This proviso was added: "Provided, that | the new district had then existed. But, as all motions and causes submitted and all will have been seen, the case was not decauses and proceedings, both civil and crim-termined on its merits here, and proceedings inal, including proceedings in bankruptcy were thought necessary to be taken indenow pending in said judicial district of West pendent of the ultimate disposition of the Virginia as heretofore constituted, in which case. Therefore we entered the decree of the evidence has been taken in whole or in February 24, and, upon further reflection, part before the present district judge of have concluded that it should not be amendthe judicial district of West Virginia as ed. heretofore constituted, or taken in whole or Motion denied. in part and submitted and passed upon by the said district judge, shall be proceeded with and disposed of in said northern judicial district of West Virginia as constituted by this act."

Mr. Justice Harlan took no part in the consideration and disposition of this motion.

We think it sufficiently appears from the record that this case, when decided below, was pending in the circuit court of the United States for the district of West Virginia, at Charleston, in the county of Kanawha, a county included in the southern district created by the act; and it involved lands sit-Public lands-land grants to railroads—inuated in the counties now in that district.

*207

Submitted April 14, 1902. Decided June 2, 1902.

IN

N_ERROR to the Supreme Court of the State of Kansas to review a judgment which affirmed a judgment of the District Court of Labette county of that state in favor of plaintiff in an action to recover damages for breach of a covenant of warranty. Affirmed.

See same case below, 62 Kan. 866, 62 Pac.

1116.

Messrs. James Hagerman, T. N. Sedgwick, and J. M. Bryson for plaintiff in

error.

Mr. John H. Mahan for defendant in

error.

Mr. Justice Brewer delivered the opinion of the court:

The paramount Federal question is whether the Missouri, Kansas, & Texas Railroad Company was authorized to select as indemnity lands in satisfaction of its grant Statement by Mr. Justice Brewer: any even-numbered sections within the place On May 20, 1899, Monroe D. Herington, limits of the prior grant to the Union Pa the defendant in error, recovered a judgcific Railroad Company. Upon this quesment in the district court of Labette county, Kansas, against Lee Clark, for the sum of $3,032.28, which judgment was affirmed by the supreme court of that state on November 10, 1900. Thereupon the case was brought here on writ of error.

tion United States v. Missouri, K. & T. R. Co. 141 U. S. 358, 35 L. ed. 766, 12 Sup. Ct. Rep. 13, is cited. The railway company, de. fendant in that case, is the successor in interest of the Missouri, Kansas, & Texas Railroad Company. The act making its land grant is the one referred to in the foregoing statement of facts, as made July 26, 1866. 14 Stat. at L. 289, chap. 270. It claimed, under the authority of that act, the right to take as indemnity lands even-numbered sections within the place limits of what is known as the Leavenworth road, in whose benefit a grant was made March 3, 1863. 12 Stat. at L. 772, chap. 98. The court held against_this_claim, saying (p. 370, L. ed. p. 770, Sup. Ct. Rep. p. 17):

The facts are these: The action was one to recover damages for breach of warranty in the conveyance of a part of section 22, township 15, range 5, in Morris county, Kansas. The tract was outside the place and within the indemnity limits of the land | grant made July 26, 1866 (14 Stat. at L. 289, chap. 270), to the Union Pacific Railroad Company, Southern Branch, a corporation whose name was subsequently changed to Missouri, Kansas, & Texas Railroad Company. The railroad company duly con"Now, it is clear that the even-numbered structed its road, and, failing to obtain with sections, within the place limits of the Leavthe place limits the full quota of lands enworth road, were reserved by the act of granted to it, selected, on October 22,*1877, 1863, for purposes distinctly declared by the tract in controversy among others in lieu Congress, and which might be wholly dethereof. At the time of such selection the feated if the Missouri-Kansas company were tract was unimproved and without actual permitted to take them as indemnity lands Occupation. The selection was approved by under the act of 1866. The requirement in the Commissioner of the General Land Of the 2d section of the act of 1863, that the fice, but no patent was issued. On Septem- 'reserved sections' which 'remained to the ber 5, 1884, the railroad company conveyed United States' within 10 miles on each side the land to Lee Clark. He conveyed by of the Leavenworth road, shall not be sold warranty deed. Herington is a subsequent for less than double the minimum price of grantee in the chain of title, and is also the public lands when sold,' nor be subject the assignee from Clark's immediate grantee to sale at private entry until they had been of all his rights under Clark's deed, includ- offered at public sale to the highest bidder, ing the right to recover damages for any at or above the increased minimum price; breach of the covenants therein contained. the privilege given to actual bona fide setThe tract was in an even-numbered sec-tlers, under the pre-emption and homestead tion and within the place limits of the laws, to purchase those lands at the ingrant, made by acts of Congress of date July 1, 1862 (12 Stat. at L. 489, chap. 120), and July 2, 1864 (13 Stat. at L. 356, chap. 216), to the Union Pacific Railroad Company, Eastern Division.

ory that the even-numbered sections, so remaining to the United States, within the place limits of the Leavenworth road could be taken as indemnity lands for a railroad corporation."

creased minimum price, after due proof of settlement, improvement, cultivation, and occupancy; and the right accorded to settlers on such sections under the homestead laws, improving, occupying, and cultivating On July 21, 1886, the selection by the the same, to have patents for not exceeding Missouri, Kansas, & Texas Railroad Com-80 acres each, are inconsistent with the thepany was canceled by order of the Commissioner of the General Land Office. Notice of this order was given to the railroad company, as also time to appeal therefrom, but no appeal was ever taken. On July 28, 1888, E. M. Cox, who had, on July 31, 1886, taken forcible possession of the land, filed his declaratory statement, claiming settlement. On July 26, 1889. he made final proof, paid the government price, and received his patent certificate. Thereafter on October 15, 1890, a patent was issued to him.

While the two statutes making the Union Pacific railroad grants did not double the price of the even-numbered sections within the place limits, yet that was done by the act of March 6, 1868 (15 Stat. at L. 39, chap. 20), which in terms provided "that such sections shall be rated at $2.50 per acre, and subject only to entry under those

(the pre-emption and homestead) laws." | tation of the powers of the Land DepartThe even-numbered sections within the placement has been affirmed by this court in limits of the Union Pacific railroad grants many cases and under different circumstanwere from that time therefore not open to ces. Wilcox v. Jackson ex dem. M'Connel, selection as indemnity lands. It is true that 13 Pet. 498, 10 L. ed. 264; United States this statute was not passed until after the v. Stone, 2 Wall. 525, 17 L. ed. 765. grant to the Missouri, Kansas, & Texas It is further contended that it was not Railroad Company, nor until after it had within the power of the Land Department to filed its map of definite location with the cancel the selection by the company, after Secretary of the Interior, which appears the conveyance of the land by the company, from an agreed statement of facts to have without notice to all the transferees, and in been on January 7, 1868, but it was passed support thereof Cornelius v. Kessel, 128 U. before the completed construction of the S. 456, 32 L. ed. 482, 9 Sup. Ct. Rep. 122; railroad and long before the selection made Michigan Land & Lumber Co. v. Rust, 168 by the company, and it is familiar law that U. S. 589, 42 L. ed. 591, 18 Sup. Ct. Rep. no title to indemnity lands is vested until 208, and Hawley v. Diller, 178 U. S. 476, 44 an approved selection has been made, and L. ed. 1157, 20 Sup. Ct. Rep. 986, are cited. that up to such time Congress has full It is undoubtedly true, as held in those power to deal with lands in the indemnity cases and others, that while the Land Delimits as it sees fit. As said in Kansas P. partment has full jurisdiction over the disR. Co. v. Atchison, T. & S. F. R. Co. 112 position of public lands,-a jurisdiction U. S. 414, 421, 28 L. ed. 794, 797, 5 Sup. which may be exercised until the passing of Ct. Rep. 208, 212: "Until selection was the legal title by the issue of a patent or made the title remained in the government, otherwise,-yet such jurisdiction cannot be subject to its disposal at its pleasure." See exercised so as to destroy any equitable also Ryan v. Central P. R. Co. 99 U. S. 382, rights without notice to the claimants 25 L. ed. 305; Grinnell v. Chicago, R. I. & thereof. While that is true, the courts are P. R. Co. 103 U. S. 739, 26 L. ed. 456; Cedar not thereby debarred from an inquiry into Rapids & M. River R. Co. v. Herring, 110 and a determination of the validity of any U. S. 27, 28 L. ed. 56, 3 Sup. Ct. Rep. 485; equitable title. They do not assume any St. Paul & S. C. R. Co. v. Winona & St. direct appellate jurisdiction over the rulP. R. Co. 112 U. S. 720, 731, 28 L. ed. 872, ings of the Land Department, and they ac876, 5 Sup. Ct. Rep. 334; Barney v. Winona cept the findings of that department as con& St. P. R. Co. 117 U. S. 228, 232, 29 L. ed. clusive upon questions of fact. Shepley v. 858, 860, 6 Sup. Ct. Rep. 654; Sioux City Cowan, 91 U. S. 330, 23 L. ed. 424; Quinby & St. P. R. Co. v. Chicago, M. & St. P. R. v. Conlan, 104 U. S. 420, 26 L. ed. 800. But, Co. 117 U. S. 406, 408, 29 L. ed. 928, 929, notwithstanding this, prior to the issue of 6 Sup. Ct. Rep. 790; Wisconsin C. R. Co. any patent a party may have rights in the v. Price County, 133 U. S. 496, 511, 33 L. land of one kind or another which courts ed. 687, 694, 10 Sup. Ct. Rep. 341; United will enforce. Thus, where the full equitaStates v. Missouri, K. & T. R. Co. 141 U. S. ble title to land has passed from the gov 358, 375, 35 L. ed. 766, 771, 12 Sup. Ct. ernment to an individual, the land is subRep. 13; Hewitt v. Shultz, 180 U. S. 139, 45 ject to state taxation, although no patent L. ed. 463, 21 Sup. Ct. Rep. 309; Southern has issued. Carroll v. Safford, 3 How. 441, P. R. Co. v. Bell, 183 U. S. 675, ante, 232, 11 L. ed. 671; Witherspoon v. Duncan, 4 22 Sup. Ct. Rep. 232. Wall. 210, 18 L. ed. 339. Where, prior to the issue of a patent, land in possession of an individual is sought to be charged with state taxes, he may contest in the courts the liability of the land therefor on the ground that full equitable title has notpassed to him, or that something yet remains to be done before the rights of the government are ended. Kansas P. R. Co. v. Prescott, 16 Wall. 603, 21 L. ed. 373; Union P. R. Co. v. McShane, 22 Wall. 444, 22 L. ed. 747.

It is contended by plaintiff in error that the selection by the railroad company, when approved by the Land Department, operated to convey the title as effectively as would a patent to it therefor; that the even-numbered sections within the place limits, al though double minimum lands, were public lands and within the jurisdiction of the Land Department, and that hence the approval of the selection by the Land Department, even if erroneous, operated to vest the title in the company. But this is a mistake. The act of Congress provided in terms that such sections should be subject only to entry under the homestead and pre-emption laws, and the Land Department had no more power to turn one of those sections over to a railroad company *than it had to grant lands in a military or Indian reservation. While the lands were within the jurisdiction of the Land Department for some purposes they were not for all. The mode of their Again, it is a well-known fact that many disposal was limited, and the Land Depart- agricultural lands and many mining claims ment had no authority to ignore that lim- are held by their owners with only final reited mode and dispose of them in any other ceipts from the government and without the way. This general doctrine as to the limi-issue of any patent. Yet the rights which

Again, even before the acquiring of even an equitable title to the land as against the government, contracts made by actual settlers concerning their possessory rights and the title hoped to be acquired from the United States may be valid as between the parties thereto, and enforced in the courts. Lamb v. Davenport, 18 Wall. 307, 21 L. ed. 759; Stark v. Starr, 94 U. S. 477, 24 L. ed. 276.

accompany title are exercised by the parties and enforced by the courts. It will be noticed that this is not an action to recover the possession of any land, or one to quiet the title thereto. It is simply an action to recover damages for the breach of a contract in respect to the land, and the decision, in no respect controlling the action of the officers of the Land Department, is simply a determination of the rights which the parties have acquired by proceeding in the Land Department. This is clearly a matter of ordinary judicial cognizance, and one which by no statute of Congress or rule of the common law is excluded from such cognizance. Garland v. Wynn, 20 How. 6, 15 L. ed. 801; Monroe Cattle Co. v. Becker, 147 U. S. 47, 57, 37 L. ed. 72, 77, 13 Sup. Ct. Rep. 217; Turner v. Sawyer, 150 U. S. 578, 37 L. ed. 1189, 14 Sup. Ct. Rep. 192.

2.

which required the contractor to make additional excavations and connections with the water at an increased expense, and gave an Increased time of performance, as such a change was not contemplated by the provisions of the contract for such changes in the plans and specifications as might be found advantageous or necessary.

The objection that a surety should have set up as an affirmative defense by plea or answer, and not by demurrer, the fact that such changes were made in his principal's contract as would release the surety if made without his consent, cannot be urged on appeal, where the declaration set out the original and supplemental contracts, and contained no averments that the surety had knowledge of or consented to the changes made by the sup plemental contract, and no leave to amend was asked when the demurrer was sustained.

[No. 224.]

1902.

A final contention in this matter is that Argued April 17, 1902. Decided June 2, the plaintiff in error is an innocent purchaser for value, and that, therefore, he and his grantees are entitled to be protected in

their title by virtue of the act of March 3, 1887 (24 Stat. at L. 556, chap. 376), and March 2, 1896 (29 Stat. at L. 42, chap. 39). It is a sufficient answer to this contention that this defense was not set up in the state courts, and that it does not appear any where in the record that Clark, to whom the railroad company conveyed, or any subsequent grantee in the chain of title, was a citizen of the United States, or had declared his intention to become a citizen, and hence the act of 1887, which purports to confirm alone the titles of citizens or those who have declared their intention to become citizens, * has no application; that the act of 1896 also has no application because that refers only to cases of lands patented or certified, and the confirmations of lands acquired by deed or contract from the party holding the patent or certificate, and here the railroad company never received any patent or certificate. In addition, prior to the passage of the act, a patent had been issued to Cox, and his title thus fully confirmed.

These considerations dispose of the only Federal question presented in the record, and, there appearing no error, the judgment of the Supreme Court of Kansas is affirmed.

N ERROR to the United States Circuit

1 Court of Appeals for the Second Circuit to review a judgment which affirmed a judg ment of the Circuit Court for the Eastern District of New York sustaining a demurrer to a complaint in a suit to recover on a contract of suretyship. Affirmed.

See same case below, 39 C. C. A. 491, 99 Fed. 237.

The facts are stated in the opinion. Messrs. George Hines Gorman and Assistant Attorney General Pradt for plaintiff in error.

Mr. James Russell Soley for defendant in error.

Mr. Justice Shiras delivered the opinion of the court:

In September, 1898, the United States of America brought an action in the circuit court of the United States for the eastern district of New York against John Gillies, Henry Hamilton, and Hugh McRoberts, Catharine Freel, Edward J. Freel, and Frank J. Freel, as executors of Edward Freel, deceased.

The complaint alleged that theretofore, and on the 17th November, 1892, the defendant John Gillies entered into a contract in writing with the plaintiff to construct a timber dry dock, to be located at the United States Navy Yard, Brooklyn, New York, according to certain plans and specifications attached to and made part of said contract; that on said 17th November, 1892, the said John Gillies, as principal, and Henry Hamilton and Hugh McRoberts, and Edward Freel, as sureties, executed their joint and several bond to the United States in the penal sum of $120,600, conditioned for the faithful performance by the said Gillies of his contract to construct said dry dock; that Gillies entered upon the performance of said contract; that subsequently, on June 16, 1893, Gillies and the United States agreed in writing to change and modify the plans and specifications so as to increase the length of said dry dock from 600 to 670 feet; that on August 17, 1893, Gillies and

*310

311

the United States further agreed in writing to change and modify the contract in certain particulars; that Gillies proceeded with the work under said original and supplemental contracts so slowly, negligently, and unsatisfactorily that the Secretary of the Navy, under the option and right reserved to him by the said contract, declared the said contract forfeited on the part of said Gillies; that thereupon, by a board duly appointed, the market value of the work done and of the materials on hand was appraised at the sum of $170,175.40; that thereafter, under the provisions of said contract, the Secretary of the Navy proceeded to complete said dry dock and appurtenances in accordance with the said contracts, plans, and specifications, at a cost to the United States of the sum of $370,000; that the sum of $72,414.16 represented the damages sustained by the plaintiff by reason of said Gillies' breach of contract; that Edward Freel died on the 24th day of December, 1896, leaving a last will appointing Catharine Freel, Edward J. Freel, and Frank J. Freel executors thereof; that the said defendant John Gillies neglected and refused to perform the terms and conditions of said contract on his part, and that the plaintiff has performed, fully and completely, all the terms and conditions of said contract on its part. Wherefore the plaintiff demanded judgment against the said defendants in the said sum of $72,414.16, with interest from April 1, 1897.

On November 26, 1898, Edward J. Freel, as executor of Edward Freel, deceased, appeared and demurred to the complaint upon the ground that it appeared upon the face thereof that said complaint did not state facts sufficient to constitute a cause of action. On May 24, 1899, after hearing the counsel of the respective parties, the circuit court sustained the demurrer, and dismissed the complaint as to said Edward J. Freel as executor. 92 Fed. 299. The case was taken to the circuit court of appeals for the second circuit, and on January 5, 1900, that court affirmed the judgment of the circuit court. 39 C. C. A. 491, 99 Fed. 237. On December 22, 1900, a writ of error was allowed, and the cause was brought to this

court.

The question in this case is whether a surety on a contractor's bond, conditioned for performance of a contract to construct a dry dock, was released by subsequent changes in the work made by the principals without his consent.

As the question is presented to us on a general demurrer to the complaint, it is necessary to set forth, with some particularity, portions of the original and of the supplemental contracts, which form parts of the complaint.

The original contract, dated November 17, 1892, contained, after alleging that proposals had been made and accepted for the construction by contract of a timber dry dock, to be located at the United States Navy Yard, Brooklyn, New York, the following provisions:

"First. The contractor will, within twenty days after he shall have been tendered the possession and occupancy of the site by the party of the second part, which possession and occupancy of the said site during the period of construction and until the completion and delivery of the work hereinafter mentioned, shall be secured to the contractor by the party of the second part, commence, and within twenty-seven calendar months from such date, construct and complete, ready to receive vessels, a timber dry dock, to be located at such place on the water line of the navy yard, Brooklyn, N. Y., as shall be designated by the party of the second part."

"Seventh. The construction of said dry dock and its accessories and appurtenances herein contracted for shall conform in all respects to and with the plans and specifications aforesaid, which plans and specifi cations are hereto annexed and shall be deemed and taken as forming a part of this contract* with the like operation and effect as if the same were incorporated herein. No omission in the plans or specifications of any detail, object, or provision necessary to carry this contract into full and complete effect, in accordance with the true intent and meaning hereof, shall operate to the disadvantage of the United States, but the same shall be satisfactorily supplied, performed, and observed by the contractor, and all claims for extra compensation by reason of or for or on account of such extra performance are hereby, and in consideration of the premises, expressly waived; and it is hereby further provided, and this contract is upon the express condition that the said plans and specifications shall not be changed in any respect except upon the written order of the Bureau of Yards and Docks; and that if at any time it shall be found advantageous or necessary to make any change, alteration, or modification in the aforesaid plans and specifications, such change, alteration, or modification must be agreed upon in writing by the parties to the contract, the agreement to set forth fully the reasons for such change, and the nature thereof, and the increased or diminished compensation, based upon the estimated actual cost thereof, which the contractor shall receive, if any; Provided, That whenever the said changes or alterations would increase or decrease the cost by a sum exceeding five hundred dollars ($500) the actual cost thereof shall be ascertained, estimated, and determined by a board of naval officers to be appointed by the Secretary of the Navy for the purpose; and the contractor shall be bound by the determination of said board, or a majority thereof, as to the amount of increased or diminished compensation he shall be entitled to receive in consequence of such change or changes: Provided further, That if any enlargement or increase of dimensions shall be ordered by the Secretary of the Navy during the construction of said dry dock, that the actual cost thereof shall