615]

Henarie; and that when Martin purchased the | lutely. It is provided by Rule 33 of the Rules
lands Henarie had paid one fourth of the of Practice in Equity, that the plaintiff may
$125,000, in good faith, relying upon the cer- set down a plea to be argued, or may take is-
tificate of the governor and on the Act of Con- sue upon it. This does not mean that the plain.
gress of June 18, 1874, and had no notice that tiff is to make thereby such a conclusive elec-
the road had not been constructed and com- tion that, if he sets down the plea to be argued
pleted by the Company as required by the Act and it is sustained on the argument, he cannot
of Congress. The plea then sets forth proceed- afterwards take issue on it. By Rule 34, on
ings and deeds by which the title of Martin the overruling of a plea on hearing, the defend-
(who had died) and the title of all other per- ant has a right to answer the bill. The object
sons became vested in the Eastern Oregon of having a plea set down for hearing is to in-
Land Company, and avers that the latter Com- duce the presentation to the court, as a ques-
pany then held the legal title to all the lands tion of law, of the matters set up in the plea,
granted to the Dalles Military Road Company, so that, assuming those matters to be true in
except such as had theretofore been sold and point of fact, the whole controversy may, per-
conveyed by the latter Company and its grant- haps, be determined as a question of law. But
ees and the Eastern Oregon Land Company. this practice would be discouraged, if the plain-
On the same date the defendants who filed tiff were not to be allowed, in case the plea be
those two pleas filed an answer in support of sustained in matter of law, to take issue upon
them.
it as matter of fact. Rule 35 provides that,
in case upon a hearing a plea is allowed, the
court may, in its discretion, upon motion of
the plaintiff, allow him to amend his bill. But
there is no restriction put upon the right of the
plaintiff to take issue upon a plea after it is al-
lowed on a hearing; and such is the view which
has been adopted by this court.

On the 25th of October, 1889, the Dalles Military Road Company, and Kelly and Thornbury, who were, respectively, president and secretary of the Company, filed an answer to the bill. No replication appears to have been filed to this answer.

The case was heard upon the pleas above mentioned, and the court, on the 18th of February, 1890, entered a decree sustaining the pleas and dismissing the bill. The opinion of the court, delivered by Judge Sawyer, the circuit judge, is reported in 41 Fed. Rep. 493. In the opinion, it was held that both of the pleas were good. As to the first plea, the view taken was that the authority to determine whether the road was completed was vested solely in the governor of Oregon, who was the agent of the United States in the premises; that his decision was, in the absence of fraud, final and conclusive; and that the government was estopped from denying its finality. As to the second plea, it was held to be good because it alleged that the defendants were bona fide purchasers from the Dalles Military Road Company, without notice of any fraud or defect in the title, and that the defendants were entitled to rely upon the Acts of Congress of 1867 and 1874, the Act of the State of Oregon, the certificate of the governor of that State, the withdrawal of the lands from sale and the issue of the patent. After deciding that the two pleas were valid and sufficient, the opinion proceeds: "The remaining question to be considered, and the only one presented upon which there is any room for doubt, is whether complainants should be permitted to reply to the pleas, or whether the bill should be dismissed. 816] Upon the whole, after careful consideration, I think the bill should be dismissed. I think it in the highest degree probable that such would be the final result, whichever course is pursued. If so, the expense and annoyance of a long litigation would be fruitless." The opinion then holds that the bill must be dismissed, on the ground that subsequent purchasers were entitled to rely upon the certificate of the governor; that the Act of Congress of June 18, 1874, affirmed the truth of the certificate and authorized the issuing of the patent; and that the claim of the United States was stale.

In Rhode Island v. Massachusetts, 39 U. S. 14 Pet. 210, 257 [10:423, 445], it is laid down by the court, speaking by Chief Justice Taney, that if a plea, upon argument, is ruled to be sufficient in law to bar the recovery of the plaintiff, the court would, according to its uniform practice, allow him to put in issue, by a proper replication, the truth of the facts stated in the plea.

In 1 Daniell's Chancery Pleading and Practice (4th ed.), chap. 15, sec. 5, p. 696, it is said, that if a plea is allowed upon argument, the plaintiff may take issue upon it, and proceed to disprove the facts upon which it is endeavored to be supported, and that he does this by filing a replication in the same manner as if the defendant had answered the bill in the usual way. To the same effect, see Cooper's Eq. Pl. 232; Beames on Pleas in Equity, 316 to 318; Rule of Lord Chancellor King, 12 Geo. I., Gilbert's Reports in Equity, 184 (2d ed.) folio 1742; Story's Eq. Pl. § 697, and Mitf. Ch. Pl., by Jeremy, 301.

Various matters of fact are alleged in the pleas, which the plaintiffs have a right to controvert, such as that there were no fraudulent representations made to the governor, that he made the certificate without any fraud on his part, that Martin was a bona fide purchaser for a valuable consideration, without notice, that Henarie was likewise, and that the subsequent grantees were such bona fide purchasers.

The decree must be reversed in so far as it dismisses the bill, and the case be remanded to the circuit court, with a direction to allow the plaintiffs to reply to, and join issue on, the pleas.

Case No. 1219 is a similar bill in equity, filed by the Attorney-General of the United States, on their behalf, against the Oregon Central Military Road Company, the California and Oregon Land Company and nineteen individWe are of opinion that the circuit court ual defendants. It alleges that, on the 2d of erred in not permitting the plaintiffs to reply July, 1864, Congress passed an Act (13 Stat. to the pleas, and in dismissing the bill abso-355) entitled "An Act Granting Lands to the

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[619]

State of Oregon, to Aid in the Construction of
a Military Road from Eugene City to the East-
ern Boundary of Said State," which granted to
the State of Oregon, to aid in the construction
of such wagon road, alternate sections of pub-
lic lands, designated by odd numbers, for three
sections in width on each side of said road, to
be exclusively applied in the construction of
the road and to no other purpose, and to be
disposed of only as the work should progress.
The provisions of the Act of Congress of July
2, 1864, were substantially the same as those of
the Act of Congress of February 25, 1867,
considered in No. 1218.

The bill sets forth an Act of the State of Ore-
gon, of October 24, 1864 (Laws of Oregon of
1864, p. 36), entitled "An Act Donating Cer-
tain Lands to the Oregon Central Military Road
Company," granting to that Company all the
lands and rights granted to the State by the Act
of Congress of July 2, 1864, for the purpose
of aiding the Company in constructing the
road mentioned in the Act of Congress, and all
lands and rights which might be thereafter
granted to the State to aid in the construction
of such road; and also that, on the 26th of
December, 1866, Congress passed an Act (14
Stat. 374) granting to the State for such purpose
such odd sections or parts of odd sections not
reserved or otherwise legally appropriated,
within six miles of each side of the road, to be
selected by the surveyor-general of the State,
as should be sufficient to supply any deficiency
in the quantity of the grant, occasioned by any
lands sold or reserved, or to which the rights
of pre-emption or homestead had attached, or
which for any reason were not subject to such
grant, within the designated limits.

the laws of Oregon; that it was not true that
the 50 miles of road referred to had been con-
structed; that, in order to procure the certifi-
cate and to use the same to secure the control
of the land within the limits of the grant pro-
vided for in the Act of Congress, the Company,
by its officers, agents and representatives,
fraudulently pointed out to the governor a
county road to which the Company never had
any legal right, and led the governor to believe
that the road had been constructed by the Com-
pany under the said Acts; that, on the 25th of
November, 1867, like fraudulent representa-
tions were made to George L. Woods, then
governor of Oregon, in regard to 424 addition-
al miles of the road; that on that date the said
governor made a certificate that such 424 miles,
more or less, had been carefully inspected and
found to be well and faithfully built in accord-
ance with the requirements of the law, and
therefore the same was approved and received;
that the 424 miles had not been constructed and
the governor well knew that, and no inspection
of any road constructed or owned by the Com-
pany had been made by the authority of the
governor; that, on the 12th of January, 1870,
like fraudulent representations were made to
the same governor by the officers, stockholders
and agents of the Company and other persons
acting in their and its interest, that the road had
been constructed as by law required, and they
presented a map falsely showing the same and
its route; that the certificate made by the gov
ernor on that day stated that the plat or map
of the road had been duly filed in his office by
the Company, and showed that portion of the
road commencing at Eugene City and ending
at the eastern boundary of the State, which
had been completed as required by the Act of
Congress and the Act of the State; that it was
not true that the Company had constructed a
road upon any line of route located or surveyed
anywhere within the limits of the grant of
land provided for in the Act of Congress or at
all; that said governor then and there well
knew this; and that it was not true that he made
or caused to be made any examination of any
road constructed or owned by the Company.

The bill also contains like allegations with
the bill in No. 1218, in regard to the passage of
the Act of the State of Oregon of October 14,
1862, and avers that the Oregon Central Mili-
tary Road Company is a private corporation
purporting to have been incorporated on the
15th of April, 1864, under the general laws of
the State of Oregon, to construct a wagon road
from Eugene City in a southeasterly direction
to the southeastern corner of the State, by way
of the middle fork of the Willamette River; The bill contains like allegations with the
that on the 27th of July, 1866, the officers, bill in No. 1218, in regard to non compliance
stockholders and agents of the Company and with the Act of Congress granting the lands,
other persons, acting in their and in its interest, and in regard to the Act of Congress of June
fraudulently represented to Addison C. Gibbs, 18, 1874; and avers that in 1867, 1871 and 1873
then the governor of Oregon, that the road had the Secretary of the Interior and the commis-
been constructed for 50 miles from Eugene sioner of the General Land Office, deceived by
City eastward, they well knowing that such such fraudulent certificates, executed and de-
representations were false and that the road had livered to the State of Oregon, for the benefit
not been constructed at all; that such represen- of the road, seven certified lists of lands, cover
tations were made for the purpose of fraudu-ing 361,327.43 acres, as intended to be granted
lently procuring from said governor a certifi-
cate that the road had been constructed in ac-
cordance with the Act of Congress of July 2,
1864, and of the Act of the State of Oregon of
October 24, 1864; that in that certificate the
governor certified that, in accordance with said
two Acts, he had passed over and carefully ex-
amined the first 50 miles of the road of the
Company, beginning at Eugene City and ex-
tending eastward towards the southern or east-
ern boundary of the State, and that the first
continuous 50 miles of said road beginning at
Eugene City were completed in accordance with
the requirements of said Act of Congress and

by the Acts of Congress, which lists were
claimed to have the force and effect of patents;
that thereafter, the President of the United
States, deceived by said fraudulent certificates.
issued to the Company two patents for 40,913.-
24 acres of land included in the grants; that
afterwards, by various deeds, the lands were
conveyed in bulk to the California and Oregon
Land Company, as lands covered by the Act
of Congress of July 2, 1864, and by the Act of
the State of Oregon of October 24, 1864; that
the California and Oregon Land Company is a
private corporation, incorporated January 9,
1877, under the general laws of the State of

[630]

The first plea relies on the three certificates
of the governors as having been made in good The bill sets forth that the State of Oregon, by
faith and without any fraudulent intent or false an Act passed October 24, 1866 (Laws of Ore-
representation. The second plea relies on the gon of 1866, p. 58), granted to the Willamette
three certificates and the delivery of the certi- Valley and Cascade Mountain Wagon Road
fied list embracing the 361,327.43 acres of land; Company all lands and rights granted to the
and avers that fifteen of the individual defend- State by said Act of Congress, for the purpose
ants, on the faith of said certificates and certi- of aiding the Company in constructing the
fied lists, purchased from two of the individual road mentioned in the Act, and also all lands
defendants, in good faith and for a valuable and rights which might thereafter be granted
consideration, all the lands granted by the to the State to aid in constructing the road;
Act of Congress which the Oregon Central and that by an Act of Congress passed July

(623)

1624]

1890.

UNITED STATES V. DALLES MILITARY ROAD Co.

The defendants Weill and Cahn, by leave of
the court, filed pleas to the bill, and an answer
in support of the pleas. The defendants Hogg,
the Willamette Valley and Coast Railroad Com-
pany, the Willamette Valley and Cascade
Mountain Wagon Road Company and the Or
egon Pacific Railroad Company filed exceptions
to the bill for impertinence, which exceptions
were sustained. The Farmers' Loan and Trust
The defendants Hogg,
Company filed pleas to the bill with an ao
companying answer.
the Wilamette Valley and Coast Railroad Com-
pany and the Oregon Pacific Railroad Com-
pany filed pleas to the bill, with an answer
supporting the pleas.

of any part of the road or of any bridges there- | deeds be declared fraudulent and void; and for of, or the establishment of any ferries on any general relief. streams along the line of any part of the road. The bill then sets forth the Act of Congress of June 18, 1874, as in Nos. 1218 and 1219, and avers that on the 19th of June, 1876, the President of the United States, deceived by such fraudulent certificates, issued to the State of Oregon, for the use and benefit of the Company, a patent for certain described lands, aggregating 107.893.01 acres, and on the 30th of October, 1882, a patent to the Company for 440,856.52 acres. The bill then sets forth conveyances of certain of the lands to the defendant Cahn in trust for the defendants Hogg and Weill and one Clark, the vesting of title to some of the lands in Weill individually, and to him Ths cause was heard upon the pleas of the in trust for Cahn and the defendants Arnstein and Meyer, the deeds covering all the lands defendants Weill and Cahn, by Judge Deady, (628) granted, or intended to be granted, to the State and a decree entered sustaining them and disby the Act of Congress, or by the State to the missing the bill as to those defendants. The Company by its Act; that Hogg still claimed an opinion of the court is reported in 42 Fed. Rep. interest in the land; that the Willamette Valley 351. Subsequently, the cause was heard upon and Coast Railroad Company, an Oregon cor- the pleas and answers of the defendants Hogg, poration, and the Oregon Pacific Railroad the Willamette Valley and Coast Railroad Company, another Oregon corporation, each of Company, the Oregon Pacific Railroad Comthem claimed a legal interest in all the lands; pany and the Farmers' Loan and Trust Comthat the Farmers' Loan and Trust Company, a pany, and a decree was entered on the 12th of New York corporation, claimed a legal and an May, 1890, sustaining the pleas and dismissing equitable interest in the lands; that the Willa-the bill as to those defendants. mette Valley and Cascade Mountain Road Company and the Willamette Valley and Cascade Mountain Military Wagon Road Company were one and the same; that the maps or plats referred to in the certificates showed the line of the road to be 4564 miles, which would make the grant of land covered by the Act of Con1827) gress 876,480 acres, of which 327,730.47 acres were not yet patented to the Road Company, and that Company claimed the right to have a patent issued therefor; tha tthe four corporation defendants and five of the individual defendants, at the time their interests accrued, had full knowledge that the road had not been constructed and maintained as required by the Acts of Congress and the laws of the State, so as to be in any sense whatsoever a public high way, or so that it could be used by the United States, or by any citizens or residents thereof, as a public highway, or so that the United States could transport its property, troops or mails over the same, and that no grades bad been constructed upon any part of the road, nor any clearing done, nor any bridges built over any streams, nor any cuts made, nor turnouts constructed, nor any ferries maintained over any streams; and that the road was not begun or completed within five years from the date of the passage of the Act of Congress, and that each of said defendants knew that the statements made in the certificates of the governors and acting governor were false, and that they did not at any time examine the road, and that the certificates were procured by said fraudulent representations, and that the said patents were procured to be issued upon said fraudulently procured certificates.

The prayer of the bill is that all the lands granted to the State by the Act of Congress of July 5, 1866, be decreed to be forfeited to the United States and restored to the public domain; that the said certificates, patent and U. S., Book 35.

Weill and Cahn filed two pleas. The first
plea sets up that the Secretary of the Interior,
after duly investigating a complaint that the
road had not been constructed as required by
the Act of Congress, directed the commission-
er of the General Land Office to certify the
lands for patent under the Act of Congress of
July 18, 1874; that the patent for the 440,856.52
acres was thereafter duly issued to the Road
Company; that the defendants Weill and Cahn,
relying upon those facts, so altered their posi
tion in reference to the lands as would render
it inequitable for the United States to assert
any right to forfeit or reclaim the lands; that
those defendants had laid out, in securing the
patents, in selecting other lands which had not
yet been patented, and in taxes, expenses and
protecting their title, large sums of money, and
had sold portions of the land with warranty;
and bad expended a large sum in rebuilding
and improving the road through its entire
length, and in constructing bridges.

The second plea of Weill and Cahn avers
that, in 1871, the attention of Weill was called
to the existence of the Road Company and its
ownership of the land grant; that it was rep-
resented that the road had been fully con-
structed and the grant earned, that the Com-
pany held title to the lands and that they were
for sale; that Weill joined with Hogg and one
Clarke to purchase the lands, which was done,
and they were deeded by the Road Company
to Clarke in August, 1871; that, in September,
1871, Clarke conveyed the lands to Cahn, to
hold them in trust for Weill, Hogg and Clarke,
according to their respective interests; that the
greater part of the lands was then unsurveyed,
a few sections had been selected and none had
been patented by the United States to the Road
Company or to the State of Oregon, and for
additional protection Weill and Clarke pur-
chased the stock of the Road Company; that,

36

569

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