U.S. Supreme Court
Railway Company v. Prescott, 83 U.S. 16 Wall. 603 603 (1872)
Railway Company v. Prescott
83 U.S. (16 Wall.) 603
The proviso in the 21st section of the Act of July 4, 1864, amendatory of the Act of July 1, 1862, to aid the Kansas Pacific Railway in the construction of its road, requiring the prepayment of the cost of surveying, selecting, and conveying the lands, requires the prepayment as to lands granted by the original act, as well as to those granted by the amendatory one.
Although lands sold by the United States may be taxed before the government has parted with the legal title by issuing a patent, this principle is to be understood as applicable only to cases where the right to the patent is complete, and the equitable title fully vested without anything more to be paid or any act done going to the foundation of the right. Hence, where there has been a large grant (as ex. gr., to a great railroad company to aid in the construction of its road), if prepayment by the chanrobles.com-red
grantee of the cost of surveying, selecting, and conveying the lands granted be required by the statute making the grant, before any of the lands "shall be conveyed," or if the grant contain a proviso that any of the lands granted and not sold by the company within three years after the final completion of the road, shall be liable to be sold to actual settlers under the preemption laws, at a price named per acre, the money to be paid to the company -- no title (in the first instance unless there be the required prepayment, nor in the second instance at all) vests in the grantee in such a way as that a tax sale will divest the government title.
An act of Congress passed in 1862, to aid what was afterwards known as the Kansas Pacific Railway Company in the construction of its road gave to the said company alternate sections of land on each side of the road, within certain limits, and provided that a patent should issue to the company only as each section of forty miles in length should be completed and accepted by the President. The act also contained a provision that any of these lands not sold by the company within three years after the final completion of the road should be liable to be sold to actual settlers under the preemption laws at a dollar and a quarter per acre, the money to be paid to the company.
No part of the road having been built in 1864, the original act of 1862 was amended in the year last named by extending the limits of the grant on each side of the road and by several other provisions favorable to the company. But by the 21st section of the amendatory statute it was enacted:
"That before any land granted by this act shall be conveyed to any company or party entitled thereto under this act, there shall first be paid into the Treasury of the United States the cost of surveying, selecting, and conveying the same by the said company or party in interest as the titles shall be required by said company, which amount shall, without any further appropriation, . . . be used by the Commissioner of the General Land Office, for the prosecution of the survey of the public lands along the line of said road, and so from year to year, until the whole shall be completed, as provided under the provisions of this act. "
With these statutes in force, the railway company filed its bill in one of the state courts of Kansas against one Prescott, to quiet the title to a tract of land in Kansas, to which it set up title only by virtue of the provisions of the above-quoted act of Congress of 1862. The defendant set up a tax title for taxes assessed in 1868, with a subsequent sale.
It was admitted on both sides that at the time the lands were assessed, the company had completed the section of forty miles of road within which the lands lay, and that the President had accepted them; but that in the present case, payment of the costs of surveying, selecting, and conveying had never been made, and that no patent for the land had issued.
The primary question thus was who was the owner of the land at the time it was assessed and taxed, the United States or the railway company? If the United States, then the land was not subject to state taxation, and the sale was void. If the railway company, it was, and there being in that case no question about the regularity of the sale, the title of the company had been divested.
And this primary question depended on others behind it, to-wit:
1st. Whether, in order to the procuring of a title into itself it was necessary for the company to have paid the costs of surveying, selecting, and conveying the land?
2d. Whether such a proviso as existed here, giving to the government a contingent right to offer the lands to actual settlers under the preemption laws, did not prevent the lands so vesting in the company as to be liable to be sold for taxes?
The court in which the company's bill was filed, referring to the doctrine as admitted, that a right to a patent was sufficient to subject lands to taxation, considered:
1. That where land is granted to a company for the sole purpose of aiding in the construction of a railroad, and the same was constructed to the approval of government, the company acquired such an interest in the land as rendered it subject to taxation, even though it had not received a chanrobles.com-red
patent, and had not paid the cost of surveying, selecting, and conveying the same.
2. That the provision in a grant by the government
"that any of the lands so granted and not sold by the company within three years after the final completion of the road should be liable to be sold to actual settlers under the preemption laws, at one dollar and a quarter per acre, the money to be paid to the company,"
reserved no such interest in the government as would render the land not subject to taxation.
It accordingly decreed a dismissal of the bill, and that decree being affirmed in the supreme court of the state, the case was brought here by the company for review. chanrobles.com-red