1. By the third section of the Act of Congress approved July 1,
1862, 12 Stat. 489, incorporating the Union Pacific Railroad
Company, lands were granted to the company
"for the purpose of aiding in the construction of the railroad
and telegraph line, and to secure the safe and speedy
transportation of the mails, troops, munitions of war, and public
stores thereon,"
and it was enacted that all such lands "not sold or disposed of"
by the company before the expiration of three years after the
completion of the entire road should be subject to settlement and
preemption like other lands. Upon a consideration of this and other
provisions of the act and of the Amendatory Act of July 2, 1864, 13
id. 356,
Held: 1. that these provisions should be so construed
as to effect their primary object, which was to furnish aid in and
during the construction of the road, and that it cannot be
controlled or defeated by the secondary and subordinate purpose of
opening to settlement and preemption such of the lands as should
not be sold or disposed of within the designated period; 2. that
the words "or disposed of" are not redundant, nor are they
synonymous with "sold," but they contemplate a use of the lands
granted different from the sale of them, and that a mortgage of
them is such a use; 3. that the mortgage of them executed by the
company April 16, 1867, for the purpose of raising money necessary
to continue and complete the construction of the road, disposed of
them within the meaning of the act, and was authorized thereby; 4.
that the mortgage was an hypothecation of the fee, and not merely
of an estate determinable at the expiration of three years from the
completion of the road, and the debt it was given to secure not
having matured, the lands are not subject to preemption.
Sed
quaere whether the remnants that may be unsold when the
mortgage debt shall be paid will not then be subject to
preemption.
2. In construing a statute, aid may be derived from attention to
the state of things as it appeared to the legislature when the
statute was enacted.
This was a bill in equity filed Sept. 28, 1878, by William H.
Platt to enjoin the Union Pacific Railroad Company from prosecuting
an action of ejectment which it brought against him the
twenty-third day of that month, for the recovery of a certain
quarter-section of land situate in the County of Hall and State of
Nebraska whereof he was in possession, claiming the equitable title
thereto. The company answered. The case was heard upon the
pleadings, and the bill dismissed. Platt appealed here.
Platt entered upon the land in the year 1874, and thereafter
Page 99 U. S. 49
remained in possession. He made improvements thereon and
performed all the conditions which entitled him as a qualified
preemptor to a preference right of purchase if the land were
subject to preemption. He duly filed, Sept. 21, 1878, his
declaratory statement, made the requisite proofs before the proper
officers, paid the receiver of the local land office $200, being at
the rate of $1.25 per acre, and took a receipt therefor.
The land is part of an odd-numbered section situate within ten
miles of the road of the company, and is included in the grant made
by the act to aid in the construction of a railroad and telegraph
line from the Missouri River to the Pacific Ocean, &c.,
approved July 1, 1862, 12 Stat. 489, and the Amendatory Act of July
2, 1864, 13 Stat. 356. The company accepted the grant, located the
route of its road, and filed a map thereof within the requisite
time, and in order to raise the means necessary to continue and
complete the work on its road which was then constructing, issued,
April 16, 1867, its coupon bonds to the amount of $10,400,000,
payable twenty days after the date thereof, with semiannual
interest. To secure the payment of them, it executed and duly
acknowledged a certain indenture of that same date covering the
granted lands, which it caused to be recorded in said Hall County
before July 1, 1872. The United States issued a patent, bearing
date March 26, 1875, to the company for the granted lands not
theretofore conveyed to it.
The company refused to accept the money so paid by Platt to the
receiver of the land office.
The bill and answer set up different dates when the road was
completed, the first alleging it to be before July, 1869, and the
latter Nov. 14, 1874, when it was finally accepted by the
government.
The act of 1862 provides as follows:
"SEC. 3. And be it further enacted that there be and is hereby
granted to the said company, for the purpose of aiding in the
construction of said railroad and telegraph line, and to secure the
safe and speedy transportation of the mails, troops, munitions of
war, and public stores thereon, every alternate section of public
land, designated by odd numbers, to the amount of five alternate
sections
Page 99 U. S. 50
per mile on each side of said railroad, on the line thereof, and
within the limits of ten miles on each side of said road, not sold,
reserved, or otherwise disposed of by the United States, and to
which a preemption or homestead claim may not have attached, at the
time the line of said road is definitely fixed,
provided
that all mineral lands shall be excepted from the operation of this
act; but where the same shall contain timber, the timber thereon is
hereby granted to said company. And all such lands so granted by
this section which shall not be sold or disposed of by said company
within three years after the entire road shall have been completed,
shall be subject to settlement and preemption like other lands, at
a price not exceeding $1.25 per acre to be paid to said
company."
"SEC. 4. And be it further enacted that whenever said company
shall have completed forty consecutive miles of any portion of said
railroad and telegraph line ready for the service contemplated by
this act and supplied with all necessary drains, culverts,
viaducts, crossings, sidings, bridges, turnouts, watering places,
depots, equipments, furniture, and all other appurtenances of a
first-class railroad -- the rails and all the other iron used in
the construction and equipment of said road to be American
manufacture of the best quality -- the President of the United
States shall appoint three commissioners to examine the same and
report to him in relation thereto, and if it shall appear to him
that forty consecutive miles of said railroad and telegraph line
have been completed and equipped in all respects as required by
this act, then, upon certificate of said commissioners to that
effect, patents shall issue conveying the right and title to said
lands to said company, on each side of the road, as far as the same
is completed, to the amount aforesaid, and patents shall in like
manner issue as each forty miles of said railroad and telegraph
line are completed upon certificate of said commissioners. . .
."
The amendatory act changes the number of sections per mile
granted by the third section of the original act from "five" to
"ten," and the limits of the grant from "ten" to "twenty," miles on
each side of the road, and declares the company to be entitled to
patents, upon the construction and acceptance of each "twenty"
consecutive miles of road.
The act of 1862 provides that upon the completion of forty
consecutive miles (changed to twenty by the act of 1864) of said
road, bonds of the United States of $1,000 each, bearing
Page 99 U. S. 51
six percent semiannual interest, due at thirty years from date,
shall be issued by the Secretary of the Treasury to the company, to
the amount of sixteen bonds per mile (a larger amount per mile
being allowed between certain designated points), and that
"To secure the repayment to the United States, as hereinafter
provided, of the amount of the said bonds so issued and delivered
to said company, together with all interest thereon which shall
have been paid by the United States, the issue of said bonds and
delivery to the company shall
ipso facto constitute a
first mortgage on the whole line of the railroad and telegraph,
together with the rolling stock, fixtures, and property of every
kind and description, and in consideration of which said bonds may
be issued, and on the refusal or failure of said company to redeem
said bonds or any part of them when required so to do by the
Secretary of the Treasury in accordance with the provisions of this
act, the said road, with all the rights, functions, immunities, and
appurtenances thereunto belonging, and also all lands granted to
the said company by the United States which at the time of said
default shall remain in the ownership of the said company, may be
taken possession of by the Secretary of the Treasury for the use
and benefit of the United States,
provided this section
shall not apply to that part of any road now constructed."
The tenth section of the act of 1864 provides that sec. 5 of the
act of 1862
"be so modified and amended that the Union Pacific Railroad
Company, the Central Pacific Railroad Company, and any other
company authorized to participate in the construction of said road
may, on the completion of each section of said road, as provided in
this act and the act to which this act is an amendment, issue their
first mortgage bonds on their respective railroad and telegraph
lines to an amount not exceeding the amount of the bonds of the
United States, and of even tenor and date, time of maturity, rate
and character of interest, with the bonds authorized to be issued
to said railroad companies respectively. And the lien of the United
States bonds shall be subordinate to that of the bonds of any or
either of said companies hereby authorized to be issued on their
respective roads, property, and equipments, except as to the
provisions of the sixth section of the act to
Page 99 U. S. 52
which this act is an amendment, relating to the transmission of
dispatches and the transportation of mails, troops, munitions of
war, supplies, and public stores for the government of the United
States. And said section is further amended by striking out the
word 'forty' and inserting in lieu thereof the words 'on each and
every section of not less than twenty.'"
The indenture executed by the company to secure its bonds
conveys in fee to trustees, upon certain trusts, terms, and
conditions, the lands granted to it by the acts of Congress. One
condition is
"that if the said party of the first part shall well and truly
pay, or cause to be paid, to the holders of the said bonds, and
every of them, the principal sums of money therein mentioned,
according to the tenor thereof, with the interest thereon, at the
times and in the manner hereinbefore provided, according to the
true intent and meaning of these presents, then and from
thenceforth this indenture and the estate hereby granted shall
cease and determine, and all the right, title, and interest in any
and all property hereby conveyed to the parties of the second part,
not then disposed of under the powers hereby conferred, shall
revert to and vest in the said party of the first part."
It further provides that the lands shall be under the management
and control of the company, to be by it sold or contracted to be
sold for such prices and on such terms of payment as shall be
mutually agreed upon by the company and the trustees; that the
trustees shall, upon payment of the purchase money of the several
tracts which may be sold, receive and apply the same, and the
proceeds of all sales made by them of lands so conveyed to them, to
the sole and exclusive purpose of the payment of the said coupon
bonds until the same and the whole thereof shall be fully paid and
satisfied, and thereafter to reconvey to the company the residue of
said lands remaining unsold; that in default of the payment of
either the interest or principal of the said coupon bonds according
to the tenor and effect thereof for the period of six months after
demand at the place of payment, the trustees are authorized to
enter into and take possession of the lands and foreclose the
indenture; that in case of such default for the period of one year,
then the principal sum of said bonds is to
Page 99 U. S. 53
become due and payable, and the said trustees are authorized to
take possession of the lands, foreclose said indenture by selling,
at public auction in the city of Omaha or New York, the lands, or
so much thereof as may be necessary to pay and discharge said
coupon bonds, or so many thereof as are then outstanding and
unpaid, and that, in case of any sale upon any such foreclosure or
at any public auction, the trustees are empowered to make, execute,
and deliver a conveyance of the lands so sold which shall convey to
the purchaser all the rights and privileges of the company in and
to the property so sold, to the same extent as the company shall
have previously enjoyed and held the same.
The indenture further declares
"That all the provisions of said acts of Congress, so far as
they are applicable, are hereby made, and shall be deemed and taken
to be, a part of this instrument, and the said provisions in all
that concerns the sale and disposal of the said lands hereby
conveyed to the parties of the second part are to be observed and
strictly and faithfully carried out and fulfilled."
The company has made no sale or disposition of the land in
controversy otherwise than by said indenture, and bonds to the
amount of $7,000,000 are still outstanding.
Page 99 U. S. 56
MR. JUSTICE STRONG delivered the opinion of the Court.
If it be conceded that the complainant has complied with all the
conditions prescribed by the acts of Congress for the acquisition
by a preemptioner of an equitable title to a portion of the public
lands, the question still remains whether the land which he claims
was open to preemption when his settlement was made. It is
confessedly a part of the lands which the United States granted to
the Union Pacific Railroad Company by the Act of July 1, 1862. 12
Stat. 489.
The third section (
supra, p.
99 U. S. 49), of
the act contains words of present grant, but the fourth section
enacted that on the completion of each successive forty miles of
the railroad and telegraph line, patents should be issued,
"conveying the right and title to said lands to said company, on
each side of the road, as far as the same is completed, to the
amount aforesaid." The seventh section required the road and
telegraph to be completed before the first day of July, 1874. The
Amending Act of July 2, 1864, 13 Stat. 356, enlarged the grant, but
made no change in its terms, and the Secretary of the Interior, as
directed by the act, withdrew the lands within fifteen miles of the
designated route of the road from preemption, private entry, and
sale.
Such was the grant. The railroad and telegraph line were
entirely completed before July 1, 1874 (if not in 1869), and
patents for all the lands granted were directed to be issued to the
company in November of that year. By force of the grant, however,
and by the definite fixing of the route of the road and the filing
the map thereof in the Interior Department, as required by law,
together with the completion of the road westward and beyond the
tract claimed by the complainant, the
Page 99 U. S. 57
title to that tract had become vested in the company before
April 16, 1867. On that day, the company, for the purpose of
raising money necessary to continue and complete the construction
of their road, issued their coupon bonds for the sum in the
aggregate of $10,400,000, bearing seven percent interest and
payable in twenty years from their date. On the same day, for the
purpose of securing the payment of the bonds, the company executed
a mortgage or deed of trust to trustees of all and several the
several sections of land granted to them by the said acts of
Congress, including the tract claimed by the complainant. The
instrument, we think, though in form a deed of trust, was
substantially a mortgage. It was delivered to the trustees and duly
recorded. The bonds were sold in different markets to
bona
fide purchasers, and they are now outstanding, about
$7,000,000 still remaining unsatisfied. All this was before the
entire road was completed and before the first step was taken by
the complainant to obtain his preemption right.
In view of these facts, we are to determine whether the mortgage
was a disposition of the lands granted to the company within the
meaning of the last clause of sec. 2 of the act of 1862. If it was,
the tract of land claimed by the complainant was not open to
settlement and preemption when he entered thereon, nor has it been
at any time since. That clause declared that
"All the lands granted by the section which shall not be sold or
disposed of by said company within three years after the entire
road shall have been completed shall be subject to settlement and
preemption,"
&c. Was the mortgage a sale or disposition of the lands as
understood by Congress? That the company had power to mortgage the
lands admits of no reasonable doubt. It may be conceded that a
railroad company has not power either to sell or mortgage its
franchise, or perhaps the road which it has been chartered to
build, without express legislative authority, and this has in some
cases been decided. The reason is that such a sale or mortgage
tends to defeat the purposes the legislature had in view in the
grant of the charter. The adventurers who obtain the charter and
who accept it undertake to construct and maintain the public work.
Their undertaking is the consideration of the grant, and
without
Page 99 U. S. 58
legislative consent they cannot throw off the obligation they
have assumed. But the reason is inapplicable to a sale or mortgage
of property which is not a part of the road, and in no way
connected with its use. Parting with such property or encumbering
it in no degree interferes with the performance of the duties of
the company to the public. Railroad companies are not usually
empowered to hold lands other than those needed for roadway and
stations or water privileges. But when they are authorized to
acquire and hold lands separate from their roads, the authority
must include the ordinary incidents of ownership -- the right to
sell or to mortgage. Especially is this so when, as in the present
case, the lands have been granted to the company by the legislature
that granted the charter, without any restriction of their use.
Assuming, therefore, as we must and as has been tacitly conceded
in the argument, that the company had the power to make the
mortgage of 1867, we need not stop to inquire whether it was a sale
or a partial sale. In some of the states as well as in England, a
mortgage is practically, as well as in form, a sale. It passes the
legal title to the mortgagee. The more general modern doctrine in
this country is, we admit, that it creates merely a lien, without
any transmission of title. But if not a sale, was the mortgage made
by the company defendant in this case not a disposition of the
lands granted to it by Congress? This question is not to be
answered by reference to definitions given in the dictionaries.
What did Congress mean in the act of 1862? That something else than
sale, either total or partial, was intended we are required by all
the rules of construction to conclude. Congress is not to be
presumed to have used words for no purpose. If it was intended that
only lands which had been sold before three years had expired after
the entire completion of the railroad should be exempted from
preemption, the words "or disposed of" were entirely superfluous.
But the admitted rules of statutory construction declare that a
legislature is presumed to have used no superfluous words. Courts
are to accord a meaning, if possible, to every world in a statute.
In
Commonwealth v. Alger, 7 Cush. (Mass.) 53, 89, it was
said that in putting a construction upon any statute, every part
must be regarded, and it must be so expounded, if
Page 99 U. S. 59
practicable, as to give some effect to every part of it. So, in
People v. Burns, 5 Mich. 114, it was held that some
meaning, if possible, must be given to every word in a statute, and
that where a given construction would make a word redundant, it was
reason for rejecting it. To the same effect is
Dearborn v.
Inhabitants of Brookline, 97 Mass. 466, and in
Gates v.
Salmon, 35 Cal. 576, it was ruled that no words are to be
treated as surplusage or as repetition. The phrase "or disposed of"
must therefore have some distinctive meaning, some meaning beyond
the word "sold." What that is may be seen very plainly when the
whole act of 1862 is examined. We are seeking for the intention of
Congress, and to discover that, we may look at the paramount object
which Congress had in view, as well as the means by which it
proposed to accomplish that object. Congress addressed itself to
the work of securing a railroad from the Missouri River to the
western boundary of the Territory of Nevada and thence to the
Pacific Ocean. The work was vast, beyond the reach of private
capital or enterprise. It could be accomplished only by the
bestowal upon a corporation of very large governmental aid. The
proposed road ran over mountains and through what was known to be
an uninhabited desert for more than a thousand miles. The lands
through which it must pass were supposed to be almost worthless and
quite unsalable until they should be made, by the construction of a
railroad, accessible to settlers and to Eastern markets. The
construction of a railroad through such a region was most
uninviting to private capitalists. To induce them to embark in the
enterprise was the overshadowing motive that dictated the act of
1862. This is apparent in almost every line of the act. For this
reason, the grants of land were made, the rights of way and of
taking materials were given, and the subsidy bonds were loaned, to
be repaid only at the expiration of thirty years, with interest
payable only at the expiration of that period. Even this was not
enough. No association and no persons were found willing, with all
this proffered assistance, to undertake the construction of the
road. But so earnest was Congress to induce the corporators to
attempt the work that in 1864 additional aid was proffered, the
grant of lands was doubled, and new privileges were conferred. We
do not now
Page 99 U. S. 60
attempt to portray the earnestness -- the all-absorbing
earnestness -- with which Congress sought to secure the
construction of the road by private enterprise. It was well
exhibited in
United States v. Union Pacific Railroad Co.,
91 U. S. 72, to
which we refer. Suffice it to say the purpose of Congress, above
all others, was to obtain the construction of the railroad by the
corporation it created to undertake the work. For that alone the
subsidy bonds were given. Only for that the grants of land were
made. All was intended to give the utmost possible assistance to
the stupendous and unparalleled enterprise. We do not say that
other incidental considerations were not kept in mind, but what we
do assert as plainly manifest in the legislation is that the
paramount intention of Congress was to give such assistance to the
company as to induce them to build the road. Every other
consideration was subordinate to that.
All will concede that in construing the act of 1862, we are to
look at the state of things then existing, and in the light then
appearing seek for the purposes and objects of Congress in using
the language it did. And we are to give such construction to that
language, if possible, as will carry out the congressional
intentions. For what particular purpose, then, was the grant of
lands made? The statute itself answers, "for the purpose of aiding
in the construction of the railroad and telegraph line," and
securing governmental transportation, &c. The lands were
granted to be used in furtherance of such construction. But
Congress and the grantees must have known that, when granted, the
lands were of little worth. They were then unsalable at any price.
Their value was wholly prospective, dependent upon the construction
of the road. Purchasers could not have been reasonably expected,
certainly few, for immediate settlement. The obvious mode,
therefore, of using the lands for the construction of the road (not
for paying debts incurred in the construction, but for immediate
need as the construction was progressing) was to hypothecate them
as security for a loan. Many persons might be willing to advance
money on the faith of the prospective value of the lands if the
railroad was built who would not be willing to buy when it was
doubtful whether the company would ever be able to raise the money
necessary to build the road and thus render the lands salable.
Congress must have
Page 99 U. S. 61
been blind, indeed, if it did not foresee this, and intend to
authorize the use of the lands to raise money by mortgage for the
object it had so much at heart. This we think, was what was
intended by the phrase "or disposed of," as distinguished from
"sold." Some of the lands might be sold as the work was
progressing, and others could be used in aid of the construction
only by pleading them to persons who might be willing to advance
money on the faith of their prospective value. But whether sold or
used as a security for money loaned to advance the construction of
the road, they were equally employed for the purpose for which they
were granted. The words "disposed of" are undeniably apt words to
indicate a transfer by mortgage. If land be conveyed to A. to
enable him to raise money for a particular purpose, nobody would
doubt that a mortgage would be a disposition of the land for that
purpose; and the grant made by the third section of the act of 1862
was obviously made, as we have suggested, with the intent of giving
present assistance to the company in the construction of the road.
It was not intended to be available only after the company had
raised all the money necessary for the work. Then the time of need
for the purpose mentioned would have gone by. The act declares it
to have been "to aid in the construction of the road," not to
reimburse expenditures made in the construction. Hence it must have
been intended that the company might use or dispose of the land in
some other way than by a sale. But in what other way? Not by gift,
for that would not have been in aid of the construction, and the
grant was intended for that. Nor by leases. They could have brought
little money. And no other mode of disposition except by mortgage
has been suggested which could furnish the requisite aid for
building the road. No other is conceivable. The conclusion would
seem, therefore, to be almost inevitable that Congress, when
speaking of a disposition of the lands other than a sale
contemplated making them available for the purposes of the grant by
mortgage.
And if so, it is hard to believe that only a limited interest in
the lands was allowed to be hypothecated. Twelve years were
designated as the period within which the road was required to be
completed, and lands not sold or disposed of within three
Page 99 U. S. 62
years thereafter were to be open to preemption. Moreover, under
the provisions of the act, the title to the lands could be
perfected in the company only as the work of construction advanced
-- that is, as each section of forty miles was completed. The
company might not become entitled to some until July 1, 1874. If,
therefore, a mortgage could only bind the lands unsold until the
expiration of three years after that date, it would have been an
hypothecation for a term of years, and as to some of the lands, for
a term of only three years. Was that the aid proffered by Congress
to stimulate and render possible the completion of an enterprise in
which it felt so deep an interest? If so, it was a barren gift.
Looking at the character of the lands and their remoteness from
settlements, it must have been evident enough that money could not
have been raised on the credit of such a mortgage. The power of
disposition given for the express purpose of enabling the company
to raise money for the construction of the road by such an
interpretation of the act is made of no value. The interpretation
therefore defeats the manifest intention of Congress, and for that
reason it cannot be accepted.
If it be suggested, as it has been on behalf of the complainant,
that the mortgage contains a provision that has some bearing upon
the extent of its lien, it may be well here to notice that
provision. The instrument purports to convey to the trustees a fee,
and not a limited estate, and it requires in all sales that may be
made under it the conveyance of a fee. It contains, however, the
following clause:
"It is hereby declared by the parties to this indenture that all
the provisions of the said acts of Congress [referring to the acts
of 1862 and 1864], so far as they are applicable, are hereby made
and shall be deemed and taken to be a part of this instrument, and
the said provisions in all that concerns the sale and disposal of
the said lands hereby conveyed to the parties of the second part
are to be observed and strictly and faithfully carried out and
fulfilled."
What are thus stipulated to be observed and strictly and
faithfully to be carried out and fulfilled are the provisions of
the acts in all that concerns the sale and disposal of the lands.
They are matters to be carried out and strictly fulfilled --
duties
Page 99 U. S. 63
to be performed by the company and duties which concern the sale
or disposal of the lands. Carrying out and performing a provision
implies action, and the provision must therefore be one relating to
action. But the acts of Congress contain no provision respecting
the sale or disposal of the lands that requires action -- that is,
something to be carried out and fulfilled -- except the implied
duty of devoting the proceeds of sales or dispositions strictly and
faithfully to aid in the construction of the road.
The provision that, at the expiration of three years from the
completion of the road, the unsold or undisposed-of lands should be
open to preemption was in its nature not one to be "strictly and
faithfully carried out and fulfilled" by the company. The right to
preemption of whatever might be left for preemption was a matter
with which the company had nothing to do -- in relation to which
they had no duties to perform, and only a right to the price paid
by the preemptor. The clause of the mortgage referred to seems
therefore to have been intended only as a stipulation on the part
of the company that whatever money was raised on the mortgage
should be strictly and faithfully applied in furtherance of the
purpose for which the grant of the lands was made -- namely to aid
in the construction of the railroad. Thus understood, it was a
valuable stipulation for the mortgagees. It added to their
security, for the value of the lands depended principally upon the
application by the company of all its means to the completion of
the work.
On the other hand, if an hypothecation of the lands in fee was
within the power to "dispose of" them, as we have endeavored to
show, and if the granting part of the mortgage made, standing by
itself, did hypothecate a fee, it is hard to believe the parties
intended by the stipulations referred to to restrict the exercise
of the power to the grant of an estate for years, a limitation
alike injurious to the mortgagors and the mortgagees. We think
therefore nothing in the stipulation is repugnant to the granting
part of the mortgage which purported an hypothecation of the entire
fee.
There is always a tendency to construe statutes in the light in
which they appear when the construction is given. It is easy to be
wise after we see the results of experience. We
Page 99 U. S. 64
may now think it quite possible the lands could all have been
sold before July 1, 1877. The unforeseen success of the enterprise
and the unprecedented rush of emigration along the line of the
railroad have shed new light upon the value of the grants made to
the company. But in endeavoring to ascertain what the Congress of
1862 intended, we must, as far as possible, place ourselves in the
light that Congress enjoyed, look at things as they appeared to it,
and discover its purpose from the language used in connection with
the attending circumstances. Guided by this rule of construction as
well as by others universally recognized, we have been led
unhesitatingly to the conclusion that the deed of trust or mortgage
executed by this company in 1867 was a disposition of the lands
granted by the third section of the act of 1862 within the meaning
of that act.
We do not say that any mortgage, however small or manifestly
made to evade a
bona fide execution of the purposes for
which the grants were made or made to defeat the policy of the
government which encourages the sale of public lands to private
settlers, and guards against the accumulation of large bodies in
single hands, would be a disposal as understood by Congress. It may
be conceded it would not be, for it would be in conflict with the
avowed object of the grant. The present is no such case. By the
pleadings, it appears that the mortgage of 1867 was made "for the
purpose of raising money necessary to continue and complete the
construction of the railroad in accordance with the act of
Congress." Nor are we now called upon to decide whether the lands
covered by the mortgage will not be open for preemption if they
shall remain unsold after the mortgage shall be extinguished. That
question is not now before us.
The principal objection urged against the interpretation we have
given to the words "sold or disposed of" is that it is repugnant to
the governmental policy of guarding against monopolies of public
lands by large corporations or single individuals. It must be
admitted that Congress had that policy in view when it declared
that the lands not sold or disposed of within three years after the
entire road should be completed should be subject to settlement and
preemption, at a price not
Page 99 U. S. 65
exceeding $1.25 per acre. But this policy was manifestly
subordinated to the higher object of having the road constructed,
and constructed with the aid of the land grant. No limitation was
set to the quantity of land which the company might sell to single
associations or single persons. It was left at liberty to sell, if
it could, to any land association or private purchaser, the entire
body of the lands or any lesser quantity, regardless of the general
legislative policy. It was allowed to sell or dispose of the grant
at its pleasure for the purpose of raising money to aid in the road
construction, provided thus raising the money was done within the
limited period. With that power no preemptor was authorized to
interfere. Whatever contingent rights he had were postponed and
subordinated to it. If, as we think it manifest, the leading
primary policy of the act was to place the lands in the hands of
the company, to be used for the completion of the road as this work
progressed, any secondary policy the government may also have had
in view ought not to be allowed to embarrass or defeat that which
was primary. It is evident Congress thought there might be remnants
of the grant, not used in aid of the construction of the road,
either because other resources of the company might prove
sufficient or because it might be found impossible to dispose of
them in time to furnish such aid, and those remnants it undertook
to open to settlement and preemption. This appears to us to have
been what was intended, and all that was intended. The construction
gives full effect alike to the paramount and the subordinate
purposes of the act. Each has its own field of operation. The
construction contended for by the appellant restricts the power of
disposition, denies the authority of the company to utilize, except
partially, for the purposes of the grant, the land granted, and
might have impaired and possibly defeated the leading purpose of
the grant. It subjects the paramount to the subordinate and
postpones the primary object to the secondary. On the other hand,
utilizing the lands by raising money upon them through a mortgage
-- or, in other words, disposing of them by mortgage -- did not
defeat the policy of opening the remnants not used to
preemption.
Thus construing the last clause of the third section of the
Page 99 U. S. 66
act, in connection with all the other provisions made by
Congress, endeavoring to give effect to every part, and regarding
the spirit as well as the letter, we are constrained to hold that
the mortgage of 1867 was a disposition of the lands mortgaged
within the meaning of the statute, and consequently that the tract
of land claimed by the complainant was not open to preemption when
he undertook to preempt it. He has, therefore, no equitable title
to it.
Decree affirmed.
MR. JUSTICE BRADLEY, with whom concurred MR. JUSTICE CLIFFORD
and MR. JUSTICE MILLER, dissenting.
I dissent from the judgment of the Court in this case. In the
third section of the original charter, after granting to the
company five alternate sections of public land on each side of its
line of railroad to aid in the construction thereof, it was
provided that all lands so granted which should not be sold or
disposed of by the company within three years after the entire road
should have been completed should be subject to settlement and
preemption, like other lands, at a price not exceeding $1.25 per
acre, to be paid to the company. The appellant, after the three
years had expired, settled upon the land in question and claimed
preemption of the same, and offered to the company the price
specified in the statute. The latter refused to receive the money
or to recognize his right, alleging that it had disposed of the
lands in 1867 by executing a mortgage for its entire land grant to
secure a loan of $7,000,000. The question is whether such mortgage
is a sale or disposition of the lands within the meaning of the
proviso of the third section. I think it is not. In my judgment,
Congress had in view such a sale and disposition of the lands as
would secure a settlement thereof. The object was to encourage a
speedy settlement of the country along the line of the road, and
hence it was provided, if the company did not so dispose of them,
they should be open to settlers, at the usual prices, reserving to
the company, however, the right to receive the purchase money for
the same. If the company, by one sweeping deed of trust or
mortgage, could cover the whole domain as with a blanket, and thus
prevent a settlement thereon until
Page 99 U. S. 67
the lands, by advance of prices, would be out of the reach of
actual settlers desirous of occupying and improving them, it seems
to me it would entirely defeat the objects of the act.
It is said, however, that if the company could not mortgage the
lands, they could not make use of them in aid of the construction
of the road, the purpose for which they were expressly granted. I
do not think this result would by any means follow. The fourth
section provides for granting to the company patents for a
proportionate part of the lands for every forty miles of railroad
which should be completed. As fast, therefore, as the successive
forty-mile sections should be completed, it was contemplated by the
act that the company should have control of the lands to that
extent. This would constantly subject to their use large tracts
which, if disposed of according to the intent of Congress, would
have effected a rapid settlement of the adjacent country in all
portions of the route which were adapted to cultivation.
The criticism that the words "sold or disposed of" mean
something more than "sold," and can only mean a mortgage of the
lands, I do not conceive to be just, but rather as sticking in the
bark. Reading the whole act together, I think the only fair
construction is that which is above suggested.
The objection that the right of preemption contended for would
have prevented the company from giving a mortgage at all is not
tenable. The mortgagees take the mortgage subject to the provisions
of the act. It contains a proviso to this express effect. The lands
were mortgaged
cum onere, and the mortgagees, if so
stipulated, would be entitled to the purchase money receivable from
settlers. This view of the subject would effectuate justice between
all the parties, preserve the true construction of the act, and
carry out the policy of Congress.
In view of these considerations, I think that the decree should
be reversed and that the appellant, the complainant below, should
be declared to be equitably entitled to the land in question.
