'.' r·
'8'1 :FIDl'lERAL'REPORTER.
defense' 'in 'the case consisted of 'A single point, and' the cases fall withi'tl'ithe exception' to the' general'rule above stated.'· The motion if:! susta!i:ned);; Uave is given t6 ans\ver within '20 dayS;' l "j'J '
SOUTHERN PA.C. it.CO.,v. GnOEOK et aI. (Circuit Court of Appeals, Ninth CIrcuit. 'May 2, 1898.) No. 398. 1. RAILROAD LAND GRANTS-WITHDRAWAL OF LANDS-PRE-EMPTION.
;(i
No can be made lands which have been withdrawn from settlement. and sale by the officers of the land department; and even If the orderot withcrrawal'ls subsequently canceled, and a patent then Issues, no title passes, for the acts of the settler were In violation of law, and void.
2.
SA'ME-WITHDRAWAL By'OPERATI()N OF LAW.
The act of July 27, 1866, § 3, granting lands to aid In the construction of the Southern Pacific Railroad Company, of itself operated to withdraw from settlement the lands lying within the Indemnity as well as the grant limits, from the date of Jiling of the map of. the general route; and the secretary of.the Interior. had no power to affect t)le grantee's rights, or to authorize a pre-emption settlement <Ill the lands,by, subsequently cancelIng his OTder withdrawing the lands from settlement. OF LAND GJl.A;NT.-POWER OF HEGHETARY OF INTERIOR.
1$.
Delay in constructing theJi'oad, beyond the time limited by law, gives the secretary of the Interior no authority to reopen the lands to settlement ,br canceling his order of wltbPrawal., A forfeiture of the railroad grant . can by congress alone. 4. 8AME-L-j\9,HE;S, OF GRANTEE. .' . . , Where the granting act of Itself' opl\rates to withdraw from settlement lands lying within the Indemnity limits as well as within the grant limits (as in the case oJ:, the grant .qf 1866 to the Southern Pacific Railroad ,Company), laches Is not imputable 'to the grantee, o.f delay in completing its road and making its indemnity selectiohs,ln a "contest with one who has attempted to make a pre-emption entry after the filing of the map of generill route.
tbe Circuit COQrt of the for the Southof " Ca.lifornia. . .. . . .r, William F. ,Herrin1 John Gl1r'ber,and William Singer, Jr., for appellaut. W. appellees; 'Befot'e,GILBERT and MORROW, Circuit Judges,: and HAWLEY, I!istrict: .
ern .pistrict ;. ,,',,'
Appell.]
I
.·
(;:}ILBERT,'Circuit JUdge. Th:e Southern Pa.dfic Company brought suit agl1inst the appellees to obtain a decree that the h61dIll trust a patent which .Otto Gr.oeck received from the· United 'Stafes to a certain tract of land, which it 'is contended was land granted: bytheUllited StateS to the railroad company by the act of date JUly' 27, 1866. Section 18 of said act authbrized the appellant to construct the railroad which now extends from San Francisco, by way of Mojave, to the Needles on the Colorado river. Section 3 provided as follows: .
SOUTHERN PAC. R. CO. V. GROECK.
971
"That· tbere be, and hereby is, granted · · .. every alternate section ,of public land, not mineral, designated by odd numbers, to the amount of · · · ten alternate sections of land per mile on each side of said railroad whenever it passes through any state, and whenever on the line thereof the United States have full title · · · at the time the line of said railroad is designated by a plat thereof, filed in the office of the commissioner of the general land office; and whenever, prior to said time, any of said sections or parts of sections shall have been granted, sold, reserved, occupied by homestead settlers, or pre-empted, or otherwise disposed of, other lands shall be selected by said company in lieu thereof, under the direction of the secretary of, the Interior, in alternate sections, and designated by odd numbers, not more than teI;t miles beyond the limits of the said alternate sections."
Section 6 of the act provided as follows: "That the president of the United States shall cause the land to be surveyed for forty miles in width on both sides of the entire line of said road after the general route shall be fixed, and as fast as may be reqUired by the construction of said railroad, and the odd sections of land hereby granted shall not oe liable to sale or entry or pre-emption before or after they are surveyed, except by said company, as prOVided in this act."
The bill alleges that the appellant accepted the terms of the grant, fixed the generalrout,eof ,its road as contemplated by the act, and on January 3, 1867, filed a map thereof in the office of the commissioner of the general land office; that on that date thecommissioner accepted and approved the map and the route designated by it, and on March 22, 1867, under the direction of the secretary of the interior, he withdrew the odd sections of land lying within 30 miles of the line of road from sale or location, pre-emption or homestead entry; that on November 2, 1869, the secretary of the interior made an order declaring the withdrawal revoked; that on December 15, 18G9, the secretary suspended -his order of November 2d; that on July 26, 1870, the secretary restored the withdrawal of March 22, 1867; that on August 15, 1887, the secretary declared the withdrawal of March 22, 1867, revoked, as to the indemnity sections thereof; that the appellant commenced to build its road during the year 1870, and completed the construction in different sections between that date and the year 1889,-the last section, extending from Huron westerly to Alcalde, having been constructed during the year 1888; that the land in suit is opposite to, and coterminous with, that section, and is within the indemnity limits of the grant, and is not included in any exception therefrom; that on September 2, 1885, the appellee Groeck settled on the land in controversy, and during the same month filed his pre-emption claim therefor in the proper land office of the United States, and thereafter complied with the land-office regulations, and on June 7, 1886, made pre-emption proof and payment for the land; that on Apri111, 1890, patent was issued from the United States, conveying the land to him; that, as the appellant's road was constructed in several sections, such sections were examined by commissioners appointed by the president, as provided by section 4 of the act, and that said commissioners reported that such sections had been completed as required by the act, and thereupon the president accepted and approved the reports; that a map of the definite location of said section between Huron and Alcalde was filed with and approved by
972
81 FEDERAL 'REPORTER.
of the interior on April 2,1889,. and thepresidentllc, ceptedandapproved the report section on November 8,1B89; that 0:p.July,13,1891, acting un· der the; direction of the secretary of the interior, selected the land in suit, as granted to it by the act. . To the bill of complaint the appellees filed a plea asserting the validity of Groeck's pre·emption, and the title thereby acquired, and further alleging that in any event the appellant, "by its long delay in asserting any claim to said land, in filing its map of definite location, and in offering to' select said land, is barred by its HLches from asserting claim theret{)." Upon the plea so interposed the court denied the right of the appellant to the relief prayed for, upon the ground of its laches, and decreed that the bill be dismissed. The questions presented upon the appeal are: First, was the land in controversy lawfully subject to the pre-emption entry of Groeck? and, second, is the appellant's right to the relief sued for barred by its laches, as alleged in the plea? The land in controversy was aUhe time of the entry by Groeck, and at the time when he took steps to acquire title thereto, withdrawn from settlement by the act of the secretary of the interior. It was land. to which section 2258 of; the Revised Statutes applied, in declaring that: "The following classes of lands, unless otherwise specifically provided by law,shall not be subject to the rights of pre-emption, t(). wit: .I!'irst, lands Included in any reservation by any treaty, law, or proclamation of the presi· dent, for. any purpose."
It is. true that in 1891, at the time when patent issued, the order of withdrawal of March 22, 1867, had been set aside by the secretary of the interior; but, as we, understand the decision of the supreme court in the case of- Rileyv. Welles, 15.4 U. S. 578, 14 Sup. Ct. 1166, no valid pre-emption could be made of lands which were withdrawn from settlement by the officers of the land department, and such entry, if made, could not become the basis of title, even upon the subsequent cancellation of the'order of withdrawal, since the acts of the settler upon such lands were acts done in violation of law, and void. This was held ina case in which "it was afterwards found that the law by re3Jilonof which this action was taken did not contemplate such a withdrawal." Wood v. Beach, 156 U. S. 550, 15 Sup. Ct. 410. But it is urged that the act of withdrawal was a ministerial act upon the part of the secr.etaryof the interior, such as could 'be set aside at any time by that officer, and that to permit a pre-emption entry to be made, as was done in this case, and to recognize its validity, was, .in effect, to set aside the order of withdrawal, lUld was tantamount to a cancellation thereof, so far as it included the particular lands sO entered. The case of Riley v. Welles may be cited likewise in .opposition to this contention. But it is not necessary to rest ,the question of the appellees' title upon the doctrine' of that case: alone. A careful consideration of <other <iecisionsof the supreme .court determining the nature of the right 'which the grantee of subha grant acquires to lands within the indemnitylimits,prior to the:time when definite location and
973
lSelection of Heu lands is made, leads us to the conclusion that, in the case of a grant such as that now under consideration, by the operation of the terms of the grant itself the indemnity lands are withdrawn from settlement from the· moment when a map of the general I'oute of the road is made and filed. It may be deduced "rom those decisions that the grant to the appellant conferred upon lbe grantee, within the indemnity limits, more than the mere right to initiate a title by selection, and that the lands in the indemnity limits are as truly granted lands, within the terms of the act, as are the lands within the place limits. The difference is in the preliminary steps which are requisite to attach the title to the particular tracts which are granted. Thus, the supreme court has held that, when the lands within the indemnity limits are all needed to make up the granted quantity, the grant to the indemnity lands takes effect at the same time, and is of the same nature, as the grant of the lands in the place limits. St. Paul & S. C. R. Co. v. Winona & St. P. R. Co., 112 U. S. 720, 726, 5 Sup. Ct. 334. In St. Paul & P. R. Co. v. Northern Pac. R. Co., 139 U. S. 1, 11 Sup. Ct. 389, answering the objection that no evidence was offered showing a selection of lieu lands, the court said: "It Is sufficient to observe that all the lands within the Indemnity limits only made up In part for those deficiencies. There was therefore no occasion for the exercise of the judgment of the secretary of the interior In selecting from them, for they were all appropriated."
But, where the lands in the indemnity limits exceed the total quantity which is granted by the act,. they remain afloat until selection is made as required by the act. In Buttz v. Railroad Co., 119 U. S. 55, 7 Sup. Ct. 100, Mr. Justice Field, referring to section 6 of the Northern Pacific Company's act, said: "The act of congress not only contemplates the filing by the company In the office of the commissioner of the general land office of a map showing the <Ie-finite locatlon of the line of Its road, and limits the grant to such alternate -odd sections as have not at that time been reserved, sold, granted, or otherwise appropriated, and are free from pre-emption, grant, or other claims or rights, but it also contemplates a preliminary designation of the general route of the road, and the exclusion from sale, entry, or pre-emption of the adjoining odd sections within forty miles on each side until the definite location Is made."
In Northern Pac. R. Co. v. Musser-Sauntry Land, Logging & Manu· facturing Co., 168 U. S. 608, 611, 18 Sup. Ct. 205, 206, the court said: "But beyond the significance of the word 'reserved,' alone, there are other words in the act which, taken in connection with It, make it clear that these lands do not fall within the grant. 'Otherwise appropriated' Is one term ·of description, and evidently when the withdrawal was made In 1866 it was an appropriation of these lands, so far as might be necessary for satisfying that partiCUlar grant. It is true, it was not a final appropriation, or an absolute passage of title to the state or the railway company, for that was contingent upon things thereafter to happen-First, the construction of the road; and, second, the necessity of resorting to those lands for supplying deficiencies in the lands in place; still, It was an appropriation for the purpose of ilupplying any such deficiencies."
Continuing, on page 611, 168 U. S., and page 207, 18 Sup. Ct., the .court said:
974 . "Neither fs It Intended to that the title to Indemnity lands dates fl.'om selection, and ·not fl.'om the grant. All that we here hold Is that when a. withdrawal of lands within indemnity limits is made in aid of an eal.'lier land gl.'ant, and made prior to the filing of the map of definite location by a company having a latel.' gl.'ant,-the .latter having such words of exception and limitation' as 9.l.'efound in the grant td the plaintitr,-it operates to except the withdrawn lands from the scope of such later gl.'ant."
In U. v. Southern Pac. R. .Co., 146 U. S. 570, 600, 13 Sup. Ct. 152, 158, the court said: "When the general I.'oute qf· the Joad is. thus fixed in good faith, and infOl.'mation thereof given to tlieland by filing a map thereof with the commissionel.' of the generaJhind"Ofiice or the secl.'etary of the interior, the law withdraws from sale or' pre·efnption the odd sections, to the extent of forty miles on each side. The object .of the law in this particular is plain. It is to pl.'eserve the land fol.' the company to which, in aid of the construction . of the road, it' is granted."
In the case of W 156 U. S. 548, 15 Sup. Ct. 410, :the land wbichwas in contr()Versy lay within indemnity limits of two railroad grants,-a grant to the Leavenworth, Lawrence & (j-alveston road, and a grant to thlil Missouri. Kansas & Pacific nailway. Act July 26, 186,6. Wood made a homestead entry prior to thl;! selectio.J;l. .of the lands in the indemnity limits by the companies, but years after the lands had been withdrawn from &j.!e, preremption, or homestead entries, under two orders of withdrawal,-one for each company. In construing section 4 of the act granting lands to aid the,construction of the Second road, in it was prQvided "that as soon. as said company' sha,ll file with the secretary of the ipterior maps of its line, designating the route thereof, it shall be duty of said secretary to withdI.'awtrom the market the lands granted by this act in such mannerasIll,ay be best calc)Jlated to effect the purposes of this act and. subserve the public interest," the colirt said, "Thl::se. \'yithdrawalswere not merely executive acts, but the latter one, at least, was in obedience to the direct command of congress." If such withdrawal takes place by operation of law,as has been said by the supreme court in these decisions, the secretary of the interior is powerless to affect the rights of the grantee by setting aside his order of withdrawal.. Nor does he acquire such power from the fact that the period has expired within which the grantee is required to the road. The expiration of the time so limited by law for tileeonstructiOl1'of the road is which rests between congress and the grantee. The delay may afford congress excellent reason to declare the land grant forfeited,but congress alone has the power to . declare such fprfeiture. After /Such lands have once been set aside by congressional act, no authorjty is vested in the. secretary of the interior, or in any officer of the landdepartment,to restore them, or <lpen them to settlement. Noris ,any right conferred upon a preeUlption seWer to fake advantage of such default of the grantee. , I t follows.froUltherulings of the supreme court in the decisions to which wehav.e referred that the plea of laches cannot avail the appellees. The lacbes is said to consist in the long delay of the incori,structiIlg the road and selecting the indemnity lands.. We are unable to''perceive how that delay has conferred rights upon the pre-emption settler, or how it now affords him ground
975
to impute .tothe company. The company owed no duty to anyintendeq settler upon the public domain.'J;'he United States did not offer this Jand to Groeck; nor did it invite bis occupancy or entry. He was a trespasser on the premises. His pre-emption entry was not only void, but it was unlawful. Neither such an entry, nor the payment of the purchase price, nor the issuance of the patent, could place him in a position to plead laches, as against the title asserted by the railroad company. Said the court in Wood v. Beach: "It Is clear that Mr. Wood acquired no equitable rights by his occupation and settlement. He went upon lands which were not open to homestead or pre-emption entry, and cannot make hiB unauthorized entry the foundation ot an equitable title."
The appellees cite and rely upon the cases of Railroad Co. v. Herring, 110 U. S. 27,3 Sup. Ct. 485, and Galliher v. Cadwell, 145 U. S. 368, 12 Sup. Ct. 873. In the first of these cases the grant to the railroad company provided for the withdrawal when a map definitely showing the line of road should be filed. The map was not filed until three years and a half after the passage of the act. During this period homestead and pre-emption entries were made. The court held that no obligation rested upon the government to withdraw the lands from sale until the grantee .filed a map in the general land .office, definitely showing the entire line of its road, and that in the meantime the lands were open to pre-emption aud homestead entry. It is readily seen that the facts in that case clearly distinguish it from the case at bar. In Galliher v. Cadwell it was said by the court: !'Laches is not, like limitation, a mere matter ot time, but principally a
question of the ineqUity of permitting the claim to be enforced,-an IneqUity founded upon some change In the condition or relations of the property or the parties." .
There are no facts in the present case to which that language is applicable. The appellant and Groeck were not in the attitude of persons to whom the .land in controversy was offered llpon equal terms, giving to the first entryman the prior right. It was offered only to the railroad company. The facts stated in the bill and in the plea are insufficient to show that the company has in any respect dealt inequitably IwithGroeck. This is not a· case in which it has delayed enforcing its rights to the detriment of another. The delay in constructing the road and in selecting the lieu lands has worked no wrong to Groeck. So long as the United States made no complaint of the delay, no equity was created thereby in favor of any intending settler. And no such settler could take it upon himself to say that the grantee had forfeited any of the rights specified in the grant. The company was. not required to give Groeck notice of its rights in the premises. He was bound to take note of the law, which itself gave biIP notice. In short, no facts exist on which laches may be imputed to the railroad company for any delay upon its part short of the statutory period of limitation whereby its right to obtain the relief sued for would be absolutely barred. The suit was brought within less than three years after definite location, which was the earliest time when selection could have been made, in less than two
976
87 FEDERAL REPORTER.
years after the issuance of Groeck's patent, and withiIdeSs than one year after selection was made: The decree will be reversed; and reo mandedt6:lihe circuitcotirt' fot" further proceedings not inconsistent with this' <>pinion: ' ;;
RYLE et al. v. KNOWLES LOOM WORKS. (Circuit Court of Appeals, fJlhlrd Circuit. June 29, 1898.)
1.
CONDITIONAL SALES-RIGHTSOB CRBlJITORS.
In Pennsylvania a sale and delivery of personal propertYl with an agree-: ment that the ownership shall remain In the vendor until the purchase price Is paid, Is voJd as to creditors of the vendee and Innocent purchasers; ,and this rule applies, the, form of tjle agreement. Where personal property ,Is delivered under a contract of bailment, accompanied with an agreement for Ii future sale to the bailee on the payment of a certain price, the ownership of the bailor Is preserved, and the transactlonJs valid, even as against the creditors of the bailee iUld innocent purchasers. CREDITORS-LEASE AS, ,
i ;
BAILMENT-RIGH'fS OF CREDITOR. '
B.
CONDITIONAL
In Pennsylvania, a res,ervatlonof title, by a11 instrument in the form of a lease, as security for the: purchase price of personal property sold and delivered, is ,unavailing as against creditors and innocent purchasers; and It matters not that the lease was contemplated from the beginning, and the property delivered in pursuance of that co,ntemplation. In replevin for'machinery sold by the plaintiff,' \vith reservation of title as security for the purchase price, the rights of innocent mortgage bondholders under a mo/:tgage exeouted by the veIldee are available as a defense.
4.
REPLEVIN-DEFENSES-RIGHTS OF MORTGAGE BONOHPLDERS,
In Error to the Circuit Court of the United States for the Eastern District of Pennsylvania. ,,' This was an action of replevin by the Knowles Loom W6rks against William Ryle and others to recover possession of certain machinery. In the circuifcClurt, verdict and judgment were given for plaintiff, and the defendants sued out this writ of error. RobertB. Honej'Wan, for plaintiffs Benno Loewy andJ. M. Rommell, for defendant in error. Before AOHE80N and DALLAS. Circuit Judges, and BRADFORD, District Judge. ACHESON, Oircuit Judge. It is, and long has been, the established rule in Pennsylvania that a sale and delivery of personal property, with an agreement that the ownership shall remain in the vendor until the purchase price is paid, is ineffectual and void as respects the creditors ofthe vendee and innocent purchasers i and the rule applies, whatever may be the form of the agreement. Hltakv. Linderman, 64 l'a. 81. 499 iStadtfeld v. Huntsman, 92 Pa. St. 53 i Thompson v. l'aret,94 Pa.' St. 'Brunswick & Balke Co. v. Hoover, 95 Pa.St. 50S;' Forrest v. Nelson, lOS Pa. Sti'481; Dearborn v. Raysor, 132 Pa. St. 231, 20 At!. 690; Farquhar v.McAlevy, 142 Pa. St. 233,21 Atl. 811; Ott v. Sweatman, 166Pa. St. 217, 31 AtI. 102. But where personal