grounds and property with the labor of the convicts, the lease thereof to require the lessee to take full control, custody and care of all convicts and erect at his own expense such buildings as would conduce to the safekeeping and working of the convicts, and to entitle the lessee to the labor of the convicts and to payment by the state of a monthly sum fixed by the lease, not exceeding fifteen thousand dollars appropriated from the state treasury per month for each month of the lease the amount of the payment specified in the lease, and required the state controller to "draw his warrants on the treasurer of the state for said sum" each month, and the treasurer "to pay the said warrants on application of said lessee in writing on the last day of each month," a five-year lease, made pursuant to said act, and providing for a monthly payment of ten thousand dollars to the lessee, constituted a contract, valid against and binding upon the state.11

Subsequently, when the validity of this contract was again unsuccessfully questioned, the Supreme Court, as an additional reason for affirming its validity, declared:12

"We do not admit that an affirmation of a contract entered into by the agents of the state, upon a subject within the constitutional control of the legislature, can only be made by direct legislative action in terms designating such contract. On the contrary, such affirmation may be justly inferred from legislation indirectly referring to the contract, or proceeding upon its assumed validity.

"Thus, in the act of April 7th, 1856, appropriating moneys to defray the expenses of the [state] prison up to March 28th, passed after a copy of the contract with Estill (whereby he took the five-year lease) had been transmitted to the senate, the legislature recognized the existence and in effect the validity of the contract in the provision that no person should receive any pay for supplies furnished under any contract with the directors of the prison until he surrendered such contract and released the state from all liability for such supplies furnished after the leasing of said prison by the Board of Commissioners under an act passed at this session of the legislature. That provision was manifestly adopted upon the supposition that the responsibility for supplies furnished subsequently to the time the prison was received by the lessee, had devolved upon him, and that the contract for the leasing, imposing such responsibility, was valid and binding."

11 California v. McCauley (1860), 15 Cal. 429, 457.

12 People v. Brooks (1860), 16 Cal. 11, 26.

Hence the provision of the statute of 185913 repealing the statute of 18561 above referred to, did not and could not abrogate or in any wise impair such lease or the obligation of the state to make the payments thereunder.15

Where a statute16 authorized the funding of the floating debt of San Francisco by exchange for twenty-year ten per cent bonds, known as "city stock," and provided for the collection of an annual tax for the payment of interest on such stock and its retirement at or before maturity, the act must be regarded as authorizing a contract between the city and the holders of such floating indebtedness, and upon exchange by any holder thereof of his old demand for city stock a new and binding contract between the city and such holder arose.17 Similarly, where the legislature authorized 18 the funding of the floating debt of Sacramento County by exchange for ten per cent bonds, payable not later than ten years after date, and (section 5) required the Court of Sessions to assess annually, in addition to other taxes, a property tax of one-fourth of one per cent to constitute a sinking fund for the redemption of the bonds, the fifth section of the act constituted a contract between the county and those who exchanged their old demands for the bonds.19 And where a statute20 consolidating the city and county of Sacramento and providing government therefor, made provision for the levy within the old city limits of a property tax of one dollar on each hundred dollars for city purposes, for the application of certain other revenue to city purposes, for funding the outstanding indebtedness of the city by exchange for six per cent bonds, and for the application of fifty-five per cent of the revenue for city purposes to interest on the bonds and to a sinking fund for their retirement, and such bonds were issued and were accepted by the creditors of the city in payment of their claims, a contract within the constitutional protection between the new municipality and the bondholders resulted.21

13 Cal. Stats. 1859, p. 374, § 13.

14 Cal. Stats. 1856, p. 48, c. 39.

15 People v. Brooks (1860), 16 Cal. 11, 33, 50.

16 Cal. Stats. 1851, p. 387.

17 People v. Woods (1857), 7 Cal. 579, 584; People v. Bond (1858), 10 Cal. 563, 570; Board of Education v. Fowler (1861), 19 Cal. 11, 23; Babcock v. Middleton (1862), 20 Cal. 643, 656.

18 Cal. Stats. 1854, p. 201.

19 English v. Board of Supervisors (1861), 19 Cal. 172.

20 Cal. Stats. 1858, p. 267.

21 Meyer v. Brown (1884), 65 Cal. 583, 589, 26 Pac. 281; Bates v. Porter (1887), 74 Cal. 224, 237, 238, 15 Pac. 732.

On the other hand, where a statute22 fixed the San Francisco water front line, granted the use and occupation for ninety-nine years of certain water lots to the city, or where the city had already granted the same, to its grantees, and provided that "the boundary line described. . . . shall be and remain a permanent water front of said city," and that "nothing in this act shall be construed as a surrender by the state of its rights to regulate the construction of wharves and other improvements," and such a prior grantee of a lot that was separated only by an intervening street from the waterline defined in the act, reclaimed his lot and constructed thereon a warehouse, there was no contract between him and the state; and the State Board of Harbor Commissioners were not debarred from afterwards re-establishing the water front further off shore.23

Where a statute relating to the incorporation of companies to supply municipalities with water, gave each such company the right to use the public streets and places for its pipes and to condemn private property, on condition that it furnish pure fresh water to the inhabitants at reasonable rates and without discrimination, and to the municipality free of charge "in case of fire or other great necessity," and provided that water rates should be determined annually by a board of commissioners selected, two by the municipal authorities and two by the water company, and in case the four could not agree, the four to choose a fifth member of the board, or if the four could not agree upon the fifth, then the sheriff to appoint the fifth, and the Spring Valley Water Works incorporated under said act, and supplied water to San Francisco and its inhabitants thereunder, a contract was not thereby created which prevented the application to the water company of the provision of Article XIV, section one, of the constitution of 1879, making the board of supervisors of the municipality, in lieu of said board of commissioners, the rate-fixing tribunal.25

Rights acquired in the national domain by proceedings to purchase. The Act of Congress of 184126 authorized entry with a Register of a United States district land office of not to exceed a quarter section of United States public lands, by legal subdivisions, when the following conditions concurred:

22 Cal. Stats. 1851, p. 307.

28 Floyd v. Blanding (1879), 54 Cal. 41, 4 Pac. Coast L. J. 424. 24 Cal. Stats. 1858, p. 218.

25 Supra, n. 36.

26 5 Stats. at L. 453.

(1) The land must have been surveyed prior to entry, and must not be of certain excepted kinds and classes.

(2) The pre-emptioner must be over twenty-one years of age, a United States citizen, or must have filed his declaration of intention to become one.

(3) The pre-emptioner must not own more than three hundred and twenty acres of land in the United States, and must not have quit or abandoned a residence on his own land, and must not be entitled to any other pre-emptive right.

(4) The pre-emptioner must have made settlement in person on the land he proposes to pre-empt since June 1, 1840, must erect a dwelling and actually reside thereon, and must undertake to improve the same.

Section II of the act provided that as between persons equally entitled under the act, the first settler on a given legal subdivision, complying with the act, is entitled to pre-empt. The Act of Congress of 185327 as modified by Act of Congress of 1854,28 made public lands in California, subject to certain provisos, subject to the foregoing act, "with all the exceptions, conditions and limitations thereof." The Act of Congress of 186229 extended the privilege of settlement upon unsurveyed lands to California, but required the pre-emptioner to file his declaratory statement within three months after the receipt at the district land office of the approved plat of the township embracing such pre-emption settlement. Under these acts, mere occupation and improvement of United States lands, with intention to pre-empt, did not confer such a vested interest in the land occupied as to impair in any respect the power of Congress to grant it to another, or otherwise dispose of it. The power of Congress ceases only when all the preliminary acts prescribed by the pre-emption laws for the acquisition of title, including payment or offer of payment of the purchase price, have been performed by the settler. Only then, for the first time, the settler acquires a vested interest in the land occupied by him, of which he cannot subsequently be deprived.30

By proceedings to exchange. The Act of Congress of 1897

27 10 Stats. at L. 244. 28 10 Stats. at L. 268.

29 12 Stats. at L. 409.

30 Hutton v. Frisbie (1869), 37 Cal. 475, per Sawyer, C. J., Rhodes and Sanderson, JJ., in leading opinion (p. 491), Crockett and Sprague, JJ., dissenting (p. 504), on the ground that occupation and improvement, without payment, created a vested right; The Yosemite Valley Case (Hutchings v. Low) (1873), 15 Wall. 77, 21 L. Ed. 82, affirming Low v. Hutchings (1871), 41 Cal. 634, 638.

provided31 "that in cases in which a tract covered by an unperfected bona fide claim or by a patent is included within the limits of a public forest reservation . . . the owner thereof may, if he desires to do so, relinquish the tract to the government, and may select in lieu thereof a tract of vacant land open to settlement not exceeding in area the tract covered by his . .

patent." In the

rules and regulations governing Forest Reserves, adopted by the Land Department32 it was provided that in his application for an exchange of lands under the foregoing act the applicant must "describe the tract selected and the tract covered by the unperfected entry," and that where final certificate or patent has issued the applicant must execute and record a quitclaim deed to the United States of his land within the reserve, and furnish an abstract showing a chain of title from the United States and back again to the United States. Under these provisions, where in June, 1899, a patentee of land within a forest reserve, without selecting a tract in lieu thereof, recorded a quitclaim deed thereof to the United States and filed the same with a sufficient abstract in the United States land office at Visalia, and from that office the papers were forwarded to the commissioner of the general land office, who held them without action until January 3, 1905, and then returned them to the patentee, the patentee never had any contract with the United States, and never obtained a vested right to make a selection of lieu lands under the act of 1897; and the repeal by Act33 of Congress of 1905 of the provision of the act of 1897 authorizing the exchange, put an end to his right to make the exchange, and his attempt later to select lieu lands was unavailing.34

Rights acquired in state lands by proceedings to purchase.-One qualified under the law existing at the time of his application to purchase state land, upon complying with all the requirements of the law and paying for the land and receiving his certificate of purchase, becomes entitled to a patent, and no subsequent constitutional or statutory enactment will be effectual to deprive him of the right so acquired.35 "Where a valid contract of sale has been entered into pursuant to law between the state and a purchaser so

31 30 Stats. at L. 11.

32 24 Land Dec. 589.

33 33 Stats. at L. 1264.

34 Roughton v. Knight (1911), 219 U. S. 537, 55 L. Ed. 569, 31 Sup. Ct. Rep. 297, affirming (1909), 156 Cal. 123, 125, 103 Pac. 834.

35 Boggs v. Ganeard (1906), 148 Cal. 711, 716, 84 Pac. 195.