United States v. Oregon C. Railroad Company

This was a bill brought by the United States against the Oregon Central Railroad Company and the Oregon & California Railroad Company in the circuit court of the United States for the district of Oregon, to quiet title to about 90,000 acres of land in the state of Oregon, and a cross bill filed by the defendants to quiet title to the same land in the Oregon & California Railroad Company. The cause was heard on the pleadings and a stipulation as to the facts, with accompanying maps and documents.

On May 4, 1870, an act of congress was approved, which is as follows (16 Stat. 94):

'Chap. LXIX.-An act granting lands to aid in the construction of a railroad and telegraph line from Portland to Astoria and McMinville, in the state of Oregon.

'Be it enacted by the senate and house of representatives of the United States of America in congress assembled, that for the purpose of aiding in the construction of a railroad and telegraph line from Portland to Astoria, and from a suitable point of junction near Forest Grove to the Yamkill river, near McMinville, in the state of Oregon, there is hereby granted to the Oregon Central Railroad Company, now engaged in constructing the said road, and to their successors and assigns, the right of way through the public lands of the width of one hundred feet on each side of said road, and the right to take from the adjacent public lands materials for constructing said road, and also the necessary lands for depots, stations, side tracks, and other needful uses in operating the road, not exceeding forty acres at any one place; and, also, each alternate section of the public lands, not mineral, excepting coal or iron lands, designated by odd numbers nearest to said road, to the amount of ten such alternate sections per mile, on each side thereof, not otherwise disposed of or reserved or held by valid pre-emption or homestead right at the time of the passage of this act. And in case the quantity of ten full sections per mile cannot be found on each side of said road, within the said limits of twenty miles, other lands designated as aforesaid shall be selected under the direction of the secretary of the interior on either side of any part of said road nearest to and not more than twenty-five miles from the track of said road to make up such deficiency.

'Sec. 2. And be it further enacted, that the commissioner of the general land office shall cause the lands along the line of the said railroad to be surveyed with all convenient speed. And whenever and as often as the said company shall file with the secretary of the interior maps of the survey and location of twenty or more miles of said road, the said secretary shall cause the said granted lands adjacent to and coterminous with such located sections of road to be segregated from the public lands; and thereafter the remaining public lands, subject to sale within the limits of the said grant, shall be disposed of only to actual settlers at double the minimum price for such lands: and provided also, that settlers under the provisions of the homestead act who comply with the terms and requirements of said act, shall be entitled, within the said limits of twenty miles, to patents for an amount not exceeding eighty acres each of the said ungranted lands, anything in this act to the contrary notwithstanding.

'Sec. 3. And be it further enacted, that whenever and as often as the said company shall complete and equip twenty or more consecutive miles of the said railroad and telegraph, the secretary of the interior shall cause the same to be examined, at the expense of the company, by three commissioners appointed by him; and if they shall report that such completed section is a first-class railroad and telegraph, properly equipped and ready for use, he shall cause patents to be issued to the company for so much of the said granted lands as shall be adjacent to and conterminous with the said completed [completed] sections.

'Sec. 4. And be it further enacted, that the said alternate sections of land granted by this act, excepting only such as are necessary for the company to reserve for depots, stations, side tracks, wood yards, standing ground, and other needful uses in operating the road, shall be sold by the company only to actual settlers, in quantities not exceeding one hundred and sixty acres or a quarter section to any one settler, and at prices not exceeding two dollars and fifty cents per acre.

'Sec. 5. And be it further enacted, that the said company shall, by mortgage or deed of trust to two or more trustees, appropriate and set apart all the net proceeds of the sales of the said granted lands, as a sinking fund, to be kept invested in the bonds of the United States, or other safe and more productive securities, for the purchase from time to time, and the redemption at maturity, of the first mortgage construction bonds of the company, on the road, depots, stations, side tracks, and wood yards, not exceeding thirty thousand dollars per mile of road, payable in gold coin not longer than thirty years from date, with interest payable semi-annually in coin not exceeding the [rate] of seven per centum per annum; and no part of the principal or interest of the said fund shall be applied to any other use until all the said bonds shall have been purchased or redeemed and canceled; and each of the said first mortgage bonds shall bear the certificate of the trustees, setting forth the manner in which the same is secured and its payment provided for. And the district court of the United States, concurrently with the state courts, shall have original jurisdiction, subject to appeal and writ of error, to enforce the provisions of this section.

'Sec. 6. And be it further enacted, that the said company shall file with the secretary of the interior its assent to this act within one year from the time of its passage; and the foregoing grant is upon condition that said company shall complete a section of twenty or more miles of said railroad and telegraph within two years, and the entire railroad and telegraph within six years, from the same date.'

Within one year from the passage of this act, the Oregon Central Railroad Company filed with the secretary of the interior its assent to the act, and prior to July 31, 1871, and February 2, 1872, filed in that department maps of survey and definite location of its line of railroad, being a location from Portland to the Yamhill river near McMinnville via a point near Forest Grove, and from that point to Castor Creek, a point 20 miles towards Astoria, and from Castor Creek to Astoria; the distances being about 26 miles from Portland to Forest Grove, about 22 3/4 miles from there to the Yamhill river, and about 102 1/2 miles from Forest Grove to Astoria. The lands adjacent to and coterminous with the entire line of definite location were segregated and withdrawn from the public lands. Twenty miles of road from Portland, running due west, and terminating at a point near the town of Hillsboro, in Washington county, Or., were constructed, and about 6 miles more to a point near Forest Grove; and from that point something over 21 miles, running almost directly south to a point near McMinnville in Yamhill county. The line was constructed on a curve as it approached Forest Grove.

The secretary of the interior, on February 16, 1872, accepted the first 20 miles as completed under the act, and on June 23, 1876, he accepted another 27 1/2 miles as so completed, being the distance from Hillsboro to a point near Forest Grove, and from that point to McMinnville.

On October 6, 1880, the Oregon Central Railroad Company, for value, sold and conveyed to the Oregon & California Railroad Company all the title and interest which it had acquired in and to the lands granted under the act, and all its road, franchises, and privileges; but it was not admitted by the United States that the Oregon Central Railroad Company had a legal right to make said sale and conveyance. On that day the Oregon Central Railroad Company was insolvent, and went into liquidation, and the conveyance was made to settle its business and dispose of its property. Neither of these railroad companies, nor any one else, has ever constructed or equipped any portion or part of any railroad from the point near Forest Grove to Astoria.

January 31, 1885, congress passed an act (23 Stat. 296, c. 46), the first section of which is as follows:

'That so much of the lands granted by an act of congress entitled 'An act granting land to aid in the construction of a railroad and telegraph line from Portland to Astoria and McMinnville, in the state of Oregon,' approved May fourth, eighteen hundred and seventy, as are adjacent to and coterminous with the uncompleted portions of said road, and not embraced within the limits of said grant for the completed portions of said road, be, and the same are hereby, declared to be forfeited to the United States and restored to the public domain, and made subject to disposal under the general land laws of the United States as though said grant had never been made.' July 8, 1885, the commissioner of the general land office issued to the local land office at Oregon City instructions for its guidance under the act of January 31, 1885, and a diagram showing the limits of the forfeited lands, and that portion of the grant which was not affected by the act. 4 Land Dec. 15. These instructions were approved by the acting secretary of the interior. The diagram showed that the road ran from Portland west to a point near Forest Grove, where it turned almost at a right angle, and ran south to McMinnville. From that point two lines were drawn, one due north and the other due west, both terminating at the 20-mile limits. The granted lands lying within the quadrant formed by these lines and the 20-mile limits, and also the indemnity lands within said lines and the 25-mile limits, were designated on the diagram as 'forfeited.' The forfeited lands on the line from Forest Grove to Astoria were also shown.

In November, 1885, the Oregon & California Railroad Company, assignee of the Oregon Central Railroad Company, presented to the land office a list of lands embraced within the territory claimed in this suit to be forfeited to the United States, and tendered the fees for locating the same, which were declined, and the list rejected, upon the ground that the lands had been forfeited.

About the same time there was filed in the land department a petition of the receiver of the Oregon & California Railroad Company, praying that the instructions in so far as they applied to the granted lands in said quadrant be revoked. This petition was referred to the commissioner for examination and report, and a report was subsequently submitted recommending 'that the restoration remain in force as per instructions of July 8, 1885,' and transmitting a second diagram, 'showing the accurate limits of the grant.' On April 5, 1887, the secretary of the interior passed upon the matter of the application of the receiver, and held that the road from Portland to Forest Grove, and from the latter point to McMinnville, were to be treated as two distinct roads, the limits of which should be adjusted separately. 5 Land Dec. 549. By that adjustment the quadrant northwest from Forest Grove fell within the lands forfeited, which was in accordance with the restoration of July 8, 1885.

Some of the lands claimed to have been forfeited to the United States have been patented, and are in the actual occupation of the patentees, or persons claiming under them; and other portions of said lands for which patents have been issued are unoccupied, and are wild lands, as is true of some of the lands claimed by the United States, which have not been sold or patented, and are not in the actual physical possession of any person or party.

The following is a sufficient reproduction of the diagram: The circuit court (Bellinger, J.) held that the lands within the quadrant were included within the lands forfeited to the government, and decreed accordingly. 57 Fed. 426. The circuit court of appeals for the Ninth circuit reversed this decree, and directed a decree in favor of the Oregon & California Railroad Company. 29 U.S. App. 497, 14 C. C. A. 600, and 67 Fed. 650. Thereupon the present appeal was prosecuted.

Asst. Atty. Gen. Dickinson and George H. Williams, for the United states.

J. Hubley Ashton and Joseph H. Choate, for appellees.

[Argument of Counsel from pages 533-535 intentionally omitted]

Mr. Chief Justice FULLER, after stating the facts in the foregoing language, delivered the opinion of the court.