Petition for Writ of Certiorari — Russell v. Texas Co. (No. 1009)

SUBJECT INDEX

Opinions below

Jurieicti

The statutes involved...

Statement

3, The beginning of the removal of Section 23 from public

lands is found in the Act of 1864, although the grant

therein failed because of Northern Pacific’s financial in-

ability to construct the road under the conditions of the

Act of 1864 6

The terms and conditions of the Joint Resolution of 1870

were accepted by Northern Pacific, the road was con-

structed with the proceeds from its bonds secured by

mortgage, and the right to Section 23 and other granted

lands was earned.

Northern Pacific selected Section 23 pursuant to both the

Act of 1864 and the Joint Resolution of 1870 and patent

thereon was issued expressly stating that it was pursuant

to both Congressional Acts. ;

Northern Pacific contracted to sell Section 23 to peti-

tioner’s predecessor, MaBelle Cobb, an actual settler, as

required by the proviso of the Joint Resolution of 1870,

but reserved the minerals in derogation thereof... 11

Petitioner’s action here under review was timely com-

menced, in a court of proper jurisdiction, and under ap-

propriate allegations 13

PAGE

Reasons for granting the writ 15

1. The decision of the court below lies athwart the Con-

gressional intent that public lands and their values,

granted solely in aid of railroad construction, find their

ultimate unencumbered disposition to the public at the

stipulated maximum return of $2.50 per acre to Northern

Pacific 15

(a) The Joint Resolution of 1870 was in its very essen-

ence necessarily a regrant, and as such, applicable in

all of its terms and provisions to all of the then un-

earned lands granted to Northern Pacific under it

and the Act of 1864 15

(b) The proviso being fully applicable to all granted

lands, the mineral reservation in conflict therewith

on Section 23 is void 20

2. The opinion of this court in United States v. Northern

Pacific R. Co., brought pursuant to Congressional Act,

serves to support this petition. 22

3. The law of estoppel in private grant, relied upon by the

Court of Appeal, is without application where the origin

of title is Congressional Act; neither does the law of

estoppel properly apply here, where judgment was made

summarily 28

Conclusion 3%

Appendices :

Appendix A. Opinion of the United States Court of Ap-

peals App. p. 1

Appendix B. Portions of the Granting Act of 1864....App. p. 19

Appendix C. Area within the State of Montana from which

were drawn public lands in aid of the construction of the

railroad and telegraph lines of Northern Pacific Railroad

Company App. p. 27

iti.

TABLE OF AUTHORITIES CITED

CAsEs PAGE

Great Northern R. Co. v. United States, 315 U. S. 262... aa

Oregon and California R. Co. v. United States, 238 U. S. 393...

21, 22, 29

Oregon and California R. Co. v. United States, 243 U. S. 549,

61 L. Ed. 890 20, 21, 22

St. Paul and Pacific R. Co. v. Northern Pacific R. Co., 139

U. S. 1 7, 15

United States v. Northern Pacific R. Co., 41 Fed. Supp. 273... 27

United States vy. Northern Pacific R. Co.,.311-U.S. 317.

8, 9, 17, 23, 24, 25, 26, 27, 28

United States v. Union Pacific R. Co. (decided April 8, 1957,

U. S. Supreme Ct.) 30

Valier Company v. State, 123 Mont. 329, 215 P. 2d 966, cert.

den. 340 U. S. 827

STATUTES

Act of July 2, 1864 (13 Stat. at L. 365, Chap. 217) :

Sec. 3

Sec. 6

Sec. 10

Sec. 20

Act of May 7, 1866 (14 Stat. at L. 355)

Act of July 1, 1868 (15 Stat. at L. 255)

Act of March 1, 1869 (15 Stat. at L. 346)

Act of April 10, 1869 (16 Stat. at L. 57)

Act of June 25, 1929 (46 Stat. at L, 41, Chap, 41)

Act of May 22, 1936 (49 Stat. at L. 1369, Chap. 444)...

United States Code, Title 28, Sec. 1254(1)

United States Code, Title 28, Sec. 1332

iv.

MISCELLANEOUS

12 American Jurisprudence, p. 769.

Congressional Globe, Feb. 8, 1870, p. 1097 (Senate) ooo... . %

Congressional Globe, Feb. 28, pp. 1584-1586 (Senate)

Congressional Globe, March 2, pp. 1624-1628 (Senate)............... 26

Congressional Globe, Apr. 7, pp. 2480-2486, 2491-2495 (Senate) 26

Congressional Globe, Apr. 9, pp. 2539-2547 (Senate)................. 26

Congressional Globe, Apr. 11, pp. 2569-2584 (Senate)... 26

Congressional Globe, Apr. 20, pp. 2833-2848 (Senate)... 26

Congressional Globe, Apr. 21, pp. 2867-2869 (Senate)... . 6

Congressional Globe, May 5, pp. 3263-3271 (House)

Congressional Globe, May 10, pp. 3343-3348 (House)

Congressional Globe, May 11, pp. 3365-3368 (House)................ 26

Congressional Globe, May 25, pp. 3786-3798 (House)..:.......... 26

Congressional Globe, May 26, pp. 3850-3853 (House)............. 26

70 Congressional Record, March 2, 1929, Part 5, pp. 5118-5122,

70th Cong., 2d Sess. 19

Joint Resolution of May 31, 1870 (67 Stat. at L. 378)...

2, 3, 4, 5, 7, 8 9, 10, 11, 15, 16

17, 18, 19, 20, 22, 24, 25, 26, 27, 31

Resolution of June 5, 1924 (43 Stat. at L. 461) 19

Webster’s New International Dictionary, Unabridged (2d Ed.,

1945) 24

Supreme: Court of the United States

October Term, 1956

No.

THEODORE B. Russet,

Petitioner,

VS.

Tue Texas Company, a corporation, FrepericK T. Man-

ninG Drittinc Company, a corporation, and THE

NorTHERN Paciric RstLway ComPany, a corporation,

Respondents.

Petition for Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit.

To the Honorable Chief Justice and to the Associate Jus-

tices of the Supreme Court of the United States:

- Petitioner, Theodore B. Russell, respectfully prays that

a Writ of Certiorari issue to review the Judgment of the

United States Court of Appeals for the Ninth Circuit

entered in the above cause on November 24, 1956. The

Court of Appeals affirmed the Judgment entered by- the

United States District Court for the District of Montana;

which was made on Respondents’ motions for Summary

Judgment, and decided that the mineral estate (valued by

Petitioner at in excess of one million dollars) on land

owned by Petitioner was vested in Respondents.

sigs

Opinions Below.

The District Court prepared no separate opinion. Its

Judgments, Partial Summary Judgment entered December

4, 1953, and Final Judgment entered October 13, 1955, are

contained in the record printed for use of the court below,

nine additional copies of which are filed herein for the use

of this Court [R. 69-73, 126-1929]. In connection with

its Final Judgment, the District Court filed a Memorandum

[R. 120-126] which is not relevant to this Petition for

Certiorari, and filed Findings of Fact and Conclusions of

Law [R. 110-120], certain of which are relevant to this

Petition [R. 111-113, 118-119].

The opinion of the Court of Appeals is not yet renal

and appears as Appendix A hereto.

Jurisdiction.

The Judgment of the Court of Appeals was entered

November 24, 1956 [R. 271, Appx. A, p. 18]. Petition

for Rehearing was filed within time, and on January 21,

1957, the Court of Appeals denied the Petition for Re

hearing (Appx. A, p. 18): Jurisdiction of this Court is

invoked under 28 U. S. C., Sec. 1254(1): Order of this

Court was made April 15, 1957, extending time for filing

the Petition to and including May 20, 1957..

Questions Presented.

1. Whether the Proviso of the Joint Resolution of

May 31, 1870* requiring, on the conditions specified, that

all lands thereby granted to a railroad in aid of. construc-

tion shall become subject to settlement and pre-empticn at

a price not exceeding $2.50 per acre, is applicable:to. the

land here involved?

1Resolution 67, Stat. at L. 378.

wots

2. Whether, the Proviso of the Joint Resolution of

1870 having been determined to be applicable, a reserva-

tion of mineral rights by Respondent, Northern Pacific

Railway Company,” in its conveyance to an actual settler

constitutes such a derogation of the Proviso as to invali-

date the mineral reservation?

The Statutes Involved.

Inasmuch as the issues presented are largely statutory,

and based upon the Congressional intent, we here set out

provisions having particular relevance, and set forth in

Appendix B their fuller expression.

1. The Act of July 2, 1864 incorporated Northern

Pacific, authorized its construction of a railroad from

Lake Superior to Puget Sound, with a branch line via the

Columbia River to Portland, Oregon, conditionally granted

certain public land in aid thereof, subject to prohibitions

against encumbrance and with reservation of Congres-

sional power to amend or repeal the Act.

Section 3 of said Act of 1864 provides, in part:

“And be it further enacted, That there be, and

hereby is, granted to the ‘Northern Pacific Railroad

Company,’ its successors and assigns, for the

"13 U. S. Stat. at L. 365, Chap. 217.

—

Be NE

tions of war, and public stores, over the route ‘of said

line of railway, every alternate section of public land,

not mineral, designated by odd numbers, to the

amount of twenty alternate sections per mile, on each

side of said railroad line, as said company may adopt,

through the territories of the United States, and ten

alternate sections of land per mile on each side of said

railroad whenever it passes through any state, . . .”

Section 10 of said Act provides, in part:

“. . . and no mortgage or construction bonds shall

ever be issued by said company on said road, or mort-

gage, or lien made in any way, except by the consent

of the congress of the United States.”

Section 20 of said Act provides:

“And be it further enacted, That the better to ac-

complish the object of this act, to promote the public

interest and welfare by the construction of said rail-

road and telegraph line, and kceping the same in

working order, and to secure to the government at

all times (but particularly in time of war) the use

and benefits of the same for postal, military, and

other purposes, congress miay, at any time, having due

regard for the rights of said Northern Pacific Rail-

road Company, add to, alter, amend, or repeal this

Act.”

2. The Joint Resolution of 1870 authorized Northern

Pacific to issue mortgage bonds for construction, author-

ized change of the main line as well as a new route for

the branch line, affirmed the land grant therefor, and

adopted a Proviso subjecting granted lands to settlement

and pre-emption and prescribing certain limitations om

foreclosure remedies.

The Resolution of 1870 provides, in part, as follows:

. . . That the Northern Pacific Railroad Company

be, and hereby is, authorized to issue its bonds to aid

dine

in the construction and equipment of its road, and to

secure the same by mortgage on its property and

rights of property of all kinds and descriptions, . . .

also to locate and construct, under the provisions and

with the privileges, grants, and duties provided for in

its act of incorporation, its main road to some point

on Puget Sound, via the valley of the Columbia river,

with the right to locate and construct its branch from

some convenient point on its main trunk line across

the Cascade Mountains to Puget Sound; . . . Pro-

vided, that all lands hereby granted to said company

which shall not be sold or disposed of or remain sub-

ject to the mortgage by this act authorized, at the

expiration of five years after the completion of the

entire road, shall be subject to settlement and pre-

emption like other lands, at @ price to be paid to said

company not exceeding two dollars and fifty cents

per acre;*.. .” .

Statement.

The particular parcel of land in issue is Section 23,

Township 17 North, Range 53 East, M. P. M., Dawson

County, Montana. Section 23 lies within twenty miles of

the road and is thus characterized as “place lands” as

distinguished from “lieu lands” or. “indemnity lands”

which Northern Pacific was entitled to select when, for

reasons described in the statutes, the lands within the

place or “primary” limits were unavailable to it.

‘The emphasis upon this part of the Proviso we have added, as

is the hinge upon which this cause turns. Petitioner contends

the Proviso applies to all lands granted to Northern Pacific

1870; whereas, Respondenis bemng * Proviso limited in ow

application to the land t made oint Resolution of 1

1 i uthorized thereby across the Cascade Moun-

<2 =

The magnitude of the Northern Pacific land grants

in Montana are graphically portrayed by the plat appear-

ing as Appendix C. The place and indemnity belts for

the present states of North Dakota, Idaho, Washington

and Oregon are fully analogous, and the grants for the

then states of Wisconsin and Minnesota differ only in

that the alternate sections of the “place lands” extend

over ten miles on each side of the road, rather than the

twenty miles applicable to the territories. The final ad-

judication of this case will likely resolve the mineral

ownership of land grant parcels disposed of by Northern

Pacific throughout its vast domain in cases where the dis-

position took place more than five years after completion

of the road. Inherent in the adjudication is the fulfillment

or permanent nonfulfillment of Congressional intentions as

to eventual devolvement upon the public of granted lands

and their values. Hence, we trace the history of Section

23, and in so doing, the history of every parcel similarly

situated.

1. The Beginning of the Removal of Section 23 From Public

Lands Is Found in the Act of 1864, Although the Grant

Therein Failed Because of Northern Pacific’s Financial

Inability to Construct the Road Under the Conditions of

the Act of 1864.

This first Act in the chain of title of Section 23, that

of July 2, 1864, proposed the financing of the construction

of a railroad through the Northwest, found by Congress

to be a public necessity, by the sale of stock to the general

public by a federally chartered corporation, in aid whereof

Northern Pacific was granted every alternate section of

a

public land, not mineral, to the amount of twenty sections

per mile through territories’ and ten sections per mile

through states, with certain selection rights in lieu of the

grant in the event mineral character, prior disposition, or

other matters prevented the operative effect of the grant

(Secs. 3 and 10). Northern Pacific’s entitlement to pat-

ent was conditioned upon favorable report as to each

twenty-five miles of line made ready for service (Sec. 4);

thus it was unable to convey its right to granted lands

until such time,° and it was prohibited from creating any

mortgage or lien without consent of Congress (Sec. 10).

On its part, the Government provided that the Govern-

ment’s reserved alternate sections should not be sold by

the Government for less than $2.50 per acre and then only

under the homestead act specified in the Act of 1864 (Sec.

6). The land grant and other rights and privileges were

wholly conditioned upon acceptance of the terms of the

Act by Northern Pacific within two years after its passage

(Sec. 12), commencement of work within two years, and

completion of not less than fifty miles per year after the

second year, with completion of the whole road by July

4, 1876 (Sec. 8).

Northern Pacific claimed its due organization and ac-

ceptance, but was unable to finance construction of the

road by public subscription. By several enactments which

preceded the Joint Resolution of 1870, Congress attempted

‘Montana was a territory and continued as such until statehood

was achieved on November 8, 1889.

*St. a and Pacific R. Co. v. Northern Pacific R. Co., 139

U.S

22

to help Northern Pacific meet the conditions of the Act of

1864; these efforts proved unavailing."

It is historical that the Act of 1864, and subsequent

enactments in its enablement, were abortive, and the con-

ditions of the Act were unfulfilled during the period from

July 2, 1864, to May 31, 1870. This fact is material to

the question of the applicability of the Proviso of the Joint

Resolution of 1870 to the lands granted to Northern Pa-

cific, including said Section 23.

2. The Terms and Conditions of the Joint Resolution of

1870 Were Accepted by Northern Pacific, the Road Was

Constructed With the Proceeds From Its Bonds Secured

by Mortgage, and the Right to Section 23 and Other

Granted Lands Was Earned.

The sum of the rights afforded by the Joint Resolution

of 1870 is an authorization to Northern Pacific to issue

bonds secured by mortgage of all of its property in aid of

construction; to have as to its main road and branch “the

privileges, grants and duties provided for in its act of

incorporation”; to be entitled to select lieu lands along the

entire road from an additional belt extending ten miles

beyond the limits defined in the Act of 1864. All of the

foregoing rights are followed by two limiting Provisos,

the first subjecting all “lands hereby granted” to settle-

ment and pre-emption at a price of not exceeding $2.50

per acre, and the second requiring, in the event of sale

under the mortgage, that “the mortgaged lands hereby

"United States v. Northern Pacific R. Co., 311 U. S. 317 at

p. 326; and see: Act of May 7, 1866, 14 Stat. at L. 355; Act of

Faly 1, 1868, 15 Stat. at L. 255; Act of March 1, 1869, 15 Stat. at

L. 346; Act of April 10, 1869, 16 Stat. at L. 57.

SS

granted” be sold at public sale at places in which situated

in single sections or subdivisions thereof to the highest

bidder.

Northern Pacific accepted the Joint Resolution of 1870

by creating bonds, secured by mortgage of all of its prop-

erties, and constructing the road with the proceeds there-

from. Eastward and westward extensions joined in Mon-

tana in 1883, and Northern Pacific Railroad Company,

chartered by the Act of 1864, carried on the operation of

the line until 1893. The land grant authorized by the

Act of 1864 and affirmed as modified by the Joint

Resolution of 1870 was earned by the completion of

the road. In 1893, Northern Pacific Railroad Company

defaulted on its mortgages, and under foreclosure proceed-

ings Northern Pacific Railway Company, Respondent here,

acquired title to all of the property of the federally char-

tered corporation, operated the road, and exercised the

statutory rights, privileges and grants. Respondent North-

ern Pacific Railway Company’s continuing obligation un-

der the Proviso has been determined.

3. Northern Pacific Selected Section 23 Pursuant to Both

the Act of 1864 and the Joint Resolution of 1870 and

Patent Thereon Was Issued Expressly Stating That It

Was Pursuant to Both Congressional Acts.

On or about September 22, 1900, Northern Pacific filed

with the General Land Office of the Department of Inte-

rior its Place List No. 36° wherein it recited its right by

"Act of June 25, 1929; 46 Stat, at L. 41, Chap. 41; United States

v. Northern Pacific R. Co., 311 U. S. 317.

*Place List No. 36 was received in evidence and is transmitted

to this Court [R. 136].

acc@iibias

virtue of the Act and Joint Resolution of 1870 to receive

patent to Section 23, in these words:

“Northern Pacific Railway Company, the successor

of the Northern Pacific Railroad Company, under and

by virtue of the Acts of Congress, entitled “An Act

granting lands to aid in the construction of a railroad

and telegraph line from Lake Superior to Puget

Sound, on the Pacific Coast, by the Northern Route,’

approved July 2, 1864, and ‘a Resolution authorizing

the Northern Pacific Railroad Company to issue its

bonds for the construction of ‘its road, and to secure

the same by mortgage, and for other purposes,’ ap-

proved May 31, 1870 . . . hereby makes and files the

following list of selections of public lands claimed by

the said Northern Pacific Railway Company, as enur-

ing to it, and to which it is entitled under and by

virtue of the grants and provisions of the said Act

of Congress, .. .” .

Thereafter, on June 24, 1902, Patent No. 74” was is-

sued to Northern Pacific covering Section 23, and other

lands, again reciting that the grant was pursuant to the

Act of 1864 and the Joint Resolution of 1870 in these

words :

“To all to whom these presents shall come, Greet-

mgs:

“Whereas, by Act of Congress approved July 2,

1864, entitled ‘An Act granting lands to aid in the

construction of a railroad and telegraph line from

Lake Superior to Puget Sound, on the Pacific Coast,

by the Northe.i. Route,’ and the Joint Resolution of

May 31, 1870, there was granted to the Northern ©

Pacific Railroad Company, its successors and assigns

Patent No. 74 was received in evidence and is transmitted to

this Court [R. 136].

ee) RS

. . . every alternate section of public land, not min-

eral, designated by odd numbers, to the amount of

twenty alternate sections per mile on each side of said

railroad line, as said company may adopt through the

Territories of the United States. . . .

“Now Know Ye that the United States of America,

in consideration of the premises, and pursuant to the

said Acts of Congress, Have Given and Granted, and

by these presents Do Give and Grant unto the said

Northern Pacific Railway Company, successor in in-

terest to the Northern Pacific Railroad Company, its

successors and assigns, the tracts of land listed as

aforesaid, . . .”

The foregoing language is relevant as evidencing recog-

nition, before any thought of the present controversy, of

the effective regrant of the Joint Resolution of 1870 and

its source as the origin of title to Section 23, thereby sub-

jecting Section 23 to its Proviso.

4. Northern Pacific Contracted to Sell Section 23 to Peti-

tioner’s Predecessor, MaBelle Cobb, an Actual Settler, as

Required by the Proviso of the Joint Resolution of 1870,

but Reserved the Minerals in Derogation Thereof.

On November 30, 1909, Northern Pacific executed its

Contract No. 5942" with MaBelle Cobb, and provided a

stipulation in the Contract according with the Congres-

sional intent expressed in the Proviso, in these words:

“As a material part of the consideration of this

contract, without which it would not be made, the

purchaser agrees that he will within one (1) year

from the date hereof break and cultivate at least one-

tenth of all of the tillable portion of the premises and

Setteenenmnemeenall

“Contract No. 5942 was received in evidence and is transmitted

to this Court [R. 136].

ee

one-tenth per year additional each of the next suc-

ceeding two (2) years, or until three-tenths of all

tillable land shall have been broken and put under

cultivation, and will make proof of stich cultivation

on or before the 30th day of November in each year,

satisfactory to the land commissioner of the vendor.”

Contract No. 5942 provided for a purchase price pay-

able to Northern Pacific of $2,880.00 for the 640-acre sec-

tion, or $4.50 per acre, as against the stipulated maximum

of the Proviso of $2.50 per acre... In addition, Northern

Pacific reserved a part of the fee title, to-wit:

“Excepting and reserving unto the vendor its suc-

cessors and assigns forever all minerals of any na-

ture whatsoever including coal, iron, natural gas and

oil, upon or in said land, together with the use of

such of the surface as may be necessary for exploring

for and mining or otherwise extracting and carrying

away the same; but the vendor shall pay to the pur-

chaser the market value at the time mining operations

are commenced of such portion of the surface as may

be used for such fy sac including any improve-

ments thereon. .

Thereafter, and on June 14, 1918, Northern Pacific by

deed granted Section 23 to Millard Stubrud, pursuant to

its Contract No. 5942 with MaBelle Cobb, to whose right

said Stubrud had duly succeeded.” The deed to Stubrud

Petitioner here succeeded to the title of Stubrud by con-

veyances of record.”

12Deed dated June 14, 1918 was received in evidence herein and»

is transmitted to this Court [R. 136].

Abstract of Title No. 5381, covering Section 23, was received

in evidence and is transmitted to this Court [R. 136].

lilies

5. Petitioner’s Action Here Under Review Was Timely

Commenced, in a Court of Proper Jurisdiction, and Under

Appropriate Allegations.

Petitioner, and his predecessors, were continuously in

unchallenged and exclusive possession of all of Section 23

until September 3, 1952 [R. 96]. ~The mineral value of

Section 23, and railroad grant lands in its region, were

virtually dormant until shortly before that date. . Not un-

til the discovery of petroleum deposits of the so-called

Williston Basin did controversy arise. The Williston

Basin and various petroleum discoveries therein cover ex-

tensive areas of Montana, North Dakota and South Da-

kota; the limits of the productive areas are as yet un-

known. Petitioner’s Abstract of Title gave no hint of the

mineral reservation in the Contract with MaBelle Cobb or

in the deed from Northern Pacific to Stubrud; nor was

there in the Abstract any intervening instrument or con-

veyance evidencing other than that the mineral estate was

wholly vested in Petitioner. As the exploration of the Wil-

liston Basin approached Dawson County and Section 23,

and the purported reservation came to light, on May 13,

1952, correspondence opened between Petitioner and Re-

spondents, under which Respondents were apprised of Peti-

tioner’s challenge of their rights in the premises [R. 88,

91]. On September 3, 1952, Respondent, The Texas

Company, appropriated use of Section 23 in connection

with its operations on other lands adjacent thereto [R. 96-

97]. On December 8, 1952, Petitioner, as plaintiff, insti-

tuted action in the District Court by Complaint, the first

cause of action™ of which is tantamount to an action to

i oeeeeeeeemmeeaiae

The second and third causes of action allege the wholly wrong-

ful misappropriation of use of Section 23 by The Texas

for its operations on adjoining lands, and sought injunction thereon,

which was granted, and damages, which were awarded to Petitioner.

mtd

quiet title and is designed to secure the adjudication of the

invalidity of the mineral reservation’ in the deed from

Northern Pacific to Stubrud [R. 3-10, 16].

Jurisdiction of the District Court was invoked under

28 U. S. C. Section 1332. Petitioner alleged his residence

in the State of Iowa, that The Texas Company is a Dela-

ware corporation, that Northern Pacific is a Wisconsin

corpo~ation, and that the amount in controversy is more

than $3,000.00 exclusive of interest and-costs [R. 2-4],

These allegations were admitted by Respondents [R. 17-

37], and found to be true by the District Court [R. 111-

112].

Northern Pacific moved for Summary Judgment [R.

54] and The Texas Company moved for Partial Sum.

mary Judgment [R. 52]. These motions resulted in Par-

tial Summary Judgment [R. 66] which was incorporated

in the Judgment entered October 13, 1955 [R. 127],

adjudicating Northern Pacific the owner in fee of all

minerals upon, in or under Section 23, and The Texas

Company as possessed of a right to enter thereon as lessee

of Northern Pacific [R. 128].

—15—

ts Reasons for Granting the Writ.

1. ‘Thn:Debleletvef the Court Bolow:3ies Atineart he Gen!

gressional Intent That Public Lands and Their Values,

Granted, Solely in Aid of Railroad Construction, Find

Their Ultimate Unencumbered Disposition to the Public

at the Stipulated Maximum Return of $2.50 per Acre to

Northern Pacific.

"What we here say of Section 23 is of equal application

to all of those parcels among the forty million acres

granted to Northern Pacific which have heretofore been

disposed of to settlers by Northern Pacific with little or no

service to.the Proviso of the Joint Resolution of 1870,

The issue to be decided is whether the Proviso shall be

forever entombed as a Congressional expression avowedly

in the interest of the general public, but wholly illusory

in result.

(a) THe Jornt Resotution or 1870 Was 1n Its Very

EssENCE NECESSARILY A REGRANT, AND Ay SUCH,

APPLICABLE IN ALL or Its TERMS AND PRovIsIONs

To ALL OF THE THEN UNEARNED LANps GRANTED

to NortHEerRN Paciric Unper It AND THE AcT OF

1864.

The Act of 1864 RGAE prohibited insti or lien

of the granted lands; as well, it restrained alienation

thereof until patent, which patent was dependent upon ad-

jacent construction of the road and acceptance by the

President’s Commissioners. See, St. Paul and Pacific

Railroad Company v. Northern Pacific Railroad Com-

pany, 139 U. S. 1. Only by the Joint Resolution of 1870

did Northern Pacific achieve a full fee to lands adjacent

to accepted construction. Prior to the adoption of the

Joint Resolution of 1870, the conditions of the Act of

1864 were unfulfilled by Northern Pacific, except as to

seonliiians

such earned lands. It stood; on’ May 31, 1870, with some

indeterminate defeasible interest: in» unearned lands by

virtue of its: failure’ to fulfill the conditions of ‘the Act of

1864, in an estate less than the fee by virtue of its lack of

power to encumber. The Joint Resolution of 1870 granted

a complete title to the alternate sections, as earned, it af-

firmed the prior grants of the Act of 1864, and added

the power to mortgage uneartied lands theretofore ‘wholly

lacking from the fee. Unless the Joint Resolution of 1870

is applicable to ‘the entire land grant unearned at the date

of its adoption, there is no source of origin of Northern

Pacific’s title. Northern Pacific thereafter accepted the

regrant of the Joint Resolution of 1870, and subjected

itself to the limitations of its Provisos, on the ‘principle

that the burdens follow the benefits accepted. That the

Joint Resolution of 1870 was a regrant which was “sine

qua non to the origin of Northern Pacific’s title to the

granted lands is demonstrated by reasoning which we will

summarize.

The financing method originally chowen by Cangitee is

spelled out in the Act of 1864. Construction was to be

financed out of public subscription to stock and patent to

public lands as each 25 miles of the road was acceptably

constructed, without limitation upon resale of lands earned

as to settlement or amount of sale price or time of sale.

In order to protect the marketability of railroad patented

lands, the United States subjected itself to the restriction

that it would not’ sell its reserved alternate sections of

public lands at a price of less than $2.50 per acre, and

then only to settlers under the “Act to secure homesteads:

to actual settlers on the public domain” of May 20, 1862..

(See Sec. 6 of the Act of July 2, 1864.) Thus, as the

road construction progressed, revenue from resale of rail-

road patented land would be a source of funds in aid of —

alec Ghai

construction. As determined by this Court, this plan of

financing failed.

During the interval between the Act of July 2, 1864,

and the Joint Resolution of 1870, the public right to be

secure in the eventual ownership of railroad granted lands

became of the utmost concern. See Great Northern R.

Co. v. United States, 315 U. S. 262. This policy in favor

of the public, coupled with the circumstance that Northern

Pacific failed to perform the conditions of the Act of

1864, renders it well nigh inconceivable that Congress

would adopt a Proviso requiring disposition to settlers

of merely that fraction of the grant adjacent to the newly

authorized branch line over the Cascades, and at the same

time impose no condition whatsoever on the nearly 2000

miles of main line from Lake Superior to the new terminus

at Portland, when beth the changed branch line and main

line were fully dependent upon the authority and benefits

afforded by the Joint Resolution of 1870.

The language of the Joint Resolution of 1870 confirms

the conclusion that the Proviso is applicable to the entire

unearned grant. First, the Joint Resolution authorized

the mortgage of all of Northern Pacific’s property of all

kinds and description, thereby empowering the mortgage

of its entire unearned land grant, and making it plain that

the Resolution is applicable to all lands encompassed by

both the Act of 1864 and the Joint Resolution of 1870.

Next, the Joint Resolution of 1870 reaffirms the authori-

zation to construct the road “under the provisions and

with the privileges, grants and duties provided for in its

act of incorporation” from the original point, specified

— States v. Northern Pacific R. Co., 311 U. S. 317 at

p.

co aS

in the original Act and unspecified in the Joint Resolution,

via a changed main line route to Portland, with authority

for a branch line to Puget Sound through the Cascade

Mountains ; thus again, in its reaffirmation of the authority

to construct the road, the reference is to the entire line,

Next, in the event “in any state or territory” the amount

of land granted is not available, an additional “lieu land”

belt is defined; the reference to “state or territory” makes

it plain that the Joint Resolution of 1870 is embracing

the line from beginning to end. Lastly, within the single

section, comes the twofold Proviso: The first referring

to disposition and the second referring to foreclosure

sales, and each based upon the words “lands hereby

granted.” The Proviso governs all that has gone before.

The words “lands hereby granted” cannot be applied to

a small. fraction of the entire grant as to eventual disposi-

tion to settlers, without being equally applicable to but

a small fraction of the entire grant as to foreclosure sales,

Yet it has never been contended that the Proviso as to

foreclosure sales is applicable only to this small fraction

of the entire grant, no doubt for the reason that the

mortgage authorized by the Joint Resolution of 1870 is

clearly applicable to the entire grant. Just as the Proviso

as to the foreclosure applies to the land grants along the

entire line, including the branch, so also its counterpart as

to eventual disposition of granted lands remaining unsold

or subject to the mortgage, applies to the lands granted

along the entire line from beginning to end, and not to

the comparatively minor stretch of the branch line across

the Cascade Mountains.

Documentary support for this conclusion is found in

the instruments under which Northern Pacific made its

selection, as well as in the patent signed by President

—j9-~

Theodore Roosevelt. Both Place List No. 36 and Patent

No. 74 recite that they are pursuant to the Act of 1864

and the Joint Resolution of 1870. If, in fact, the Joint

Resolution.of 1870. was not a regrant standing as a part

of the. origin of title, ee ee

selection nor authority for patent.

The applicability of the Proviso to all of the granted

lands, and hence to Section 23 here involved, is confirmed

by later Congressional expressions. Thus the Joint Con-

gressional Committee acting under the Resolution of

June 5, 1924," among its other castigations of the rail-

road’s ‘collusion, fraud and flaunting of the legislative

and public will, states as one of its reasons for the for-

feiture ‘of Northern Pacific’s then outstanding indemnity

claims: “(d) the failure of the Northern Pacific Rail-

road Co. to dispose of any of the granted lands through

settlement and pre-emption after July 4, 1884, as required

by the resolution of May 31, 1870. . .”"* Acting upon the

Committee Report, the Congress by its Act of June 25,

1929 expressed its continuing purpose and intention that

the policy of the Joint Resolution of 1870 relative to dis-

position of granted lands should prevail, for which see

Appendix B, page 26,

543 Stat, at L. 461.

The Report of ‘that Committee is found in the Congressional

Record of March 2, 1929, 70th Congress, Second Session, Vol.

70, Part 5, pp. 5118 to 5122.

2

(b) Tae Proviso Betinc FULty APPLICABLE TO ALL

GRANTED LANDS, THE MINERAL RESERVATION IN

ConFiict THEREWITH oN Section 23 Is Vou.

As noted in the Statement, the statutory time for com-

pletion of the road was July 4, 1879, and the road was

actually completed in 1883, the Contract with MaBelle

Cobb was executed in 1909, and the time intervening

was well beyond the five years stipulated in the Proviso

after which Northern Pacific was required to sell the land

for settlement. Contract No. 5942 spelled out the neces-

sity for the grantee to improve the land by the tilling

thereof and satisfactorily report thereon to Northern

Pacific’s Land Commissioner. The price exacted from the

settler, MaBelle Cobb, was $4.50, an unlawful considera-

tion in that the Joint Resolution of 1870 prescribed a

price of not more than $2.50 per acre. The exaction of

mineral reservation was also illegal. The principle is

established by Oregon and California R. Co. v. United

States, 243 U. S. 549, 61 L. Ed. 890, wherein this Court

said, at pp. 552 ana 553:

“An immediate and sufficient answer to the conten-

tion would seem to be that the grant was not abso-

lute, but was qualified by a condition in favor of

settlers, and if the ‘lands’ granted had such inci-

dents, the ‘lands’ directed to be sold to actual settlers

were intended to have such incidents. That is, if

the ‘lands’ granted carried by necessary implication

all that was above the surface and all below the

surface, to the railroad company, they carried such

implication to the actual settler. In other words, what

‘ands’ meant to the railroad company they meant to

the settler, embraced within his right to purchase

and acquire.”

ay ae

An earlier Oregon and California R. Co. case, dealing

with a similar land grant proviso, is authority for the

rule that the grant is law as well as contract, and has the

constancy of laws as well as their command, and remains

operative and obligatory until repealed. See, Oregon and

California R. Co. v. United States, 238 U. S. 393.

‘<The foregoing authorities, coupled with the rule that

a law relative to a contract becomes a part of the contract™

constitute the Proviso a part of the contract and the deed

issued pursuant thereto, as fully as though written therein.

The mineral reservation being in conflict with the Proviso

in the contract and in the deed, and the reservation being

against the law, it is void and without legal effect ob

initio.”

In considering the title of Petitioner, as successor to

the title of MaBelle Cobb, it is proper to consider that

she was peculiarly within the legislative contemplation

of the Proviso as a consequence of the terms of the

contract executed with her by Northern Pacific. She it

was who was required to improve the land by tillage for

three. consecutive years and report annually thereon to

the Land Commissioner for Northern Pacific. The suc-

cessor, Stubrud, received the deed to Section 23 from

the settlement intent of the Proviso, and bringing himself

squarely within its benefits. As a consequence, we do not

have an issue of whether the Provise created a trustee-

ship, a third party beneficiary contract, or some inchoate

interest in favor of the undesignated members of the

S aRIREEEEEIEEEEE

“Vaker Company v. State, 123 Mont. 329, 225 P. =

Den. 40 U.S 87, 71S Ce 63, 95 L. Ed. 607,

“Lowery v. Garfield Cownty, 122 Mont. 571, 208 P. 2d 478,

—22—

general public, which distinguishes this case from the

holdings in the Oregon and California R. Co. cases, supra,

But we do concern ourselves with whether the original

settlers of the West, the pioneers whose traffic with the

railroad was within the contemplation of the Congress

tion respecting railroad grants.

2. The Opinion of This Court in United States v. Northern

Pacific R. Co., Brought Pursuant to Congressional Act,

Serves to Support This Petition.

We have included in Appendix B, at page 26, certain

of the more pertinent provisions of the Act of June 25,

1929, directing the forfeiture of certain land grants to

Northern Pacific, and instructing the Attorney General

to file an action to quiet title, for accounting and damages

against Northern Pacific, wherein the Congress expressed

its continuing intent as to disposition by Northern Pacific

in accordance with the policy of the Joint Resolution of

1870. By the Act of May 22, 19 ® there was author- —

sed a direct appeal to this Court of the action against

Northern Pacific instituted by the Attorney General it

accordance with the Act of June 25, 1929 in the District

Court for Eastern Washington. The Proviso of the

Joint Resolution of May 31, 1870 was a major issue. a

The Government contended, in its appeal No. 3 before

this Court, that the Proviso was binding upon Northern |

ee

1949 Stat. at L. 1369, Chap. 444.

ninco

Pacific as to every part of the granted lands, that North-

ern Pacific had breached the policy of the United States

prescribed in the Proviso, thereby wholly defeating its

right to any further award.” Northern Pacific moved

to dismiss the charge, was sustained by the special master,

this Court reserved its ruling :™

“The justices who heard this case are equally di-

of the fact that our rulings on other issues may be

dispositive of the entire controversy.”

The judgment was reversed :™

“The appeal in No. 4 is without merit, but, upon

the appeal in No. 3, the judgment is reversed and

the cause is remanded for further proceedings as

indicated in this opinion.”

In its paragraph 18 of the opinion, this Court passed

upon the Government’s claim for damages by reason of

Northern Pacific’s breach of the Proviso. The Court

specifically held, contrary to the ruling of the District

Court, that the Government was entitled to prove any

damage to it, or advantage to Northern Pacific, arising

out of the breach of the Proviso™ as to additional lands

United States v. Northern Pacific R. Co., 311 U. S. 317 at

Pp. 4

4311 U. S. 317, at p. 342.

311 U. S. 317, at p. 376.

a

—~24+—

granted by the Joint Resolution, but not as to lands

acquired under the grant of 1864.% United States v,

Northern Pacific R. Co. unquestionably determined that

the Proviso established a legally enforceable obligation.

It unequivocally decided that the obligation applied to

all additional lands granted by the Joint Resolution of

1870. The court reserved the question as to whether the

Proviso applied to every part of the granted lands on the

issue of forfeiture of right to further awards of lands;

at the same time, the court held that no damages would

lie as to lands “acquired” under the Act of 1864, but that

damages would lie as to the lands granted under the

Joint Resolution of 1870. These rulings would be in-

herently contradictory unless the word “acquired” is given

its logical meaning, namely, those lands actually earned by

adjacent construction accepted by the Government under

the terms of the Act of 1864, but prior to and without

using the benefits of the Kesolution of 1870. The primary

use of the word “acquired” is to gain “usually by one’s

own exertions.” (Webster’s New International Diction-

ary, Second Edition, Unabridged, 1945).

The Court also reserved the question of whether the

breach of the conditions of the Act of 1864 by Northern

Pacific defeated its entitlement thereunder.” Contrary

—25—

to the conclusions of the lower courts in the judgment to

which this Petition is addressed, the Court in United

States v. Northern Pacific R. Co. did not attempt to

delineate the lands which were “acquired” by Northern

Pacific under the Act of 1864, or those which were granted

under the Joint Resolution of 1870. This was a factual

matter, the decision on which was dependent upon the

taking of testimony and the cause was remanded for that

purpose. The ultimate decision on this issue rests upon

determination of which lands were “acquired” by North-

ern Pactfic as a result of its road construction completed

under the Act of 1834 without the benefit of mortgage

funds. All land grant acquisitions achieved by construc-

tion of the road with mortgage funds find their origin in

the additional grant of the Joint Resolution of 1870, which

conveyed the power to encumber and with it the financial

ability, theretofore lacking, to. construct additional road

and “acquire” additional land. It is factual that the road

was not built in Montana until 1880, thai the first mort-

gage conveying Section 23 was executed on May 1, 1879;

thereby Northers, Pacific accepted the benefit of the

Joint Resolution of 1870 as to said Section 23, and ac-

cepted the limitations of the Proviso.

As we have stated, the Proviso applied to all lands

subjected to the mortgage authorized by the Joint Resolu-

tion, as is evidenced by the use of the words “lands

hereby granted” both in the Proviso as to disposition,

and in the Proviso as to mortgage foreclosure sale. The

words “or remain subject to the mortgage by this act

authorized” in the Proviso as to disposition become nuga-

tory in the absence of a construction giving life to the

legislative intent that the Proviso would apply to all lands

regranted by the Joint Resolution with a further quantum

nT

of the fee, to-wit, the power to mortgage, which had been —

withheld in the Act of 1864. That. this Court; in the

United. States v. Northern Pacific case, used the words —

“additional lands granted by that Resolution” to dis-

tinguish from lands earned and acquired under the Act

of 1864,-becomes clear with recognition that no authority

was required by Northern Pacific to mortgage lands

earned by railroad construction accepted by the Presi- —

dent’s Commissioners prior to, and without utilizing the —

benefits of, the Joint Resolution. :

The legislative history” is consistent with the above

construction of the Proviso. Thus, a proposed amend-

ment to apply the Proviso to all lands~“heretofore and

hereafter” granted was defeated, as was an amendment

to limit the Proviso to the “additional alternate sections”

granted by the Joint Resolution, the latter being a patent

reference to sections adjacent to the new branch line alone.

Even though it should be held that the language of —

the Court in United States v. Northern Pacific R. Co,

has the meaning attributed by the courts below in this —

cause nonetheless the decision would not be controlling —

in this case. Foremost in support of this conclusion is

the Act of June 25, 1929, which has the continuing force —

of law, and precludes any final determination of the

action commanded by Congress against Northern Pacific,

except in compliance with its provisions. Th cote We

Ca alae Comin tae. le te Games Oh a

eee aire

260. ce 2348; or. 21 cre =

A Bs 5308 ee 20.5071 May 1 ee 3850.88

a

see

eS

eS

—27—

compromised, and adjudication as contrmplated by Con-

gress was not had, and Judge Schwellenbach so stated.”

The District Judge’s misgivings as to the decree based

upon settlement, without Congressional authority, are

obvious from his expressions. The consequence of this de-

cree by compromise is the absence of ruling on the facts

and contentions which this Court reserved, and Petitioner

is not judicially barred by the rule of stare decisis from

of 1870 as the origin of title to said Section 23. Most

certainly, the harsh deprivation: of petitioner’s day in

Court by summary judgment was unjustified.

Secondly, the Court’s opinion in United States v. North-

ern Pacific R. Co. did not deal with oil, gas or minerals

of any kind. This action by a place land grantee of

the railroad, a grantee standing in the shoes of a settler

chosen by Northern Pacific, who is invoking the contint-

ing Congressional expressions in his favor, and the re-

served ruling on the question by this Court, is the only

one of its kind. As a prime beneficiary of ‘the Proviso

Petitioner seeks his right to a full hearing: unshackled

by an interpretation placed upon a few short sentences

arising in the course of litigation between parties dif-

ferently situated, with a myriad of wholly different issues,

and complicated by allegations of fraud, mistake, and ad-

where such substantial rights and important factual issues

are involved.

ee

4 Waited States v. Northern Pacific R. Co, 41 Fed. Supp. 273,

at

—28—

Lastly, if it be true that United States v. Northern

Hacific R: Co. limits the right of the government to

damages from Northern Pacific, and no more can be

claimed from the language, the public interest in freedom

from monopoly of public resources requires that the hold-

ing be limited to the parties there before the Court. We

respectfully. contend that the precise facts and issues in

this case have not been decided, and are of such import-

ance as to merit this Court's attention and authoritative

guage of United States v. Northern Pacific as susceptible

of the meaning followed by the lower courts, nevertheless

the continuing Congressional intent that such lands find

their ultimate way into the hands of the public, calls for

determination of the precise question here presented, in

order that the clearly expressed mandate of Congress to

Northern Pacific not be further subverted. :

3. The Law of Eetoppel in Private Grant, Relied Upon by

the Court of Appeal, Is Without Application Where the

Origin: of Title Is Congressional Act; Neither Does the

. Law of Estoppel Properly Apply Here, Where Judgmest

Was Made Summarily.

huasiiaee eb Abeta’ ‘ehikc to dibide thie che Ne

principal reliance upon rules of estoppel which, without —

doubt, govern purely private conveyancing and quiet title

actions. ‘It overlooked the laws by ‘which public land,

Section 23, camie into the possession of Northern Pacific,

and in turn, MaBelle Cobb and her successors. In sub —

stance and effect Congressional grants of public lands -

to a railroad, subject to the limitations of a Proviso such

as here, were a transfer of ownership and administra-—

tion of the public lands from the government to the raiF

road in order that the railroad could derive the proceed

—29—

from sale of the lands in aid of construction. Northern

Pacific, from May 31, 1870,. until five years after com-

pletion of the road, had the right to deed the land to whom

it would, for such consideration as it would. The reason

for the time limitation ceases if, at its expiration, Northern

Pacific continued to be free to deal-at will. MaBelle

Cobb, having paid the price, and settled the land in

accordance with the contract stipulations, became the

owner of the unencumbered, unreserved title to Section

23, as fully as would have been the case had she been

dealing with the Department of Interior. Her full measure

of title came by law, which the purported reservation could

not destroy. Hence, this is not a case of private grant,

but a reliance upon Congressional Act, continually re-

expressed, as the origin of a full title which renders the

mineral reservation contrary thereto void (see: Oregon

C. R. Co. v. United States, 238 U. S. 393). The rules

of estoppel in private conveyancing have no application

to this case.

Furthermore, the very nature of the defense of estoppel

would seem to preclude the grant of respondent’s motion

for summary judgment. The defense of estoppel was

respondent’s burden to establish. It is equitable in nature,

cannot be founded upon a void provision in an. instru-

ment,” and is conditioned by the “clean hands” maxim.

Estoppel is ruled out as a defense by Oregon v. United

States, supra, in which the Court said, in 2 railroad grant

action,

“We may observe again that the acts of Congress

are laws as well as grants, and have the

of laws as well-as their command, and are operative

Valier Company v. State, 123 Mont. 329, 215 P. 2d Cert.

Den. 340 U. S. 827; 12 Am. Jur. 709. es

fe

ba:

Sa

—j0—

to.and answers all the other contentions of the rail:

road company based on waiver, acquiescence, and

nana gee, coma, t0 Se, Seteneee hehe. se. :

statute of limitati a

Estoppel, id ad gh: 0 tov “tote aren ll

éssence a fact question, the evidence in rebuttal of which —

is greatly dependent upon the form in which the estoppel

is claimed in the trial court. Under- these circumstances,

the grant of summary judgment was improper.

‘United States v. Union Pacific R. Co. holds that

Congress did ‘not’ intend to deliver the mineral wealth

of the‘ country to the railroads by ‘the land grarit acts. -

The case deals with minerals underlying the right-of-way

and does’ not become coritrolling precedent in this ‘plate

lands matter; yet the: principle upon which it is founded

supports the grant of this Petition. The opinion makes

plain that the federal policy after the gold strike in Cali- -

fornia in 1849, was to reserve for public use all known

mineral lands. On this Petition, we pose the settler from

among the public and their successors, on the one hand,

as against Northern Pacific on the other, as the Congres-

- Patific case it was submitted that public lands were —

granted that they might be sold by the railroads at maxi

mum marketability in proceeds with which to aid in com

struction: Also, it was argued that mineral: reservations

neither afforded maximum return, nor in any other man--

- MDecided by this Court on April 8, 1957.

alas

ner aided in building the road, the sole and only purpose

for grant of public lands. Furthermore, it was demon-

strated that Congress and the nation did not even con-

ceive of the device of severance of the minerals from the

fee until thirty years and more after 1870. Had Northern

Pacific complied with the terms of the Proviso and sold

the land within the Congressionally contemplated. time

after the completion of the road, the settlers would have

received the fee unreservedly, simply because the device

of reserving mineral rights from the fee was then un-

known to Congress or Northern Pacific. These points

verify the conclusion that by the Proviso of the Joint Reso-

lution of 1870, Congress intended that Northern Pacific

convey to settlers the whole fee in order that these lands,

unsold during the construction period and five years

thereafter, be opened and unreservedly belong to the pub-

lic, further that this intention found its concept in the

belief that the public, succeeding to these public lands

and their values, would best accelerate the growth, develop-

“Ment and economic health of the country, @ concept as

valid today as it was in 1870.

For the foregoing reasons, we respectfully submit that

this Petition for a Writ of Certiorari should be granted.

Respectfully submitted,

Harotp Jupson,

Attorney for Petitioner.

-Ratpn J. Anverson,

~ ‘Stanzey P. Sorenson,

J. R. Vaucnan,

Of Counsel.

Opinion of the United States Court of Appeals.

"United States Court of Appeals, Ninth Circuit.

_ Theodore B. Russell, Appellant, v. The Texas Com-

, a corporation, Frederick T, Manning Drilling Com-

, 4 corporation, and The Northern Pacific Railway

i for damages arising from use of surface rights by

tndant. The United States District Court for the

rict of Montana, William D. Murray, J., rendered

s adverse to surface owner on quiet title cause

‘action and in favor of surface owner in causes of

m based upon damages and the surface owner and

of the defendants appealed. The Court of Appeals,

bert, District Judge, held that where owner of surface

license from the day it received the offer.

yments affirmed.

ph J. Anderson, Stanley P. Sorenson, J. R. Vaughn,

a, Mont., for appellant.

‘J. Coleman, Cale Crowley, Coleman, Jameson &

» Billings, Mont., Walter Will, Denver, Colo., for

ee and cross asioitlant: The Texas Co.