ST. PAUL, S. & 'T,'l]j'.RY: CO.1i.SAGE.
S.& T. F. Ry.
.4ppeatB, E(ghth CircwU. Februaty 1, 1899.)
The fact that under the bill, instead of a reoovery of the lands, a money judgment oould be had for the proceeds of their sale, does not a:l!ect the question of lachesJ it appearing that sUl.'h proceeds havEI,been used in payiXlg defendant's debts, ana that a judgment for the amount therebf would greatly depreciate the value of defendant's bonds and stock-shares, many of which have doubtless passed into the hands of innocent holders. 44 Fed. :Rep. 817, and 82 Fed. Rep. reversed.
Appeal from Circuit Court of the United States for the District of Minnesota. Bill originally brought by the Hastings & Dakota Railway Company against the Stillwater & Taylor's Falls Railway Company to recover certain lands, or to have an accounting for the money realized therefrom. Russell Sage, having purchased all the title and interest of complainant since the commencement of the suit, was substituted as plaintiff. Decree for complainant, (32 Fed. Rep. 821,) which was affirmed on rehearing, (44,Fed. Rep. 817.) Defendant appeals. Reversed. Thomas Wilson and Lloyd W. Bower8, for appellant. John M. Gilman, Frank B. Kellogg, 01.Mn Morris, and Briuon £0 (}ray, for appellee. Before CALDWELL, Circuit Judge, and SRmAsand TRAYER, District Judges. SRmAS, District Judge. By an act of congress, approYed March 3, 1857,' there was granted to the then territory of Minnesota, for the purpose of aiding in the construction ora line oftailway from Stillwater, by way of St. Paul and St. Anthony, to a point between the foot of Big Btouelake and the mouth of Sioux Wood river, with a branch by way of St; Cloud and Crow Wing to the Red River of the North, every
, alternate section of land designated by odd numbers for six sections on lipes being further provided that each side of said if it should appear, when said lines of railway were definitely fixed, that the United had'·soldanyof the granted sections or parts thereof, or that the right of pre-emption had attached thereto, then .selections of indemnity lands be made by agents ofthe territory. suhject to the approval of. the ,secretary of the interior,from the oddnumbered sections lying nearest to the six-mile limit, anil'within a lilJ;lit of, line of .said railways. By the act of March 3, 1865, the place limits as defined in the actof 1857 were to 10 sectioosper mile, and the indemnity Hmits to 20 miles on each side of the railroads named in the act. The territory of Minnesota, by an act ofits legislature, approved May 22, 1857, accepted thegrantJor the purposes named, and authorized the:Minrieso1;a & Pacific Ra;ilroad Company to construct the designated lines of, railway, and by various transfel'sand other proceedings, not necessary to be detailed, the St. Paril, Stillwater & Taylor's Falls Railway Company bas become the beneficiary under said grant, and entitled to all the lands and the proceeds thereof passing by the terms thereof, by reason oftha construction of the named line of railway, by way of St. Paul and St. AnthonY,to a point between the foot of Big Stone lake and the lDouth of Sioux)Vood river. By an act ofcongress, approved a grant of land was made to the,state of Minnesota,1o a,id in the construction ofaJine of railway from the town of Hastings, through the counties of Dakota, Scott, Carver,and McLeod, to a point on the western boundary of state to be by the legislature; the grant the odd-numbered sections for 10 miles 0n . .of the JlaU!l\ild 'line of railway, with the right to select indemnity lands within a limit of 20 miles. The state of Minnesota aiJ. the st!!-te legislature, approved March 4, 1867., aQllra.qthqrize<i the/:B;astings & Dakqta Railway Company to conline qf railway, and. to thereby become the beneof, the contained in the act.of 1866, and that the qonstrllction of the road, become entitled to the benefit 9J the',grant in On the 19th of December, 1871, the secretary of tqe interior certified to the stMe 'of Minnesota, and the state, on the 19th of Feb.ruary, 1872. conveyer! to the St. Paul, Stillwater & Taylor's c<>m.pany, sQme20,807 acres of land as part of the indemnity lands belonging to that company, all of which lands are th.e or place limits of the grants under which that company claims title, but within the indemnity limits thereof as enlarged by the amendatory act of March 3, 1865; or, in other words, the, same l\remQre than 15 but less than 20 miles from the line of rail:way operated by that. company , and they are within 10 Iniles of the.:-Ji-ne of railw$:yconstructedand operated by the Hastings & Dakota Company; On the 26th day of Janullry. 1886, there was filed in the United States circuit o()urt for the district of Minnesota by the Hastings & Da-
ST. Pf\UL; S. &, T. F. BY. 'CO. V. SAGE.
.' " I,
kota ,bill in equity, in Which it was averred that the complainant was the re!!.l owner of the 20,807 acres of land above the had he,en wrongfully certified and conveyed to the St. 'Paul, Stillwater & Taylor's Falls Railway COIppany; that by the act of congress of July 4, 1866, and the location of the line of railway', ,and the filing th,e map showing such location, the equi. table rigpt, and title to said, lands had passed to the complainant com· pany said, lands had been selected and certified as indemnity, lands fqrtoe ,benefit of the Stillwater & Taylor's Falls Company, which' was made the defendant to the bill. and a decree wasprayeel tq the effect defendallf be decreed to hold all said lands, and the legal title ,thereof, in trust for complainant, and to convey the .same, or, thereto be passed to complainant, as providedl;>y the utes of the state of Minnesota, and for other and further relief. On the 9th day oLTune, 1887, an amendment was filed to the bill, in which it was ,that the defendant company had sold, mortgaged, and otherwise disposed of certain portions of the lands inquestion, and it prayed that, in additiori to .the relief originally asked, the sold, mortgaged, or defendant be required, to account for pos!;ld of, ,arid ,to pay the. proceeds th,ereof to complainant. The defend· ant company the bill'upon the merits, and the cause was duly submitted, ,upon the pleadings and proofs, and thereupon a decree was entered, adjudging that, the complainant company had the equitable lands described in the bill; that the defendant company be title to from asserting any slaim or title thereto, and be teqllire4 to cqnvey such portiop. thereohs had not qeen previously or Of tQ the complainant within 30 days after the confirmation Of the xnaster's, ,report, !!.nd the case was ordered to be referred t9 for pim to ascertain and report the number of acres of the landg t4athad ollensold or dispcis,eJ of by the defendant company. with ,the a,inountsr,eJ1li/'led 'by such sales, together with, a statement of the penses lind pptlay made or incurred by the defendanqn reference on account of said lands. It appearilig by a stipulation signed on haifofeach pll,l'ty,and 'filed on the11tl1 d,ay of 'March, 1891, that lIastipgs Railway Company D119, since'the comme,l;lcement o( the suit, sold, and assigned all its title and interest in the lands in to R1flssell Sage, it was ordered by the court that he be sub4 stituted as complainant in the cause. The report qf master having been filed. thereupon the defendant company moved lor and obtained an order for a rehearing of the cause upori'its meritli,,' and also obtained leave to amend the answer in the as an' additional the statute of. limitations cause, by enacted, by of the state of Minnesota, averring as basis thereof'that the lands in dispute had been certified by ,the ,secretary of the interior t6 the state for the benent ,of defendant, and had, been by the state to defendant, ,and the deeds, entered upon the publiq mw:ethlttl.slx y,ears before the bringing of this suit." Upon rnhearing,th,e'Ibq\:irt helel,'. , 'a,dversely .to., the ., plea of 'C,/ :' .:.-.. " .' . . ,, , , ' ' ,.I ' ., , . . '.
a. n the. CooJpany,'and that the. ,anet!> expedses and the outlay incurred by defendant lncOnnectlOn wIth saId o( thereof by the. defendant compMywile du1yentered.To reyer$e thIs decree t'h,e' defendant . npPieal' t6 this. cou'rt; and counsel \lery the ljf and faets ,itt thEl controversy. ,.. ' .,.. . : to' thequestioris the. plea of the of which l'Ei assi'gl1edas, enor. Onbennltoftl1e compll\i'1iant'it,isargped that of the United ,sitting inequ,itY.1 rights arising'undei' acts of of a',statestatute of tiobs.cannot. be made avplicable thereto. .Where Tights to property are fqr eriforcing created ing the same is likewise by congressional the>juris-: diction is conferred upon.' the as in matters pertaining to patentS, arid thelike,jheri it be claimed that limit:atiopd,o not apply 'thereto j cases wherein jurisdiction over the controversy. if!!, concurrent in the state'a.nd federal courts, 'why should liot force be glVElnto the state stat-llteinbbth courts? In England the statute was'driginally applicable to nctions at law, but Murts' in all'caaes of concurtent ju'riadiction, gave full effect to of the statute, acting,as 1,t was Sliid" by way of analogy; but bY,tHe act of a:and4 Woo. IV. suits in equitr were brought )'Vtthin the express provisions' bf the statute. In Minnesota the statute in ternis is applicable to proceedings tit lawaJ1d in equity, and is therefore binding upon the,state coutts, without regard to the nature of the jurisdiction that is being exercised in the given case, or, 'asis said by the supreme court in Godden v. Kt1n1JU3U. 99 U. 8.201: "'8tl;&tutes of limitationfo'rm part of the IpgislatioDof every governmlC\l).t, and,aloe everywhere regaI'dedas conducive, and even necessary, to t·lle peace and repose of society. When they'are addressed to courts of equity as well as courts of law, as they seem t6 be in controversies of concurrent jurisdiction, thpy are equally obligatory in botll forums as a means of promoting uuiformity of decision."
'th.e,.J:.e . s0t.d Of
.)b.. I.r'tlUt't.. . ·. ·.
The'general question under consideration is quite fully discussed by Mr. Justice HARLAN in de!:vering the opinion of the. court in Kirby v. Railroq.dCo., 120 U. S.130, 7 Sup. Ct. Rep. 430, in which it is held that the 'jurisdiction in conferred upon the courtR of the United States 'Cannot be hnpaited. or impeded in execution, by state statutes of limitatii;ln, and'particnIarly in cases solely Of equitable cognizance; that in cases of concurrent lega,la,nd equitable i)irisdiction, subject to the rule Of carefully preserving the jurisdiction the federal courts tinimpaired, thecotlrt of'equity is bound to enforcetbestate' statute of limitations, and incases of equitable cognizance solely the court will, by
ST. J;>AUI;j, S. &: T. F. RY. CO. fl·. SAGE.
way of analogy, .pplyJhe: provisions.,of. the sUl.testatute applicable to the ..matter ofthfl.controversy, and thus give effect, to the salutary principleunderlyingtbese statutes of repose·. In applying these princonsideration, the ciples to the facts ,of the' particular. case then court held that, it would not, the case being in equity, apply a provision would bar relief..in equity against an actual secret of a state statute fraud in a given number. of years from the perpetration of the act of fraud,but would apply the limitation in accordance with the equitable principle r6C9gnizad in .the federal courtsjothat the bar caused by the lapse of time should not begin to run until the discovery of the fraud by the one aggrieved thereby, or the :equivalent of such dis\lovery. It ap..pearing, however,.thatJilt'aJ:ly seveniyearshad elapsed after the ery of the fraud; the, court held that the limitation of six y.ears provided in the statutes ofNewYQrk j from which state the cause came to the supreme court,Jwft8 !lobar ·to. the proceeding. IJ · In. Wood' v.' qtJ!Jlpenter, . lOl' U. S. 1:35-, ;vill be found· a very instruotwhat i$·.r¢quired in the way of pleading and proof, when iti!iHIOQgb.Hq p.voidr !the bal'ofthe statute on the ground of lack of knowl.. .edge ,It is theteinsaid: . ; I '
",1Iairs·. p()licy lies at ,their foundation.. They stlmuWhile time is .late .to activity, aqll pUPish the evidence ofrigbts; they, supply its plaoe by a. presumption which renders proof unnecessary. Mere delarextendingtcHh61imit prescribed is itself. 8 . The bane and: the together."
(if JiWitatf6n ara vital to the welfare 01 society, ;and are favored in the law. i,'I'heyare found udapproved in all systems of enlightened jurisprudence. ,They .ptolnoterepose by giVing security. and stability to human
The tbmprpceeds to show that the principle that the bar or the statute, in. of. fraud, ilJ not usually held to begin to run until the rliscoveryoUpl!;fraud, is a, rule :originally :established by courts of equity ,. anci thcmce impprted..into the statuteSj. that a party who seeks to .avoi4 the the bOllnd. by stringent t:Ulell of pleading and as to. the time when the fraud,mislllpresentation"orconcealment was discovered, and the nature thereof, so that:.the.court may see whether, .by ordinary diligence, an madejthat a general allegation of earlier discovery ignorance at qne time, and of knowledge at another, are of no effectj that a .party seeking to a,?ojdthebar of the statute on account of fraud must aver and sho.wthat qe llfled due diligence to detect it, and, if he had the of or iohill pqwer, he will deemed to know all that, have obtained knowledgeofj that the: .fraudwhicb will the rUl)ningof the statute must· be ODe .that is, and conce,aJ,ed, and not one that ,is open and, k,nown. ' U. S. 149,,5 Sup. Ct.:Rep. 399,.it apfOO'.the warranty in a [in :was brought in .the Vnited States circuit Yo,rk; it being.cJ,aiml3d that the llU-
vol. 49".' ..
in·the'$tate of: Iowa unders: ttl that .tataLdt appeared ·in'thedai.lse; ,that in MaYi1869ij&)pll.tEmt ill drie form had'been issned,conveyingtheland to BiCk'llell; which patent was ,forwarded to the local)and-dfficeat Fort Dodge,lawa, for delivery to Bfuknell. In,J'une, 1878, the ebmmissioner of land-office .or.dered:the patent tobereturned·tohis office,arid on its reception he 'rora'off the signature·of the president, and erased the; record of the patrent general land.office. thlWBickneli 'andhis.granteeshad been in theactualpossessiori ofthepremisesflince 1862, a,nd had made' valMble improvements onthalnnd. 'The -Bupreme.courtheld that, without d(3ciding whether the patent conveyed a;valid title or not, Bicknell andbi8'fgrantees :Were in possession under color of titlei and that provisions of the Iowa statute, making 10 years'.possessionabar,:waaJ8.pplicable to the case, regardless of whether the suit was at law: or in equity,citing, in support of the ruling;' the cases of Lejfin[J1Dell/ v. :Warreni 2 Blaok, 599';" Croxall v. Sher!Terd,. Q,Wall.289; Di.cker:SDn v. 0oJiJtove, 100 583. '. These citations are stifiil!lient to show;,as'is .saidin Leffingwell v.' Warren, fWJpra, "that the courts of the United ;States, in theabsenoeof legislation upon the ,congJ'l':1!S,.recpgpize Jhe:a.tatlltes of'lh;nitatiqp of the sev;eral give: them. the same and effect which are given bythtd4>cal tribunals.":,' There isoothing in'the'subject-matter of the contr,ov.ersy now before the court that'takes' the . ?ase .out of the the iA tIle In The.orlgmal partIes to,.tlle the laws of ... '.l:be litIgation are ooth corpora.tions question in dispute between them is, which party is the owner of the land; .na j while the' settlement or' -that question invOlveS; among other matters. the construction of the several acts of congresl!llmaking grants to the state of Minnesota. to aid in theconstrlidtion of certain lines way,that fact does notn1ake the litigation solely lind' bxClu'sively of,fedtM righ'ts of the respectH,'e eml ;jurisdiction.This proceeding parties to these lands could have been in the 'propercoiirt 6f the 'stslteof··Minnesota, and its jurisdiction to hear and determine:ill tions arising in the case ''\vouid have bMn beyond dispute. If. the Buit had been thus brought in>1ihe state COutt;can it be doubted that it would have 'been the duty of that court to give full force to the state statute of limitations, had thesamelleenpleadedin the case? If any ofthepro'visions of the atatute---il.:statute wisely eliacted to give stability to titles, thereby promoting confidence, 'and· encouraging the the lands of the state, and intended to prevent the.,evil of parties' waiting until by lapse 'of time valuable evidence may be rendered difficult'of procurement or wholly unattainable; and then preferring speculative claims-would have: barred. the suit if brought in:thestate court,: why should not the eainebar be effectual when the proceeding is in tIle federal court? Upon both principle anHauthority weare.'ofthe opinion that the cil.seis one in whlch the federal courtj sitting'in
ST. PAUL, S. '" T. F. RY. CO. V. SAGE.
should give the same force anclefficacy to'the provisions of the state statute that would be given thereto if the cause was pending before a court of the state of Minnesota. In the state statute are to be found two clauses which it is claimed have relation to a suit of this character, being subdivisions 6 and 7 of section 6, c. 66, tit. 2, of the General Statutes of Minnesota, the limit of time applicable to each being six years. These clauses read as 101. lows: "Sixth. An action for relief on the ground of fraud; the cause of action in
such caseis not to be deemed· to have acctued until the discovery by the ago grieved party of the facts constituting the fraud. "Seventh. Actions to enforce a trust or .to compel an accounting where the trustee has neglected to discharge his trust, or has repudiated the trust relation, or has fully performed the same."
In the absence of an authoritative construction of these clauses of the statute by the supreme court of Minnesota, we should be of the opinion that the proceeding now before the court comes within the sixth subdrvision above cited. That subdivision covers actions for relief on the ground of fraud; and. as the statute is undeniably intended to include proceedings at law and in equity, it may well· be argued that the clause includes not only such actual frauds as may form the basis for actions at law, but also all such transactions as a court of equity will adjudge to be frauds, actual or constructive; thus including cases wherein a party, baving become vested with the title of property rightfully belonging to another, refuses to convey the same to the real owner, or to account to him for the value thereof, in case the same has been sold and the money appropriated by the one not entitled thereto, which withholding of the property or its proceeds would be deemed to be a fraud upon the rights of the real owner. The seventh subdivision',covering actions to enforce a trust or to compel an accounting where a trustee has neglected his duty or has repudiated the tl'Ust relation, would seem to be limited to trusts express, implied, or resutting, growing out of the agreements of parties, or out of the duties and obligations pertaining to some relation of trust assumed by the one oharged as a trustee, and does not include' purely constructive trusts of the character of that charged against the defendant in this proceeding. This is clearly indicated by the terms used to describe the derelictions of the trustee,which may form the hasis ·of the action, intended to be included within this subdivision, to-wit, "where the trustee has neglected to discharge his trust, or has repudiated the trust rellJ.tion, or has fully performed the same." This phraseology is entirely apt when applied to cases wherein an actual trusteeship exists, and the trustee neglects the duty assumed by him, or, after assuming the position, then repudiates the trust relation, or closes up the trust, but fails to properly account for his stewardship, but it is only by a strained construction of the terms that they can be made applicable to constructive trusts that are imposed by the law, contrary to the will of the one held to· account. It is. however, claimed by the defendant that the supreme court ·of Minnesota, in the case of Burk v. Association, 40 v.49F.no.5-21
Minn. 506, 42 N.W. Rep. 479, has expressly ruled that a case similar to"that now before the court, wherein it was sought to have the defendant adjudged a trustee of the legal title for the benefit of the plaintiff, was governed by the seventh subdivision above cited, and it is not to be denied that the opinion does so state. The case is very briefly reported, and in view of the language used in other decisions by the same court, including that in the case of LeW'isv. Welch, decided in April last, and reported in 48 N. W. Rep. 608, it is not entirely clear that the suof Minnesqta, whose construction of the statute is, of course, binding upon us, intends to be understood as ruling that cases like the present do not come under the sixth, but only under the seventh, vision of sectbn 6 of the statute.' If if be held that the seventh subdivision is the clause applicable to the proceeding, then it follows that the bar of the statute is made out, for it is not disputed that the lands were deeded to the defendant company in 1871, and that company has ever · since ,that date claimed' to be the owner of the lands, so that more than six elapsed since the defendant received the title before the present suit was brought. The slUDe tesult follows, if it be held that the case falls within the provisions of subdivision.6 of the statute. In that event, the ruling in Woodv. Carpenter, already citp-d, would be applicable, and it would be incumbent upon complainant, in order to avoid the bar created by I the lapse Qf six years since the of the title in the defendant com· pany, to. !WOw olearlywhen discovery of the fact was made, and that the company was not in fault in not obtaining such knowledge at an earlier day. The fraud sought to be charged upon the defendant is not an actual fraud"nor is it one which wall in any way concealed or kept secret. The facts show that both companies were claiming these lands. Every step taken by the defendant was, of necessity, made openly and above board. The lands were selected as indemnity lands, belonging to the defendant, and the governor ot the state asked in due form that they be so certified. They were certified to the state, and by the state were deeded to the defendant. These deeds were entered of record in the counties wherein the lands are situated, and in fact every step taken in procuring t.he same was made part of the public records of the federal and stateland departments, which were open to the scrutiny of the public. The lands were offered for sale and sold to various purchasers, who entered into actual and open possession of the premises, and thus notice in every possible way was given to all the world that the defendant claimed the land, with Jull right to sell and dispose of the s,ame. In view of the facts disclosed upon this record, it cannot be held that the complainant can escape the bar provided in the sixth subdivision on the ground that it did not discover the facts of the alleged fraud, for, if it was ignorant of the fact ofthe transfer of the title of these lands to the defendant, it must have been willfully ignorant, in that it had before it the means of knowledge,and it is not claimed that the defendantpracticed any concealment in the premises. The plea that was filed on be-half of the defendant was, in effect, that six years and more had elapsed
ST. PAUL, S. & T. F. BY. CO. t1. SAGE.
sin(le the title of the lands had been conveyed to it, and therefore the ae . tion was barred by lapse of time·. According to the ruling of the Unitc<. StatessuPFeme court in Wood v. Carpenter, IfUIpra, if the complainant desired to escalJe the bar by reason of the fact thatrelief was sought again% fraud not discovered until a time within the six years, then it was the duty of the complainant,by proper allegations and proof, to show the existence of actual fraud,concealed from the knowledge of complainant, and, without fault on its part, not discovered until within the six before the bringing of the suit; and under the ruling of the supreme cotm of Minnesota in Burk v. Association, 8upra, if there were any facts excusing the delay, the complainant should have pleaded and proved the same. The bill on its face expressly avers that the lands in dispute were selected by the agents appointed by the governor of the state, with' the approval of the secretary of the interior, and were certified to the state in aid of, and for the benefit of, the St. Paul & Pacific Company, the predecessor of the defendant company, on the 11th day of October, 1871, and it is not averred that the complainant or its predecessors had not knowledge of this fact. When the plea of the statute was filed, it was open to' complainant to meet it by the averment ofany and all facts which would avoid the running of the statute, if any such existed, but no amended or bill or amendment thereto was filed, and there is, therefore, upon the face of the pleadings nothing to the contrary of the fact that complainant and all its predecessors had full knowledge of all the tranSfers of the lands in dispute at the time the same were made. The evidence also shows that the entire line of complainant's road was completed by December, 1879, more than six years before this suit was brought. Reliance is placed, in argument, upon the testimony of George E. Skinner and W. H. Kelly, who were land commissioners of the complainant company,'that they or the company did not have notice of the transfer of these lands to the defendant until in 1883. While these witnesses do in general terms so testity, they wholly fail to explain why they, or the company they represented, did not take interest enough in the matter to make any inquiry about these lands, or to obtain knowledge of their condition in regard to title or occupancy, It does not seem possible that no examination or inquiry in regard to these lands was ever made on behalf of the complainant company for nearly four years after the whole line of road was completed, and for seventeen years after they were granted to the compaoy, according to the present contention. The means of knowledge on part of the complainant were too open and available for it to be credible tbat the company allowed a period of seventeen years to elapse after the date of the grant under which it claims, and four years after it had earned all it could under the grant, before any inquiry touching these lands was made in the interest of the com pany, and even the slightest inquiry or examination would have disclosed the fact that the state and United States authorities had selected and conveyed these lands to the defendant company, deeming that company to be en-
titled thereto. If, however, it be true that, the complainant dId not ob- . tainknowledge of this fact until,in 1883, as is now claimed, then 'such want of knowledge was due solely to the inexcusable negligence of the complainant, and ignorance due to negligence cannot be urged as a ground why the bar of the statute should not prevail. Furthermore, even if it should appear that through any fault in pleading or otherwise the defense based upon the plea of the statute of limitations had not been technically made out, or if there was no provision in the statute properly applicable to proceedings of this Qature, we deem it to be a ,case wherein the long and unexplained delay in bringing the suit requires the court ,to hold that claim' has, through the laches of complainant and his assignor, become a.stale demand, and one which a court of equity will not enforce. The rule that laches will defeat a claim whicb, if promptly pressed, would have been recognized and protected by a court of equity, is so well settled that it i'!l hardly necessary to cite authorities in support thereof. See, ;however, Wagner v. Baird, 7 How. 234; .Hurne v. Beal's Ex't, 17 Wall. 336; Marsh v. Whitmore, 21 Wall. 178; Sullivan v. RailroadOo., 94 U. S. 806; Lansdale v. Smith, 106 U. S. 391, 1 Sup. Ct. Rep. 350; Speidel v. Henrici, 120 U. S. 377,7 Sup. Ct. Rep. 610; Mackall v. Casilear, 137 U. S. 556, 11 Sup. Ct. Rep. 178j Boone Co. v. Railroad 00., 139 U. S. 684, 11 Sup. Ct. Rep. 687. The admitted facts of the case are these: T,he grant of the lands under which the complainant claims, was made July 4, 1866, to the state, and on .the 7th of March, 1867, the Hastings & Dakota Railway Company was designated as the beneficiary of the grant by action of the state legislature. On the 26th of June, 1867, the company filed its map of definite location of the line of railway in the general land-office, and now asserts that from that date its rights had attached to the lands in dispute, orthatthe samewere from that date withdrawn from the operation of any grant or other disposition under the laws of the United States. The completed by line of .railway of the Hastings & Dakota Company the lands in. dispute in 1879. Theselectiou and conv:eyance of the lands to the, defendant company was made inOctober, 1871, and the present bill was filed January 26, 1.886. Even if it be true, as claimed by complainant,that until the final completion of the road the Hastings & Dakota Company could not maintaip a 1;lill to compel the transfer of the legal title to it, yet it is entirely clear that, upon the conveyance.9f the land to the defendant company in 1871, the Hastings & Dakota Company could have maintained II. bill in equity enjoiriing that cOIppany from selling or incumbering the property until the final determination of the question of the rightful ownership of the lands. No such action was taken. The Hastings & Dakota Company,so far as it apPE!!lrs, remained supinely inactive, and permitted the state authorities to select the lands as indemnity lands belonging to the defendant company, and to petition the secretary of the interior to certify them to the st!,l.te for the benefit of the defendant company, and upon their certification to the state permitted the state to deed them to the defendant company without objectiqn or protest. Orant the contenI . . . . .
ST. PAUL, S. & T. F. RY. CO· .". SAGE.
tion of the complainant, that there was no appropriate legal remedy open to the railway company until the lands had been deeded to the fendant, what excuse is there for the delay of over 14 years that intervened between the time the lands were deeded to the defendant company and the bringing of the present suit, during which period the courts of equity were open for the assertion and protection of whatever rights and belonged to the complainant company. It is urged in argument that it does not appear that the lapse of time has put the defendant company or anyone else at a disadvantage, and therefore there is no ground for applying the doctrine of laches. The lapse Of time is almost certain to affect the evidence upon which the legal rights of the parties are dependent, and this is a sufficient reason for ra;. quiringdiligence at the hands of a suitor in equity in all cases wherein it appears that delay may have put a party to a disadvantage in the procurement of matel'ial evidence. The record of this case discloses the fact that one of the main points in controversy is in regard to the extent of the withdrawal of lands ordered by the commissioner of the general land-office, in letters addressed to the local land-officers in Minnesota, dated July 10,1865, and containing diagrams of the line of the railway opposite to which the ultimate sections were ordered withdrawn. These diagrams and other like matters are not in evidence. having, it would seem, become lost or mislaid. But. aside from considerations of this nature, it is clearly apparent that the money interest of the· defendant, and others holding under it, would be disastrously affected by entertain;. ing the present bill at this late date. In the first instance, it is averred in the amendment to complainant's bill that after the lands had been conveyed to the defendant company it executed a mortgage thereon, and it appears from the evidence that the bonds secured by such mortgage were sold. for the purpose of raising money to aid in building the rail. way owned. by the defendant. The bill, as amended, prays the court to adjudge the lands. to be the property of complainant. the defendant to be a trustee holding the title for complainant; and certainly, from the moment this bill was filed. the security of the mortgage executed by the deJendantcompany has been affected, and the value of the bonda secured thereby has been. depreciated. Furthermore, if the defendant company is now required to pay the sum adjudged against it, the loss caused thereby will fall upon the present stockholders, none of whom may have been benefited by the sale of the lands made in years past. The court cannot ignore the fact that the stock and bonds of corporations like the defendant arecol1stantly changing hands, and that it is entirely possible that the present stockholders I when they purchased their stock, paid a larger price therefor by reason of the fact thaUhe defendant then appeared to be the owner of the lands in controversy; and certainly, if the large sum now claimed is assessed against the company, the loss caused to the stockholders, and bondholders as well, in the necessary depreciation of the value of their will be certain and great. As is said by the supreme court in Graham v. Railroad 00., 8.161, 6 Sup. Ct. Rep. 1009, a case wherein fl,bill was filed: for relief against fraud in the giving and foreclosure of.a.
rlljJrpad tn,ortgage, the bill baing filed within fourteen years after the giving of tl>.e mortgage and. sevenyearsafter the foreclosure thereof: ".oudng aU this time .thereeords of ,the conrts, npon which appear all the which the is. to have have to. Inspectiol1 and examination, and what has been done under them'might have been, known to the plaintiff if hehad sern fit to make inquiry. In the mean time,'lt is apparent that many persons mllst have acqUired rights in the stock of· the new' corporation who were ignorant of the alleged frauds. Under such circntnstanct's, to set aside this mOl'tgagr, and to disl'egarll thedecrre of foreclosure, ... ... ... is a proposition so wild and preposterous as hardly to plel'it seriOllS " If, however, the court should give consideration only to the effects of the proceeding upon the delendant company, there is ample ground therein to sustain the defense of laches., The decree appealed from gi ves judgment for the sum of $211,536.35:, and awards execution for the collection thereof. It appears from the. evidence that, as the lands were sold the proceeds realized were used in paying the debts of the com pany , and no part thereof is now under the control of the company. There is included in the sum awarded complainant a large allJount of interest, and if the decree is affirmed the compliny will be compelled to meet a dePland for a sum largely over $200,000; or by failure to pay the same submit to alevy of execution on its property. It certainly needs no extended argument to show that it is entirely possible that the affirmance of the decree might cause the insolvency of the company, or at least it might greatly cripple and embarrass it. In view of the possible consequence to the company alone, it is certainly the duty of the court to require that the equity of complainant be made clear in all essential points, including that of diligence, before the court will move in its behalf. But, aside from all considerations of the effect upon the defendant company, its stockholders and bondholders, of entertaining the present bill, there are other and more persuasive grounds' for holding that the reliefsought should not be at this late day. The equitable rule that one who is negligent shall not have relief, and the barring of proceedings alter the lapse of stated periods of time by statutory enactments, are alike based upon public policy, as wen as upon considerations affecting only individual rights. It is to the puhlic interest that stability in the title to property should exist, and that all uncertainties and disputes as to the ownership of land should be speedily put at rest. No greater evil to the community at large can well be imagined than that caused by attacks upon the title to large bodies of land which have been for years in the actual possession of bona fide settlers, thus weakening the public confidence in the recognized and established evidences of title. It is greatly to the welfare of the community that realty shall be improved to the best advantage, and rendered as productive as possible, and yet.these results cannot be expected if the parties in possession are in doubt whether if they sow they wiUbe permitted to reap the harvest. Hence, there lies at the foundation of tho principle that,the lapse of time will become a defense to the title of the one in possession of property not only consideration for his personal rights and equities, but also a recogllition of the higher publio interests, which eanonly be subj;;erved
ST. PADL,S. 41: T. F. BY. CO. tI. SAGE.
by putting at rest, as speedily as possible, all doubts and uncertainties touching the title of realty, to which end it is the duty of courts to discourage delays in the assertion of conflicting claims thereto. We conceive this case to belong to a class which imperatively calls foJ' a strict application of the rule that courts of equity will move only in behalf of the diligent. Grants like those under which the parties her&to respectively claim the premises in dispute embrace quantities of land. and yet the grants do not describe the particular sections that are included therein. The line of the railway must be located to the satisfaction of the secretary of the interior, and the actual limits of the grant are then defined by the officers of the land department, and in case of indemnity lands, the selections are made by the agents of the state, and, upon approval by the secretary of the interior, they are certified to the state for the benefit of the named railroad, and the state then in due time conveys the same to the company. The beneficiaries of such grants wellkn6w the steps required to be taken to perfect the evidence of title, and 'they equally well know that,of necessity, the public must rely upon the acts of the state and United States officials in apportioning the lands covered by different grants, as evidence of the ownership thereof; and, therefore, where there are grants that may conflict, and the state and national authorities undertake, as it is their duty to do, to apportion to each grant the lands covered thereby, and conveyances are made to the state and by the state to the respective railway companies, and the latter then proceed to sell the same to actual settlers, if either company intend:;s to question the correctness of the selections or apportionment thus made, good faith requires that prompt action shall be taken, or it will, in the interests of the public, be held that the apportionment has been acquiesced in. In the case at bar it cannot be otherwise than that the Hastings de Dakota Company well knew that the prior grants contained in the acts of 1857 and 1865 had been made, and that the line of the defendant company was so located that there might be a Conflict between the grants to the defendant company and that to the Hastings & Dakota Company. It cannot be otherwise than that jt was well known to the Hastings & Dakota Company that the state and United States officials would, of necessity, be called upon to make the selections of the lands belonging to each company, and to cause them to be certified to the state, and that in faotthese officials did make the selections, and that the governor of the state in writing requested the certification of the lands in dispute to the state for the benefit of the defendant company, and when they were so bertified the state in due time deeded them to the defendant. It was open to the Hastings & Dakota Company to have preferred its claim, if it deemed it had one, before the officials of the land department and the secretary of the interior to the lands now in dispute, or to the state authorities, after the certification to the state; but it was then silent. When the lands were deeded to the .defendant, it could then have asserted its claim thereto, and, if its right and title was denied, it could have invoked the aid of the court of equity to enjoin the sale of the lands until the questions in dispute had been put atrest.H
took no action',butsileIitly stood'by, and permitted the lands now the subject of dispute to be sold to actual settlers, and then, after the lapse of 14 years, it filed the present bill, for the purpose of asserting that the selections made by the state officials, and approved by the secretary of the interior, and confirmed by the .certification to the state, and by the conveyance of the state to the defendant company, were based upon a wrong construction of the grants in 'question, and that since 1867, the Hastings & Dakota Company has been the equitable owner of the land, and· now seeks the interposition of the court of equity to enforce its long dormant claim to the property. Every consideration for public and private interests alike calls upon the court to refuse its aid to a claimant who,without excuse, has permitted so many adverse interests to grow up in ignorance of the claim now sought to be asserted. It is said in argument that no injury will be caused to the settlers upon these lands, because the court can award a money judgment against thedefeodant corporation. The bill prays that the complainant be adp judged to be the owner of the entire 20,8.07 acres, and the instant it was filed it tbrewa cloud over the title of every acre, and the settlers thereon have been from that day, and are now, sufferers by reason of the attack thuamade .upon the validity of the titles under which they hold their farms. Theinstantthis hill became liapenden8 the title of the settler was attacked, and, the value of his .property, if he wisbed to sell, was necessarily depreciated. The fact that the title under which the settlers held their farms was thus attacked and clouded must have greatly discoura:ged the settlers, and deterred them from making valuable and perntaneIiHmprovements upon their lands;-ll loss to the settlers and the ()omrnuliityalike, which can never be mad.e good, for no human power can recall the years that have elapsed. We' are not willing, by entertaining a b.ill of,the nature of the one ,now us, to cast doubt and uncertainty uponithe title to thousands oractes·of land occupied by actual settlers, which titJ.e is based upon ,grants in aid of the construction of lines of railway, and where the state and United States officials have' apportioned the lands supposed to be cov-ered· by the several grants, and such APportionmentb,as been acquiesced in for' 'years by the railway companies interested in allch grants. Every ,coll siderationof public and private interel!ts require that repoli)e l:!e quickly to rights acquired. under such oircumstances,. and· hence, as aI'ready said, this CaS(\ belongs to a class which demands vigilance, diligenCt',a!1dpromptactionon the part of any individual or corporation that 19 question the rightfulness of the apportionment made by the pubUl) officials. under grants of the kind giving rise to the present ,controversy. . In our Ndgment, the defenses based upon the statute of limitations and uponthEdaches of the Hastings & Dakota (Jompany are a complete ,anewer to the bill herein filed, and we therefore relieved from the con'aideratjoI) of the other questions presented on the record. The ,decree llppealed froUl is reversed, and the cause is remanded to instructions to dismiss the bill for want ofequitYt J at the cos,t of; complainant.
.'BOMAN V. BOMAN.
(Cilrcutt Court of .AppeaZs, Ninth Cilrcutt. Jannary 25, 1899.)
INTEBTAOy-EFFEOT OF WILL.
A clause in a will devising "to each of my1;leirs at law the sum of'one dollar" will not take the will outo! the operation of a statute which provides that a testator shall he deemed to die to such child 01' children, or, ill case of their death, descendants of such c1lildor children, "not named or prOVided for" in his will. Code Wash.S 1825. 47 Fed. Rep. 849. reversed.
, Appeal from the Circuit Court of the United States for the District of Washington. In Equity. Action by Albert T. Boman and Arrisa L. A. Bilbrey against Mary E. Boman, to compel her to render an account as executrix, etc., of 'George M. Boman, deceased. Plaintiffs appeal from a j sustainingdefendant's demurrer to the complaint. Reversed. Andrew'F:'Burleigh. for appellants. . JuniWj Rpchester, for appellee. Before DEADY, HAWLEY, and MORROW, District Judges. :\ HAWLEY, District Judge. Thisaction was institutedto compel resp6rid ent to render an account as executrix of the estate of George M. Boman; deceased, and to pay to plaintiffs the amount which they, as children of the deceased, are legally entitledto receiv.e. The complaint, among other things, alleges that plaintiffs are citizens of the state of Tennessee; defendant is a resident oBhe state of Washington; that, in 1861, George M. Boman, now deceased, was married to Armilda C. Ramsey, both parties being at that time residents of the state of Tennessee; that plaintiffs are the issue of said marriage, and children of the said George M. Boman, born, respectively, in the years 1862 and 1864; that on the 1st day of December, 1890, in the county of Kings, state of Washington, the said George M. Boman made his last will and testament, a copy Of which is annexed to and made a part of this coni plaint; that on the 19th day of December, in the state of Washington, the said George M. man, husband of the said defendant, died, leaving surviving him two children, viz., the 'plaintiffs herein; that at the time of his death he was possessed of an estate of about that neither the plaintiffs nor their descendants have had any proportion of his estate bestowed upon them; or either of them, in his lifeAime, by way of advancement or otherwise; that he did not name the plaintiffs, or either of them, in his will, nor did he make any provision for them, or either of them, therein, or erwise howsoever. The defendant demurred to this bill of complaint upon the ground that it did not state a case entitling plaintiffs to any relief against defendant. This demurrer was sustained, and, plaintiffs decliningto amend their bill, judgment was rendered against them for costa, from which judgment plaintiffs appeal.