UNITED STATES '!l. WILLAMETTE VAL. &: C. Y. WAGON-ROAD CO.
807
acquiring from the state the right to receive ·andcolleeti the tolls. Conceding the cOITectness of therulmg,-and it was doubted at the time by some of the judges of the court,-it goes no' further than to hold that the contract was not a lease, and that the compensation which might result to ,Taylor for operating the canal was in the nature of recompense for personal services. In the case in hand there is no public work to be operated, no agency for the government, but a simple contract, as we view it, to pay so much for sugar produced under certain circumstances. As to the present the claim, although in the name of David R. Calder, as holding the license" is really for sugar'produced on the plantations of John Calder & Co., cultivated by that firm, and it should not be restricted toa claim ,for rec()mpense for the personal services of David R. Calder. Weare of opinion, :therefore, that none of the contentions of the appellants are well taken; and we hold that the claim of David R. Calder against the United States for bounty for sugar produced upon the plantations of John Calder & Co. during the year 1891 is property that passed by the cession in the insolvency proceedings to the syndics of John Calder & Co. and David R. Calder indiVidually, as a fund to be applied to the payment of creditors. The application of appellees to amend the decree of the circuit court by reinstating the injunetionagainst the assistant treasurer, on the authority of Clark v. Clark, 17 How. 315, as approved in Phdps v. McDonald, 99 U. S. 298, cannot be considered, as di:l not appeal. The decree appeal<!d from is affirmed, with costs.
UNITED STATES v. WILLAMETTE VAL. & C. M. WAGON-ltoAD CO. et al. (Circuit Court, D. Oregon. May 18, 1892.) SUIT TO ENFonCE FORFEI-
GRANT OF PUBLIC LANDS IN AID OF WAGON ROAD TURE-LACHES-ESTOPPEL.
Congress granted certain lands to Oregon in 1866 to aid in the construction of a wagon road from Albany to the eastern boundary of the state. In 1874 congress enacted that, when the road is shown by the certificate of the governor of Oregon to have been constructed and completed, patents to the lands should issue. By 1871 such certificates had been made. In 1882, after complaint to the department of the interior that the road had not been constructed, and after reference of the matter to congress and .its refusal to act, and after investigation by the department, the patents issue. The defendants Weill and Cahn claim to be purchasers of the land in good faith upon the strength of the gavernor's certificates, and further claim to have expended large sums of money on said lands after the issuance of the patents, and to have sold portions thereof with warranty; also to have fully rebuilt the rpad before the passage of the act of March, 1889, authorizing this suit to enforce forfeiture. HeU, on exceptions to their answer setting forth these, tacts,, (1) that the defense of laches is not applicable to the United States; (2) that the United States are estopped to enforce the forfeiture; (3) that, the grant being jp. praesenti with condition subsequent,a construction of the road after the time limited in the grant, but before the assertion of a claim to a forfeiture, may be pleaded in defense of this; suit. "
S08
, FEDERAL REPORTER,
vol. ,54. the Willarilette
of respondents, and ,the cancellation issu,e<kthe,;,efor. Responde:Jlts filed answers and pleas, I4nd,tlte: bill upon argument of the pleas. Complainant appealed, and this qecision was reV'ersed, and the cause ,11 Sup.. Ct. Rep. 988" Respondents thereupon alijlwered ,on the merits. Heard on exceptions to the answer. Exceptions overruled. Tanner P. Mays,for the United States. C.F;. S. Wood, for 4efendants. ,
\{"pJlro' ,& Ca.seade'iM;Q'lffiWn ,Wagpn-Boad Company and others for
,,(lln
Qf,
GILBERT, Circuit Judge. A bill was filed on behalf of the against the Willamette Valley & Cascade Mountain Wago:p.-Road Compapy and other defendants, setting forth the act of congress of July 5, 1866, which grants to the state of Oregon, to aid in the con!'lu\l.otiQn of a wagon road from Albany to the eastern. boundary of the state, certain sections of the public lands situate along the line of. said road, together with a right of way for the same, and, 'confers upon. the legislature power to dispose of the lands as '$e ,Work progressed,. upon the issuance of a, certificate of the gover!lQr of the stl;tte to the secretary of the interior that any 10 milE¥l' of i<he same were but provides that, if the road is not completed in five years, no further sales shall be made, but the land remaining unsoip,s):tall revert to the United States; and further provides that the road shall be constructed of such' width, grades, and bridges as to permit of its regular use as a wagon road, and in such other special manner as the state may prescribe, and that the road remain a public highway for the use of the government of the' United S t a t e s . , , The bill alleges that the state of 'Oregon, by an act passed October 24, 1866, transferred-to the corporation defendant all lands and rights sp graItted to the state by congress, for the purpose of aiding the corporation in constructing the road mentioned in the act. The bill 'fUrther , states that by an act of congress of July 15, 1870, a 'was made in the route of the road, and that the corporation defendant thereupon,by supplemental articles of incorporation changed the line of its Toad to conform to the act of congress; that on the 11th day 'of May, 1868, the officers of the corporation fraudulently represented to the governor of Oregon that the road had been constructed as required by law for a distance of 180 miles from Albany, and thereby fraudUlently procured a certificate to that e:fl'ectfrom the governor ; that on the 8th day of September, 1870, the 9th day of 1871, and the 24th day of June, 1871, further certificates were frauqUlently procured, to the e:fl'ect that the remainder'of the 1I0ad to the state line had been completed; but the bill alleges that the road never was constructed. . ,The bill further alleges that by act of congress of June, 1874, patents for the granted lands were authorized. to be issued to the state of Oregon, or to any corporation to which its rights had been
UNITED STATES'/). WILLAMETTE VAL. & C. M. WAGON-ROAD CO.
transferred in all cases where the roads in aid of the construction of which said lands were granted are shown by the certificate of the governor of Oregon, as in said acts provided, to have been constructed and completed: "provided that this shall not be construed to revive any land grant already expired, nor to create any new rights of any kind, except to provide for issuing patents for lands to which the state is already entitled." The bill then avers that patents were issued on June 19, 1876, for 107,893.01 acres of the lands, and on October 30, 1882, for 440,856.72 acres. The prayer of the bill is that all of the lands granted to the state by the act of July 5, 1866, be decreed to be forfeited to the United States, and restored to the public domain, and that the certificates and patents be declaredfra:udulent and void. To this bill the defendants Weill and Cahn first filed two pleas, with accompanying answers. The first plea set up that the patent of October, 1882, was issued after due examination by the secretary of the interior, and in pursuance of the act of June, 1874, and that said defendants, relying thereon, had paid taxes and other expenses on said lands, and had sold portions thereof with warranty of title, and that it would be mequitable for the United States to claim a forfeiture of the lands. The second plea' averred that in 1871 these defendants, believing that the road had been fully completed, as certified by the governors of Oregon, made purchase of the lands in good faith, and paid therefor $161,400. The pleas weI",' set down for argument upon their sufficiency, and it was held upon the facts contained in the first plea that the claim of the govern"Uent was a stale claim, and that lapse of time was a bar to the suit, and that the second plea was good, for that it showed that the defendants were bona fide purchasers, (42 Fed. Rep. 351;) and the bill was dismissed. Appeal was taken to the supreme court, and the decision of the circuit court was reversed; the supreme court holding that the defense of 'laches could not be made as against the government, and that the United States should have the opportunity to file replication, and put in issue the allegations of the (11 Sup. C1. Rep. 988.) When the case was remanded to this court, the defendants Weill and Cahn, instead of relying upon the pleas. answered the bill upon its merits, and the now comes before the court on exception to portions of the answer, for. impertinence. The first exception is to tbat portion of the answer which responds to the allegation of the bill that the defendant corporation. in constructing the wagon road, was bound to .construct the same in the manner prescribed by an existing statute of the state of Oregon, enacted October 14, 1862. The points involved in this exception were ably discussed by Judge Sawyer in the case of·U. S. v. Dalles Military Road Co., 40 Fed. Rep. 114, in which he held that the act of congress of February 25, 1867, granting the lands to the state, and the act of the legislature of Oregon of October 20. 1868, transferring the grant to the defendant corporation,' formed the entire statutory contract with the road company, and that in the method of constructing the road the company was' entiriely uh-
810
FEDERAL REPORTER,
vol. 54.
affected ,by the acto! the legislature of October 20, 1868. No doubt can be entertained of the correctness of that decision, and the first exception is debied. The second exception is to the allegation in the answer that'long befol'e congress pMsed the act of March 2, 1889, authorizing this suit, the defendants ,had entirely rebuilt the road in a substantial manner. It is claimed on! behalf of the complainant that a construction of the road by the defendants after the expiration of the time limited in the act therefor comes too late, and will not avoid the forleiture.· This question has also been decided in this court in the previous decisions of this case, (42 Fed. Rep. 351,) where Judge Deady, upon the authority of numerous decisions, held that the grant from the gOvernment was a grant in praesenti, with condition subsequent, and could only be defeated upon breach of such conditiQ;n, ,the condition subsequent here being that the road be completed in the manner provided by the act within five years from the date thereof; and that, if this condition were not complied with, the Vnited States might, by legislative enactment or judicial proceedings, have enforced the forfeiture; but that, until such action by tne government, the title remains in the grantee. It is not claimed. that any forfeiture Wa.'$ geclared or sought prior to the pasJlage!>f the 2, 1889. If the road was constructed at any:timebefore:!that date, the defendants should be allowed to show that fact, and the exception will be denied. The remaining exceptions are taken to the defenses which are, in substance, as follows: That in 1878 complaint was made to the department of the interior that the road had not been built, and thereupon the commissioner of the general land office appointed an agent. to report upon the same; that the agent reported that the complnJnt was true; that in 1880 the report, with the accompanying evidence, was laid before both houses of congress, and referred to the appropriate committees of the same; that the committees, after examination, each reported· that no action be taken; that the secretary of the interior thereafter examined the report and evidence, and in 1882 made decision that the evidence showed that the road was properly constructed, and directed the commissioner of the general land office to certify the same for issuance of patent, and thereupon patent issued; that the defendants, relying on the result of, the investigation and the issuance of the patent, did alter their position with reference to the lands, so as to render it inequitable for the government, after such lapse of time, to assert title to the sist of-First, lache,s; second, estoppel. So far as laches is concerned, of $2,660.62; second, by payment of $29,853.79 for taxes; third, by payment of $109,800;97 for grading, selecting, and platting lands, ahd protecting their title; fourth, by selling and conveying portions of the lands with warranty of title. These defenses so pleaded consist of-First,laches; second, estoppel. So far as laches is concerned, the decision of the supreme court in this case, and in U. S. v. Insley, 180 U. S. 268,9, Sup. Ct. Rep. 485, (reversing 25 Fed. Rep. 804, and Van Brocklin v.State of Tennessee, 117 U. S. 151, 6 Sup. Ct. Rep. 67011'eVersingthe judgment of the supreme COlIrt of Tennessee,
UNITED STATES V. WILLA?IETTE VA,L. &; C. l'tf. WAGON-ROAD CO.
and U. S. v. Nashville, C. & St. L. R:y. Co., 118 R S. 120, 6 Sup. Rep. 1006,) must be regarded as finally settling the doctrine that laches or staleness of. claim cannot be set up as a defense to any suit in equity brought by the United States to assert rights vested in them as a sovereign government, unless congress has clearly manifested its intention otherwise. It is contended that congress has expressed' a contrary intention in this instance by providing in the act of March 2, 1889, which au' thorizes the prosecution of this suit, that it shall be tried and adjudicated in like manner and by the same principles and rules of jurisprudence as other suits inequity are therein tried; and it seems difficult to give any meaning to these words without giving them the construction contended for; but, in the light of the decision of the supreme court in this case, it must be held that the "other suits in equity''' to which reference is made lire suits in which the United States is a party, apd that it was not the intention of the statute that the defendants in this suit should avail themselves of defenses not open to defendants in other suits brought by the United States. These portions of the answer, however, set up matter by way of estoppel, and it remains to be considered whether that defense is applicable in this case. The government is not ordinarily bound by an estoppel. While individuals may be estopped by the unauthorized acts of their agents, apparently within the scope of their agency, the sovereign power, being the trustee of the people, is rarely, if ever, bound by the acts of its agents; but, while it is true that for the neglect or the illegal or unauthorized acts of its agents the government should not ordinarily be estopped to show the truth, there is good anthority, based upon sound reasoning, to support the doctrine that where the government has acted by legislative enactment, resolution, or gmnt, or otherwise than through the unauthorized or illegal acts of its agents, and the parties dealing with the government have relied upon the same:'and in good faith have so changed their relation to the subject-matter thereof that it would be inequitable to declare such action or grant illegal, the government will be estopped. Com. v. Andre, 3 Pick. 224; Cahu v. Barnes, 7 Sawy. 48, 5 Fed. Rep. 326; State v. Milk, 11 Fed. Rep. 397 ;Pengra v. Munz, 29 Fed. Rep. 830; Woodruff v. Trapnall, 10 How. 190. No good reason can be offered why the United States, in dealing with their subjects, should be unaffected by considerations of morality and right which ordinarily bind the conscience. The defense of estoppel stands upon different ground from that of laches. It is held that laches is not imputable to the government upon grounds of public policy. The common-law rule that no lapse of time can bar the right of the king is not only recognized in the United States, but is deemed to be applicable with added reason, from the fact that here property. is held, not as by a monarch for personal or private purposes, but in trust fO'!' the common welfare; and, where the agencies of the people are so numerous and scattered, the utmost vigilance would not. save the public from loss; but, when matter of estoppel arises, the observance of honest dealing may become of higher importance than the preservation of the public domain. It was well said in Wood-
812
FEDERAL R;J!)PORTER,
rtrl!
that we' naturally look to the action ofa sovereign a more scrupulous regard to justice and a,bjgl!,er,morality than belong to the ordinary transactions of indio viduals. if, it ,be true that the matters involved in this suit were investigated, 'as set forth in the answer, and the patents were thereafter and the .defendants, assuming that such action was a final of the question of title, and relying on the same, made tile e;penditures they claim to have made, the government should estopped from enforcing the forfeiture, The supreme court, in reversi:n,g the decree in· this case, and remanding the cause, expressly refrained from deciding the que!!tions involved in the controversy, but,reversed the case, that its merits might be investigated; and I hold it ,to be in harmony with the construction thus given by the pfQvisions of the act of March 2,,1889, as well a-sconformable to the general principles of equity that should govern tp.e a-nd all similar cases, to allow the defendants the benefit of,aU ihe, defenses here pleaded.' .The exceptioWl will be denied.
'FITZSIMMONS et al. v. UNITED STA.TES. (Oircult Court of Fifth Circuit. February 27, 1893.) No. 68. 1. APPEAL-REVIEW-RULINGS ON MOTION FOR NEW TRIM,. 2.. UNITED' STATES l{ARSHALs-':'AccmJNTING-CREDITS.
The optnl.6D· and rulings of a trial judge on motion for a new trial are not subject to review by the circuit court of appeals.
A United States maxs1lal, in his character of disbursing officer of the governmE'int, is not elltltled, as between himself and the government, to credit for unpaid disbursements,. or for services rendered and fees earned by his depUties, unless he· has paid for the same.
8.' SAME-ACTION ON BOND-SET-OFF-,MONEY DUE DEPUTIES. In an action on the official bond of a United States marshal to recover moneys due the United' States, moneys alleged to be due by the United States to, the marshal's deputies be allowed as a set-off when there is ..no showing as to the character of the services for which credit is '. or whether any return thereof, duly verifled, with details, was ever made, as required by Rev. St. § 833, or that the same had ever been '; subInittedto the treasury department to be audited and allowed inaccordance with section 841.
In Error to the Circuit Court of the United States for the Northern DistIiet of Georgia: ,At La",. Action by .the United States against Owen P. Fitzsimmons andtb,esureties. on his official bond as United States marshal:.. V':erdic.t fl.nd judgment for plaintiff, and new trial denied. :QeMnda:p.t&appeal. .M;qdified and affirmed. to auditor's report, see 50 Fed. Rep. 381. '. '. ' . "Sta,tkinentby PARDEE, Circuit Judge: ,; ..... , '".:
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