Weyerhaeuser v. Hoyt/Opinion of the Court

Conflicting claims to 40 acres of land in the state of Minnesota is the controversy which this case involves. Both parties assert title derived from the United States, the appellants in virtue of a patent issued under a land grant made to the Northern Pacific Railroad Company, and the appellee as the result of an alleged purchase under the timber and stone act. The facts are these:

The Northern Pacific Railroad Company in 1883 filed in the Land Department a list of indemnity selections which embraced the land in question. In 1893 a rearranged list was filed, differing from the previous one, in that it specified the particular tract of land lost in the place limits for which each described selection within the indemnity limits was made. The Land Department having ruled that the eastern terminus of the Northern Pacific Railroad Company was not at Ashland, but at Duluth, a point west of Ashland, the selections, so far as they related to lands east of Duluth, among which was the land in controversy, were canceled by order of the Secretary of the Interior. Following this, in December of that year, Richard B. Jones applied to purchase the land under the timber and stone act. A few months after, on February 28, 1898, the Secretary of the Interior made an order formally withdrawing from entry the selected land east of Duluth in order, as was declared, to preserve the right of the railroad company, if any, resulting from the selections previously filed, pending the decision by this court of cases involving whether the eastern terminus was at Duluth or at Ashland. About nine months after this withdrawal, in December, 1898, Jones made his final proof and paid the purchase money, $100. The receiver of the local land office, however, recited in the receipt issued to Jones that his rights were 'subject to any claim the Northern Pacific Railroad Company may have to the lands herein described.'

In 1900 (177 U.S. 421, 44 L. ed. 830, 20 Sup. Ct. Rep. 677; 177 U.S. 435, 44 L. ed. 836, 20 Sup. Ct. Rep. 706), it was decided that the eastern terminus of the Northern Pacific road was at Ashland, and therefore that the Land Department had erred in holding that such terminus was at Duluth. The Secretary of the Interior then formally reinstated the list of selections previously filed by the railroad company, the entry of Jones was canceled, and the selections were approved and patents issued to the Northern Pacific Railway Company as entitled to all rights under the selections. The railway company conveyed the tract in controversy to Weyerhaeuser and Humbird, the present appellants.

This suit was then begun by Hoyt in a court of the state of Minnesota, against Weyerhaeuser and Humbird, to compel a conveyance of the land, and to restrain the cutting or removal of timber during the pendency of the suit, on the ground that the title was held by the defendants in trust for complainant. The right to relief was principally based upon the contention that the purchase by Jones under the timber and stone act was paramount to the indemnity selection previously made by the railroad company, and hence that the Land Department had fallen into an error of law in patenting the land to the company. In addition there were numerous other grounds upon which the right to relief was predicated, but we do not deem it necessary now to detail them, as we shall come to state and dispose of them after we have passed upon the contention concerning the paramount nature of the timber and stone entry. The case, having been removed into a circuit court of the United States upon the ground that on the face of the bill it involved the construction of acts of Congress, was in that court tried and a decree was entered dismissing the bill. The circuit court of appeals, whose action is now under review, reversed the decree of the circuit court, and remanded the cause, with directions to enter a decree for the complainant, granting the relief prayed. 88 C. C. A. 404, 161 Fed. 324.

The decision of the court was based upon the conclusion that the application to purchase, made by Jones, although subsequent in date to the filing by the railroad company of its list of indemnity selections, was paramount to such selections, even although they had been subsequently approved by the Secretary of the Interior. This was not, however, the result of an interpretation originally considered of the granting act, but was exclusively caused, as shown by the opinion of the court, by what was held to be the authoritative and controlling operation of a decision of this court,-Sjoli v. Dreschel, 199 U.S. 564, 50 L. ed. 311, 26 Sup. Ct. Rep. 154. The soundness of this view lies at the threshold of the case; since, if it be that the rights of the parties are authoritatively concluded by the ruling in the Sjoli Case, it will not be necessary to further consider the subject. Coming at once to analyze the ruling in the Sjoli Case in order to fix its true import, we think it is apparent that the court below was mistaken in holding that the decision was here authoritatively decisive. This is said because we see no escape from that conclusion when the issues in the Sjoli Case are accurately ascertained and are compared with those here presented.

The Sjoli controversy, succinctly stated, thus arose: A homestead settler went in 1884 upon land within the indemnity limits of the grant to the Northern Pacific Railroad Company. He erected a dwelling house and moved into it with his family and cultivated a portion of the land, all prior to the filing in 1885 of a list of selections by the railroad company, embracing the tract settled upon by Sjoli. Although the settler had thus, prior to the filing of the list of selections, entered upon and improved the land with the intention of perfecting title under the homestead laws, his application to enter, for reasons which need not be here adverted to, was not made until subsequent to the filing by the railroad company of its list of selections. Relying upon this fact, the railroad company opposed the application of Sjoli, and the proceedings which took place in the Land Department simply required the Department to determine whether the railroad company, by the filing of its list of selections, could deprive the settler Sjoli of his rights, despite the fact that his settlement and improvement of the land had occurred prior to the filing by the company of its list of selections. The Land Department decided in favor of the settler, and a patent was issued to him.

The matter decided by this court in the Sjoli Case arose from the bringing of a suit by Dreschel, as assignee of the rights of the railroad company, asserting that Sjoli held the land in trust for him as the grantee of the railway company, because the Land Department had, as a matter of law, erred in deciding that the rights of the settler Sjoli were paramount to the subsequent selection by the railroad company, since, at the time of the filing of such list of selections, no record evidence existed in the Land Department of the asserted settlement by Sjoli, or of his intention to avail of the benefit of the homestead laws. The action of the Land Department in maintaining the paramount right of the settler was sustained. As it is manifest from the statement we have made that the controversy in this case involves no question whatever concerning the rights of a settler initiated prior to the filing by the railroad company of its list of selections, but simply calls upon us to determine whether the Land Department erred in deciding that a filed list of selections was, after approval, paramount to a subsequent application to purchase, it is at once demonstrated that the question here involved is wholly different from that which was decided in the Sjoli Case. This difference is as wide as that which would exist between a ruling that one who was prior in time was prior in right, and a directly antagonistic decision that one who was subsequent in time was yet prior in right. And the broad distinction which obtains between the matter which was involved and decided in the Sjoli Case and the question presented on this record is made, if need be, more apparent when it is considered that, in the Sjoli Case, the action of the Land Department in issuing the patent to the settler, because he was prior in time, was sustained, while to hold that decision applicable here would reverse the action of the Land Department in issuing a patent to the railway company because it was prior in time. While, in view of this difference between the issues involved in the Sjoli Case and those here arising, we are constrained to the conclusion that the former case cannot be held to be here authoritatively decisive, of course, the due persuasive force of the reasoning of the opinion in the Sjoli Case, if here applicable, remains, and must be considered when we come, as we now do, to pass upon the controversy here arising, enlightened by the true interpretation of the granting act, as elucidated by the applicable decisions of this court.

It is beyond dispute on the fact of the granting act of July 2, 1864 (13 Stat. at L. 365, 367, chap. 217), and of the joint resolution of May 31, 1870 (16 Stat. at L. 378), extending the indemnity limits, that it was the purpose of Congress in making the grant to confer a substantial right to land within the indemnity limits in lieu of lands lost within the place limits. It is also beyond dispute that, as the only method provided by the granting act for executing the grant in this respect was a selection of the lieu lands by the railroad company, subject to the approval of the Secretary of the Interior, that a construction which would deprive the railroad company of its substantial right to select, and would render nugatory the exertion of power of the Secretary of the Interior to approve lawful selections when made, would destroy the right which it was the purpose of Congress to confer. That the effect of holding that lands lawfully embraced in a list of selections duly filed and awaiting the approval of the Secretary of the Interior could, in the interim, be appropriated at will by others, would be destructive of the right of selection, is not only theoretically apparent from the mere statement of the proposition, but has, moreover, in actual experience, been found to be the practical result of carrying that doctrine into effect. See 25 Ops. Atty. Gen. 632. Considering the language of the granting act from a narrower point of view, a like conclusion is in reason rendered necessary. The right to select within indemnity limits was conferred to replace lands granted in place which were lost to the railroad company because removed from the operation of the grant of lands in place by reason of the existence of the rights of others originating before the definite location of the road. The right to select within indemnity limits excluded lands to which rights of others had attached before the selection, and hence simply required that the selection, when made, should not include lands which, at that time, were subject to the rights of others. The requirement of approval by the secretary consequently imposed on that official the duty of determining whether selections were lawful at the time they were made, which is inconsistent with the theory that anyone could appropriate the selected land pending action of the Secretary. The scope of the power to approve lists of selections, conferred on the Secretary, was clearly pointed out in Wisconsin C. R. Co. v. Price County, 133 U.S. 496, 511, 33 L. ed. 687, 694, 10 Sup. Ct. Rep. 341, where it was said that the power to approve was judicial in its nature. Possessing that attribute, the authority therefore involved not only the power, but implied the duty, to determine the lawfulness of the selections as of the time when the exertion of the authority was invoked by the lawful filing of the list of selections. This view, while it demonstrates the unsoundness of the interpretation of the granting act which the contrary proposition involves, serves also at once to establish that the obvious purpose of Congress in imposing the duty of selecting and submitting the selections when made to the final action of the Secretary of the Interior was to bring into play the elementary principle of relation, repeatedly sanctioned by this court and uniformly applied by the Land Department from the beginning up to this time, under similar circumstances, in the practical execution of the land laws of the United States. Without attempting to cite the many cases in this court illustrating and applying the doctrine, a few only which are aptly pertinent and here decisive are referred to. Gibson v. Chouteau, 13 Wall. 92, 100, 20 L. ed. 534, 536; Shepley v. Cowan, 91 U.S. 330, 23 L. ed. 424; St. Paul & S.C.. R. Co. v. Winona & St. P. R. Co. 112 U.S. 720, 733, 28 L. ed. 872, 877, 5 Sup. Ct. Rep. 334; Oregon & C. R. Co. v. United States, 189 U.S. 103, 112, 47 L. ed. 726, 730, 23 Sup. Ct. Rep. 615; United States v. Detroit Lumber Co. 200 U.S. 321, 334, 50 L. ed. 499, 504, 26 Sup. Ct. Rep. 282, and cases cited.

In Shepley v. Cowan, there was conflict between a pre-emption claim and a selection on behalf of the state of Missouri under an act of Congress conveying to the state a large quantity of land to be selected by the governor, the act providing that if the selection should be approved by the Secretary of the Interior, patents were to issue. The court said (p. 337):

'The party who takes the initiatory step in such cases, if followed up to patent, is deemed to have acquired the better right, as against others, to the premises. The patent which is afterwards issued relates back to the date of the initiatory act, and cuts off all intervening claimants. Thus, the patent upon a state selection takes effect as of the time when the selection is made and reported to the land office; and the patent upon a pre-emption settlement takes effect from the time of the settlement, as disclosed in the declaratory statement or proofs of the settler to the rigister of the local land office.'

On page 338, after distinguishing Frisbie v. Whitney, 9 Wall. 187, 19 L. ed. 668, and Yosemite Valley Case (Hutchings v. Low) 15 Wall. 77, 21 L. ed. 82, the court said:

'But whilst, according to these decisions, no vested right as against the United States is acquired until all the prerequisites for the acquisition of the title have been complied with, parties may, as against each other, acquire a right to be preferred in the purchase or other acquisition of the land when the United States have determined to sell or donate the property. In all such cases the first in time in the commencement of proceedings for the acquisition of the title, when the same are regularly followed up, is deemed to be the first in right.'

In St. Paul & S.C.. R. Co. v. Winona & St. P. R. Co. 112 U.S. 720, 28 L. ed. 872, 5 Sup. Ct. Rep. 334, one of the questions arising for decision was which of two railroad companies was entitled to certain tracts of lieu lands situated within overlapping indemnity limits of certain grants made by an act of Congress to the territory of Minnesota, to aid in the construction of the roads of the contesting companies. The selections were to be made by the governor, and required the approval of the Secretary of the Interior. The Winona Company filed a list of selections. The St. Paul Company made no selections, but nevertheless, on grounds which need not be stated, the Secretary of the Interior certified the lands to the state for the use of that company. The Winona Company brought suit in the state court to have a declaration of its rights in the land, and to restrain the St. Paul Company and others from receiving a patent or other evidence of title to the lands from the governor of the state. The state court decreed in favor of the Winona Company, and this court affirmed its action. In the course of the opinion it was said (page 731):

'The time when the right to lands becomes vested, which are to be selected within given limits under these land grants, whether the selection is in lieu of lands deficient within the primary limits of the grant or of lands which, for other reasons, are to be selected within certain secondary limits, is different in regard to those that are ascertained within the primary limits by the location of the line of the road.'

After referring to prior decisions, the conclusion was reached that, as to the lands to be selected, 'priority of selection secures priority of right;' and that, as the Winona Company alone had made selection of the lands, and that selection was lawful, the right to the land as against third parties vested in the Winona Company as of the date of the filing of its lists of selections. In concluding the opinion it was said (p. 733):

'It is no answer to this to say that the Secretary of the Interior certified these lands to the state for the use of the appellant. It is manifest that he did so under a mistake of the law; namely, that appellant, having made the earlier location of its road through these lands, became entitled to satisfy all its demands, either for lieu lands or for the extended grant of 1864, out of any odd sections within 20 miles of that location, without regard to its proximity to the line of the other road. We have already shown that such is not the law, and this erroneous decision of his cannot deprive the Winona Company of rights which became vested by its selection of those lands. Johnson v. Towsley, 13 Wall. 72, 80, 20 L. ed. 485, 486; Gibson v. Chouteau, 13 Wall. 92, 102, 20 L. ed. 534, 537; Shepley v. Cowan, 91 U.S. 330, 340, 23 L. ed. 424, 427; Moore v. Robbins, 96 U.S. 530, 536, 24 L. ed. 848, 851.'

So, also, in Oregon & C. R. Co. v. United States, 189 U.S. 103, 47 L. ed. 726, 23 Sup. Ct. Rep. 615, the court said (p. 112):

'Now, it has long been settled that while a railroad company, after its definite location, acquires an interest in the odd-numbered sections within its place or granted limits,-which interest relates back to the date of the granting act,-the rule is otherwise as to lands within indemnity limits. As to lands of the latter class, the company acquires no interest in any specific sections until a selection is made with the approval of the Land Department; and then its right relates to the date of the selection. And nothing stands in the way of a disposition of indemnity lands, prior to selection, as Congress may choose to make.'

The doctrine thus affirmatively established by this court, as we have said, has been the rule applied by the Land Department in the practical execution of land grants from the beginning. Porter v. Landrum, 31 Land Dec. 352; Re Southern P. R. Co. 32 Land Dec. 51; Re Santa Fe P. R. Co. 33 Land Dec. 161; Eaton v. Northern P. R. Co. 33 Land Dec. 426; Santa Fe P. R. Co. v. Northern P. R. Co. 37 Land Dec. 669. The well-settled rule of the Land Department on the subject was thus stated by the then assistant attorney general in the department, now Mr. Justice Van Devanter, as follows:

'Under this legislation the company was, by the direction or regulations of the Secretary of the Interior, required to present at the local land office selections of indemnity lands, and these selections, when presented conformably to such direction or regulations, were to be entertained and noted or recognized on the records of the local office. When this was done the selections became lawful filings; and while, until approved and patented, they would remain subject to examination, and to rejection or cancelation where found for any reason to be unauthorized, they, like all other filings, were entitled to recognition and protection so long as they remained undisturded upon the records.

'There is no question in this case as to the sufficiency of the loss assigned, or as to the formality and regularity of the selection.

'What effect has been given to a pending railroad indemnity selection?

'Prior to 1887 the rights of a railroad company within the indemnity belt of its grant were protected by executive withdrawal; but on August 15, that year, these withdrawals were revoked, and the land restored to settlement and entry; but such orders, although silent upon the subject, were held not to restore lands embraced in pending selections. Dinwiddie v. Florida R. & Nav. Co. 9 Land Dec. 74. In the circular of September 6, 1887 (6 Land Dec. 131), issued immediately after the general revocation of indemnity withdrawals, it was provided that any application thereafter presented for lands embraced in a pending railroad indemnity selection, and not accompanied by a sufficient showing that the land was for some cause not subject to the selection, was not to be accepted, but was to be held subject to the claim of the company under such selection. In fact a railroad indemnity selection, presented in accordance with departmental regulations, and accepted or recognized by the local officers, has been uniformly recognized by the Land Department as having the same segregative effect as a homestead or other entry made under the general land laws.' [32 Land Dec. 53.]

Despite the doctrine of this court, as expounded in the cases previously referred to, the unbroken practice of the Land Department from the beginning in the execution of land grants, impliedly sanctioned by Congress during the many years that administrative construction has prevailed, and the destructive effect upon rights conferred by land-grant acts which would result from applying the contrary view, it is yet urged that this must be done because of decisions of this court which it is insisted constrain to that conclusion. One of the decisions thus referred to is Sjoli v. Dreschel, to which we have previously referred, and others are cited in the margin.

What we have already said as to the Sjoli Case would suffice to dispose of the suggestion concerning that case, but we shall recur to it. As to the other cases, it would be adequate to say that not one of them involved the question here under consideration, nor even by way of obiter was an opinion expressed on such question. Indeed, all the cases relied upon may be placed in one of three classes: (a) those involving the nature and character of the right, if any, to indemnity lands prior to selection; (b) whether such lands, after the filing of a list of selections, and before action by the Secretary of the Interior thereon, could be taxed by a state to the railroad company as the owner thereof; and (c) those which were concerned with the nature and character of acts which were adequate to initiate a right to public land which would be paramount to a list of selections when the acts were done before the filing of the list of selections. In none of the cases, moreover, was the wellsettled doctrine of this court as to relation, even by remote implication, questioned. Indeed, in most of the cases relied upon, the previous decisions to which we have referred, expounding the doctrine of relation, were approvingly cited or expressly reaffirmed.

The Sjoli Case, from the facts we have already stated, is clearly here inapplicable, because it falls in the third of the above classes. If it be conceded that general language was used in the opinion in that case which, when separated from its context and disassociated from the issues which the case involves, might be considered as here controlling, that result could not be accomplished without a violation of the fundamental rule announced in Cohen v. Virginia, 6 Wheat. 399, 5 L. ed. 290, so often since reiterated and expounded by this court, to the effect that 'general expressions in every opinion are to be taken in connection with the case in which those expressions are used. If they go beyond the case, they may be respected, but ought not to control the judgment in a subsequent suit when the very point is presented for decision.' The wisdom of the rule finds apt illustration here when it is considered that not even an intimation was conveyed in the Sjoli Case of any intention to overrule the repeated prior decisions of this court concerning the operation and effect of the doctrine of relation upon the approval, by the Secretary of the Interior, of a lawful list of selections. That the general expressions in the Sjoli Case are not persuasive here clearly results from the demonstration which we have previously made, that to apply them would be in effect to destroy the indemnity provisions of the granting act. Moreover, that serious general injurious consequences would arise from treating the expressions relied upon in the Sjoli Case as persuasive is clear (a) because to do so would result in the overthrow of the uniform rule by which the Land Department has administered land grants from the beginning,-a rule continued in force after the decision in the Sjoli Case, because of the administrative conclusion that that case should be confined to a like state of facts, and not be extended to other and different conditions (25 Ops. Atty. Gen. 632); (b) because of the destructive effect upon rights of property and the infinite confusion which would now arise from extending, under the circumstances stated, the observations in the Sjoli Case to the wholly different state of facts presented upon this record.

While the foregoing disposes of the main propositions which the case presents, there are additional contentions which it is necessary to pass upon. Irrespective of any question as to the paramount nature of a list of selections, it is contended on behalf of appellee, contrary to the ruling of the Secretary of the Interior: (a) that the selection by the railroad company of the tract in controversy was void and it could not lawfully be approved; (b) in any event, that he was entitled to the land by virtue of the provisions of an act approved July 1, 1898 (30 Stat. at L. 620, chap. 546); and (c) the Northern Pacific Railway Company did not succeed to the rights of the Northern Pacific Railroad Company in the land, if any right thereto became vested in the latter company.

a. This contention is predicated upon the claim that the selecting company had not sustained a legal loss of the tract in lieu of which the land in controversy was selected and that if it had sustained the loss, the selection was not lawful, because the tract selected was not on the same side of the railroad as the tract lost, and was not the nearest unappropriated land to it. These contentions were considered at much length by the Secretary of the Interior in the opinion, copied in the record, affirming the cancelation of the entry of Jones (34 Land Dec. 105), and were found not to be meritorious. The reasons advanced by the Secretary in support of his rulings upon the legal propositions involved seem to us convincing, and we therefore hold the contentions untenable. Cognate to the contentions just disposed of is a claim made in argument that the filed list of selections was void for the reason that the joint resolution of May 31, 1870, establishing the second indemnity limits, required certain facts to appear in order to entitle the railway company to the land, and that in selecting the land those requisites were not complied with. The claim substantially embodies merely criticisms directed to the form or regularity of the selection list, and is not, in any view, of such a character as to render void the filed list. The matter being within the jurisdiction of the Secretary of the Interior, we must assume that the facts necessary to establish the right to approve the selections were shown to his satisfaction.

b. This contention asserts that complainant is entitled to the land by virtue of certain provisions relating to the Northern Pacific land grant contained in the subdivision entitled, 'Surveying the Public Lands,' embodied in the sundry civil appropriation act of July 1, 1898. The provisions are copied in the opinion in Humbird v. Avery, 195 U.S. beginning at page 485, 49 L. ed. 292, 25 Sup. Ct. Rep. 123, and need not be here repeated. As there said, they 'disclose a scheme or plan for the settlement of the disputes arising out of the conflicting rulings in the Land Department in reference to the eastern terminus of the railroad, and its action in reference to the public lands between Duluth and Ashland.' It is argued that the Secretary of the Interior erroneously decided that the land could not be claimed under the act of 1898 by Jones or his grantee, because, prior to January 1, 1898, Jones had done nothing more than to file his application for the land, and was consequently not a purchaser entitled to the benefits of the statute. In our opinion no error was committed by the Secretary in so deciding. Because we reach this conclusion we must not be considered as intimating any opinion whatever regarding the soundness of the contention made on behalf of the appellants, to the effect that, in any event, the act of 1898 can have no application to one who purchased land under the timber and stone act.

c. It is contended that the Northen Pacific Railway Company, under its charter, had no power to purchase the tract of land here in controversy, and that for various reasons the legal proceedings under which the railway company asserted it had acquired the rights of the Northern Pacific Railroad Company in the land were ineffective to produce any such result. On this record, however, it is not necessary to pass upon these contentions. As the object of the bill is to seek to charge the defendants as trustees of the land for complainant, plainly, if a valid selection was made, proof that their grantor never acquired title to the land would not estabish a right to it in the complainant.

It follows that the decree of the Court of Appeals must be reversed, and that of the Circuit Court affirmed. And it is so ordered.

Mr. Justice Harlan, with whom concurred Mr. Justice Day, dissenting: