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.ct of 1857 these selections could only be made within fifteen miles of the
ne of the road, and the court says that the lands, which it now classifies together in this second group, are within the fifteen-mile or indemnity limit of the Winona road, and are not within the fifteen-mile or indemnity limit of the St. Paul road, but they are within the twenty-inile limit of the latter road. In regard to these lands, the court held that the right of the Winona Company was superior, under the act of 1857, to the St. Paul Company's claim, under the act of 1864, and that the latter had no other claim. This act of 1864 was one which, by its title, was passed to give to the state of Iowa lands in aid of a road from McGregor, on the Mississippi river, to the western boundary of the state, and another road from Sioux City to the Minnesota line in the county of O'Brien. 15 St. 72. To this state was given the alternate sections, designated by odd numbers, for ten sections on each side of these roads. As the Sioux City road was probably intended to meet the road from St. Paul and St. Anthony towards the mouth of the Big Sioux river, at the line between the two states, congress by the seventh section enlarged the grant to this latter road to make it equal to that of the lowa roads. This section reads as follows: "Sec. 7. That there be, and is hereby, granted to the state of Minnesota, for the purpose of aiding in the construction of a railroad from St Paul and St. Anthony, via Minneapolis, to a convenient point of junction west of the Mississippi, to the southern boundary of the state, in the direction of the mouth of the Big Sioux river, four additional alternate sections of-land per mile, to be selected upon the same conditions, restrictions, and limitations as are contained in the act of congress entitled •An act making a grant of lands to the territory of Minnesota, in alternate sections, to aid in the construction of certain railroads in said territory, and granting public lands, in alternate sections, to the state of Alabama to aid in the construction of a certain railroad in said state,' approved March third, eighteen hun. dred and fifty-seven: provided, that the land to be so located by virtue of this section may be selected within twenty miles of the line of said road, but in no case at a greater distance therefrom. Approved May 12, 1864.”
By the act of March 3, 1865, (13 St. 526,) it was enacted that the grant of lands to the state of Minnesota to aid in the construction of railroads, of March 3, 1857, “shall be, and hereby is, increased to ten sections per mile for each of said roads and branches, subject to all limitations contained in said act and subsequent acts, and as hereinafter provided,” thus placing all the other Minnesota roads on an equality in that respect with the one from St. Paul and St. Anthony to the Iowa state line. This statute also requires that the first proviso to the first section of the act of 1857 be so amended as to read that the land so located shall in no case be further than 20 miles from the lines of said roads, and said lands shall in all cases be indicated by the secre. tary of the interior. It also provides that nothing herein contained shall in. terfere with any existing rights acquired under any law of congress heretofore enacted granting lands to the state of Minnesota to aid in the construction of railroads. There is nothing in either of these statutes which indicates or requires that the six-mile limit of the original grant is to be enlarged so that, within a limit of ten miles, all the odd sections fall immediately within the grant on the location of the road. Such language was used in the fourth section of the act concerning the Union Pacific Railroad in 1864, only a few weeks later than the act of that year now under consideration. There it was enacted that the words of the act of 1862 should be so changed as to change the original limits, and include within that grant the sections added to it by the amendment of 1864. U. 8. v. Burlington & M. R. R. Co. 93 U. S. 334.
In addition to this significant fact, both the act of 1864 and of 1865 speak of the additional sections to be selected, a word wholly inapplicable to lands in place which are not ascertained by selection, but are fixed and determined by the location of the line of the road. The act of 1865, which is to be consid
ered in pari materia on this point, provides that these lands shall be indicated by the secretary of the interior. What this word "indicated” means may admit of some doubt, but taken in connection with the other two statutes, and other acts granting lands to aid in the construction of railroads, it probably means no more than what is expressed in the act of 1857, namely, that the selections of lieu lands shall be made by the governor or his agent and approved by the secretary. We think, therefore, that these additional lands granted to appellant, under which it claims the right to go into the limits of appellee's primary grant, are lands to be selected, and that some selection on the part of appellee or for its benefit must be shown. As to the lands in the second class, of the Minnesota supreme court, it is found as a fact, by the amended finding in which the attention of the court was specially turned to that matter, that no selection of any of them was ever made by defendant below, or by any one for that company. The language of the court in its supplementary finding of facts is: "Neither the state nor the defendant, nor any agent of the state or of the defendant, ever selected for the defendant, or on account of the location or construction of its line of road, any of the lands in controversy in this action lying west of the west line of range (37) thirtySeven."
As all the lands in controversy lying east of this line are included in the first class as being within the plaintiff's six-mile limits of land in place, and as no selection on behalf of defendant has ever been made of any of the lands west of that line, these two facts would seem to dispose of the whole controversy. For while the inferior court so far modified its first finding, namely, that both parties did, on the twenty-third day of May, 1872, present lists of all the lands in controversy to the local district*land-officers as selections under their respective grants, as to say that no selections were ever presented by defendant for any lands west of range 37, it left the fact that lists of selection for these latter were presented by plaintiff to stand, and also of the payment of the office fees, and that the lists were certified to the department. There was then a selection of the lands included in this class made by plaintiff or for its benefit on the twenty-third of May, 1872, and no selection of them ever made by or on behalf of defendant. The time when the right to lands becomes vested, which are to be selected within given limits under these land grants, whether the selection is in lieu of lands deficient within the primary limits of the grant, or of lands which, for other reasons, are to be selected within certain secondary limits, is different in regard to those that are ascertained within the primary limits by the location of the line of the road. In Ryan v. Railroad Co. 99 U. S. 382, this court, speaking of a contest for lands of this class, said: “It was within the secondary or indemnity territory where that deficiency was to be supplied. The railroad company had not, and could not have, any claim to it until specially selected, as it was for that purpose;" and the reason given for this is that “when the road was located and maps were made, the right of the company to the odd sections first named became fixed and absolute. With respect to the lieu lands, as they are called, the right was only a float, and attached to no specified tracts until the selection was actually made in the manner prescribed.'
The same idea is suggested, though not positively affirmed, in the case of Grinnell v. Railroad Co. 103 U. S. 739. In the case of Cedar Rapids R. Co. v. Herring this principle became the foundation, after much consideration, of the judgment of the court rendered at the last term, (110 U. S. 27; S. C. 3 Sup. CT. REP. 485;) and the same principle is announced at this term in the case of Kansas Pac. R. Co. v. Atchison, T. & S. F. R. Co. 112 U. S. 414; S. C. ante, 208. The reason of this is that, as no vested right can
attach to the lands in place (the odd-numbered sections within six miles of each side of the road) until these sections are ascertained*and identified by a
legal location of the line of the road, so in regard to the lands to be selected
within a still larger limit, their identification cannot be known until the selection is made. It may be a long time after the line of the road is located before it is ascertained how many sections, or parts of sections, within the primary limits, have been lost by sale or pre-emption. It may be still longer before a selection is made to supply this loss.
The plaintiff in error insists that the map of its line of road was filed in 1859. The court of original jurisdiction finds that, up to the time of the trial in October, 1878, a period of nearly 20 years, no selection of these lands had ever been made by that company, or any one for it. Was there a vested right in this company, during all this time, to have not only these lands, but all the other odd sections within the 20-mile limits on each side of the line of the road, await its pleasure? Had the settlers in that populous region no right to buy of the government, because the company might choose to take them, or might, after all this delay, find out that they were necessary to make up deficiencies in other quarters? How long were such lands to be withheld from market, and withdrawn from taxation, and forbidden to cultivation?
It is true that in some cases the statute requires the land department to withdraw the lands within these secondary limits from market, and in others the officers do so voluntarily. This, however, is to give the company a reasonable time to ascertain their deficiencies and make their selections. It by no means implies a vested right in said company, inconsistent with the right of the government to sell, or of any other company to select, which has the saine right of selection within those limits. Each company having this right of selection in such case, and having no other right, is bound to exercise that right with reasonable diligence; and when it is exercised in accordance with the statute, it becomes entitled to the lands so selected. The unascertained float then becomes a vested right to an identified tract of land. In this case, and for these reasons, priority of selection secures priority of right. The judgment of the supreme court as to the land in this, its second class, is correct, whatever may have been its reasons for it. It is no answer to this to say that the secretary of the interior certified these lands to the state for the use of the appellant. It is manifest that he did so under a mistake of the law, namely, that appellant, having made the earlier location of its road through these lands, became entitled to satisfy all its demands, either for lieu lands or for the extended grant of 1864, out of any odd sections within 20 miles of that location, without regard to its proximity to the line of the other road. We have already shown that such is not the law, and this erroneous decision of his cannot deprive the Winona Company of rights which became vested by its selection of those lands. Johnson v. Towsley, 13 Wall. 80; Gibson v. Chouteau, 13 Wall. 102; Shepley v. Cowen, 91 U.S. 340; Moore v. Robbins, 96 U. S. 536.
We see no error in the judgment of the supreme court of Minnesota, and it is accordingly affirmed.
(113 U. S. 51)
(January 5, 1885.)
A fire policy, covering merchandise belonging to a firm, provided that it should be void if the property“ be sold or transferred, or any change takes place in title or possession, (except by succession by reason of the death of the insured,) whether by legal process, or judicial decree, or voluntary transfer or conveyance." Subsequently, and before loss, the firm, owning this property in certain proportions, made an agreement in writing with A., by which they agreed to receive him into their business upon the following terms and conditions : Said company is to be. come incorporated. A. is to pay into the firm for its use $5,000 forthwith, and
IS. C. 20 Fed. Rep. 657.
$5,000 in two years, with interest semi-annually until paid. The name of the new company shall be determined hereafter. The property of the existing firm shall be put into the corporation to be formed as aforesaid, adding to it the $10,000 to be paid by A. The interest and shares of the several parties in the new company shall be in proportion to the amount so contributed by each to the capital stock. When a charter shall be procured as aforesaid, half of A.'s stock shall be held by said company till said second sum of $5,000, with interest, shall be paid. No change in the name or character of the existing firm shall be made until said corporation shall be formed. Held, that A. did not become a partner, or acquire any interest in the property of the partnership, before it was made a corporation. In Error to the Circuit Court of the United States for the District of Minnesota.
This action was brought on two policies of fire insurance, issued March 10, 1883, by the London Assurance Corporation, of London, on certain goods, wares, and merchandise, which, it is admitted, was, at the time of insurance, the property of the firm of Drennen, Starr & Everett, doing business in the city of Minneapolis, Minnesota. The loss occurred on the twenty-ninth of July, 1883, and there was no dispute, at the trial, as to its amount. Each policy contained a provision that it should be void if the property insured “be sold or transferred, or any change takes place in title or possession, (except by succession by reason of the death of the insured,) whether by legal process, or judicial decree, or voluntary transfer or conveyance." Also, that “if the interest of the assured in the property be any other than the entire, unconditional, and sole ownership of the property, for the use and benefit of the assured,
it must be so represented to the corporation, and so expressed in the written part of this policy, otherwise the policy shall be
void. When property has been sold and delivered, or otherwise disposed of, a so that all interest or liability on the part of the assured herein named has
ceased, this insurance on said property shall immediately terminate. The defendant disputed its liability on the ground that Drennen, Starr & Everett, on the twenty-fourth of May, 1883, before the loss, admitted one Arndt as a partner in their firm, and that thereby, without its knowledge or consent, and by the voluntary act of the plaintiffs, the title, interest, and possession of the insured in the property was changed, and the policies became void. The plaintiffs denied that Arndt ever became a member of their firm or acquired any interest in the property insured. Upon this issue the proof was, substantially, as will be now stated. Arndt resided in Sandusky, Ohio. He visited Minneapolis in May, 1883, and first became acquainted with plain. tiffs Drennen and Starr on or about the twentieth day of that month. Negotiations then commenced with Drennen and Starr, who acted for their firm, and resulted in the making of the following agreement:
"This agreement, made and entered into this twenty-fourth day of May, A. D. 1883, by and between E. J. A. Drennen, F. W. Starr, and Edward D. Everett, who are now members of and constitute the firm of Drennen, Starr & Everett, all of the city of Minneapolis, Minnesota, parties of the first part, and D. M. Arndt, of the city of Sandusky, Ohio, party of the second part, witnesseth: Said parties of the first part hereby agree to receive into their business said Arndt on the following terms and conditions:
“1st. Said company is to become incorporated. “2d. Said Arndt is to pay into said firm for its use, on or before June 14, 1883, five thousand dollars.
“3d. Said Arndt is to pay into said firm for its use, on or before January 1, 1885, an additional sum of five thousand dollars.
“4th. Said Arndt is to pay said firm interest at the rate of 8 per cent. per annum on each of said sums of five thousand dollars from January 1, 1883. till each of said sums shall be paid as aforesaid, the interest on last-mentioned gum to be paid semi-annually.
"5th. If said Arndt shall be unable to pay said second $5,000 by January 3 1, 1885, his interest shall be decreased 50 per cent.; and until said last-men-* tioned sum of $5,000 shall be paid, or interest decreased as aforesaid, the liability of said Arndt therefor shall be evidenced by his promissory note, executed to said firm, bearing interest as aforesaid, and dated January 1, 1883. The business to be carried on by the new company to be formed as aforesaid shall be of the same nature as that now conducted by Drennen, Starr & Everett; the name of the new company to be formed shall be determined hereafter.
“It is understood and agreed that of the effects and rights of the firm of Drennen, Starr & Everett, Drennen owns one-half and said Starr and Everett each one-fourth thereof. All said rights and effects shall be put into the corporation to be formed as aforesaid, at their value as shown by the inventory taken January 1, 1883, less any loss by reason of non-payment of any claim for goods sold by them before that time, and that to the amount to be contributed as aforesaid shall be added said sum of ten thousand dollars to be paid by said Arndt as aforesaid.
“The interest and shares of the several parties to this agreement in the new company shall be in proportion to the amount contributed by each to its capital stock according to the plan aforesaid.
“When a charter shall be procured as aforesaid, 50 per cent. of the stock of said Arndt shall be held by said company, or some one in trust for it, till said second sum of $5,000, with accruing interest thereon, shall be paid. It is understood said Arndt is to attend to the book-keeping and office work of said business, and that each remaining partner of the firm of Drennen, Starr & Everett shall actively engage in the business of the new company; that no change in the name or character of the firm of Drennen, Starr & Everett shali be made until said corporation shall be formed.
"In testimony whereof, said parties hereto set their signatures the day and year first herein written.
E. J. A. DRENNEN, “FRED. W. STARR. “DAVID M. ARNDT.”
* Everett, one of the plaintiffs, was then absent from Minneapolis, but, upon his return soon after, was informed by his partners of the contents of the written agreement with Arndt. The latter, immediately after the agreement was signed, went to Sandusky, but returned to Minneapolis about the seventeenth of June, 1883. This was after Everett learned from his partners what had occurred between them and Arndt. On the eighteenth of June, 1883, plaintiffs received from Arndt the sum of $5,000, which was placed to his individual credit upon the account-books of the firm, and was by plaintiffs deposited in their bank; and on July 3, 1883, he made and delivered to them his promissory note for $5,000, which was also entered upon their account-books to his individual credit. It was accepted by them as other bills receivable in their business. This constituted the whole evidence upon which the case went to the jury. There was a verdict and judgment for the defendant.
Geo. B. Young, for plaintiff in error. C. K. Davis, for defendant in error.
Mr. Justice HARLAN, after stating the facts, delivered the opinion of the court:
*At the trial below the plaintiffs asked the court to instruct the jury that the written agreement with Arndt, followed by his payment of $5,000 in money, the delivery of his note for a like amount, and the entry of the money and notes to hig'individual credit upon the books of Drennen, Starr & Everett, did not constitute him a partner with plaintiffs, as between themselves, and did not have the effect to assign or transfer to him any title or interest in the property insured. The court refused to give that instruction, but charged the jury that "said agreement so signed, if assented to by Everett,