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United States v. Ames/Opinion of the Court

Judicial cognizance of prize cases is derived from that article of the Constitution which ordains that the judicial power shall extend to all cases of admiralty and maritime jurisdiction; and the district courts for many years exercised jurisdiction in such cases without any other authority from Congress than what was conferred by the ninth section of the Judiciary Act, which gave those courts exclusive original cognizance of all civil causes of admiralty and maritime jurisdiction, including the seizures therein mentioned, the rule adopted being that prize jurisdiction was involved in the general delegation of admiralty and maritime cognizance, as conferred by the language of that section. Glass v. The Betsey, 3 Dall. 6; The Admiral, 3 Wall. 603; Jennings v. Carson, 1 Pet. Adm. 7; 1 Kent, Com. (12th ed.) 355; 2 Stat. 781, sect. 6.

Admiralty courts proceed according to the principles, rules, and usages which belong to the admiralty as contradistinguished from the courts of common law. Manro v. Almeida, 10 Wheat. 473; 1 Stat. 276.

Seizure of the property and the usual notice precede the appearance of the claimant; but when those steps are taken, the owner or his agent, if he desires to defend the suit, must enter his appearance in the case, and the court may, in its discretion, require the party proposing to appear and defend the suit to give security for costs as a preliminary condition to the granting of such leave.

Due appearance having been entered, the claiment, if he wishes to avoid the inconvenience and expense of having the property detained until the termination of the suit, may apply to the court at any time to have the property released on giving bond, which application it is competent for the court to grant or refuse.

Bail in such a case is a pledge or substitute for the property as regards all claims that may be made against it by the promoter of the suit. It is to be considered as a security, not for the amount of the claim, but simply for the value of the property arrested, to the extent of the claim and costs of suit, if any, beyond the preliminary stipulation. Williams & Bruce, Prac. 210.

Whenever a stipulation is taken in the admiralty for the property subjected to legal process and condemnation, the stipulation is deemed a mere substitute for the thing itself, and the stipulators are held liable to the exercise of all those suthorities on the part of the court which the tribunal could properly exercise if the thing itself were still in the custody of the court. The Palmyra, 12 Wheat. 1; The Wanata, 95 U.S. 611; The Steamer Webb, 14 Wall. 406.

Fees and expenses of keeping the property having been paid, it is the duty of the marshal to surrender the property as directed in the order of release; and it is settled law that if any one, in defiance of the order, unlawfully detains the same he is liable to be proceeded against by attachment. The Towan, 8 Jurist, 223; The Tritonia, 5 Notes of Cases, 111.

Concisely stated, the material facts as derived from the allegations of the bill of complaint are as follows: 1. That a certain steamboat was with her cargo, consisting of eleven hundred and twenty bales of cotton, seized as enemy property. 2. That proceedings, on the 23d of March, 1865, were commenced against the property in the District Court for the Eastern District of Louisiana, to procure a decree of forfeiture of the property, the charge being that the cargo was obtained within territory occupied by armed public enemies. 3. That the person named in the bill of complaint appeared in the suit as claimant of the cargo, and obtained an order of the court that the cargo of cotton might be released to the claimant, he, the claimant, giving bond to the complaints in the sum of $350,000, with good and solvent security. 4. That the claimant on the following day, in pursuance of the order, filed the required bond to the amount specified in open court, duly executed by the claimant as principal and with sureties accepted by the court as satisfactory. 5. That the marshal on the same day, in compliance with the order of the court, released and delivered the cargo to the claimant. 6. That on the 10th of May following the District Court entered a decree in the suit dismissing the libel and ordered that the cargo seized be restored to the claimant, from which decree the complainants appealed to the Circuit Court. 7. That the Circuit Court on the 8th of June then next reversed the decree of the District Court and entered a decree condemning the steamboat and her cargo as forfeited to the United States, and condemning the claimant to pay to the complainants $204,982.28, with interest, and a decree in the usual form against the sureties. 8. That the decree last named is in full force, and that neither the claimant nor sureties have ever paid the same or any part thereof to the complainants. 9. Nulla bona having been returned upon the execution, the present bill of complaint was filed in the name of the United States; and the prayer is that the executors of Oakes Ames may be decreed to admit assets in their hands sufficient to pay and satisfy the aforesaid decree and interest, and that it be decreed that they shall pay the amount of the decree and interest to the complainants.

Certain other matters are also set forth in the bill of complaint which it is alleged entitle the complainants to the relief prayed, of which the following are the most material: 1. That at the time of the seizure of the steamboat and her cargo, and at the time the bond for the release of the cargo was given, and at the time the decree was entered against the claimant and his sureties in the bond, the testator of the executors named as respondents and the other respondent named were partners of the claimant under the firm and style alleged in the bill of complaint, and that the partners in the course of the partnership business purchased the cargo of the steamboat for the benefit of the partnership, and that the other two partners well knew of the commencement of the suit by the complainants to procure a decree of forfeiture of the property, and that they directed the claimant to give the release bond in the name and style of the partnership as obligors, and that the copartners obtained possession of the cargo and sold the same, and received the proceeds to their own use as copartners. 2. That large sums of money, to wit, $21,963.72, paid for storage, internal revenue, and the charges of the treasury agent, were paid with the funds of the partnership with full knowledge of all the said copartners, as well as counsel fees and the expenses of defending the suit to condemn the property. 3. That the complainants at the time the release bond was executed had no knowledge that these parties were partners, and that neither the partnership nor the partner last named in the bill of complaint have sufficient goods or estate to pay the amount of the decree against the claimant and his sureties.

Service was made, and the respondent executors appeared and demurred to the bill of complaint, and on the same day the other respondent appeared, and he also filed a demurrer to the bill. Continuance followed, and at the next session of the court in the same term the Circuit Court entered a decree sustaining the demurrers and dismissing the bill of complaint. Prompt appeal was taken by the complainants in open court, and they now assign for error that the Circuit Court erred in sustaining the demurrers and in dismissing the bill of complaint.

Equitable relief is claimed by the complainants chiefly upon three grounds, each of which is attempted to be supported upon the theory that they have suffered a loss and that they have not an adequate and complete remedy at law. Irrespective of the course pursued by counsel in the argument of the cause, the respective grounds of claim will be examined by the court in the following order, as the one best calculated to exhibit the controversy in its true light.

Throughout it may be considered that the complainants admit that they have no remedy at law, but they contend that they are entitled to equitable relief for at least three reasons: 1. Because the property seized as forfeited to the United States has been legally condemned, and that the principal and sureties in the stipulation for value given for the release of the same at the commencement of the proceedings in the admiralty court have become insolvent and unable to pay the amount of the decree recovered by the complainants in the admiralty court. 2. Because the other two partners named in the bill of complaint were each equally interested with the claimant in the property seized and condemned, of which the complainants had no knowledge; and that inasmuch as the property when released went into the possession of the partnership and was sold for the benefit of all the partners, the claim of the complainants is that they are entitled to equitable relief. 3. Because the estate of the deceased partner is liable for the whole decree; and inasmuch as his estate is insufficient to pay all his debts, the United States are entitled to maintain the bill of complaint to secure their preference.

Due seizure of the property was made and due proceedings were instituted in the Admiralty Court for its condemnation; and the allegations of the bill of complaint show that the person named was duly admitted to appear as claimant, and that the Admiralty Court on his motion passed the order that the property should be released upon his giving a bond to the complainants in the sum of $350,000, with good and solvent security, which is the usual order given in such cases.

Proceedings of the kind are usually adopted in all seizures under the revenue and navigation laws, as is well known to every practitioner in such cases. 1 Stat. 696, sect. 89; Rev. Stat. 938. Bond or stipulation with sureties for the discharge of the property seized is allowed in all revenue cases, except for forfeiture, and the better opinion is that even in seizures for forfeiture the bond may be executed in the same manner by the claimant. Id., sects. 940, 941.

Pursuant to the known and well-recognized practice, the court allowed the claimant to give the bond with sureties approved by the court, and thereupon directed the marshal to surrender the property to the principal in the bond. Beyond all doubt, therefore, the claimant acquired the possession of the property lawfully and in pursuance of the order of the Admiralty Court.

Hearing was subsequently had; and the Admiralty Court entered a decree in the case dismissing the libel, and ordered that the property, consisting of the cargo of the steamboat, be restored to the claimant. Due appeal to the Circuit Court was entered by the libellants; and the record shows that the Circuit Court reversed the decree of the District Court, and adjudged and decreed that the steamboat and her cargo be condemned as forfeited to the United States. No appeal was ever taken from that decree, and the allegations of the bill of complaint also show that the Circuit Court entered a decree against the claimant and his sureties in the release bond or stipulation for value in the sum of $204,982.28 with interest and costs of suit.

Attempt is not made to call in question the jurisdiction of the Admiralty Court, nor of the Circuit Court in the exercise of its appellate poswer in the case. Nothing can be better settled, said Judge Story, than the proposition that the admiralty may take a fidejussory caution or stipulation in cases in rem, and that they may in a summary manner render judgment and award execution to the prevailing party. Jurisdiction to that effect is vested in the District Court, and for the purposes of appeal is also possessed by the circuit court, both courts in such cases being fully authorized to adopt the process and modes of process belonging to the admiralty, and the district courts have an undoubted right to deliver the property on bail and to enforce conformity to the terms of the bailment. Authority to take such security is undoubted, and whether it be by a sealed instrument or by a stipulation in the nature of a recognizance, cannot affect the jurisdiction of the court. Having jurisdiction of the principal cause, the court must possess the power over all its incidents, and may by monition, attachment, or execution enforce its decree against all who become parties to the proceedings. Brig Alligator, 1 Gall. 145; Nelson v. United States, Pet. C. C. 235.

Bonds given in such cases, syas Dunlap, are to all intents and purposes stipulations in the admiralty, and must be governed by the same rules. Original cognizance in such cases is exclusive in the district courts; but the circuit courts, in the exercise of their appellate jurisdiction, possess the same power to the extent necessary in re-examining the orders and decrees of the subordinate court. Dunlap, Prac. 174; The Peggy, 4 C. Rob. 389; The Ann Caroline, 2 Wall. 558.

Such security was taken for the cargo seized in the District Court, and no review of that order was asked in the Circuit Court. Where an appeal is taken from the decree of the District Court, the res if not released, or the bond or stipulation for value, follows the cause into the Circuit Court, where the fruits of the property if not released, or the bond or stipulation for value, may be obtained in the same manner as in the court of original jurisdiction, the bond or stipulation being in fact nothing more than a security taken to enforce the final decree. McLellan v. United States, 1 Gall. 227.

It matters not, says the same magistrate, whether the security in such a cause be a bond, recognizance, or stipulation, as the court has an inherent right to take it and to proceed to render judgment or decree thereon according to the course of the admiralty, unless where some statute has prescribed a different rule. The Octavia, 1 Mas. 150; The Wanata, supra.

Securities of the kind are taken for the property seized for the value of the same when delivered to the claimant, and the stipulation will not be reduced if the property when sold brings less than the appraised value, nor can the court award any damages against the sureties beyond the amount of the stipulation, even if the amount of the stipulation is less than the decree. The Hope, 1 Rob. Adm. 155.

Authorities may be found which deny the power even of the Admiralty Court to recall the property for any purpose after the stipulation for value has been given and the property has been delivered to the claimants. The Wild Ranger, Brown & Lush. 671; Kalamazoo, 9 Eng. l. & Eq. 557; S.C.. 15 Jur. 885; The Temiscouta, 2 Spinks, 211; The White Squall, 4 Blatch. 103; The Thales, 10 id. 203.

Other decided cases, perhaps for better reason, hold that in case of misrepresentation or fraud, or in case the order of release was improvidently given without any appraisement or any proper knowledge of the real value of the property, it may be recalled before judgment where the ends of justice require the matter to be reconsidered. The Hero, Brown & Lush. 447; The Union, 4 Blatch. 90; The Duchese, Swabey, 264; The Flora, Law Rep. 1 Adm. 45; The Virgo, 13 Blatch. 255.

Suppose the power, in case of fraud, misrepresentation, or manifest error in the court, exists in the court of original jurisdiction, or even in the Circuit Court, inasmuch as the stipulation for value follows the appeal into that court, still it is clear that no other court possesses any such jurisdiction nor any power to re-examine the discretionary ruling of the admiralty courts in that regard. Smart v. Wolff, 3 T. R. 340; Lord Camden v. Home, 4 id. 382; The Wanata, supra; Houseman v. The Schooner North Carolina, 15 Pet. 40.

Even if the rule were otherwise, it would not avil the complainants in this case, as they never made any application either to theDistrict Court or to the Circuit Court to recall the property, nor is it now pretended that the amount of the stipulation is not fully equal to the value of the cargo released, nor that the sureties were not perfectly solvent at the time the bond was executed. Nothing of the kind is alleged, and of course nothing of the kind is admitted by the demurrer.

Suitors in cases of seizures on waters navigable from the sea by vessels of ten or more tons burthen are saved the right of a common-law remedy where the common law is competent to give it. 1 Stat. 77.

Given as the bond was on the release of the cargo of cotton in a suit in rem for its condemnation, it became the substitute for the property; and the remedy of the libellants, in case they prevailed in the suit in rem for condemnation, was transferred from the property to the bond or stipulation accepted by the court as the substitute for the property seized. Common-law remedies in cases of seizure for forfeiture or to enforce a lien are not competent to effect the object for which the suit is instituted, and consequently the jurisdiction conferred upon the district courts, so far as respects that mode of proceeding, is exclusive. Parties in such cases may proceed in rem in the admiralty; and if they elect to pursue their remedy in that mode, they cannot proceed in any other forum, as the jurisdiction of the admiralty courts is exclusive in that mode of proceeding, subject, of course, to appeal to the Circuit Court. Leon v. Galceran, 11 Wall. 185; Steamboat Company v. Chase, 16 id. 522; The Belfast, 7 id. 624.

Proceedings in rem are exclusively cognizable in the admiralty, and the question whether a case is made for the recall of property released under bond or stipulation in such a case must, beyond all doubt, be determined by the courts empowered to hear and determine the matter in controversy in the pending suit. Nor is there any thing unusual in the fact that other parties beside the claimant were interested in the property seized at the time the property was released and the bond for value taken in its place. In the Matter of William Stover, 1 Curt. C. C. 201; The Adeline and Cargo, 9 Cranch, 244.

Whenever a seizure takes place, it is the right of the owner to appear and file his claim, if he complies with the preliminary order of the court as to costs; but the claim is often made by the master of the vessel or the managing owner, and it may be made by an agent or the consignee, and in the case of a foreign ship it may be filed by the consul of the nation to which the ship belongs. Experience has approved the practice, as the security is rendered sufficient by the sureties; nor is the danger of loss from their insolvency much if any greater than what arises where the property is retained, from liability to decay or to destruction by fire or flood. Admiralty courts everywhere favor the practice, and the same is sanctioned to a very large extent by the acts of Congress. 9 Stat. 81; Rev. Stat., sect. 941.

Many of the preceding observations made to prove that the first ground of claim set up by the complainants cannot be sustained are equally applicable to the second, for the same purpose; but there is another answer to the second, which is even more conclusive than any thing before remarked to show that the decree of the Circuit Court is correct.

Although the claimant is the sole principal in the bond, yet the allegations in the bill of complaint are that the other two partners were equally interested in the property, and that the claimant procured the release of the property, for the benefit of the copartnership; and the complainants allege that the transaction should be viewed in all respects as if all the members of the firm had been principals in the bond, inasmuch as the property when released went into the possession of the firm and was sold for the benefit of all the partners. Concede what is not admitted, that evidence to prove that theory may be admissible, it is nevertheless true that the theory must be examined in view of the established fact that the Circuit Court entered a final decree on the bond against the principal and sureties for the whole value of the cargo which was seized and condemned, and the bill of complaint alleges that the decree of the Circuit Court is in full force and unreversed.

None of the authorities afford any countenance whatever to the theory that the property released can be recalled for any purpose after the property has been condemned and the libellants have proceeded to final judgment against the principal and sureties in the bond or stipulation for the release of the property seized. Difficulties of the kind, it would seem, must be insuperable; but if they could be overcome, there is still another, which of itself is entirely sufficient to show that the second ground of claim is no better than the first.

Judgment has already been rendered against the claimant; and even admitting that the other two partners may be treated as if they were joint principals in the bond given for the value of the property released, it is quite clear that the judgment against the claimant would be a bar to an action against the other partners upon the bond. Even without satisfaction, a judgment against one of two or more joint contractors is a bar to an action against the others, within the principle of the maxim transit in rem judicatam, the cause of action being changed into matter of record. King v. Hoare, 13 Mee. & W. 494.

Judgment in such a case is a bar to a subsequent action against the other joint contractors, because the contract being joint and not several, there can be but one recovery. Consequently the plaintiff, if he proceeds against one only of the joint contractors, loses his security against the others, the rule being that by the recovery of the judgment, though against one only, the contract is merged and a higher security substituted for the debt. Sessions v. Johnson, 95 U.S. 347; Mason v. Elared, 6 Wall. 231. From which it follows, if the theory of the complainants is correct that the bond is to be regarded as the joint bond of the three partners, that they are without remedy against the other two, as they have proceeded to final judgment against the claimant.

Neither of the other partners signed the bond but the complainants allege that the firm directed the claimant to give the bond for and in the name and style of their said partnership as obligors; to which it may be answered that if the firm gave such directions the claimant did not follow them, as the bond set forth in the record as an exhibit to the bill of complaint shows that it is the individual bond of the alleged senior partner. Nor do the complainants pretend that the other partners ever signed the instrument, but they contend that the demurrer admits every thing which they have alleged.

Matters of fact well pleaded are admitted by a demurrer, but it is equally well settled that mere conclusions of law are not admitted by such a proceeding. Dillon v. Barnard, 21 Wall. 430; Ford v. Peering, 1 Ves. Ch. 71; Lea v. Robeson, 12 Gray (Mass.), 280; Redmond v. Dickerson, 1 Stockt. (N. J.) 507; Murray v. Clarendon, Law, Rep. 9 Eq. 17; Nesbitt v. Berridge, 8 Law Times, N. S. 76; Story, Eq. Plead. (7th ed.), sect. 452.

Facts well pleaded are admitted by a demurrer; but it does not admit matters of inference or argument, nor does it admit the alleged construction of an instrument when the instrument itself is set forth in the record, in cases where the construction assumed is repugnant to its language. Authorities to that effect are numerous and decisive; nor can it be admitted that a demurrer can be held to work an admission that parol evidence is admissible to enlarge or contradict a sealed instrument which has become a matter of record in a judicial proceeding. Beckham v. Drake, 9 Mee. & W. 78; Humble v. Hunter, 12 Law Rep. Q. B. 315; McArdle v. The Irish Iodine Company, 15 Irish C. L. 146; Sprigg v. Bank of Mount Pleasant, 14 Pet. 201.

Mere legal conclusions are never admitted by a demurrer; nor would it benefit the complainants even if it could be held otherwise, as it must be conceded that the theory of the bill of complaint is that the liability of the three partners is a joint liability, and it is equally well settled that a judgment against one in such a case is a bar to subsequent action against either of the others, as appears from the authorities already cited, to which many more may be added. Robertson v. Smith, 18 Johns. (N. Y.) 459; Ward v. Johnson, 13 Mass. 148; Cowley v. Patch, 120 id. 137; Smith v. Black, 9 Serg. & R. (Pa.) 142; Beltzhoover v. The Commonwealth, 1 Watts (pa.), 126.

Where the contract is joint and several the rule is different, to the extent that the promisee or obligee may elect to sue the promisors or obligors jointly or severally; but even in that case the rule is subject to the limitation that if the plaintiff obtains a joint judgment he cannot afterwards sue the parties separately, for the reason that the contract or bond is merged in the judgment, nor can be maintain a joint action after he has recovered judgment against one of the parties, as the prior judgment is a waiver of his right to pursue a joint remedy. Sessions v. Johnson, supra.

Concede that, and still the complainants aver that they did not know, when they obtained their decree against the claimant and his sureties, that the property belonged to the partnership, or that the bond for value was in fact given by the claimant pursuant to the direction of the other partners.

Averments in a bill of complaint that the parties to a judicial proceeding understood that the legal effect would be different from what it really is, amounts merely to an averment of a mistake of law against which there can be no relief in a court of equity. Hunt v. Rousmaniere's Administrators, 1 Pet. 1.

Courts of equity may compel parties to execute their agreements, but they have no power to make agreements or to alter those which have been understandingly made; and the same rule applies to judgments duly and regularly rendered and in full force. 1 Story, Eq. (9th ed.), sect. 121; Bilbie v. Lumley, 2 East, 183.

Fraud is not imputed, nor is it charged that there was any mistake or misrepresentation. Where there is neither accident nor mistake, misrepresentation nor fraud, there is no jurisdiction in equity to afford relief to a party who has lost his remedy at law through mere ignorance of a fact, the knowledge of which might have been obtained by due diligence and inquiry, or by a bill of discovery. Penny v. Martin, 4 Johns. (N. Y.) Ch. 566; Anderson v. Levan, 1 Watts & S. (Pa.) 334.

Courts of equity will not grant relief merely upon the ground of accident where the accident has arisen without fault of the other party, if it appears that it might have been avoided by inquiry or due diligence. 1 Story, Eq. (9th ed.), sect. 105.

Ignorance of the facts is often a material allegation, but it is never sufficient to constitute a ground of relief, if it appears that the requisite knowledge might have been obtained by reasonable diligence. Id., sect. 146.

Relief in equity will not be granted merely because a security in an admiralty suit becomes ineffectual, if it appears that it became so without fraud, misrepresentation, or accident, which might have been prevented by due diligence. Hunt v. Rousmanier's Administrators, 2 Mas. 366; Sedam v. Williams, 4 McLean, 51.

Having come to the conclusion that the alleged claim of the United States is not well founded, the question of priority becomes wholly immaterial.

Decree affirmed.

MR. JUSTICE BRADLEY dissented.


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Platt v. Union Pacific Railroad Company

APPEAL from the Circuit Court of the United States for the District of Nebraska.

This was a bill in equity filed Sept. 28, 1878, by William H. Platt, to enjoin the Union Pacific Railroad Company from prosecuting an action of ejectment which it brought against him the twenty-third day of that month, for the recovery of a certain quarter-section of land situate in the county of Hall and State of Nebraska, whereof he was in possession, claiming the equitable title thereto. The company answered. The case was heard upon the pleadings, and the bill dismissed. Platt appealed here.

Platt entered upon the land in the year 1874, and thereafter remained in possession. He made improvements thereon, and performed all the conditions which entitled him, as a qualified pre-emptor, to a preference right of purchase, if the land were subject to pre-emption. He duly filed, Sept. 21, 1878, his declaratory statement, made the requisite proofs before the proper officers, paid the receiver of the local land-office $200, being at the rate of $1.25 per acre, and took a receipt therefor.

The land is part of an odd-numbered section, situate within ten miles of the road of the company, and is included in the grant made by the act to aid in the construction of a railroad and telegraph line from the Missouri River to the Pacific Ocean, &c., approved July 1, 1862 (12 Stat. 489), and the amendatory act of July 2, 1864 (13 Stat. 356). The company accepted the grant, located the route of its road and filed a map thereof within the requisite time, and, in order to raise the means necessary to continue and complete the work on its road which was then constructing, issued, April 16, 1867, its coupon bonds to the amount of $10,400,000, payable twenty days after the date thereof, with semi-annual interest. To secure the payment of them it executed and duly acknowledged a certain indenture of that same date, covering the granted lands, which it caused to be recorded in said Hall County before July 1, 1872. The United States issued a patent, bearing date March 26, 1875, to the company for the granted lands not theretofore conveyed to it.

The company refused to accept the money so paid by Platt to the receiver of the land-office.

The bill and answer set up different dates when the road was completed; the first alleging it to be before July, 1869, and the latter Nov. 14, 1874, when it was finally accepted by the government.

The act of 1862 provides as follows:--

'SECT. 3. And be it further enacted, that there be and is hereby granted to the said company, for the purpose of aiding in the construction of said railroad and telegraph line, and to secure the safe and speedy transportation of the mails, troops, munitions of war, and public stores thereon, every alternate section of public land, designated by odd numbers, to the amount of five alternate sections per mile on each side of said railroad, on the line thereof, and within the limits of ten miles on each side of said road, not sold, reserved, or otherwise disposed of by the United States, and to which a pre-emption or homestead claim may not have attached, at the time the line of said road is definitely fixed: Provided, that all mineral lands shall be excepted from the operation of this act; but where the same shall contain timber, the timber thereon is hereby granted to said company. And all such lands so granted by this section which shall not be sold or disposed of by said company within three years after the entire road shall have been completed, shall be subject to settlement and pre-emption like other lands, at a price not exceeding $1.25 per acre to be paid to said company.

'SECT. 4. And be it further enacted, that whenever said company shall have completed forty consecutive miles of any portion of said railroad and telegraph line ready for the service contemplated by this act, and supplied with all necessary drains, culverts, viaducts, crossings, sidings, bridges, turnouts, watering-places, depots, equipments, furniture, and all other appurtenances of a first-class railroad,-the rails and all the other iron used in the construction and equipment of said road to be American manufacture of the best quality,-the President of the United States shall appoint three commissioners to examine the same and report to him in relation thereto; and if it shall appear to him that forty consecutive miles of said railroad and telegraph line have been completed and equipped in all respects as required by this act, then, upon certificate of said commissioners to that effect, patents shall issue conveying the right and title to said lands to said company, on each side of the road, as far as the same is completed, to the amount aforesaid; and patents shall in like manner issue as each forty miles of said railroad and telegraph line are completed upon certificate of said commissioners.'. ..

The amendatory act changes the number of sections per mile granted by the third section of the original act from 'five' to 'ten,' and the limits of the grant from 'ten' to 'twenty,' miles on each side of the road; and declares the company to be entitled to patents, upon the construction and acceptance of each 'twenty' consecutive miles of road.

The act of 1862 provides that upon the completion of forty consecutive miles (changed to twenty by the act of 1864) of said road, bonds of the United States of $1,000 each, bearing six per cent semi-annual interest, due due at thirty years from date, shall be issued by the Secretary of the Treasury to the company, to the amount of sixteen bonds per mile (a larger amount per mile being allowed between certain designated points); and that 'to secure the repayment to the United States, as hereinafter provided, of the amount of the said bonds so issued and delivered to said company, together with all interest thereon which shall have been paid by the United States, the issue of said bonds and delivery to the company shall ipso facto constitute a first mortgage on the whole line of the railroad and telegraph, together with the rolling-stock, fixtures, and property of every kind and description, and in consideration of which said bonds may be issued; and on the refusal or failure of said company to redeem said bonds or any part of them when required so to do by the Secretary of the Treasury, in accordance with the provisions of this act, the said road, with all the rights, functions, immunities, and appurtenances thereunto belonging, and also all lands granted to the said company by the United States which at the time of said default shall remain in the ownership of the said company, may be taken possession of by the Secretary of the Treasury for the use and benefit of the United States: Provided, this section shall not apply to that part of any road now constructed.'

The tenth section of the act of 1864 provides that sect. 5 of the act of 1862 'be so modified and amended that the Union Pacific Railroad Company, the Central Pacific Railroad Company, and any other company authorized to participate in the construction of said road, may, on the completion of each section of said road, as provided in this act and the act to which this act is an amendment, issue their first-mortgage bonds on their respective railroad and telegraph lines to an amount not exceeding the amount of the bonds of the United States, and of even tenor and date, time of maturity, rate and character of interest, with the bonds authorized to be issued to said railroad companies respectively. And the lien of the United States bonds shall be subordinate to that of the bonds of any or either of said companies hereby authorized to be issued on their respective roads, property, and equipments, except as to the provisions of the sixth section of the act to which this act is an amendment, relating to the transmission of despatches and the transportation of mails, troops, munitions of war, supplies, and public stores for the government of the United States. And said section is further amended by striking out the word 'forty' and inserting in lieu thereof the words 'on each and every section of not less than twenty."

The indenture executed by the company to secure its bonds conveys in fee to trustees, upon certain trusts, terms, and conditions, the lands granted to it by the acts of Congress. One condition is, 'that if the said party of the first part shall well and truly pay, or cause to be paid, to the holders of the said bonds, and every of them, the principal sums of money therein mentioned, according to the tenor thereof, with the interest thereon, at the times and in the manner hereinbefore provided, according to the true intent and meaning of these presents, then and from thenceforth this indenture and the estate hereby granted shall cease and determine, and all the right, title, and interest in any and all property hereby conveyed to the parties of the second part, not then disposed of under the powers hereby conferred, shall revert to and vest in the said party of the first part.'

It further provides that the lands shall be under the management and control of the company, to be by it sold or contracted to be sold for such prices and on such terms of payment as shall be mutually agreed upon by the company and the trustees; that the trustees shall, upon payment of the purchase-money of the several tracts which may be sold, receive and apply the same, and the proceeds of all sales made by them of lands so conveyed to them, to the sole and exclusive purpose of the payment of the said coupon bonds, until the same and the whole thereof shall be fully paid and satisfied, and thereafter to reconvey to the company the residue of said lands remaining unsold; that in default of the payment of either the interest or principal of the said coupon bonds, according to the tenor and effect thereof, for the period of six months after demand at the place of payment, the trustees are authorized to enter into and take possession of the lands and foreclose the indenture; that in case of such default for the period of one year, then the principal sum of said bonds is to become due and payable, and the said trustees are authorized to take possession of the lands, foreclose said indenture by selling, at public auction in the city of Omaha or New York, the lands, or so much thereof as may be necessary to pay and discharge said coupon bonds, or so many thereof as are then outstanding and unpaid; and that in case of any sale upon any such foreclosure, or at any public auction, the trustees are empowered to make, execute, and deliver a conveyance of the lands so sold, which shall convey to the purchaser all the rights and privileges of the company in and to the property so sold, to the same extent as the company shall have previously enjoyed and held the same.

The indenture further declares 'that all the provisions of said acts of Congress, so far as they are applicable, are hereby made, and shall be deemed and taken to be, a part of this instrument, and the said provisions in all that concerns the sale and disposal of the said lands hereby conveyed to the parties of the second part are to be observed and strictly and faithfully carried out and fulfilled.'

The company has made no sale or disposition of the land in controversy otherwise than by said indenture, and bonds to the amount of $7,000,000 are still outstanding.

Mr. James Lowndes for the appellant.

The Attorney-General for the United States.

The controlling question is, Had the United States the right to sell, in accordance with the provisions of the pre-emption laws and at the minimum price, the tract of land involved in this controversy? In disposing of it, it is not important to determine at which of the dates alleged by the respective parties the road was completed, as, at the time of the appellant's entry, more than three years had elapsed from the date claimed by the company as that when the road was accepted.

No sale or disposition of the land within the meaning of the act has been made by the company. It may be that 'dispose of' has not such an exact and universally accepted technical meaning as 'sell,' 'exchange,' 'mortgage.' It popularly signifies 'to sell.' Webster's definition is, 'to exercise finally one's power of control over; to pass over into the control of some one else; to alienate; to bestow; to part with; to get rid of.' Worcester's is, 'put out of possession of.'

Every one of these definitions points to a transfer of title and ownership as the essential signification of the word. Its usual technical meaning is 'to sell.' A general devise with power to dispose of carries the fee. 2 Redf. Wills, 334, note. A devise with power of disposition gives power to convey the fee. Lyon v. Marsh, 116 Mass. 232; Ellston v. Schilling, 42 N. Y. 79.

It was not the effect nor the intent of the indenture to transfer the title or the ownership of the lands. Its effect must be determined by the law of the State where the lands are situated (United States v. Crosby, 7 Cranch, 115; Clark v. Graham, 6 Wheat. 577; McGoon v. Scales, 9 Wall. 23); and in deciding upon it this court conforms to the decisions of the State court. Hinde v. Vattier, 5 Pet. 398.

The statutes of Nebraska enact that 'in the absence of stipulations to the contrary the mortgagor of real estate retains the legal title and right of possession thereof' (Gen. Stat. 1873, sect. 55, p. 881); and not only her courts, but those of the respective States where the granted lands lie, hold that a mortgage conveys no title or right of possession. It merely creates a lien to be enforced by action. Kyger v. Ryley, 2 Neb. 20; Chick v. Willetts, 2 Kan. 384; Waterson v. Devoe, 18 id. 223; Drake v. Root, 2 Col. 685; Hyman v. Kelly, 1 Nev. 179; Johnson v. Sherman, 15 Cal. 287; Goodnow v. Ewer, 16 id. 461; Dutton v. Warschauer, 21 id. 609.

The indenture, so far from stipulating that the legal title and right of possession shall not remain in the company, provides that the latter shall have the exclusive control of the lands, and full power and authority to make contracts for the sale of them at such prices as it and the trustees may agree upon. It thus appears that nothing but a lien on the lands was created, which is not a jus ad rem, but simply a charge upon them, binding them with no greater force and effect than an ordinary judgment, or an assessment against them for taxes. The company concedes the non-transfer of them. It alleges, in the action of ejectment, that it is the owner, seised in fee of the tract in question and entitled to the possession thereof.

In ascertaining the meaning of the act subjecting the lands to pre-emption, on the failure of the company to sell or dispose of them within a specific period, we may recur to the history of the times, to the surrounding circumstances, the preceding legislation touching the public domain, and to the apprehended mischief which Congress sought to avert. Rhode Island v. Massachusetts, 12 Pet. 657, 723; Maryland v. Railroad Company, 22 Wall. 105; United States v. Union Pacific Railroad Co., 91 U.S. 72.

These have been considered by this court in Railway Company v. Prescott, 16 Wall. 609, and the case shows that the construction for which the company now contends would, if practically carried out, defeat the settled policy of the government, and exclude from pre-emption an immense body of lands, the settlement of which Congress designed to facilitate and expedite.

If creating the lien on the lands is disposing of them, then the company has complied with the requirement of Congress. The extinguishment of the lien by the payment of the debt would not render them subject to settlement under the pre-emption laws.

Counsel may insist that our construction does not give effect to 'or.' The word does not necessarily imply that the terms between which it is found are alternatives. Worcester remarks that there is no word in the language of more equivocal import. It is often used to connect equivalent expressions. Such is the case here.

The indenture, by providing that the provisions of the act in all that concerns the sale and disposal of the land shall be deemed and taken as a part of the instrument, stipulates, if our construction be correct, that the lands shall, at a given time, be subject to pre-emption at $1.25 per acre. This can work no hardship as the avails of the sales would be paid to the company, and the holders of the bonds purchased them with knowledge of the conditions of the grant.

Platt has met the requirements of the pre-emption laws, and has a complete equitable right to the land. Frisbie v. Whitney, 9 Wall. 187; Hutchings v. Low, 15 id. 77; Shepley et al. v. Cowan et al., 91 U.S. 330; Moore v. Robbins, 96 id. 530. He is, therefore, entitled to relief. The failure of the company to sell within the appointed time vested the legal title to the lands in the United States, or if this court holds that such title still abides in the company, then the latter holds it as the trustee of parties entitled to pre-emption under the acts of Congress, and those acts can be executed only by the officers of the government.

Mr. Sidney Bartlett and Mr. Samuel Shellabarger, contra.

MR. JUSTICE STRONG delivered the opinion of the court.

title: Platt v. Union Pacific Railroad Company


text: Talk:Platt v. Union Pacific Railroad Company


text:
Platt v. Union Pacific Railroad Company/Opinion of the Court

If it be conceded that the complainant has complied with all the conditions prescribed by the acts of Congress for the acquisition by a pre-emptioner of an equitable title to a portion of the public lands, the question still remains, whether the land which he claims was open to pre-emption when his settlement was made. It is confessedly a part of the lands which the United States granted to the Union Pacific Railroad Company by the act of July 1, 1862. 12 Stat. 489.

The third section of the act contains words of present grant, but the fourth section enacted that on the completion of each successive forty miles of the railroad and telegraph line, patents should be issued, 'conveying the right and title to said lands to said company, on each side of the road, as far as the same is completed, to the amount aforesaid.' The seventh section required the road and telegraph to be completed before the first day of July, 1874. The amending act of July 2, 1864 (13 Stat. 356), enlarged the grant, but made no change in its terms; and the Secretary of the Interior, as directed by the act, withdrew the lands within fifteen miles of the designated route of the road from pre-emption, private entry, and sale.

Such was the grant. The railroad and telegraph line were entirely completed before July 1, 1874 (if not in 1869), and patents for all the lands granted were directed to be issued to the company in November of that year. By force of the grant, however, and by the definite fixing of the route of the road, and the filing the map thereof in the Interior Department, as required by law, together with the completion of the road westward and beyond the tract claimed by the complainant, the title to that tract had become vested in the company before April 16, 1867. On that day the company, for the purpose of raising money necessary to continue and complete the construction of their road, issued their coupon bonds for the sum in the aggregate of $10,400,000, bearing seven per cent interest, and payable in twenty years from their date. On the same day, for the purpose of securing the payment of the bonds, the company executed a mortgage or deed of trust to trustees of all and several the several sections of land granted to them by the said acts of Congress, including the tract claimed by the complainant. The instrument, we think, though in form a deed of trust, was substantially a mortgage. It was delivered to the trsutees, and duly recorded. The bonds were sold in different markets to bona fide purchasers, and they are now outstanding, about $7,000,000 still remaining unsatisfied. All this was before the entire road was completed, and before the first step was taken by the complainant to obtain his pre-emption right.

In view of these facts, we are to determine whether the mortgage was a disposition of the lands granted to the company within the meaning of the last clause of sect. 2 of the act of 1862. If it was, the tract of land claimed by the complainant was not open to settlement and pre-emption when he entered thereon, nor has it been at any time since. That clause declared that 'all the lands granted by the section, which shall not be sold or disposed of by said company within three years after the entire road shall have been completed, shall be subject to settlement and pre-emption,' &c. Was the mortgage a sale or disposition of the lands as understood by Congress? That the company had power to mortgage the lands admits of no reasonable doubt. It may be conceded that a railroad company has not power either to sell or mortgage its franchise, or perhaps the road which it has been chartered to build, without express legislative authority, and this has in some cases been decided. The reason is that such a sale or mortgage tends to defeat the purposes the legislature had in view in the grant of the charter. The adventurers who obtain the charter and who accept it undertake to construct and maintain the public work. Their undertaking is the consideration of the grant, and without legislative consent they cannot throw off the obligation they have assumed. But the reason is inapplicable to a sale or mortgage of property which is not a part of the road and in no way connected with its use. Parting with such property or incumbering it in no degree interferes with the performance of the duties of the company to the public. Railroad companies are not usually empowered to hold lands other than those needed for roadway and stations, or water privileges. But when they are authorized to acquire and hold lands separate from their roads, the authority must include the ordinary incidents of ownership,-the right to sell or to mortgage. Especially is this so when, as in the present case, the lands have been granted to the company by the legislature that granted the charter, without any restriction of their use.

Assuming, therefore, as we must, and as has been tacitly conceded in the argument, that the company had the power to make the mortgage of 1867, we need not stop to inquire whether it was a sale or a partial sale. In some of the States, as well as in England, a mortgage is practically, as well as in form, a sale. It passes the legal title to the mortgagee. The more general modern doctrine in this country is, we admit, that it creates merely a lien, without any transmission of title. But if not a sale, was the mortgage made by the company defendant in this case not a disposition of the lands granted to it by Congress? This question is not to be answered by reference to definitions given in the dictionaries. What did Congress mean in the act of 1862? That something else than sale, either total or partial, was intended we are required by all the rules of construction to conclude. Congress is not to be presumed to have used words for no purpose. If it was intended that only lands which had been sold before three years had expired after the entire completion of the railroad should be exempted from pre-emption, the words 'or disposed of' were entirely superfluous. But the admitted rules of statutory construction declare that a legislature is presumed to have used no superfluous words. Courts are to accord a meaning, if possible, to every world in a statute. In Commonwealth v. Alger (7 Cush. (Mass.) 53-89), it was said that in putting a construction upon any statute every part must be regarded, and it must be so expounded, if practicable, as to give some effect to every part of it. So, in People v. Burns (5 Mich. 114), it was held that some meaning, if possible, must be given to every word in a statute, and that where a given construction would make a word redundant, it was reason for rejecting it. To the same effect is Dearborn and Others v. Inhabitants of Brookline (97 Mass. 466); and in Gates v. Salmon (35 Cal. 576) it was ruled that no words are to be treated as surplusage or as repetition. The phrase 'or disposed of' must, therefore, have some distinctive meaning, some meaning beyond the word 'sold.' What that is may be seen very plainly when the whole act of 1862 is examined. We are seeking for the intention of Congress, and to discover that we may look at the paramount object which Congress had in view, as well as the means by which it proposed to accomplish that object. Congress addressed itself to the work of securing a railroad from the Missouri River to the western boundary of the Territory of Nevada, and thence to the Pacific Ocean. The work was vast, beyond the reach of private capital or enterprise. It could be accomplished only by the bestowal upon a corporation of very large governmental aid. The proposed road ran over mountains and through what was known to be an uninhabited desert, for more than a thousand miles. The lands through which it must pass were supposed to be almost worthless, and quite unsalable, until they should be made, by the construction of a railroad, accessible to settlers and to Eastern markets. The construction of a railroad through such a region was most uninviting to private capitalists. To induce them to embark in the enterprise was the overshadowing motive that dictated the act of 1862. This is apparent in almost every line of the act. For this reason the grants of land were made, the rights of way and of taking materials were given, and the subsidy bonds were loaned, to be repaid only at the expiration of thirty years, with interest payable only at the expiration of that period. Even this was not enough. No association and no persons were found willing, with all this proffered assistance, to undertake the construction of the road. But so earnest was Congress to induce the corporators to attempt the work, that in 1864 additional aid was proffered, the grant of lands was doubled, and new privileges were conferred. We do not now attempt to portray the earnestness-the all-absorbing earnestness with which Congress sought to secure the construction of the road by private enterprise. It was well exhibited in United States v. Union Pacific Railroad Co. (91 U.S. 72), to which we refer. Suffice it to say, the purpose of Congress, above all others, was to obtain the construction of the railroad by the corporation it created to undertake the work. For that alone the subsidy bonds were given. Only for that the grants of land were made. All was intended to give the utmost possible assistance to the stupendous and unparalleled enterprise. We do not say that other incidental considerations were not kept in mind, but what we do assert as plainly manifest in the legislation is, that the paramount intention of Congress was to give such assistance to the company as to induce them to build the road. Every other consideration was subordinate to that.

All will concede that in construing the act of 1862 we are to look at the state of things then existing, and in the light then appearing seek for the purposes and objects of Congress in using the language it did. And we are to give such construction to that language, if possible, as will carry out the congressional intentions. For what particular purpose, then, was the grant of lands made? The statute itself answers, 'for the purpose of aiding in the construction of the railroad and telegraph line,' and securing governmental transportation, &c. The lands were granted to be used in furtherance of such construction. But Congress and the grantees must have known that, when granted, the lands were of little worth. They were then unsalable at any price. Their value was wholly prospective, dependent upon the construction of the road. Purchasers could not have been reasonably expected, certainly few, for immediate settlement. The obvious mode, therefore, of using the lands for the construction of the road (not for paying debts incurred in the construction, but for immediate need as the construction was progressing) was to hypothecate them as security for a loan. Many persons might be willing to advance money on the faith of the prospective value of the lands, if the railroad was built, who would not be willing to buy when it was doubtful whether the company would ever be able to raise the money necessary to build the road and thus render the lands salable. Congress must have been blind, indeed, if it did not foresee this, and intend to authorize the use of the lands to raise money by mortgage for the object it had so much at heart. This we think, was what was intended by the phrase 'or disposed of,' as distinguished from 'sold.' Some of the lands might be sold as the work was progressing, and others could be used in aid of the construction only by pleading them to persons who might be willing to advance money on the faith of their prospective value. But whether sold or used as a security for money loaned to advance the construction of the road, they were equally employed for the purpose for which they were granted. The words 'disposed of' are undeniably apt words to indicate a transfer by mortgage. If land be conveyed to A. to enable him to raise money for a particular purpose, nobody would doubt that a mortgage would be a disposition of the land for that purpose; and the grant made by the third section of the act of 1862 was obviously made, as we have suggested, with the intent of giving present assistance to the company in the construction of the road. It was not intended to be available only after the company had raised all the money necessary for the work. Then the time of need for the purpose mentioned would have gone by. The act declares it to have been 'to aid in the construction of the road,' not to reimburse expenditures made in the construction. Hence it must have been intended that the company might use or dispose of the land in some other way tnan by a sale. But in what other way? Not by gift; for that would not have been in aid of the construction, and the grant was intended for that. Nor by leases. They could have brought little money. And no other mode of disposition except by mortgage has been suggested which could furnish the requisite aid for building the road. No other is conceivable. The conclusion would seem, therefore, to be almost inevitable, that Congress, when speaking of a disposition of the lands other than a sale, contemplated making them available for the purposes of the grant by mortgage.

And if so, it is hard to believe that only a limited interest in the lands was allowed to be hypothecated. Twelve years were designated as the period within which the road was required to be completed, and lands not sold or disposed of within three years thereafter were to be open to pre-emption. Moreover, under the provisions of the act, the title to the lands could be perfected in the company only as the work of construction advanced; that is, as each section of forty miles was completed. The company might not become entitled to some until July 1, 1874. If, therefore, a mortgage could only bind the lands unsold until the expiration of three years after that date, it would have been an hypothecation for a term of years, and as to some of the lands, for a term of only three years. Was that the aid proffered by Congress to stimulate and render possible the completion of an enterprise in which it felt so deep an interest? If so, it was a barren gift. Looking at the character of the lands and their remoteness from settlements, it must have been evident enough that money could not have been raised on the credit of such a mortgage. The power of disposition given for the express purpose of enabling the company to raise money for the construction of the road, by such an interpretation of the act is made of no value. The interpretation, therefore, defeats the manifest intention of Congress, and for that reason it cannot be accepted.

If it be suggested, as it has been on behalf of the complainant, that the mortgage contains a provision that has some bearing upon the extent of its lien, it may be well here to notice that provision. The instrument purports to convey to the trustees a fee, and not a limited estate, and it requires in all sales that may be made under it the conveyance of a fee. It contains, however, the following clause: 'It is hereby declared by the parties to this indenture that all the provisions of the said acts of Congress [referring to the acts of 1862 and 1864], so far as they are applicable, are hereby made and shall be deemed and taken to be a part of this instrument, and the said provisions in all that concerns the sale and disposal of the said lands hereby conveyed to the parties of the second part are to be observed and strictly and faithfully carried out and fulfilled.'

What are thus stipulated to be observed and strictly and faithfully to be carried out and fulfilled are the provisions of the acts in all that concerns the sale and disposal of the lands. They are matters to be carried out and strictly fulfilled,-duties to be performed by the company, and duties which concern the sale or disposal of the lands. Carrying out and performing a provision implies action, and the provision must, therefore, be one relating to action. But the acts of Congress contain no provision respecting the sale or disposal of the lands that requires action, that is, something to be carried out and fulfilled, except the implied duty of devoting the proceeds of sales or dispositions strictly and faithfully to aid in the construction of the road.

The provision that at the expiration of three years from the completion of the road the unsold or undisposed-of lands should be open to pre-emption, was in its nature not one to be 'strictly and faithfully carried out and fulfilled' by the company. The right to pre-emption of whatever might be left for pre-emption was a matter with which the company had nothing to do,-in relation to which they had no duties to perform, and only a right to the price paid by the pre-emptor. The clause of the mortgage referred to seems, therefore, to have been intended only as a stipulation on the part of the company that whatever money was raised on the mortgage should be strictly and faithfully applied in furtherance of the purpose for which the grant of the lands was made; namely, to aid in the construction of the railroad. Thus understod, it was a valuable stipulation for the mortgagees. It added to their security; for the value of the lands depended principally upon the application by the company of all its means to the completion of the work.

On the other hand, if an hypothecation of the lands in fee was within the power to 'dispose of' them, as we have endeavored to show, and if the granting part of the mortgage made, standing by itself, did hypothecate a fee, it is hard to believe the parties intended by the stipulations referred to to restrict the exercise of the power to the grant of an estate for years, a limitation alike injurious to the mortgagors and the mortgagees. We think, therefore, nothing in the stipulation is repugnant to the granting part of the mortgage which purported an hypothecation of the entire fee.

There is always a tendency to construe statutes in the light in which they appear when the construction is given. It is easy to be wise after we see the results of experience. We may now think it quite possible the lands could all have been sold before July 1, 1877. The unforeseen success of the enterprise and the unprecedented rush of emigration along the line of the railroad have shed new light upon the value of the grants made to the company. But in endeavoring to ascertain what the Congress of 1862 intended, we must, as far as possible, place ourselves in the light that Congress enjoyed, look at things as they appeared to it, and discover its purpose from the language used in connection with the attending circumstances. Guided by this rule of construction, as well as by others universally recognized, we have been led unhesitatingly to the conclusion that the deed of trust or mortgage executed by this company in 1867 was a disposition of the lands granted by the third section of the act of 1862, within the meaning of that act.

We do not say that any mortgage, however small, or manifestly made to evade a bona fide execution of the purposes for which the grants were made, or made to defeat the policy of the government which encourages the sale of public lands to private settlers, and guards against the accumulation of large bodies in single hands, would be a disposal as understood by Congress. It may be conceded it would not be, for it would be in conflict with the avowed object of the grant. The present is no such case. By the pleadings it appears that the mortgage of 1867 was made 'for the purpose of raising money necessary to continue and complete the construction of the railroad, in accordance with the act of Congress.' Nor are we now called upon to decide whether the lands covered by the mortgage will not be open for pre-emption, if they shall remain unsold after the mortgage shall be extinguished. That question is not now before us.

The principal objection urged against the interpretation we have given to the words 'sold or disposed of' is, that it is repugnant to the governmental policy of guarding against monopolies of public lands by large corporations or single individuals. It must be admitted that Congress had that policy in view when it declared that the lands not sold or disposed of within three years after the entire road should be completed should be subject to settlement and pre-emption, at a price not exceeding $1.25 per acre. But this policy was manifestly subordinated to the higher object of having the road constructed, and constructed with the aid of the land grant. No limitation was set to the quantity of land which the company might sell to single associations, or single persons. It was left at liberty to sell, if it could, to any land association or private purchaser, the entire body of the lands or any lesser quantity, regardless of the general legislative policy. It was allowed to sell or dispose of the grant at its pleasure, for the purpose of raising money to aid in the road construction, provided thus raising the money was done within the limited period. With that power no pre-emptor was authorized to interfere. Whatever contingent rights he had were postponed and subordinated to it. If, as we think it manifest, the leading primary policy of the act was to place the lands in the hands of the company, to be used for the completion of the road, as this work progressed, any secondary policy the government may also have had in view ought not to be allowed to embarrass or defeat that which was primary. It is evident Congress thought there might be remnants of the grant, not used in aid of the construction of the road, either because other resources of the company might prove sufficient, or because it might be found impossible to dispose of them in time to furnish such aid, and those remnants it undertook to open to settlement and pre-emption. This appears to us to have been what was intended, and all that was intended. The construction gives full effect alike to the paramount and the subordinate purposes of the act. Each has its own field of operation. The construction contended for by the appellant restricts the power of disposition, denies the authority of the company to utilize, except partially, for the purposes of the grant, the land granted, and might have impaired and possibly defeated the leading purpose of the grant. It subjects the paramount to the subordinate, and postpones the primary object to the secondary. On the other hand, utilizing the lands, by raising money upon them through a mortgage, or, in other words, disposing of them by mortgage, did not defeat the policy of opening the remnants not used to pre-emption.

Thus construing the last clause of the third section of the act, in connection with all the other provisions made by Congress, endeavoring to give effect to every part, and regarding the spirit as well as the letter, we are constrained to hold that the mortgage of 1867 was a disposition of the lands mortgaged within the meaning of the statute, and, consequently, that the tract of land claimed by the complainant was not open to preemption when he undertook to pre-empt it. He has, therefore, no equitable title to it.

Decree affirmed.

MR. JUSTICE BRADLEY, with whom concurred MR. JUSTICE CLIFFORD and MR. JUSTICE MILLER, dissenting.


text: Talk:Platt v. Union Pacific Railroad Company/Opinion of the Court


text:
Platt v. Union Pacific Railroad Company/Dissent Bradley

MR. JUSTICE BRADLEY, with whom concurred MR. JUSTICE CLIFFORD and MR. JUSTICE MILLER, dissenting.

I dissent from the judgment of the court in this case. In the third section of the original charter, after granting to the company five alternate sections of public land on each side of its line of railroad, to aid in the construction thereof, it was provided that all lands so granted, which should not be sold or disposed of by the company within three years after the entire road should have been completed, should be subject to settlement and pre-emption, like other lands, at a price not exceeding $1.25 per acre, to be paid to the company. The appellant, after the three years had expired, settled upon the land in question and claimed pre-emption of the same; and offered to the company the price specified in the statute. The latter refused to receive the money or to recognize his right, alleging that it had disposed of the lands in 1867 by executing a mortgage for its entire land grant to secure a loan of $7,000,000. The question is, whether such mortgage is a sale or disposition of the lands within the meaning of the proviso of the third section. I think it is not. In my judgment, Congress had in view such a sale and disposition of the lands as would secure a settlement thereof. The object was to encourage a speedy settlement of the country along the line of the road; and hence it was provided, if the company did not so dispose of them, they should be open to settlers, at the usual prices, reserving to the company, however, the right to receive the purchase-money for the same. If the company, by one sweeping deed of trust, or mortgage, could cover the whole domain as with a blanket, and thus prevent a settlement thereon until the lands, by advance of prices, would be out of the reach of actual settlers desirous of occupying and improving them, it seems to me it would entirely defeat the objects of the act.

It is said, however, that if the company could not mortgage the lands they could not make use of them in aid of the construction of the road, the purpose for which they were expressly granted. I do not think this result would by any means follow. The fourth section provides for granting to the company patents for a proportionate part of the lands, for every forty miles of railroad which should be completed. As fast, therefore, as the successive forty-mile sections should be completed, it was contemplated by the act that the company should have control of the lands to that extent. This would constantly subject to their use large tracts, which, if disposed of, according to the intent of Congress, would have effected a rapid settlement of the adjacent country in all portions of the route which were adapted to cultivation.

The criticism that the words 'sold or disposed of' mean something more than 'sold,' and can only mean a mortgage of the lands, I do not conceive to be just, but rather as sticking in the bark. Reading the whole act together, I think the only fair construction is that which is above suggested.

The objection that the right of pre-emption contended for would have prevented the company from giving a mortgage at all is not tenable. The mortgagees take the mortgage subject to the provisions of the act. It contains a proviso to this express effect. The lands were mortgaged cum onere, and the mortgagees, if so stipulated, would be entitled to the purchase-money receivable from settlers. This view of the subject would effectuate justice between all the parties, preserve the true construction of the act, and carry out the policy of Congress.

In view of these considerations, I think that the decree should be reversed, and that the appellant, the complainant below, should be declared to be equitably entitled to the land in question.


text: Talk:Platt v. Union Pacific Railroad Company/Dissent Bradley


text:
Lange v. Benedict

MOTION to dismiss a writ of error to the Court of Appeals of the State of New York.

This action was brought by Edward Lange in the Supreme Court of the State of New York, to recover damages for his alleged unlawful imprisonment by Charles L. Benedict, District Judge of the United States for the Eastern District of New York, who as such, by virtue of an act of Congress, held the Circuit Court of the United States for the Southern District of New York at the October Term thereof, 1873.

At that term, so held by said Benedict, Lange was tried upon an indictment consisting of twelve counts; some of them charging him with having feloniously stolen certain mail-bags in use by the Post-Office Department; others with having, for lucre and gain, feloniously appropriated certain other such mail-bags; and others with having knowingly and unlawfully, for lucre and gain, conveyed away certain other such mail-bags, to the hindrance and detriment of the public service. The indictment was found under sect. 290 of the act of June 8, 1872 (17 Stat. 320), which provides that the prisoner, on conviction of the offence, if the value of the property be less than $25, shall be imprisoned not more than one year, or be fined not less than ten nor more than $200. The jury found Lange guilty, and the value of the property to be less than $25. The court during the term sentenced him, November 3, to be imprisoned for the term of one year and to pay a fine of $200. On the following day there was paid into the registry of the court $200, in full satisfaction of the fine imposed by the sentence; and on the 7th of that month the clerk of the court deposited it at the office of the Assistant Treasurer in New York City, to the credit of the Treasurer of the United States. On the same day a writ of habeas corpus was granted in favor of Lange, returnable the ensuing day; and during the same term of the court he was produced in obedience to the writ, whereupon, after hearing, the court, on November 8, vacated and set aside the sentence pronounced against him on the third day of that month, and, proceeding to pass judgment anew, resentenced him to be imprisoned for the term of one year.

On the seventeenth day of December, an order for a rule returnable before said Circuit Court, to show cause why a writ of habeas corpus should not issue, was granted by Judge Woodruff. On the 24th of that month the rule was discharged. Thereupon a writ of habeas corpus was issued by Judge Blatchford, returnable December 29 before Judge Benedict. The latter, upon the return-day, ordered that the prisoner be remanded and the writ dismissed.

On the 13th of January, 1874, writs of habeas corpus and certiorari were granted by this court, and it subsequently adjudged that the sentence pronounced on the 8th of November, 1873, under which Lange was then held a prisoner, had been pronounced without authority. It was thereupon ordered and directed that he be discharged.

The imprisonment complained of was that suffered by Lange from the time of the second sentence until his discharge.

To the complaint, which set up the foregoing matters, the defendant demurred, upon the ground that it appeared on its face that: 1. The court had no jurisdiction of the person of the defendant. 2. The court had no jurisdiction of the subject of the action. 3. The complaint did not state facts sufficient to constitute a cause of action.

The demurrer was overruled at the special term of the Supreme Court, but the judgment was reversed at the general term. Lange appealed to the Court of Appeals, where the judgment at the general term was affirmed and the complaint dismissed. He thereupon sued out this writ of error.

Mr. B. F. Tracy for the defendant in error, in support of the motion.

I. It would be a work of supererogation to cite authorities in support of the settled doctrine, that, in order to give this court jurisdiction to re-examine the judgment of a State court, it must appear affirmatively from the record that a Federal question was necessarily involved in the determination of the matter in controversy. a. It is quite manifest that the Court of Appeals may have disposed of the whole case by holding that the act complained of was a judicial act, and, for that reason, entailed no liability upon the judge. b. That the court decided no Federal question is shown by its opinion incorporated in the record. This court, in some instances, looks to the opinion below, for the purpose of ascertaining whether, in point of fact, a Federal question was decided. McManus v. O'Sullivan, 91 U.S. 578. c. The Supreme Court, at general term, decided: 1. That the act complained of was lawful, because authorized by the decision of this court in Basset v. United States, 9 Wall. 38. 2. That, whether lawful or not, it was a judicial act, for which no liability was incurred. The Court of Appeals limited its action to determining the last question upon grounds of public policy and general law, without reference to any principle of Federal jurisprudence.

II. Even if there had been drawn in question the validity of an authority exercised under the United States, or the defendant had claimed an immunity under a commission derived from such authority, the decision, to give this court jurisdiction, must have been against such authority or such immunity. Rev. Stat. 709.

Mr. William H. Arnoux, contra.

I. The judgment of this court in Ex parte Lange (18 Wall. 163) is in rem, and conclusive upon every one to the extent it was made. This action is based upon it precisely as a creditor's bill is based upon a preceding judgment.

If full faith and credit are not given to that judgment, which means that, if whenever it comes in question complete effect is by construction withheld from it,-this court can review, and has jurisdiction.

The imprisonment for which Lange seeks redress was under the second judgment, which this court declared to be void. It was without authority of law, and beyond the scope of the defendant's official power. It was, therefore, a trespass. A subordinate court, by declaring it to be a judicial act, has practically disregarded the decision of this court, and refused to acknowledge its binding effect.

II. Any case that draws in question the power of a United States officer raises a Federal question.

In regard to the jurisdiction of this court, it cannot be material whether the defendant had no judicial power whatever, or none to render the judgment which has been held void. In either case, it raises the question whether, so far as that act is concerned, he was not a judge, but a trespasser.

This is properly a question for determination here, and cannot have a valid ultimate decision from any other tribunal.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Lange v. Benedict


text: Talk:Lange v. Benedict

title: Talk:Lange v. Benedict


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Lange v. Benedict/Opinion of the Court

In Ex parte Lange (18 Wall. 163) we decided that the present plaintiff in error must be discharged from imprisonment, because the sentence under which he was held was not authorized by law. In the present case, the Court of Appeals of New York held that even though such was the law the defendant in error is not liable in damages for the false imprisonment, because in pronouncing the judgment under which the imprisonment was had he acted as a judge, in his judicial capacity, and not so entirely in excess of his jurisdiction as to make it the arbitrary and unlawful act of a private person. This is not a Federal question, and it was the only question decided.

The writ must, therefore, be dismissed for want of jurisdiction; and it is

So ordered.

title: Lange v. Benedict/Opinion of the Court


text: Talk:Lange v. Benedict/Opinion of the Court


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Doggett v. Railroad Company

APPEAL from the Circuit Court of the United States for the Northern District of Florida.

This is a bill in equity filed by Francis Vose, a citizen of New York, William H. Wagner, a citizen of South Carolina, and Aristides Doggett, who was appointed a receiver of the internal improvement fund of Florida by the court below, against the Florida Land Company, to compel the company, in accordance with the provisions of an act of the State of Florida, entitled 'An Act to provide for and encourage a liberal system of internal improvements in this State,' passed Jan. 6, 1855, to pay said Doggett, as such receiver, one-half of one per cent on the entire amount of bonds issued by the company.

Certain lands and the proceeds thereof were set apart by said act, and constituted said fund. It was irrevocably vested in certain State officers and their successors in office, to hold the same in trust for the uses and purposes in said act mentioned, with power to sell and transfer the lands, receive payment therefor, to invest surplus moneys arising therefrom in stocks of the United States or of the several States, or in the internal improvement bonds issued under the provisions of the act, and also to so invest the surplus interest arising from said investments, and to pay out of said fund the interest from time to time as it might become due on the bonds issued by the different railroad companies under the authority of the act, and with further power to receive and demand semi-annually, after each separate line of railroad should be completed, the sum of one-half of one per cent on the entire amount of bonds issued by such company, as a sinking-fund for the payment of said bonds as they should become due.

The Florida Railroad Company was chartered by the legislature of Florida. It accepted the provisions of the act and issued its bonds.

The third section of the act is as follows:--

'SECT. 3. Be it further enacted, that all bonds issued by any railroad company under the provisions of this act shall be recorded in the comptroller's office, and so certified by the comptroller, and shall be countersigned by the State treasurer, and shall contain a certificate on the part of the trustees of the internal improvement fund that said bonds are issued agreeably to the provisions of this act, and that the internal improvement fund, for which they are trustees, is pledged to pay the interest as it may become due on said bonds. All bonds issued by any railroad company under the provisions of this act shall be a first lien or mortgage on the road-bed, iron, equipment, workshops, depots, and franchise; and upon a failure on the part of any railroad company accepting the provisions of this act to provide the interest as herein provided on the bonds issued by said company, and the sum of one per cent per annum as a sinking-fund, as herein provided, it shall be the duty of the trustees, after the expiration of thirty days from said default or refusal, to take possession of said railroad and all its property of every kind, and advertise the same for sale at public auction to the highest bidder either for cash or additional approved security, as they may think most advantageous for the interest of the internal improvement fund and the bondholders. The proceeds arising from such sale shall be applied by said trustees to the purchase and cancelling of the outstanding bonds issued by said defaulting company, or incorporated with the sinking-fund: Provided, that in making such sale it shall be conditioned that the purchasers shall be bound to continue the payment of one-half of one per cent semiannually to the sinking-fund, until all the outstanding bonds are discharged, under the penalty of an annulment of the contract of purchase, and the forfeiture of the purchase-money paid in.'

The remaining sections of the act bearing upon the questions involved are set out in the opinion of the court.

The bill of complaint charges that on Nov. 3, 1870, said Vose filed his bill in that court against Reed and others, trustees of said fund, alleging that he was the owner of first-mortgage bonds of the company issued under the provisions of said act; that the company having failed to provide the interest and the sum of one-half of one per cent per annum on the entire amount of its bonds, and been so in default for about three years, the trustees took the road into their possession, and sold it for $323,400 to one Dickerson and his associates, subject to all the provisions of the act, and, among others, to those of its second and third sections; that the trustees, in accordance with sect. 3, determined to apply the amount received from the sale to the purchase and cancellation of outstanding bonds of the company, and not to incorporate the same with the sinking-fund provided by the act for the full discharge of the bonds and interest, and by said application all of the outstanding bonds of the company were purchased and cancelled, except two hundred and twenty-eight, of which said Vose owned one hundred and ninety-five, and said Wagner twelve.

It then states that said bill of complaint filed by said Vose charges the trustees with acts of nonfeasance and malfeasance, among others, in failing to demand from the present owners of the railroad the sum of one-half of one per cent on the entire amount of bonds issued by said railroad company; that the change in the corporate name of the company in no wise affected its title or removed its liabilities; and that the property is held subject to the conditions and terms of sale, and to the payment of said sum of one-half of one per cent.

The bill then sets up the decree appointing said Doggett receiver of all the moneys and securities belonging to said trust fund, in the hands of the trustees, and giving him power to sue for and collect the same; and alleges that at a final hearing a decree was rendered directing that he be continued as receiver, and conferring power upon him to sue for and receive all moneys now due or which might thereafter become due to said internal improvement fund; that he has demanded from the trustees all the money due to said fund from the purchasers of said road; that the trustees have wholly failed to pay it, at times claiming that the purchasers have paid all that can be justly claimed of them under the sale, and at other times that the purchasers should only be called upon to pay one-half of one per cent semi-annually on the two hundred and twenty-eight bonds actually outstanding. The bill alleges that sects. 2 and 3 of the act required the purchasers of the road to continue the payment of the one-half of one per cent semiannually on the entire amount of the bonds issued by the company, and it prays, among other things, that the company may be adjudged and decreed to be liable to pay accordingly.

The company demurred to the bill for want of equity and for misjoinder of parties complainant. The demurrer was sustained and the bill dismissed. Doggett then appealed to this court.

The case was argued by Mr. Theron G. Strong and Mr. William A. Maury for the appellant, and by Mr. William M. Merrick for the appellee.

MR. JUSTICE SWAYNE delivered the opinion of the court.

title: Doggett v. Railroad Company


text: Talk:Doggett v. Railroad Company

title: Talk:Doggett v. Railroad Company


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Doggett v. Railroad Company/Opinion of the Court

This is a case in equity. The bill was filed by Doggett, as a receiver appointed in another case in the same circuit court whence this case came, and by Vose and Wagner, as co-complainants with him. The defendant demurred upon the grounds, among others, that the bill does not make a case that entitles the complainants to any relief, and that there is a fatal misjoinder of parties with respect to Vose and Wagner. The Circuit Court sustained the demurrer and dismissed the bill. Doggett thereupon removed the case to this court by appeal. With respect to the merits, the case presents but a single question; that is, whether the appellee is bound to pay Doggett, as the receiver of the internal improvement fund of Florida, the one-half of one per cent, semi-annually, upon the entire amount of the bonds issued by the company, or only to make such payment upon the amount of such bonds as are still outstanding. The bonds were issued pursuant to an act of the legislature of Florida, entitled 'An Act to provide for and encourage a liberal system of internal improvements in this State,' passed Jan. 6, 1855. The road was sold, and the proceeds applied, as far as they would go, to the extinguishment of the bonds. The whole number issued was one thousand five hundred and eighteen, of $1,000 each. Twelve hundred and ninety have been retired. Two hundred and twenty-eight are still unredeemed and outstanding.

The determination of the question before us depends upon the construction and effect of the second, third, and twelfth sections of the act before mentioned.

The second section, after making the governor and other designated officers of the State trustees of the internal improvement fund, proceeds to define their powers and duties. They are empowered 'to receive and demand semi-annually the sum of one-half of one per cent (after each separate railroad is completed) on the entire amount of the bonds issued by said railroad company, and invest the same in the stocks of the United States or State securities, or in the bonds herein provided to be issued by said company.'

The third section provides that the bonds shall contain 'a certificate on the part of the trustees of the internal improvement fund that said bonds are issued agreeably to the provisions of this act, and that the internal improvement fund, for which they are trustees, is pledged to pay the interest as it may become due on said bonds.' Provision is then made for the seizure and sale of the road in default of payment as required. The section thus concludes: 'The proceeds arising from such sale shall be applied by said trustees to the purchase and cancelling of the outstanding bonds issued by said defaulting company, or incorporated with the sinking-fund: Provided, that in making such sale it shall be conditioned that the purchasers shall be bound to continue the payment of one-half of one per cent semi-annually to the sinking-fund until all the outstanding bonds are discharged, under the penalty of an annulment of the contract of purchase and the forfeiture of the purchase-money paid in.'

Under these provisions the road was sold and the proceeds applied, as before stated.

The twelfth section is as follows:--

'Every railroad company accepting the provisions of this act shall, after the completion of the road, pay to the trustees of the internal improvement fund at least one-half of one per cent on the amount of indebtedness on bond account, every six months, as a sinking-fund, to be invested by them in the class of securities named in sect. 2, or to be applied to the purchase of the outstanding bonds of the company; but it shall be distinctly understood that the purchase of said bonds shall not relieve the company from paying the interest on the same, they being held by the trustees as an investment on account of the sinking-fund.'

By the proviso in the third section it is declared that after a sale the payment of the semi-annual half per cent shall continue 'until all the outstanding bonds are discharged.' It is clear that it was to continue no longer. Before the sale, if the trustees should purchase the bonds as an investment for the sinking-fund the company was to continue to pay the interest upon them. This was right and reasonable. After the sale and the discharge of a part of the bonds by the proceeds of the sale, as occurred here, there is no provision for the payment of any interest. It would be wrong as to the bonds discharged by means derived from the company, and absurd as to all other bonds,-the company being deprived of all means of payment by the loss of their road. Hence, after the sale, the exaction is only that the semi-annual half per cent shall be paid, and that by the purchasers of the road; and it is expressly declared by the twelfth section that it shall be 'on the amount of indebtedness on bond account.' This is the requirement, and it goes no further. Upon what ground, then, can the purchasers be required to pay any thing more? There is no warrant for such a demand in the letter, meaning, or reason of the statute. The primary requirement is that the payment shall be made upon all the bonds issued, and to cease when they are all discharged. The extent of the burden assumed by the State was graduated as to each road by the total amount of its bonds. Why should not the burden of the company be diminished in the same ratio with the burden of the State? The former is to cease wholly when all the bonds are discharged. Why should it not be lessened in the exact proportion that the amount of the outstanding bonds is reduced? The contrary, we think, cannot be supported. As well might a creditor, where payments at different times have been made by the debtor, demand interest upon the whole amount of the original debt until the last dollar is paid. This, in effect, is the case made by the bill. But there is a short and conclusive answer to the claim. It is, that the twelfth section constituted a contract with the purchasers of the road. That contract was that they should pay 'on the amount of indebtedness on bond account.' This was made a condition of the sale; and they so agreed, and they agreed to nothing else. This contract is binding upon both parties, and cannot be changed without their mutual consent. The language of the act is too clear to admit of doubt. In a statute 'where the intent is plain, nothing is left to construction.' United States v. Fisher, 2 Cranch, 386.

There is no complaint that payment upon the bonds outstanding has not been regularly made.

We have no doubt as to the merits of the bill. We think the objection of misjoinder was also well taken. The case was purely ancillary in its character. The receiver represented the court which appointed him and the trustees of the internal improvement fund. Vose and Wagner claimed to own a part of the outstanding bonds. But that gave them no standing place in the litigation. As well might every other holder of any of the bonds, however small the amount, or how numerous such holders might be, have been made co-complainants with the receiver, as Vose and Wagner. The presence of the latter as such parties was unwarranted, and if permitted, and the suit had gone on, would have incumbered the record unnecessarily and have led to confusion.

The demurrer was properly sustained.

Decree affirmed.


text: Talk:Doggett v. Railroad Company/Opinion of the Court


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Transportation Line v. Cooper

ERROR to the Supreme Court of the State of New York.

This suit was brought under the provisions of the statute of New York, in the Supreme Court of that State, by Hobart Cooper, as administrator of his wife, to recover damages for her death, caused by a collision in the port of New York, between a schooner, which was in tow of the tug 'J. N. Parker,' and a canal-boat loaded with coal, whereof he was master, having on board his wife and children, and which with other boats was in tow of the steam-tug 'U.S. Grant.' The Eastern Transportation Line owning one tug, and J. J. Austin the other, were the defendants. Cooper, in the court below, had a judgment against them. The Eastern Transportation Line alone appealed to the general term. The judgment was affirmed there, and subsequently on appeal by the Court of Appeals. This writ of error was then sued out.

One of the errors assigned is that the court charged the jury that 'there is no law requiring that a canal-boat which is not used for the purpose of transporting passengers should be provided with life-preservers or life-boats, or any paraphernalia of that kind.' The other errors are grounded upon exceptions to the charge, which relate to questions not arising under any act of Congress.

The defendant in error moved to dismiss the writ for want of jurisdiction, and united therewith, under the amended sixth rule, a motion to affirm the judgment below.

Mr. William Stanley in support of the motion.

Mr. R. D. Benedict, contra.

MR. CHIEF JUSTICE WAITE announced the judgment of the court.

title: Transportation Line v. Cooper


text: Talk:Transportation Line v. Cooper

title: Talk:Transportation Line v. Cooper


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Transportation Line v. Cooper/Opinion of the Court

The only Federal question presented in this case is one upon which we are not inclined to hear an argument. A canal-boat laden with coal for transportation, having on board the wife and children of the captain, is not 'a barge carrying passengers,' within the meaning of sect. 4492, Rev. Stat., which requires such a barge, while in tow of a steamer, to be provided with 'fire-buckets, axes, life-preservers, and yawls.' The motion to dismiss is denied, but that to affirm is granted.

Judgment affirmed.


text: Talk:Transportation Line v. Cooper/Opinion of the Court