Miller v. Swann & Billups

89 Ala. 631 | Ala. | 1889

SOMERYILLE, J.

This case has once before been decided by this court, at a former term. The facts of the case remain essentially unchanged. .The chancellor now decides, that there is nothing in the amended bill, or in the additional testimony, which takes the case out of the operation of the former decision, as it appears reported under the title of Swann & Billups v. Miller, 82 Ala. Rep. 530.

The decree might well be affirmed upon the authority of that case. The printed argument filed in the case, by the able counsel of the appellant, and his oral argument at the bar, are but reproductions of the one filed on his application for a re-hearing on the former appeal. This argument was then considered by us, and we saw nothing in it which, in our judgment, required us to modify or recant the opinion then announced.

In view of the importance of the question raised, and the magnitude of the interests involved, however, we haye held the cause up for further examination, in the light of one or more recent decisions of the Supreme Court of the United States, which are asserted to bear on the subject in dispute.

The contest of title is between Swann and Billups, on the one hand, who derive their interest in the land from the State, and Miller, on the other, who claims through one Bagley, under the Alabama and Chattanooga Railroad Company. The common source of title is; admitted to be the State, the lands in controversy being a portion of those granted to the State of Alabama by the act of Congress approved June 3d, 1856 (11 U. S. Stat. at large, pp. 17-18), to aid in the construction of certain railroads in this State. This grant was renewed and extended by another act of Congress, approved April 10, 1869 (16 U. S. Stat. at large, pp. 45-46.)

Much time and space may be saved by disposing of some points urged in the argument of appellant’s counsel, as to which there can be no room for reasonable controversy.

So far as the question of forfeiture is concerned, it may be admitted that, if the railroad company had the authority to sell the lands, and did so prior to the legally authorized time, the condition violated would be a condition subsequent, and no one could take advantage of the violation of a condition subsequent, except the United States Government. The rule is unquestionable, that no one but the grantor, or his heirs, or successors, can set up a failure to perform a condition subsequent.

The. question of forfeiture does not, however, enter the case, as we view it. If there had been a forfeiture for violation of a condition subsequent, and the Government had claimed the benefit of it, the title of Swann & Billups, as trustees, as well as that of the State under which they claim, would also be divested. The plaintiffs in ejectment would have no title, and this fact would, of itself, defeat their action, unless the defendants were estopped to deny the fact by reason of claiming through the Alabama & Chattanooga Railroad Company, which corporation held under the State by grant, and solemnly admitted its title by so holding, and executing a mortgage back to the State on these lands to secure certain bonds loaned by the State to expedite the construction of the road. — Acts 1869-1870, pp. 89-92. The basis of the defense to the bill, which seeks to enjoin the ejectment suit, is, that the title of the plaintiffs in ejectment is good, and, therefore, there necessarily could have been no forfeiture. The only issue is, whether such title has been divested by a lawful and authorized sale by the railroad company, under the power conferred by the State, and under the acts of Congress in question.

It has often been held, in the numerous cases of this class, which have come’before this court for consideration, as follows: (1.) That the title to these lands was vested by Congress in the State as trustee for the purposes mentioned. (2.) That the State had the right to transfer the lands to the railroad company, subject to the restrictions imposed by the acts of Congress, which made the grant; and that the transfer was subject to these restrictions on the grantee’s power of disposition. (3.) That the legal title to the lands was to remain in the State until the road was completed, which event occurred on May 17 th, 1871, the State never having conveyed the legal title, up to this time, unless to Swann & Billups, as trustees for the creditors. (4.) That the State had no authority to sanction any sale of these lands, except such as might be made in substantial compliance with the terms imposed by Congress, and that it has made no attempt to do so.

These propositions are fully supported by the decisions of this court, and by those of the United States Supreme Court.—Swann v. Lindsey, 70 Ala. 507; Swann v. Larmore, Ib. 555; s. c., 116 U. S. 198; Standifer v. Swann, 78 Ala. 88; Ware v. Swann, 79 Ala. 331; Swann v. Miller, 82 Ala. 530; Swann v. Gaston, 87 Ala. 569.

The interest in the lands claimed by the railroad company was derived from the State, through the joint resolution of the General Assembly, approved January 30th, 1858, granting them to certain railroads, under which corporations the Alabama & Chattanooga road claims by privity of title. Acts 1857-58, p. 430; Swann v. Lindsey, 70 Ala. 507.

The railroad company, on March’ 2d, 1870, mortgaged these lands back to the State, under the authority conferred by tbe act o£ tbe General Assembly, approved February 11th, 1870. — -Acts 1869-70, pp. 89-92. The sales to Bagley were made after tbe execution of tbis mortgage, and Miller claims no better title than Bagley acquired.

Unless tbe lien of tbe mortgage was released, it is manifest that tbe title acquired under it would be superior to that acquired from tbe mortgagor — or, in other words, that Swann & Billups’ title would be superior to Miller’s.—Wilson v. Boyce, 92 U. S. 320.

A mortgagor ordinarily has no power to sell the mortgaged property, free of the incumbrance created by tbe mortgage. He may do so, however, if allowed by tbe contract of tbe parties, the rights of no creditors intervening. Or be may be permitted to do so by express legislative authority. Such authority is claimed in tbis case.

Tbe act of February 11th, 1870, expressly permits a “reservation” to be made by tbe railroad company, in tbe mortgage to be executed to the State, providing that “the said Alabama & Chattanooga Railroad Company shall have tbe privilege and right of selling said lands, or any part thereof, in accordance with the act of Congress granting tbe same.”—Acts 1869-70, pp. 89-90, sec. 1. Tbis reservation was incorporated in tbe mortgage, and its construction, as applied to the facts of tbe case, is the controlling question for us to decide. The power retained by tbe mortgagor was not unlimited power to sell. It was a power to sell only in accordance with tbe terms and' conditions of tbe act of Congress making tbe grant — which, we have said in a former decision, was “a law as well as a grant.” If these terms and conditions were followed, then the lien of the mortgage was by agreement to be released. If they were not followed, as to the mode or time prescribed, or otherwise, then tbe contract of tbe parties is, that tbe lien of tbe mortgage was to remain unaffected. Compliance with tbe essential requirements of tbe act of Congress became thus a condition precedent to the divestiture of title out of tbe State as mortgagee. Tbis, we repeat, was tbe express contract between the parties. It is sufficiently shown in tbe former opinion in tbis case, that the attempt to sell to Bagley was in direct violation of tbe terms of the law of Congress, and, therefore, necessarily also in violation of tbe agreement of .the parties to tbe mortgage, which was based on that law.—Swann v. Miller, 82 Ala. 530. The lien of the mortgage, for this reason, remained undischarged. This we understand to be the natural and just construction of the mortgage agreement, and of the act of the Alabama General Assembly, approved February, 1870, above cited. The case of St. Louis Iron Mountain & Railway Co. v. McGee, 115 U. S. 469, is not, in our opinion, in conflict with the conclusion reached in this case. The question there discussed involved the construction of no mortgage, or other contract between the State and the railroad to which the grant was made, analogous to the one here construed, which governs the relative rights of the contracting parties.

The act of Congress conferring title to these lands, moreover, was not a mere grant. As said on the former appeal in this case, “It was a law as well as a grant.”—Swann v. Miller, 82 Ala. 540. Its policy was to prohibit either the State, or its grantees, from selling any of these lands, except in the mode, and at the time authorized. Its prohibition was against such sales. An express act of the General Assembly, attempting to legalize these sales, would have been void for repugnancy to the letter and policy of the law. An agreement between the State and the railroad company, having in view such a violation of the Congressional statute, would have been equally void. Can the actual doing of the illegal thing be less invalid than the agreement to do it, or than a law which is void because it purports to authorize it to be done? In Pettit v. Pettit, 32 Ala. 288, this court properly held, that a lease of lands belonging to an Indian reservation, under a treaty with the Chickasaw nation, was illegal and void, because in violation of the provisions and policy of the treaty of 1832. And it was further held that it “was incapable of confirmation, because it falls within the influence of the general rule, that a contract which is void, either by a positive law, or upon principles of public policy, is deemed incapable of confirmation.” We have once before so declared the law of this case, and we adhere to the conclusion reached.—Swann v. Miller, 82 Ala. 530, 540; Bishop on Contr., §§ 542, 614, 620, 846; 2 Pom. Eq. Jur., § 964.

There is another view of this question of ratification. No one could ratify the sale in question except the State, so as to discharge the lien of its mortgage. This could be done only by legislative authority.—Van Dyke v. State, 24 Ala. 81. The laws enacted on this subject protect only the titles of bona fide purchasers, and Bagley was not of this class. Swann v. Miller, 82 Ala. 530, 540. The receipt of the purchase-money for the lands, by the officers of the railroad company, was no estoppel to preclude the rights of the State.

One suggestion more. It is argued, that, inasmuch as the railroad was fully completed, the purposes of the act of Congress have been carried out, and this confers a strong equity on the purchaser of the land, which was a part of the fund intended for this trust. It may be answered, that the equity of the State is the stronger, in view of the fact that the road was constructed with her bonds advanced to the company, for the security of which the very mortgage in controversy was given.

The decree of the chancellor is accordingly affirmed.