« ForrigeFortsett »
and has put the case so clearly that we can hardly add anything to what has been said by him. We will, however, select Pennock v. Coe, 23 How. 117, 16 L. Ed. 436; Branch v. Jesup, 106 U. S. 468, 486, 1 Sup. Ct. 495, 27 L. Ed. 279; Bear Lake Company v. Garland, 164 U. S. 1, 15, 17 Sup. Ct. 7, 41 L. Ed. 327; Pardee v. Aldridge, 189 U. S. 429, 23 Sup. Ct. 514, 47 L. Ed. 883, and Hamlin v. European & North American Railway Company, 72 Me. 83-as illustrating how liberally the federal courts and the local courts in Maine support provisions in mortgages of franchises of railroad corporations with reference to property subsequently acquired, which is of appropriate use in connection with such franchises. These cases, among other things, settle that with reference to realties and lines of railway subsequently acquired, provided they are incidental to the purposes of the franchise, it is entirely unimportant whether they are obtained by purchase or construction or by condemnation or deed.
By the charter of the Washington County Railroad Company, it was not only authorized to construct a main line of road between the termini which we have named, with a branch to Eastport, but also "to build branches or extend its lines into one or more towns, and operate the same with steam or other motive power." Of course, the words "one or more towns" leave the construction of this clause indefinite. It may well be said that it was not intended to permit correspondingly indefinite authority to "build branches," or to "extend its lines," for indefinite distances, including the possibility of paralleling other railroads. Considering the general purview of the charter, and especially the words "other motive power," which undoubtedly contemplated what are known as "trolley lines," which, at the date of the charter, extend ordinarily only short distances for local uses, it can hardly be questioned that the purpose of this provision was to enable this corporation to develop the county of Washington, as we have already suggested. Therefore, while we are not called on to determine, and it might be impossible to theoretically determine, the minimum or the maximum of the powers thus given to the Washington County Railroad Company, yet we can hardly doubt that the building of branches within the county, no longer than the line to Princeton, not injurious to other enterprises, and natural feeders to the main railroad, is within the purview of this provision of its charter. Neither, in view of the authorities to which we have referred, and especially in view of the broad expression, "extend its lines," found in this extract from the charter, can we have any doubt that extension by purchase was authorized, as well as extension by construction, provided, in either case, that no detriment was done to any other existing enterprise. That there was any detriment in this case is not claimed, and it is a matter of common knowledge within this state and district that there was none such. Therefore we think the acquisition of this line to Princeton was an exercise of the franchises which the Washington County Railroad Company possessed at the time its mortgage was executed.
The mortgage, in describing what was embraced in it, contains the following language: "And also all rights, powers, privileges, and franchises, relating to or useful for the said railroad or branch, includ
ing the right to operate and maintain the same, whether now held or hereafter acquired by the mortgagor." We have already shown that the acquisition of this line to Princeton was within the exercise of franchises possessed by the respondent corporation at the time the mortgage was executed; but a question is raised by Washington county arising out of the two words, "relating to or useful for the said railroad or branch." The word "branch," in this connection, undoubtedly means the main line between the specified termini in Hancock county and the city of Calais; but there can be no question, in view of the facts which we have stated, that the line to Princeton was, as we have already said, a feeder to the main line, and was served by it, and therefore came within the words, "relating to or useful for the said railroad." This is emphasized by the fact that a part thereof, some three miles in length, as we have already said, was properly, and we have no doubt economically, made a portion of the main line. Therefore we hold that the line to Princeton should be covered into the decree.
This disposes of all the exceptions taken by the county of Washington to the report of the master, and leaves for consideration only a single exception taken by Mitchell. The master fixed the upset price of the property to be sold under the decree of foreclosure at $2,000,000. Mitchell claims that it should be $2,500,000. By the terms of the mortgage the purchaser at a foreclosure sale has the right to make the major payment in bonds, and the decree as reported by the master provides therefor. Where there is nothing of that character in the mortgage or the statutes, and the court is appealed to by the parties to insert it, it may, of course, as incidental thereto, impose equitable conditions as to the upset price, or as to any other topic as to which conditions can reasonably be imposed; but in the present case there is nothing in this feature of the decree, nor in any other feature thereof, which gives this court at the present time jurisdiction, on the mere suggestion of either party, to fix an upset price. Nevertheless Mitchell appeals to us to do so, and the complainant consents that we should. The complainant, perhaps, is wise in this, because, in the absence of an upset price, the sale, being subject to confirmation, might be set aside on the ground that the bids were insufficient, and the final disposition of the property be embarrassed and delayed. Consequently it is proper for the parties to agree that the court should at the present time determine the upset price. Therefore we accept the jurisdiction in this respect which the parties desire us to exercise.
A careful examination of the facts satisfies us that the property at the present time is capable of earning at least $100,000 annually, applicable, on conservative rules, to interest or dividends. The past history indicates that the future will show larger net returns, but we are not justified in speculating on this. Events may occur which will diminish the net income notwithstanding the expectation of its increase. We are, however, justified by the continuous growth which the past has developed in taking the present net earning capacity of the property as indicating the value which shall be set on it for an upset price. This is to be estimated in view of the fact that the property
can be made dividend earning as well as interest paying. As dividend earning, it would pay 4 per cent. on $2,500,000, which, on a fair basis, would justify a valuation at that figure. We should, however, allow for the fact that a purchaser would be expected to make a reasonable profit, and that there are embarrassments and difficulties often met with in converting an enterprise like this into a dividend paying property.
We deduct for all that $200,000, leaving the upset price to be fixed in the decree $2,300,000.
This disposes of all the questions which were left for us to consider. It is ordered that the upset price named in the decree for sale shall be $2,300,000, instead of $2,000,000, as reported by the master; that all other exceptions to the master's report are overruled; and that, subject to the modification as to the upset price, the master's report is confirmed; and a decree will be entered accordingly.
NORTHERN LUMBER CO. v. O'BRIEN et al.
(Circuit Court, D. Minnesota, Fifth Division. August 19, 1903.)
1. PUBLIC LAND-ACTIONS-COURTS-JURISDICTION.
Since the disposition of public lands under the acts of Congress is exclusively vested in the Land Department of the government, which must primarily determine the rights of claimants, courts have no jurisdiction to determine controversies between claimants of such land, the legal title to which has never passed from the United States by the issuance of a patent.
2. SAME-CUTTING TIMBER-INJUNCTION.
Where, in an action to determine conflicting claims to public land, it appeared that the claims of both complainant and defendants to timber thereon were made in good faith and on colorable grounds, and that the defendants threatened and proposed to cut and remove the timber, it was proper for the court to restrain such removal until the land had been patented by the United States, though, by reason of the fact that it had not been patented, the court was without jurisdiction to determine the adverse claims of the parties thereto.
James B. Kerr and M. T. Sanders, for plaintiff.
LOCHREN, District Judge. This cause came on for final hearing June 15, 1903, upon the bill, the answer of defendants William O'Brien, Albert J. Lammers, and George A. Lammers, and the stipulation of facts on file; the complainant appearing by James B. Kerr, its solicitor, and the answering defendants by J. N. Searles, their solicitor. The defendant Mary E. Coffin, though duly served with the subpoena on the 3d day of January, 1903, has never appeared in the suit, and is in default.
From the admissions in the pleadings and the stipulated facts it appears that by an act of Congress of May 5, 1864 (13 Stat. 64, c. 79), there was granted to the state of Minnesota, to aid in the construction
1. See Public Lands, vol. 41, Cent. Dig. § 307.
of a railroad from St. Paul to the head of Lake Superior, every alternate section of public land of the United States, not mineral, designated by odd numbers, to the amount of five alternate sections per mile on each side of said railroad on the line thereof within said state. Other provisions of the act, and affecting the terms of the grant, do not affect the issues in this case. Said grant of land became vested in the Lake Superior & Mississippi Railroad Company, which on May 7, 1864, filed in the office of the Commissioner of the General Land Office a map or diagram showing the projected general route of its railroad from St. Paul to a point on Lake Superior. On May 26, 1864, the said Commissioner transmitted a copy of said map or diagram to the register and receiver of the United States Land Office at Duluth, Minn., with his letter informing them of the fact that the Secretary of the Interior had approved the withdrawal of the lands for the railroad, and directing them "to suspend from pre-emption settlement and sale, a body of lands about twenty miles in width as indicated on the enclosed diagram 'A' marked Lake Superior and Mississippi Railroad." The land in dispute, the south half of the southeast quarter of section twenty-seven (27), township fifty-two (52) north, of range fifteen (15) west, of the fourth principal meridian, was coterminous with and within 10 miles of the general route of said railroad, as shown by the said map or diagram. Afterwards, on the 25th day of September, 1866, said Lake Superior & Mississippi Railroad Company filed in the office of said Commissioner of the General Land Office its map of the definite location of its said railroad from St. Paul to Duluth on Lake Superior, whereby it appeared and became definitely settled that the land above described and here in dispute was and is beyond and outside of any lands which could pass to or be obtained by the said railroad company under any of the terms of said land grant.
The Northern Pacific Railroad Company was created by act of Congress of July 2, 1864 (13 Stat. 365, c. 217), and authorized to construct and operate a continuous railroad and telegraph line from a point on Lake Superior, in Minnesota or Wisconsin, westerly, within the United States and north of the forty-fifth parallel of latitude, to Puget Sound, with a branch by the valley of the Columbia river to Portland, Or. It was granted every alternate section of public land, not mineral, designated by odd numbers, to the amount of 20 alternate sections per mile, on each side of said railroad line, as the company might adopt, through territories of the United States, and 10 alternate sections per mile on each side of the railroad, whenever it passed through any state, "whenever on the line thereof the United States have full title, not reserved, sold, granted or otherwise appropriated and free from pre-emption or other claims or rights, at the time the line of said road is definitely fixed and a plat thereof filed in the office of the Commissioner of the General Land Office."
The Northern Pacific Railroad Company afterwards definitely located its entire line from Ashland, on Lake Superior, in Wisconsin, to Puget Sound, and constructed and completed thereon its railroad and telegraph lines. In doing this, on July 6, 1882, it duly filed in the office of the Commissioner of the General Land Office a map or
plat, duly approved by the Secretary of the Interior, showing the line of definite location of its said railroad from Thompson Junction, in Minnesota, to Ashland. On that same date the land here in dispute was and is coterminous with and within 20 miles (10 alternate sections) of that portion of said railroad so definitely located between Thompson Junction and Ashland, and was public land of the United States, not reserved, sold, granted, or otherwise appropriated, and was free from pre-emption, or other claims or rights, and nonmineral in character. The same land was also, at the date of said grant to the Northern Pacific Railroad Company, public land of the United States, and subject to that grant, unless the said withdrawal of lands by direction of the Secretary of the Interior, for the benefit of the Lake Superior & Mississippi Railroad Company, as above set forth, operated to take said lands out of the category of public lands so granted to the Northern Pacific Railroad Company.
On October 17, 1883, said Northern Pacific Railroad Company filed in the United States Land Office at Duluth its certain list, known as Duluth List No. 9, wherein, among other lands, was listed the land in dispute, to bring such lands before the officers of the Interior Department for examination and patenting to that railroad company, which had at the time of filing said list paid the selection fees and fees for surveying said land. On April 6, 1901, the Commissioner of the General Land Office refused to approve said list No. 9, and rejected the same, for the alleged reason that at the date of said grant to the Northern Pacific Railroad Company the lands described in said list were reserved for the Lake Superior & Mississippi Railroad Company by said order of withdrawal, and were therefore not included in the grant. Upon appeal to the Secretary of the Interior said ruling. and decision of the Commissioner of the General Land Office was affirmed July 16, 1901.
In the year 1893 said Northern Pacific Railroad Company became insolvent; and in a suit in this court to foreclose mortgages upon its land, property, and franchises, and for the sequestration and distribution of its property for the benefit of its creditors, secured and unsecured, Edward H. McHenry and Frank G. Bigelow were by this court duly appointed receivers of all the property of said railroad company, and among other things authorized to sell the lands of said railroad company in Minnesota, and to make contracts and deeds therefor; and on November 4, 1898, said receivers sold and conveyed by deed to Frederick Weyerhauser and John A. Humbird all the right, title, and interest of the Northern Pacific Railroad Company in said land here in dispute; and the said Weyerhauser and Humbird on March 4, 1899, conveyed to the Northern Lumber Company, a Wisconsin corporation, the complainant herein, all their interest and estate thus acquired in and to all the timber standing and growing on the land in dispute, which timber is of the value of more than $2,000.
All of section 27, township 57 north, range 15 west, being the section containing the land here in dispute, was on November 3, 1859, offered for sale to the public, under proclamation of the President, No. 643, and ever since has remained open to private sale or to entry, unless withdrawn by reason of the matters hereinbefore stated.