Lyle v. Patterson

By the act of May 12, 1864 (13 Stat. at L. 72, chap. 84), Congress made a land grant to the state of Iowa to aid in the construction of a railroad from Sioux City to the Minnesota line, a distance of about 80 miles. It was provided that the road should be completed within ten years, but that as each 10 miles was completed, a patent for one hundred sections should be issued by the Secretary of the Interior to the state, for the benefit of the company building the road. In 1866 the state passed an act under which the Sioux City & St. Paul Railroad was to receive the benefit of the congressional land grant. That company began construction in 1872. Several 10-mile sections were completed. Patents were accordingly issued to the state, and it, in turn, made a number of grants to the railroad company. But, because of a controversy as to what had been earned, the state of Iowa refused to convey to the railroad company those sections which contained the land involved in this controversy.

This particular tract was sold on May 12, 1887, by the railroad company to Pasco, who bought in good faith, believing that the company had earned the right to receive a title thereto. He paid part of the purchase price, promised to pay the balance in ten annual instalments, entered into possession, and made valuable improvements. In 1889 he sold his interest to Patterson, who agreed to pay the balance of the purchase money due to the railroad. Patterson, by himself and tenants, remained in possession until January, 1901. He then sold to Smiths, and the latter, in March, 1901, conveyed to Thomas Beacom. In May, 1901, the appellant, Lyle, claiming that he had a homestead right in the premises, brought the present suit against Patterson, Smiths, and Thomas Beacom, to charge them as trustees holding title for his use.

On the trial it appeared that in 1874, 56 miles of the railroad had been constructed, after which the company ceased to build. The road not having been fully constructed within ten years, as required by Congress in the act of 1864, the state of Iowa refused to issue grants for land claimed by the railroad company, and, by appropriate legislation, the state resumed all the unearned land and relinquished the same to the United States. In 1889 the government filed in the circuit court a bill against the Sioux City & St. Paul Railroad Company, asking the court to quiet the title of the United States to land therein described, included in which was the quarter section sold, in 1887, to Pasco. That suit resulted in a decree in favor of the United States. It was affirmed October 21, 1895 (159 U.S. 354, 40 L. ed. 179, 16 Sup. Ct. Rep. 17).

On October 22, 1895, the day following the decision in favor of the government, and for the purpose of initiating a homestead right, James Beacom entered upon the land, and in the afternoon of the same day Lyle did likewise. He hauled a small hut upon the land, did a little plowing, and slept on the place one or two nights. He left, intending to return, but was prevented from doing so by James Beacom, who, with a drawn pistol and threats of violence, kept him from coming on the land. Subsequently, Lyle did re-enter and remained until he was again forced to leave.

On November 18, 1895, shortly after the decision that the land did not belong to the railroad, but to the United States, notice was given by the Department of the Interior that all the land included in the decree would be restored to the public domain and be subject to entry ninety days after publication. Those having rights under the act of 1887 (24 Stat. at L. 557, chap. 376) were required to file their claims within ninety days following. In February and again in March, 1896, Lyle made his homestead application, tendering the necessary fees. Similar applications were made by James Beacom, Hoffman, and others. Patterson made his claim under the act of 1887. It was rejected on the ground that after the passage of that act, and with notice of the defective title, he had made a new contract with the railroad company as to what should be paid him in the event the government succeeded in the suit. Hoffman was held to be entitled to the patent. On appeal, that decision was reversed by the Commissioner of the Land Office, who ruled in favor of James Beacom. On a further appeal the Secretary of the Interior held that nothing had been done under the new contract to deprive Patterson of the priority given to good-faith purchasers under the act of March 3, 1887, and a patent was accordingly issued to him on March 23, 1901. Thereupon Lyle, on May 24, 1901, brought this bill against Patterson, Smiths, and Thomas Beacom, to cancel the patent, or to have the holders of the legal title decreed to hold the land in trust for him. The circuit court dismissed the bill, and the decree was affirmed (100 C. C. A. 379, 176 Fed. 909) by the circuit court of appeals.

Messrs. Madison B. Davis and Alfred Pizey for appellant.

Messrs. George C. Scott, William Milchrist, and W. D. Boies for appellees.

Statement by Mr. Justice Lamar:

Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court: