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May 9, 1973

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amended, by the Act of June 6, 1900, ulations, 43 CFR Subparts 2610, 31 Stat. 614. These Acts provided 2611. Proceeding under the Act of for selection rights to public land August 31, 1964, supra, which auby a patentee or a settler or owner thorizes any person who recorded of an unperfected bona fide claim his claim properly to elect to receive of land included within the limits cash instead of land, the appellants of a public forest reserve upon his chose to receive cash. The value of relinquishing his claim or title to forest lieu selection rights is $275 an the tract to the United States. Al- acre, 43 CFR 2221.2-3 (1970). though the 1897 and 1900 Acts were As noted above, the Bureau's derepealed by the Act of March 3, cisions held that the railroad, and, 1905, 33 Stat. 1264, provision was consequently, the claimants, lost all made for the continuing recogni- selection rights against the United tion of certain selection rights un- States when the railroad executed der the earlier Acts. Santa Fe sold a release of certain rights to railits selection rights in the early years road grant lands and indemnity of this century. Since exchange se- rights pursuant to section 321 (b) lection rights were held to be per- of the Transportation Act of 1940, sonal and nonassignable, see George supra. L. Ramsey, 58 I.D. 272 (1942), The Bureau relied upon several Santa Fe adopted a procedure utiliz- cases to support its conclusion. The ing two powers of attorney. The first, Udall v. Battle Mountain, first appointed an attorney-in-fact supra, held that forest lieu rights to make selection in the name of were not assignable, at least prior the railroad while the second au- to the Acts of July 6, 1960, 74 Stat. thorized him to convey the selected 334, and of August 3, 1964, supra, lands to whomever he chose. This and when the United States reconprocedure has been noted. Battle veyed to the railroad the land upon Mountain Company, A-29146 which the forest lieu rights were (January 31, 1963), aff'd Udall v. based, as it had in that case, the seBattle Mountain, 385 F. 2d 90 (9th lection right was extinguished. ConCir. 1967), cert. denied, 390 U.S. sequently, the United States did not 957 (1968). The appellants hold have to recognize any rights in the separate appointments from Santa assignee even though he had reFe as attorneys-in-fact through corded his rights under the 1955 mesne conveyances.

Act, supra, prior to the reconveyThe appellants recorded their se

2 Under the Act of August 31, 1964, as lection right documents pursuant to

amended, the right to apply for land or cash the Scrip Recordation Act of 1955, expired on January 1, 1970, except for soldiers'

additional claims, for which filing may be made 69 Stat. 534, noted at 43 U.S.C. to and including December 31, 1974. 43 CFR

2612.4 (1972). Appellants filed their appli8 274 (1970), and the pertinent reg

cations prior to January 1, 1970.

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ance.' It then conluded that in an- railroad to execute a release of any

a other case, United States v. Santa claim it might have “* * * against Fe Railroad and Donald E. the United States to lands, interests Wheeler, Civil No. 64-1430 (C. D. in lands, compensation, or reimCal. filed December 16, 1968) (here- bursement on account of lands or after Wheeler), the court held that interests in lands which have been the railroad's release had wiped out granted,

granted, claimed to have been the selection rights of its assignees. granted, or which it is claimed

The appellants assert that Battle should have been granted to such Mountain is not controlling because carrier or any *** predecessor in there the United States reconveyed interest under any grant to such the base lands to the railroad carrier or such predecessor in interwhereas here it still retains them. est." It further provided that Further they contend that Wheeler, “Nothing in his section shall be while recognizing the holding in construed as requiring any such carBattle Mountain, held only that a rier to reconvey to the United States patent issued to the assignee rather lands which have been heretofore than the railroad in violation of the patented or certified to it." Department's regulations will be On December 18, 1940, Santa Fe canceled. It did not, they say, rule filed a release which provided that on the effect of the railroad release it: vis-a-vis forest lieu rights.

"* * * relinquishes, remises and quitNeither Battle Mountain nor claims to the United States of America Wheeler reaches the issue upon

and all claims of whatever description to which these appeals hinge. Never

lands, interests therein, compensation or

reimbursement therefor on account of theless, the Bureau's conclusion that

lands or interests granted, claimed to the release put an end to the forest

have been granted, or claimed should lieu selection rights of Santa Fe or have been granted by any act of the Conits attorneys-in-fact is correct. gress to Santa Fe Pacific Railroad ComTo see why, we turn to section 321,

pany or to any predecessor in interest in

aid of the construction of any portion of Part II, Title III of the Transpor

its railroad. tation Act of 1940, 49 U.S.C. $ 65

The release stated that it did not (1970). Section 321 (a) made con

embrace cessions to the railroads which authorized increased rates and other

** * * lands sold by the company to in

nocent purchasers for value prior to Septransportation charges to the

tember 18, 1940, lands embraced in selecUnited States. To qualify for the tions made by the company and approved new rates, sec. 321 (b) required a by the Secretary of the Interior prior to

September 18, 1940, or lands which have 3 In Lade v. Udall, 432 F.2d 254 (9th Cir. been patented or certified to the company 1970) the Court followed Battle Mountain.

or any predecessor in interest in aid of There the facts were the same except that the land was conveyed after the rights were re

the construction of its railroad." corded and not before as in Battle. To the same The scope

of the release was coneffect Richard M. Lade, 1 IBLA 189 (1970); Richard Y. Lade, 1 IBLA 192 (1970).

sidered in Krug v. Santa Fe Pacific

May 9, 1973 R.R., 329 U.S. 591 (1947), which quently in March 1943, respondent filed reviewed two departmental deci

applications with the Secretary of the sions which had denied Santa Fe's

Interior to select its lieu lands. After the

respondent signed the release, and beapplication for certain indemnity

cause of it, the Secretary rejected the rights. In each case, but under sep- applications. The railroad then filed this arate statutes, Santa Fe had relin- suit in a Federal District Court for relief quished, by deed to the United by injunction or by way of mandamus to States, lands to which its right un

require the Secretary and other Interior

Department officials to pass on its applider a land grant had vested. The

cations without regard to the release. The Court held:

District Court dismissed the bill on the * * * The railroad urges that these

merits, holding that the statute and reclaims are not covered by the Act or by

lease barred the claims. It read the 1940 the release. They, allegedly, are not

Act as defining a congressional purpose claims “on account of" or "under any

"to wipe the slate clean of such claims by grant" of lands, but rest on contractual

any railroad which enjoyed the benefits exchanges of lands made under the Acts

of the rate concessions made by the of 1874 and 1904. 18 Stat. 194; 33 Stat.

Transportation Act * * *" 57 F. Supp. 556. These Acts largely represented a con

984, 987. The United States Court of Apgressional effort to settle conflicts among

peals for the District of Columbia re railroads, Government, and settlers,

versed, holding, as respondent urges in which arose by reason of settlement by

this Court, that the 1940 Act did not aphomesteaders on railroad-granted lands

ply to the type of claims involved here. after the grants had been made. Both

80 U.S. App. D.C. 360, 153 F.2d 305. ImActs provided that where settlers had so

portance of the question decided caused occupied railroad-granted lands, the rail

us to grant certiorari. road could, upon relinquishment of its

We agree with the District Court. We title to them, select other lands in lieu

think, as it held, that the Secretary of of them. The procedure for selecting the

the Interior's construction of the 1940 Act lieu lands under the 1874 and 1904 Acts

was clearly right. Therefore, we do not was substantially identical to the origi

discuss the Government's contention that, nal procedure provided by the Acts for

since the Secretary's construction was a selection of indemnity lands. Before the

reasonable one, it was an allowable exer1940 Act respondent had, under the 1874

cise of his discretion which should not be and 1904 Acts, relinquished title to the

set aside by injunction or relief in the Government to certain lands previously

nature of mandamus. See Santa Fe P. R. granted. In August 1940, and subse

R. v. Work, 267 U.S. 511, 517; cf. Santa

Fe P. R. R. v. Lane, 244 U.S. 492. * Santa Fe Pacific Railroad Company, 58 I.D. The respondent argues the case here 596 (1944); Santa Fe Pacific Railroad Com

as though the 1940 Act applied only to pany, 58 I.D. 601 (1944). Other departmental decisions held that the release extinguished

claims for "lands under any grant." The a railroad's unexercised right to select in- language is not so narrow. It also redemnity land, Atlantic and Pacifio Railroad quired railroads to surrender claims for Company, 58 I.D. 577 (1944) ; that the trans

"compensation, or reimbursement on acferee of a railroad's right to unselected in. demnity land is not an innocent purchaser for

count of lands or interests in lands which value to whom a patent may be issued pursu- have been granted, claimed to have been ant to the saving clause of sec. 321 (b) of

granted, or which it is claimed should the Transportation Act, supra; Atlantic and

have been granted * * * under any Pacific Railroad Company, 58 I.D. 588 (1944); Santa Fe Pacific Railroad Company, 58 I.D.

grant." (Italics supplied.) This lan591 (1944).

guage in itself indicates a purpose of

its draftsmen to utilize every term from one thing—the land grants. We which could possibly be conceived to give think Congress wrote finis to all these the required release a scope so broad claims for all railroads which accepted that it would put an end to future con- the Act by executing releases. (329 U.S. troversies, administrative difficulties, and at 596-598.) claims growing out of land grants. Be

To emphasize the Court held that yond a doubt, the words “compensation"

the release included a payment to and “reimbursement” as ordinarily understood would describe a payment to

the railroad in money or in kind for railroads in money or in kind for the surrender of lands previously acsurrender of lands previously acquired quired by them under a grant. In by them “under a grant.” If they do not

this case, as in those, the indemnity have this meaning, their use in the Act

rights of the railroad were “paywould have been hardly more than surplusage. And when viewed in the con

ments in kind” for the surrender text of the historical controversies and of lands previously acquired by it claims under the land grants, the con- under a grant. So here, too, they clusion that the 1940 Act covers claims

fall within one release. such as respondent's seems inescapable. The legislative history of the Act shows

Appellants seek to distinguish that Congress was familiar with these

these cases from Krug. They ascontroversies. In 1929 it passed an Act sert that the release did not apply intended to authorize and require judi- to lands "patented” to Santa Fe. In cial determination of land-grant claims of

support they cite Santa Fe Pacific the Northern Pacific Railroad in order

R. R. v. Cord, 482 P. 2d 503 (Ariz. finally and completely to set them at rest. 46 Stat. 41. The suit authorized by

1971); cert. denied, 404 U.S. 912 that Act was tried in a Federal District (1971). There Santa Fe had conCourt and was pending in this Court veyed land to the United States purwhen the 1940 Act was passed. United

suant to the Act of June 4, 1897, States v. Northern Pac. Ry., 311 U.S. 317. Our decision in it shows the complexity

supra, and had sold powers of atand ramifications of the numerous ques

torney based upon that reconveytions involved in land-grant controver- ance. In 1955 and later, Santa Fe sies. Reference to this case was made by obtained quitclaim deeds from the Government officials in urging Congress

United States for the base lands and to include in the predecessors of the 1940 Act a requirement that the railroad sur

conveyed them to the heirs of the render all claims arising out of land original purchasers of the powers of grants as a prerequisite to any Govern- attorney. Cord and Wheeler, who ment rate concessions. Here, as in the there, too, held the powers through 1929 Act, which applied to the claims

mesne conveyances, filed suit, alof only one railroad, we think Congress leging that Santa Fe had destroyed intended to bar any future claims by all accepting railroads which arose out of

their selection rights, and asked any or all of the land-grant acts, inso- damages. In holding for the plainfar as those claims arose from originally tiff, the Court rejected Santa Fe's granted, indemnity or lieu lands. All the

contention that its release had terActs here involved, the Acts of 1866, 1874,

minated the forest lieu selection 1904 and 1940, relate to a continuous stream of interrelated transactions and rights in 1941. The Arizona Court controversies, all basically stemming held that Krug applied only to May 9, 1973 "granted” land and not to land that made pursuant to a grant, which had been patented, that once land were not reconveyed to the United had been patented they are no

States and which did not serve as longer "grant-lands."

base for lieu or indemnity selecThis distinction is not persuasive. tion rights or any other form of The Arizona Court reasoned that

compensation or reimbursement “grant-lands” were lands to which then unsatisfied. the railroads had an unperfected We note that in Krug the railright whereas patented lands were road's right to the base lands was lands to which the railroads were

conveyed to the United States by perfected and were thus no longer a deed, although no patent had pre“grant-lands.”

viously issued. Therefore, we canThe distinction between lands to which a railroad has a perfected or

not ascribe the same importance as a unperfected right does not depend

the Arizona Court, to the fact that upon whether a patent has issued. a patent had issued. A railroad's rights to land falling

& The District Court decision, Santa Fe within the place limits of the grant Pacific R.R. v. Ickes, 57 F. Supp. 984, 986, vest upon its filing of a map of de

987 (D.C. 1944), which Krug affirmed, stated :

“The issue therefore is whether the release finite location showing the route of

embraces, and thereby extinguishes, the right the road. Tarpey v. Madsen, 178

to select lands in lieu of relinquished lands

under the Acts of 1904 and 1874, supra, U.S. 215, 223, 227 (1900).

respectively. Thus the right of the railroad to

“The release embraces any and all claims of

whatever description to lands and interests the land within its place limits was therein granted by any Act of Congress to vested and it could not be deprived plaintiff or any predecessor in aid of the con

struction of any portion of its railroad. Plainof it without its consent.5 Santa Fe tiff's right to select lieu lands is a claim Pacific Railroad Company, 58 I.D.

to lands, and this is not disputed. Plaintiff

does contend, however, that it is not a claim 596, 600 (1944). Accordingly, the to lands granted by any Act of Congress in distinction between granted and

aid of construction; that is, that the Acts of

1904 and 1874, supra, are not granting acts vested, but not patented, and in aid of construction, and therefore that such patented land is not substantive claim is not included in the release.

“The Act of 1866, supra, under which plainenough to hold that unsatisfied lieu

tiff's predecessor acquired title to the lands or indemnity rights stemming from relinquished, is concededly a granting act in

aid of construction. The Acts of 1904 and 1874, the former are cut off by the release supra, are supplemental to, and in legal effect but those arising from the latter

amendatory of, the Act of 1866, supra. They

made provision for the relief of settlers who are not.

were found to be occupying the lands of the The exception in the statute and

railroad company. They gave the railroad com

pany the right to select equal quantities of release pertains to patented lands lands in lieu of lands which they relinquished

for the benefit of such settlers. They were mea5 An apparent exception is that a patent sures found to be desirable by reason of unforewill not issue if land is found to be mineral in seen developments arising out of the operation character at any time prior to the issuance of the railroad land grant acts. The plaintiff of a patent. Barden v. Northern Pacific R.R., itself probably was not without selfish motive 154 U.S. 288 (1894) ; Southern Pacific Com- in the relinquishment of its lands, which pany, 71 I.D. 224, 228 (1964).

tended to prevent an exodus of established

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