157 F. 96 | U.S. Circuit Court for the District of Northern California | 1907
This is a bill in equity brought by the United States against the Southern Pacific Railroad Company to establish and to enforce a trust in and for moneys received by said defendant for sales of land made by the defendant to numerous bona fide purchasers within the overlapping primary limits of the land grant made to the Atlantic & Pacific Railroad Company by the act of Congress approved July 27, 1866 (14 Stat. 292, C.-278), and the subsequent land grant made to the Southern Pacific Railroad Company by the act of Congress approved March 3, 1871 (16 Stat. 579, c. 122)'. The lands described in the bill of complaint are in the state of California, and were by mistake and error patented by the. United States to the defendant under the erroneous supposition that such lands were a part of the lands granted to said company by the act of Congress approved March 3, 1871. The bill also seeks an accounting for the moneys received by the defendant from the sales of such lands and a discovery under oath as to what sales of such lands have been made, the name of each purchaser of each tract, the date of each sale and the terms thereof, the agreed purchase price and the amount received thereon, and the date and amount of each payment of principal or interest upon each purchase. To this bill the defendant filed a general demurrer, on the ground that the bill did not state a cause entitling the plaintiff to the relief sought and prayed for in the bill against the defendant. The defendant also filed a special answer, making discovery under oath as to all matters and things concerning which discovery was specifically sought by the bill. The bill of complaint and demurrer, together with the special answer, having been set down for a hearing, the defendant contended, upon argument, that there was no jurisdiction in equity in the cause, and that the facts set forth in the bill did not entitle the plaintiff to any relief. Upon consideration, the court overruled the demurrer, and gave the defendant time in which to file a further answer. Defendant thereupon filed its further answer, and thereafter plaintiff and defendant entered into a stipulation as to the evidence of the case. The case is now before the court upon the facts stated in the bill of complaint, and in the special answer making discovery under oath, and the stipulations as to the evidence in the case.
It is stipulated, among other things, that all lands described in Exhibits A and B, attached to plaintiff’s complaint, are within the primary limits of the land grant made to the defendant, the Southern Pacific Railroad Company by the act of Congress approved March 3, 1871. and within the primary or indemnity limits of the land grant made to the Atlantic & Pacific Railroad Company by the act of Congress approved July 27, 1866, and that it has been finally and conclusively adjudged and determined in numerous suits in the United States Circuit Court for the Southern District of California and in the Supreme Court of the United States, in which the United States was plaintiff and the
The act of March 3, 1887 (24 Stat. 556, c. 376 [U. S. Comp. St. 1901, p. 1595]), provided for the adjustment of railroads and for the forfeiture of unearned lands, for the cancellation of patents wrongfully issued to railroad companies, for the issuing of new patents to innocent purchasers, and for the recovery from such companies of the government price for the lands so patented and sold. Section 4 of the act provided that after cancellation of the erroneously issued railroad company patent, and the issuance of a new patent to the purchaser in good faith from the railroad company, “the Secretary ’of the Interior, on behalf of the United States, shall demand payment from the company which has so disposed of such lands, of an amount equal to the government price of similar lands; and in case of neglect or refusal of such company to make payment as hereafter specified, within ninety days after the demand shall have been made, the Attorney General shall cause suit or suits to be brought against such company for the said amount.” By the act of Congress approved February 12, 1896 (29 Stat. 6, c. 18 [U. S. Comp. St. 1901, p. 1596]), it was provided:
“That where such purchasers, their heirs or assigns, have paid only a portion of the purchase price to the company, which is less than the Government price of similar lands, they shall be required, before the delivery of patent for their lands, to pay to the government a sum equal to the difference between the portion of the purchase price so paid and the Government price, and in such case the amount demanded from the company shall be the amount paid to it by such purchaser.”
The act of March 2, 1896 (29 Stat. 42, c. 39 [U. S. Comp. St. 1901, p. 1603]), provided that where a purchaser of land patented to a railroad company is found by a decree of court, or in certain cases by the Secretary of the Interior, to have purchased in good faith, suit shall be brought against the company to recover the minimum price of the land. It is contended on behalf of the defendant that the material facts stated in the bill of complaint, and admitted and disclosed in the answer in discovery, and further admitted in the stipulation as to evidence, constitute the case an action at law, and not a controversy of equitable jurisdiction. The court is unable to take this view of the case. It may be that with the evidence now before the
It is objected that the plaintiff • bases its right of action upon the authority granted by the acts of March 3, 1887, and March 2, 1896, and that these acts are based upon the provisions contained in the original granting act of July 27, 1866, reserving the right and power to alter, amend, and repeal the act; that the two acts named do not constitute an exercise of such reserve power, because those acts-relate only to lands not granted. The objection is hypercritical. The acts relate to the erroneous conveyance of lands under the supposed authority of the original granting acts, and in this respect may be deemed amendatory to such acts. But they have a broader foundation than that. They are independent acts, and do not purport to alter, amend, or repeal the act of July 27, 1866, granting lands to the Atlantic & Pacific Railroad Company, or the act of March 3, 1871, granting lands to the Southern Pacific Railroad Company. They were passed by Congress pursuant to its- constitutional authority to make all needful rules and regulations respecting the territory or other prop
Let a decree be entered in favor of the plaintiff.