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present and prospective, in and to any and all the lands granted by congress to the territory of Minnesota," by the act of March 3, 1857, for the purpose of aiding in the construction of said lines of road, "together with all and singular the rights, privileges and immunities conferred and intended to be conferred by said act of congress." The act last aforesaid, creating the St. Paul & Pacific Railroad Company, and conferring upon it the rights and privileges aforesaid, contained the following provision as to the conveyance of said lands by the state: "Whenever said company shall actually complete that portion of the road between St. Paul and St. Anthony, so that regular trains of cars are running thereon, and not before, the governor shall certify the 'same to the secretary of the interior, and thereupon the title to one hundred and twenty sections of land shall vest in said company. And when twenty continuous miles of said road shall be completed, and regular trains running thereon, the title to a further quantity of one hundred and twenty sections of land shall vest in said company. And whenever said company shall actually complete twenty continuous miles of said road from Minneapolis westwardly, so as to admit of the running of regular trains of cars on the same, the governor shall certify the same to the secretary of the interior, and thereupon a further quantity of one hundred and twenty sections of said lands shall vest in said company; and so on, as often as any further twenty continuous miles of said road shall be completed so as to admit of the regular running of trains of cars thereon, the governor shall in like manner certify the same to the secretary of the interior, and a further quantity of one hundred and twenty sections of said land shall vest in said company; and it shall be the duty of the governor, whenever said road shall be completed between St. Paul and St. Anthony, in his official capacity, and on behalf of the state, to convey to said company one hundred and twenty sections of land; and whenever any further twenty continuous miles of said road or its branches shall be completed and in operation, the governor shall in like manner convey a further quantity of one hundred and twenty sections of land and so on as often as any further twenty continuous miles of said road or its branches shall be completed, shall in like manner convey to said company a further quantity of one hundred and twenty sections of land, until there shall be conveyed to said company all the lands to which they shall be entitled, according to the terms and provisions aforesaid. ***" Sp. Laws Minn. 1862, c. 20. Prior to the passage of the last-mentioned act of March 10, 1862, the United States had certified to the state of Minnesota about 370,394 acres of land which pertained to the branch line aforesaid from St. Anthony, via St. Cloud and Crow Wing, to St. Vincent. On February 6, 1864, one E. B. Litchfield entered into an agreement with the St. Paul & Pacific Railroad Company to construct the main line of its road from St. Anthony to Breckenridge, and its branch line from St. Paul to Watab in Benton county, Minn., a place 80 miles northwest from St. Paul, and, in consideration therefor, the St. Paul & Pacific Railroad Company by said agreement sold, assigned, and transferred to Litchfield all of its "rights, benefits, privileges, property, franchises, and interests * * * under the laws of the territory or state of Minnesota" belonging to that porton of the branch line from St. Paul to Watab, "together with the lands granted by congress to the territory of Minnesota for the purpose of aiding in the construction of said eighty miles of road." It also sold and transferred to Litchfield, by the same agreement, all of its rights, franchises, etc., belonging to the main line from St. Anthony to Breckenridge, together with the land granted by congress for the purpose of aiding in the construction of that part of the main line. The agreement with Litchfield was subsequently fully ratified and confirmed by the state of Minnesota by legislative enactment, and Litchfield and his associates became consolidated into a corporation under the name of the First Division of the St. Paul & Pacific Railroad Company. Sp. Laws Minn. 1866, c. 1. The latter company will be hereafter termed the First Division Company. In this manner the St. Paul & Pacific Railroad Company became segregated into two corporations. .
One day before the grant of March 3, 1857, was enlarged, as heretofore stated, that is to say, on March 2, 1865, the legislature of Minnesota passed an act which contained the following provision, to wit:
"Sec. 2. Any and all additional grants of land made prior to the passage of this act, or which may hereafter be made by the congress of the United States,
to the state of Minnesota for the purpose of aiding in the construction of the lines of railroad or any portion of them authorized to be constructed by the St. Paul and Pacific Railroad Company, shall inure to the benefit of said company, and said lands and the present and future interest of the state in or to them, are hereby granted and assigned unto the said company upon the same terms and conditions as the lands heretofore granted for the same purpose, together with the conditions contained in said act of congress donating the same. And the title of all lands heretofore, or hereafter granted by the congress of the United States, to the state of Minnesota for the purposes aforesaid, shall vest in said company at the time, and upon the terms prescribed by said act or acts of congress making the grant, and it shall be the duty of the governor, on behalf of the state, to convey to said company the lands so granted according to the terms and provisions contained in the act or acts aforesaid." Sp. Laws Minn. 1865, c. 6.
The so-called branch line from St. Paul to Watab was completed in sections, as follows: Ten miles of the road, from St. Paul to St. Anthony, were completed on or about July 2, 1862, prior to the organization of the First Division Company; by February 20, 1865, a further section of 10 miles, from St. Anthony in the direction of Watab, was completed; before March 3, 1865, when the grant was enlarged, an additional section of 20 miles was com pleted, making 40 miles of completed road counting from St. Paul, or 30 miles counting from St. Anthony; prior to September 18, 1866, a further section of 30 miles was completed to St. Cloud; some time in the fall of 1867, the branch line was extended by the First Division Company from St. Cloud to Sauk Rapids, the latter point being 76 3/10 miles distant from St. Paul, and about four miles from Watab; the First Division Company never constructed the remaining 4 miles necessary to reach Watab. The governor of the state of Minnesota made several conveyances to the First Division Company of lands pertaining to the branch-line land grant, on the assumption that the lands had been duly earned by the First Division Company under the legislative acts aforesaid, by the construction of the branch line to the extent last above indicated. Only three of the deeds so made are challenged in the present suit. The first of said three deeds was executed on August 22, 1866. It purported to convey 76,422.07 acres of land, about 11,540 acres whereof were situated north of Watab. The deed contained a recital that the governor had, on August 21, 1866, certified to the completion of a second section of 20 miles of the branch line, and that the First Division Company had become entitled to a deed for an additional 120 sections of land to aid in the construction of a third section of 20 miles of the branch line, which were thereby conveyed. The second deed was executed on September 20, 1866, and purported to convey 76,624.86 acres of land, about 58,721 acres whereof were north of Watab. This deed contained a recital that the governor had certified to the completion of a third section of 20 miles of the branch line, and that the grantee had become entitled to a conveyance of an additional 120 sections of land to aid in the construction of the fourth and last section of 20 miles of the branch line. The third deed was not executed until July 26, 1871. It purported to convey 77,008.86 acres of land, about 47,741 acres whereof were north of Watab. It contained a recital, in substance, that the land conveyed was land to which the First Division Company had become entitled under the various statutes heretofore mentioned, in consequence of the increase of the original grant from 6 to 10 sections per mile. The plaintiff company contended that, upon a true construction of the aforesaid federal and state statutes, the three deeds last above mentioned were executed without authority of law, and were utterly void as to the lands conveyed lying north of Watab. By an act of congress approved March 3, 1871 (16 Stat. 588, c. 144), the St. Paul & Pacific Railroad Company was authorized to change the course of the branch line beyond St. Cloud, by constructing it on a more direct route from St. Cloud to St. Vincent, without passing through Crow Wing, but this change of route was authorized on condition that it built a road about due north from St. Cloud, via Crow Wing, to Brainerd, Minn., to connect at that point with the Northern Pacific Railroad. The same act gave the same proportional grant of lands along the new route from St. Cloud to St. Vincent, on condition that the St. Paul & Pacific Railroad Company relinquished the old grant along the line as originally projected, from Crow Wing to St. Vincent.
The plaintiff company lays claim to all the lands north of the Watab terminal, about 118,000 acres, that were conveyed by the governor to the First Division Company by the three deeds aforesaid, on the following grounds, that is to say: The St. Paul & Pacific Railroad Company having failed to construct the line of road from St. Cloud to Brainerd, and from St. Cloud to St. Vincent on the new 'route, as authorized by the act of March 3, 1871, supra, the legislature of Minnesota, on March 1, 1877, passed an act entitled "An act to provide for the completion of the lines of railroad commonly known as the St. Paul and the Pacific Extension Lines."
The first section of that act was as follows: "Be it enacted etc., That the rights, privileges, franchises, grants of land, and property heretofore held by the St. Paul and Pacific Railroad Company, appertaining to the uncompleted portions of that line of railroad extending from Watab to Brainerd, are hereby declared forfeited to the state, without merger or extinguishment, but are hereby preserved, continued and conferred upon the terms and conditions as in this act provided."
The second, third, and fourth sections of the act authorized persons holding bonds secured by mortgage on said extension lines to organize a "bond company" to complete the same, but such corporation was not organized, and these sections never became operative.
The fifth section of the act contained the following provision: "In case such a corporation as that herein designated the 'bond company,' shall not be duly and sufficiently organized for the purposes of this act, on or before May 1, 1877, * then, and in that case, any company or corporation now organized, or that may hereafter organize, having authority from this state to build, maintain and operate a line of railroad within or through the state, may succeed to and acquire the right to complete, own, maintain and operate the uncompleted portions of said line of railroad mentioned in the first section of this act, by filing with the governor a written notice of its desire and intention, under and subject to the provisions of this act, to complete, equip, maintain and operate the then uncompleted portions of said line of railroad. *** Work shall be commenced thereon within thirty days after the filing of such notice, or as soon thereafter as the state of weather shall permit, and prosecuted to completion within one year from the filing of such notice. *** But upon default to commence work or to prosecute the same to completion within the time aforesaid, said company shall forfeit all right to complete, maintain or operate the part or portion of said line remaining uncompleted at the time of such default. ***"
The seventh, ninth, and tenth sections of the act contained the following provisions:
"Sec. 7. ** ** Any company acting under and pursuant to the provisions of this act, shall become entitled to, and invested with, all and singular the rights, privileges, immunities, franchises, lands, and property appertaining to the portion of road it shall complete, which were formerly held by, or which formerly belonged to, the St. Paul and Pacific Railroad Company, or which were formerly granted to the St. Paul and Pacific Railroad Company, and shall be entitled to the same whenever and as often as any continuous ten (10) miles of road are completed. * * *”
"Sec. 9. One half of all the land up to two hundred thousand acres in quantity, which shall be first acquired on account of the construction of the present uncompleted line of railroad from Watab to Brainerd, * * * shall be reserved and retained by the state, to be used by it for the payment of the claims incurred for work and material furnished in the construction of said lines of railroad. * *
A board was also created by this section to audit and allow such claims and to sell the reserved lands for the purpose of paying the same after they had been allowed.
"Sec. 10. The St. Paul and Pacific Railroad Company, or any company or corporation taking the benefits of this act, shall not in any manner, directly or indirectly, acquire or become seized of any right, title, interest, claim or demand in or to any piece or parcel of land lying and being within the granted or indemnity limits of said branch lines of road, to which legal and full title has not been perfected in said St. Paul and Pacific Railroad Company, or their successors or assigns, upon which any person or persons have in good
faith settled and made or acquired valuable improvements thereon, on or before the passage of this act, or upon any of said lands upon which has been filed any valid pre-emption or homestead filing or entry, not to exceed one hundred and sixty acres to any one actual settler; and the governor of this state shall deed and relinquish to the United States all pieces or parcels of said lands so settled upon by any and all actual settlers as aforesaid, to the end that all such actual settlers may acquire title to the land upon which they actually reside, from the United States, as homesteads or otherwise, and upon the acceptance of the provisions of this act by said company, it shall be deemed by the governor of this state as a relinquishment by said company of all such lands so occupied by such actual settlers; and in deeding to the United States such lands, the governor shall receive as prima facie evidence of actual settlement on said lands, the testimony and evidence, or copies thereof, heretofore, or which may be hereafter taken in cases before the local United States land offices, and decided in favor of such settlers."
Sp. Laws Minn. 1877, p. 257, c. 201.
It is conceded that the Western Pacific Railroad Company, now known as the St. Paul & Northern Pacific Railroad Company (the plaintiff company), complied with the provisions of the foregoing act of March 1, 1877; that it completed the road from Watab to Brainerd about November 1, 1877, and thereby became entitled to all the property, lands, and franchises that were intended to be conferred by said act.
The defendant company, the St. Paul, Minneapolis & Manitoba Railway Company, deraigned title to the lands in controversy by foreclosure sales made under the following described mortgages: First, by a sale under a mortgage executed June 2, 1862, by the St. Paul & Pacific Railroad Company for the purpose of securing bonds, which mortgage covered the sotermed branch line from St. Paul to Watab, and purported to convey all the right, title, and interest the said company then had or might become entitled to of, in, or to the lands granted to the territory of Minnesota by the act of March 3, 1857, "for the purpose of aiding *** in the construction of a railroad from St. Paul, via St. Anthony, Anoka and St. Cloud, to Watab on the Mississippi river, being three thousand eight hundred and forty acres of land for each mile, amounting in the aggregate to three hundred and seven thousand, two hundred acres, be the same more or less, and situated in the present state of Minnesota adjoining and adjacent to the line of the railroad" of the St. Paul & Pacific Railroad Company, "hereinbefore described." Second, by a sale under a mortgage executed by the First Division Company October 1, 1885, to secure certain bonds, which mortgage purported to convey all the right, title, and interest which the First Division Company then had or might become entitled to of, in, or to all of those sections of land granted to the territory and state of Minnesota by the acts of March 3, 1857, and March 3, 1865, to aid in the construction of the railroad lines mentioned in said acts, and which lands were subsequently granted by the state to aid in the construction of the branch line from St. Paul, via St. Anthony, Anoka, and St. Cloud, to Watab. The land so conveyed was further described in said mortgage as consisting of 10 sections per mile, amounting in the aggregate to 512,000 acres, and as being "situate in the present state of Minnesota adjoining and adjacent to the line of railroad" of said First Division Company, "as hereinbefore described." Third, by a sale under another mortgage, executed April 1, 1871, by the St. Paul & Pacific Railroad Company, covering the new or altered line, and land grant pertaining thereto, from St. Cloud to St. Vincent, which had been authorized by the act of March 3, 1871, supra; also covering the line required to be built by that act from St. Cloud, via Crow Wing, to Brainerd. The St. Paul & Pacific Railroad Company was made a party to each of the suits whereby the aforesaid mortgages were foreclosed. By virtue of sales made under the decrees of foreclosure in said suits, the defendant company claims to have succeeded to all the right, title, and interest of the First Division Company in and to the lands now in controversy which the latter company acquired through the legislation aforesaid, and by the agreement between Litchfield and the St. Paul & Pacific Railroad Company, heretofore mentioned. On March 7, 1881, the state of Minnesota, by legislative enactment, "fully ratified and confirmed" the several purchases so made as aforesaid by the defendant company of the lines of road heretofore described,
and the rights and franchises pertaining thereto. Sp. Laws Minn. 1881, c. 412. The original bill of complaint in the present action was filed on August 18, 1886. An amended complaint was filed five years thereafter, to wit, on August 31, 1891. The original bill prayed that the defendant company might be decreed to hold the lands in controversy, that is, the lands north of Watab, as a trustee for the plaintiff company, and that it be required to convey the same to the plaintiff by a good and sufficient deed; also, that it be required to account for the proceeds of all the lands in controversy that it had sold. The amended bill prayed for a cancellation of the aforesaid deeds executed by the governor of the state of Minnesota, as clouds upon the complainant's title, and that the defendant company might be compelled to account for the proceeds of such of said lands embraced in said deeds as it had sold and conveyed to third parties. The circuit court found and decided that the deeds executed by the governor of the state of Minnesota on August 22, 1866, September 20, 1866, and July 26, 1871, herein before mentioned, were null and void so far as they conveyed lands north of Watab, and that they operated as a cloud upon the plaintiff company's title. 57 Fed. 272. It accordingly decreed that said deeds be canceled so far as they operated to cloud the plaintiff company's title, and that the defendant company pay to the plaintiff $270,844.05, the same being the amount found to have been received by the defendant company on account of lands sold. Both parties have perfected an appeal to this court, and both appeals are before us on the same record.
M. D. Grover and George B. Young (T. R. Benton, on the brief), for St. Paul, M. & M. Ry. Co.
Fred M. Dudley and James McNaught, for St. Paul & N. P. R. Co. Before CALDWELL, SANBORN, and THAYER, Circuit Judges.
THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court.
The first question presented for consideration is one of jurisdiction, and, as both parties to the suit are corporations created by and existing under the laws of the state of Minnesota, the decision of the jurisdictional question turns upon the inquiry whether the case is one arising under the laws of the United States. Since the recent decisions in Tennessee v. Union & Planters' Bank, 152 U. S. 454, 14 Sup. Ct. 654; Chappell v. Waterworth, 155 U. S. 102, 15 Sup. Ct. 34; and Postal Telegraph Cable Co. v. Alabama, 155 U. S. 482, 15 Sup. Ct. 194,-it must be regarded as settled that the circuit court of the United States cannot entertain jurisdiction of a case as one arising under the constitution, laws, or treaties of the United States, whether such suit is commenced therein originally, or is brought there by removal, unless the plaintiff's complaint or declaration shows that it is a case arising under the federal constitution or national laws or treaties. And even under the judiciary act of March 3, 1875 (18 Stat. 470, c. 137), the same rule, it seems, was applicable to suits originally brought in the circuit court; that is to say, under that act the right to entertain a case brought therein originally, on the ground that it involved a federal question, depended upon the inquiry whether the plaintiff's statement of his cause of action showed the existence of a federal question. Tennessee v. Union Planters' Bank, supra; Metcalf v. Watertown, 128 U. S. 586, 589, 9 Sup. Ct. 173. The necessary result of this doctrine is that, when a complaint filed in the circuit court of the United States discloses a controversy arising under federal laws, the jurisdiction of the court will not be