95 F. 203 | U.S. Circuit Court for the District of Northern Iowa | 1899
The general purpose of the bill herein filed is to obtain a decree adjudging that the complainant is entitled to enter as a homestead, under the laws of the United States, the N. W. i of section 5, township 95 N. of range 42 W. of the fifth P. M., situated in O'Brien,county, Iowa; it being averred in the bill that the land department, wrongfully, unlawfully, and against the claim and protest of complainant, issued a patent to the land, under date of August 5, 1898, to the defendant John Schneider. According to the averments of the bill, these .premises formed part of the land granted by congress, under date of May 12, 1864, to the state of Iowa, to aid in the construction of a line of railway from Sioux City to the Minnesota state line, but the title to which ultimately reverted to the United States, by reason of the failure of the Sioux City & St. Paul Railroad Company to fully complete the line to Sioux City; the same having in fact been built from the Minnesota line to Lcmars, Iowa, and no further. Based upon the failure to construct the railway from Leniars to Sioux City, and under the
To this bill a demurrer is interposed, and in support of it the contention is made that this court is without jurisdiction, because ' the suit is between citizens of the same state, and it is not averred in the bill that the premises in dispute exceed in value the sum of $2,000. In the concluding paragraph of 'the bill it is averred that the value of the land is $8,000, for which sum judgment is prayed, and it therefore sufficiently appears that the amount in controversy exceeds $2,000; and, as the complainant bases his right of action solely on the provisions of the laws of the United States regulating homestead entries upoin the public land, it is clear that the controversy is one arising under the laws of the United States, over which this court, under the provisions of the judiciary act of August 13, 1888, has jurisdiction, irrespective of the citizenship of the litigants.
In further support of the demurrer it is contended that the bill is without equity, in that it fails to show any error of law inhering in thé action of the land department in overruling the claim of complainant to be allowed to enter the land in dispute as a homestead, and in issuing the patent to the defendant. By section 4 of the act of March 3, 1887 (24 Stat. 556), it is expressly provided that, in the readjustment of the grants under that act, purchasers in good faith from the railway companies of any lands erroneously certified
The location of the land in dispute is within the limit of the grant, and is opposite to the line as constructed between the Minnesota state line and Lemars. The fact that when Schneider made his contract of purchase with the railway company the road had not been built between Lemars and Sioux City, and through the lapse of time the railway company had lost the right to earn the lands which would have become its property had the road from Lemars to Sioux City been constructed' in accordance with the terms of the grant, and the further fact that the legislature of Iowa, by an act approved March 16, 1882, had resumed all unearned lands pertaining to this grant, do not show that Schneider was not acting in good faith in contracting with the railway company. Assuming that it must be held that he had knowledge of the fact that the railway company had not completed the line of road from Lemars to Sioux City and had therefore lost the right to the lands it would have earned by the construction of this part of the line, this would not charge him with knowledge of any facts tending to show that the land he was contracting about had not been earned by the company. The question of the total number of acres which the company could hold under the grant and the location thereof was not finally determined until the decision of the supreme court was announced, in 1895, in the case of Sioux City & St. P. R. Co. v. U. S., 159 U. S. 849, 16 Sup. Ct. 17; it being said in the course of the opinion that:
“Under this view, it is unnecessary to inquire whether the particular lands here in dispute should not have been assigned to the company, rather than other lands, containing a like number oí acres, that were in fact transferred to it, and which cannot now be recovered by the United States, by reason of their having been disposed of by the company. If the company has received as much in quantity as should have been awarded to it, a court of equity will, not recognize its claim to more, in whatever shape the claim is presented.”
Thus, it appears tbat the question of whether the premises in dispute, as a strict matter of law, were not earned by the company, has never been decided; but the right of the company to assert a claim to the O’Brien county lands, including the premises in dispute in this suit, was denied on the ground that, as the company had in fact received in quantity'all the lands it had earned, the company would not be heard to assert its legal claim to the lands in question. To charge Schneider with being a purchaser in bad faith, it is necessary to hold that, when he made his purchase from the railway company, he ought to have foreseen the outcome of 'litigation between the United States and the railway company, which had not then been commenced, and which resulted in a decision which holds, not that.
.But it is further contended on behalf of complainant that because Schneider, after he had made the contract of purchase, entered into a contract with the railway company to the effect that if the supreme court should finally decide adversely to the right of the railway company to hold the lands under the grant, then Schneider would surrender his contract of purchase to the company upon payment to him by the company of all money received from him, this must be held to prove the had faith of Schneider in originally entering into the contract of purchase. The assertion of such a contention surely shows the straits, to which complainant is driven in his effort to make out this charge of bad faith on part of Schneider. This agreement, if it had been fully carried out and performed (which is not dun ged in the hill), would only have had the effect to settle the question of damages as between the railway company and Schneider, but it would not in any way affect the right of the latter to secure the title of the land from the United States under the provisions of the acts of 1887 and 1896. There is nothing, therefore, to be found in the allegations of the bill which tends to support, as a matter of law, the charge of bad faith alleged agaiust the defendant Schneider in entering into the contract of purchase with the railway company. The evidence show's that, in reliance upon this contract, Schneider has paid to the railway company several hundred dollars,. — having hound himself to pay in all the sum of $2,275, — and has spent several hundred dollars, and years of time and labor, in making a home upon the premises, and that he has paid the taxes assessed upon the premises ever since his purchase. These facts not only justify, hut demand, the finding that Schneider was and is a purchaser of these premises in good faith, within the meaning of the act of 1887, which declares that the title of such a purchaser must be held good, although that of the railway company may be held invalid and void, it must be kept in mind that this case is not one wherein an actual, subsisting title in one person is sought to be defeated by the assertion of a claim based on a purchase made in good faith for a valuable consideration; that is, a purchase made of an apj)arent title by one who is ignorant of the existence of an adverse claim. The complainant herein has full knowledge of the facts, and he is seeking, through the forms of law, to secure to himself the lands in question, with all the added value given thereto by the time, money, and labor of the defendant Schneider, on the ground that, as between the defendant and the United States, it must be held that Schneider