Source: https://caselaw.findlaw.com/us-supreme-court/237/547.html
Timestamp: 2019-04-24 13:19:28+00:00

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[237 U.S. 547, 548] Messrs. Harrison G. Platt, Alexander Britton, Robert Treat Platt, and Hugh Montgomery for appellant.
Messrs. J. H. Carnahan and F. H. Mills for appellee.
Daniels, the appellant here, was plaintiff in the trial court and appellant in the court below. In stating this case in its opinion the court below mentioned that there were fifteen other cases under submission in which Daniels also was the plaintiff in the trial court and the appellant before it, and that all the cases involved substantially the same legal questions. The court evidently considering that its conclusions in this disposed of the other cases, directed a judgment of affirmance not only in this, but in the other fifteen cases. It would seem, since only fourteen of the cases besides this one are here, that in one of the cases no appeal was taken; but otherwise the situation which existed below obtains here, since this and fourteen other cases are before us for decision. For the appellant this case and the fourteen others were argued in one brief, but for the appellees the cases in the briefs are divided into groups, presumably in consequence of what was assumed to be some material difference of fact between them. In passing upon the cases the court below substantially rested its conclusion upon what it decided was the power of the officers of the Land Department over the land entries which are the subject of the controversy, although in concluding its opinion the court intimated rather than decided that even if its views on the question of power were mistaken, there was a state of fact in this ( and presumably in the other cases) which required a decision against Daniels, the appellant. 125 C. C. A. 93, 205 Fed. 235.
In the argument before us for the appellant it is not disputed that if the court below was right in its ruling as to the power of the Land Department, its conclusion in [237 U.S. 547, 553] this and all the other fifteen cases was correct and its decrees must be affirmed, since, under the hypothesis stated, there is no contention that there is any fact in this or any of the other cases which would justify a different conclusion. On the other hand, in the arguments for the appellees, although it is not disputed that if the court below erred in the proposition which it maintained concerning the power of the Land Department, its decrees were wrong, it is nevertheless insisted that putting the proposition of power out of view, in some, if not in all, the cases, particular facts were established which, when properly considered, would require an affirmance of the decrees.
Under these conditions, to avoid repetition in the statement of the other cases, we proceed first in this case to dispose of the proposition as to the power of the officers of the Land Department in order, if it be found that such proposition was well founded, to decide this and all the other cases without going any further. In following this method we shall state the case on broad lines so as to present in bold relief the legal question for decision, paying no heed to facts not in any way involved in that question. If, after doing so, the power upheld by the court below be found not to exist, we shall then examine the facts to determine how far they may control or influence the decision of the case.
In June, 1902, the state of Oregon prepared lists selecting lands in place of certain designated school lands for which it claimed to be entitled to be indemnified, and these lists were filed in the local land office and were transmitted for approval to the Commissioner of the General Land Office. The state, before such approval, sold to Daniels the land covered by the lists, including that with which this controversy is concerned. The Land Department subsequently refused to approve the state lists because of error concerning the school lands for which the right of indemnity was asserted. Daniels, the purchaser from the state, was therefore without right in and to the land. Through the governor of the [237 U.S. 547, 554] state an arrangement was made with the Land Department by which the state might point out and substitute other school sections, the right to which had been lost, for those previously stated, and if it could not do so, on notice from the Department that its lists would be canceled the state might relinquish its claim, if any, arising from the filing of the lists, in favor of its vendees, who, on presentation of the relinquishment, might enter the land which they had already bought from the state. The Department directed attention to the fact that in the meanwhile the right of the vendees to make the proposed entry would be indubitably preserved, as the filing of the previous lists by the state had segregated the land, and until the relinquishment was presented that segregation would continue; and further, that if the relinquishment and the application to enter the lands were filed together, no danger of loss of right would exist. Daniels, to avail of this advantage, procured the Aztec Land & Cattle Company and one Perrin, who owned land which had been included in the San Francisco Mountains Forest Reserve, in his interest and for his account to surrender said land to the United States under the provisions of the act of Congress of June 4, 1897 (chap. 2, 30 Stat. at L. 36), and to apply for the benefit of Daniels to enter as lieu land the land which he had bought from the state of Oregon. To accomplish this purpose it was understood that the relinquishments which the state had made of its rights, if any, to such land, resulting from its filed lists, should be delivered to the land office in connection with the application to enter the lieu lands, thus following the method suggested previously by the Land Department. Carrying out this purpose after compliance in every respect with the statute and with the regulations of the Land Department, the application for the lieu lands was filed and the certificate of relinquish- [237 U.S. 547, 555] ment from the state was simultaneously handed to the proper land office.
This brings us to determine whether the Land Department had a right to reject a prior lieu land entry or entries and award the land to subsequent and subordinate applicants under the assumption that it possessed a discretionary right to do so,-an authority the possession of which was sustained by both the courts below.
In primarily testing the proposition from the point of view of principle it is well at once to exactly fix its true import. In doing so it is to be conceded (a) that the act of Congress gave the right to one whose land had come to be included by operation of law in a forest or other reservation to apply to the land office and obtain the right to enter an equal amount of public land upon the surrender to the United States of the land situated in the reservation, and upon the doing and offering to do everything required [237 U.S. 547, 558] by the law or the lawful regulations of the Land Department to be done or offered to be done for that purpose; (b) that in the particular case the application to enter the lieu land came within the grant of the statute, and all that was required by law or lawful regulation was done by the applicant in order to obtain entry; and (c) that it was the plain duty of the proper authorities of the Department on the filing of the entry in due course under the law to grant it. When these conclusions are accepted it results that the claim of discretionary power is substantially this: That in a case where, under an act of Congress, a right is conferred to make an application to enter public land, and a duty imposed upon the Department to permit the entry, the Department is authorized in its discretion to refuse to allow that to be done which is commanded to be done, and thus deprive the individual of the right which the law gives him. And it becomes, moreover, certain that the necessary result of this assertion is the following: That although Congress may have the power to provide for the disposition of the public domain and fix the terms and conditions upon which the people may enjoy the right to purchase, it has not done so, since every command which it has expressed on this subject may be disregarded, and every right which it has conferred on the citizen may be taken away by an unlimited and undefined discretion which is vested by law in the administrative officers appointed for the purpose of giving effect to the law. When the true character of the proposition is thus fixed it becomes unnecessary to go further to demonstrate its want of foundation. And the inherent vice which thus clearly appears from the mere statement of the proposition when reduced to the ultimate conceptions which it involves is not relieved by the suggestion that the action taken in this case by the Department rested not upon the assumption that there was a general discretion, but upon the assumption that such discretion arose because of the pri- [237 U.S. 547, 559] mary mistake made by the local land officers concerning the lieu entry and the allowance of the filing of claims which were subsequent in date. We say this because thus seemingly to limit the discretionary power exerted would, in our opinion, aggravate its manifest unsoundness, for the power as thus qualified would come to this: That the commission of a wrong by the officers of the Department in disobeying the act of Congress and in denying to an individual a right expressly conferred upon him by law would become the generating source of a discretionary power to make the disobedience of law lawful and the taking away of the right of an individual legal. But this, in another form of statement, brings the proposition back to its real and essential basis.
Let us consider the subject from the point of view of the authorities relied on as sustaining the possession of the discretionary power by the Land Department, first, from the point of view of the opinion expressed by the Secretary of the Interior, and second, from that of the court below in affirming the action of that officer. As to the first, it is to be observed that the only authority referred to was the case of Hoyt v. Weyerhaeuser, decided April 17, 1908, in the circuit court of appeals for the eighth circuit (88 C. C. A. 404, 161 Fed. 324), and that therefore the ruling was not the result of any prior administrative rule or practice of the Department asserting the existence of the administrative authority which the proposition involves. We do not stop to point out that in our opinion the ruling in Hoyt v. Weyerhaeuser did not sustain the right to exert the discretionary authority which it exercised, since that case, after the action of the Land Department, was reviewed in this court and reversed upon reasoning which negatives the assumption that the Department possessed the discretionary authority which it assumed it had. Weyerhaeuser v. Hoyt, 219 U.S. 380 , 55 L. ed. 258, 31 Sup. Ct. Rep. 300.
As to the second, while the court below likewise re- [237 U.S. 547, 560] ferred to no practice or ruling of the Land Department asserting the possession by the Department of the latitude of discretion which it exercised, that power was sustained and the lawfulness of its exertion in the present case established by the ruling in Cosmos Exploration Co. v. Gray Eagle Oil Co. 190 U.S. 301 , 47 L. ed. 1064, 23 Sup. Ct. Rep. 692. While thus understanding the Cosmos Case, the court recognized that the decision in Weyerhaeuser v. Hoyt was in conflict with such view if that decision was applicable to the case before it, which the court concluded was not the case because it must be restricted to applications for indemnity selections made by a railroad company under a railroad grant, and therefore did not relate to lieu land selections applied for under the act of 1897. But we are of opinion that this interpretation of the Cosmos Case cannot be justified. In the first place we can discover no reason for holding that the Cosmos Case either expressly or by any reasonable implication sustained the assumption that there existed in the Land Department in the case of lieu land entries or any other the vast latitude of discretion involved in the proposition which was sustained. It is true in the Cosmos Case it was decided that courts would not interfere with the right of the Department to pass upon a question which it had the power to decide as a prerequisite to allowing a lieu entry under the act of 1897, but that ruling has no relation to the question of the right of the Department, after it had passed on the prerequisites required for the entry under the act of 1897, and after it had decided that they had all been complied with, to deny the right of the applicant to enter, and under the theory of a discretion possessed to permit a later applicant to take the land, thus depriving the first applicant of the right conferred upon him by the act of Congress. The difference between the two is that which must obtain between the power to decide, on the one hand, whether the prerequisites [237 U.S. 547, 561] to an entry exist, and the right, on the other, of the Land Department, after finding that an applicant has fully complied with the law and is entitled to make the entry which he asks, to permit somebody else to enter the land under the assumption that the law vests a discretion which enables that to be done.
It is true again that in the Cosmos Case the court declined to hold that the Department was not at liberty to determine the question as to the mineral character of the lands sought to be entered because that inquiry arose after entry and before its final allowance,-a ruling which but in a different form illustrates the broad distinction which we have just pointed out. It is also true that Weyerhaeuser v. Hoyt concerned a question of the selection of indemnity lands by a railroad company under a railroad grant, but the reasoning in that case, we are of opinion, in the very nature of things is repugnant to the possibility of the possession of the discretionary power in the Department here asserted.
There being, then, no basis for the assumption of a discretionary power on the part of the Land Department upon which the lieu land entry or entries were finally rejected and the land awarded to other entrymen who were later in time, the bill stated a cause of action sustaining the relief prayed unless the demurrer was rightly maintained for some other reason. And for the purpose of considering that subject we state under one heading the questions involved in its solution.
From the point of view that it is established that error of law was committed by the Land Department in assuming that it had a discretion to reject the lieu entry, is its action nevertheless sustainable because of the suggestion made by the court below in closing its opinion, or for any other fact or reason pressed in argument?
'Under dates of March 5 and June 11, 1906, the register submitted full reports to your office [General Land Office] upon the said applications, and stated there were objections to the allowance of the same in that there were various homestead and timber and stone applications which had been allowed subsequently to the cancelation of the state's list. The register also referred to the fact that Daniels had caused a contest to be instituted against the state's selection, and questioned his good faith in the matter.
'Separate appeals were taken by the Aztec Land & [237 U.S. 547, 563] Cattle Company and Perrin from this action of the local officers, and the papers in connection with the application of the Aztec Company were transmitted to the Department by your office, letter of May 9, 1906, for further consideration in connection with the report of the local office.
'Upon consideration of the matter thus presented, the Department held in its decision of June 26, 1906, that the facts failed to show that Daniels was entitled to protection as a bona fide purchaser from the state; that the state's selections were filed January 28, 1902, while the lands were sold on January 21st, preceding, at which time they were public lands of the United States, and no one purchasing them could claim to be a bona fide purchaser from the state; that as late as October 5, 1903, Daniels was not asserting that he was a purchaser in good faith from the state, but was acting adversely to it, and attempting to contest the lists under which he later asked for recognition as a bona fide purchaser and for equitable relief; that this position then was inconsistent with the position later assumed; and if he had since acquired assignments of the state's certificates of sale, he had done so with full knowledge of the invalidity of the state's claim; that the facts set forth above were fatal to his contention that he was a bona fide purchaser, and as such should be permitted to file the state's relinquishment and obtain preceedence over others seeking to appropriate the lands under the general land laws; that to concede to him this privilege under letters October 17 and 13, 1903, mentioned above, would, in effect, be to make such persons as from time to time might constitute the State Land Board agents to dispose of the public lands of the United States, within the state, to such persons as they might favor by means of sales of public land as state land, the subsequent filing of the state's lists invalid for want of sufficient base, the filing of the state's relinquishment, and the protection of [237 U.S. 547, 564] the purchaser from the state by grace of the Land Department. The Department accordingly held in that decision that the lieu selection should be rejected.
'A motion for review of said decision of June 26th, 1906, having been filed by Daniels, the Department, on May 15 and 18, 1907, rendered decisions holding that while Daniels was not, strictly speaking, a bona fide purchaser from the state, because the certificates of sale issued by the state antedated the filing of the school indemnity selections, and therefore were made at a time when there was no actual claim of the state pending, still Daniels had not purchased the land until the month of April, 1902, nearly three months after the lands had been actually selected by the state, and that having paid a valuable consideration for the lands in an honest belief that a title was being obtained, that was sufficient to constitute a bona fide purchase.
As additionally stated by the Secretary in his opinion, the Commissioner of the General Land Office transmitted the decision just stated to the local land officers along with the lieu entry or entries for allowance, and instructed those officers to notify the parties who had been allowed to make entries subsequent to the filing of the lieu applications to show cause why their entries should not be canceled.
And it was the controversy which arose from this petition which took the subject again before the Commissioner of the General Land Office and to the Secretary of the Interior, and which led to the final decision of the Department of 1910, with which we are dealing, maintaining the right of the lieu entrymen, and in which, as we have previously seen in discussing the question of discretion, the Department explicitly and finally found (1) that Daniels as a matter of fact was in good faith in his dealings concerning the purchase of the land from the state of Oregon and the receipt from the state of its relinquishment, and (2) that the application for the lieu entry or entries and the relinquishment by the state were presented to the land office for filing at one and the same time. Because of its conclusive effect upon that aspect of the question we append in the margin the finding made by the Secretary of the Interior on this subject. 1 [237 U.S. 547, 566] Under these conditions it is apparent that the suggestion made in the opinion of the court below was either inadvertent, or, if not, was clearly without foundation,-a result as to which there is no room for controversy in view of the express finding by the Department of the simultaneous presentation of the relinquishment and the application for the lieu entry or entries, since it constitutes a finding of fact by the Department which it was within its province and its duty to make, and which the courts have no power to review. And from this it follows that any attempt to base a right in favor of persons entering subsequently because of the failure of the local land officers to file would reduce the case at once to the contention that one who had done everything essential, exacted either by law or the regulations of the Department, to obtain a right from the land office conferred upon him by Congress, could be deprived of the same either by the exercise of discretion or by a wrong committed by the land officers.
In addition, in the brief for the appellee in this case [237 U.S. 547, 567] various mixed contentions of law and fact are stated under six propositions which it is deemed establish that the demurrer was rightly sustained even although the Land Department did not possess the discretion which it assumed it had. Some of them we think too obviously devoid of merit to require anything but statement. For instance, the contention that because a patent of the United States is involved, therefore the United States is a necessary party. As to the others, we think whatever be their merit, as to which we intimate no opinion, they plainly concern themselves with the merits of the case, and have no tendency to establish the proposition that the demurrer was rightly sustained. Thus, so far as the final action of the Secretary was concerned, we think under the averments of the bill and on the face of the Secretary's opinion it is to be assumed that the necessary parties to enable the Secretary to act were before him, and that this carries with it, at least for the purposes of the hearing on the merits, the question whether there was an insufficiency of parties in the previous hearings.
Our conclusion, therefore, is that the judgment sustaining the demurrer was wrong and it must be and is reversed and the case is remanded for further proceedings in accordance with this opinion.
[ Footnote 1 ] 'It is true the record shows that the relinquishments were not marked filed in the local office until February 10, 1904, which was two days after the presentation of the scrip applications.
'It is further shown that it was the custom in that office to note the filing of the relinquishments of entries and filings upon public lands on the same day they were received in the office; and a clerk in said office gives it as his opinion that if these relinquishments had been received on February 8, instead of February 10, the filing would have been noted on the day they were received.
'But it is evident from the facts and circumstances surrounding the incident that the scrip applications and the state's relinquishments were, in fact, filed simultaneously.
'The filing was by mail, and the letter of transmittal was written by Daniels's attorney, the said L. T. Barin.
'The letter recites that it contains the relinquishments in question, and it was received at the local land office February 8. Moreover, the action of the local officers at the time in rejecting the proffered scrip applications is put upon the ground that part of the lands were covered by pending homestead and timber and stone applications, whereas if the state had not then relinquished its school indemnity selections, the local officers would surely have assigned this as the reason for rejection of said applications, because this reason would have applied to all the lands involved, instead of only a small portion of them, as was the case with the reason assigned.
inadvertence he was ever advised thereof by the local officers.

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