Reply Brief for the United States — United States v. Northern Pacific R. Co.

Supreme Court brief1940

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. The Company’ 8 Basic-Miseonceptions- - .-.----------------- Se i

‘hemes Corrections-in the Company’s Brief... ..---- See 4

I. D. The 1929 Act conferred a new right_..--- Slatin toto ae 7

. II. Certain defenses‘not available to the company - - - &

. III. B. Failure to complete the Wallule-Portland line was m

: .@ substantial breach. ---.-..-.-----------.---- 7 :

III. C. Violation of the sale ane! preemption proviso was a i

% substantial breach --.- ..-=-..--..-.-----.--- 8 Th

III. D Violation of the forecloeure provieo was a substan- oF

ET IR i it cb indie dees cncdbosciivances 4 “2

III. E. The company’s jllegal disposition of assets was a

substantial breach... ..-..--.-.-------.---- 10

= III. G. The company’s fraud in connection with the mia- ie aoe -

e. - eral classification was a substantial breach_-- -- . -.

4 IV. . The com Taust account for excess velues re-- , ~ Bee.

ceived through illegal withdrawals. ---- ~~ ----- 13-

= v. B. 2. In any event, subsequent restorations should have

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- _ - Cesey v. United i eeid: 260 UV. G, 900.......--nrehe~--s 11,12

= -- Deviev. Mille, 194 U.8. 461..-.2.--2----,----2------- 5. 3

a - Forest Reserve case (United States v. Northern Pac. ‘Rye Co., a

3 ABER. CE. SES 17, 20,24. °

= < Guaranty Trust Co..v. United States, 304 U. 8. 126_--.---- 4

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_ Heath v. Northern Pac. Ry. Co., 38 L. D. 77..--------- -- 9: ®

ie. Hewitt v. Schultz, 180 U. 8..139_.....--.--------------- 17, 20:

_ McElrath v. Tames States, 102 U. 8. eS SR PES, at

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i McHenry v. Alford, 168 U: S. BS EPA Sapte acy ap See - -

EB & Oregon & California R. R. Co..v. Unied States, 238 U. 8.

i ; SEE SITES CREE . SR RAMES : AGENT 28 3, 4, 6, 11

ii Oregon a California R. R.,Co. v. United States, 243 U.S.

Bi ot Seen ete Aeneas Us kiee ae savage ond wecsc-- S41

; - Pan American Co. v. United States, 273 U. 8. oe ES ae

x ° a: : United States v..Oregon Lumber Co., 260 U. 8. 290... ...... 7

ee f United States v. San Francisco, 310 eM, 2G ae. 5 ids oo ee

fs United States v. Trinidad Coal Co., 137 U. 8. 160_..--- waa ts D

4 United States v. Union Pacific R. R. Co., 98 U. 8. 569____- 11

2 United States v. Winona &c. R. R. Co., 165 U.S. 463. __- 13

: Utah Power & Light Co. v. United States, 243 U. 8. 3892.. 11

3 Wardell v. Railroad Company, 103 U. 8S. 651. -... —— ae 12:

4 The Western Maid, 257 U. S. 419___-- foe teanerenateeee-

| . Statutes:

q Act of July 2, 1864, e. CCXVII,,13 Stat. 365_-_____- ene.

g Joint Resolution of March 1, 1869, No. 15, 15 Stat. 346___ 8

7 Joint Resolution of May 31, 1870, No, 67,-16 Stat. 378... 3, 8°9

7 Act of June 25, 1929, c. 41, 46 Stat. 41__._..._. Seer 2, 4, 13

+ vy | Necisigps of the Secretary of the Interior: * ra

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Inthe Supreme Gourtof te inited Sines

wet aN _ OctoseR TERM, 1940.

—— . /

No. 3.

Unie Grares OF AMERICA, APPELLANT

\ Vv. :

- NogkrHern Paciric Ramway CoMPANY, Nowienaan

PaciFio RarroaD COMPANY, ET AL.

ON APPEAL .FROM {FE DISTRICT COURT OF THE UNITED

STATES FOR THE EASTERN DISTRICT OF WASHINGTON,

NORTHERN* DIVISI ON $ L

a ~ ° 6

REPLY BRIEF FOR THE UNITED STATES ON REARGUMENT

The company’s brief on reargument, filed Octo-

ber 8, 1940 (hereinafter cited as N. P. 2a Br.),

fails almost _ completely. to meet, the contentions

- made inthe Government’s main brief on reargu-

ment. (cited as U. 8. 2d Br.). In addition, the

company’s brief et a number of pipers, misstates _

- the record.

- We shall onddinds to: deal, as devitiexily ’ af,

possible, ~with the basie errors contained in that*”

brief, and thereafter with the specific matters ‘in

it which seem ‘in monk urgént need of correction.

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[HE COMPANY'S BASIC MISCONCEPTIONS |

_ The company’s position rests upon three basic

errors which réach to the’ heart of the case. ,

First. —The company’s brief throughout pro- .

ceeds on the assumption that the Act of June 25,

1929, declares a common-law forfeiture. Yet, as

my P we have shown at some considerable length (Point

eR 7 I, U. 8, 2d Br. 60-79), that assumption is wholly —

without foundation. Our. argument on that point

is not met, and the legislative material adduced -

tS eee 1. 7 in support of our construction of the statute is

: . .. | entirely ignored. Indeed, the company in. effect,

ne aa 3 ignores everything in the Act except the word

j ae me ao ; _ “forfeited,” and proceeds to impress upon that |

fey eee word its own interpretation of a common-law for- '

oe F _ feiture. This basic fallacy underlies“the whole

Oe ere 5 _ of the,cOmpany’s brief, and necessarily removes

Mes Bae _ its arguments a. considerable distance from, the

{ issues in the case. oe

a _ Second.—The company’s brief ‘wholly ignores

- * the circumstance that the granting Act and Reso-

lution imposed any duties or, obligations upon it.

1: ‘Tt assumes that the United States was obliged fully

. _ to perform a contract which the company might"

breach as it pleased. It assumes-that the United _

* States, must pay compensation for an alleged

} ’ breach of a-contract, and yet is barréd from inquir-

| ) ing into any breaches of that same contract. on the

part of the company. | (

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Third. The company’s Lisale contentions are

made in the face of the opinions in the Oregon '& -

California litigation, 238 U. S. 393, 243 U. 8.549,

to whieh the attention of the Court is again in-

~-yited. Those decisions sre more than interpreta-

tions of a particular grant; they are lucid state-

ments of the proper apprvach to cases of this char- —

acter, In ‘several particulars they control the

| decision here.

1. Here, as in the Oregon & California case, "e |

conipany is attempting to construct an argument

‘based on the inviolability of vested rights ‘‘by

_ pushing into view the rights conferred by the

granting acts and putting-out of view the wrongs é

committed by [the company].”’ 243 U.S. at 599.

2.. Here, as in the Oregon & California case, the

company is in substance attacking the wisdom of

the provisions of the Resolution of 1870. But

“granting the obstacles aid infirmities, they were

but promptings and reasoris fer an appeal to Con-

gress to relax the law; they were neither cause nor —

justification for violating it.”* 238 U.S. at 423..

3. Heré, as in the Oregon &- California case, the

‘ . company asks that its violations of law—violations

extending virtually to every restrictive: provision

of the grants—be disregarded. To do so “would

be in effect to declare that covenants violated are

the same as covenants performed—wrongs done

_ the Same as rights .exercised—and, by confounding

these essential distinctions, give to the transgres-

sion of the law-what its observance is alone entitled

to.”? 243 U.S. at 561-62. AS ay

4, Here, as in the Oregon & California case, the

company attempts to defeat a consideration of its

own wrongs by asserting defenses of acquiescence,

z= ao waiver, and estoppel to prevent the enforcement of

\ se a legislative contract. But ‘‘the acts of Congress

aw 4 are laws as well as grants and have the constancy

% of laws as well as their command and are operative

Peete and obligatory until repealed. This comment ap-

: ee plies to and answers all the other contentions of

: “<- the railroad company based on waiver, acquies-

eence, and estoppel * * *.” 288U.S. at'427. |

¢ Ne

SPECIFIC ObaRRoZIONs IN THE COMPANY 1s aera

, q Stiga Sey , The specific matters in the company’ ’s. brief

1 - . which require correction will be discussed under

headings which follow those of the main brief for

_ the United States on reargument.

‘I, D, THE 1929 ACT CONFERRED A NEW RIGHT

{

Dt Caner . The company argues (N. P. 2d Br. 20-23) that

i i ae ees the Act of 1929 conferred, not a new Le st but a °

ie eee Rew remedy. .

a } ch Kee _ “We need waste no time on refinements upon

the suggested. distinction -between rights and

remedies,”’ Guaranty Trust Co. v. United States,

804 U. S. 126, 141, for the reason that here there

is no difference in substance. The fact of‘the _

| matter is that prior: to the Act of 1929, the’ com-.

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pany was ‘helpless’? in the face of the with- : |

drawals (N. P. Br. 10), whereas thereafter it could —

obtain compensation. For the rest, *‘legal obliga-

tions that exist but cannot be enforced are ghosts

that are seen in the law but that are elusive to the

grasp.” . The Western Maid, 257 U. S..419, 433.

“Tt is quite incredible that such an unsubstantial

distinction should find a place in constitutional

law.’”’ Of. Davis v. Milli, 194 U. S. 451, 456. When,

as here,. the right is unenforceable save, as Con-

gress may grant a remedy, Congress still has the

power. to. condition the remedy. M cElrath v.

United State 28, 102 U. S. 426, 440,

Il. CERTAIN DEFENSES NOT AVAILABLE TO THE

COMPANY .

ee The ééhonpediar argues (N. P. 2d Br. 15-16)

‘that our contentions under Point II, to the effect

that the defenses of waiver, acquiescence, and

estoppel were . not, available to the company, are

antithetical to our other contention (Point. I (B),.

U. S. 2d Br. 70-73) ‘that the ultimate determina- 7

tion intended by the 1929 Act was intended to be

judicial.

We fail ‘to recognize the antithesis. The’ Ket

directed that the matters be judicially determin

. on their merits, a result which would be preven

by the assertion of the defenses in question, -<

But the company urges (N. if 2d Br. 12) that.

the. 1929 Act “‘left the respective ak and obli-

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: gations of the. ‘parties exactly where they Were *

- under settled principles of law and equi

' If “‘settled principles of Jaw and equity” in-

¢ludes the settled principle that railroad. land '

- . grants are laws as well as grants, having ‘the con-

stancy and. command of law, binding and, obli-

-gatory upon all untit repealed, and: thus not subject

’ to defenses of waiver, acquiescence, or estoppel,

Oregon & California R. R. Co. v. United States,

- 238 U. S. 393, 427, then there is no dispute between

the parties. Congress believed that principle to |

_ applicable; the’ language in question from the Ore-

gon & Caiifornia opinion was incorporated by ref-

- ‘serence into the committee report (U. S. 2d Br.

82-83, 277-78). That is decisive of the entire con-

_ troversy on this question. ,/_-

2. The remainder of Point II (U. S. 2d Br.

85-111) was included simply to show that, even if

for some reason not now apparent the land grants

should be held not to be laws, or somehow subject

to the defenses of waiver, acquiescence, or estoppel,

then it would still be possible for this Court, with-

out any legal or constitutional. difficulty, to give

_ effect to the purpose of Congress, and reach the

result which Congress‘ititended, viz.,a free and un-

trammelled i laquiry, undeterred iy technical con-

_ siderations or unmeritorious defenses, into all the -

- frauds of the company and breaches of contract

which were disclosed to the Joint Committee.

‘ Thé company argues however (N. P. 24 Br. 10),

| that Congress elec not to cenlare | a a

and that the United States is bound by the doc-

trine of election of remedies, citing United States

v. Oregon Lumber Co., 260 U. 8. 290.

But the doctrine’of election of remedies re-

quires, first, that a remedy actually be undertaken

and pursued : to final judgment; and, second, that :

. the remedy thus chosen be entirely inconsistent.

-with the remedy sought thereafter. See United

States v. Oregon Lumber Co., supra, at 294-95, ‘297,

and cases there cited. Here, no remedy was ever

elected; and there is no inconsistency at all be-

tween refusal.to declare a common-law forfeiture .

—_

Pak

(letting the company retajn what it has) and re-.

‘fusal of “counter-performance ‘(saying . that the

-eompany is not entitled’ to more). The decision

. cited ha therefore no application: here.’

III. B. FAILURE TO COMPLETE ‘THE WALLULA-

PORTLAND LINE WAS A SUBSTANTIAL BREACH.

The company does not deny the application of

contract principles, nor the soundness of the par-

ticular propositions submitted, nor the substan-

tiality of: this breach asa matter ‘of contract law;

it simply urges th a 2d Be 18-19) that, An: the:

1 The decisions seems, im any event, to be es «Re in rea-

soning by the dissent (Brandeis, J., Taft, C. J.; and Holmes,

J.J, and has never won tlie approval of the- profession. ee

36 Harv. L. Rev. 593; 23 Col. L. Rev. 380; 17 Ill. L. Rev. 614;

7 Minn. L. Rev. 244: 71 U. of Pa. L, Rev. 178.

presents no occasion for its reexamination, ‘but it shguid cer-

tainly not be extended t to the. wcities! different issué _—

presented. SP °

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‘eighties, Congzess elected not to declare a for- ,

feiture because it deemed the completion of the |

Wallula-Portland line unnecessary.

But Congress was dealing with sieioeuelle for a

common-law forfeiture, not, as here, with a. re- -

fusal of counter-performance. It is oné thing to.

say that the noncompletion of the Wallula-Port-

land line is insufficient reason to strip the com-

‘+ pany of all its assets; it is quite another to say

that this admitted breach‘ is ground for holding

_ 1° that the company should not receive more than |

reney has.

TIL, C. VIOLATION OF THE SALE AND PREEMPTION

PROVISO WAS A SUBSTANTIAL BREACH

“4. ‘The company says (N. P. 2d Br. 46), “Seo-

. tion 10 of the Act-of 1864 is specific in forbidding

a mortgage ‘by thé said company on said road.’

This language, by implication, authorizes a mort-

gage on the lands.”” .The argument then continues

‘to the effect that the mortgage authorization in _

1870 extended only to the additional lands then

graritéd. (Se

-But this satin saline siecioak the “

cumstance that the company did not need the 1870

_Joint Resolution for autHority to mortgage the

road; such authority it gtready had by virtue of

the Joint Resolution of March 1, 1869, No. 15, 15

Stat. 346 (App. 85) This Court has already

recognized that the company was prohibited from _

: mortgaging its lands by Section 10 of the 1864 — |

Act. See McHenry'v. Alford, 168 U. 8. 651, 667.

What the’ company now urges is that when Con-

gress authorized it to mortgage all its lands, the -

limitations placed on that‘authority were intended

to apply ‘only to the additional fringe of lands - -

granted in 1870. Under. this view, the bitter legis-

lative controversy over the 1870 Joint Resolution

could have been no more than an exercise in

shadow boxing. a é

' 2. The company (N. P: 2d Br. 46) cites ‘Heath Vv.

Northern Pac. Ry. Co.;-38:L. D. 77, as sustaining |

. the view that it was justified in denying preemp-. ;

tion rights to settlers. That ruling, howeveyy sim-

- ply went to the question of enforceability {i only -..

held that, title to the lands having passed from the _ ;

United States to the company pthe Department of

the Interior would not ‘enforce, nor promulgate

regulations concerning, the company’s sce shar

ae with respect to the preemption proviso.

Tm, D. VIOLATION OF THE FORECLOSURE PROVISO WAS A

SUBSTANTIAL BREACH

1. Under this heading the company. resumes its —

vigorous defense of the validity of the 1875 and

1896 foreclosures as conduits of title CN. 2 oe

' Br.-31-48).

As we stated in our main brief (w. S. 2d Br. .

162-63); we do not question thé suecession of the

Northern. Pacific Railway Company to the rights - _

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. conferred by the evanting Act and Resolution. Tho

real question is as to the extent of those rights, and

‘specifically, whether the alleged violations of the

foreclosire ‘sale proviso amount to a substantial

breach of the company’s contract. The company ’s

argument deals primarily with its right” of suc-

cession ; it does not squarely meet our contentions

as to deficiencies i in performance.

2.“The company asserts (N. P. 2d Br. 43) that :

the United States took no.exception to the finding

that the sales were made to the highest and best

- bidders where the lands were situated. To the con-

trary, that finding .was very specifically. objected

to before it was made (R. 593, Objection 2).

. 3. The company then argues (N. P. 2d Br. 43)

that the evidence does not support the Govern- —

ment’ s contention on this point. It is not per-

ceived how this fact (if established, which we do

not concede) is in any way relevant to the present

inquiry; which concerns the sufficiency of the chal-

lenged subdivision of the bill. |

ILE ‘THE COMPANY'S ILLEGAL DISPOSITION OF ASSETS

_ - WAS A SUBSTANTIAL BREACH

1. The. company urges N. Pp, 2d Br. 51) that.

“The Dnited States, with : full knowledge, has

waived all rights, if any, it ever had.” No record -

' references aré cited in support of this assertion,

eand: we think: that none are available,

. etn ne _ iets see te apace bet Bb SAE se

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2, United States v. Union Pacific R. R. Co., 98 = ie

U. 8. 569, is cited (N. P. 2d Br. 103) as a com- £

"plete answer to this phase of the litigation. It

may. be questioned. whether the approach of that 24

opinion is law today after the Oregon & California :

litigation, 238 U. S. 398, 243.U, S. 549, or after a :

the rulings in Causey v. United States, 240U.8. ° . a Se

399; Utah Power & Light Co.‘v. United States, I

243 vw S. 389; and United States v. San Francisco, —

* 310 U. S: 16, which establish that pecuniary dam-

_age. is immaterial where the United States sues. =

to enforce the policy , underlying a public statute. , e

- But there is a further and even more conclu- |

sive answer. The Union Pacific case arose out of

the Credit Mobilier scandals, and was brought by.

the United States for “the collection sand pay-_ rie ate fe

ment of such moneys and the restoration of such ;

_ property, or its value ‘either to said railroad cor-, : . ie

» poration or to the United States, whichever shall

in equity be entitled thereto’’”’, This Court held —

‘ - that since the railroad company asked for no relief. .

and since the United States was not injured, ‘no

case for relief is made by the bill.”’” The caseis © = + 4+

completely distinguishable from the present case EES

in that here the company is seeking to recover from ‘ Pe

- the United States and bases its right to recovery: ay ie ;

upon a contract which it has violated.. Here the _ s

United States is. not seeking: to recover anything

~ because of the illegal disposition of assets; -it is

simply setting up those facts as a defense to the

“eompany’ 8 lati Moreover, in n the Jater decision

Of Wardelt-v-Reitroad-Company, 103 U. 8. 651,

659, this Court-held that a diversion of assets of the

Union Pacific was a fraudulent proceeding “‘not

only against the company, but also.against the gov-

ernment, which had largely contributed. to its aid >

_ by the loan of bonds and by the grant of lands.”

III. G. THE COMPANY’S FRAUD IN CONNECTION WITH |

THE MINERAL CLASSIFICATION WAS “A SUBSTANTIAL ‘

BREACH « .

1. The company argues (N. P. 2d Br. 55), ‘‘the

United States affirms the classification so far as it

benefited and repudiates the classification so far

as it imposes an obligation.’’, Granted that, in the

ordinary case, a party seeking to rescind a _ fraud-

ulent transaction must offer to do equity, | the

short answer is that no such obligation rests upon —

_ the United States when: it is enforcing the policy

underlying , a public statute. When the leases

made by ‘Secretary Fall were annulled, the United

States was granted relief without first compen-

sating, the lessor for its improvements. Pan |

- American Co. v. United States, 273 U.S. 456. —

Accord: United ‘States v. Trinidad Coal Co., 137

U.S. 160; Causey v. United: States, 240 U: 8, 399.

. One who defrauds the public does so at his peril. |

2. The company states (N. P: 2d Br. 54) that —

the United States “had complete knowledge,

gained after full investigation, of all particulars

( * ’ }

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of the classification as early as 1908,’’ This as- _

___sertion is not supported by any record reference;

. the undisputed evidence shows that the United

States had no knowlége of the company’s par-

ticipation in the fraud (U. 8. 2d Br. 194198).

IV. B, THE COMPANY MUST ACCOUNT FOR EXCESS |

VALUES RECEIVED THROUGH ILLEGAL WITHDRAWALS

1. “The company’s brief asserts (N. P. 2d Br.

57). that the adjustment of the grant ‘involves 5

only determination of; first, the measure of the —

grant; second, acres received; and, third, whether

the company had earned them.” Nothing is said -——

regarding the company ’s obligation to return lands

- or values received without authority of law,’ and

a discreet silence is preserved as to the require-_.

mient.of Section 6 ‘of the 1929 Act that tle court

“‘shali determine what quantities in lands or values -

_ said companies have received :in excess of the full ~

‘-amounts they were entjtled to receive * * .*

. through mistake of law or fact, or through misap-_ }

prehension as to the proper construction of said

grants, * * * and said excess lands and yal-

ues, if any, shall be charged against said companies

in the judgments and decrees of said couitt.’’

Nothing eould better illustrate the company’s one-:

sided approach to the. present litigation. _ . |

2. The company cites United States v. Winona

&e, R. R. Co., 165 U: 8. 463, a suit to cancel cer-

‘tain patents alleged to have been issued by mis- —

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take. But that decision went offon the ground that

the patents in question had been confirmed by sub-

sequent legislation; and thereforé so much. of the

opinion as is quoted by the company (N.. P. 2d Br. :

115-116) is clearly obiter.

3. The company urges (N. P. 2d Br. 59) “the =

utter impossibility of proof of loss to appellant:

arising out of transactions closed more than 50

years ago. ”» All we are seeking here is to obtain

ye the opportunity to prove our loss, denied us below

on thé company” s motion.

"_ V,B, 2. IN\ANY EVENT, SUBSEQUENT RESTORATIONS

SHOULD HAVE’ BEEN CONSIDERED

is. heading the company makes ‘an. -

, if true, would be serious. It ‘says

1. Under

assertion whic

_(N. P. 2d Br. 61):

ry, repeat aid sepia our objection to

the injection on appeal of contentions not

made below and thereforé not passed upon

-. by the master. Appellant’ s insistent use of _

erroneous figures in connection with this

subject emphasized the importance of the

ruke that an appellate court will, not’ ¢on-

sider‘ matters *which ‘were not considered |

below. ae

The record does not ‘support this _— but ;

completely refutes it. . ;

.(a) As a basis for contending that withdrawals.

were validated by subsequent — restorations, the

. government brought out. in its proof (Unprinted

° a v« ep Pe, m c ‘ ee , mas. Shuai < Se owe a

— 2 ek me et > ¢

5 aed : ‘ . . a

2 a ata SOOT CONROE ARES “NERS SECA Seen SNe Se < = p “

e -

‘ ‘

| 15 |

Transcript of Evidence, pp. 159-61) tbat, in the

-gecond indemnity limits in Montana, an excess of

Jands appeared until 1904, a deficieney from 1904

" ¢o 1911 and -an excess, due to subsequent restora-

tions, in 1911 and 1912. Thereafter, the argu- —

‘ment that, even if: unsurveyed lands were to be

ignored, subsequent surveys and restorations must °

in any event be considered was presented to the

Master,’ and was rejected by him. He said (R.

_ 504): The withdrawals having been invalid, the’

- occurrence, subsequently, of an excess, would not

legalize any. particular withdrawal.’’ ©

The Government’s rights were meticulously pre- —

served, not only by exceptions to tue Master’s re-

_+ port (R.§68-70, Exception XLITI, especially par.

ing lands available for indemnity. Altho there was no

[i]}, but also by objections to the proposed find-

ings (R. 504, Objection 6 (b); R. 595, Objection

*In the brief filed before the Master on the adjustment

phase of the case, the Government urged (p. 135) :

“se * * Large areas of lands.in these categories were

restored, and such restorations increased the area of remain-

. obligation on the Government to ever make any of these

lanids available for indemnity or for selection by the com-

pany, it did so.. When, thereafter, parts of these lands were

again withdrawn or other lands in the indemnity Jimits were

withdrawn,the company had no cause for complaint so long

as sufficient lands remained to satisfy the losses. The res-

ons operated to the advantage of the company while

e valid withdrawals operated to its disadvantage, but about.

this the company could_not complain so long as what re-

mained was sufficient to satisfy all losses.”

We shall be glad to make a copy of this brief available in

case the Court should desire to examine it.

‘ “

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| 16

7 (b); : me 597-98, Objection 10; R. 598, Objection

12). |

(b)° Nor does the company thr its assertion

S|: FS that erroneous figures have been used. The record

BE ieee ea ae not appealed to, and the only .-eference cited is

ma '_N.P. Br. 154. That does not establish the chargé;.°

a. z it does not prove that any: figgres used hy the Gov-.

4 7 ‘ernment are in any respect incorrect; it consists

is ee simply of an‘ argument as to the meaning of

COM ote hay age availability. Our contentions on that phase of the ~—

& ease (Points V (A) and (B), U. 8. 2d. Br. 218-.

38) are nowhere met: in either of the company’s —

briefs.: — 72 |

2. An equally bold. assertion, appears at N. P.

' 2d Br. 62, where it is said that the statement that —

e2 second indemnity limits were laid down only at

the request of the company is incorrect. Again _

no record reference is. cited; and again the rec- *

| ord (R. 805) proves the correctness of the Govern- 7

a: ye eae ment’s statement. ;

a. Es - The decision in 2 L. D. 511 is oe to the con-

See Sete eee ae dane te

Ps is eae

| > ~~. * down of second indemnity limits at all; it con-

. oS _ cerned the withdrawal of jands within. those

limits. Such a withdrawal the Departnient re-

We i | fused to make because-at the time, in 1883, it did

ee ae __not appear that resort’ to those limits would ever

- be necessary. Four years later, as we have shown,

__the practice of withdrawing indemnity lands was

stopped, 6.L. D. 77, 92-93; and in 1901 it was

————. .« ~~. Se [es ss fen a ae ee a oa Pre ee Fe Le Oe ee Ne

- 7 : ee eeiehemieie BoM cee* bee 2 dba

. : ah

17 ae '@

authoritatively demotistrated that all the indem~

nity withdrawals for the benefit of the company |

had’ been illegal. Hf ewitt v. Schultz, 180 ie 8. = ~~

V. B. 3. WITHDRAWALS ONLY INVALID TO THE EXTENT

> THE DEFICIEN CY

The company face P,-2d Br. 62-63) ‘oumntiy ena pe

assumes that our argument on this point reduces x, 2 oe |

itself to a mere question of valuation, and that ~~. - ee

_ the difference between the parties is whether the | - .

- company shall be in effect entitled to sélect, or »

whether, as we urge (U. S. 2d Br. 236-38), it

‘may: have compensation for a resultant deficiency

based on. the average valuation of the entire

- withdrawal.* ,

But. our contention has a bende application

than simply valuation ; it goes to the- heart of the as :

award. . Take, for example, the Idaho withdrawal a

of March 1, 1898, discussed at U. S. 24 Br.224-_ | re

25: If, as we contend, unsurveyed lands are to

be taken irto consideration, that withdrawal was

valid. If, as we. contend in any event, subse-

quently surveyed or subsequently restored lands are

to be taken into consideration, that withdrawal was | ;

valid. Only if both these contentions are rejected : He oc.

8 Qur.contention was. predicated. on the view that the grava- —

men of any injury suffered by the company was not the cur-" *

| tailment of the right to select but the uccurrence of a defi-

ciency. Even the Master came to the conclusion that this -

was the effect of the Forest Reserve case (R. 497-99), stating

(R. 499) that “the grant of indemnity may become in the

lust stage.a grant of quantity and not of quality.”

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J Se PLATES One eae ie Po RT ee Ta ane DO Avis Late eae Ae eS ete Bey 2 NES LEO OIE HEE ge EEE AE TAR PBA EL et MELT EE 5 ,

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ean this withdrawal of 163,280 acres be held in-

-valid—and then only because it created a deficiency

_ of some 5,600 acres. But fr this deficiency of $,600

acres the court: below awarded compensation for

19,680 acres. Obviously, such a — cannot be

supported. os

‘Vv. C. 6. THE AWARD CANNOT BE SUSTAINED AS TO

45, 178 ACRES OF INDEMNITY LANDS FOR WHICH

‘PATENTS ‘ARE DIRECTED TO ISSUE

Here again (N. P. 2d Br. 64) the*company

: charges that. the United States is raising on ap-

peal questions not raised below, saying that the

. Government. below ‘conceded the Company, ’s right

to patent for these lands. .

This overlooks that the proof on the se Re

_ phase necessarily’conformed to the issues as then :

_ framed, Every subdivision charging fraud or -

breach of contract had been stricken from the. bill,

. and the United States was obliged to proceed on

the assumption ‘that the company was entitled to

: compensation. None the less, the basic point was

, preserved by exceptions to the Master’s second: re-

= ‘SS 6S! port. (B.. 976, _ Exception LVIID), and by objec- .

emer. tions to the proposed: findings (R. 594, Objection.’

. "6 (a); R.-597-98, Objection 10; R. 598, Objection”

12). And the objection as to. lack of a proper

- tract-for-tract pees was likewise made @..

-» 600, Objection as) ;

. he Pe PAL ae Oe ee Tey eo ee oe = oe ae ° ‘i iat °

Bis rT tiene meee errs tee RT ame comin ean aa GOERS IRE NEED By pee Sharan om “

fasnesrrrties.. we a pind Secu ate ee ce Sis o Un cimin Koa Nise oe ae me.

| . ae

. 19 7 \

v. EB. 1. NO DEFICIENCY 1 WALLULA-PORTLAND LINE

HAD BEEN CONSTRUCTED i

Here the company (N. P. 2d Br. 65) admits that _ ate Ae

the objection was raised before thé court below, , - HE

but argues that it should have been taken before

the Master. Se

But the basis for. the contention had- already | ee

been stricken, and the Master in his first report _ . TE othe

_had professed himself unable to see how failure to ~~ eit hes

construct the’ Wallula-Portland line could have - . .°

any relevance to the adjustment of the grant (R. S|

386). When that position was ‘sustained by the be | ee

. eourt, it would have been perfectly useless to have ——

raised it before the Master again. The United - | . sae on

~. Statesduly—excepted to the striking out of the Me s i

challenged . subdivisions (R. 412-14), and raised , emer.

the objection again when proposed ‘findings ‘were , A We ;

before the court (R. 595, Objection 6 {d]).. Mis =) > Mie dL

not perceived how its Fights could have been more. « ae es

_sedulously guarded. 4 BT See “7

V. B. 2. NO DEFICIENCY BECAUSE NO anes : * Hies.

_ COMPANY’ WOULD’ OR COULD HAVE SELECTED OR Be

OBTAINED SUCH LANDS — ae MT eo a ee > TBS.

1, Again, the company asigeria OVP. 24.Br.65), Raker, «86 fa Weta

“We do riot. find that this point. ever was raised _ vid nn

below, having | been - first presented py: assign- ‘Sere - rg : <1 foe

~Thents 42-and ‘43 in this Court. It certainly was UT ies a € _ eas

not presented to the’ Master, nor passéd upon by wow . A. eae REC.

the District Court.’’ But the present ‘contention med e | ae aetna

is explicitly set out (R. 595-96, Objection 7 [e]) . oats aa

a : i

Nee : é

as a reason for ‘bjecting : to the proposed findings,

The point’ was also raised before the Master.‘

~ 9, On the merits, the company’s contentions are

completely answered by Hewitt v. Schultz, 180 _

- “of Yands within’ the indemnity limits for the

exclusive benefit of the company was illegal

and unauthorized. Yet the effect of the decree. «

below is tdé recognize just such. an illegal

, withdrawal. It is no answer to.this argument to

cite the Farest Reserve case; that does ‘not ques-

tion the itt v. Schultg ru ruling, but simply adds

4 See the % siiinianaitle brief, Sis which the following

excerpts are quoted (pp. 252, 253) :

“# *°* Tf this Court should now hold that. the ih:

yee. drawals of indemnity lands made ‘by the Government for

_.. its own purposes .are not valid and ‘should: hold that ‘the

these lands, the result ‘will be that the Company will haye

~ benefits to which it is not entitled under the provisions of :* 7

. the granting act but: te which the settlers were. entitled.

. The net result of the withdrawal made by the Government

. for its own purposes -would ,.. practically. the same as

_. if the withdrawal had been made by the Government for the

- benefit of the Company in the’ first place. This could not |

* legally have betn, dons: aise: v. Schult 2, 180 U. S. 189).

4 ae ” “* Jee. eae |

we. iristead of whine the 1929 Act, Congress had restored

all Withdrawn lands defendants could not: have obtained all

of them under the contract. Defendants were obliged-wnder

_ the terms of the contract to submit to such depletions cf the

area as might result from acquisitions. by settlers.” They

-were not entitled to the benefits that would flow from the.

. equivalent of & withdrawal of. the land for their own

benefit. . oer: g . hee fac ;

i eB te.

oO ' ; ‘ .

‘ ‘ >

the qualification that the United States may: not,

by its own act, create a deficiency. The Forest -

Reserve case recognizes the supremacy of the set- -

tler in the indemnity limits, and the basic error of.

the court below on. this point was that it disre-

garded the settler in favor’ of the companfiy.

— 8. So far as the company’s. delay in ‘making’

selections is concerned (see U. 8. 2d Br. 253), it

is to be ‘noted that the facts there stated -are not

disputed, - N onetheless, the oigeny singles out

- in Idaho winikdiaad in. 0

there stated, set out only by

- might properly have added that. between 1884 and.

_ 1900 there were in ‘the second indemnity belt. in

. Montana .as later laid down from 421,343.70 acres |

to 671,603.83 acres of vacant surveyed lands which

o would have been available for selection had the

p eee

company obtained :the establishment of the second

“indemnity, belt in Montana immediately after the’ -

‘Toad was- definitely . located’ in that ‘State fun- .

printed Govt.. Exk. 90}. . The completion of the .

_ mineral élagsification- was not essential to gemon-*~ on-".

‘ strate. the néed for a. ‘second deity tlt ee

Montana. -

And to complete the ae we might ‘also ‘bate

stated that, as. shown by Government Exhibits 82, .

~ 85, 88, 90, 93, 95, 98, and 100 (unprinted), there

were on December ‘31, 1897, immediately prior to

Mag brief was, | ae

ay of example. We :

_ ie

‘

the ‘withdrawals of March -1, 1898, 929,005.99 acres aca

2 Ac aE : Q :

of surveyed lands in all indemnity limits of the —

: grant as then laid down or which might have been

_. laid down at that time, which had not been elected

| 3 - by the: company.

— wo eae CONCLUBION

: be For these reasons, as well as those set out in

i : our main brief, it is submitted that the Poa

8 below should be reversed. ;

Respectfully submitted.

—_— ———Funars Bwo.z,

Fy Se - 3 Solicitor. General.

re de he Noamax M. Lerrent;

Simona rs ihe Assistant Attorneys General.

FREDERICK. BERNAYS WIENER,

i Loy nee E. E. Dan ty,

a“ . “Special Assistants to uhe Attorney General.

; | - Waurer 8. Suaney,

_ Manaanar A. SHEA, ao aha

panies de : ;

‘U.S. GOVERNMENT PRINTING OFFICE: 1946

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.