Statement of the Case.

BYBEE v. OREGON AND CALIFORNIA RAILROAD COMPANY.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF OREGON.

No. 276. Argued March 31, 1891.- Decided April 20, 1891.

The grant of "lands to aid in the construction of a railroad and telegraph line from the Central Pacific Railroad, in California, to Portland in Oregon," made by the act of July 25, 1866, 14 Stat. 239, c. 242, was a grant in præsenti; and the provision in section of that act that in case the companies should fail to complete the road on or before July 1, 1875, this act shall be null and void, and all the lands not conveyed by patent to said company or companies, as the case may be, at the date of any such failure, shall revert to the United States, is a condition subsequent, of which only the United States can take advantage.

Under the act of July 26, 1866, 14 Stat. 251, c. 262, "granting the right of way to ditch and canal owners over the public lands," no right could be acquired to any portion of the public lands until the actual taking possession of the same for the purpose of constructing a ditch.

A conveyance by deed of a perpetual right in land, for a solid consideration therein expressed, without any covenant for the payment of rent or the redelivery of possession, creates the relation of grantor and grantee between the parties.

The grantee in a deed of conveyance is not estopped to deny the title of his grantor.

The plaintiff in error, under the act of July 26, 1866, 14 Stat. 251, c. 262, constructed a ditch over lands granted to the defendant in error for a railroad under the act of July 25, 1866, 14 Stat. 239, c. 242. The defendant in error, under a misapprehension of its legal rights, received a deed from the plaintiff in error, conveying a license to enter upon said ditch and construct its road over the same, for the consideration of $250 paid by defendant in error to plaintiff in error, and upon condition against impairing or destroying said ditch. The plaintiff in error sued the defendant in error for so constructing its road as to permanently obstruct and destroy his ditch. Held, that the defendant in error by accepting the deed, was not estopped from denying the title of the plaintiff in error, or from asserting the invalidity of the covenant into which it had inadvertently entered.

THIS was an action originally begun in the state court for Jackson County, Oregon, and removed to the Circuit Court of the United States upon the petition of the defendant, upon the

Statement of the Case.

ground that the case involved the validity of conflicting grants of land from the United States. The plaintiff sued to recover for damages to a water ditch and water right, occasioned by the construction of the defendant's road. His complaint alleged, in substance, that on the third of September, 1883, he was the owner of an undivided half of a certain water ditch and water right on the south side of Rogue River, in Jackson County, and in lawful possession of the same, as tenant in common with one Daniel Fisher; that upon this day the plaintiff and Fisher, for the consideration of $250 paid to them, executed a deed to defendant of a right to construct and operate its railroad and telegraph line across the said water ditch, but upon condition that it should not in any way destroy or injure the same, or obstruct their use and enjoyment of it as a means of conveying water through the same; and that the defendant accepted the deed, received possession of the water ditch and constructed its railroad and telegraph line across the same, but in such a manner as to permanently obstruct and destroy it, and render it impossible to use it for the conveyance of water, and refused to make any compensation to the plaintiff for his interest therein.

The answer of the defendant, in substance, denied the ownership of plaintiff and Fisher in any portion of the water ditch or water right alleged to have been destroyed by the defendant, and denied their lawful possession thereof. It further denied that the deed set forth in the complaint contained any condition whatever, or that defendant ever assented to any condition connected with such deed, or received possession of the ditch under this deed; and alleged as a separate defence to the complaint that it was incorporated to construct and operate a railroad and telegraph line from Portland, in Oregon, and running thence southerly through the Willamette, Umpqua and Rogue River valleys to the California line on the southern boundary of Oregon. That by section three of an act of Congress, approved July 25, 1866, 14 Stat. 239, c. 242, there was granted to it a right of way through the public lands of the United States, to the extent of one hundred feet in width on each side of the said railroad where it might pass

Statement of the Case.

through such lands. That the lands through and over which the portion of the said water ditch, alleged to have been injured by defendant, was constructed and is situated, were at the date of said act public lands of the United States, over and upon which the defendant had the right, by virtue of the grant made in that act, to locate its right of way and construct its railroad and telegraph line. That in locating said right of way and constructing said road it became necessary for the defendant to appropriate to its use one hundred feet in width on each side of its road, through and over which said lands a portion of said water ditch alleged to have been injured by defendant was located and constructed, and that the defendant did accordingly locate its right of way over the ground through which the water ditch was dug, and constructed its road over such right of way, and that any injury which may have been done to said ditch was done in the course of such construction.

The answer further alleged that on May 17, 1879, the said Daniel Fisher attempted to appropriate to his own use, under the mining laws of the United States, a portion of said right of way, and constructed thereon the said ditch; that the only claim of right ever made by Fisher to locate and dig that portion of such ditch was obtained by virtue of his pretended compliance with certain provisions of the mining laws; that he had no other interest or ownership in such land than the right so acquired, and plaintiff's only interest therein was acquired under and through said Fisher; and that defendant took nothing by the deed mentioned in the complaint, as it then owned, by virtue of the said grant of the United States, all the rights and property pretended to be conveyed by said. deed, and never received any consideration whatever for the sum alleged to have been paid by it for such pretended con

veyance.

To this separate defence in the answer the plaintiff demurred, upon the ground (1) that it did not state facts sufficient to constitute a defence. (2) That the facts stated in the complaint estopped the defendant from setting up the right of way mentioned in such defence, or any benefit under the Congressional

Argument for Plaintiff in Error.

grant of the right of way of July 25, 1866, set forth in such defence. (3) That defendant had forfeited and lost all its right under such grant over the land where the ditch was situated, by its failure to complete its railroad on or before the first day of July, 1875, and had at no time since owned any right or interest in such land or right of way over the same.

The court below overruled the demurrer in an opinion reported in 11 Sawyer, 479, and 26 Fed. Rep. 586, and the plaintiff not desiring to plead further, entered a final judgment in favor of the defendant, to reverse which the plaintiff sued out this writ of error.

Mr. John H. Mitchell for plaintiff in error.

It is conceded that but for the qualifying provisions of section 8 in the act of July 25, 1866, this grant must be held to be a grant in præsenti, under and by virtue of which the lands granted passed directly as of the date of the grant to the company; and that the conditions of the grant in such event are conditions subsequent, and in such case the grant can only be defeated by a failure to comply with the conditions subsequent, and in which case there must be a reëntry upon the part of the government. But it is respectfully insisted that the words of present grant in the second section of the act are so qualified by the provisions of section 8, that upon a proper and fair construction of the act as a whole, the conditions, and all the conditions, so far as they relate to the right of way and the completion of the road within a certain time, must be held to be conditions precedent, and not conditions subsequent. And not only so, but being conditions precedent, such failure to comply with them within the time required by the act, especially in view of the provision that in such event the act should be null and void, operated ipso facto as a termination of all right to acquire any further interest in any lands not then. patented.

It will be observed by the court that the provisions of this act as to the effect of a failure to comply with the conditions, whether they be regarded as conditions subsequent or condi

Argument for Plaintiff in Error.

tions precedent, are essentially different in phraseology and in legal effect from the great body of Congressional grants to railroad companies.

A striking similarity, however, will be found between the act under consideration in this respect and the act granting lands to aid in the construction of railroads in the Territory of Minnesota, and which came under consideration in this court in the case of Rice v. Railroad Co., 1 Black, 358, and in which case this court held that although words of present grant were used in the granting section which, had they stood alone, would have passed the title as of the date of the grant, they were so qualified by subsequent provisions of the act as to prevent the same from being a present grant. This case was approved in St. Paul & Pacific Railroad v. Northern Pacific Railroad, ante, 1.

The granting words in the Minnesota act and those in the grant under consideration are exactly alike, but as in that case the court found in the subsequent language an intent on the part of Congress to limit and modify the meaning of the words "that there shall be and is hereby granted," so in this case we have the same intent expressed in somewhat similar but much more emphatic language, which makes the conclusion irresistible that no present estate was granted or intended to be granted by Congress to these railroad companies.

In presenting this case counsel are not unmindful of the rulings of this court-notably in the case of Railroad Co. v. Baldwin, 103 U. S. 426-giving construction to an act of Congress, then under review, granting right of way to a railroad company somewhat similar to the act making grant to the defendant in so far as it relates to the nature and effect of the grant of right of way over the public domain; and in discussing this case there is no disposition to contest the correctness of the rule laid down in the case referred to, and perhaps in some other cases since that time, as applicable to the particular grants referred to, and as applicable to the facts presented in connection therewith, as to progress made by the companies respectively under those grants where rights of settlers were supposed to have attached.