262 F. 675 | 8th Cir. | 1920
The state of Wyoming was admitted by act of Congress on July 10, 1890 (26 Stat. 224)', which granted to il sections 16 and 36 for educational purposes, with certain indemnity lands in place thereof in case they had been otherwise disposed of; the indemnity lands to be selected with the approval of the Secretary of the Interior. Under this grant the state acquired a perfect title to
On April 4, 1912, the state filed in the proper local land office its application under’the provisions of the act of Congress of July 10, 1890 (26 Stat. 222), and sections 2275 and 2276 of the Revised Statutes, and the acts amendatory thereof (Comp. St. §§' 4860, 4861), for the tract of land involved in the present suit as indemnity for a part of said section 36. The state did everything necessary to show a perfect title to the land relinquished and perfect relinquishment thereof to tire government, and everything that was required either by statute or regulation of the' Land Department to select the land here involved as indemnity for the land so relinquished. Among other things in the showing was an affidavit that the land applied for contained no known deposits of mineral or petroleum, and it was stipulated at the hearing that at the time the application was filed the land “had been classified by the government in no way as mineral lands.” The filing of the application was allowed by the local land office, publication ordered, the receipt of the publication fee accepted, and all the papers submitted by the state were sent to the Commissioner of the General Land Office on April 30, 1912, with proper certificate of the local officials, showing that the records in their office disclosed no adverse claims to the land selected.
. On May 6, 1914, the President, under the terms of the act of June 25,1910 (36 Stat. 847 [Comp. St. §§ 4523 — 4525]), withdrew as oil land the tract so applied for by the state.
On April 29, 1915, the Commissioner of the General Land Office caused notice tp be given to the state advising it that, inasmuch as the tract applied for had been withdrawn as oil land, certification of the selection, if made, would contain a reservation of the petroleum deposits under the act of July 17, 1914 (38 Stat. 510 [Comp. St. § 4640c]), unless the state within 30 days filed an application for classification of said land as nonmineral, together with a showing, in which event the state would be allowed a hearing to show that the tract was riot valuable for petroleum.
On May 24 of the following year, 1916, the state made what purported to- be a lease of the property to defendant Ridgely, for the purpose of drilling for oil thereon, which lease was thereafter by mesne conveyance assigned to defendant Midwest Refining Company.
By letter dated the day following the date of the lease, to wit, May-25, 1916, the state replied to the notice given under instructions of the Commissioner last above referred to, declining to accept a surface patent, so called, and, instead of asking for a hearing as to the character of the land, claimed that an equitable title had vested in it by virtue of . its compliance with the laws and regulations in its application for selection of April 4, 1912.
Thereafter, on August 17, 1916, the Commissioner of the General I,-and Office held the selection for cancellation, on the grounds that the land had been withdrawn as oil lands and had been shown to be
Going back, now, to developments on the land, in the year 1916 drilling for oil was undertaken by the defendant Midwest Refining Company, and carried on to discovery and subsequent production. But no discovery was made or drilling commenced until after M,ay 24, 1916, the date of the lease to Ridgely, and nearly a year after the letter of July 29, 1915, from the Commissioner to the state of Wyoming, notifying it that, if the selection were allowed, it would contain a reservation of the petroleum deposits. Since that time production has been carried on by defendant Midwest Refining Company, and is now being carried on by it from a number of wells making a large production. This suit was brought by the United States to enjoin the continuing trespass involved in such drilling and operation and exhaustion of the oil content of the land, to quiet title in the government, and to cancel the various instruments relied on by defendants, as supporting their claim of an equitable title thereto, and for an accounting. The state intervened in the action. It and the other defendants filed separate answers. Evidence was adduced, showing the facts substantially as above recited. The trial court dismissed the bill upon the merits, and the present appeal seeks a review of that decision.
It is stated in the briefs, and was referred to in the oral arguments, that it is the purpose of all parties in this case to present squarely the question whether or not the state can obtain title to lieu lands by filing its application for selection and complying with all the requirements of the statutes, rules, and regulations on its part to be complied with, although its selection never was approved, but prior to action thereon by the Commissioner of the General Land Office and while the application for the selected land was pending before him, the land applied for was shown to be oil land, and withdrawn as such, and upon those grotinds the selection was rejected.
We think that it has been clearly determined by the Supreme Court that the state, down to the time of the approval of the application by the Commissioner of the General Land Office, acquires no estate, legal or equitable, in the lands applied for as against the government. The only right which it acquires by its application and the proceedings in the local land office is to be protected against any subsequent right in the tract being acquired by private parties in case the government decides to dispose of the lands as agricultural lands.
This in our judgment is placed beyond controversy by the decision of the Supreme Court in Wisconsin Railroad Co. v. Price County, 133 U. S. 496, 511, 512, 10 Sup. Ct. 341, 33 L. Ed. 687, and more particularly by the decision in Cosmos Co. v. Gray Eagle Oil Co., 190 U. S. 301, 23 Sup. Ct. 692, 24 Sup. Ct. 860, 47 L. Ed. 1064. The latter case is directly in point. There are minor circumstances in which it differs from the present case, but none of these constitutes a substantial ground of distinction.
The case of Daniels v. Wagner, 237 U. S. 547, 35 Sup. Ct. 740, 59 L. Ed. 1102, L. R. A. 1916A, 1116, Ann. Cas. 1917A, 40, does not impair the authority of the Cosmos Case, but expressly approves it as to the power of the Commissioner to determine the mineral character of the land applied for. All the Daniels Case decides is this: That the applicant for lieu lands, by presenting his application to the local land' office, acquires the right as against private individuals whose rights in the property arise subsequently, to be protected against such subsequent private rights, and that the Commissioner of the General Land Office in the name of discretion cannot, while holding the lands subject to disposal as agricultural, timber, or desert lands, give the land to a private party whose rights arose after the application to select the indemnity lands was made to the local land office. The Daniels Case has nothing to do with the right of the government to decide any question of fact involved in the application to select the land as indemnity. It simply holds that a private individual, whose rights arise subsequent to the entry of the application in the local land office, cannot, be given priority over such applicant. The Supreme Court in the case cited simply holds the Commissioner, in exercising his jurisdiction to dispose of the lands as between private parties, must give effect to the general doctrine of priorities.
In the argument and briefs there is a great array of authorities holding that it is the “known” mineral quality of lands at the time a right to them is acquired which controls in suits to cancel patents, and that the discovery of the mineral character of the land subsequent to the inception of the right does not give the government the right to cancel a patent. The difference between those cases and the "present is plain. This is not a suit to cancel a patent or an equitable title. The suit simply involves the question of the right of the government, through
The decree of the District Court is reversed, with directions to the trial court to enter a decree in favor of the plaintiff in accordance with the prayer of the bill, and proceed with the cause.