MacDonald v. United States

119 F.2d 821, 1941 U.S. App. LEXIS 4665

Opinions

HEALY, Circuit Judge.

The United States prevailed below in a suit to enjoin the Great Northern Railway Company from drilling for or removing oil, gas and minerals underlying its right of way, except pursuant to the provisions of the act of May 21, 1930, 46 Stat. 373, 30 U.S.C.A. § 301 et seq., which authorizes leases for such purpose.

The Great Northern extends westerly from Minnesota to Puget Sound. It has numerous branch lines. In 1891 its predecessor, the Saint Paul, Minneapolis & Manitoba Railroad Company, pursuant to the General Right of Way Act of March 3, 1875, 18 Stat. 482, 43 U.S.C.A. § 934 et seq.,¹ filed with the Department of the Interior a map of definite location of that portion of its road passing through Glacier County, Montana.

1a In 1907 that company conveyed all its rights of property to the Great Northern. With the discovery of oil in Glacier County on lands adjacent to the right of way, the nature of the estate in the land granted by Congress for right of way purposes has become a question of considerable importance. The complaint and answer in the suit were so drafted as to present the question whether the railroad owns the underlying minerals, or whether by the terms of the 1875 act subsurface rights were reserved to the United States. The court granted the government’s motion for judgment on the pleadings, thus resolving the dispute in favor of the United States.

Appellant MacDonald sought leave to intervene in the trial court, and from the denial of his petition he appeals. His grievance will be considered later in the opinion.

Counsel have gathered in the brief3 a wealth of material bearing on the subject of the nature of a railroad’s interest in its right of way. It is not our purpose, however, to give more than passing notice to the authorities cited; the search need not take us so far afield. Enough to say that as a general rule a railroad company is recognized as having something of greater dignity than the easement known at common law. Its right to the exclusive occupancy of the surface, and so much of the subsurface as is essential for railroad purposes, has been said to be as absolute as that of an owner in fee, subject only to the possibility of loss or termination of the right by reason of non-user. Most of the modern decisions in the states go no farther than to recognize an exclusive easement or a qualified fee in the surface. For "good statements of the view see Pennsylvania S. Valley R. Co. v. Reading Paper Mills, 149 Pa. 18, 24 A. 205; Kansas C. R. Co. v. Allen, 22 Kan. 285, 31 Am.Rep. 190; Smith v. Hall, 103 Iowa 95, 72 N.W. 427, 428. On the other hand, counsel for the Great Northern call attention to many state statutes or special acts, antedating 1875, permitting railroad companies to acquire a fee simple estate in their rights of way. It is claimed that the majority of the not very numerous state decisions upon this question, prior to 1875, upheld the view that a railroad has the fee in the land over which its right of way passes.² We assume this to be true.

So much for the general law on the subject. It is obvious that much depends upon the facts of each case, the terms of the governing statute or the wording of the particular grant or conveyance. Cf. Carter Oil Co. v. Welker, 7 Cir., 112 F.2d 299.

It is the contention of the Great Northern that the estate conveyed by the various federal grants is a fee simple ownership in the land itself, subject only to the condition subsequent that it be used for railroad purposes. For this proposition it relies confidently on decisions of the Supreme Court in which the estate or interest acquired is described as a limited fee. Thus in Northern Pacific Ry. Co. v. Townsend, 190 U.S. 267, 23 S.Ct. 671, 672, 47 L.Ed. 1044, the court said of the right of way granted to the Northern Pacific under the act of July 2, 1864, 13 Stat. 365, that “in effect the grant was of a limited fee, made on an implied condition of reverter in the event that the company ceased to use or retain the land for the purpose for which it was granted.” Similar language is found in other opinions of the court.³ **&It would serve no useful purpose to undertake here a statement of the facts'of these cases or of the way in which the question of title arose; enough to say that in none of them was the court confronted with the question of the ownership of underlying minerals. We do not believe the holdings are decisive of that question. So far, however, as concerns the surface area embraced in the federal right of way grants, it may be taken as settled that the title of the railroads is the equivalent of a fee, limited only by the possibility of reverter. One of this group of cases, Rio Grande Western R. Co. v. Stringham, 239 U.S. 44, 36 S.Ct. 5, 60 L.Ed. 136, directly involves the 1875 act, and special consideration will be given it later in the opinion.

The grants prior to 1871 included extensive acreages in addition to the right of way. The largest, the donation to the Northern Pacific, embraced the 20 alternate odd-numbered sections of public lands on each side of the road, or a total of about 40,000,000 acres. It is a matter of history that this lavish policy had met with public disfavor prior to the adoption of the General Right of Way Act of 1875.⁴ The change in public sentiment is reflected in a resolution passed by the lower house of Congress March 11, 1872. The resolution declares that in the judgment of the house, “the policy of granting subsidies in public lands to railroads and other corporations ought to be discontinued, and that every consideration of public policy and equal justice to the whole people requires that public lands should be held for the purpose of securing homesteads to actual settlers, and for educational purposes, as may be provided by law.”⁵ At the time of the passage of the General .Right of Way Act the title to the great bulk of the lands in the western states and territories was in the United States, and if railroad construction was to continue at all it was essential to grant a right of way over the public domain for this purpose. The 1875 grant was not in the nature of a bounty; rather it was legislation calculated to promote settlement and to enhance the value of the public domain made accessible by the building of railways. United States v. Denver & Rio Grande Ry. Co., 150 U.S. 1, 14 S.Ct. 11, 37 L.Ed. 975. At the outset, it is not lightly to be assumed that Congress intended to grant rights more extensive than those necessary to enable the roads to build over the public land.

We turn now to the provisions of the act. It opens with the statement that “the right of way through the public lands of the United States is hereby granted to any railroad company * * * to the extent of one hundred feet on each side of the central line of said road * * *.” Section 4 provides for filing with the local register of a profile of the road, and for the notation of the same upon the plats in his office after approval by the Secretary of the Interior. It was early held by the Secretary that the 4th section provides a method of securing the benefits of the act in advance of construction; and that in those instances where the road had actually been built over the public land it was unnecessary to file a map of definite location. Dakota C. R. Co. v. Downey, 8 Land Dec. 115. This administrative holding was followed by the court in Jamestown & Northern R. Co. v. Jones, 177 U.S. 125, 20 S.Ct. 568, 4 L.Ed. 698, and was later applied in Stalker v. Oregon S. L. R. Co., 225 U.S. 142, 32 S.Ct. 636, 56 L.Ed. 1027.

The 4th section, after authorizing the procedure above mentioned, significantly provides that “thereafter all such lands over which such right of way shall pass shall be disposed of subject to such right of way.” A provision somewhat similar appears in the grant to the Portland, Dalles and Salt Lake Railroad Company, 17 Stat. 52, approved April 12, 1872; but no provision of the kind is found in any of the earlier acts. Elaborate attempts are made to explain away this language, as, for example, by saying that it is a mere statement of the obvious; but the clause ought to be taken as meaning what it says. If by force of the filing and approval of the profile Congress intended that the fee simple title should vest in the railroad, surely language so utterly incompatible would not have been employed in the direction for future disposition immediately following. Apter words to indicate the intent to convey an easement would be difficult to find. We need not labor the point. The act is to be read as a whole and effect given, if possible, to all its provisions. While in respect of its affording a special means of claiming the benefits of the act section 4 may be said to have a special purpose, there is no persuasive reason for believing that the clause in question docs not qualify as well as illuminate the entire statute.

The grantee is entitled to have the act liberally construed to effect the purpose for which it was enacted. United States v. Denver & Rio Grande Railway Co., supra. Otherwise it is to be construed strictly in conformity with the rule that grants from the sovereign should receive a construction favorable to the claim of the government rather than that of the grantee. “Nothing passes by implication, and unless the language of the grant be clear and explicit as to the property conveyed, that construction will be adopted which favors the sovereign rather than the grantee.” Northern Pacific Railway Co. v. Soderberg, 188 U.S. 526, 23 S.Ct. 365, 368, 47 L.Ed. 575. And see Caldwell v. United States, 250 U.S. 14, 20, 21, 39 S.Ct. 397, 63 L.Ed. 816. A grant of the underlying minerals would have been an obvious subsidy and it was plainly not the purpose of Congress to subsidize the roads.⁶

As noted in Northern Pacific Ry. Co. v. Soderberg, supra, in the grants subsequent to 1860, embracing lands in the then unsurveyed and little known territories, a reservation was invariably made of lands suspected of being rich in metals. The Northern Pacific grant, for example, excluded mineral lands, although at the same time it excluded coal and iron from the definition of minerals. True, the reservation contained in these grants was of the land itself, not of the underlying minerals; and necessarily the right of way grants were intended to be effective whether or not the way selected should extend over mineral lands. But for this very reason the settled policy adds color to the belief that the general act of 1875 was intended as granting no more than a right of passage.

This view of the act is in line with the interpretation almost uniformly given it by the Department of the Interior. The right of way circular issued January 13, 1888 (12 Land Dec. 423) states that “the act of March 3, 1875, is not in the nature of a grant of lands; it does not convey an estate in fee, either in the ‘right of way’ or the grounds selected for depot purposes.⁷ It is a right of use only, the title still remaining in the United States. * * * All persons settling on public lands to which a railroad right of way has attached, take the same subject to such right of way and must pay for the full area of the subdivision entered, there being no authority to make deductions in such cases.” The verbiage is repeated in the regulations of March 21, 1892, 14 Land Dec. 338. The phraseology of the revision of November 4, 1898, (27 Land Dec. 663, 664) is slightly different, but the grant is said to be merely of a right of use for necessary railroad purposes, the fee remaining in the United States. Perhaps out of deference to the language of the Supreme Court in Northern Pacific Ry. Co. v. Townsend, supra, the grant is described in the revision of February 11, 1904, 32 Land Dec. 481, 482, 483, as “a base or qualified fee giving the possession and right of use of the land for the purposes contemplated by law.” But in the regulations of May 21, 1909 (37 Land Dec. 787, 788), the notion disappears that the estate granted is a base or qualified fee, and the original thought is resumed that the railroad takes an easement only, the fee simple title remaining in the United States.⁸ As was to be expected, the rulings of the Department subsequent to 1915 become confused and uncertain.

We turn now to the decision in Rio Grande Western Ry. Co. v. Stringham, supra. The opinion was handed down in 1915. The dispute concerned a strip of land claimed by the railroad company as a right of way under the act of March 3, 1875. The defendants asserted title under a patent for a placer mining claim. On appeal to the Utah supreme court a judgment in favor of the defendants was reversed and the case remanded with a direction to “enter a judgment awarding to the plaintiff title to a right of way over the lands in question 100 feet wide on each side of the center of the track.” 38 Utah 113, 110 P. 868, 872. The trial court entered judgment accordingly. The railroad company again appealed, insisting that the judgment was inadequate, and that it had a fee simple title. 39 Utah 236, 115 P. 967. The court said that appellant’s grievance should have been asserted by petition for a rehearing and declined to modify the judgment. On appeal to the Supreme Court of the United States the judgment was affirmed. In the course of its affirming opinion the latter court said: “The right of way granted by this and similar acts is neither a mere easement, nor a fee simple absolute, but a limited fee, made on an implied condition of reverter in the event that the company ceases to use or retain the land for the purposes for which it is granted, and carries with it the incidents and remedies usually attending the fee.” [239 U.S. 44, 36 S.Ct. 6, 60 L.Ed. 136.]

On its facts the case is distinguishable. If subsurface rights had been in issue, the decision would compel us to reverse the present judgment; but subsurface rights were not involved, and the judgment of the Utah court was properly affirmed as it stood. The government was not represented in the suit and we are informed that the defendants themselves filed no brief. Not having its attention called to significant differences between this and earlier grants with which it had dealt, the court merely paraphrased the language of former opinions. Now we are asked to accept the dicta as gospel, despite its manifold shortcomings even as dicta. We choose to believe the statute is a safer guide.

The act of May 21, 1930, 46 Stat. 373, 30 U.S.C.A. § 301, provides that the Secretary of the Interior may, if he deems it in the public interest, “lease deposits of oil and gas in or under lands embraced in railroad or other rights of way acquired under any law of the United States, whether the same be a base fee or mere easement.” This statute is little more than a self-serving declaration, as it was enacted at a time when the ownership of the underlying oil had become a subject of controversy. However, an earlier act of June 26, 1906, 34 Stat. 482, 43 U.S.C.A. § 940, is of some value in the interpretation of the 1875 grant. That act, which declared a forfeiture of unused rights of way, refers to the grant as an easement.

The petition of appellant MacDonald for leave to intervene alleged that a certain quarter section of land, described in the government’s complaint as being part of the laud crossed by the Great Northern’s right of way, had been the subject of a homestead patent to his predecessor containing no exception of the oil or other minerals under it. The whole area within the exterior boundaries of the quarter section had, petitioner averred, been included in the patent, subject to the railroad’s right of way. It was alleged that both the government and the railroad company claim title to the minerals underlying the right of way as it crosses this quarter section, but that the ownership thereof is in the petitioner by virtue of the homestead patent; that the interest of petitioner would not be adequately represented by plaintiff or defendant, and that petitioner is so situated as to be adversely affected by a decision arrived at without the complete presentation of his interest. The petitioner further alleged that his claim involved questions of law which were the same as those involved in the case between the plaintiff and the defendant, and that under the provisions of Rule 24(a) and (b) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, petitioner was entitled to come in. Leave was denied.

We see no error in the ruling. The sole issue in the case was whether the general right of way grant included subsurface minerals. The entire right of way, so far as it rested on the grant, was involved in the suit. The government alleged only that under the act the Great Northern had acquired no interest in the underlying oil deposits, but that these remained the property of the United States, and subject to its control and disposition. In no sense was the interest of the United States adverse to that of MacDonald. For the purpose of the suit the two interests were identical. A decision against the railroad would determine only the basic question, leaving the rights of subsequent patentees of the government to future adjudication. On the other hand, were the holding to be against the government, the decision would mean that the United States retained no mineral rights which it could thereafter have conveyed to the homesteaders and other patentees along the right of way. To that extent, only, petitioner has an obvious interest in the suit and in an outcome favorable to the government.

Subdivision (a) of Rule 24, permitting intervention as a matter of right, provides, so far as pertinent here, that the application shall be granted “when the representation of the applicant’s interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action.” Both conditions must be shown to exist. There is no reason to believe that the government’s representation of MacDonald’s interest is inadequate here, or that it was inadequate below. For that matter, both here and below, he presented an elaborate brief on the merits of the case and was heard thereon as fully as though he had been allowed to intervene. On the whole, the government would seem to have a vastly greater interest in the success of its suit than the intervener. Other patentees along the right of way have the same claim of right to intervene as MacDonald has. The government argues with much force that to determine subsequent rights it would be necessary to consider numerous types of patents and statutes and many classification orders, all of which would become immaterial if the decision in the main case were adverse. The purpose of the action was to determine once and for all the scope of the 1875 grant, and this ought to be done before an attempt is made to litigate the effect of subsequent patents.

Assuming that denial of leave to intervene under subdivision (b) of the Rule is reviewable, what has been said disposes of that branch of the inquiry.

Affirmed.

1 “Chap. 152. — An act granting to railroads tlie right of way through the public lands of the United States.

“Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That tlie right of way through tlie public lands of the United States is hereby granted to any railroad company duly organized under the laws of any State or Territory, except the District of Columbia, or by the Congress of the United States, which shall have filed with the Secretary of the Interior a copy of its articles of incorporation, and due proofs of its organization under the same, to the extent of one hundred feet on eaeh side of the central line of said road; also the right to take, from the public lands adjacent to the line of said road, material, earth, stone, and timber necessary for the construction of said railroad; also ground adjacent to such right of way for station-buildings, depots, machine shops, side-tracks, turnouts, and water-stations, not to exceed in amount twenty acres for each station, -to the extent of one station for each ten miles of its road.

“Bee. 2. That any railroad company whose right of way, or whose track or road-bed upon such right of way, passes through any canyon, pass, or defile, shall not prevent any other railroad company from the use and occupancy of the said canyon, pass, or defile, for the purposes of its road, in common with the road first located, or the crossing of other railroads at grade. And the location of such right of way through any canyon, pass, or defile shall not cause the disuse of any wagon or other public highway now located therein, nor prevent the location through the same of any such wagon road or highway where such road or highway may be necessary for the public accommodation; anil where any change in the location of such wagon road is necessary to permit the passage of such railroad through any canyon, pass, or defile, said railroad company shall before entering upon the ground occupied by such wagon road, cause the same to be reconstructed at its own expense in the most favorable location, and in as perfect a manner as the original road: Provided, ’That such expenses shall be equitably divided between any number of railroad companies occupying and using the same canyon, pass, or defile.

“See. 3. That the legislature of the proper Territory may provide for the manner in which private lands and pos-sessory claims on the public lands of the United States may be condemned; and where such provision shall not have been made, such condemnation may be made in accordance with section three of the act entitled ‘An act to aid in the construction of a railroad and telegraph line from the Missouri River to the Pacific Ocean, and to secure to the Government the use of the same for postal, military, and other purposes, approved July first, eighteen hundred and sixty-two,’ approved July second, eighteen hundred and sixty-four.

“Sec. 4. That any railroad-company desiring to secure the benefits of this act, shall, within twelve months after the location of any section of twenty miles of its road, if the same be upon surveyed lands, and, if upon unsurveyed lands, within twelve months after the survey thereof by the United States, file with the register of the land office for the district whore such land is located a profile of its road; and upon approval thereof by the Secretary of the Interior the same shall be noted upon the plats in said office; and thereafter all such lands over which such right of way shall pass shall be disposed of subject to such right of way: Provided, That if any section of said road shall not be completed within five years after the location of said section, the rights herein granted shall be forfeited as to any such uncompleted section of said road.

“Sec. 5. That this act shall not apply to any lands within the limits of any military, park, or Indian reservation, or other lands specially reserved from sale, unless such right of way shall be provided for by treaty-stipulation or by act of Congress theretofore passed.

“Sec. 6. That Congress hereby reserves the right at any time to alter, amend, or repeal this act, or any part thereof.

“Approved, March 3, 1875.”

We are not advised of the date of filings relating to other portions of the right of way.

2 For authorities dealing with the general subject see footnote to Magnolia Petroleum Co. v. Thompson, 8 Cir., 108 F.2d 217, 227.

3 Missouri K. & T. R. Co. v. Roberts, 152 U.S. 114, 14 S.Ct. 496, 38 L.Ed. 377; Missouri K. & T. R. Co. v. Oklahoma, 271 U.S. 303, 46 S.Ct. 517, 70 L.Ed. 957; Noble v. Oklahoma City, 297 U.S. 481, 494, 56 S.Ct. 562, 80 L.Ed. 816; Clair-mont v. United States, 225 U.S. 551, 556, 32 S.Ct. 787, 56 L.Ed. 1201; Buttz v. Northern Pacific R. Co., 119 U.S. 55, 66, 7 S.Ct. 100, 30 L.Ed. 330; Choctaw O. & G. R. Co. v. Mackey, 256 U.S. 531, 538, 41 S.Ct. 582, 65 L.Ed. 1076; Noble v. Union River Logging R. Co., 147 U.S. 165, 13 S.Ct. 271, 37 L.Ed. 123; United States v. Michigan, 190 U.S. 379, 23 S.Ct. 742, 47 L.Ed. 1103; Northern Pacific R. Co. v. Ely, 197 U.S. 1, 25 S.Ct. 302, 49 L.Ed. 639; Stalker v. Oregon Short Line R. Co., 225 U.S. 142, 32 S.Ct. 636, 56 L.Ed. 1027; Great Northern R. Co. v. Steinke, 261 U.S. 119, 43 S.Ct. 316, 67 L.Ed. 564. Compare Railway Co. v. Alling, 1878, 99 U.S. 463, 475, 25 L.Ed. 438; Smith v. Townsend, 1893, 148 U.S. 490, 498, 499, 13 S.Ct. 634, 37 L.Ed. 533.

4 See “Land Grants” 9 Encylopaedia of the Social Sciences (1933), page 35; “Land Grants to Railways”, 3 Dict.Am. Hist. p. 237 (1940).

5 Cong. Globe, 42nd Congress, 2nd sess. 1585 (1872). Cf. also H.Rept. No. 10, 43rd Cong, 2nd sess. (1874), p. 1.

6 The right given by the act to take from the adjacent public lands material and timber necessary for construction has been held not to authorize the taking of timber for use in the building of rolling stock for operating purposes. United States v. Denver & R. G. Ry. Co., supra.

7 The present case does not involve the land granted for station and kindred purposes; and concerning that phase of the act we express no opinion.

8 See also, as further illustrative of the administrative interpretation, 1903, 32 Land Dec. 33; 1907, 35 Land Dec. 495; 1899, 28 Land Dec. 412.