lands so excepted, as also for any excluded as
mineral, other lands were to be "selected by said company," under
the direction of the Secretary of the Interior, from unoccupied,
unappropriated, nonmineral lands in odd-numbered sections within
prescribed indemnity limits. The line of the road was to be
definitely located by filing a map or maps thereof in the General
Land Office, and the road, when constructed, was to be
"subject to the use of the United States for postal, military,
naval, and all government service, and also subject to such
regulations as Congress may impose restricting the charges for such
government transportation."
As each consecutive 25 miles of road was constructed and made
ready for the service contemplated, the same was to be examined by
commissioners selected by the President, and, if they reported that
the same was completed in all respects as required, patents were to
be issued to the company for the lands opposite to and coterminous
with the completed section. The president was to cause the lands
along "the entire line" to be surveyed for 40 miles in width on
both sides "after the general route shall be fixed, and as fast as
shall be required by the construction of said road;" the granted
sections within the pace limits were to be withheld from sale,
entry, and preemption, except as against preemption and
Page 256 U. S. 60
homestead occupants whose settlement preceded the definite
location of the line; all lands within the indemnity limits were to
be and remain subject to the operation of the preemption and
homestead laws, save as the odd-numbered sections should be taken
out of the operation of those laws by indemnity selections made to
supply losses within the place limits (
Hewitt v. Schultz,
180 U. S. 139,
180 U. S.
147-149,
180 U. S.
155-156;
Weyerhaeuser v. Hoyt, 219 U.
S. 380,
219 U. S.
387-388), and the price of the even-numbered sections
retained by the United States in the place limits was to be
increased to double the usual minimum. If the company accepted the
terms on which the grant was made, it was required to signify its
acceptance in writing under its corporate seal within two
years.
The company duly accepted the terms of the grant, filed
appropriate maps of the general route, afterwards definitely
located the line in the mode prescribed, and constructed and
completed the road from Ashland, Wisconsin, on Lake Superior, to
Tacoma, Washington, on Puget Sound, and thence to Portland, Oregon,
its full length being more than 2,000 miles. The definite location
was completed in 1884 and the construction in 1887. The road as
completed was examined and favorably reported by the commissioners
and accepted by the President. Reports of Commissioner of Railroads
-- for 1885, p. 22; 1886, p. 36; 1887, p. 24; 1888, p. 24;
Doherty v. Northern Pacific Ry. Co., 177 U.
S. 421;
United States v. Northern Pacific R.
Co., 95 F. 864,
177 U. S. 177 U.S.
435;
United States v. Northern Pacific R. Co.,
193 U. S. 1.
The losses to the grant in the place limits through other
disposals, homestead settlements, and the like prior to the
definite location of the line, and through the exclusion of lands
found to be mineral, amounted to several million acres. To supply
these losses, it was necessary to resort to the indemnity limits,
as was contemplated and provided in the granting act and
resolution. In the asserted exercise
Page 256 U. S. 61
of this right, the company selected the lands in question. The
particular losses on account of which the selection was made were
such as to support it, the selection was made in conformity with
the directions given by the Secretary of the Interior, and the
lands selected were subject to selection unless rendered otherwise
by a temporary executive withdrawal made about a year before. The
local land officers accepted and approved the selection list and,
in transmitting it to the General Land Office, called attention to
the withdrawal. But when the Commissioner and the Secretary
approved the selection and caused the patent to issue, they
overlooked the withdrawal, and so did not consider or pass on its
bearing on the company's right to select the lands. Five years
later, the matter was called to their attention, and they caused
this suit to be brought.
The lands in question were not surveyed in the field until near
1905, and the plat of survey was not filed in the local land office
until April 5, 1905. This indemnity selection was made later in the
same day. On several occasions prior to 1904, the company had
endeavored to select lands in the indemnity limits while they were
as yet unsurveyed, or before the plat of the survey was filed in
the local land office, but the Secretary of the Interior had
refused to consider such selections and had directed that none be
received until after the land was surveyed and the plat filed.
Thus, this selection was made as soon as was admissible under the
Secretary's directions. The temporary executive withdrawal of the
lands was made January 29, 1904, before they were surveyed, and was
intended to prevent the acquisition of any claim to them pending an
inquiry into the desirability of adding them, along with other
lands, to an existing forest reserve. On March 7, 1906, they were
added to the reserve by an executive proclamation.
In its defense to the suit, the company takes the position
Page 256 U. S. 62
that the temporary withdrawal did not affect its right to select
the lands, and therefore that the United States was not prejudiced
by the fact that the Commissioner and the Secretary overlooked the
withdrawal when the selection was approved and the patent issued.
In support of this position, the company points to the stipulation
on which the case was heard in the district court wherein,
following a reference to the Act of March 3, 1887, c. 376, 24 Stat.
556, directing the Secretary "to immediately adjust" this and other
railroad land grants, and to a special report of the Commissioner,
made in 1906, purporting to show that the adjustment of this grant
pursuant to that act had progressed to a point where it was
disclosed there was a net deficiency in the grant of 4,092,472.09
acres, it is said:
"The plaintiff admits that, when the withdrawal order of January
29, 1904, was issued, the lands patented to the defendant or its
predecessor in interest within the primary and all indemnity
limits, plus all other lands within the primary or place limits,
not patented, but which passed under the grant, and also all
odd-numbered sections in all indemnity limits which the defendant
was entitled to select under the regulations of the Land Department
did not equal the sum total of all the odd-numbered sections lying
within the primary or place limits of the grant, and this condition
still obtains; but the plaintiff does not admit that the correct
measure of the grant is the aggregate area of all odd-numbered
sections within the primary or place limits, or that any definite
quantity of land was granted and guaranteed to the defendant by any
of the acts of Congress making grants of land to the defendant or
its predecessor or predecessors in interest."
And, in further support of its position, the company contends
that where, through preemption and homestead entries or other
disposals, the available lands in the indemnity limits have been so
far diminished that those
Page 256 U. S. 63
remaining are all needed to supply losses in the place limits
the government is not at liberty to reserve the remaining lands, or
any of them, for its own uses, and thereby to cut off the company's
right to claim them as indemnity, because, as against the
government, they thenceforth are appropriated to the fulfillment of
its obligation under the grant, and because the company has a
vested right in the fulfillment of that obligation which all
departments of the government are bound to respect. On the other
hand, counsel for the government insist (a) that no right to lands
in the indemnity limits attaches, either generally or specifically,
until they are selected by the company; (b) that, up to that time,
the government is free to reserve them for its own purposes, and
thereby to cut off the right of selection, and (c) that this is so
even where the losses in the place limits exceed the available
lands in the indemnity limits, and although the company's purpose
to claim the latter be asserted at the earliest opportunity. The
question thus presented has an important bearing on the further
administration and adjustment of this grant, and perhaps of others,
and counsel on both sides have dealt with it accordingly. In its
present form, the question is new, but the principles which must
control its solution are well settled.
The purpose of the granting act and resolution was to bring
about the construction and operation of a line of railroad
extending from Lake Superior to Puget Sound and Portland through
what then consisted of great stretches of homeless prairies,
trackless forests, and unexplored mountains, and thus to facilitate
the development of that region, promote commerce, and establish a
convenient highway for the transportation of mails, troops,
munitions and public stores to and from the Pacific Coast, with all
the resultant advantages to the government and the public. To that
end, the act and resolution embodied a proposal to the company to
the effect that, if it would
Page 256 U. S. 64
undertake and perform that vast work, it should receive in
return the lands comprehended in the grant. The company accepted
the proposal and, at enormous cost, constructed the road and put
the same in operation, and the road was accepted by the President.
Thus, the proposal was converted into a contract, as to which the
company, by performing its part, became entitled to performance by
the government.
Burke v. Southern Pacific R. Co.,
234 U. S. 669,
234 U. S.
679-680. The provision relating to indemnity lands was
as much a part of the grant and contract as the one relating to
land in place,
Payne v. Central Pacific Ry. Co.,
255 U. S. 228, and
it is apparent from the granting act and resolution that
"it was the purpose of Congress in making the grant to confer a
substantial right to land within the indemnity limits in lieu of
lands lost within the place limits."
Weyerhaeuser v. Hoyt, 219 U. S. 380,
219 U. S. 387.
Such rights are within the protection of the due process of law
clause of the Constitution.
Sinking Fund Cases,
99 U. S. 700,
99 U. S.
718.
When the grant was made by the act and resolution, it was
thought that the indemnity limits as therein defined contained
lands largely in excess of what would be required to supply losses
within the place limits, and hence the provision in § 6 under
which, as construed by the land officers and this Court, all lands
in the indemnity limits were to be and remain subject to the
operation of the preemption and homestead laws, save as the
odd-numbered sections should be taken out of their operation by
indemnity selections. Under that provision, however, the lands
available for indemnity were diminished much more rapidly than was
expected; but, as the provision was one of the terms of the grant,
the company must submit to whatever of disadvantage results from
it. This the company frankly recognizes, for in its brief it
says:
"It was a part of our contract that, until selected, lands
within the indemnity belt should be open to settlement under
Page 256 U. S. 65
the homestead and preemption laws."
and also:
"The question here is not whether, in the face of the
deficiency, the settler [before selection] may acquire rights
superior to ours, for we concede that he may."
But that provision gives no warrant for thinking that, after the
company has earned the right to receive the lands comprehended in
the grant, the government is free to reserve or appropriate to its
own uses lands in the indemnity limits which are required to supply
losses in the place limits. We say "required" because we perceive
no reason to doubt that lands in the indemnity limits may be so
reserved or appropriated where what remains is sufficient to
satisfy all the losses.
While it often has been said that, under such a grant, no right
attaches to any specific land within the indemnity limits until it
is selected, an examination of the cases will show that this
general rule never has been applied as between the government and
the grantee where the lands available for indemnity were not
sufficient for the purpose. Its only application has been where
either the rights of settlers were involved or the lands available
for indemnity exceeded the losses, thereby making it essential that
there be a selection and identification of the particular lands
sought to be taken. This distinctions is illustrated in
St.
Paul and Pacific R. Co. v. Northern Pacific R. Co.,
139 U. S. 1. The
question there presented was whether there was any need for a
selection where no right of a settler was involved and the lands
available for indemnity were not sufficient to supply the losses.
By reason of this insufficiency, it was ruled that the lands in the
indemnity limits necessarily were appropriated to satisfy the
losses, and that no selection was required. The Court said, p.
139 U. S. 19:
"As to the objection that no evidence was produced of any
selection by the Secretary of the Interior from the indemnity lands
to make up for the deficiencies found in the lands within the
place
Page 256 U. S. 66
limits, it is sufficient to observe that all the lands within
the indemnity limits only made up in part for these deficiencies.
There was therefore no occasion for the exercise of the judgment of
the Secretary in selecting from them, for they were all
appropriated."
That ruling related to the right to indemnity lands under this
grant, and so is particularly in point; but it is well to observe
that what was said about an existing deficiency related, as appears
on pages
139 U. S. 8 and 9
of the opinion, to the portion of the grant in Minnesota and not to
other portions. This exception to the general rule that a selection
is essential has been recognized by this Court in other cases.
United States v. Missouri, Kansas & Texas Ry Co.,
141 U. S. 358,
141 U. S. 376;
United States v. Colton Marble & Lime Co.,
146 U. S. 615,
146 U. S. 616;
Southern Pacific R. Co. v. Bell, 183 U.
S. 675,
183 U. S.
682.
One of the regulations of the Land Department requires that
indemnity selections be accompanied by a specification -- tract for
tract -- of the losses on account of which they are made. But that
department holds that this regulation does not apply where the
losses exceed the lands which may be taken as indemnity. Thus, in
Hastings & Dakota Ry. Co., 19 L.D. 30, it was said by Secretary
Smith:
"The object in establishing the rule was to prevent the
possibility of one basis of loss being used for more than one
selection. As this grant is known to be deficient over 800,000
acres, . . . the danger of a duplication of the losses does not
exist, and the reason of the rule ceasing, the rule itself does not
operate."
And a similar ruling is found in Chicago, Rock Island &
Pacific Ry. Co. v. Wagner, 25 L.D. 458, 460, and other cases.
Giving effect to all that bears on the subject, we are of
opinion that, after the company earned the right to receive what
was intended by the grant it was not admissible for the government
to reserve or appropriate to its own uses
Page 256 U. S. 67
lands in the indemnity limits required to supply losses in the
place limits. Of course, if it could take part of the lands
required for that purpose, it could take all, and thereby wholly
defeat the provision for indemnity. But it cannot do either. The
"substantial right" conferred by that provision (
Weyerhaeuser
v. Hoyt, supra) cannot be thus cut down or extinguished
(
Sinking Fund Cases, supra).
A more difficult question -- to which only slight attention is
given in the briefs -- is whether it sufficiently appears from this
record that the grant was deficient at the time of the temporary
withdrawal -- that is, that the lands available as indemnity were
not then sufficient to supply the losses. The question is one the
determination of which rests primarily with the Land Department.
The stipulation on which the case was heard does not show that the
department has determined the question, nor that it has refused to
do so, but only that the question was not considered when this
patent was issued, the withdrawal being then inadvertently
overlooked. In these circumstances, to entitled either party to
have the question determined in this suit, the facts shown should
make its right solution quite plain, for the decision might
conclude both parties for all time -- as respects other lands as
well as those in suit.
Southern Pacific R. Co. v. United
States, 168 U. S. 1,
168 U. S. 48. Of
course, the company is entitled to have the question considered and
decided somewhere, and, if the deficiency be established, is
entitled to have the selection of these lands sustained. A third of
a century already has elapsed since the company earned the right to
receive what was intended by the grant.
Two matters stated in the stipulation are relied upon as showing
a deficiency. One is that, in 1906, the Commissioner reported to
the Secretary that the adjustment of the grant had progressed to a
point where it was disclosed
Page 256 U. S. 68
that there was a net deficiency of 4,092,472.09 acres. By the
act of March 3, 1887,
supra, the supervision of the
adjustment was specially devolved on the Secretary, and yet the
stipulation does not show that he approved the Commissioner's
report or in any way recognized it as correct. We think the report,
in the absence of any confirmatory action by the Secretary, cannot
be taken as sufficiently establishing that a deficiency existed.
The other statement is that, at the time of the temporary
withdrawal, all the lands theretofore received by the company, plus
all that it was possible for it to receive thereafter, whether as
place lands or indemnity lands, did not equal "the sum total of all
the odd-numbered sections lying within the primary or place
limits," and that condition still obtains. But the statement also
says that the government "does not admit that the correct measure
of the grant is the aggregate area of all odd-numbered sections
within the primary or place limits." What was meant by this
qualification is not otherwise disclosed, nor is it explained in
the briefs. The aggregate of the odd-numbered sections within the
place limits is the correct measure of the grant, unless (a) part
of the grant included only a moiety of those sections, [
Footnote 1] or (b) the route of this
road and that of another with a prior land grant were found to be
upon the same general line, in which event a stated deduction was
to be made from the amount of land granted to this company.
[
Footnote 2] There would be no
right to indemnity as respects the moiety not included, nor as
Page 256 U. S. 69
respects the lands required to be deducted. Either of those
conditions, if existing, would affect the measure of the grant, and
would have to be considered in determining whether there was a
deficiency. The stipulation does not show the presence or the
absence of either condition, and the matter is not one of which
courts take judicial notice. Therefore, the actual situation,
whatever it may have been, should have been shown. As this was not
done, neither party is entitled to have the question whether there
was a deficiency determined upon the present record.
Turning to the published decisions of the Land Department, we
find that, in
Hessey v. Northern Pacific Ry. Co., 43 L.D.
302, the Secretary distinctly declared that the grant was so far
deficient that many losses within the place limits must remain
unsatisfied, and therefore that compliance with a provision that
indemnity selections be made from lands nearest the line of the
road was no longer required. But, as that finding apparently
related to the situation existing December 9, 1909, it cannot be
taken as showing that there was a deficiency almost six years
before, when the temporary withdrawal now in question was made. The
situation may have changed materially in the meantime, for
doubtless large numbers of homestead entries were being made within
the indemnity limits every year.
We conclude that the decrees below must be reversed and the suit
remanded to the district court with directions (a) to accord the
parties a reasonable opportunity, on a further hearing, to
supplement and perfect the showing made in the present record, if
either or both are so disposed; (b) if the parties avail themselves
of that opportunity, to proceed to an adjudication of the suit upon
the record as thus supplemented, and (c) if the parties do not
avail themselves of that opportunity, to enter a decree cancelling
the patent without prejudice to the right of the company to have
the question of the asserted deficiency
Page 256 U. S. 70
in the grant determined by the Land Department and to have the
present selection sustained and given full effect if the grant was
deficient when the temporary withdrawal was made.
Decree reversed.
[
Footnote 1]
Southern Pacific R. Co. v. United States, 183 U.
S. 519,
183 U. S. 525;
Sioux City & St. Paul R. Co. v. United States,
159 U. S. 349,
159 U. S.
364-365.
And see United States v. Northern Pacific
R. Co., 193 U. S. 1.
[
Footnote 2]
Section 3 of the granting act contains the following:
"
Provided that, if said route shall be found upon the
line of any other railroad route to aid in the construction of
which lands have been heretofore granted by the United States, as
far as the routes are upon the same general line, the amount of
land heretofore granted shall be deducted from the amount granted
by this act."