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whether agricultural or known to be chiefly valuable for coal-must be determined according to the conditions existing at the time when the applicant does all that he is required to do to entitle him to a patent, but is grounded in a mis

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. 1050, 18 Sup. Ct. Rep. 632, which related to what is called Baca tract No. 4. Congress had accorded to the heirs of Luis Maria Baca the right to relinquish their claim to a large body of land in New 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.

9 Land Dec. 408; Rice v. California, 4, 1897. The act clearly coutemplates 24 Land Dec. 14; United States V. an exchange of equivalents. Such is Morrison, 240 U. S. 192, 207, 60 L. the unmistakable import of its terms. ed. 599, 606, 36 Sup. Ct. Rep. 326; In the case of the relinquishment of United States v. Sweet, 245 U. S. 563, patented lands, title is to be given by 572, 62 L. ed. 473, 480, 38 Sup. Ct. the government for title received." Rep. 193. And, as respects cash en- And again, p. 564: "It would be tries and entries under the pre-emption, strange indeed if, by the latter [1897] homestead, desert land, and kindred act, Congress intended that one who, laws, the Land Department always has accepting the government's offer of exruled that if, when the claimant has change, relinquishes a tract to which he done all that he is required to do to has obtained full title in a forest reserentitle him to receive the title, the vation, and in lieu thereof selects a tract land is not known to be mineral, he of land which, at the time, is vacant and acquires a vested right which no subse- open to settlement, and does all that is quent discovery of mineral will devest required of him to complete the selecor disturb. Harnish v. Wallace, 13 tion and to perfect the exchange, should Land Dec. 108; Rea v. Stephenson, 15 thereby acquire only an inchoate right Land Dec. 37: Reid v. Lavallee, 26 Land to the selected tract, liable to be defeatDec. 100, 102; Aspen Consol. Min. Co. ed by subsequent discoveries of mineral v. Williams, 27 Land Dec. 1, 17; Dia- at any time before patent, or before mond Coal & Coke Co. v. United States, final action upon the selection by the 233 U. S. 236, 240, 58 L. ed. 936, 939, 34 Land Department. Such a construction Sup. Ct. Rep. 507. And this rule has would not only tend to defeat the obbeen applied by that Department, al- jects for which the act was passed, by though not uniformly, to selections made discouraging owners of lands in forest in lieu of relinquished lands in public reservations from giving up their titles, reservations. Thus, in Kern Oil Co. v. but would be against both the letter and Clarke, 30 Land Dec. 550, where a lieu spirit of the act. Parties would be selection under the Act of June 4, 1897, slow indeed to relinquish their complete chap. 2, 30 Stat. at L. 36, 9 Fed. Stat. titles if it were once understood that Anno. 2d ed. p. 587, was under consid- they could obtain only doubtful or coneration, the Secretary of the Interior tingent rights in return for them. It said, p. 556: "When do rights under could not have been the intention of the selection become vested? In the Congress that parties accepting the govdisposition of the public lands of the ernment's offer of exchange should be United States, under the laws relating embarrassed by any such conditions of thereto, it is settled law: (1) That doubt and uncertainty." when a party has complied with all the terms and conditions necessary to the securing of title to a particular tract of land, he acquires a vested interest therein, is regarded as the equitable owner thereof, and thereafter the government holds the legal title in trust for him; (2) that the right to a patent, once vested, is, for most purposes, equivalent to a patent issued, and when in fact issued, the patent relates back to the time when the right to it became fixed; and (3) that the conditions with respect to the state or character of the land, as they exist at the time when all the necessary requirements have been complied with by a person seeking title, determine the question whether the land is subject to [502] sale or other disposal, and no change in such conditions, subsequently occurring, can impair or in any manner affect his rights." Again, p. 560: "These established principles, in the opinion of the Department, are applicable to selections under the Act of June

That view was repeated and applied in many other departmental decisions dealing with lieu selections. But afterwards the Secretary, conceiving that the decisions of this court in Wisconsin C. R. Co. v. Price County, 133 U. S. 496, 33 L. ed. 687, 10 Sup. Ct. Rep. 341, and 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, justified him in so doing, ruled that [503] no right attached under such a selection unless and until it was approved by him, and therefore that, even though the selection was lawfully made, he possessed a discretion to reject it and give effect to an intervening change in conditions, as where a new claimant settled upon the land or sought to make entry of it while the selection was pending.

Under this changed ruling the Secre tary rejected several selections lawfully made by one Daniels, and awarded and patented the land to others. Daniels then brought suits against the patentees,

charging that, by the selections, he Commissioner of the General Land Ofacquired the equitable title, that his fice had reported that the company selections were rejected and the patents already had received indemnity lands issued through a misapprehension of the largely in excess of the losses for which law, and therefore that the patentees it was entitled to indemnity, and the took the legal title in trust for him. company was disputing that report. Ultimately the suits came to this court, Until that controversy was determined and, after a full review, the changed it could not be known whether the comruling of the Secretary was disapproved pany was entitled to an approval of the and Daniels's contention sustained. selection. In that situation the United Daniels v. Wagner, 237 U. S. 547, 59 States had such an interest in the land L. ed. 1102, L.R.A.1916A, 1116, 35 Sup. as made it nontaxable. Whether the Ct. Rep. 740, Ann. Cas. 1917A, 40. The selection was valid or otherwise was prisubstance of the decision was that, as marily a question for the Secretary of the selections were lawful when made, the Interior to determine. Ultimately "it was the plain duty" of the Secretary he held it valid, but not until after the to approve them; that the contrary view tax was levied, indeed, after the suit found no justification in Cosmos Ex- was brought. The suit involved the ploration Co. v. Gray Eagle Oil Co. validity of the tax, and nothing more. supra; and that the real authority and Its purpose was not to control the acduty of the Secretary in dealing with tion of the Secretary by a writ of mansuch selections were pointed out in damus or injunction, nor to determine Weyerhaeuser v. Hoyt, 219 U. S. 380, the title as between the United States 387, 388, 55 L. ed. 258, 261, 262, 31 and the company, or between the comSup. Ct. Rep. 300, where it was said: pany and a grantee of the United States. "The requirement of approval by the True, the court, after commenting on Secretary consequently imposed on that the difference between the granted lands official the duty of determining whether in place and the indemnity lands, as the selections were lawful at the time respects the mode of identification, very they were made, which is inconsistent broadly stated that an indemnity selecwith the theory that anyone could ap- tion, to be effective, required the appropriate the selected land pending proval of the Secretary; but it was not action of the Secretary. The scope of meant by this that the Secretary arbithe power to approve lists of selections trarily could [505] defeat the right of conferred on the Secretary was clearly selection by withholding his approval, pointed out in Wisconsin C. R. Co. v. nor that if, through a mistake of law, he Price County, 133 U. S. 496, 511, 33 rejected a selection which was valid at L. ed. 687, 694, 10 Sup. Ct. Rep. 341, the time it was made, the company where it was said that the power to ap- would be remediless. There was prove was judicial in its nature. Pos-occasion to consider those questions, nor sessing that attribute, the authority | could they properly be determined therefore involved not only the power, without the presence of parties not then but implied the duty, to determine the before the court. And that the court lawfulness of the selections [504] as of did not intend its words to be taken so the time when the exertion of the au- broadly is illustrated by the fact that thority was invoked by the lawful filing it cited with approval the case of St. of the list of selections." Paul & S. C. R. Co. v. Winona & St. P. R. Co. 112 U. S. 720, 733, 28 L. ed. 872, 877, 5 Sup. Ct. Rep. 334, wherein an indemnity selection lawfully made, but disapproved by the Secretary, was sustained against an adverse certification on the ground that "this erroneous decision of his" did not deprive the selector "of rights which became vested by its selection of those lands."

As the circuit court of appeals in the present case, like the Secretary in the other, regarded the decisions in the Wisconsin C. R. Co. Case and the Cosmos Exploration Co. Case as showing that no right attaches under a lieu selection unless and until approved by the Secretary, it is well to point out just what was involved in those cases; for it then will be apparent that there was no purpose in either to go to the length suggested.

The Wisconsin C. R. Co. Case was a suit to enjoin the collection of a tax levied on land which, at the time, was covered by a pending indemnity selection under a railroad land grant. The

no

The Cosmos Exploration Co. Case was a suit by a lieu-land selector to establish his title as against others who were claiming under placer mining locations. The selection was not accompanied by proof that the land was not then occupied adversely, although that was required. Within the time prescribed by

upon in Daniels v. Wagner as interpretative of the decision, and this court answered: "But we are of opinion that this [507] interpretation of the Cosmos Exploration Co. Case cannot be justified." Besides, it was adjudged in the Daniels Case that a lieu selection which is lawful at the time it is made does invest the selector with equitable rights which he may enforce in an appropriate way where the Secretary, through an error of law, rejects the selection. And that ruling was reaffirmed and applied in Payne v. Central P. R. Co. 255 U. S. 228, ante, 598, 41 Sup. Ct. Rep. 314, and Payne v. New Mexico, 255 U. S. 367, ante, 680, 41 Sup. Ct. Rep. 333.

the regulations the mining claimants taken as declaring that no right vests filed in the land office verified protests under a lieu selection unless the Secreassailing the regularity and validity of tary approves it; but that such a ruling the selection, setting up locations of the was intended is refuted by the opinion selected land made under the placer as a whole, and particularly by the mining law prior to the selection, and statements therein that the power of the alleging that the lands "were not sub- Secretary is not to be exercised arbiject to selection" because "the same trarily, and that his "decision of any was mineral land and was included legal question would not, of course, be within" the mining locations. The pro- binding on the courts" should the questests were entertained, and, with the tion properly arise in future litigation. selection, were pending when the suit The general expressions were relied was begun, which was shortly after the protests were filed. The suit was brought on the theory that by the selection the selector acquired "the full, complete, and equitable title" to the selected land, notwithstanding he had not submitted any proof of nonoccupancy, and that the protests were not such as could be entertained or investigated by the Land Department. That case and another (United States ex rel. Riverside Oil Co. v. Hitchcock, 190 U. S. 316, 47 L. ed. 1074, 23 Sup. Ct. Rep. 698), [506] wherein a writ of mandamus was sought against the Secretary by another lieu-land selector, were heard and disposed of as related cases, and the decision in one should be read in connection with that in the other. The full substance of the decision in the Cosmos Exploration Co. Case is in the following excerpt from the opinion, 190 U. S. 315: "Concluding, as we do, that th question whether the complainant has ever made a proper selection of land in lieu of the land relinquished has never been decided by the Land Department, but is still properly before that Department, the courts cannot take jurisdiction and proceed to decide such question themselves. The government has provided a special tribunal for the decision of such a question arising out of the administration of its Public Land Laws, and that jurisdiction cannot be taken away from it by the courts. United States v. Schurz, 102 U. S. 378, 395, 26 L. ed. 167, 171. The bill is not based upon any alleged power of the court to prevent the taking out of mineral from the land, pending the decision of the Land Department upon the rights of the complainant, and the court has not been asked by any averments in the bill or in the prayer for relief to consider that question. For the reasons stated, we think the bill does not state sufficient facts upon which to base the relief asked for, and that the defendants' demurrer to the same was properly sustained." There are general expressions in the opinion, which, separated from the rest, might be

The only exception to the general rule before stated respecting the time as of which the character of the land-whether mineral or nonmineral-is to be determined is one which, in principle and practice, is confined to railroad land grants. From the beginning the Land Department, by reason of the terms of those grants and the restrictive interpretation to which they are subjected, uniformly has construed and treated them as requiring that the character of the land be determined as of the time when the patent issues. In 1890 Secretary Noble, in declining to disturb this construction and practice, pointed out the reasons which had led the Department to make a distinction in this regard between those grants and other land laws, and said: "This practice, having been uniformly followed and generally accepted for so long a time, there should be, in my judgment, the clearest evidence of error, as well as the strongest reasons of policy and justice controlling, before a departure from it should be sanctioned. It has, in effect, become a rule of property." Central P. R. Co. v. Valentine, 11 Land Dec. 238, 246. In 1894 the matter came before this court, and the construction and practice of the Land Department were sustained. Barden v. Northern P. R. Co. 154 U. S. 288, 38 L. ed. 992, 14 Sup. Ct. Rep. 1030. As the opinion in that

It results that the Secretary erred in matter of law in rejecting the selection, and that the District Court rightly entered a decree for the defendants. See Cornelius v. Kessel, 128 U. S. 456, 461, 32 L. ed. 482, 483, 9 Sup. Ct. Rep. 122; United States v. Detroit Timber & Lumber Co. 200 U. S. 321, 338, 50 L. ed. 499, 506, 26 Sup. Ct. Rep. 282. The decree of the Circuit Court of Appeals is accordingly reversed.

MERCHANTS' LOAN & TRUST COM-
PANY, as Trustee of the Estate of
Arthur Ryerson, Deceased, Plff. in Err.,

V.

JULIUS F. SMIETANKA, formerly United States Collector of Internal Revenue for the First District of the State of Illinois.

case shows, the court recognized that 41 Sup. Ct. Rep. 314, that the Act of the mineral land exception in other land 1910, under which the withdrawal was laws simply operates to exclude from made, is confined to "public lands;" that sale, etc., "land known at the time to be by the selection this land had ceased to mineral," and was careful to explain be public, and that the act could not be that its decision related to "grants in construed to embrace it without workaid of [508] railroads," and to "no ing an inadmissible interference with other grants." The grounds on which the vested rights. decision was put were, (a) that the railroad land grants, besides being confined in the granting clause to lands "not mineral," contain provisos declaring in words or effect "that all mineral lands be, and the same hereby are, excluded from the operation of this" grant; (b) that such grants, although expressly requiring that the question whether the lands are otherwise excepted be determined as of the time the map of definite location is filed, contain no such provision in respect of the exception of mineral land; (c) that it was well understood that many years would necessarily elapse between the filing of the map and the time when, by construction of the road, the grantee would be entitled to patents; and, as the grants covered great areas, in one instance nearly equal to that of Ohio and New York, it hardly could have been intended to arrest mineral development in those areas in the meantime; (d) that such grants "must be strictly construed," and "if they admit of different meanings, one of extension and one of limitation, they must be accepted in a sense favorable to the grantor;" and (e) that the long-prevailing construction and practice of the Land Department ought not to be disturbed. Plainly, the decision in that case is without bearing here, save as it recognizes that rights under other land laws are to be tested by a different rule. And this is emphasized by the fact that in Shaw v. Kellogg, 170 U. S. 312, 42 L. ed. 1050, 18 Sup. Ct. Rep. 632, where the selection of Baca tract No. 4 was involved, the court distinguished the Barden Case, and applied the general rule before stated. And it is of further significance that this court has recognized that the legislation of Congress designed to aid the common schools of the states is to be construed liberally rather than restrictively. Beecher v. Wetherby, 95 U. S. 517, 526, 24 L. ed. 440, 441; Johanson v. Washington, 190 U. S. 179, 183, 47 L. ed. 1008, 1010, 23 Sup. Ct. Rep. 825.

Of the executive withdrawal of the land two years after [509] the lieu selection was lawfully made, it suffices to say, following the recent decision in Payne v. Central P. R. Co. 255 U. S. 228, ante, 598,

(See S. C. Reporter's ed. 509-522.) Error to district court Federal quesconstitutionality of income

tion
tax.

1. The Federal Supreme Court has jurisdiction of a writ of error to a district court to review a judgment which sustained a demurrer to a declaration in assumpsit to recover back Federal income taxes, where the claim to recover is based upon the contention that the fund taxed was not income within the scope of U. S. Const., 16th Amend., and that the effect given by the

Note. On direct review in Federal Supreme Court of judgments of district or circuit courts-see notes to Gwin v. United States, 46 L. ed. U. S. 741; B. Altman & Co. v. United States, 56 L. ed. U. S. 894; and Berkman v. United States, 63 L. ed. U. S. 877.

As to constitutionality of income tax— see notes to Alderman v. Wells, 27 L.R.A. (N.S.) 864, and State ex rel. Bolens v. Frear, L.R.A.1915B, 569.

As to income tax on sales of property-see note to State ex rel. Bundy v. Nygaard, L.R.A.1917E, 566.

That popular and received import of words furnishes rule of interpretation in laws as well as in public and social transactions-see note to Maillard v. Lawrence, 14 L. ed. U. S. 925.

And see note to this case as reported in 15 A.L.R. 1311.

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