United States v. Des Moines Nav Railway/Opinion of the Court

Prior to the decision of this court in Railroad Co. v. Litchfield, 23 How. 66, which decision was announced in 1860, it was a disputed question whether the grant extended above the Raccoon fork. The opinions and rulings of the executive officers of the government were conflicting; and it is not strange that many settled upon these lands in the belief that they were public lands of the United States, and open to settlement. But if they were not in fact open to settlement-if the title legally and fairly passed to the navigation company-no relief from the hardships occasioned by their mistake can be furnished by the courts, whose functions are limited to declaring where, in the face of conflicting claims, the title really rests. We pass, therefore, to the consideration of the matter of title.

It will be observed, in the first place, that there is in this case no question as to the priority of claim. The single question is whether the defendant's title is good as against the government. If so, it is unquestionably prior to all claims of the settlers, for, as appears, as early as June, 1849, the lands to the northern limits of the state were reserved from settlement and sale by direction of the land department; and this reservation was continued in force notwithstanding the subsequent conflicting rulings as to the extent of the grant and the adjudication of this court as to the extent of its limits. The validity of this reservation was sustained in the case of Wolcott v. Des Moines Co., 5 Wall. 681, decided at December term, 1866. In that case it was held that, even in the absence of a command to that effect in the statute, it was the duty of the officers of the land department, immediately upon a grant being made by congress, to reserve from settlement and sale the lands within the grant; and that, if there was a dispute as to its extent, it was the duty to reserve all lands which, upon either construction, might become necessary to make good the purposes of the grant. This ruling as to the power and duty of the officers of the land department has since been followed in many cases. Bullard v. Railroad Co., 122 U.S. 167, 7 Sup. Ct. Rep. 1149, and cases cited in the opinion.

As lands properly reserved are not open to settlement or sale, it follows that the lands above Raccoon fork were at the time of the passage of the resolution of 1861 wholly within the disposing power of congress; and no rights could have attached, by occupancy or otherwise, which would burden the title, or either legally or equitably affect any grant or disposition which congress might then see fit to make. By that resolution congress relinquished to the state all the title of the United States (and that was a full and absolute title) to such tracts of land as were then held by bona fide purchasers under the state law; and by the act of the succeeding year the grant was in terms extended to the northern limits of the state, so that all alternate sections above the Raccoon fork, not theretofore disposed of by the state to bona fide purchasers, thereby passed to the state. As the original grant in 1846 was, within settled rules of construction, a grant in praesenti, (Salt Co. v. Tarpey, 142 U.S. --, 12 Sup. Ct. Rep. 158, and cases cited in the opinion,) the act of 1862, which was a mere extension of the grant, took effect and passed title at once to the state; and the resolution of 1861, which was in terms a relinquishment, also operated as an immediate transfer of title. By the reservation, therefore, full title was retained in the United States; and by the resolution of 1861, and the act of 1862, the same full title passed eo instanti to the state.

But if by the resolution title passed to the state, it also at the same time passed through the state to the real beneficiaries of this resolution, to-wit, bona fide purchasers under the state of Iowa. Section 1202 of the Code of Iowa of 1851 reads as follows: 'Where a deed purports to convey a greater interest than the grantor was at the time possessed of, any after-acquired interest of such grantor, to the extent of that which the deed purports to convey, inures to the benefit of the grantee.' The deeds made by the state to the navigation company recite that 'the state of Iowa does hereby sell, grant, bargain, and convey to the said Des Moines Navigation and Railroad Company the following referred to and described lands, to-wit, [describing them,] to have and hold the above-described lands, and each and every parcel thereof, with all the rights, privileges, immunities, and appurtenances of whatever nature thereunto belonging.' These were deeds purporting to convey a full title. That is the general rule, and such is the import of section 1232, Code of Iowa of 1851, prescribing forms for deeds.

Even if there were no such statute with respect to after-acquired titles, the manifest intent of congress in the resolution was not to transfer the title to the state, to be by it disposed of as it saw fit, but to the state solely for the benefit of bona fide purchasers. The inference from the language, standing by itself, is made certain by the act of 1862, where it refers to the lands covered by this resolution as lands 'released by the United States to the grantees of the state of Iowa under the joint resolution of March 2, 1861.' This is an interpretation by congress of the scope of that resolution, and shows to whom congress intended that the lands should pass.

Was the navigation company a bona fide purchaser under the state? Of course, if it was, the other defendants who hold under it also were. It is claimed by the appellant that the bona fide purchasers referred to were certain parties who had bought portions of these lands from the state of Iowa, paying cash therefor, for the purpose of making homes, and who had taken possession thereof, and were then occupying the same. But the term 'bona fide purchaser' has a well-settled meaning in the law. It does not require settlement or occupancy. Any one is a bona fide purchaser who buys in good faith and pays value. To limit the term as here used to settlers is to interpolate into the statute a restriction which neither the language nor the surrounding circumstances justify. The term itself, as stated, has no such restricted meaning; and, while it may be that there were individuals holding tracts which they had separately settled on and paid for, yet it was also true that the great body of the lands had been conveyed to the navigation company in payment for work done on the Des Moines improvement. This was a well-known fact; and, if congress had intended to distinguish between settlers and other purchasers, it would not have used language whose well-understood meaning included both. If anything can be drawn from the debates in congress at the time of the passage of this resolution it sustains this construction. As appears from the senate proceedings, when the resolution was pending, the fact that a large portion of these lands had been conveyed to the navigation company for work done on the improvement was stated, and an attempt was made to limit the relinquishment to lands 'by the said state sold to actual settlers.' Instead of that, the words now used were inserted, to-wit, 'bona fide purchasers under the state of Iowa.' Cong. Globe, pt. 2, 2d Sess. 36th Cong. 1130-1133. Independently, however, of any inference from these congressional proceedings, there can be no doubt that a party doing work under a contract with the state, making a settlement, and receiving a conveyance of these lands in payment for that work, is a bona fide purchaser. If so, this cause of action fails and the bill must be dismissed.

But the case does not rest here. The title to these lands has often been brought in question in cases determined by this court, and its uniform ruling has been in favor of the validity of the title of the navigation company. A review of some of these cases will be instructive. In Wolcott v. Des Moines Co., supra, it appeared that Wolcott had purchased from the navigation company, the principal defendant in this case, a half section of land above the Raccoon fork, and received a warranty deed therefor. On the decision in Railroad Co. v. Litchfield, supra, that the grant extended only to the Raccoon fork, he sued the navigation company for breach of covenant, alleging that the title to the tract sold had failed. This court affirmed the judgment of the circuit court against him. After referring to its decision in respect to the extent of the grant of 1846, it quoted the resolution of 1861 and the act of 1862, and added: 'If the case stopped here, it would be very clear that the plaintiff could not recover; for, although the state possessed no title to the lot in dispute at the time of the conveyance to the Des Moines Navigation and Railroad Company, yet, having an after-acquired title by the act of congress, it would inure to the benefit of the grantees, and so in respect to their conveyance to the plaintiff. This is in accordance with the laws of the state of Iowa.' It then noticed the contention of the plaintiff that the title to this tract did not pass to the navigation company by this later legislation, because prior thereto, and on May 15, 1856, congress had made a grant to the state of six alternate sections on each side of certain proposed railroads, to aid in their construction. The tract was within the limits of this grant, but the court held that the title to it did not pass thereby, because of the previous reservation made in 1849, the grant by its terms excepting from its operation all lands reserved by 'any act of congress, or in any other manner by competent authority, for the purpose of aiding in any objects of internal improvements, or for any purpose whatsoever.' It will be seen that this decision not only determined the validity and scope of the reservation, but also interpreted the effect of the resolution as operating to transfer full title to the navigation company.

In 1872 the cases of Williams v. Baker, and Cedar Rapids R. Co. v. Des Moines Nav. Co., 17 Wall. 144, and Iowa Homestead Co. v. Valley R. Co., Id. 153, were decided. The first two cases were disposed of by one opinion. Both were suits to quiet title. One side claimed under the river grant, and the other under the railroad grant of 1856. Decrees in favor of the river grant were sustained. In the opinion the court noticed the long contest as to the scope of the original grant, and the final determination thereof, in the case of Railroad Co. v. Litchfield. It then observed: 'This decision was received as a final settlement of the long-contested question of the extent of the grant. But it left the state of Iowa, which had made engagements on the faith of the lands certified to her, in an embarrassed condition, and it destroyed the title of the navigation company to lands of the value of hundreds of thousands of dollars, which it had received from the state for money, labor, and material actually expended and furnished. What was also equally to be regretted was that many persons, purchasers for value from the state or the navigation company, found their supposed title an invalid one.' And, after referring to the legislation of 1861 and 1862, it added: 'This legislative history of the title of the state of Iowa, and of those to whom she had conveyed the lands certified to her by the secretary of the interior as a part of the grant of 1846, including among her grantees the Des Moines Navigation and Railroad Company, needs no gloss or criticism to show that the title of the state and her grantees is perfect, unless impaired or defeated by some other and extrinsic matter which would have that effect;' and closed the opinion in these words: 'We therefore reaffirm-First, that neither the state of Iowa, nor the railroad companies, for whose benefit the grant of 1856 was made, took any title by that act to the lands then claimed to belong to the Des Moines river grant of 1846; and, second, that by the joint resolution of 1861, and the act of 1862, the state of Iowa did receive the title for the use of those to whom she had sold them as part of that grant, and for such other purposes as had become proper under that grant.'

In the third case, which was also a contest between a claimant under the railroad grant and parties claiming under the river grant, the validity of the latter was affirmed, and in its opinion the court said: 'It is therefore no longer an open question that neither the state of Iowa, nor the railroad companies, for whose benefit the grant of 1856 was made, took any title by that act to the lands then claimed to belong to the Des Moines river grant of 1846; and that the joint resolution of 2d of March, 1861, and the act of 12th of July, 1862, transferred the title from the United States and vested it in the state of Iowa for the use of its grantees under the river grant.'

Again, in 1879, the question of this grant came before this court in Wolsey v. Chapman, 101 U.S. 755. In that case the claim adverse to the river grant originated in this way: On September 4, 1841, congress passed an act, (5 St. 453,) by the eighth section of which there was granted to each state 500,000 acres of land for purposes of internal improvement. By the constitution of Iowa, under which the state was admitted, this grant was appropriated to the use of common schools, (Const. Iowa 1846, art. 9, 'School Funds and Schools,' § 3,) and this appropriation was assented to by congress by a special act, (9 St. 349.) On July 20, 1850, the agent of the state having charge of the school lands selected the particular tract in controversy as a part of this school grant; and thereafter, and in 1853, the appropriate proceedings being had, a patent was issued by the state to Wolsey. The grant of 1841 was one which required selection, and so no rights accrued to the state to this tract under such grant until the selection on July 20, 1850; but that, as we have seen, was several months after the lands had been reserved for the river grant. The court, in an elaborate opinion by Chief Justice WAITE, reviewed all the legislation and the previous decisions of the court, and reaffirmed those decisions. The deed from the state to the navigation company, under which Chapman claimed, being subsequent to the patent from the state to Wolsey, it was contended that the former could not question the title thus previously conveyed. Upon this matter the court said: 'Of this we entertain no doubt. If the state had no title when the patent issued to Wolsey, he took nothing by the grant. No question of estoppel by warranty arises; neither does the after-acquired title inure to the benefit of Wolsey, because when the United States made the grant in 1861 it was for the benefit of bona fide purchasers from the state under the grant of 1846. This is evident as well from the tenor of the joint resolution of 1861 as from the act of 1862. The relinquishment under the joint resolution is of all the title which the United States retained in the tracts of land above the Raccoon fork, 'which have been certified to said state improperly by the department of the interior as part of the grant by the act of congress approved August 8, 1846, and which is now held by bona fide purchasers under the state of Iowa;' and by the act of 1862 the lands are in terms to be held and applied in accordance with the provisions of the original grant. This legislation, being in pari materia, is to be construed together, and manifests most unmistakably an intention on the part of congress to put the state and bona fide purchasers from the state just where they would be if the original act had itself granted all that was finally given for the river improvement. The original grant contemplated sales by the state in execution of the trust created, and the bona fide purchasers referred to must have been purchasers at such sales. This being so, the grant, when finally made, inured to the benefit of Chapman, rather than Wolsey.'

At the same term the case of Litchfield v. County of Webster was decided. 101 U.S. 773. The question in that case was at what time the title to these lands passed from the United States, and the lands became subject to taxation. In disposing of that question the chief justice, speaking for the court, observed: 'We think, however, that for the year 1862 and thereafter they were taxable. By the joint resolution, congress relinquished all the title the United States then retained to the lands which had before that time been certified by the department of the interior as part of the river grant, and which were held by bona fide purchasers under the state. No further conveyance was necessary to complete the transfer, and the description was sufficient to identify the property. The title thus relinquished inured at once to the benefit of the purchasers for whose use the relinquishment was made. All the lands involved in this suit had been certified, and Litchfield, or those under whom he claims, were bona fide purchasers from the state.'

Again, in 1883, the case of Dubuque & S.C.. R. Co. v. Des Moines Val. R. Co., 109 U.S. 329, 3 Sup. Ct. Rep. 188, came to this court on error to the supreme court of the state of Iowa. This was an action to recover lands and quiet title, and in which the parties respectively claimed under the railroad grant of 1856 and the river grant; and again the chief justice delivered the opinion of the court, and in it said: 'The following are no longer open questions in this court: * *  * That the act of July 12, 1862, (chapter 161, 12 St. 543,) transferred the title from the United States and vested it in the state of Iowa for the use of its grantees under the river grant. Wolcott v. Des Moines Co., 5 Wall. 681; Williams v. Baker, 17 Wall. 144; Iowa Homestead Co. v. Des Moines Nav. & R. Co., Id. 153; Wolsey v. Chapman, 101 U.S. 755, 767.'

Still later, and in 1886, another attempt was made to disturb the title held under the river grant in the case of Bullard v. Railroad Co., 122 U.S. 167, 7 Sup. Ct. Rep. 1149, which also came here on error to the supreme court of the state of Iowa. The contention in that case in behalf of the plaintiff in error was that the resolution of 1861, which relinquished to the state the title to lands held by bona fide purchasers under it, operated to terminate the reservation from sale made by the land department for the benefit of the river grant, and thus left all lands above the Raccoon fork not then held by bona fide purchasers open to settlement, and free for the attaching of any other grant from that time and up to the act of 1862, which in terms extended the river grant to the northern limits of the state, and, of course, included all lands, whether held by bona fide purchasers or otherwise. But this court sustained the decision of the supreme court of Iowa, and ruled that the reservation from sale made by the land department was not terminated by the resolution of 1861, but continued in force until the act of 1862.

Such have been the decisions of the court in respect to this grant and titles; decisions running through 25 years, all affirming the same thing, and all without dissent. It would seem, if the decisions of this court amount to anything, that the title of the navigation company to these lands was impregnable. Indeed, the emphatic language more than once used, as quoted above, appears like a protest against any further assault upon that title.

Nor has this line of decisions been confined to this court. It runs through the Reports of the supreme court of Iowa. In addition to the two cases, heretofore referred to, coming from that court to this, and in which its decisions were sustained, may be noticed the following: Bellows v. Todd, twice before that court, and reported in 34 Iowa, 18, and 39 Iowa, 209. This was an action of ejectment, brought by Bellows, holding under the navigation company, against Todd, claiming to have settled upon the premises under the pre-emption and homestead laws of the United States in 1860. On the first trial the court refused to give the following instruction: 'If the jury find from the evidence that the lands in controversy were certified to the state of Iowa in 1853, under the act of congress of 8th August, 1846, and that the same have been conveyed by the state of Iowa to the Des Moines Navigation and Railroad Company, and by said company to plaintiff's grantors, and by them to the plaintiff in this action, then the plaintiff is entitled to recover.' When the case came before the supreme court, (34 Iowa,) the refusal to give this instruction was adjudged error, and the case remanded for a new trial. On the second trial the plaintiff requested the following instruction: 'The plaintiff in this action claims title to the lands described in his petition under conveyances from the grantees of the Des Moines Navigation and Railroad Company; and the defendant, as one ground of his defense, alleges that he has been in the continuous occupation and possession of said land for ten years prior to the commencement of this action, and that by reason of such occupation and possession his title is superior and paramount to that of the plaintiff; but, if the jury find from the evidence that this land was certified to the state of Iowa under the act of congress of August 8, 1846, and has been conveyed by the state to the Des Moines Navigation and Railroad Company, under which plaintiff holds, then, the state having acquired title to said land by the joint resolution of congress of March 2, 1861, the title of the state, so acquired, inures to the benefit of said company and its grantees and the plaintiff; and, if this action was commenced within ten years from the date of the passage of said joint resolution, then the plaintiff is entitled to recover in this action, notwithstanding the alleged occupation and possession of defendant,'-which was refused; and in 39 Iowa the refusal to give this instruction was adjudged error, and the judgment reversed, and the case remanded. The significance of this instruction is apparent, inasmuch as the action was commenced on May 19, 1870, less than 10 years from the resolution of March, 1861. In its opinion in this last case the court observes: 'That the title which the state acquired under the resolution of March 2, 1861, inured to the benefit of the Des Moines Navigation Company and its grantees, under the circumstances set forth in the instruction, is elemental. Revision, § 2210; Code, § 1931.'

In addition, there is a series of cases, of which Stryker v. Polk Co., 22 Iowa, 131; Litchfield v. Hamilton Co., 40 Iowa, 66; and Goodnow v. Wells, 67 Iowa, 654, 25 N. W. Rep. 864,-are examples, in which it was held that these lands were subject to taxation for the year 1861. Of course, they could not be subject to taxation unless by the resolution the title had passed, not simply from the United States, but also through the state to its grantees; and repeatedly, in different ways, is it asserted in the opinions in these cases that the title had so passed. We have thus a concurrence of opinion on the part of the supreme court of Iowa and this court for a quarter of a century in favor of the validity of the title acquired by the navigation company. It would seem as though the period of rest as to this question of title ought by this time to have been reached.

But the government is the complainant, induced, doubtless, to bring this suit by the act of the legislature of March 28, 1888, which purports to relinquish for the state its trust, and to reconvey to the United States all its right and title to these lands, as well as by the urgent appeals of the settlers; and the claim is that its presence as a party introduces new questions into the litigation,-questions not at all affected by the prior decisions. It is the original grantor, and its contention is that, while the title of its grantee may be unassailable by other persons, it has the right to challenge it, because the grant was made in trust for a specific purpose, and that trust has not been properly executed, nor the lands appropriated to the purposes thereof. That the proposition of law which underlies this claim is correct cannot be doubted. The grantor of lands conveyed in trust may be the only party with power to complain of the breach of that trust, or, on account of such breach, to challenge the title in the hands of the trustee or others holding under him; and the title conveyed, voidable alone at its instance, may be good as against all the world besides.

Before, however, examining the applicability of this proposition of law to the case at hand, one or two preliminary thoughts naturally arrest the attention. There has been long delay in presenting this claim. A third of a century has passed since the state conveyed to the navigation company, and more than a quarter of a century since congress relinquished and granted to the state the title to these lands. During that time there have been marvelous changes in the population, the industries, the business interests of the state; legislatures and courts have been busy determining rights and establishing relations based upon the vesting of title in the navigation company. A proposition to destroy this title, and to put at naught all that has been accomplished in respect thereto and based thereon during these years, is one which may well make us pause. While it is undoubtedly true that when the government is the real party in interest, and is proceeding simply to assert its own rights and recover its own property, there can be no defense on the ground of laches or limitation, (U.S. v. Railway Co., 118 U.S. 120, 125, 6 Sup. Ct. Rep. 1006; U.S. v. Insley, 130 U.S. 263, 9 Sup. Ct. Rep. 485,) yet it has also been decided that, where the United States is only a formal party, and the suit is brought in its name to enforce the rights of individuals, and no interest of the government is involved, the defense of laches and limitation will be sustained as though the government was out of the case, and the litigation was carried on in name, as in fact, for the benefit of private parties. U.S. v. Beebe, 127 U.S. 338, 8 Sup. Ct. Rep. 1083. In that case a bill was brought by the United States to set aside certain patents issued to one Roswell Beebe, and the charge was that Beebe, by fraudulent practices, obtained the patents. But it also appeared that certain individuals claimed to have equitable titles to the land by virtue of prior locations, and that the effect of a decree canceling the patents would be simply to enable such other parties to perfect their equitable titles. Forty-five years had elapsed since the patents were issued, and this court, declining to enter into any inquiry as to whether the patents were fraudulently obtained, ruled that the defense of laches was complete, because the government was only a nominal, and not the real, party in interest.

The history of the present litigation shows that the long contest has been between the navigation company and its grantees on the one side and settlers claiming the right to pre-emption or homestead, or parties claiming under the railroad grants, on the other. The bill alleges:

'And complainant further alleges and charges that, at the time of the side settlement of 1858, and at all other times theretofore, there existed in the constitution of the state of Iowa, from the time of the admission of said state into the Union in 1846, a provision in the words following, to-wit: 'The general assembly shall not locate any of the public lands which have been or may be granted by congress to this state, and the location of which may be given to the general assembly, upon lands actually settled, without the consent of the occupant. The extent of the claim of any occupant so exempting shall not exceed three hundred and twenty acres.' That at the time of the pretended settlement so made between the state of Iowa and the said navigation company, and at all times when the state has attempted to dispose of lands covered by the grant of 1846 and the said act of 1862, which are in controversy in this suit, said lands were occupied by persons who had settled upon them in tracts of not more than 320 acres to each person, in the belief that they were open to location, settlement, pre-emption, and purchase under the land laws of the United States, and at said time they were occupying said lands in tracts not larger than 320 acres to each, and the said state of Iowa was thereby and therefore prohibited under said constitutional provision from disposing or attempting to dispose of any of the lands in controversy, since none of said persons so occupying said lands consented to any sale or disposition of them whatever.'

And in the brief of the attorney general it is stated that 'the contest here is not between bona fide settlers as against each other, but this litigation is in the interests of bona fide settlers against speculators who have appropriated these lands in violation of law and of the principles of common honesty.'

The district judge, deciding this case in the court below, said: 'Any purpose to call in question the title of parties in actual possession, holding under the state or the navigation company, is expressly disclaimed in the bill, it being averred that the benefit of a decree in favor of complainant is sought only as to such lands as are now actually occupied by settlers who do not hold title under the state or the navigation company, the same amounting to 109,057 acres.' And, after deciding the legal question in favor of the navigation company, he goes on to discuss and suggest what in equity and justice the government should do for the benefit of these settlers. We should be closing our eyes to manifest facts if we did not perceive that the government was only a nominal party, whose aid was sought to destroy the title of the navigation company and its grantees, in order to enable the settlers to perfect their titles, initiated by settlement and occupancy; and, in that event, the delay of 30 years is such a delay as a court of equity forbids. At any rate, it makes most apt the observation of Mr. Justice MILLER, speaking for the court in the case of U.S. v. Throck-morton, 98 U.S. 61, 64, in which case a bill had been filed to set aside a decree rendered more than 20 years before: 'It is true that the United States is not bound by the statute of limitations as an individual would be. And we have not recited any of the foregoing matters found in the bill as sufficient of itself to prevent relief in a case otherwise properly cognizable in equity. But we think these are good reasons why a bill which seeks, under these circumstances, to annul a decree thus surrounded by every presumption which should give it support, shall present on its face a clear and unquestionable ground on which the jurisdiction it invokes can rest.'

Even if this be regarded as a bill brought by the United States simply to protect its own interests and recover its own property, still it is well settled that, where relief can be granted only by setting aside a grant, a patent, or other evidence of title issued by the government in the orderly administration of the affairs of the land department, the evidence in support must be clear, strong, and satisfactory. Muniments of title issued by the government are not to be lightly destroyed. Railroad Co. v. Attorney General, 118 U.S. 682, 7 Sup. Ct. Rep. 66; Maxwell LandGrant Case, 121 U.S. 325, 381, 7 Sup. Ct. Rep. 1015; Iron Co. v. U.S., 123 U.S. 307, 8 Sup. Ct. Rep. 131. In the second of these cases, Mr. Justice MILLER, speaking for the court, said: 'It is not to be admitted that the titles by which so much property in this country and so many rights are held, purporting to emanate from the authoritative action of the officers of the government, and, as in this case, under the seal and signature of the president of the United States himself, shall be dependent upon the hazard of successful resistance to the whims and caprices of every person who chooses to attack them in a court of justice; but it should be well understood that only that class of evidence which commands respect, and that amount of it which produces conviction, shall make such an attempt successful.'

Returning now to the special contention on the part of the government: It is scarcely necessary to determine whether the trust was one following the lands, or merely in the proceeds of the sales of the lands, and whose faithful performance is a question only between the United States and the state, as was finally determined to be the state of the trust created by the 'swamp-land' grant. Mills Co. v. Railroad Co., 107 U.S. 557, 2 Sup. Ct. Rep. 654. We pass rather to inquire in what manner the state performed the duties or trust imposed by the acceptance of this grant, in so far as such performance affects the title to the lands in controversy. The general purpose of the grant was to aid the territory or state in improving the navigation of the Des Moines river. The second section of the act prescribed the conditions under which the territory or state might sell the lands, as follows:

'Sec. 2. And be it further enacted that the lands hereby granted shall not be conveyed or disposed of by said territory, nor by the state to be formed out of the same, except as said improvements shall progress; that is, the said territory or state may sell so much of said lands as shall produce the sum of thirty thousand dollars, and then the sales shall cease, until the governor of said territory or state shall certify the fact to the president of the United States that one-half of said sum has been expended upon said improvement, when the said territory or state may sell and convey a quantity of the residue of said lands, sufficient to replace the amount expended; and thus the sales shall progress as the proceeds thereof shall be expended, and the fact of such expenditure shall be certified as aforesaid.'

The third section declared that the price should not be less than the minimum price of other public lands. So that all that the act provided for was that the state should appropriate the lands to the improvement of the river; that it should make no sales at less than $1.25 per acre; and that its sales should not anticipate its expenditures by more than $30,000. Now, it is not pretended that the state appropriated the lands to any other purpose, or that the price at which it sold was less than $1.25 per acre. The contract between it and the navigation company provided for conveyances only as the work progressed, and money was expended by the company; and the settlement proposed by the legislature and accepted by the company, and the certificate made by the governor to the president, showed that the navigation company had expended money enough to justify the conveyance of all the lands which were in fact conveyed. On the face of the transaction, therefore, the duties imposed by the trust were exactly and properly performed, and the title to the navigation company passed to it in strict compliance with the very letter of the statute. But it is earnestly contended that the navigation company was not a bona fide purchaser; that, while it claimed to have expended $330,000 on the improvement, in truth it had not expended half that amount; that by means of its false representations, and by threats of bringing suit against the state and obtaining damages against it, it induced the legislature to pass the resolution of 1858, offering terms of settlement; that the work of improving the river was unfinished, not more than one-tenth of the work necessary therefor having been done; and that the state has wholly abandoned the undertaking.

With respect to the last two allegations it is not perceived how, if true, they can affect the title of the navigation company to lands deeded by the state to it in payment of work done. Surely the title to lands which the state conveyed at the inception of the undertaking, either for cash or for work done thereon, cannot fail because the state failed to complete the improvement. No land could have been sold if the purchaser's title had depended upon such a condition.

If we examine the testimony, there is nothing in it worthy of mention tending to impeach the bona fides of the transaction between the state and the navigation company. Only one witness was offered by the plaintiff to prove the amount of work done by the navigation company, and the influences by which the action of the legislature was induced, and his testimony carries on its face abundant evidences of its own unworthiness. In the face of the deliberate proceedings of the legislature and the executive officers of the state in respect to a matter of public interest, open to inspection and of common knowledge, something more than the extravagant and improbable statements of one witness, made 30 years after the event, is necessary to overthrow the settlement. Indeed, counsel for the government make slight reference to this testimony; but rest their case upon the allegations of the bill, which, as against the principal defendant, the navigation company, were admitted by demurrer. It is urged that there is an express averment that the navigation company and its grantees are not, and never were, bona fide purchasers of the lands, or any part thereof. But such a general averment, though repeated once or twice, is to be taken as qualified and limited by the specific facts set forth to show wherein the transaction between the state and the navigation company was fraudulent. Where a bill sets out a series of facts constituting a transaction between two parties, a demurrer admits the truth of those facts, and all reasonable inferences to be drawn therefrom, but not the conclusion which the pleader has seen fit to aver. And the fact which stands out conspicuously is the resolution proposing settlement, which passed the legislature of the state of Iowa in March, 1858. That act is beyond challenge. The knowledge and good faith of a legislature are not open to question. It is conclusively presumed that a legislature acts with full knowledge, and in good faith. It is true, the bill alleges that its passage was induced by the navigation company by false representations and threats of suits, but such an allegation amounts to nothing. In Cooley's Constitutional Limitations, (5th Ed. 222,) the author, citing several cases, observes: 'From what examination has been given to this subject, it appears that whether a statute is constitutional or not is always a question of power; that is, a question whether the legislature in the particular case, in respect to the subject-matter of the act, the manner in which its object is to be accomplished, and the mode of enacting it, has kept within the constitutional limits, and observed the constitutional conditions. In any case in which this question is answered in the affirmative, the courts are not at liberty to inquire into the proper exercise of the power. They must assume that legislative discretion has been properly exercised. If evidence was required, it must be supposed that it was before the legislature when the act was passed; and, if any special finding was required to warrant the passage of the special act, it would seem that the passage of the act itself might be held to be equivalent to such finding. And, although it has sometimes been urged at the bar that the courts ought to inquire into the motives of the legislature where fraud and corruption were alleged, and annul their action if the allegations were established, the argument has in no case been acceded to by the judiciary, and they have never allowed the inquiry to be entered upon.' See, also, Fletcher v. Peck, 6 Cranch, 87; Ex parte McCardle, 7 Wall. 506; Doyle v. Insurance Co., 94 U.S. 535; Powell v. Pennsylvania, 127 U.S. 678, 8 Sup. Ct. Rep. 992, 1257. And in this case the circumstances surrounding the transaction preclude the idea of misconduct or ignorance on the part of the legislature. The threat of suit, when the state could not be sued except at its own will, could not have been very persuasive. The work done by the navigation company was open to inspection. It was done along the line of the principal river in the state. It was in fact made a matter of examination and report; and, while the amount expended by the navigation company might not have been known to the exact dollar, yet, in a general way, the cost of what had been done could easily have been ascertained, and must have been known. But, if no lack of good faith can be imputed to the state,-the party making the offer of settlement,-does it not follow necessarily that none can be imputed to the navigation company,-the party accepting the offer? for how can fraud be imputed to one who simply accepts terms of settlement voluntarily offered by another? And if this settlement was made in good faith, and with out fraud, is it not clear that the navigation company, taking the lands which the state offered in payment for the work which it had done, took those lands as a bona fide purchaser, and therefore comes within the letter and spirit of the resolution of 1861? And here the significance of this resolution is evident. It was passed by congress after the settlement proposed by the Iowa legislature in 1858 had been accepted by the navigation company, and deeds had passed in accordance therewith. Its passage imports full knowledge of antecedent facts upon which it is based. In Powell v. Pennsylvania, 127 U.S. 678, 686, 8 Sup. Ct. Rep. 992, 1257, referring to action had by the legislature of the state, this court said: 'The legislature of Pennsylvania, upon the fullest investigation, as we must conclusively presume, and upon reasonable grounds, as must be assumed from the record,' etc. So congress, by this resolution of 1861, knowing that this settlement had been offered by the state of Iowa and accepted by the navigation company; knowing that such act on the part of the legislature conclusively implied full knowledge and good faith, and that an acceptance of such offered settlement by the navigation company also implied good faith; knowing, also, that the conveyances made under this settlement embraced the major portion of the lands,-must be assumed to have approved such settlement, and intended to relinquish to the navigation company the title supposed to have been conveyed by the settlement and deeds. Surely it cannot be that, when it knew the import and implication of the legislative act, congress thought to repudiate it, or invite investigation into a matter which otherwise stood foreclosed of all inquiry. As its own acts were free from imputation, it knew that the acts of the legislature of the state of Iowa were also free from imputation, and that a settlement which that legislature had offered could not be challenged for fraud; and with that knowledge it confirmed the title which the legislature of Iowa had attempted to convey. Surely, under those circumstances, the courts are not at liberty to probe the matters surrounding this settlement, to see if some party did not misrepresent the facts, and utter falsehoods. So, if we narrow the inquiry to the mere language of the bill, in view of all the facts disclosed therein, and of those legislative and judicial proceedings which are matters of common knowledge and need not be averred, it is evident that the government has not made out its case; and, if we broaden the inquiry to all the facts disclosed by the testimony, it is clear beyond doubt that the navigation company was a bona fide purchaser within the meaning of the resolution of 1861, and intended as a beneficiary thereunder.

It follows from these conclusions that there was no error in the ruling of the circuit court dismissing the bill, and its decree is affirmed.