V.

less sum in satisfaction thereof, though ac- charge, which instructed the jury that the cepted as satisfaction, is not binding as compromise evidenced by the agreement such, for want of consideration." Chicago, must be treated as inefficacious as to the M. & St. P. R. Co. v. Clark, 178 U. S. 364, particular items to which it related unless 44 L. ed. 1105, 20 Sup. Ct. Rep. 928, and it was found that the minds of the parties authorities there cited.

had met on an entirely new and independent Conceding, without so deciding, that such contract. rule was controlling in Porto Rico, we The judgment of the court below is rethink it is not applicable to the case in versed, and the cause is remanded with hand. As pointed out by this court in the directions to set aside the judgment, and case just previously cited, the rule in ques- grant a new trial. tion is subject, among others, to the well- Reversed. established exception that it does not apply

(195 U. S. 524) where, at the time of the agreement, there

UNITED STATES, Appt., was a dispute between the parties, the subject-matter of which dispute is embraced in CHICAGO, MILWAUKEE, & ST. PAUL the agreement to extinguish a greater by a

RAILWAY COMPANY et al. less amount. True it is, as pointed out in Fire Ins. Asso. v. Wickham, 141 U. S. 564, Railway land grants-erroneous certification 35 L. ed. 860, 12 Sup. Ct. Rep. 84, it must

by Secretary of Interior-bona fide purappear that the alleged dispute really ex

chaser. isted, and did not arise merely from an 1. A certification to the state of Minnesota, arbitrary denial by one party of an obliga- made by the Secretary of the Interior, for the tion which was obviously due. Despite the benefit of a railway company, of land within construction which we have given the con

the indemnity limits of the railway land

grant act of July 4, 1866 (14 Stat. at L. 87, tract, we think it is quite clear that the

chap. 168), even if erroneous, is not absoluteproof established that there was a bona fide

ly void because of a previous application to dispute in this case. As we have seen, enter the land as a homestead after a prior from the very inception of the contract the homestead entry had been canceled for abanparties differed as to the medium of pay- donment, which application was' refused be

cause the land in question had then been ment,—the one, the city, insisting that it

withdrawn from market by the Land Departwas Porto Rican money; the other, the gas

ment, where this refusal was acquiesced in company, that it was foreign current money. and an entry was then made under an During a period of fully twenty years this amended application, which did not cover the controversy continued, and in every instance land in question, although the entryman the gas company, although protesting, ac

thereunder made use of such land in connec

tion with his own, but without laying claim cepted the city's view of the contract, and,

to it as land which he had attempted to enter, by taking a different medium, bound itself and which had been improperly or wrongfully as to those payments despite its protest. refused him. When the period arrived when the company 2. A purchaser of land certified by the Secrewas no longer willing to so act, and stood tary of the Interior to the state of Minnesota

in aid of railway construction, and conveyed upon its rights as it understood them,

by that state to a railway company, occupies naturally the city stood upon its asserted

the position of a purchaser in good faith, prorights, and thus the parties were at arm's tected as such by the act of March 3, 1887 length, disputing their respective rights. If (24 Stat. at L. 556, chap. 376, U. S. Comp. there had been no agreement, the solution

Stat. 1901, p. 1595), § 4, although the certific

cation was erroneous, and might have been would have required judicial action. When,

avoided and the land recovered back by the in view of this dispute, an agreement was

government while in the hands of the railway reached that the payment should be made company, where such purchaser had no noin United States currency, and that the tice, actual or constructive, of the claim of payment should extinguish a larger amount

the government. estimated in Porto Rican currency, there

[No. 54.] was necessarily a compromise and settle. ment as to that payment which put the Submitted November 4, 1904. Decided De

cember 12, 1904. transaction so settled exactly in the position which had resulted from the action of the PPEAL from the United States Circuit

A parties concerning the payments made dur- Court of Appeals for the Eighth Circuit ing the preceding period of more than to review a judgment which affirmed a detwenty years.

cree of the Circuit Court for the District of It follows from the foregoing that the Minnesota, dismissing a bill to set aside a court below erred to the prejudice of the certification under a congressional land city in refusing the instruction asked by it grant, made by the Secretary of the Interior as to the result of the compromise, and that to the state of Minnesota, for the benefit of this error was not cured by the general'a railway company, and to set aside the conveyance of such land by the state to the rail- lands was largely in excess of 80 acres. On vay company, and by the company to one the 29th day of November, 1870, the Southof the individual defendants. Affirmed. ern Minnesota Railroad Company selected

See same case below, 54 C. C. A. 545, 116 this tract, in section 35, in lieu of part of Fed. 969.

the land lost in the granted limits; and the

land was certified to the state of Minnesota Statement by Mr. Justice Peckham: by the Secretary of the Interior, March 25,

The United States, on the 6th day of 1871, for the benefit of the railroad comMarch, 1893, filed this bill in the circuit pany; and on the 8th day of August, 1871, court of the United States for the district the state of Minnesota conveyed it by deed of Minnesota, for the purpose of setting to the railroad company. In March, 1868, aside the certification, under the land grant the company had mortgaged all of its propof Congress (14 Stat. at L. 87, chap. 168), erty, including the land granted under the made by the Secretary of the Interior, of the act of Congress and all subsequently acland described in the bill, to the state of quired property, to secure the payment of Minnesota, for the benefit of the railroad its bonds. This mortgage was foreclosed, company, and also to set aside the conveyance and the property sold and conveyed to a thereof by the state to the railroad com- new corporation by the name of the pany, and by the company to one of the in- Southern Minnesota Railway Company, and dividual defendants. A supplemental bill the land was conveyed to that company. On was filed, by leave, March 4, 1901, bringing the 5th day of January, 1885, the railway in by service of the subpæna other individ- company, by contract in writing, agreed to ual defendants.

sell the land in dispute to one A. Boyeson, The suit was brought under and pursuant for the sum named in that contract. Boyeto the act of Congress of March 3, 1887 (24 son assigned his interest in the contract, Stat. at L. 556, chap. 376, U. S. Comp. on the 6th of January, to Fredericksen, Stat. 1901, p. 1595), entitled "An Act to who, on the 1st day of April, 1885, assigned Provide for the Adjustment of Land Grants it to the defendant, Thomas S. Thompson, made by Congress to Aid in the Construc- and, in turn, on the 3d day of February, tion of Railroads, and for the Forfeiture of 1888, the latter assigned it to Ericksrud, Unearned Lands, and for Other Purposes.” who paid the balance due upon the con

Upon trial in the circuit court the bill tract, and received the warranty deed for was dismissed, and the decree of dismissal the land from the railway company on the was affirmed by the United States circuit 20th day of March, 1888. court of appeals for the eighth circuit (54 Ericksrud died intestate on March 27, C. C. A. 545, 116 Fed. 969), and from that 1888, and on November 6, 1888, the land decree of affirmance the government has ap- was decreed by the probate court to be the pealed here.

property of the widow and heirs at law of The facts upon which the controversy Ericksrud, and they remained in possession, arose are, in substance, as follows: On the and, on the 24th of May, 1899, these heirs 4th day of July, 1866, Congress passed an at law, still being in possession, conveyed act making an additional grant of lands to the same to the defendant Woodwick for the the state of Minnesota (14 Stat. at L. 87, sum of $2,000 cash. This is the title of chap. 168), to aid in the construction of record coming from the United States to railroads in that state. The Southern the state, thence to the railroad company, Minnesota Railroad Company was, at the and, by mesne conveyances, to the defendant time of the passage of the act of Congress, Woodwick; and there was nothing of record a corporation organized under the laws of showing that any other person was entitled Minnesota, with the power to construct a to the land at the time when Woodwick line of railroad, as mentioned in that act. paid the $2,000 to the heirs of Ericksrud, The legislature of Minnesota, on the 25th and took the deed therefor. The defendant day of February, 1867, transferred the land Donovan, however, lays claim to the land in granted to it by the act of Congress to the question pursuant to the facts now to be railroad company, subject to the provisions stated. of that act and also of the state statute. Prior to the passage of the granting act

Among the lands thus transferred was a of Congress, above referred to, one Luman lot 80 acres in extent, in Faribault county, Barclay had, on the 21st day of June, 1866, Minnesota, being the property in dispute entered this land in controversy, and also in this suit. The land was within the the 80 acres in section 26, adjoining, as a indemnity limits of the grant by Congress homestead. In the following year (1867) to the state, as determined by the map of Barclay abandoned the land and went to definite location of the railroad, which be- Canada. Some time after his departure, came effective February 25, 1867. The de and in the same year (1867), Donovan, the ficiency in what are termed the "place" ' defendant, sought to acquire a homestead on government land. He examined the land | 26, Donovan says he offered to make proof for which Barclay had made his entry, and also as to the land in seetion 35, but his decided to enter it as a homestead. He offer was rejected

He offer was rejected because, among other went to the United States local land office reasons, he had not entered the land in for the purpose, and was informed by the that section. He has obtained his patent register of the land office that he could not for the 80 acres in section 26. make the entry until Barclay's entry was On the 26th day of June, 1883, Donovan canceled. He was also informed that, if he applied at the local land office to enter this wished to make a claim that Barclay had tract of land in section 35 as an additional abandoned his interest, he should publish homestead, under the act of March 3, 1879 notice of the time and place where he would (20 Stat. at L. 472, chap. 191, U. S. Comp. make proof upon that matter. He pub- Stat. 1901, p. 1401); and the register cerlished a notice accordingly, for three weeks, tified that the application was for surveyed and paid $9 as the cost thereof, and, in the lands of the class the applicant was legally fore part of August, 1867, made proof that entitled to enter under the homestead act Barclay had abandoned his homestead of 1862 [12 Stat. at L. 392, chap. 75]; in claim. Donovan insists that he was given other words, unappropriated public lands of to understand that he could enter the land the United States. The application was reas a homestead as soon as the local landjected upon the ground that the land so office received notice from the General Land applied for had been certified to the state Office, at Washington, that Barclay's entry of Minnesota, for the benefit of the railroad was canceled. He thereupon made one ap- company. Donovan appealed from this replication to enter both tracts of land,—thejection to the Commissioner of the General 80 acres in section 26, and the 80-acre tract Land Office, where, it is stated, the matter in question in section 35, but left the date is still pending and undetermined. of application blank, because he could make In 1885 the defendant Thompson, an asno entry for the lot in section 35 until Bar- signee of the contract made by the railway clay's entry had been canceled. He did this, company with Boyeson, went into possession as he or his witness Bullis said, to head off of the 80 acres in section 35, and ordered any other applicant for the land, and he Donovan off the same, and Donovan left the left the application with the local land land accordingly. . After Thompson took office. He then went into possession of sec- possession of the land, April 1, 1885,tion 26, and commenced the erection of a Donovan, in the same year, commenced a house thereon; and he says he commenced suit in the district court of Faribault the cultivation of a small part of the tract county to obtain possession of the land; in section 35. This was in the fall of 1867. and, on or about the 24th of March, 1887, The Barclay entry was duly canceled at the state court decided that Donovan had Washington on the 14th of January, 1868, no title to the land, or right to the possesand notice thereafter given to the local land sion of the same, and that Thompson had office, and Donovan was notified of the fact. the right to the possession thereof under On the 6th day of June, 1868, Donovan went the contract already mentioned. This judg. to the local land office, and applied to enter ment against him in the state court was the two tracts of land. He was there in- never appealed from by Donovan, nor has formed that the odd-numbered sections with it ever been vacated, modified, or reversed. in 20 miles of the road had been withdrawn In 1888 Donovan applied to the Land Defrom market; and that such withdrawal in-partment at Washington for relief, by reacluded the section in question; and that he son of the act of Congress of March 3, 1887, could not, therefore, enter the 80 acres in heretofore referred to. In relation to that section 35 as a part of his homestead. application the Commissioner of the General

Donovan acquiesced in this determination Land Office, on February 14, 1889, addressed of the local land office, and made his entry a letter to the Secretary of the Interior, for the 80 acres in section 26. The old ap- and therein spoke of Donovan's application plication for the two lots was destroyed, for the institution of proceedings under that and a new one made out for the lot in sec- act of Congress, and said that Donovan had tion 26. He thereafter used the land in no title to the land; but he sent all the section 35, in connection with his own in papers to the Secretary, for review by him. section 26, and cut grass upon and ploughed On the 1st of April, 1889, the Secretary resome of it; but it does not appear that he plied to the communication of the Commislaid any claim to it as land which he had sioner of the General Land Office, and attempted to enter, and which had been im- therein reversed his holding, and directed properly or wrongfully refused him. His the latter to make a demand of the railway house and other permanent improvements company for the reconveyance of the land, were on section 26. At the time he made as provided for in the act. On the 12th of proof (in 1875) for the 80 acres in section April, 1890, the Commissioner sent a communication to the Secretary, informing him | under the grant to the state pursuant to that a demand for the reconveyance of the the act of July 4, 1866, and it was thereland had been made April 9, 1889, upon the fore not legally withdrawn from market by railroad company, and that no answer had any act of the Land Department, nor could been made, although more than a year had it be certified to the state; and that the elapsed since the demand. On the 16th of attempt to do so was not only erroneous, April, 1890, the Secretary of the Interior but absolutely void; that, at the time when transmitted the letter to the Attorney Gen- Donovan made application to enter the land, eral, with a request that suit might be in- in June, 1868, it was part of the public stituted to have the certification of the land lands of the United States, open to entry, in question by the Land Department to the and his application, although he had done state of Minnesota set aside and canceled if, all that he could, was wrongfully denied by in the opinion of the Attorney General, the the local land office; that thereafter the suit could be maintained. After

After waiting filing of the map of definite location by the three years, and on the 6th of March, 1893, railway company, and its selection of the the United States filed its bill against the land in question, and the certification of the Chicago, Milwaukee, & St. Paul Railway land by the Secretary of the Interior to Company as successor in interest of the for- the state, and the conveyance by the state mer companies, and also against the South to the railway company, and the contract ern Minnesota Railway Company, Michael and conveyances following thereon,-conDonovan, Thomas S. Thompson, and C. c. veyed no interest in or title to the premises Ericksrud. On August 11, 1894, the com- in question, but that they rightfully bepanies answered the bill. Donovan did not longed to Donovan, and therefore the ceranswer it until March 6, 1901, and then con- tification by the Land Department, etc., fessed the same, and prayed that the relief should be set aside, to the end that the land asked for might be granted. On March 4, may be transferred to Donovan, as demanded 1901, the United States filed a supplemental in the bill. bill, wherein it was stated that no service On the other hand, it is insisted on the had ever been made upon Thompson or part of the defendant Woodwick, that the Ericksrud, and that, on May 24, 1899, the action of the Land Department officials in heirs of Ericksrud had joined in a deed withdrawing the land in question from conveying the land in question to Louis K. market was valid, and within the jurisdicWoodwick. Process was prayed against the tion of that department; that the selection defendants, the heirs of Ericksrud, and also of the land by the railway company was against Woodwick, and subpenas were proper, as being within the indemnity limits served on them, and on May 2, 1901, they of the grant by Congress; and that its ceranswered the supplemental bill. A special tification by the Secretary of the Interior examiner was appointed to take testimony; to the state was within the power of that and on the 13th of January, 1902, he sub- officer, and the act was not, therefore, bemitted his report of the testimony taken in yond his jurisdiction; and that his certifithe suit, to the court.

cation and the action of the state conveyed

a good title, or, at any rate, that the deAssistant Attorney General Purdy for fendant Woodwick was a bona fide purchaser appellant.

of the land, and as such his rights were Messrs. Burton Hanson, W. H. Nor-preserved under the act of March 3, 1887. ris, and Andrew C. Dunn for appellees. 24 Stat. at L. 556, chap. 376, U. S. Comp.

Stat. 1901, p. 1595. Mr. Justice Peckham, after making the If Woodwick is protected under that act, foregoing statement of facts, delivered the as a purchaser in good faith, even against opinion of the court:

Donovan, it is unnecessary to pursue an The Attorney General contends that, be- inquiry as to the existence of any other defore the passage of the act of Congress fense. We are of opinion that Woodwick granting the land (July 4, 1866), Barclay is protected under the 4th section of the had made legal entry upon the books of the act. The plain intent of that section is, as local land office, of the land in question, stated by Mr. Justice Brewer in delivering under the homestead laws of Congress, and the opinion of the court, in United States that such legal entry was in existence at v. Winona de St. P. R. Co. 165 U. S. 463, the time of the passage of the act of Con- 41 L. ed. 789, 17 Sup. Ct. Rep. 368, to secure gress of July 4, 1866; that, by reason of one who, in good faith and as an honest such entry, the land was excepted from the transaction, purchases the land, and to leave grant under that act, and that when Bar- to the government a simple claim for money clay abandoned his homestead claim upon against the railroad. The justice said (pp. the land, it immediately became public land 480, 481, L. ed. p. 796, 797, Sup. Ct. Rep. of the United States, and did not then pass 'p. 372):

“It will be observed that the technical remained in the Land Department, to be term 'bona fide purchaser' is not found in exercised by the Secretary of the Interior, this section, and while it is provided that notwithstanding the acts of Donovan as a mortgage or pledge shall not be considered shown by this record. It is shown by the a sale so as to entitle the mortgagee or testimony of Donovan himself and of luis pledgee to the benefit of the act, it does witness Bullis, putting it all together, that secure to every one who, in good faith, has there never was, in fact, any entry of this made an absolute purchase from a railroad land at the local land office, in the name of company, protection to his title, irrespective Donovan, before the certification in 1871. of any errors or mistakes in the certification The facts as to what took place in that or patent.

office, in regard to the applications of DonThese being the provisions of ovan in 1867, before the Barclay entry was the act of 1887, the act of 1896 (29 Stat. canceled, and in June, 1868, when the entry at L. 42, chap. 39, U. S. Comp. Stat. 1901, was made for the lot in section 26, are set p. 1603), confirming the right and title of forth in the statement of facts herein, and a bona fide purchaser, and providing that the need not be repeated. The statement shows patents to his lands should not be vacated no such facts as put Donovan in the place or annulled, must be held to include one of one who, having done all he could to enter who, if not in the fullest sense a bona fide the land, had been refused such entry, but purchaser,' has nevertheless purchased in had nevertheless not acquiesced in such degood faith from the railroad company.” cision, and had taken possession of it as a

The counsel for the government, while homestead. On the contrary, Donovan did strenuously denying that the legal title to acquiesce in that decision, and amended his this land passed to the state of Minnesota application. by virtue of the certification, in 1871, ad- There was no entry made on the books of mits in his brief that, if Woodwick bought the local land office for this land, under the the land as a bona fide purchaser in 1899, amended application, and the power of the and acquired the legal title to the same, Secretary of the Interior to make the certhen, at that present time, not only was the tification, even if we assume that it was right of the United States to recover the erroneously exercised, was not an act which land defeated, but Donovan was precluded was beyond the jurisdiction of the Secretary. from thereafter asserting his claim to the The legal title was thus transferred by the land, as against such bona fide purchaser. government to the state, and, at the most, His denial that the legal title passed is it was an erroneous certification within the based upon the contention that Donovan, meaning of the act of 1887. Although under before the year 1871, when the Secretary of such circumstances, if the certification were the Interior certified this land to the state, erroneous and might have been avoided, and had, as stated by counsel, initiated proceed- the land recovered back by the government ings to obtain this land in section 35 as a while in the hands of the railroad company, homestead, and had done all he could to yet, Woodwick, if a purchaser in good faith make entry thereof, and had been in posses- of the lands, was entitled to them under the sion for three years before this certification; provisions of the act. He had no notice, and that prior to 1871 an initiatory title actual or constructive, of the claim of the had passed from the United States to Don-government in regard to this land. The ovan, by reason of his possession and offer record title was plain. No suit had been to enter the land, and his payment of the commenced when Ericksrud took his title fees and expenses to the local land officers, from the government, and went into possesso as to prevent the passage of the legal sion thereunder. He died within a week title to the state, by virtue of the certifica- thereafter, and his heirs thereupon took tion referred to, which, by reason of the possession. They were in possession when acts of Donovan, was rendered wholly void, the government commenced this suit, in It is also asserted that, if the United States, 1893, but were never served with process in 1871, did retain title in itself, notwith therein until 1901; which was two years standing Donovan's occupation and cultiva- after Woodwick had purchased the property tion of the land, yet such occupation and from them, and had in good faith paid them cultivation withdrew the land from the ju- the sum of $2,000 in cash for the land. risdiction of the Land Department, so far as Counsel for the government admits that any right or power to issue a certification it is futile to maintain that Woodwick had to the railroad company was concerned, just constructive notice of the defects in his title as effectually as though the land had been by reason of the pendency of this suit, which reserved or otherwise appropriated specific. had been commenced by the government in ally by an act of Congress.

1893, but in which the railroad companies We think that, in 1871, when the certifi. alone had been served with process. cation was made, jurisdiction over this land Whatever equities Donovan may have had