Source: http://supreme.nolo.com/us/139/663/case.html
Timestamp: 2019-04-18 14:20:42+00:00

Document:
The grant of "lands to aid in the construction of a railroad and telegraph line from the Central Pacific Railroad, in California, to Portland in Oregon," made by the Act of July 25, 1566, 14 Stat. 239, c. 242, was a grant in praesenti, and the provision in section 8 of that act that in case the companies should fail to complete the road on or before July 1, 1875, this act shall be null and void, and all the lands not conveyed by patent to said company or companies, as the case may be, at the date of any such failure shall revert to the United States, is a condition subsequent, of which only the United States can take advantage.
Under the Act of July 26, 1566, 14 Stat. 251, c. 262, "granting the right of way to ditch and canal owners over the public lands," no right could be acquired to any portion of the public lands until the actual taking possession of the same for the purpose of constructing a ditch.
A conveyance by deed of a perpetual right in land, for a solid consideration therein expressed, without any covenant for the payment of rent or the redelivery of possession, creates the relation of grantor and grantee between the parties.
The grantee in a deed of conveyance is not estopped to deny the title of his grantor.
The plaintiff in error, under the Act of July 26, 1866, 14 Stat. 251, c. 262, constructed a ditch over lands granted to the defendant in error for a railroad under the Act of July 25, 1866, 14 Stat. 239, c. 242. The defendant in error, under a misapprehension of its legal rights, received a deed from the plaintiff in error conveying a license to enter upon said ditch and construct its road over the same for the consideration of $250 paid by defendant in error to plaintiff in error, and upon condition against impairing or destroying said ditch. The plaintiff in error sued the defendant in error for so constructing its road as to permanently obstruct and destroy his ditch. Held that the defendant in error, by accepting the deed, was not estopped from denying the title of the plaintiff in error or from asserting the invalidity of the covenant into which it had inadvertently entered.
ground that the case involved the validity of conflicting grants of land from the United States. The plaintiff sued to recover for damages to a water ditch and water right occasioned by the construction of the defendant's road. His complaint alleged in substance that on the 3d of September, 1883, he was the owner of an undivided half of a certain water ditch and water right on the south side of Rogue River, in Jackson County, and in lawful possession of the same, as tenant in common with one Daniel Fisher; that upon this day, the plaintiff and Fisher, for the consideration of $250 paid to them, executed a deed to defendant of a right to construct and operate its railroad and telegraph line across the said water ditch, but upon condition that it should not in any way destroy or injure the same or obstruct their use and enjoyment of it as a means of conveying water through the same, and that the defendant accepted the deed, received possession of the water ditch, and constructed its railroad and telegraph line across the same, but in such a manner as to permanently obstruct and destroy it and render it impossible to use it for the conveyance of water, and refused to make any compensation to the plaintiff for his interest therein.
through such lands. That the lands through and over which the portion of the said water ditch alleged to have been injured by defendant was constructed and is situated were at the date of said act public lands of the United States, over and upon which the defendant had the right, by virtue of the grant made in that act, to locate its right of way and construct its railroad and telegraph line. That in locating said right of way and constructing said road, it became necessary for the defendant to appropriate to its use one hundred feet in width on each side of its road, through and over which said land a portion of said water ditch alleged to have been injured by defendant was located and constructed, and that the defendant did accordingly locate its right of way over the ground through which the water ditch was dug, and constructed its road over such right of way, and that any injury which may have been done to said ditch was done in the course of such construction.
The answer further alleged that on May 17, 1879, the said Daniel Fisher attempted to appropriate to his own use, under the mining laws of the United States, a portion of said right of way, and constructed thereon the said ditch; that the only claim of right ever made by Fisher to locate and dig that portion of such ditch was obtained by virtue of his pretended compliance with certain provisions of the mining laws; that he had no other interest or ownership in such land than the right so acquired, and plaintiff's only interest therein was acquired under and through said Fisher, and that defendant took nothing by the deed mentioned in the complaint, as it then owned, by virtue of the said grant of the United States, all the rights and property pretended to be conveyed by said deed, and never received any consideration whatever for the sum alleged to have been paid by it for such pretended conveyance.
grant of the right of way of July 25, 1866, set forth in such defense, (3) that defendant had forfeited and lost all its right under such grant over the land where the ditch was situated by its failure to complete its railroad road on or before the 1st day of July, 1875, and had at no time since owned any right or interest in such land or right of way over the same.
The court below overruled the demurrer in an opinion reported in 26 F. 586, and, the plaintiff not desiring to plead further, entered a final judgment in favor of the defendant, to reverse which the plaintiff sued out this writ of error.
Two questions are presented by the record in this case: first, whether the defendant lost the power to take possession of its right of way by its failure to construct its road within the time limited by the acts of Congress, and second whether it is estopped to claim that it took nothing under its deed from the plaintiff, and may set up a separate and independent title in itself.
1. By section 2 of an Act of Congress approved July 25, 1866, entitled "An act granting lands to aid in the construction of a railroad and telegraph line from the Central Pacific Railroad in California to Portland, in Oregon," 14 Stat. 239, there was granted to such company organized under the laws of Oregon, as the legislature of said state should thereafter designate, to aid in the construction of its road, "every alternate section of public land, not mineral, designated by odd numbers, to the amount of twenty alternate sections per mile," not otherwise disposed of by the United States, with the right to select from the odd sections, within ten miles beyond the limits of the granted lands, other lands in lieu of any which might have been so disposed of prior to the location of the line, and by section 3 there was granted to it the right of way through the public lands, to the extent of one hundred feet in width on each side of said railroad where it might pass over the public lands, including all necessary grounds for stations, etc.
By section 6, the companies were required to file their assent to the act within one year, to complete the first twenty miles within two years, and at least twenty miles in each year thereafter, and the whole on or before the 1st of July, 1875.
"this act shall be null and void, and all the lands not conveyed by patent to said company or companies, as the case may be at the date of any such failure, shall revert to the United States,"
but by a subsequent Act of June 25, 1868, 15 Stat. 80, the time for completing the road was extended to July 1, 1880.
That the company did not complete its road by the time limited by the act of 1868, namely July 1, 1880, is conceded by both parties, and is evident from the fact that the defendant took this deed from the plaintiff on December 3, 1883, wherein, for the consideration of $250, it was agreed that the defendant might enter upon plaintiff's water ditch, and construct and operate its railroad and telegraph line over the same. Indeed it appears to have been a matter of such common knowledge in the State of Oregon that the road was not constructed until after 1880 that the court below was inclined to take judicial notice of the fact.
"It is settled law that no one can take advantage of the nonperformance of a condition subsequent annexed to an estate in fee but the grantor or his heirs, or the successors of the grantor if the grant proceed from an artificial person, and, if they do not see fit to assert their right to enforce a forfeiture on that ground, the title remains unimpaired in the grantee. . . . And the same doctrine obtains where the grant upon condition proceeds from the government; no individual can assail the title it has conveyed on the ground that the grantee has failed to perform the conditions annexed."
"that lands granted by Congress to aid in the construction of railroads do not revert after condition broken until a forfeiture has been asserted by the United States, either through judicial proceedings instituted under authority of law for that purpose or through some legislative action legally equivalent to a judgment of office found at common law. . . . Legislation, to be sufficient, must manifest an intention by Congress to reassert title and to resume possession. As it is to take the place of a suit by the United States to enforce a forfeiture, and judgment therein establishing the right, it should be direct, positive, and free from all doubt or ambiguity."
The manner in which this forfeiture shall be declared is also stated in United States v. Repentigny, 5 Wall. 211, 72 U. S. 267; Farnsworth v. Minnesota & Pacific Railroad Co., 92 U. S. 49, 92 U. S. 66; McMicken v. United States, 97 U. S. 204, 97 U. S. 217.
"The provision in the act of Congress of 1856 that all lands remaining unsold after ten years shall revert to the United States if the road be not then completed is no more than a provision that the grant shall be void if a condition subsequent be not performed."
The title to the land having vested in the company by virtue of the grant, the provision that it shall complete the road within a certain number of years does not cease to be a condition subsequent by declaring that the act shall be null and void if the condition be not complied with.
"This act shall be null and void, and all the lands not conveyed by patent to said company or companies, as the case may be at the date of any such failure, shall revert to the United States."
even in the construction of the last mile. And this construction of the section is in harmony with the general purpose of the act and the policy of Congress in making the grant."
A condition that would put it beyond the power of the company to build the last mile of its road by the aid of the granted lands is manifestly so harsh and unjust that the breach of such condition ought not to be treated as a forfeiture unless the language of the act be so clear and unambiguous as to admit of no other reasonable construction.
"in case of noncompliance, the act itself ceases to have any operation, and all the powers, rights, and franchises thereby granted were deemed forfeited an terminated. There was to be not merely a case of forfeiture, which could be enforced by an action instituted by the Attorney General, but the powers, rights, and franchises were to be taken and treated as forfeited and terminated. At the end of the time limited, the corporation was to come to an end, as if that were the time limited in its charter for its corporate existence."
if the provisions of this act are not complied with, then the franchise and privileges herein granted shall utterly cease to be forfeited."
A breach of this condition was held ipso facto to forfeit the franchises of the corporation. A distinction was drawn in this case between forfeitures at common law, which did not operate to divest the title of the owner until by proper judgment in a suit instituted for that purpose the rights of the state had been established, and a forfeiture declared by statute, in which case the title to the thing forfeited vests immediately in the state upon the happening of the event for which the forfeiture is declared.
"too well settled to admit of discussion that a corporation can be judicially determined to have ceased to exist only in a suit to which the commonwealth is a party. The act of incorporation is a contract between the commonwealth and the corporation. Whether the corporation has complied with the conditions is a question of fact to be judicially determined. The commonwealth may waive a strict compliance with the terms of the act, and may elect whether it will insist upon a forfeiture if there has been a breach of condition,"
citing a number of prior cases in the same state.
forfeiture nor the cause could be inquired into in another suit, nor could the existence of the corporation be questioned incidentally or collaterally. To the same effect is the case of Lagrange & Memphis Railroad Company v. Rainey, 7 Coldwell 420. In this case it was held that if an act of incorporation fixes a definite time in which the charter shall expire, when the time for this expiration arrives, the corporation is dissolved. But if its continuance beyond a fixed time is made to depend upon the performance of a given condition, the nonperformance of the condition is a mere ground of forfeiture.
"This, however, can only be taken advantage of by the state in a proceeding in the nature of a quo warranto, and the existence of the corporation can never be collaterally called in question."
It is not, indeed, always easy to determine whether a condition be precedent or subsequent. It must depend wholly upon the intention of the parties as expressed in the instrument and the facts surrounding its execution. If the condition does not necessarily precede the vesting of the estate, or if, from the nature of the act to be performed, and the time required for its performance, it is evident that the intention of the parties is that the estate shall vest, and the grantee shall perform the act after taking possession, then the condition is treated as subsequent, and there is no forfeiture without a reentry by the grantor or, in the case of the state, without some action on its part manifesting an intention to resume its title. In the case under consideration, the act, as already stated, takes effect as a present grant, and the provision for a forfeiture in case the company fails to complete its road is clearly a condition subsequent.
Upon the whole, we think there is nothing to distinguish this case from Schulenberg v. Harriman, and that the learned judge of the court below was correct in holding that the railroad company had not forfeited its right to construct its road by failure to complete the same within the time limited.
"If the company could be compelled to purchase its way over any sections that might be occupied in advance of its location, very serious obstacles would be imposed to the progress of the road. For any loss of lands by settlement or reservation, other lands are given; but for the loss of the right of way by these means, no compensation is provided, nor could any be given by the substitution of another route."
prevent the grantee from entering in pursuance of his grant or can recover damages that may necessarily be occasioned by such entry."
We regard this exposition of the law as sound and the case as exactly in point in this connection.
2. With regard to the question of estoppel, the complaint alleges that the defendant went into possession of that portion of the plaintiff's ditch across which its road was constructed under a deed from plaintiff and his tenant in common for a consideration of $250 paid, and assented to the condition therein contained against impairing or destroying said ditch, the only right conveyed being a license "to enter on said ditch and construct and operate its road over the same" upon such condition. The contention of the plaintiff is that, in receiving this deed and entering into possession, the relation of landlord and tenant was created between them, and not that of vendor and vendee, so far as the doctrine of estoppel is concerned. But as the deed was the conveyance of a perpetual right for a solid consideration therein expressed, and there was no covenant for the payment of any rent nor for the redelivery of possession, we think it should be regarded as creating the relation of grantor and grantee between the parties thereto. We have already found that the title of the company to its right of way upon the location of its route related back to the date of the act, and hence that when it took possession of the land in question, plaintiff had no title thereto which he could set up against the company. Had the defendant not accepted the deed from the plaintiff, it might, under our ruling upon the first point, have treated him as a trespasser. The real question, then, is whether the defendant is placed in a worse position by having accepted the deed from a party who had no title to the premises he assumed to convey -- the defendant having taken the conveyance under a mistaken view of the law applicable to the case.
It is conceded that, as a general principle, the grantee in a deed of conveyance is not estopped to deny the title of his grantor, and unless this case be an exception to this rule, it will necessitate an affirmance of this judgment. The rule was first applied by this Court in the case of Blight's Lessee v.
Rochester, 7 Wheat. 535, in favor of the grantee, who was permitted to show that the person from whom he derived title was an alien and, under the laws then existing, incapable of transmitting by inheritance the title to lands in this country. In Merryman v. Bourne, 9 Wall. 592, it was stated that the vendee "holds adversely to all the world, and had the same right to deny the title of his vendor as the title of any other party," and in Robertson v. Pickrell, 109 U. S. 608, it was held, in an elaborate opinion by MR. JUSTICE FIELD, that defendants, who held under a deed of a life estate, were not estopped from setting up a superior title. Cases in the state courts to the same effect are Comstock v. Smith, 13 Pick. 116; Osterhout v. Shoemaker, 3 Hill 518; Clee v. Seaman, 21 Mich. 287, and Sparrow v. Kingman, 1 N.Y. 242.
on the land. Subsequently the county caused the mortgage to be foreclosed. The defendant derived title through this foreclosure. It was held, as against the heirs of the original purchaser, that the defendant was estopped to deny the validity of the commissioner's deed. So, in Phelan v. Kelley, 25 Wend. 389, it was held that where a person having a possessory title to lands dies in possession leaving several children, his heirs at law, who succeed to such possession, it was not competent for one of such heirs, who had obtained the exclusive possession of the whole of the premises, to defeat a recovery by his co-heirs of their proportional parts or shares by setting up a title acquired from the owners of the land; that to avail themselves of such title, they must first surrender possession to their co-heirs, and then bring ejectment. And in a number of cases it has been held that where one takes by descent as a co-heir or tenant in common he cannot show, in an action of ejectment by his co-heir, that his ancestor had no title. Jackson v. Streeter, 5 Cowen 529; Proprietors of Braintree v. Battles, 6 Vt. 395.
this would be a useless and expensive formality, and we think the rule that forbids a tenant from disputing his landlord's title without first surrendering his possession has no application to a case like this. It may be said in general that the doctrine of estoppel exists only where there is an obligation to restore the possession of the land upon certain contingencies -- such, for instance, as exist between landlord and tenant or mortgagor and mortgagee. In such cases, the occupant is considered to have pledged his faith to return the possession of the land which he occupies, and will not be permitted to do anything to impair the title of him from whom he has received it. 3 Wash.Real Property 98; Gardner v. Greene, 5 R.I. 104; Osterhout v. Shoemaker, 3 Hill 513.
In this case, the defendant not only did not agree to resurrender possession to the plaintiff, but it accepted the deed with this covenant or condition, for which it received no consideration, and we do not consider it a breach of good faith upon the part of the defendant to set up this fact; nor ought it to be put in a worse position by having accepted this deed, and paid $250 therefor, than it would have occupied had it refused altogether to treat with the plaintiff. The deed was evidently delivered and received by these parties under a misapprehension of their legal rights, and it would be manifestly unjust to hold the defendant forever estopped from asserting the invalidity of the covenant into which it had inadvertently entered.

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