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APPEAL from the United States Cir- Starr, 6 Wall. 402, 418, 18 L. ed. 925,

Court of Appeals for the Eighth Circuit to review a decree which reversed a decree of the District Court of the United States for the District of Wyoming, dismissing the bill in a suit by the United States to establish title to land claimed by the state of Wyoming as school lands, and to require an accounting of profits. Reversed.

See same case below, 262 Fed. 675.

C. C. A.

The facts are stated in the opinion.

Mr. John W. Lacey argued the cause, and, with Mr. William L. Walls, Attorney General of Wyoming, and Messrs. D. A. Preston, H. S. Ridgely, and Her bert V. Lacey, filed a brief for appel

lants:

Sections 2275 and 2276 of U. S. Rev. Stat. (Comp. Stat. §§ 4860, 4861, 8 Fed. Stat. Anno. 2d ed. pp. 633, 634), gave the state the right to relinquish the base lands and select the lands in controversy in exchange.

California v. Deseret Water, Oil & Irrig. Co. 243 U. S. 415, 61 L. ed. 821, 37 Sup. Ct. Rep. 394.

The offer to exchange was made by the government.

Roughton v. Knight, 219 U. S. 537, 546, 55 L. ed. 326, 327, 31 Sup. Ct. Rep.

297.

The land in controversy was not, at the time of the selection, mineral in character.

Deffeback v. Hawke, 115 U. S. 392, 404, 29 L. ed. 423, 426, 6 Sup. Ct. Rep. 95; Colorado Coal & I. Co. v. United | States, 123 U. S. 307, 327, 31 L. ed. 182, 190, 8 Sup. Ct. Rep. 131; Davis v. Wiebbold, 139 U. S. 507, 518, 35 L. ed. 238, 242, 11 Sup. Ct. Rep. 628; Shaw v. Kellogg, 170 U. S. 312, 332, 42 L. ed. 1050, 1057, 18 Sup. Ct. Rep. 632; Moran v. Horsky, 178 U. S. 205, 209, 44 L. ed. 1038, 1039, 20 Sup. Ct. Rep. 856; United States v. Plowman, 216 U. S. 372, 374, 54 L. ed. 523, 524, 30 Sup. Ct. Rep. 299; Diamond Coal & Coke Co. v. United States, 233 U. S. 236, 240, 58 L. ed. 936, 939, 34 Sup. Ct. Rep. 507.

By complying with the statute, the state acquired equitable title to the lands in controversy.

Benson Min. & Smelting Co. v. Alta Min. & Smelting Co. 145 U. S. 428, 432, 36 L. ed. 762, 764, 12 Sup. Ct. Rep. 877; Carroll v. Safford, 3 How. 441, 11 L. ed. 671; Lytle v. Arkansas, 9 How. 314, 13 L. ed. 153; French v. Spencer, 21 How. 228, 15 L. ed. 97; Witherspoon v. Duncan, 4 Wall. 210, 18 L. ed. 339; Stark

929; Barney v. Dolph, 97 U. S. 652, 656, 24 L. ed. 1063, 1064; Wirth v. Brason, 98 U. S. 118, 121, 25 L. ed. 86, 87; Simmons v. Wagner, 101 U. S. 260, 25 L. ed. 910; Hedrick v. Atchison, T. & S. F. R. Co. 167 U. S. 673, 679, 42 L. ed. 320, 322, 17 Sup. Ct. Rep. 922; United States v. Detroit Timber & Lumber Co. 200 U. S. 321, 337, 50 L. ed. 499, 505, 26 Sup. Ct. Rep. 282; El Paso Brick Co. v. MeKnight, 233 U. S. 250, 256, 58 L. ed. 943, 947, L.R.A.1915A, 113, 34 Sup. Ct. Rep. 498.

Title was not affected by discoveries of minerals afterwards.

Colorado Coal & I. Co. v. United

States, 123 U. S. 307, 328, 31 L. ed. 182, 190, 8 Sup. Ct. Rep. 131; Davis v. Wiebbold, 139 U. S. 507, 524, 35 L. ed. 238, 244, 11 Sup. Ct. Rep. 628; Shaw v. Kellogg, 170 U. S. 312, 332, 42 L. ed. 1050, 1057, 18 Sup. Ct. Rep. 632.

The grant is in præsenti.

Rutherford v. Greene, 2 Wheat. 196, 4 L. ed. 218; Lessieur v. Price, 12 How. 59, 13 L. ed. 893; Schulenberg v. Harriman, 21 Wall. 44, 22 L. ed. 551.

The original grant of school lands to a state takes effect in præsenti.

Rice v. California, 24 Land Dec. 15; Sherman v. Buick, 93 U. S. 209, 23 L. ed. 849; Heydenfeldt v. Daney Gold & S. Min. Co. 93 U. S. 634, 23 L. ed. 995, 13 Mor. Min. Rep. 204; United States v. Morrison, 240 U. S. 192, 207, 60 L. ed. 599, 606, 36 Sup. Ct. Rep. 326; Re Jacks, 7 Land Dec. 570; Harnish v. Wallace, 13 Land Dec. 108; Rea v. Stephenson, 15 Land Dec. 38.

A selector acquires the equitable title to the selected lands when he has done all that the law and the authoritative regulations require of him; and this vesting of the equitable title is not postponed until the Department decides that the selector has complied with the law and the regulations.

Re McDonald, 30 Land Dec. 124; Clarke v. Northern P. R. Co. 30 Land Dec. 145; Kern Oil Co. v. Clarke, 30 Land Dec. 550; Gray Eagle Oil Co. v. Clarke, 30 Land Dec. 570; Re Coffin, 31 Land Dec. 175; Kern Oil Co. v. Clotfelter, 30 Land Dec. 583; Kern Oil Co. v. Clarke, 31 Land Dec. 288; Bakersfield Co. v. Saalburg, 31 Land Dec. 312; Farnum v. Clarke, 148 Cal. 610, 84 Pac. 166.

The decision in the Cosmos Case does not support the government's contention.

Daniels v. Wagner, 237 U. S. 547, 560, 59 L. ed. 1102, 1107, L.R.A.1916A, 1116, 35 Sup. Ct. Rep. 740, Ann. Cas. 1917A,

40; Weyerhaeuser v. Hoyt, 219 U. S. | County, 133 U. S. 496, 511, 512, 33 L. ed. 380, 55 L. ed. 258, 31 Sup. Ct. Rep. 300. 687, 694, 695, 10 Sup. Ct. Rep. 341; The correct construction of Wiscon- Buena Vista Land & Development Co. v. sin v. Price County is fixed by Weyer- Honolulu Oil Co. 166 Cal. 71, 134 Pac. haeuser v. Hoyt, supra. 1154; Roberts v. Gebhart, 104 Cal. 69, 37 Pac. 782; Baker v. Jamison, 54 Minn. 27, 55 N. W. 749; Stalker v. Oregon Short Line R. Co. 225 U. S. 142, 56 L. ed. 1027, 32 Sup. Ct. Rep. 636.

In dealing with state lieu selections, where the state has fully complied with all the prerequisities for acquiring title to the selected land, there is no basis of authority for holding-as counsel for the government and the lower court here hold, in attempting to explain away the meaning of Daniels v. Wagner-that while no private individual can, by subsequent entry, acquire any rights in the selected land, nevertheless the United States is not bound by such a selection, and may lawfully withhold or dispose of the title at its pleasure.

The withdrawals of the land as mineral, and the establishment of its mineral character prior to approval, barred acquisition thereof by the state.

Re Administrative Ruling, 43 Land Dec. 293; Frisbie v. Whitney, 9 Wall. 187, 19 L. ed. 668; Yosemite Valley Case (Hutchings v. Low) 15 Wall. 77, 21 L. ed. S2; Shepley v. Cowan, 91 U. S. 330, 23 L. ed. 424; Russian-American Pack

Clarke v. Northern P. R. Co. 30 Landing Co. v. United States, 199 U. S. 570, Dec. 145; Ballinger v. United States, 216 U. S. 240, 249, 54 L. ed. 464, 468, 30 Sup. Ct. Rep. 338; Leonard v. Lennox, 104 C. C. A. 296, 181 Fed. 763.

The court here has jurisdiction of the appeal.

Thomson v. Dean (Dean v. Nelson) 7 Wall. 342, 19 L. ed. 94; First Nat. Bank v. Shedd, 121 U. S. 74, 30 L. ed. 877, 7 Sup. Ct. Rep. 807; Winthrop Iron Co. v. Meeker, 109 U. S. 180, 27 L. ed. 898, 3 Sup. Ct. Rep. 111; Bank of Lewisburg v. Sheffey, 140 U. S. 445, 35 L. ed. 493, 11 Sup. Ct. Rep. 755; McGourkey v. Toledo & O. C. R. Co. 146 U. S. 536, 36 L. ed. 1079, 13 Sup. Ct. Rep. 170; Carondelet Canal & Nav. Co. v. Louisiana, 233 U. S. 362, 58 L. ed. 1001, 34 Sup. Ct. Rep. 627; Collins v. Miller, 252 U. S. 364, 64 L. ed. 616, 40 Sup. Ct. Rep. 347.

Assistant Attorney General Nebeker argued the cause, and, with Special Assistant to the Attorney General Underwood, filed a brief for appellee:

Until approval by the Secretary of the Interior, no title, legal or equitable, vests in the state under a lieu or exchange selection application.

California v. Deseret Water, Oil & Irrig. Co. 243 U. S. 415, 420, 61 L. ed. 821, 824, 37 Sup. Ct. Rep. 394; Cosmos Exploration Co. v. Gray Eagle Oil Co. 190 U. S. 301, 47 L. ed. 1064, 23 Sup. Ct. Rep. 692, 24 Sup. Ct. Rep. 860; State v. Hyde, 88 Or. 1, 169 Pac. 757, 171 Pac. 582; Sioux City & St. P. R. Co. v. Chicago, M. & St. P. R. Co. 117 U. S. 406, 408, 29 L. ed. 928, 929, 6 Sup. Ct. Rep. 790; Northern P. R. Co. v. McComas, 250 U. S. 387, 391, 392, 63 L. ed. 1049, 1052, 1053, 39 Sup. Ct. Rep. 546; Wisconsin C. R. Co. V. Price

50 L. ed. 314, 26 Sup. Ct. Rep. 157; Wagstaff v. Collins, 38 C. C. A. 19, 97 Fed. 3; United States v. Detroit Timber & Lumber Co. 200 U. S. 321, 334, 50 L. ed. 499, 504, 26 Sup. Ct. Rep. 282; United States v. Morrison, 240 U. S. 192, 60 L. ed. 599, 36 Sup. Ct. Rep. 326; Barden v. Northern P. R. Co. 154 U. S. 288, 38 L. ed. 992, 14 Sup. Ct. Rep. 1030; Burke v. Southern P. R. Co. 234 U. S. 669, 58 L. ed. 1527, 34 Sup. Ct. Rep. 907; United States v. Southern P. Co. 251 U. S. 1, 64 L. ed. 97, 40 Sup. Ct. Rep. 47; United States v. Sweet, 245 U. S. 563, 62 L. ed. 473, 38 Sup. Ct. Rep. 193; Leonard v. Lennox, 104 C. C. A. 296, 181 Fed. 760; Roughton v. Knight, 219 U. S. 537, 547, 55 L. ed. 326, 327, 31 Sup. Ct. Rep. 297.

Mr. Justice Van Devanter delivered the opinion of the court:

This is a suit by the United States to establish title in it to 80 acres of land, and to the proceeds of oil taken therefrom. The district court rendered a decree dismissing the bill on the merits, which the circuit court of appeals reversed (C. C. A. -, 262 Fed. 675), and the defendants bring the case here.

One of the defendants, the state of Wyoming, claims under a lieu selection, made in 1912, and the other defendants under a lease from the state, made in 1916. It is against the selection and the lease that the United States seeks to establish title.

By the Act of July 10, 1890, chap. 664, 8 4, 26 Stat. at L. 222, Congress granted to the state, for the support of common

1 The state was not made a party at first, but afterwards, at its own request, was admitted as a defendant, to enable it to defend the lieu selection.

schools, certain lands in place (§§ 16, local officers transmitted the list and other and 36 in each township), with excep- papers to the General Land Office with tions not material here; and by the Act a certificate stating that no adverse filof February 28, 1891, chap. 384, 26 Stat. ing, entry, or claim to the selected land at L. 796, Comp. Stat. §§ 4860, 4861, 8 was shown by the records in their office, Fed. Stat. Anno. 2d ed. pp. 765, 768, and that the filing of the list was amending $ 2275, 2276, Rev. Stat., the allowed and approved by them. The list state was invited and entitled, in the event remained in the General Land Office any of the designated lands in [494] awaiting consideration by the Commisplace, after passing under the school sioner for upwards of three years. In grant, should be included within a pub- the meantime, on May 6, 1914, two years lic reservation, to waive its right there- after the selection, the selected land, to, and select in lieu thereof other lands with other lands aggregating more than of equal acreage from unappropriated 88,000 acres, was included in a tempononmineral public lands outside the res-rary executive withdrawal as possible ervation and within the state. See Cal- oil land under the Act of June 25, 1910, ifornia v. Deseret Water, Oil & Irrig. chap. 421, 36 Stat. at L. 847, Comp. Co. 243 U. S. 415, 61 L. ed. 821, 37 Sup. Stat. § 4523, 8 Fed. Stat. Anno. 2d ed. Ct. Rep. 394; Payne v. New Mexico, 255 p. 657. On April 29, 1915, the ComU. S. 367, ante, 680, 41 Sup. Ct. Rep. 333. missioner, coming to consider the selecOther laws of general application, $$ tion, declined to approve it as made, 441, 453, 2478, Rev. Stat., Comp. Stat. and called on the state either to accept §§ 681, 699, 5120, 3 Fed. Stat. Anno. 2d a limited-surface right-certification ed. p. 947, 8 Fed. Stat. Anno. 2d ed. pp. of the selected land, or to show that it 491, 862, required that the selections be still was not known or believed to be made under the direction of the Secre- mineral. The state declined to accede tary of the Interior. to either alternative, and insisted that In 1897 a tract in place, which had its rights should be determined as of the passed to the state under the school time when the waiver and selection grant, was included within a public res- were made, and that, applying that test, ervation, called the Big Horn National it became invested with the equitable Forest. On April 4, 1912, the state-title to the selected land two years prior through its governor, Joseph M. Carey, to the temporary withdrawal, and at a and its land commissioner, S. G. Hop- time when that land plainly was neither kins-filed in the proper local land office known nor believed to be mineral. The a selection list waiving its right to that tract, and selecting in lieu thereof other land of the same area from public lands within the stale and outside the forest reserve. The land so selected included the 80 acres now in controversy. At that time the state had a perfect title to the tract in the reserve, and the land selected in lieu thereof was vacant, unappropriated, and neither known nor believed to be mineral. The list fully conformed to the directions on the subject issued by the Secretary of the Interior, and was accompanied by the requisite proofs and the proper fees. Notice of the selection was regularly posted and published, proof thereof was duly made, and the state paid the publisher's charge. Thus, as the circuit court of appeals said: "The state did everything necessary to show a perfect title to the land relinquished and perfect relinquishment thereof to the government, and everything that was required either by statute or regulation of the Land Department" in selecting the lieu land instead of the relinquished tract.

No objection was called forth by the notice, and in [495] regular course the

Commissioner thereupon ordered the selection canceled, not because it was in any respect objectionable when made, but on the theory that he was justified in rejecting it by reason of the subsequent withdrawal and subsequent oil discoveries in that vicinity. The state appealed to the Secretary of the Interior, and, on October 25, 1916, he affirmed the Commissioner's action.

In the meantime, on May 24, 1916, the state had given to the defendant Ridgely a lease permitting him to drill the selected land for oil, and the lease had been assigned to the defendant oil company. There was no oil discovery, nor any drilling, on the selected land up [496] to the time the lease was given; but thereafter the oil company began drilling, and at large cost carried the same to discovery and successful production. This was four years after the selection.

The question presented is whether, considering that the selection was lawfully made in lieu of the state-owned tract contemporaneously relinquished, and that nothing remained to be done by the state to perfect the selection, it was admissible for the Commissioner and

the Secretary to disapprove and reject it, on the ground that the selected land was withdrawn two years later under the Act of June 25, 1910, and still later was discovered to be mineral land, -that is, to be valuable for oil. Or, putting it in another way, the question is whether it was admissible for those officers to test the validity of the selection by the changed conditions when they came to examine it, instead of by the conditions existing when the state relinquished the tract in the forest reserve and selected the other in its stead. In principle it is plain that the validity of the selection should be determined as of the time when it was made; that is, according to the conditions then existing. The proposal for the exchange of land without for land within the reserve came from Congress. Acceptance rested with the state, and, of course, would be influenced and controlled by the conditions existing at the time. It is not as if the selection was merely a proposal by the state which the land officers could accept or reject. They had no such option to exercise, but were charged with the duty of ascertaining whether the state's waiver and selection met the requirements of the congressional proposal, and of giving or withholding their approval accordingly. The power confided to them was not that of granting or denying a privilege to the state, but of determining whether an existing privilege conferred by Congress had been lawfully exercised, in other words, [497] their action was to be judicial in its nature, and directed to an ascertainment and declaration of the effect of the waiver and selection by the state in 1912. If these were valid then,-if they met all the requirements of the congressional proposal, including the directions given by the Secretary, they remained valid notwithstanding the subsequent change in conditions. Acceptance of such a proposal, and full compliance therewith, confer vested rights which all must respect. Equity then regards the state as the owner of the selected tract, and the United States as owning the other; and this equitable ownership carries with it whatever of advantage or disadvantage may arise from a subsequent change in conditions, whether one tract or the other be affected. Of course, the state's right under the selection was precisely the same as if, in 1912, it had made a cash entry of the selected land under an applicable statute; for the waiver of its right to the tract in the forest re

serve was the equivalent of a cash consideration. And yet it hardly would be suggested that the Commissioner or the Secretary, on coming to consider the cash entry, could do otherwise than approve it, if, at the time it was made, the land was open to such an entry, and the amount paid was the lawful price.

The conclusion, which we deem plain in principle, is fully sustained by prior adjudications. In Benson Min. & Smelting Co. v. Alta Min. & Smelting Co. 145 U. S. 428, 36 L. ed. 762, 12 Sup. Ct. Rep. 877, 17 Mor. Min. Rep. 488, which presented the question of when, under the Public Land Laws, a right to the land becomes vested, it was said, p. 431: "When the price is paid, the right to a patent immediately arises. If not issued at once, it is because the magnitude of the business in the Land Department causes delay. But such delay in the mere administration of affairs does not diminish the rights flowing from the purchase, or cast any additional burdens on the purchaser, or expose him to the assaults of third parties." And again, p. 432: "It is a general rule, in respect to the sales of real estate, [498] that when a purchaser has paid the full purchase price, his equitable rights are complete, and there is nothing left in the vendor but the naked legal title, which he holds in trust for the purchaser. And this general rule of real-estate law has been repeatedly applied by this court to the administration of the affairs of the Land Department of the government; and the ruling has been uniform, that whenever, in cash sales, the price has been paid, or, in other cases, all the conditions of entry performed, the full equitable title has passed, and only the naked legal title remains in the government, in trust for the other party, in whom are vested all the rights and obligations of ownership." In Colorado Coal & I. Co. v. United States, 123 U. S. 307, 31 L. ed. 182, 8 Sup. Ct. Rep. 131, a title obtained through pre-emption cash entries was assailed on the ground that the land was shown by subsequent discoveries to be mineral; but the attack failed, the court saying, p. 328: “A change in the conditions occurring subsequently to the sale, whereby new discoveries are made, or by means whereof it may become profitable to work the veins as mines, cannot affect the title as it passed at the time of the sale. The question must be determined according to the facts in existence at the time of the sale." In United States v. Iron Sil

ver Min. Co. 128 U. S. 673, 32 L. ed. 571,, discoveries of mineral." In Leonard v. 9 Sup. Ct. Rep. 195, a title acquired Lennox, 104 C. C. A. 296, 181 Fed. 760, through an application for a placer pat- a contention that an application for a ent was sought to be annulled on the nonmineral final entry, even if regularly ground that subsequent mining disclosed presented, and based on full compliance that the land was lode land; but the with the law, should be disallowed and title was sustained, the court observing, rejected where the land subsequently is p. 683: "The subsequent discovery of discovered to be mineral (coal), was lodes upon the ground, and their suc- [500] overruled by the circuit court of cessful working, does not affect the good appeals of the eighth circuit, the court faith of the application. That must be saying, p. 764: "This insistence cannot determined by what was known to exist prevail. It not only is opposed to the at the time." Particularly in point is settled rule that the character of the land Shaw v. Kellogg, 170 U. S. 312, 42 L. ed. whether agricultural or known to be 1050, 18 Sup. Ct. Rep. 632, which re- chiefly valuable for coal-must be deterlated to what is called Baca tract No. 4. mined according to the conditions existing Congress had accorded to the heirs of at the time when the applicant does all Luis Maria Baca the right to relinquish that he is required to do to entitle him their claim to a large body of land in to a patent, but is grounded in a misNew Mexico, and to select [499] instead apprehension of the authority and duty "an equal quantity of vacant land, not of the officers of the Land Department mineral," in not exceeding five tracts in in respect of such an application. that territory. As here, there was no Whilst it undoubtedly is subject to provision for a patent. The original examination and consideration by them, claim was relinquished and the lieu this is not that they may elect whether selection made conformably to direc- or not they will consent to its allowance, tions given by the Land Department, but that they may ascertain whether or the selected land being represented as not the applicant has acquired a right vacant, and not known to be mineral. to its allowance,-a right which is Afterwards the selection of a part of acquired, if acquired at all, at that tract No. 4 was called in question on the point of time when the applicant has ground that it was shown by subsequent done all that he is required to do in the discoveries to be mineral. This court premises instead of at the time of its sustained the selection and said, p. 332: recognition by them." The last expres"The grantees, the Baca heirs, were sion on this subject in this court is authorized to select this body of land. found in Payne v. New Mexico, 255 U. They were not at liberty to select lands S. 367, ante, 680, 41 Sup. Ct. Rep. 333, already occupied by others. The lands where it was held in respect of a state must be vacant. Nor were they at lib- lieu selection like the one in question erty to select lands which were then here that the Commissioner and the Secknown to contain mineral. Congress retary, in acting thereon, are required to did not intend to grant any mines or give effect to the conditions existing mineral lands, but with these excep- when it was made; that if it was valid tions their right of selection was co-ex- then, they are not at liberty to disaptensive with the limits of New Mexico. prove or cancel it by reason of a subseWe say 'lands then known to contain quent change in conditions; and that in mineral,' for it cannot be that Congress this regard the statute under which the intended that the grant should be ren-selection was made does not differ from dered nugatory by any future discoveries of mineral. The selection was to be made within three years. The title was then to pass, and it would be an in- The Land Department uniformly has sult to the good faith of Congress to ruled that the states acquire a vested suppose that it did not intend that the right in all school sections in place title, when it passed, should pass abso- which are not otherwise appropriated, lutely, and not contingently upon sub- and not known to be mineral, at the time sequent discoveries. This is in accord they are identified by the survey, or at with the general rule as to the transfer the date of the grant, where the survey of title to the public lands of the Unit- precedes it, regardless of when the ed States. In cases of homestead, pre- matter becomes a subject of inquiry and emption, or town-site entries, the law ex- decision, and that this right is not decludes mineral lands, but it was never feated or affected [501] by a subdoubted that the title, once passed, was sequent mineral discovery. California free from all conditions of subsequent v. Poley, 4 Copp's L. O. 18; Re Miner,

other land laws offering a conveyance of the title to those who accept and fully comply with their terms.

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