Platt v. Union Pac. R.R. Co., 99 U.S. 48

Platt entered upon the land in the year 1874, and thereafter p. 49remained in possession. He made improvements thereon, and performed all the conditions which entitled him, as a qualified pre-emptor, to a preference right of purchase, if the land were subject to pre-emption. He duly filed, Sept. 21, 1878, his declaratory statement, made the requisite proofs before the proper officers, paid the receiver of the local land-office $200, being at the rate of $1.25 per acre, and took a receipt therefor,

The act of 1862 provides that upon the completion of forty consecutive miles (changed to twenty by the act of 1864) of said road, bonds of the United States of $1,000 each, bearing p. 51six per cent semi-annual interest, due at thirty years from date, shall be issued by the Secretary of the Treasury to the company, to the amount of sixteen bonds per mile (a larger amount per mile being allowed between certain designated points) ; and that “ to secure the repayment to the United States, as hereinafter provided, of the amount of the said bonds so issued and delivered to said company, together with all interest thereon which shall have been paid by the United States, the issue of said bonds and delivery to the company shall ipso facto constitute a first mortgage on the whole line of the railroad and telegraph, together with the rolling-stock, fixtures, and property of every kind and description, and in consideration of which said bonds may be issued; and on the refusal or failure of said company to redeem said bonds or any part of them when required so to do by the Secretary of the Treasury, in accordance with the provisions of this act, the said road, with all the rights, functions, immunities, and appurtenances thereunto belonging, and also all lands granted to the said company by the United States which at the time of said default shall remain in the ownership of the said company, may be taken possession of by the Secretary of the -Treasury for the use and benefit of the United States: Provided, this section shall not apply to that part of any road now constructed.”

The tenth section of the act of 1864 provides that sect. 5 of the act of 1862 “ be so modified and amended that the Union Pacific Railroad Company, the Central Pacific Railroad Company, and any other company authorized to participate in the construction of said road, may, on the completion of each section of said road, as provided in this act and the act to which this act is an amendment, issue their first-mortgage bonds on their respective railroad and telegraph lines to an amount not exceeding the amount of the bonds of the United States, and of even tenor and date, time of maturity, rate and character of interest, with the bonds authorized to be issued to said railroad companies respectively. And the lien of the United States bonds shall be subordinate to that of the bonds of any or either of said companies hereby authorized to be issued on their respective roads, property, and equipments, except as to the provisions of the sixth section of the act to p. 52which this act is an amendment, relating to the transmission of despatches and the transportation of mails, troops, munitions of war, supplies, and public stores for the government of the United States. And said section is further amended by striking out the word ‘ forty ’ and inserting in lieu thereof the words ‘ on each and every section of not less than twenty.’ ”

It further provides that the lands shall be under the management and control of the company, to be by it sold or contracted to be sold for such prices and on such terms of payment as shall be mutually agreed upon by the company and the trustees ; that the trustees shall, upon payment of the purchase-money of the several tracts which may be sold, receive and apply the same, and the proceeds of all sales made by them of lands so conveyed to them, to the sole and exclusive purpose of the payment of the said coupon bonds, until the same and the whole thereof shall be fully paid and satisfied, and thereafter to reconvey to the company the residue of said lands remaining unsold; that in default of the payment of either the interest or principal of the said coupon bonds, according to the tenor and effect thereof, for the period of six months after demand at the place of payment, the trustees are authorized to enter into and take possession of the lands an foreclose the indenture; that in case of such default for. the period of one year, then the principal sum of said bonds is to p. 53become due and payable, and the said trustees are authorized to take possession of the lands, foreclose said indenture by selling, at public auction in the city of Omaha or New York, the lands, or so much thereof as may be necessary to pay and discharge said coupon bonds, or so many thereof as are then outstanding and unpaid; and that in case of any sale upon any such foreclosure, or at any public auction, the trustees are empowered to make, execute, and deliver a conveyance of the lands so sold, which shall convey to the purchaser all the rights and privileges of the company in and to the property so sold, to the same extent as the company shall have previously enjoyed and held the same.

No sale or disposition of the land within the meaning of the act has been made by the company. It may be that “ dispose of has not such an exact and universally accepted technical meaning as “ sell,” “ exchange,” “ mortgage.” It popularly signifies “ to sell.” Webster’s definition is, “ to exercise finally one s power of control over; to pass over into the control of p. 54some one else; to alienate; to bestow; to part with; to get rid of.” Worcester’s is, “put out of possession of.”

Such was the grant. The railroad and telegraph line were entirely completed before July 1, 1874 (if not in 1869), and patents for all the lands granted were directed to be issued to the company in November of that year. By force of the grant, however, and by the definite fixing of the route of the road, and the filing the map thereof in the Interior Department, as required by law, together with the completion of the road westward and beyond the tract claimed by the complainant, the p. 57title to that tract had become vested in the company before April 16, 1867. On that day the company, for the purpose of raising money necessary to continue and complete the construction of their road, issued their coupon bonds for the sum in the aggregate of $10,400,000, bearing seven per cent interest, and payable in twenty years from their date. On the same day, for the purpose of securing the payment of the bonds, the company executed a mortgage or deed of trust to trustees of all and several the several sections of land granted to them by the said acts of Congress, including the tract claimed by the complainant. The instrument, we think, though in form a deed of trust, was substantially a mortgage. It was delivered to the trustees, and duly recorded. The bonds were sold in different markets to bona fide purchasers, and they are now outstanding, about $7,000,000 still remaining unsatisfied. All this was before the entire road was completed, and before the first step was taken by the complainant to obtain his pre-emption right.

In view of these facts, we are to determine whether the mortgage was a disposition of the lands granted to the company within the meaning of the last clause of sect. 2 of the act of 1862. If it was, the tract of land claimed by the complainant was not open to settlement and pre-emption when he entered thereon, nor has it been at any time since. That clause declared that “ all the lands granted by the section, which shall not be sold or disposed of by said company within three years after the entire road shall have been completed, shall be subject to settlement and pre-emption,” &c. Was the mortgage a sale or disposition of the lands as understood by Congress ? That the company had power to mortgage the lands admits of no reasonable doubt. It may be conceded that a railroad company has not power either to sell or mortgage its franchise, or perhaps the road which it has been chartered to build, without express legislative authority, and this has in some cases been decided. The reason is that such a sale or mortgage tends to defeat the purposes the legislature had in view in the grant of the charter. The adventurers who obtain the chartei* and who accept it undertake to construct and maintain the public work, heir undertaking is the consideration of the grant, and p. 58without legislative consent they cannot throw off the obligation they have assumed. But the reason is inapplicable to a sale or mortgage of property which is not a part of the road and in no way connected with its use. Parting with such property or incumbering it in no degree interferes with the performance of the duties of the company to the public. Railroad companies are not usually empowered to hold lands other than those needed for roadway and stations, or water privileges. But when they are authorized to acquire and hold lands separate from their roads, the authority must include the ordinary incidents of ownership, — the right to sell or to mortgage. Especially is this so when, as in the present case, the lands have been granted to the company by the legislature that granted the charter, without any restriction of their use.

Assuming, therefore, as we must, and as has been tacitly conceded in the argument, that the company had the power to make the mortgage of 1867, we need not stop to inquire whether it was a sale or a partial sale. In some of the States, as well as in England, a mortgage is practically, as well as in form, a sale. It passes the legal title to the mortgagee. The more general modern doctrine in this country is, we admit, that it creates merely a lien, without any transmission of title. But if not a sale, was the mortgage made by the company defendant in this case not a disposition of the lands granted to it by Congress ? This question is not to be answered by reference to definitions given in the dictionaries. What did Congress mean in the act of 1862 ? That something else than sale, either total or partial, was intended we are required by all the rules of construction to conclude. Congress is not to be presumed to have used words for no purpose. If it was intended that only lands which had been sold before three years had expired after the entire completion of the railroad should be exempted from pre-emption, the words “ or disposed of ” were entirely superfluous. But the admitted rules of statutory construction declare that a legislature is presumed to have used no superfluous words. Courts are to accord a meaning, if possible, to every word in a statute. In Commonwealth v. Alger (7 Cush. (Mass.) 53-89)» it was said that in putting a construction upon any statute every part must be regarded, and it must be so expounded, p. 59practicable, as to give some effect to every part of it. So, in People v. Burns (5 Mich. 114), it was held that some meaning, if possible, must be given to every word in a statute, and that where a given construction would make a word redundant, it was reason for rejecting it. To the same effect is Dearborn and Others v. Inhabitants of Brookline (97 Mass. 466) ; and in Grates v. Salmon (35 Cal. 576) it was ruled that no words are to be treated as surplusage or as repetition. The phrase “ or disposed of ” must, therefore, have some distinctive meaning, some meaning beyond the word “ sold.” What that is may be seen very plainly when the whole act of 1862 is examined. We are seeking for the intention of Congress, and to discover that we may look at the paramount object which Congress had in view, as well as the means by which it proposed to accomplish that object. Congress addressed itself to the work of securing a railroad from the Missouri River to the western boundary of the Territory of Nevada, and thence to the Pacific Ocean. The work was vast, beyond the reach of private capital or enterprise. It could be accomplished only by the bestowal upon a corporation of very large governmental aid. The proposed road ran over mountains and through what was known to be an uninhabited desert, for more than a thousand miles. The lands through which it must pass were supposed to be almost worthless, and quite unsalable, until they should be made, by the construction of a railroad, accessible to settlers and to Eastern markets. The construction of a railroad through such a region was most uninviting to private capitalists. To induce them to embark in the enterprise was the overshadowing motive that dictated the act of 1862. This is apparent in almost every line of the act. For this reason the grants of land were made, the rights of way and of» taking materials were given, and the subsidy bonds were loaned, to be repaid only at the expiration of thirty years, with interest payable only at the expiration of that period. Even this was not enough. No association and no persons were found willing, with all this proffered assistance, to undertake the construction of the road. But so earnest was Congress to induce the corporators to attempt the work, that in 1864 additional aid was proffered, the grant of lands was doubled, and new privileges were conferred. We do not now p. 60attempt to portray the earnestness — the all-absorbing earnestness— with which Congress sought to secure the construction of the road by private enterprise. It was well exhibited in United States v. Union Pacific Railroad Co. (91 U. S. 72), to which we refer. Suffice it to say, the purpose of Congress, above all others, was to obtain the construction of the railroad by the corporation it created to undertake the work. For that alone the subsidy bonds were given. Only for that the grants of land were made. All was intended to give the utmost possible assistance to the stupendous and unparalleled enterprise. We do not say that other incidental considerations were not kept in mind, but what we do assert as plainly manifest in the legislation is, that the paramount intention of Congress was to give such assistance to the company as to induce them to build the road. Every other consideration was subordinate to that.

All will concede that in construing the act of 1862 we are to look at the state of things then existing, and in the light then appearing seek for the purposes and objects of Congress in using the language it did. And we are to give such construction to that language, if possible, as will carry out the congressional intentions. For what particular purpose, then, was the grant of lands made ? The statute itself answers, “ for the purpose of aiding in the construction of the railroad and telegraph line, and securing governmental transportation, &c. The lands were granted to be used in furtherance of such construction. But Congress and the grantees must have known that, when granted, the lands were of little worth. They were then unsalable at any price. Their value was wholly prospective, dependent upon the construction of the road. Purchasers could not have been reasonably expected, certainly few, for immediate settlement. The obvious mode, therefore, of using the lands for the construction of the road (not for paying debts incurred in the construction, but for immediate need as the construction was progressing) was to hypothecate them as security for a loan. Many persons might be willing to advance money on the faith of the prospec tive value of the lands, if the railroad was built, who would not be willing to buy when it was doubtful whether the company would ever be able to raise the money necessary to build t road and thus render the lands salable. Congress must have p. 61been blind, indeed, if it did not foresee this, and intend to authorize the use of the lands to raise money by mortgage for the object it had so much at heart. This, we think, was what was intended by the phrase “ or disposed of,” as distinguished from “ sold.” Some of the lands might be sold as the work was progressing, and others could be used in aid of the construction only by pledging them to persons who might be willing to advance money on the faith of their prospective value. But whether sold or used as a security for money loaned to advance the construction of the road, they were equally employed for the purpose for which they were granted. The words “ disposed of ” are undeniably apt words to indicate a transfer by mortgage. If land be conveyed to A. to enable him to raise money for a particular purpose, nobody would doubt that a mortgage would be a disposition of the land for that purpose; and the grant made by the third section of the act of 1862 was obviously made, as we have suggested, with the intent of giving present assistance to the company in the construction of the road. It was not intended to be available only after the company had raised all the money necessary for the work. Then the time of need for the purpose mentioned would have gone by. The act declares it to have been “ to aid in the construction of the road,” not to reimburse expenditures made in the construction. Hence it must have been intended that the company might use or dispose of the land in some other way than by a sale. But in what other way ? Not by gift; for that would not have been in aid of the construction, and the grant was intended for that. Nor by leases. They could have brought little money. And no other mode of disposition except by mortgage has been suggested which could furnish the requisite aid for building the road. No other is conceivable. The conclusion would seem, therefore, to be almost inevitable, that Congress, when speaking of a disposition of the lands other than a sale, contemplated making them available for the purposes of the grant by mortgage.

And if so, it is hard to believe that only a limited interest in t e lands was allowed to be hypothecated. Twelve years were designated as the period within which the road was required to e completed, and lands not sold or disposed of within three p. 62years thereafter were to be open to pre-emption. Moreover, under the provisions of the act, the title to the lands could be perfected in the company only as the work of construction advanced; that is, as each section of forty miles was completed. The company might not become entitled to some until July 1, 1874. If, therefore, a mortgage could only bind the lands unsold until the expiration of three years after that date, it would have been an hypothecation for a term of years, and as to some of the lands, for a term of only three years. Was that the aid proffered by Congress to stimulate and render possible the completion of an enterprise in which it felt so deep an interest ? If so, it was a barren gift. Looking at the character of the lands and their remoteness from settlements, it must have been evident enough that money could not have been raised on the credit of such a mortgage. The power of disposition given for the express purpose of enabling the company to raise money for the construction of the road, by such an interpretation of the act is made of no value. The interpretation, therefore, defeats the manifest intention of Congress, and for that reason it cannot be accepted.

What are thus stipulated to be observed and strictly and ait fully to be carried out and fulfilled are the provisions of the acts in all that concerns the sale and disposal of the lands. T ey are matters to be carried out and strictly fulfilled, —duties p. 63to be performed by the company, and duties which concern the sale or disposal of the lands. Carrying out and performing a provision implies action, and the provision must, therefore, be one relating to action. But the acts of Congress contain no provision respecting the sale or disposal of the lands that requires action, that is, something to be carried out and fulfilled, except the implied duty of devoting the proceeds of sales or dispositions strictly and faithfully to aid in the construction of the road.

On the other hand, if an hypothecation of the lands in fee was within the power to “ dispose of ” them, as we have endeavored to show, and if the granting part of the mortgage made, standing by itself, did hypothecate a fee, it is hard to believe the parties intended by the stipulations referred to to restrict the exercise of the power to the grant of an estate for years, a limitation alike injurious to the mortgagers and the mortgagees. We think, therefore, nothing in the stipulation is repugnant to the granting part of the mortgage which purported an hypothecation of the entire fee. . There is always a tendency to construe statutes in the light in which they appear when the construction is given. It is easy to be wise after we see the results of experience. We p. 64may now think it quite possible the lands could all have been sold before July 1, 1877. The unforeseen success of the enterprise and the unprecedented rush of emigration along the line of the railroad have shed new light upon the value of the grants made to the company. But in endeavoring to ascertain what the Congress of 1862 intended, we must, as far as possible, place ourselves in the light that Congress enjoyed, look at things as they appeared to it, and discover its purpose from the language used in connection with the attending circumstances. Guided by this rule of construction, as well as by others universally recognized, we have been led unhesitatingly to the conclusion that the deed of trust or mortgage executed by this company in 1867 was a disposition of the lands granted by the third section of the act of 1862, within the meaning of that act.

The principal objection urged against the interpretation we have given to the words “ sold or disposed of ” is, that it is repugnant to the governmental policy of guarding against monopolies of public lands by large corporations or single in i viduals. It must be admitted that Congress had that policy in view when it declared that the lands not sold or dispose o within three years after the entire road should be comp e should be subject to settlement and pre-emption, at a price no p. 65exceeding $1.25 per acre. But this policy was manifestly subordinated to the higher object of having the road constructed* and constructed with the aid of the land grant. No limitation was set to the quantity of land which the company might sell to single associations, or single persons. It was left at liberty to sell, if it could, to any land association or private purchaser* the entire body of the lands or any lesser quantity, regardless of the general legislative policy. It was allowed to sell or dis-, pose of the grant at its pleasure, for the purpose of raising money to aid in the road construction, provided thus raising the money was done within the limited period. With that power no pre-emptor was authorized to interfere. Whatever contingent rights he had were postponed and subordinated to it. If, as we think it manifest, the leading primary policy of the act was to place the lands in the hands of the company, to be used for the completion of the road, as this work progressed, any secondary policy the government may also have had in view ought not to be allowed to embarrass or defeat that which was primary. It is evident Congress thought there might be remnants of the grant, not used in aid of the construction of the road, either because other resources of the company might prove sufficient, or because it might be found impossible to dispose of them in time to furnish such aid, and those remnants it undertook to open to settlement and pre-emption, his appears to us to have been what was intended, and all t at was intended. The construction gives full effect alike to t e paramount and the subordinate purposes of the act. Each as its own field of operation. The construction contended or y the appellant restricts the power of disposition, denies e au^ority of the company to utilize, except partially, for the

o p. 66act, in connection with all the other provisions made by Congress, endeavoring to give effect to every part, and regarding the spirit as well as the letter, we are constrained to hold that the mortgage of 1867 was a disposition of the lands mortgaged within the meaning of the statute, and, consequently, that the tract of land claimed by the complainant was not open to pre-emption when he undertook to pre-empt it. He has, therefore, no equitable title to it.

I dissent from the judgment of the court in this case. In the third section of the original charter, after granting to the company five alternate sections of public land on each side of its line of railroad, to aid in the construction thereof, it was provided that all lands so granted, which should not be sold or disposed of by the company within three years after the entire road should have been completed, should be subject to settlement and pre-emption, like other lands, at a price not exceeding $1.25 per acre, to be paid to the company. The appellant, after the three years had expired, settled upon the land m question and claimed pre-emption of the same; and offered to the company the price specified in the statute. The latter refused to receive the money or to recognize his right, alleging that it had disposed of the lands in 1867 by executing a mortgage for its entire l£nd grant to secure a loan of $7,000,000. The question is, whether such mortgage is a sale or disposition of the lands within the meaning of the proviso of the third section. I think it is not. In my judgment, Congress had in view such a sale and disposition of the lands as would secure a settlement thereof. The object was to encouiage a speedy settlement of the country along the line of the road, and hence it was provided, if the company did not so dispose of them, they should be open to settlers, at the usual, prices, reserving to the company, however, the right to receive the purchase-money for the same. If the company, by one sweeping deed of trust, or mortgage, could cover the whole domain as with a blanket, and thus prevent a settlement thereon unti p. 67the lands, by advance of prices, would be out of the reach of actual settlers desirous of occupying and improving them, it seems to me it would entirely defeat the objects of the act.

At that term, so held by said Benedict, Lange was tried upon an indictment consisting of twelve counts; some of them charging him with having feloniously stolen certain mail-bags in use by the Post-Office Department; others with having, for lucre and gain, feloniously appropriated certain other such mail-bags; and others with having knowingly and unlawfully, for lucre and gain, conveyed away certain other such mail-bags, to the hindrance and detriment of the public service. The indictment was found under sect. 290 of the act of June 8,1872 (17 Stat. 320), which provides that the prisoner, on conviction of the offence, if the value of the property be less than $25, shall be impiisoned not more than one year, or be fined not less than ten nor more than $200. The jury found Lange guilty, and the value of the property to be less than $25. The court during the term sentenced him, November 3, to be imprisoned for the term of one year and to pay a fine of $200. On the following day there was paid into the registry of the court $200, in full satis faction of the fine imposed by the sentence; and on the .7th o that month the clerk of the court deposited it at the office o p. 69the Assistant Treasurer in New York City, to the credit of the Treasurer of the United States. On the same day a writ of habeas corpus was granted in favor of Lange, returnable the ensuing day; and during the same term of the court he was produced in obedience to the writ, whereupon, after hearing, the court, on November 8, vacated and set aside the sentence pronounced against him on the third day of that month, and, proceeding to pass judgment anew, resentenced him to be imprisoned for the term of one year.

It would be a work of supererogation to cite authorities in p. 70support of the settled doctrine, that, in order to give this court jurisdiction to re-examine the judgment of a State court, it must appear affirmatively from the record that a Federal question was necessarily involved in the determination of the matter in controversy, a. It is quite manifest that the Court of Appeals may have disposed of the whole case by holding that the act complained of was a judicial act, and, for that reason, entailed no liability upon the judge, b. That the court decided no Federal question is shown by its opinion incorporated in the record. This court, in some instances, looks to the opinion below, for the purpose of ascertaining whether, in point of fact, a Federal question was decided. McManus v. O' Sullivan, 91 U. S. 578. c. The Supreme Court, at general term, decided: 1. That the act complained of was lawful, because authorized by the decision of this court in Basset v. United States, 9 Wall. 38. 2. That, whether lawful or not, it was a judicial act, for which no liability was incurred. The Court of Appeals limited its action to determining the last question upon grounds of public policy and general law, without reference to any principle of Federal jurisprudence.

Certain lands and the proceeds thereof were set apart by said act, and constituted said fund. It was irrevocably vested in certain State officers and their successors in office, to hold the same in trust for the uses and purposes in said act mentioned, with power to sell and transfer the lands, receive payment therefor, to invest surplus moneys arising therefrom in stocks of the United States or of the several States, or in the internal i mprovement bonds issued under the provisions of the act, and also to so invest the surplus interest arising from said in vestments, and to pay out of said fund the interest from time to time as it might become due on the bonds, issued by t le different railroad companies under the authority of the ac, and with further power to receive and demand semi-annual y, p. 73after each separate line of railroad should be completed, the sum of one-half of one per cent on the entire amount of bonds issued by such company, as a sinking-fund for the payment of said bonds as they should become due. , The Florida Railroad Company was chartered by the legislature of Florida. It accepted the provisions of the act and issued its bonds.

Ihe bib of complaint charges that on Nov. 3,1870, said Vose p. 74filed his bill in that court against Reed and others, trustees of said fund, alleging that he was the owner of first-mortgage bonds of the company issued under the provisions of said act; that the company having failed to provide the interest and the sum of one-half of one per cent per annum on the entire amount of its bonds, and been so in default for about three years, the trustees took the road into their possession, and sold it for $323,400 to one Dickerson and his associates, subject to all the provisions of the act, and, among others, to those of its second and third sections; that the trustees, in accordance with sect. 3, determined to apply the amount received from the sale to the purchase and cancellation of outstanding bonds of the company, and not to incorporate the same with the sinking-fund provided by the act for the full discharge of the bonds and interest, and by said application all of the outstanding bonds of the company were purchased and cancelled, except two hundred and twenty-eight, of which said Vose owned one hundred and ninety-five, and said Wagner twelve.

“Every railroad company accepting the provisions of this act shall, after the completion of the road, pay to the trustees of t e internal improvement fund at least one-half of one per cent on t & amount of indebtedness on bond account, every six mon S, as sinking-fund, to be invested by them in the class of securities na in sect. 2, or to be applied to the purchase of the outstan in bonds of the company; but it shall be distinctly understood that p. 77the purchase of said bonds shall not relieve the company from paying the interest on the same, they being held by the trustees as an. investment on account of the sinking-fund.”

by should not the burden of the company be diminished in the same ratio with the burden of the State ? The former is to cease wholly when all the bonds are discharged. Why s ould it not be lessened in the exact proportion that the amount of the outstanding bonds is reduced ? The contrary, we think, cannot be supported. As well might a creditor, w ere payments at different times have been made by the demand interest upon the whole amount of the original mad th® dollar is paid. This, in effect, is the case to th "th6 there is a short and conclusive answer e claim. It is, that the twelfth section constituted a conac with the purchasers of the road. That contract was that p. 78they should pay “ on the amount of indebtedness on bond account.” This was made a condition of the sale; and they so agreed, and they agreed to nothing else. This contract is binding upon both parties, and cannot be changed without their mutual consent? The language of the act is too clear to admit of doubt. In a statute “ where the intent is plain, nothing is left to construction.” United States v. Fisher, 2 Cranch, 886.