ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE.
Adams, Hunter, and Becker, Circuit Judges.
This appeal and cross-appeal arise from an action brought by David W. Deakyne against the United States to quiet title to 2.25 acres of marshland located on the northeasterly side of the Lewes and Rehoboth Canal in the City of Lewes, Delaware.*fn1 The case has a venerable history, extending back to 1887, when the Delaware legislature authorized condemnation of the land for use by the United States for construction of a canal. The original plans for the canal would have left the land submerged; however, the canal, as ultimately built in 1927, bypassed the land.
Deakyne traces his interest in the land through a chain of conveyances back to the original condemnees. In 1963, his immediate predecessor in interest, his mother, initiated negotiations with the United States Army Corps of Engineers seeking to obtain a release of claims by the United States. Deakyne took up these negotiations when his mother conveyed her interest to him in 1973. Prior to 1975, the Corps represented that the United States held a perpetual easement in the land. In 1975, however, Deakyne received a letter from the legal department of the Corps stating that the Corps' attorneys understood the Delaware statute to have authorized condemnation of a fee rather than an easement, and that the United States therefore held a fee simple interest in the land. Deakyne also claimed a fee interest, and when negotiations finally broke down in early 1978, he instituted this action.*fn2
The background facts are extremely detailed. They are amply set forth in the thoughtful opinion of the district court, see Deakyne, supra note 1, and we will not repeat them here. For present purposes we need only explain the procedural history of the case and the contested issues, as well as the reasons for our disposition.
After development of a record in the district court, both Deakyne and the Government moved for summary judgment. The Government asserted that 28 U.S.C. § 2409a(f),*fn3 which bars claims brought under section 2409a more than twelve years after the plaintiff or any predecessor in interest knew or should have known of the Government's claim to an interest in the land, divested the district court of jurisdiction to decide Deakyne's claims.*fn4 The court rejected this argument, noting that because the Government had first laid claim to a fee interest, as opposed to an easement, in 1975, Deakyne's suit was brought well within the statutory period. The court then construed the 1887 Delaware statute authorizing condemnation of lands for the canal as permitting only the taking of easements, concluding that the United States' interest was limited to an easement and that its claim to a fee simple failed. However, the court also held that section 2409a(f) barred Deakyne's claim that the United States had abandoned the easement obtained from Delaware in 1892.*fn5 The court reasoned that "the facts on which [his abandonment argument] is based have or should have been known to him and his predecessors in interest since 1912 when the project was rerouted." 530 F. Supp. at 1327.
The Government has appealed, first contending that, because Deakyne's predecessor in interest knew at the time of condemnation that the United States claimed some interest in the land, the district court was without jurisdiction to adjudicate the United States' interest -- be it a claim to the fee or merely to an easement. In the alternative, the Government argues that the circumstances surrounding the United States' reconveyance in 1924 of some of the lands acquired from the State of Delaware pursuant to the 1887 statute clearly put Deakyne's predecessor in interest on notice that the United States claimed to possess a fee to all such lands.*fn6 Thus, says the Government, Deakyne's cause of action "accrued" in 1924 and was extinguished 12 years later, in 1936, and the district court therefore was without jurisdiction in 1978 to adjudicate the United States' claim to a fee. The Government did not advance this contention in the district court, and we ordinarily are unwilling to consider arguments not made below. In this case, however, the issues raised by the Government concerning the 1924 events are jurisdictional, see supra note 5, and can be raised at any time.*fn7 Deakyne has cross-appealed, asserting that the court should have taken jurisdiction over the claim that the Government abandoned its easement.
We agree with the district court's analysis of the first contention raised in the Government's appeal, and we will not discuss it further. However, we will remand for the limited purpose of allowing the district court to determine whether the 1924 events, not previously considered, warrant a finding that Deakyne's predecessor in interest should have known that the Government, in 1924, was claiming a fee interest in Deakyne's land. As to Deakyne's cross-appeal, we will affirm.
In 1924, Congress enacted a bill reconveying to the State of Delaware a portion of the land originally donated by the State to the United States pursuant to the 1887 Delaware statute. The reconveyed land did not include the Deakyne land. The Act by its terms appears to have conveyed a fee: "Be it enacted . . . That the United States hereby grants, quitclaims, and reconveys to the State of Delaware all that certain piece or parcel of land situate in Lewes and Broadkill Hundred . . . ." Pub. L. No. 160, 43 Stat. 245 (1924), Government's Brief at 12. The Government argues that if the United States claimed only an easement for the construction of a canal, Congress would not have purported in 1924 to convey unrestricted title to the land to the State of Delaware which was not the owner of the underlying fee. In the Government's submission this Act therefore shows that Congress understood the United States to have held a fee interest in all the land reconveyed and by implication in all lands that had been condemned pursuant to the 1887 Delaware statute for use in the canal project. The Government also submits that the Act provided notice of the United States' claim to everyone claiming any interest in any such lands. The Government concludes that this purported statutory conveyance of an unrestricted fee interest in adjacent lands should have put Deakyne's predecessor in interest on notice of the claim by the United States to a fee in the property now in dispute, thus barring Deakyne's suit in its entirety under § 2409a(f).
While we intimate no view as to whether the Government should prevail on this argument, it is at least a colorable one. There is, however, a predicate question of fact to be resolved. Deakyne claims that the property reconveyed by the 1924 Act was part of the so-called "Warner Grant," fee title to which resided with the State of Delaware in 1887, so that the State retained fee title to that property when it was donated to the United States for canal purposes pursuant to the 1887 Delaware statute, see United States v. 1,010.8 Acres, More or Less, Situate in Sussex County, Delaware, 56 F. Supp. 120, 129-30, 144 (D. Del. 1944).*fn8 He also claims that all parties -- the United States, the State of Delaware, and the successors in interest of the 1887 condemnees -- understood in 1924 that the United States held only an easement in the land it proposed to reconvey to the State. Because the 1924 statute reconveyed the land to the State of Delaware, Deakyne asserts, it did no more than officially extinguish the easement. Thus, Deakyne concludes, the 1924 Act did not notify claimants to neighboring lands that the United States understood its interest to be a fee.
The Government controverts Deakyne's factual assertion, claiming that "the exact boundaries of the Warner Grant are unknown," Government's Reply Brief at 5. The Government argues further that the legislative history supports its interpretation of the 1924 Act as conveying a fee to a party other than the pre-1887 fee owner. An earlier draft of the bill, which would have authorized conveyance of the land directly to the City of Lewes, was modified pursuant to the advice of the Secretary of War. The Secretary's letter, which was incorporated into the legislative history, asserts that "the State of Delaware, in pursuance of [the 1887 Delaware Statute], acquired by condemnation the lands required as a right of way for this waterway . . . . The parcel described in the bill is a part of the lands thus condemned and conveyed by the State. '" H. R. Rept. No. 672, 68th Cong. 1st Sess. 2 (1924), Government's Brief at 11 (quoting Secretary of War's letter) (emphasis added). The letter also appears to assume that the United States was free to dispose of the land to anyone and did not have to limit the grantee to using the land for canal purposes, ...