Wisconsin Central Railroad v. Price County

Cassoday, J.

By the act of Congress of May 5, 1864, certain lands were granted to the state to aid in the building of three separate lines of railway. 13 Stats, at Large, 66, ch. 80. The third section granted lands to the state in aid of what is now the plaintiff’s line of road. The language of the section is in effect “ that there be and is hereby granted to the state of "Wisconsin, for the purpose of aiding in the construction ” of said line of road, “ every alternate section of public land designated by odd numbers, for ten sections in width on each side of said road. . . . But in case it shall appear that the United States have, when the line or route of said road is definitely fixed, sold, reserved, or otherwise disposed of any sections or parts thereof, granted as aforesaid, or that the right of preemption or homestead has attached to the same, that it shall be lawful for any agent or agents of said state, appointed by the governor thereof, to select, subject to the approval of the secretary of the interior, from the lands of the United States, nearest to the tier of sections above specified, as much public land in alternate sections, or parts of sections, as shall be equal to such lands as the United States have sold or otherwise appropriated, or to which the right of preemption or homestead has attached as aforesaid, which lands (thus selected in lieu, etc.) shall be held by said state, or by the company to which she may transfer the same, for the use and purposes aforesaid.” Sec. 7 provided, in effect, that whenever the companies to which this grant is made, or to which the same may be transferred, shall have com*586pleted twenty consecutive miles of any portion of said railroads, . . . patents shall issue, conveying the right and title to said lands to the said company entitled thereto, on each side of the road, so far as the same is completed, and coterminous with said completed section, not exceeding the amount aforesaid, and patents shall in like manner issue as each twenty miles of said road is completed: provided, however, that no patents shall issue for any of said lands unless there shall be presented to the secretary of the interior a statement, verified on oath or affirmation by the president of said company, and certified by the governor, . » . that such twenty miles have been completed in the manner required by this act.” Sec. 8 provided, in effect, “that the said lands hereby granted shall, when patented as provided in section seven of this act, be subject to the disposal of the companies respectively entitled thereto, for the purposes aforesaid, and no other.” Sec. 9 provided, in effect, “that if said road ... is not completed within ten years from the time of the passage of this act, as provided therein, no further patents shall be issued to said company for said lands, and no further sale shall be made, and the lands unsold shall revert to the United States.” That act was explained and enlarged by a resolution of Congress approved June 21, 1866. 14 U. S. Stats, at Large, 360. By an act of Congress approved April 9, 1874, the time for the completion of the road, without reversion, was extended to December 31, 1876. 18 Stats, at Large, 28, ch. 82.

It is undisputed that all the lands covered by sec. 3 of the act of Congress of May 5, 1864, were, by several acts of the legislature of this state, granted to the predecessors of the plaintiff and finally to the plaintiff, substantially upon the same terms and conditions named in the acts of Congress. Among the conditions so imposed by the state was one to the effect that the title to the lands should not vest in the company sooner or faster than the lands might be *587sold, as provided and declared in tbe aforesaid act of Congress ; but declared, in effect, that tbe company should be capable in law of taking and bolding any land so granted which should be conveyed to it by such grant, or deed, or by the operation of law, and might also mortgage, or pledge, or otherwise dispose of all their right, title, interest, or claim therein of which it might be seized at the time of the execution of such mortgage, or which it might acquire subsequently thereto. Secs. 8, 11, ch. 314, P. & L. Laws of 1866; secs. 9, 12, ch. 362, P. & L. Laws of 1866, as amended by ch. 6, Laws of 1875. By a subsequent act it was declared, in effect, that whenever any railroad company in this state, holding grants of land to aid in its construction, had or should finish its said railroad, or, any section thereof, and the same should be certified to the secretary of the interior by the governor as completed in compliance with the several acts and resolutions of Congress and the acts of the legislature of this state, and lists of said lands should be certified by the secretary of the interior to the state for such company, the governor was thereby authorized and directed to convey the same by deeds to such company, which deeds, when so issued, should be prima facie evidence of title in all the courts, and inure to the benefit of the company, or its assigns, and all persons claiming under it. Ch. 381, Laws of 1876.

It is admitted that the plaintiff fully completed its road in compliance with all the requirements of the act of Congress and the legislature as early as in June, 1877. The mere fact that the road was not fully completed before December 31, 1876, did not work a forfeiture of the grant. That could only be done by direct action by Congress or direct proceedings in court for that purpose before such completion. Schulenburg v. Harriman, 21 Wall. 62-4; Van Wyck v. Knevals, 106 U. S. 368, 369. No such action has ever been taken by Congress, nor in any court. It is also *588admitted that a statement thereof, verified by the oath of the president of the company, and certified to by the governor, was upon such completion, and during the year 1877, presented to the secretary of the interior. It is also conceded, and virtually found by the court, that prior to 1880 the plaintiff had duly selected the lands claimed by it under the grant, including all the lands in question; that such selections had been duly certified to by the United States land agents of the respective districts where the lands were situated, and also by the governor of the state, and a list of the lands so selected and so certified, including all the lands in question, had been presented to the secretary of the interior, and patents therefor been requested, but that the secretary had refused to issue or allow such patents to be issued. It also appears from a letter addressed to the secretary of the interior under date of November 16, 1877, by the commissioner of the general land office at Washington, in the record before us, submitting list No. 8 of selections by the plaintiff for his approval, that it then appeared from the records in his office that out of the odd-numbered sections within the ten-mile limits of said road the United States had, prior to the passage of the land grant of May 5, 1864, disposed of 789,622 acres; and after the passage of the act, and prior to the definite location of the line, the United States had disposed of 161,695.53 acres more; that according to the practice of that office prior to the date of that letter the plaintiff was entitled to lands from the indemnity limits in lieu of those disposed of prior to the passage of the act, as well as those disposed of after the passage of the act; but that it appeared from the decision of the supreme court of the United States in the case of Leavenworth, L. & G. R. Co. v. U. S. 92 U. S. 733, then recently published, that such practice of that office had been erroneous, and that indemnity could only be allowed for lands sold or disposed of by the United' States after the passage of the *589granting act; and that, applying that rule to the grant in question, the plaintiff had already received patents for 41,820 acres in excess of the indemnity authorized by the granting act.

In response to that letter, the secretary of the interior,. under date of December 26, 1871, sanctions the commissioner’s version of that decision, and quotes at length from the opinion of Mr. Justice Davis in behalf of the majority of the court in that case, and concludes by instructing the commissioner, by reason of that decision, not to issue any further patents to the plaintiff, and to call upon it to relinquish its claims to the lands so patented in excess of what it was entitled to under the grant by such construction. From the decision of the majority of the court in the case just cited Mr. Justice Field delivered a dissenting opinion, concurred in by Justices SwayNe and StkoNo. Such refusal of Mr. Schurz, the then secretary of the interior, to issue any further patents to the plaintiff or to the state, by reason of the construction thus given to the granting act, was frequently repeated and continued during his term of office; and the same ruling and construction were sanctioned and followed by his successor, Mr. Secretary Teller. None of these refusals were put upon any other ground than the one mentioned. There is no claim that any secretary of the interior ever refused to issue any of such patents by reason of any of the lands in question being swamp lands, or lands to which the right of preemption or homestead had attached, or that any of them had been reserved for any other purpose, or sold, or disposed of to any other corporation or person; or that any other party was making any claim to the lands, or any of them; or that there was any other ground for refusing such patents, except as stated. Such being the facts, we must conclude that neither of the secretaries found any fault with the selections made and certified; but, on the contrary, that they each recognized and *590acquiesced in such selections, and would have issued such patents but for the reasons given.

Since the decision of this case by the trial court, the supreme court of the United States has announced its decisión in Winona & St. P. R. Co. v. Barney, 113 U. S. 618. In that case the court was unanimous, and the opinion by Mr. Justice Field refers to the case of Leavenworth, L. & G. R. Co. v. U. S., supra, as follows: The language (of Mr. Justice Davis) in Leavenworth, L. & G. R. Co. v. U. S. 92 U. S. 733, is quoted as sanctioning the position of the appellant. The court, speaking of the indemnity clause in the grant then under consideration, said its purpose was to give sections beyond the limits designated for those lost within it by the action of the government between the date of the grant and the location of the road. But it did not say that this was its only purpose; and if the language must be construed as meaning that, it was a mere dictum, not essential to the decision of the case. The question was, what lands could be taken for indemnity, not for what deficiencies indemnity could be had. And it was held that an Indian reservation did not pass by the grant, and could not be taken as indemnity for the lands otherwise lost from it. There was no question before the court for what deficiencies indemnity could be supplied.” After giving the reasons for a different construction than the one intimated by Mr. Justice Davis, the learned justice said: “It follows that in our judgment the indemnity clause covers losses from the grant by reason of sales and the attachment of preemption rights previous to the date of the act, as well as by reason of sales and the attachment of preemption rights between that date and the final determination of the route of the road.”

The language in the act of Congress thus construed by that court, which is the final arbiter of the question, is so nearly identical with the language in the act before us *591which we are now considering, that we feel bound by the decision as an authoritative exposition of the law on the subject. From this decision we are forced to the conclusion that each of the learned secretaries of the interior named refused to issue patents for the lands in question solely by reason of a misconception of what the supreme court of the United States had in fact decided some ten years ago in the case mentioned.

Did the mere fact of such refusal, based solely on such erroneous conception of the law, prevent the equitable title to the lands in question from becoming vested in the plaintiff so as to subject them to taxation? The language of the act of Congress was that of a present grant to the state, but with conditions, restrictions, and limitations preventing any title from being vested, in the plaintiff, except on performance of such conditions, etc. Schulenburg v. Harriman, 21 Wall. 58, 62; Tucker v. Ferguson, 22 Wall. 571, 572; Missouri, K. & T. R. Co. v. Kansas Pac. P. Co. 97 U. S. 495, 496; Railroad Co. v. Baldwin, 103 U. S. 429. Upon the same terms it was granted to the plaintiff by the state. The grant operated as a law as well as a transfer of property to the state, and had such force as the intent of Congress required. Missouri, K & T. R. Co. v. Kansas Pac. R. Co. 97 U. S. 497. After the definite location of the line of the road the equitable right to earn the undis-posed of lands became fixed in the plaintiff, and no valid adverse right to any such lands in the place limits could be subsequently acquired. Van Wyck v. Knevals, 106 U. S. 360; Walden v. Knevals, 114 U. S. 373. Yet, while any of such lands remained unearned, the right of the plaintiff to the same was very much like the right of a vendee of specific lands in an executory contract. Kansas Pac. R. Co. v. Dunmeyer, 113 U. S. 641; Walden v. Knevals, supra.

The right of the plaintiff to lands earned, but sjtuated in the indemnity limits, and not ascertained nor selected, was *592quite similar, but attached to no specified laud. Ryan v. Railroad Co. 99 U. S. 382; Gedar Rapids & M. R. Co. v. Herring, 110 U. S. 38 et seq.; Kansas Pac. R. Co. v. A., T. & S. F. R. Co. 112 U. S. 414. But as to lands within the place limits, which had in fact been earned, and in respect to which all the requisite conditions had been fully complied with, such contract became executed so far as the plaintiff was concerned; and hence it thereby became invested with an equitable right to the lands. West Wis. R. Co. v. Trempealeau Co. 35 Wis. 258; S. C. affirmed, 93 U. S. 595; Van Wyck v. Knevals, 106 U. S. 360; Grinnell v. Railroad Co. 103 U. S. 742; S. C. 5 Am. & Eng. R. Cas. 447; Litchfield v. Webster, 101 U. S. 775; Cedar Rapids & M. R. R. Co. v. Herring, supra; Walden v. Knevals, supra; Kansas Pac. R. Co. v. A., T. & S. F. R. Co. supra. The same is true with respect to lands fully earned and duly selected from the indemnity limits, and properly certified to and sanctioned by the requisite state and national authorities. Ibid. As soon as the plaintiff had acquired such complete equitable right to any specific lands, the same could not be defeated by the land department at Washington issuing a patent therefor to some other party. Van Wyck v. Knevals, supra; Walden v. Knevals, supra; Gedar Rapids & M. R. R. Co. v. Herring, supra.

There can be no doubt but what the plaintiff, prior to 1880, acquired such complete equitable rights to the eleven forties in the place limits. The same is true in respect to the lands selected from the indemnity limits, and certified and presented to the secretary of the interior as stated, unless the mere refusal of the secretary to issue patents therefor on the ground mentioned prevented such equitable rights from vesting in the plaintiff. The requisite fees and charges of the local land offices and the department of the interior seem to Ijave been paid or in effect tendered by the plaintiff. There is no doubt but what the selections were made by the *593party designated by tbe law. True, tbe act of Congress declared that the selections should be “ subject to the approval of the secretary of the interior.” No objection having been made by that officer to the selections certified and presented to him as stated, except on the ground mentioned, must be regarded as equivalent to an acceptance by him of such selections, since it now appears that the only objection made was unfounded, and that the plaintiff was then legally entitled to the lands. Thus, it has been held that the receipt of the map definitely fixing the line of a proposed railway in that department without objection, must be “ considered as equivalent to its acceptance.” 114 U. S. 315.

We are not aware of any decision of the supreme court of the United States, nor of any intimation in any of the opinions of that court, precluding such approval by implication of the selections so made. In one of the cases above cited Mr. Justice Miller said: “As regards the lands to be selected in lieu of those lost by sale, or otherwise, it may be that no valid right accrues to any particular section, or part of a section, until the selection is made and reported to the land office, and, possibly, not then until the selection is approved by the proper officer.” 103 U. S. 142. In a later case, above cited, the same learned justice quotes the same language, and adds: “ It is not easy to see how rights can be vested in any particular section or sections of the latter class [indemnity lands] until it is ascertained how many of the original odd-numbered sections are thus lost, and until the grantee has exercised Ms right of selection. . . . They [these latter] are not and cannot be made specific until the grantee’s right of selection has been exercised.” 110 U. S. 38, 39.

These are the strongest expressions of opinion coming from that court we have been able to find. The only objects Congress could have had in requiring the approval of the selections by the secretary of the interior were to insure *594selections “ from tbe lands of the United States nearest to the tier of sections ” in the place limits, and to avoid, as far as possible, controversies with other adverse claimants, and thus render as certain as possible the description of the lands owned by the company, which might otherwise be less certain. Here the lands were selected, and there is no claim that they were not, “nearest to the tier of sections” in place, nor that there are any adverse claimants to any of the lands, .nor that the plaintiff had not the equitable right to all of .the lands in question at the time of the levy and assessment-of the taxes; but the right of taxation is resisted solely on the ground that, up to the time of bringing this suit, the plaintiff has been unable to procure patents of the lands -.from the general land office by reason of a mistaken notion as to the effect of a decision once made by the supreme court of the United States many years ago, but which .mistaken notion can no longer be entertained in view of the recent utterances of the same court. "We must hold that the secretary of the interior did, in effect, approve by implication of the selections made, certified, and presented to him as stated. If we are wrong in this we have the consolation, of knowing that the error may be corrected. It is not the .United States that is attempting to impose the taxes in question, but the municipal instrumentalities of the state, which conceded the plaintiff’s equitable right to the lands. The mere fact that the lands in question were not held under patents from the United States did not prevent their being subject to taxation. Railway Co. v. McShane, 22 Wall. 444; Tucker v. Ferguson, 22 Wall. 527; Ross v. Outagamie Co. 12 Wis. 26; Wis. Cent. R. Co. v. Taylor Co. 52 Wis. 51-56; Witherspoon v. Duncan, 4 Wall. 210; Carroll v. Safford, 3 How. 441; S. C. 44 U. S. S. C. R. 441, and notes; Thomson v. Pacific R. R. 9 Wall. 579.

The statutes declare that “ taxes shall be levied upon all property in this state, except such as is exempted there*595from. The terms real property,’ * real estate,’ and ‘ lands/ when used in this title, shall include, not only the land itself, but all buildings, fixtures, improvements, rights, and privileges appertaining thereto. . . . The person holding the contract or certificate of sale of any real property contracted to be sold by the state, but not conveyed, shall be deemed the owner for such purpose.” Secs. 1034, 1035, 1043, E. S. There is no claim that any of the lands in question are exempt by reason of sec. 1038, or any statute of this state. The special exemption given by ch. 21, Laws of 1877, the validity of which was sanctioned by this court, expired before the levy and assessment in question. Wis. Cent. R. Co. v. Taylor Co. 52 Wis. 37. In the language of the supreme court of the United States, “ Congress has not seen fit, either expressly or by implication, to impose any restriction upon the taxing power of the state. That subject ■was remitted, as under the circumstances it might well be, wholly to her wisdom and discretion.” 22 Wall. 571, 572. In the case last cited it was, in effect, held that “ the equitable or inchoate title of the company to the residue of the lands ” was capable of being mortgaged, and hence taxed. Mid.

Vie must hold, upon principle as well as the authorities, that the plaintiff’s equitable right to patents for all the lands in question was complete prior to 1883, and hence the equitable title was then fully’ vested in it so as to subject isaid lands to taxation in that year. Ross v. Outagamie Co. 12 Wis. 26; Tucker v. Ferguson, 22 Wall. 527; Witherspoon v. Duncan, 4 Wall. 210; Wheeler v. Merriman, 30 Minn. 379; Gulf R. Co. v. Morris, 13 Kan. 317; Puget Sound A. Co. v. Pierce Co. 1 Wash. T. (N. S.) 159; Cass Co. v. Morrison, 28 Minn. 257; S. C. 5 Am. & Eng. R. Cas. 404; Cornelius v. Kressel, 58 Wis. 237; Fowler v. Scott, ante, p. 509.

The mere fact that the taxes were not assessed to the plaintiff by name, nor to “ unknown,” is not a valid reason for *596Sustaining this judgment. The statute simply requires that real property shall be entered in the name of the owner, if known to the assessor, otherwise to the occupant thereof, ■•if ascertainable, and otherwise 'without cmy narnie.” Sec. 1043, R. S.; State ex rel. C., M. & St. P. R. Co. v. Blackstone, 63 Wis. 364.

By the Oourt.— The judgment of the circuit court is reversed, and the cause is remanded with directions to dismiss ■ the complaint.