Cobb v. Clough

LOCHREH, District Judge. This case has been very fully argued on both sides, and there seems to be no dispute as to the facts. The matters set forth in the bill of complaint are admitted by the demurrers in the case, and this renders immaterial the last question raised by counsel for defendants, as to.the verification of the bill. The demurrers admit the statements in the bill to be correct, and therefore, although the bill is not verified in the manner usually done when the bill is made the basis of a temporary injunction, I think it obviates' any objection upon that ground. The result of the demurrers is that all allegations stated *in the bill which are material and well pleaded are admitted, but, of course, mere conclusions are not admitted. It seems that in the year 1860 congress granted swamp lands to the state of Minnesota for certain objects indicated, among which were internal improvements. In the year 1875 the legislature granted to the Duluth & Iron Range Railroad Company 10 sections per mile, to be selected within 10 miles of the — 607 — railroad, to be built by the shortest and most feasible route, between fixed termini, Duluth being the southern terminus, and the other at some point, in section 60. range 12, on condition that 20 miles of the road was to be built in 2 years, and ihe entire road in 5 years. The1 lands were to be certified and pa urn ted to the company as each 10 miles of road was completed and certified to be properly completed by commissioners appointed by the governor. Any deficiency in the 10 sections per mile within the 10-mile limit was to be made up by selections within the counties of tít. Louis, Lake, and Cook. On filing the map of the route, all other swamp land within the 10-mile limit; was thereby withdrawn from other disposition. The time for building the railroad was extended from time to time by acts of the legislature, and by an act of that body passed in 1883,1 believe, the northern terminus of the railroad was changed further west, and a little north, necessitating a change of location of part of the line; and the railroad was finally completed within the time limited by the last act, and certified to be properly built, completed, and to be transacting business over its entire line, by a commissioner appointed by the governor to make examination of these facts. The grant of lands by the act of 1875 was a. present grant upon conditions subsequent. No forfeiture for breach of condition whs ever declared, either by legislative act or judicial decree; the condition was finally performed, and such performance accepted by the state, through its executive, in whom that power was vested; and some 201,000 acres of the land were patented to the railroad company. After the grant, and before the road whs built and the conditions subsequent were performed, the constitution of the state was amended so as to prohibit the granting of swamp lands in aid of railroads. Tli is could not a fleet the prior grant of 1875, which stood as a valid existing grant and contract; but it is claimed that as the northern terminus of the road was changed, and the line also changed, subsequent to that amendment, the land grant would not attach to the changed line. But, had there been no such amendment of the constitution, it would not be claimed (fiat merely such change of terminus and line would have detached the grant made by the original act. There can be no doubt that, if there had been no change in the constitution, the state, with consent of the company, could have changed the northern terminus and the location of the road, without saying anyi hing further about the grant, and not affect the grant; and it seems to me if this grant to the road made by the act of 1875, which was a present grant at the time, whs not affected by the amendment, that it would not be affected by this change in the constitution, so long as it was merely a change in the line, allowing it to remain substantially in the place where it was originally designated, and not departing substantially from the original scheme or intention; although it might he a different case were the change so radical in direction or length as to make it clear that it involved a new and entirely different enterprise. Moreover, the allegations of the bill are that the deficiency as to the 10-mile limit will cover all swamp lands in the three counties named. If so, the land grant is in no wav changed from what it w'ould have been had the road been built between the termini first — 608 — named. It was not, therefore, changed so as to affect any lands which were not covered by the act of 1875 before the amendment prohibiting the granting of swamp lands for such enterprises. All these questions, and the right of this railroad company to this land grant, seem to have been decided in its favor by the supreme court of Minnesota in the case of Minneapolis & St. C. R. Co. v. Duluth & W. R. Co., 45 Minn. 104, 47 N. W. 464, referred to by counsel. The right of the railroad company to these lands, and the right of complainant, as the trustee under the mortgage, with respect to these lands, appears to be clear, not only to the lands which have been formally conveyed by the governor, but also to the other lands covered by the grant, although not so conveyed, nor perhaps even specially designated by selection. They belong to the railroad company beneficially, and in equity, and are covered by the mortgage to complainant, although the bare legal title may still remain in the state. The state has no right in respect to the lands, except to perform its contract by investing the railroad company with the title. I speak, of course, of the case as presented by the bill and admitted by the demurrers. But for the immunity of the state as sovereign, and under the eleventh amendment to the federal constitution, there could be no question that a suit would lie against it directly to restrain its action, if it threatened to dispose of or embarrass the title to these lands, to the prejudice of the railroad company or the complainant. This action is to restrain the officers of the state, its governor, auditor, and treasurer, who form an executive, commission, from disposing of the title to any of these lands, or the timber or minerals, as they were directed to do by the act of the legislature of 1897, and to restrain the governor, auditor, and attorney general from commencing action against the grantees of the railroad company, or persons having contracts with respect to the lands, or the timber and minerals, with, the railroad company, as also directed by said act of the legislature, and which would obviously cloud the title of the railroad company to the lands, and bring multiplicity of actions. The serious objection urged by defendants is that; although the state of Minnesota is not nominally made a party defendant, yet this suit against all the chief executive officers of the state, in respect to a matter in which the state by its legislature claims an interest which it has directed these officers to assert and maintain, is in reality a suit against the state. It must be admitted that, if it is not such a suit, it comes perilously near the line. The decisions on this subject are numerous, and, in my judgment, not conflicting. The state can bring suits and assert its rights in court, but cannot be brought into court, to litigate a right claimed against it, without its consent. But a state is bound by the constitution of the United States as much as any citizen, and any enactment of the state impairing the obligation of a contract is void, though its contracts cannot be actively enforced in the courts without its consent. Thus, no action against the state can be maintained, without its consent, to collect an indebtedness of the state or compel it to perform its contracts, or for any kind of positive and affirmative relief. On — 609 — the other hand, any enactment of a state legislature impairing the obligation of a contract, or tending to devest vested rights, is absolutely void. In law, being null, it is not the act of the state; and if a state officer, under color of such void enactment, attempts or threatens any acts ((Hiding to impair or interfere with contractual or vested rights, it will not be regarded as the act of (he state, and such officer will be restrained from such unlawful affirmative action, whether he purposes to act in the name of (he state, or in his official or personal name. Thus, proposed prosecutions of a criminal or penal nature or form, which if begun would have to be instituted in the name of the state, have been enjoined in some cases which have been cited on the hearing. The theory governing these cases appears to be, not so much the theory that the immunity to the states is a shield and not a weapon, as that tlie state being absolutely bound by the federal constitution, its enactments, in contravention of that instrument, are absolutely void, to the extent that they will not be recognized as acts of the state, nor afford color of defense in protecting officials of the state acting or threatening to act thereunder, and renders (he plea of official character of such persons immaterial. Therefore the doctrine of tlie Minnesota supreme court tty at the governor and executive officers are not amenable to tbe process of the courts in respect to (he discharge of their official duties has no bearing in a case of this kind; because, if they are liable at all, in respect to matters of this kind, it is because they are passing outside their official duties, and that, while they are til tempting to do what is directed by an act of the legislature, they are doing a,n act which is not supported by any valid law. Ho it does not seem to me that the doctrine of the Minnesota court has any special bearing in this case. While the federal courts have gone to considerable length to sustain the position that state officers may be restrained from acts impairing contractual or vested rights, the authority to grant injunctions in such cases has been limited to remedial relief. I think the case of Osborn v. Bank, 9 Wheat. 738, cited on both sides, is a signal instance of this kind. In that case a large sum of money (some $98,000) had been taken by state officers from a bank of the United States, under what was held to be a void enactment. An action to recover that money was allowed to be maintained against the officers of the state, although it was admitted that it could not be maintained against the state itself. It was permitted to be maintained against tlie successors of the officers who took the money. It was claimed that the money had been kept separate from other moneys of the state in the treasury, and therefore could be identified; but it was none the less claimed to be the money of the state, collected by the officers under the laws of the state. There is also the case which has been cif.ed as arising in South Carolina (Tindal v. Wesley, 17 Sup. Ct. 770), which was an action to recover real estate in Columbia, H. O., of an officer of the state, — the secretary of state, —who was in possession of tlie property. The answer alleged it to be the property of the state, and that, it was in defendant’s possession as such officer. It was found by the court that the property had — 610 — been actually sold by the state to the plaintiff. There was no question that it had once belonged to the state; but the action was maintained, although it was admitted that the state, if it had any claim, might bring an action to assert that claim. I think these two cases perhaps go as far as any that have been cited on either side. The result is, as it seems to me, that this injunction must be granted. The only question in my mind is with respect to the restraint against bringing any action. I do not think there is any doubt that the injunction should be broad enough to prevent actions being brought against the grantees of the railroad company, — a multiplicity of actions; but I think a single action might be permitted against the railroad company, if desired, in order to bring the matter up in proper form. If it is thought fit to bring a single action in any court, I doubt if I should restrain the bringing of such action against the railroad company and Mr. Oobb. The further hearing of this case, as to the form of the decree to be granted, was then adjourned until the 9th day of July, 1897. (July 9, 1897.) After hearing arguments with respect to the form or injunction to be granted, the court rendered the following decision: I should agree with Mr. Kellogg entirely, if we could bring the state of Minnesota into court, and settle this matter definitely by a decree which would finally determine the interests of all persons who have, or claim to have, any interest in this property. Such course would be consonant with the practice of courts of equity. From the case as presented, it appears, as I stated heretofore, that this land grant was made to the railroad company many years ago, — a grant in prsesenti, with conditions subsequent. The conditions, it also appears, were performed, and the lands in part were patented to the railroad company. Now, there is nothing presented casting any doubt upon the title of the railroad company to these lands, except simply questions that arise from a change in one of the termini, and that really makes no difference whatever in the land grant. It would have been the same if the railroad had been built to the first-named termini, instead of as at present. I think no question has been suggested as to the power of the state and the railroad company, acting concurrently, to change these termini, without affecting the grant that was given. The other question arises from the change in the constitution in 1883, and that would not. affect the prior grant made to the railroad company by the state, to which the railroad company had a vested right. There has been no suggestion which really casts any doubt at all upon the right of the railroad company to this grant, and the decision of the supreme court of Minnesota, which has been referred to in 45 Minn, and 47 N. W., confirms that title. So that a case is presented of a property right which ought to be protected, as far as a court can protect it, from being disturbed by any action casting cloud upon the title, or interfering with the possessors, by harassing them with a multiplicity of suits. The difficulty with the case is that the state of Minnesota cannot be brought here into court against its will. — 611 — No action can be taken which will result in the final determination of the rights of everybody as to these lands. Whatever the final judgment of this court may be, the state of Minnesota is not and will not he hound by it. It hardly seems to me that such action can properly be taken as will in effect restrain, or have any legal effect amounting to an absolute restraint against, the state of Minnesota, so as to prevent it from bringing any action to test its claim, whatever it may be, to these lands. And, as that matter cannot be determined here, I am inclined to think that this injunction should be issued, as indicated by me the other day. I am still of opinion that permission should be granted to the state to choose another forum, if it desires to select one; at any rate, that ah opportunity should be given it to test its claim to these lands. I do not think the state ought to he allowed, or that these officers ought to he allowed, to bring a multiplicity of suits against the grantees of the railroad company at this lime. It seems to me it will be sufficient to bring one suit against the railroad company, and perhaps Mr. Cobb, and, if it is thought necessary, to join one or more other parties, in order to test the question of their rights as bona fide purchasers under their deeds from the railroad company following the deeds from the state.