APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT.
MR. JUSTICE HARLAN delivered the opinion of the court.
By the act of Congress of March 3, 1887, c. 376, it was provided
that if, at the completion of the adjustments of land grants thereby directed to be made, or sooner, it appeared that lands had been from any cause erroneously certified or patented to or for any company claiming by, through or under grant from the United States to aid in the construction of a railroad, it should be the duty of the Secretary of the Interior to thereupon demand from such company a relinquishment or reconveyance to the United States of all such lands, whether within granted or indemnity limits; and if the company did not reconvey within ninety days after demand made, it should thereupon be the duty of the Attorney General to commence and prosecute in the proper courts the necessary proceedings to cancel the patents, certification or other evidence of title theretofore issued for the lands, and to restore the title thereof to the United States. 24 Stat. 556, c. 376.
In United States v. Missouri &c. Railway, 141 U.S. 360, 380, 382 -- which was an action brought by the United States after the passage of the above statute to have certain patents for land cancelled -- this court, after observing that as to some of the lands the United States appeared to have a direct interest in them, said: "As to others, it is under an obligation to claimants under the homestead and preemption laws to undo the wrong alleged to have been done by its officers, in violation of law, by removing the cloud cast upon its title, by the patents in question, and thereby enable it to properly administer these lands, and to give clear title to those whose rights, under those laws, may be superior to those of the railway company. A suit, therefore, to obtain a decree annulling the patents in question, so far as it is proper to do so, was required by the duty the Government owed as well to the public as to the individuals who acquired rights, which the patents, if allowed to stand, may defeat or embarrass." Reference was made in that case to United States v. San Jacinto Tin Co., 125 U.S. 273, 286, in which it was held that the United States could sue to set aside a patent improperly issued, where it appeared that there was an obligation on the part of the United States to the public, or to any individual, or where it had any interest of its own; also, to United States v. Beebe, 127 U.S. 338, 342, in which it was
held that patents procured by fraud could be cancelled at the suit of the United States where that was necessary to be done in order that it might fulfill its obligations to others. The court then observed: "These principles equally apply where patents have been issued by mistake, and they are specially applicable where, as in the present case, a multiplicity of suits, each one depending upon the same facts and upon the same questions of law, and be avoided, and where a comprehensive decree, covering all contested rights, would accomplish the substantial ends of justice." See also United States v. Oregon &c. Railroad Co., 176 U.S. 28.
In this state of the law, the present suit was brought by the United States against the Oregon and California Railroad Company in order to obtain a decree canceling certain patents for lands, which, it was alleged, had been illegally and by mistake issued in the name of the United States to that company, which succeeded to the rights of the Oregon Central Railroad Company.
The case was heard upon a stipulation as to evidence, from which the following facts appear:
By the act of Congress of July 25, 1866, c. 242, 14 Stat. 239, the California and Oregon Railroad Company, and such company organized under the laws of Oregon as the Legislature of the latter State designated, were authorized to locate, construct and maintain a railroad and telegraph line between Portland, Oregon, and the Central Pacific Railroad Company in California.
For the purpose of aiding in the construction of that line, Congress granted to those companies, their successors and assigns, every alternate add-numbered section of public lands, not mineral, to the amount of twenty sections per mile, (ten on each side,) of the railroad line. But the act provided that when any of the alternate sections or parts of sections should be found "to have been granted, sold, reserved, occupied by homestead settlers, preempted, or otherwise disposed of, other lands, designated as aforesaid, shall be selected by said companies in lieu thereof, under the direction of the Secretary of the Interior, in alternate sections designated by odd numbers as aforesaid, nearest
to and not more than ten miles beyond the limits of said first-named alternate sections; and as soon as the said companies, or either of them, shall file in the office of the Secretary of the Interior a map of the survey of said railroad, or any portion thereof, not less than sixty continuous miles from either terminus, the Secretary of the Interior shall withdraw from sale public lands herein granted on each side of said railroad, so far as located and within the limits before specified. . . . Settlers under the provisions of the homestead act, who comply with the terms and requirements of said act, shall be entitled, within the limits of said grant, to patents for an amount not exceeding eighty acres of the land so reserved by the United States, anything in this act to the contrary notwithstanding."
The Oregon Central Railroad Company was designated by the Oregon Legislature as the company organized under the laws of Oregon, entitled to receive the granted lands in Oregon, and the benefits and privileges of the above act of 1866.
Prior to October, 1869, that company definitely fixed on the ground and surveyed the first section of the railroad in Oregon. That section extended from Portland to Jefferson, and comprised not less than sixty continuous miles from the northern terminus of the road; and on October 25, 1869, the company filed in the office of the Secretary of the Interior, and on January 29, 1870, the Secretary duly accepted and approved, a map of the survey and definite location of that section.
During the year 1869 and the months of January and February, 1870, the company definitely fixed on the ground and surveyed the second section of its road, which section comprised not less than 124 continuous miles from Jefferson; and on March 26, 1870, filed in the office of the Secretary, and on March 29, 1870, that ...