Sioux City & St. Paul Railroad Company v. United States/Opinion of the Court

1. The lands now in dispute are part of the 85,457.40 acres patented by the United States to Iowa for the use and benefit of the Sioux City Company, but never conveyed by the state to that company.

If the company has received as much of the public lands as it was entitled to have on account of constructed road, may not the lands in dispute (the time limited by congress for the completion of the entire road having passed) be regarded as 'undisposed of,' within the meaning of section 4 of the act of 1864, and may they not, therefore, be claimed by the government as belonging to the United States? According to that section, if the two roads named in it were not completed within 10 years from the several acceptances of the grant, the lands granted and not patented were to revert to the state 'for the purpose of securing the completion of the said roads within such time, not to exceed five years, and upon such terms as the state shall determine.' And the second proviso was to the effect that said lands should not in any manner be disposed of or incumbered, except as the same were patented under the provisions of the act; 'and should the state fail to complete said roads within five years after the ten years aforesaid, then the said lands undisposed of as aforesaid shall revert to the United States.'

If the terms of an act of congress granting public lands 'admit of different meanings,-one of extension and the other of limitation,-they must be accepted in a sense favorable to the grantor; and, if rights claimed under the government be set up against it, they must be so clearly defined that there can be no question of the purpose of congress to confer them.' Leavenworth, L. & G. R. Co. v. U.S., 92 U.S. 733, 740. Acts of this character must receive such construction 'as will carry out the intent of congress, however difficult it might be to give full effect to the language used if the grants were by instruments of private conveyance.' Railroad Co. v. Barney, 113 U.S. 618, 625, 5 Sup. Ct. 606. 'Nothing is better settled,' this court has said, 'than that statutes should receive a sensible construction, such as will effectuate the legislative intention, and, if possible, so as to avoid an unjust or an absurd conclusion.' Lau Ow Bew v. U.S., 144 U.S. 47, 59, 12 Sup. Ct. 517.

Giving effect to these rules of statutory interpretation, we cannot suppose that congress intended that the railroad company should have the benefit of more lands than it earned. As the lands granted could only be devoted to the construction of the Sioux City Road from sioux city to the Minnesota line, and as the state, holding the legal title in trust, has not disposed of and does not intend to dispose of them for the purpose of completing that part of the road located between Sioux City and Le Mars, we perceive no sound reason why, within the meaning of the act of 1864, these lands may not be regarded as 'undisposed of,' and equitably the property of the United States, if it be true that the railroad company has received as much of the public lands as it was entitled to have on account of constructed road certified by the governor of the state. This was the interpretation placed by the state upon the act of congress; for by the act of the Iowa legislature of March 16, 1882, the state, because of the failure of the Sioux City Company to construct any road between Sioux City and Le Mars, resumed the title to all lands that had not been 'earned' by the railroad company; and by the subsequent statute of March 27, 1884, it relinquished and conveyed to the United States all lands and rights of land resumed and intended to be resumed by a previous act.

It is apparent, therefore, that the fundamental question in the case is whether the Sioux City Company, having failed to complete the entire road from Sioux City to the Minnesota line, has received as many acres of the public lands as it could rightfully claim under the act of 1864? If this question be answered in the affirmative, the company cannot complain of the final decree as one to the prejudice of its substantial rights. Before considering this question, it is necessary to examine certain propositions relating to the quantity of lands to which the Sioux City Company was entitled for constructed road.

2. On behalf of the company it is contended that, in ascertaining the extent of the grant, we must assume that each odd-numbered section in the place limits contained its full complement of 640 acres, and that, if any section contained in fact less than that quantity, the United States was under a legal obligation to make good the difference. Clearly, the act of 1864 does not admit of this construction. The record shows that many sections in the granted limits, as surveyed and marked, contained less than 640 acres. The grant was of the odd-numbered sections for 10 sections in width on each side of the road, whether they contained 640 acres, or more or less than that quantity. The United States did not undertake that the granted sections should contain any given number of acres. If it appeared, at the time the line of the road was located, that the United States had sold or reserved any particular section, the selection from the public lands, nearest to the tiers of the granted sections, to supply that loss, was limited by the act to the quantity of lands actually in the section so sold or reserved. The court below well said that there was no guaranty by the United States that the quantity of land covered by the grant should equal any fixed number of acres either for the construction of the entire road or any portion thereof, and that the exceptions named in the act clearly show that the company undertaking the construction of the line of the proposed railway was to get only the quantity of land that was ultimately found to be, in fact, covered by the grant.

3. The company also contends that it was entitled to lands for the whole number of miles of road actually constructed by it; that is, for the 50 miles certified by the governor to have been completed, and also for the fraction of 6 1/4 miles immediately north of Le Mars, which was never certified to the secretary of the interior. We cannot assent to this construction of the act of congress. Congress evidently had in view the construction of an entire road from Sioux City to the Minnesota state line; and, to that end, the first section of the act of 1864 grants to the state every alternate section of land designated by odd numbers for 10 sections in width on each side of the road. But that section must be taken in connection with the fourth section, prescribing the mode in which the grant shall be administered. By the latter section, it is provided that the state shall not dispose of the lands granted, except for the purposes indicated by congress and in the manner prescribed; further, that 'said lands shall not in any manner be disposed of or incumbered, except as the same are patented under the provisions of this act.' Now, the manner prescribed for disposing of the lands granted was that patents should be issued to the state for 100 sections of land for each section of 10 consecutive miles, when the governor certified to the completion of such section in good, substantial, and workmanlike manner as a first-class railroad. This was evidently the interpretation given by the state to the act of congress, for the governor never certified to the construction of any section of road less than 10 consecutive miles in length.

It does not follow from this interpretation of the act that the company could never get lands for a fractional part of constructed road, less than 10 consecutive miles. Provision was made for such cases by the clause directing patents to be issued to the state, as each section of 10 consecutive miles was constructed, and was properly certified by the governor, 'until said roads, or either of them, are completed, when the whole of the lands hereby granted shall be patented to the state for the uses aforesaid, and none other.' In other words, for a completed road, the state should have the full quantity of lands granted and found in odd-numbered sections, with the right to select other lands to supply any losses in either of the modes specified in the act of congress. But the time never came when the state could rightfully demand patents for the whole of the lands granted. The road was never completed, and therefore patents could not be legally issued, except for 100 sections of land for each section of 10 consecutive miles of road, certified by the governor of the state to have been constructed in the mode required by congress. The result of this view is that the secretary of the interior was without authority to issue patents, except for the 5 sections of 10 consecutive miles each, that is, for 50 miles of constructed road certified by the governor of the state. The state could not, without completing the road, or causing it to be completed, demand patents on account of the construction of less than a section of 10 consecutive miles. This was the view taken by Secretary Lamar, who said that 'a careful consideration of the granting act convinces me that there is no authority of law for patenting any lands on account of the six and a quarter miles of road [immediately north of Le Mars], and that no lands have been earned by the construction thereof.' 6 Land Dec. 51.

4. 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 or alienation, from conditions subsequent, or from liability to forfeiture. In support of this contention, reference is made to Bybee v. Railroad Co., 139 U.S. 663, 674, 676, 677, 11 Sup. Ct. 641; Van Wyck v. Knevals, 106 U.S. 360, 1 Sup. Ct. 336; Wisconsin Cent. R. Co. v. Price Co., 133 U.S. 496, 10 Sup. Ct. 341; Salt Co. v. Tarpey, 142 U.S. 241, 12 Sup. Ct. 158; St. Paul & P. R. Co. v. Northern Pac. R. Co., 139 U.S. 1, 6, 11 Sup. Ct. 389. 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. 59; Iron Co. v. Cunningham, 155 U.S. 372, 15 Sup. Ct. 103. See, also, Railroad Co. v. Brown, 39 Iowa, 655; Sioux City & St. P. R. Co. v. Osceola Co., 43 Iowa, 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.

5. The company also contends that any calculation of the quantity of lands that the railroad company was entitled to receive on account of constructed road, duly certified, must be on the basis that it was entitled to lands in lieu of those awarded to the Milwaukee Company in the common place limits of the two intersecting roads. In this interpretation of the statute we cannot concur.

The rule is well settled that when lands are granted by acts of congress of the same date, or by the same act, to aid in the construction of two railroads that must necessarily intersect, or which are required to intersect, each grantee (the map of definite location having been filed and accepted) takes, as of the date of the grant, an equal undivided moiety of the lands within the conflicting place limits, without regard to the time of the location of the respective lines. Sioux City & St. P. R. Co. v. Chicago, M. & St. P. R. Co., 117 U.S. 406, 408, 6 Sup. Ct. 790; St. Paul & S.C.. R. Co. v. Winona & St. P. R. Co., 112 U.S. 720, 727, 5 Sup. Ct. 334; Missouri, K. & T. R. Co. v. Kansas Pac. R. Co, 97 U.S. 491, 501; Railroad Co. v. Herring, 110 U.S. 27, 3 Sup. Ct. 485; Grinnell v. Railroad Co., 103 U.S. 739. In Donahue v. Iron Co., 155 U.S. 387, 15 Sup. Ct. 115, this court said: 'The rule is that where two lines of road are aided by land grants made by the same act, and the lines of those roads cross or intersect, the lands within the 'place' limits of both, at the crossing or intersection, do not pass to either company in preference to the other, no matter which line may be first located or road built, but pass in equal undivided moieties to each.'

The grants for the Sioux City and Milwaukee roads were by the same act. Of the granted sections in place limits common to both roads, each company, having filed its map of definite location, took, as of the date of the grant, an equal undivided moiety,-no more. The equal undivided moiety granted for one road was not granted, nor could it be used, for the other road. Congress knew, when it passed the act of 1864, that there would be an overlapping of place limits at the required point of intersection of the two roads; and the Sioux City Company, when it accepted the benefit of the grant, knew that such must be the case. As the act did not provide for a selection of lands for either road on account of the undivided moiety of place lands granted for the other, we may not assume that the right to such selection was intended to be reserved. Lands lost to the Sioux City Company in one of the modes named in the act of congress, and for which other lands could be selected, were lands granted for that company, not lands granted to another company for a different road. The lands which the Sioux City Company claims to have so lost- namely, the undivided moiety granted, and subsequently awarded, to the Milwaukee Company out of the common place limits-were never granted for the Sioux City road, but were never granted the McGregor or Milwaukee Company.

This question was examined in 1887 with great care by Secretary Lamar. The claim was made before him by the Sioux City and the Milwaukee Companies that each was entitled to indemnity for the lands which it claimed to have lost by reason of the grant for the other company of an equal undivided moiety WITHIN THE CONFLICTING PLACE LIMITS. the secretary said: 'i am unable to conclude that such was the intention of congress in making the grant. To say that it was would be to say in effect that, in so far as the ten-mile limits of the two grants overlap, the purpose of the granting act was to make what would amount to a double grant. Each company got a moiety of the lands in odd-numbered sections within the common granted limits. Now, should there be allowed to each company indemnity for the moiety lost by grant to the other, a quantity of land equivalent to all the odd and even numbered sections in said common granted limits would be passed under the granting act. This, I think, could not be justified by any proper construction of the act, nor can I conceive it to have been intended y congress. The grant was of a moiety for each road within the common granted limits of both roads. This accords with the view expressed by the supreme court in the case of St. Paul & S.C.. R. Co. v. Winona & St. P. R. Co., 112 U.S. 720, 5 Sup. Ct. 334. Either this is true, or congress, by the same act, twice granted the same lands. To say that it did or intended to do this would be to say that it acted unreasonably or without a proper understanding of what it was doing. Now, since indemnity is allowed only for lands granted and lost from the grant, and since, in the common ten-mile limits of these two roads, only a moiety was granted, it follows that neither company has any legal claim for indemnity on account of the moiety granted to the other.' 6 Land Dec. 54, 62.

6. In the light of these principles, we come to the practical question presented for determination; namely, whether the Sioux City Company, having failed to complete the road for the benefit of which the grant was made, has received as much of the public lands as it was entitled to receive under the act of 1864. This is entirely a matter of figures.

As heretofore shown, the state patented or certified to the railroad company 322,412.81 acres out of the 407,870.21 acres patented by the United States. We have seen that, of the 322,412.81 acres so transferred to the company, 41,687.52 acres were taken from the Sioux City Company and given to the Milwaukee Company by the decree of the circuit court, pursuant to the mandate of this court in Sioux City & St. P. R. Co. v. Chicago, M. & St. P. R. Co., 117 U.S. 406, 6 Sup. Ct. 790. This, as has been stated, left the Sioux City Company with title to 280,725.29 acres, which it has disposed of or sold, and about which no question is made in this case by the United States.

Was the company entitled to a larger quantity of lands on account of the 50 miles of road certified by the governor of Iowa to have been properly constructed?

We have said that the Sioux City Company was only entitled to the sections as surveyed and as they appeared on the public records, whether they contained more or less than 640 acres each. Upon examination of the certified list of lands, based on the diagram originally furnished by the railroad company to the secretary of the interior, and transmitted by the general land office to the local land office on the 26th of August, 1867, it is found that the actual area of the odd-numbered sections within the place limits of the Sioux City road, excluding odd-numbered sections within the conflicting place limits of the two roads, contained only 247,476.85 acres; and the actual area within the conflicting place limits of the two roads, according to the same diagram, was 70,705.29 acres. Of the latter quantity, one-half, or 35,352.64 acres belonged to the Milwaukee Company, as its equal undivided moiety of the lands in the common place limits. Apparently, therefore, if this diagram be taken as a basis of calculation, the railroad company could have earned, on account of the 50 miles of constructed road, only 247,476.85 acres outside of the conflicting place limits and 35,352.64 acres within such limits,-in all, 282,829.49 acres, or 2,104.21 acres more than the 280,725.29 acres actually received by it, and about which no question is here made by the government.

But there are exhibits in the case, made part of the agreed statement of facts, that lead us to a different result. In 1887 the commissioner of the land office, having before him the question of how much of the public lands the Sioux City Company was entitled to receive, caused an accurate measurement to be made of the area of the odd-numbered sections and parts of sections lying within the grant made by the act of May 12, 1864, for the construction of the Sioux City road. The record shows, if that measurement be regarded, that within the common place limits of the two roads there were only 69,825.99 acres, of which the Sioux City Company was entitled to one-half, or 34,912.99 acres; and that outside of the conflicting limits, and within the place limits of the Sioux City road, there were only 243,807.41 acres. So that, on the basis of the measurement of 1887, the company could have earned for the 50 miles of certified road only 278,720.40 acres; that is, less, by 2,004.89 acres than it has actually received and holds or has sold.

The result is that, if the diagram furnished by the railroad company in 1867 be followed, the Sioux City Company is entitled to 2,104.22 acres in addition to what it has received; whereas, if the measurement of 1887, made under the direction of the land office, be accepted, that company has received 2,004.89 acres more than should in any case have been awarded to it.

We are of opinion that the measurement of 1887 should be taken as the basis for determining the area of the odd-numbered sections within place limits. In the agreed statement of facts, reference is made to a list, certified from the general land office, of the odd-numbered sections and parts of sections lying within the conflicting place limits of the Sioux City and Milwaukee roads; and it is agreed that that list is correct according to the limits laid down on the map of 1887, 'and correctly shows the area of each of said tracts.' In the agreed statement of facts, reference is also made to another list, certified from the general land office; and it is stated to be a correct list of the odd-numbered sections and parts of sections within the place limits of the Sioux City road outside of the conflicting limits 'and the areas thereof,' as defined and certified on the map of 1887.

These lists were objected to by the railroad we do not perceive any good reason why we do not pereive any good reason why they are not competent as evidence,-as much so as the diagram of 1867 and the lists based upon it. Surely, it was competent for the land office, when determining whether the Sioux City Company was entitled to additional lands, to ascertain, by careful remeasurement, the exact area of the odd-numbered sections covered by the grant of 1864, and thus determine whether the map furnished by the railroad company in 1867 was in all respects accurate. By examining the maps of 1867 and 1887, it was easy to perceive in what particulars they differed; and, by proof, to show which was correct. But the defendant took no proof to discredit the map of 1887, and rests this part of the case upon the general proposition that, after the lapse of so many years, the court should base its decree on the map of 1867, which was accepted by the government, and was not questioned until the measurement of 1887 was made by the general land office. This view is, of course, entitled to great weight, and might be accepted, if the determination of this question of evidence and the acceptance of the measurement of 1887 would affect the rights of third parties to specific lands. The matter to be ascertained is the number of acres in each one of certain sections, the exterior boundaries of which are not in dispute. Now, it would seem that, as between the United States and the railroad company, and for the purpose of ascertaining the quantity in acres of public lands which the company earned, or could have earned, on account of the construction of the 50 miles of road, the latest official measurement of the area of the granted limits, not charged to have been fraudulently made, may be accepted as the best, if not conclusive, evidence.

It is said that a contrary view was announced in U.S. v. Hancock, 133 U.S. 193, 196, 10 Sup. Ct. 264. That was a suit to set aside a patent based upon a decree confirming a claim to certain lands within specified boundaries. The court, following previous decisions, held that 'when a decree gives the boundaries of the tract to which the claim is confirmed with precision, and has become final by stipulation of the United States, and the withdrawal of their appeal therefrom, it is conclusive, not only on the question of title, but also as to the boundaries which it specifies.' That was a case in which the rights of third parties were involved, and it is scarcely necessary to say that nothing we have said is in conflict with the principle settled in it.

Our conclusion, then, is that the Sioux City Company, having failed to complete the entire road, for the construction of which congress made the grant in question, was not entitled to the whole of the lands granted, but, at most, only to 100 odd-numbered sections-as those sections were surveyed, whatever their quantity for each section of 10 consecutive miles constructed and certified by the governor of the state; and that according to the measurement of 1887, which is accepted as the basis of calculation, the railroad company had, prior to the institution of this suit, received more lands, on account of the 50 miles of constructed road certified by the governor, than it was entitled to receive. Under this view, it is unnecessary to inquire whether the particular lands here in dispute should not have been assigned to the company, rather than other lands, containing a like number of acres, that were, in fact, transferred to it, and which cannot now be recovered by the United States, by reason of their having been disposed of by the company. If the company has received as much, in quantity, as should have been awarded to it, a court of equity will not recognize its claim to more in whatever shape the claim is presented.

It is proper to say in this connection that the United States in its bill alleges that the excess of lands received by the company was 1,288.13 acres. We have found the excess to be 2,004.89 acres. The bill also states that the lands in Dickinson and O'Brien counties, here in dispute, aggregate 21,979.85 acres, and so the decree below assumes. The amount appears to be 21,692.18 acres, and it was so stated by Secretary Lamar. 6 Land Dec. 63. But these differences are immaterial on the present appeal, for we adjudge that, although the lands in dispute were patented to the state for the use and benefit of the Sioux City Company, the latter is not entitled to any of them, whatever may be the aggregate quantity of acres. It is not claimed by the company that any of these lands constitute a part of those actually certified to it by the state.

7. The last contention of the appellants is that the claim of the United States ought not to prevail against the trustees in the mortgages executed by the railroad company, and which constitute the only security for bona fide holders of bonds secured by those mortgages. The first of these mortgages was executed August 1, 1871, before any lands were patented to the state, and before the railroad company had commenced the construction of its road; the second, on the 25th day of February, 1884, long after the Iowa legislature, which had authority under the act of 1864 to dispose of lands not earned, had declared the resumption by the state of the title to all lands patented to the state under the act of congress and not earned, and more than 15 years after the railroad company accepted the act of the state that conferred upon it the benefits of the grant.

In reference to this claim by the trustees in those mortgages,-assuming that they properly represent in this matter the holders of bonds,-it is sufficient to say that the secretary of the interior was without authority to issue any patents to the state for the use and benefit of the railroad company, except for the 50 miles of road certified by the governor to have been constructed in the manner required by the act of congress. The trustees and all holders of bonds secured by the mortgages were bound to know the extent of the secretary's authority under the act of congress. The utmost that the trustees could claim is that the mortgages covered 100 sections for each 10 consecutive miles of road certified by the governor of the state to have been properly constructed. Lands to that extent have been received by the company. The 85,457.40 acres of which the lands in dispute were part, and which remained with the state after transferring to the company 322,412.81 acres of the 407,870.21 acres patented to the state for the use of the company, were not, and could not legally have been, covered by the mortgages.

Upon the grounds stated in this opinion, we adjudge that the decree below did not prejudice any right of the appellants, or of either of them, and it is therefore affirmed.