Source: https://supreme.justia.com/cases/federal/us/255/489/
Timestamp: 2019-04-19 14:42:11+00:00

Document:
1. Lands "in place" granted to a state for the support of schools and subsequently included within a reservation by the United States are exchangeable for unappropriated, nonmineral public lands of equal acreage outside the reservation under the Act of February 28, 1891, c. 384, 2 Stat. 796, amending §§ 2276, 2276, Rev.Stats. P. 255 U. S. 493.
2. Although, under other general provision (Rev.Stats. §§ 441, 453, 2478), the lieu lands are selected by the state under the direction of the Secretary of the Interior, this implies no discretion in him or in the Land Department to refuse approval of selections duly made, their function here being purely the judicial one of determining whether selections, with accompanying surrenders of base land, complied with the act of Congress and the Secretary's directions under the conditions existing at the time when the selections were made and completed. P. 255 U. S. 496.
3. When such a selection, with accompanying waiver or surrender, has been duly made and completed in full conformity with the act and the directions of the Secretary, the equitable title to the tract selected passes to the state, the United States acquiring a like title to the base land, and the rights of the state cannot be affected by a subsequent attempt by the executive to reserve the tract selected or a subsequent discovery that it contains mineral. P. 255 U. S. 497. Wisconsin Central R. Co. v. Price County, 133 U. S. 496, and Cosmos Exploration Co. v. Gray Eagle Oil Co., 190 U. S. 301, explained.
4. It is a general rule that the question of the mineral or nonmineral character of land selected or entered shall be determined as of the time when the selector or entryman fully complied with all conditions precedent resting upon him. P. 255 U. S. 500.
5. The exception to this rule found in the case of lands claimed under railroad aid grants, where the question of mineral character remains open until patent issues, is based upon the peculiar terms and subject matter of the granting acts, their long administrative interpretation, and their restrictive construction in favor of the government. P. 255 U. S. 507.
6. Legislation of Congress designed to aid the common school should be construed liberally, rather than restrictively. P. 255 U. S. 508.
7. The Act of June 25, 1910, c. 421, 36 Stat. 847, did not, and constitutionally could not, authorize executive withdrawal of land equitably vested in a state under a lieu election. P. 255 U. S. 509.
This is a suit by the United States to establish title in it to eighty acres of land and to the proceeds of oil taken therefrom. The district court rendered as decree dismissing the bill on the merits, which the circuit court of appeals reversed (United States v. Ridgely, 262 F. 675), and the defendants bring the case here.
One of the defendants, the State of Wyoming, * claims under a lieu selection, made in 1912, and the other defendants under a lease from the state made in 1916. It is against the selection and the lease that the United States seeks to establish title.
place after passing under the school grant should be included within a public reservation, to waive its right thereto and select in lieu thereof other lands of equal acreage from unappropriated nonmineral public lands outside the reservation and within the state. See California v. Deseret Water, etc., Co., 243 U. S. 415; Payne v. New Mexico, ante, 255 U. S. 367. Other laws of general application, §§ 441, 453, 2478, Rev.Stats., required that the selections be made under the direction of the Secretary of the Interior.
"the state did everything necessary to show a perfect title to the land relinquished and perfect relinquishment thereof to the government, and everything that was required either by statute or regulation of the Land Department"
in selecting the lieu land instead of the relinquished tract.
regular course, the local officers transmitted the list and other papers to the General Land Office with a certificate stating that no adverse filing, entry, or claim to the selected land was shown by the records in their office, and that the filing of the list was allowed and approved by them. The list remained in the General Land Office awaiting consideration by the Commissioner for upwards of three years. In the meantime, on May 6, 1914, two years after the selection, the selected land, with other lands aggregating more than 88,000 acres, was included in a temporary executive withdrawal as possible oil land under the Act of June 25, 1910, c. 421, 36 Stat. 847. On April 29, 1915, the Commissioner, coming to consider the selection, declined to approve it as made and called on the state either to accept a limited surface right certification of the selected land or to show that it still was not known or believed to be mineral. The state declined to accede to either alternative, and insisted that its rights should be determined as of the time when the waiver and selection were made, and that, applying that test, it became invested with the equitable title to the selected land two years prior to the temporary withdrawal, and at a time when that land plainly was neither known nor believed to be mineral. The Commissioner thereupon ordered the selection cancelled -- not because it was in any respect objectionable when made, but on the theory that he was justified in rejecting it by reason of the subsequent withdrawal and subsequent oil discoveries in that vicinity. The state appealed to the Secretary of the Interior, and, on October 25, 1916, he affirmed the Commissioner's action.
to the time the lease was given, but, thereafter, the oil company began drilling and at large cost carried the same to discovery and successful production. This was four years after the selection.
The question presented is whether, considering that the selection was lawfully made in lieu of the state-owned tract contemporaneously relinquished, and that nothing remained to be done by the state to perfect the selection, it was admissible for the Commissioner and the Secretary to disapprove and reject it on the ground that the selected land was withdrawn two years later under the Act of June 25, 1910, and still later was discovered to be mineral land -- that is, to be valuable for oil. Or, putting it in another way, the question is whether it was admissible for those officers to test the validity of the selection by the changed conditions when they came to examine it, instead of by the conditions existing when the state relinquished the tract in the forest reserve and selected the other in its stead.
their action was to be judicial in its nature, and directed to an ascertainment and declaration of the effect of the waiver and selection by the state in 1912. If these were valid, then, if they met all the requirements of the congressional proposal, including the directions given by the Secretary, they remained valid notwithstanding the subsequent change in conditions. Acceptance of such a proposal and full compliance therewith confer vested rights which all must respect. Equity then regards the state as the owner of the selected tract and the United States as owning the other, and this equitable ownership carries with it whatever of advantage or disadvantage may arise from a subsequent change in conditions, whether one tract or the other be affected. Of course, the state's right under the selection was precisely the same as if, in 1912, it had made a cash entry of the selected land under an applicable statute, for the waiver of its right to the tract in the forest reserve was the equivalent of a cash consideration. And yet it hardly would be suggested that the Commissioner or the Secretary, on coming to consider the cash entry, could do otherwise than approve it if, at the time it was made, the land was open to such an entry and the amount paid was the lawful price.
"When the price is paid, the right to a patent immediately arises. If not issued at once, it is because the magnitude of the business in the Land Department causes delay. But such delay in the mere administration of affairs does not diminish the rights flowing from the purchase, or cast any additional burdens on the purchaser, or expose him to the assaults of third parties."
that, when a purchaser has paid the full purchase price, his equitable rights are complete, and there is nothing left in the vendor but the naked legal title, which he holds in trust for the purchaser. And this general rule of real estate law has been repeatedly applied by this Court to the administration of the affairs of the Land Department of the government, and the ruling has been uniform that, whenever, in cash sales, the price has been paid, or, in other cases, all the conditions of entry performed, the full equitable title has passed, and only the naked legal title remains in the government in trust for the other party, in whom are vested all the rights and obligations of ownership."
"A change in the conditions occurring subsequently to the sale, whereby new discoveries are made, or by means whereof it may become profitable to work the veins as mines, cannot affect the title as it passed at the time of sale. The question must be determined according to the facts in existence at the time of the sale."
"The subsequent discovery of lodes upon the ground and their successful working does not affect the good faith of the application. That must be determined by what was known to exist at the time."
"The grantees, the Baca heirs, were authorized to select this body of land. They were not at liberty to select lands already occupied by others. The lands must be vacant. Nor were they at liberty to select lands which were then known to contain mineral. Congress did not intend to grant any mines or mineral lands, but, with these exceptions, their right of selection was coextensive with the limits of New Mexico. We say 'lands then known to contain mineral' for it cannot be that Congress intended that the grant should be rendered nugatory by any future discoveries of mineral. The selection was to be made within three years. The title was then to pass, and it would be an insult to the good faith of Congress to suppose that it did not intend that the title, when it passed, should pass absolutely, and not contingently upon subsequent discoveries. This is in accord with the general rule as to the transfer of title to the public lands of the United States. In case of homestead, preemption, or townsite entries, the law excludes mineral lands, but it was never doubted that the title, once passed, was free from all conditions of subsequent discoveries of mineral."
"This insistence cannot prevail. It not only is opposed to the settled rule that the character of the land -- whether agricultural or known to be chiefly valuable for coal -- must be determined according to the conditions existing at the time when the applicant does all that he is required to do to entitle him to a patent, but is grounded in a misapprehension of the authority and duty of the officers of the Land Department in respect of such an application. Whilst it undoubtedly is subject to examination and consideration by them, this is not that they may elect whether or not they will consent to its allowance, but that they may ascertain whether or not the applicant has acquired a right to its allowance -- a right which is acquired, if acquired at all, at that point of time when the applicant has done all that he is required to do in the premises, instead of at the time of its recognition by them."
The last expression on this subject in this Court is found in Payne v. New Mexico, ante, 255 U. S. 367, where it was held in respect of a state lieu selection like the one in question here that the Commissioner and the Secretary, in acting thereon, are required to give effect to the conditions existing when it was made; that, if it was valid then, they are not at liberty to disapprove or cancel it by reason of a subsequent change in conditions; and that, in this regard, the statute under which the selection was made does not differ from other land laws offering a conveyance of the title to those who accept and fully comply with their terms.
sale or other disposal, and no change in such conditions subsequently occurring can impair or in any manner affect his rights."
"These established principles, in the opinion of the department, are applicable to selections under the act of June 4, 1897. The act clearly contemplates an exchange of equivalents. Such is the unmistakable import of its terms. In the case of the relinquishment of patented lands, title is to be given by the government for title received."
"It would be strange indeed if, by the latter  act, Congress intended that one who, accepting the government's offer of exchange, relinquishes a tract to which he has obtained full title in a forest reservation, and in lieu thereof selects a tract of land which at the time is vacant and open to settlement, and does all that is required of him to complete the selection and to perfect the exchange, should thereby acquire only an inchoate right to the selected tract, liable to be defeated by subsequent discoveries of mineral at any time before patent, or before final action upon the selection by the Land Department. Such a construction would not only tend to defeat the objects for which the act was passed by discouraging owners of lands in forest reservations from giving up their titles, but would be against both the letter and spirit of the act. Parties would be slow indeed in relinquish their complete titles if it were once understood that they could obtain only doubtful or contingent rights in return for them. It could not have been the intention of Congress that parties accepting the government's offer of exchange should be embarrassed by any such conditions of doubt and uncertainty."
no right attached under such a selection unless and until it was approved by him, and therefore that, even though the selection was lawfully made, he possessed a discretion to reject it and give effect to an intervening change in conditions, as where a new claimant settled upon the land or sought to make entry of it while the selection was pending.
as of the time when the exertion of the authority was invoked by the lawful filing of the list of selections."
As the circuit court of appeals in the present case, like the Secretary in the other, regarded the decisions in the Wisconsin Central case and the Cosmos case as showing that no right attaches under a lieu selection unless and until approved by the Secretary, it is well to point out just what was involved in those cases, for it then will be apparent that there was no purpose in either to go to the length suggested.
defeat the right of selection by withholding his approval, nor that if, through a mistake of law, he rejected a selection which was valid at the time it was made, the company would be remediless. There was no occasion to consider those questions, nor could they properly be determined without the presence of parties not then before the court. And that the court did not intend its words to be taken so broadly is illustrated by the fact that it cited with approval the case of Saint Paul & Sioux City R. Co. v. Winona & Saint Peter R. Co., 112 U. S. 720, 112 U. S. 733, wherein an indemnity selection lawfully made, but disapproved by the Secretary, was sustained against an adverse certification on the ground that "this erroneous decision of his" did not deprive the selector "of rights which became vested by its selection of those lands."
"Concluding, as we do, that the question whether the complainant has ever made a proper selection of land in lieu of the land relinquished has never been decided by the Land Department, but is still properly before that Department, the courts cannot take jurisdiction and proceed to decide such question themselves. The government has provided a special tribunal for the decision of such a question arising out of the administration of its public land laws, and that jurisdiction cannot be taken away from it by the court. United States v. Schurz, 102 U. S. 378, 102 U. S. 395. The bill is not based upon any alleged power of the court to prevent the taking out of mineral from the land, pending the decision of the Land Department upon the rights of the complainant, and the court has not been asked by any averments in the bill or in the prayer for relief to consider that question. For the reasons stated, we think the bill does not state sufficient facts upon which to base the relief asked for, and that the defendants' demurrer to the same was properly sustained."
interpretation of the Cosmos case cannot be justified." Besides, it was adjudged in the Daniels case that a lieu selection which is lawful at the time it is made does invest the selector with equitable rights which he may enforce in an appropriate way where the Secretary, through an error of law, rejects the selection. And that ruling was reaffirmed and applied in Payne v. Central Pacific Ry. Co., ante, 255 U. S. 228, and Payne v. New Mexico, ante, 255 U. S. 367.
"This practice having been uniformly followed and generally accepted for so long a time, there should be, in my judgment, the clearest evidence of error, as well as the strongest reasons of policy and justice controlling, before a departure from it should be sanctioned. It has, in effect, become a rule of property."
railroads" and to "no other grants." The grounds on which the decision was put were: (a) that the railroad land grants, besides being confined in the granting clause to lands "not mineral," contain provisos declaring in words or effect "that all mineral lands be, and the same hereby are, excluded from the operation of this" grant; (b) that such grants, although expressly requiring that the question whether the lands are otherwise excepted be determined as of the time the map of definite location is filed, contain no such provision in respect of the exception of mineral land; (c) that it was well understood that many years would necessarily elapse between the filing of the map and the time when by construction of the road the grantee would be entitled to patents, and, as the grants covered great areas, in one instance nearly equal to that of Ohio and New York, it hardly could have been intended to arrest mineral development in those areas in the meantime; (d) that such grants "must be strictly construed," and "if they admit of different meanings, one of extension and one of limitation, they must be accepted in a sense favorable to the grantor;" and (e) that the long prevailing construction and practice of the Land Department ought not to be disturbed. Plainly the decision in that case is without bearing here, save as it recognizes that rights under other land laws are to be tested by a different rule. And this is emphasized by the fact that, in Shaw v. Kellogg, supra, where the selection of Baca tract No. 4 was involved, the Court distinguished the Barden case, and applied the general rule before stated. And it is of further significance that this Court has recognized that the legislation of Congress designed to aid the common schools of the states is to be construed liberally, rather than restrictively. Beecher v. Wetherby, 95 U. S. 517, 95 U. S. 526; Johanson v. Washington, 190 U. S. 179, 190 U. S. 183.
the lieu selection was lawfully made it suffices to say, following the recent decision in Payne v. Central Pacific Ry. Co., ante, 255 U. S. 228, that the Act of 1910, under which the withdrawal was made, is confined to "public lands," that, by the selection, this land had ceased to be public, and that the act could not be construed to embrace it without working an inadmissible interference with vested rights.
* The state was not made a party at first, but afterwards, at its own request, was admitted as a defendant to enable it to defend the lieu selection.

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