The herald., 1894-05-23
AGAINST THE SOUTHERN PACIFIC
An Important Decision by Su-
periOr Judge Shaw.
The Right of the Company to Fore
close Denied.
A Land Controversy Which Brought Up
the Old Land Grant QuestIons-The
Defendant Entitled to Recover
Money Paid Out.

~cAP0hJ VS. 0AhbOIs
1t WAS an action to foreclose two con-
tracts for the sale of lands. Each con-
tract was for section of land, and the
two contracts we're in all respects iden-
tical, except the description of the land
sold, and the court treats them as one.
The purchase price for both sections
was $l2 800. The plaintiff was the sci.
Ter and ]. II. Painter was the buyer.
He is now dead. and the action was
against the administrator of his estate.
The terms OF sale were a payment OF
$500 in cash, interest at per cent on
the balance, payable annually in adj
vance, and the balance to be paid in
fve'years. The contract was made Au-
gust Is, 1887, and the final payment
became due August Is, 1892. The action
was begun March Is, 1898.
The contracts described the land by
reference to the section, township and
range, but recited the fact that it has
never been surveyed. 1t is also recited
that the seller claimed the lands az part
OF the land grant made to it by con-
gress, and that no patent for the lands
had yet been issued to it, and it was
agreed that the company should use or
binary diligence to obtain such patent,
and that in case it be finally determined
that patent shall not issue to the COM
pany, it would upon demand repay,
without interest, to the buyer the mon
eys that had been paid to it by him.
The deceased paid down $3.50, and
also the fret years interest in advance,
amounting to $7l6S0, making in all
$32768 80. No subsequent payments
were made.
The complaint did not allege failure to
pay the balance of the principal, al
though it was due, but the several sums
OF interest due in advance, amounting to
$685. 20, and for this failure sought
strict foreclosure and decree declaring
the contracts null and void.
The defendant, by way of counter
claim, alleged that it has been finally
determined that a patent shall not
issue to the plaintiff for the lands in
controversy, and has demanded re-
turn of the $3276.S0 paid by deceased,
which the plaintiff refused to do.
The court, in discussing the points
raised, says that it appears by the stipu-
lation OF facts that the lands were in
cluded in the grant by the United States
to the Atlantic and Pacific Railroad
company, made July 81. 1886, and were
also included in the grant by the United
States to the Southern Pacific Railroad
company, made March 3, 1871, being
located at the crossing of the lines of
the two granite; that plaintiff has no
other claim or title thereto except under
the last named grant; that plaintiff has
never taken any steps to obtain patent,
and that the United States has brought
suit against the defendant to recover
damages for timber cut on the land and
to quiet its title thereto. which suit is still
pending.
The court further says that the United
States supreme court has decided that
the Southern Pacific Railroad com pany
under the grant has no right or title
whatever to any OF the lands included
in the grant OF July 81, 1886. to the At
lantic and Pacific Railroad company,
and that plaintiff can never obtain q
patent for the lands in controversy.
The plaintiff contended that because
the suit mentioned above did not in
volve precisely the same tracts of land
as are described in the present complaint,
the right to patent to these particular
lands has not been finally determined !;
that the return of the money is not yet
required; but the court holds that this
would be an extremely technical and
literal construction both of the agree
ment and of the decision of the supreme
court.
In regard to the failure OF the South.
ern Pacific company to obtain patent
for the land the court says:
Almost seven years have elapsed and
it is now admitted that nothing at all
has been done to that end. Not only
this but in the meantime suit has been
begun by the United States against the
plaintiff to quiet the title to another
tract of land to which plaintiff made the
same claim OF right, which suit was
manifestly brought as test case and the
court Of last resort has finally decided
that the plaintiff has no right. There
10 no pTetense that the right to the land
in this suit is not in all respects the
same as to the land affected by that de-
cision, nor that the plaintiff intends ever
to make any further effort to procure
patent, nor that it has any hope or
ground for success if it did. The de-
fendant is not required by the contract
to move in the matter. The position of
the plaintiff therefore is that it has no
intention OF trying to get patent does
not expect to, and knows it never can
get one, but it does not propose ever to
have final decision on the question OF
its right to one, because upon the hap
pening OF that event the defendant
would have right to the repayment of
the money paid on the contract, and by
avoiding any decision it can forever post
pone the day OF such pay ment, and thus
retain, without interest, the money it
ought to refund to the defendant.
This isin total disregard OF its agree
ment to use ordinary diligence to pro-
cure patent, and 80 clearly in bad
faith that it should be held as equiva-
lent to an abandonment of its claim
under the grant and an acquiescence in
the decision OF the United States supreme
court.
The plaintiff does not ask for any de.
fciency judgment, nor for sale OF the
premises, and the object of the fore
closure is obvious. 1t is not to obtain
payment of the interest which the de-
ceased has failed to pay, but to foreclose
the right of the defendant to recover of
the plaintiff the money which has been
paid on the contract.
Without discussing any of the other
questions argued in the case, l think
that under the facts as stipulated the
agreement by it's own terms stands re-
soinded and that defendant is entitled
to recover of plaintiff the moneys here
tofore paid thereon. Judgment will be
entered that the plaintiff take nothing
u h.A L l. +. L.