584
FEDERAl, REPORTER,
vol. 46.
will not uphold them if this candor and fairness are wanting. If creditors are not afforded all the information necessary to an intelligent decision on the expediency ofa full, release to the debtor, and if ample time and opportunity for, Inakingup a decision be not given, then this delinquency is itself a badge of fraud; and, when it is as palpable and manilest as in this case, the deed ought to be set aside. I \V-ill decree accordingly.
CHICAGO
& A.
BUrDGE
Co. v.
ANGLO-AMERICAN PACKING
&
PROVISION
Co. et at. (Circuit Court, W. D. Missouri, St. Joseph, Division. June 18, 1891.) 1. CREDITORS' BILL-WHE:lif MAIKTAINABLE.
A creditor of a corporation obtained a jlidgment in personam against it in a federal court of Kansas. On the return of execution unsatisfied in that state, he instituted attachment proceedings in a state court of Missouri against land there situated, the legal title to which was in the directors, and held by them in trust for the corporation. Held that, after a lien against this land by prosecuting the attachment to judgment, the creditor had the right to maintain a bill in equity in the state court to remove the obstruction of the legal title in the directors, and to subject the property to the payment of his debt, without first issuing an execution on the judgment, and having a return of bo>w: and the removal of the cause into a federal court of Missouri, by the directol's and the corporation, on the ground of their non-residence, does not deprive him of this right.
2.
SAME-BIlEACH OF TRUST.
During the pendency of the original suit in the federal court of Kansas, a contract was entered into between the directors and stockholders of the corporation, by which the land in question was to be sold, and the proceeds first applied to the liqui· dation of the debts of the corporation. Hdd, that the failure of the directors to make the sale, and to so apply the proceeds, was a breach of their trust, and was sufficient to confer jurisdiction on a court of equity to reach the land as an equitable asset of the corporation, for the benefit of one of its creditors. BY PUBLICATION.
3. SAME-SERVICE
Since the object of the suit is to fix the trust on the land in the hands of the directors, and to subject it t.o Jilluility for the creditor's debt, jurisdiction over the corporatiou, which is a non-resident, may be obtained by publication, under Rev. St. Mo. § 2022, which prOVides that in suits which have for their immediate object the enforcement or establishment of any lawful right, claim, or demand to or against any real property within the jurisdiction of the court, an order by publication may be made. 4. FUAUDULENT CONVEYANCES-WHAT AIlE.
Rev. St. Mo. § 571, which gives an attaching creditor an action at law to set aside a" fraudulent" conveyance of property, does not apply where the legal title of land was in good faith taken for the use and benefit of the debtor, with a resulting trust in favor of its creditors.
5.
JUDGMENT AGAINST COIlPORATION-EFFECT ON DIRECToHs.
A judgment in persontl,m against a corporatiou, obtained in a federal court of a sister state, is conclusive on the merits in the cOurts of every other state when made the basis of an action; and the directors and managers of the corporation are as bound by the judgment as, tire corporation itself.
is a bill in equity. Itssuhstantialavermentsareas follows: The com plainant 'is a corporation under the laws of Kansas and Missouri, and the Anglo-American Payking & Provision Company is a business carromtion of the slate ot Illinois, and the other, respondents, Robert D., John, George, Anderson, William, and Alexander,Fowler, are also citizens of,
CHICAGO & A. BRIDGE CO. V. ANGLO-AMERICAN PACK. & PROVo CO.
585
and residents of, the state of Illinois. . From January, 1878, to 1884 or 1885, the said Fowlers were in business as partners, under the firm name of "Fowler Bros.," engaged in butchering hogs and packing pork at the town of Winthrop, in Buchanan county, Mo. In 1878 they purchased the real estate in question, situated in said county. and caused the deed therefor to be made to the respondents Robert D. and Anderson Fowler. Said property was designed and used for the plant in conducting said packing business. and was bought, used, and treated as partnership property of said Fowler Bros. The said Fowlers were the sole incorporators and stockholders and managers of said packing company, organized as a corporation, as aforesaid; and said real estate, so held as partnership property, was put into said corporation as an asset thereof; the said corporation issuing stock to said Fowlers in amount and value equal to the value of all the partnership property, including said real estate, which was thereafter treated and regarded as a part of the assets of the corporation, although the legal title remained in said Robert D. and Anderson Fowler. From 1878 to 1884 or 1885, the said corporation respondent occupied and used said real estate, conducting thereon the business aforesaid, as formerly conducted by said Fowler Bros. In 1880 the respondent corporation contracted with the complainant the debt in qUrstioll, for which the complainant brought suit in the circuit court of the United States for the district of Kansas, and on the 10th day of May, 1885, recovered judgment against the respondent corporation for the sum of $3,404.74, and costs amounting to $363.90. On this judgment execution was duly issued from said court, and was returned 1mlla bona. The bill avers that said respondent corporation neither at that time owned, nor has since owned, any property in said state of Kansas. It is also averred that in 1884, during the pendency of said suit in the United States court in Kansas, the said Fowlers entered into a contract with the respondent George Fowler, by which all the assets of the corporatioll, except the said real estate, was conveyed to said George Fowler. Among other things, said contract provided that'''fhe packing-house property at Winthrop shall be sold, and, after first discharging all debts, liabilities, and ontgoings affeeting the same, the moneys. arising from such sale shall be applied, first, in repaying to each partner the amount of capital invested in said concern, and interest thereon. and the ultimate surplus shall be divided equally among all the parties hen·to; it being understood that any loss which may adse on the sale of the last-men tionf'd premises shall, in the final adjustment of the accounts, be borne by all the parties hereto in equal shares." The bill avers that the property so. alluded to was the real estate in question. In November, 1889, complainant instituted suit by attachment in the circuit court of Buchanan county · .Mo., against the respond, ent corporation on said judgment, so recovered in the United States court in Kansas, and caused the real estate aforesaid to be seized under writ of attachment. Service was had in this action on the defendant therein on order of publication. There was no appearance therein by the defendant. Judgment by default was taken, which judgment was mad?
'FEDERkLREPORTER,
voL 46.
final May 31, 1890. and:without issuing 'allY exeCl,ltiqH On tMsjudgmen't, tnecomplainunt:filed the ,present bill in the said circuit c'OlH't of Buchanancoul1tiy,'setting out the facts afores'aid,tllleging that the respondent corporation and the other respondents are ,citizens, residents of the state of Illinois, and that the said corporation has no other property in the state of MisS0ul'i. The bill alleges that,while the legal title to the said real estate remains in the said Robert D;and Anderson Fowler,: 'they hold the same in trust for the said corporation, wi th a rcsultimrtrust in favor of the compluimint, as such credito.r. The prayer of the bill is that said :B'owlers be adjudged to so hold the said property in trust; that the court, by proper decree, subject said real estate to the payment of the judgment aforesaid, and order the sale of the said real estatef6r.the satisfaCtion thereof; and for .all proper relief. Service of this bill was had on order of publication., On the return-day the said Fowlers'(Robert and Anderson) appeared, and on their application this cause was removed to this court, on the ground that applicants were nonresidents of the state. ,In this oourt said Fowlers demur to the bill on the ground that it does not state facts sufficient to entitle the complainant to the relief sought, or to allY relief whatever against respondents. Thomas & Dowe and BiP,. Waggener, for complainant. Lancaster, Pike & Hall, ·for respondents. PHILIPS, J., (after stating thefacts as above.) It is to be kept in mind, in the consideration of this case, that the suit was instituted in the state court, and that jurisdiction in this court attaches by reason of the act of removal. It is also to be kept in mind that the plaintiff had first re{luced this claim against the defendant corporation, Anglo-American Packing & Provision Company, to judgment in the United States circuit court 01 Kansas. That judgment was in personam, and, it being a court of record, every intendment is to be indulged infavor of the validity and -conclusiveness of that judgment. According to the averment of the bill, the real estate in question is an asset of the debtor corporation. While the legal title thereto is in the Fowlerll,in equity the property belongs to the corporation, and is held by them in trust for the payment of the -Corporation debts. As such it was subject 'to seizure under process of attachment for the complainarit's debt. Section 4915, Rev. St. Mo.; Evans v. Wilder, 5 Mo. 313; Rankin v. Harper, 23 Mo. 585; Hefrington v. He'I'r'ington, 27 Mo. [j69; Dunnica v. Coy, 28 Mo. 525. The s'itus of the land drew to it the venue in the attachment proceeding in the Buchanan circuit court. The action could not have been instituted elsewhere. Sections' 2010, 2011, Rev. St. Mo. ' The defendants therein being nonresidents of the state, the statute, (section 2022) expressly authorizes service by publication., After due proof of publication, judgment was taken therein by default. It is tfue that it is a! judgment ,intern only, 'but it corl9tituted a lien on the attached :property, effectually biriding it from the time of the levy ofthe writ of attachment, (Lackey v. Seibert, 23 1\-10.85,) and, when the plaintiff therein obtained .its judgment,. this lien became res a(ljudicata.
CHICAGO & A. BRIDGE 'CO.
V.ANGLo-'A.MElucAN
PACIL & PIWV. CO.
587
Havingtbus secured this lien bY.attachmellt prosecuted to the question arises, the plaiptiffthereinhave the right to resort to this bill in equity to. the obstruction of the legal title in the Fowlers, and to subject the property to the payment ofits debt, without first issuing an execution on the judgment, and a return of nulla bona! Counsel for complainant iuvokef' sfJction 571, Rev; S1. Mo., which declares that "any attaching creditor may maintain an action for the' purpOse of setting aside any fraudulent conveyance, assignment, charge, lien, or incumbrance of or upon any property attached in any action instituted by him." This statute clearly is not applicable to the facts of' this case. It obtains solely as to fraudulent conveyances, etc., whereas the deed by which defendants obtained the legal title to the property in question was not fraudulently-taken .. 'By the averments ofthe bill they helel it under conditions of implied trust, for the use and benefit of the debtor, with a resulting trust. in favol" of its creditors; The general rule of equity, as contended for by respondents, is thnt before the general creditor can resort to a court of equity to reach his debtor's property beld under a fraudulent deed, and the like, he must reduce'his Claim to judgment, issue execution, and have a return of nulla bona; in other words, he must exhaust his legal. remedies. The reason of this rule, requiring a judgment, etc., is that the claim must be rendered certain; otherwise, the proceeding to vacate the-fraudulent transfer of the title, and to remove obstaCles placed in the way of thfl succetisful operaiion of the execution, might be entirely fruitlel'sifafter all the debtor failed to obtain a judgment on his claim. But in this case the complainant had already obtained judgment in in the United States circuit court of a sister state. Vfhat was the effect of that judgment? "A judgment rendered by a court of competent authority, having jurisdiction of the parties and subject-matter, in one state, is conclusive on the merits in the courts of other state when. made the basis of an action, and in such action the merits cannot be inquired into. * * * Accordingly, the courts of one state, when called upon to recognize and enforce a judgment from another state, must admit, not only that there is a record, and that it is what it purports to be, but also that it is just, that the money awarded to the'plaintiff is legally due, and that he has a right to recover it without a reinvesiigationof his claim. * * * The true doctrine is that such a is to'recdve in allcourls the same faith, credit, and respectthat is accordeq. taii at home.". 2 Black, Judgrn. §§ 857, 859; Renaud v. Ahbott, 116 U. 8.277, 6 Sup. Ct. Rep. 1194. The respondents,: being the principal stockholders in the corporation, and its managers, were as conclusively bound by that judgment as the corporation itself. Hawkins v.Glenn,131 U. S. 319,9 Sup. Ct. Reo. 739; 2 Black, Judgm. § 583. While s.uch judgment, to be made available for process in another jurisdiction, would have to ..be 8uedover, yet, by the first judgment, the claim is rendered as certain as it ever can be. Ite merits cannot be relitigated. Th.e liability of the defendant corporation is fixed irreversibly. Hence,: it:il:! 'Mid by the chanceIl<ir in Robert v. Hodges, 16
N.J.Eq. '305: ·.
.".
.
"The objection to the that the clai mof the attaclJing' .creditor is notas;certa.int'd, If it 'be entitled til any consideration, can have nq application in thepteseilt case,'fur the'plaintlf'f'sclaims against the defendants have, in fact, been f'stllblis'l\.ed by jUdgment. The fact that the judg-rnent was recovered, in another st<ltedoes the conclusiveness of the jUdgment as to the amount due. If the court where the judgment is recovered have jurisdictioll ot, tile person of the qefendant, and of the subject-matter of the sUIt, its conclusiveuess cannot be questioned in the forum of another state, where it is' sought to be enforced. Moulin v. [nsumnce Co., 24 N. J. Law, 2:cl2." ,. Where tJ1e reason of the rule ceases;., the rule itself ought not longer to operate. In this case the claim was pot only certain. but it had back of it a judgment conclusive and binding, and, under the law of the forum w}Jere the attachment suit was institut'ed, the complainant had secured and fixed his lien upon the real estate. ,Why should it then be compelled to proceed to execution, when all the purchaser could obtain by a sale thereunder wquid :be a lawsuit, before he could get rid of the legal title of the respondents? He would acquire only the equitable interest of the debt9r corporation in the land, after which he would be COI11pelled to resort to a c01.lrt· of equity to divest the legal title. There is much practical sense in the distinctioll, d,rawn by the supreme court of Maine in Brway v. Hogan, 53 Me. 544: "It is only when the debtor once had a title to the land, and has conveyed it away fraudulently, thata levy can be of any use. In such case, the conveyanoe being fraudulent, it is, as to the creditor, no conveyance, and he may treat the title as still remaining in the debtor. But when, as in this case, the debtor never had any title, treating the con veyance to his wife as either valid or void will not give him a title. It will be either in the wife, or >in her grantor: it will not be in the debtor, and a levy on it as his property . would be an idle and useless ceremony. No title could possibly ue obtai ned ',by it." In Case v. Beauregard, 101 U. S. 691, the equity rule in this respect , is succinctly stated thus: "It may be said that, whenever a cl'editor has a trust in his favor, or a lien : upon property for the debt due him, he may go into eqUity without exhaust; ing legal processes or remedies .. Tappan v. E'van8, 11 N. H. 311: Holt v. ;Bancroft, 30 Ala. 193. in Llmse .cases in which it has been held that :obtaining a judgment and issuing an execution is necessary before a court of e.quity can be asked to set aside fraud ulent dispositions of a debtor's property, given is that a general creditorhitli 110 lien: and, when such bills lillve been sustained withoiit 'R judgment at law, it lias been to enable the creditor to obtain a lien, either by jlldgmentor.execution. But when the bill asserts a liell or a tl;ust. and sh(jws that it ,can be made available only by ,.aid of a chancellor, it obviously mllkes a case for his interferellce." 'In Tappa-nv. Evans, 11 N. H. 311, cited by Mr. Justice STRONG in support of the rule above quoted, the court say, (page 327:) , "The gene".al principle deilueible from the authorities applicable to this case ':is that. where property issllbjeet to execution, and a creditor seeka to have a I fraudulent conveyance or'obiltI'uction to the levy or sale removed, he may tile ,81 bill as soon as he has ob.tainedlf, ,the property, whether the lien be olltained by attachment, judgment,or the issuing of an execution."
CHICAGO & A. BRIDGE CO. fl.
PACK. & PROVo CO.
589
Again, on 330, it is said: "In relation to real fraudulently conveyed by the debtor, one mode of relief in equity is to rempve the fraudulent title either before or after a levy, so as to perfect the titJ'e acquired under the proceedings at law." 'fhis was followed in Sheaje v. Sheaje, 40 N. H. 518. See, also, Stone v. Anderson, 6 Fost. (N. H.) 516, in which the authol'itiE's are cited holding that, whenever the attaching creditor has obtained his lien, he "has a title to maintain a bill to set aside a fraudulent conveyance of the real estate." . See, also, Bank v. Harvey, 16 Iowa, 146-148. In Conroy v. Woods, 13 Cal. 633, it is said: "In this case the plaintiff had. before the filing of his bill, a lien byattachment and a.judgment. There was no necl'ssity for the levy of an execution. It would have answl'red nobenefie:al pnrpose. It was not necessary to give a lien. That had already accrUed from the levy of the attachment, and it was not necessary for a sale. for a sale was not desired. * * * 'fhe authorities do not place the right to 11:0 into equity upon the ground that the cumplainants must, show themselves to be creditors by jUdgment, but they go on the ground that they must show a lien Ul'0ll the property, and this lien exists as well by the levy of au attachment as by execution." In New Jersey (Robert v. Hodges, 16 N. J. Eq. 305) it is held that an attaching creditor, even before judgment in rem, is entitled to go into equity to remove obstacles to the title of the land, "becanse the creditor has a valid subsisting lien." In Lackland v. Smith, 5 Mo. App. 162, the court, after conceding that the judgment there was only in rem, and could not be in personam, because of the non-residence of the non-appearing defendant, say: "It was a judgment, however, binding Smith's interest in the property described in the attachment, and within the jurisdiction of the court. It gave to plaintiff a right also to proper proceMtngs to snbject the equitable interest of l'n1ith in this real estate to the payment of the amount found to be due,' Under this execution plaintiff declined to sell any interest of declaring that he was un willing by sllch a sale to sacrifice valuable property, and he very properly, on this state of facts, commenced proceedings in equity to enforce, without any unnecessary sacrifice of a valuable interest in real estate, the legal rights which he had in his action of Jaw established againat any interest Smith may have in the pl"Operty attached." The authorities touching the right of an attaching creditor after his lien on the property is fixed to go into equity are cited, pro and con, in 3 Porn. JUl'. note,p. 465. Whatever may have been the earlier view of the supreme of Missouri, it is apparent from its later utterances that, as its horiron extends, it gives a much broader and efficacious office to equity than first entertained. The highest office of equity is to serve the. best interests of justice, and, while securing this end in enforcing the rights orthe creditor, it will also have regard to the interest of the debtor. In Bobb v. Woodward, 50 :M:o. 95, the practice of the creditor, after obtaining his judgment, proceeding to execution and sale·. was deservedly censured. The court say.
590
."
FED:ERA.L REPORTER,
"There is little doubt that the interest of IJothdehtors and crpdJtors would if ip alQhese resultingtplsts the creditor were be, to ascertain, by judicial decision, the actu,<lI interest of. the debtor in the propit f(·r * 'l,ftlle propE>rtY,is before ,the erty doubt is solved, it necessarily follows that 'tne purchase is subject to all the uncertainty of a gambling advmture. All our observation shows that such interests are bid off at a nominal sum, and, while the delJtor is stripped, the creditor receives nothing."
*. '"
Accordingly, in Zoll v. Scrper, 75 Mo. 460, the court held that"So long as the right to,the execution upon the judgment obtained continues, the creditor may go into eqUity to subject the land to.too payment of his debt, f()rthe reason that a sale under an execution in J>uch case would be, in effect,' but the sale of a lawsuit, and the laud would be sClcrifiGed. and 110 one could possibly be benefited materially but the purchaser, and he only in the event that he succeeded in setting aside the fraudulent deed. While Ule creditor might have the land sold on execution, equity wi\! not compel,hi'm to pursue that ruinous course."
It certainly is to the interest of all parties here concerned that the rights and equities of the debtor corporation and of the Fowlers in the real estate in question, should be ascertained and definitely settled before th.e sale. Such was clearly the right of the complainant in the state court, where it instituted this suit. Has it lost that right by the mere act of removal into this court at the behest of the respondents? The complainant could not have brought the attachment suit in this court, as the defendants are not residents of. this district. Having obtained this lien by the attachment and judgment in the state court, the present suit tSal;qillaryto that judgment,-a continuation, in effect, of that action,to work out the satisfacti()nof the judgment. , : The bill. in equity could not have been,: in the first instance, brought in, this court,!1S the federal court cannot be employed in an ancillary or auxiliary service of the state court. Tbrbell v. G1'iggs; 3 Paige, 207; Davis v; 23 Hun, 648; Claflin". McDermott, 12 Fed. Rep. 375. When the cause was removed here by the responderits,theother party should not be deprived of the substantial rights secured to it in the forum where it was compelled bylaw to bring its ,action. This court takes the cause precisely in the condition which the law affixed toit in the state court at the time of the removal. We take the cause as we find it, beginning where the state' coMt left it, ""lith full recbgnition of all su bstantial rights." Butro v. Simpson, '14 Fed. Rep. 370; -Fidelity Trust Co. V'. Gill Car Co., 25 Fed. Rep. 741; Goldstein v. Cityoj'New Orleans, 38 Fed. Rep. 628, 629; Duncan v. Gegan, lOlD. S. 810. . It would be a: travesty upon justice that It defellClant, by virtu e of the l"emovlll act of congress, predicated alone upon the inCident of the defendant being a noD.-residen,fQf the statejcould esca:rethe liability which the law places upon him in the state court, where thecompHtinant rightfully brought his action. 'The complaiimi:W, hiivihg u'lien and judgment in the state court giving it 'the right 'in the same court to proceed by bill in equity as it did, presents a case distinguishable fro in that ofSCGUv.
This is reaffirmed as late as in, Lionberger v. Baker, 88 Mo. 455, 456.
Neely, 11 Sup:. Ct,Rep. 712.: $here the l3uit was in the federal court on a simple contract deqt, and when was, noantryed,ent lien., Mr. Justice }1'IELD in thatopiuion recognizes the right,here contel).ded for, for he says: . '" "It is the existence, before the suit in eqUity is Instituted, of a lien upon or interest in the property, created by contract, or by contribution to its value by labor or material, or by jUdicial proceedings had, which causes for the enforcement of such lien or interest from the case at bar. It
Superadded to all this, there is another ground upon which this bill possibly may be sustained. UI,lder the provisions of the contract of 1884, made during the pendency of the suit in the United States court in Kansas, the packing-house property, which is alleged to be the real estate in question, was to be sold, and the proceeds first applied to the liquidation of the debts of the corporation. If that was a part of the consideration of the contract then made' between the stockholders and directors of the corporation, it was not only an express recognition of the fact that this real estate was held in trust for the use and benefit of the corporation, but it was by all the parties in interest charged with the payment of this debt, among others. To thereafter fail to so apply it was a breach of the trust by the holders of the legal title, and would seem to bring the case especially within the province of a court of equity, to reach an equitable asset of the debtor for the benefit of the creditor. Be this as it may, the court ough t to retain the bill, to see what the real facts are respectingsaid contract. It is finally urged that the Anglo-American Packing & Provision Company being a necessary party to this suit, and it being a non-resident of the state, jurisdiction over it in this action cannot be obtained by order of publication. The Code of Practice of the state directs that all attachment suits shall be brought in the county where the property attached may be found, and that suits for the possession of real property, "or whereby the title may be affected, shall be brought in the county within which such rE'al estate, or some part thereof, is situated." Sections 2010, 2011, Rev. St. As the purpose of this action is to affect the title to real estate, it had to be.instituted in Buchanan county. As the object of this suit is to fix upon the real estate in the hands of the Fowlers the tru'St, and to subject it to liability for complainant's debt, it affects the title to real estate, and therefore the court of the situs of the property subject-matter. The practice act alone can give jurisdiction over would be lame indeed, if, after making the foregoing provisions, it had stopped short of prescribjng 80n)e mea.ns of bringing the parties to be affected by the judgment before the court in sU9h manner as.1'.o give the court jurisdiction over the rea. This the statute has undertaken to do by section 2022, which provides, inter alia: "In suits in attachment, and in all actions at law or eqUity, which have for their immediate object the enforcement or establishment of any laWful right, claim, or demand to or .against any real property within the jurisdiction of the cOl1;rt·. !in order of publication may be made," etc.
592
FmDERAL REPORTER,
Within the purview OfsMtion 2022, this action has for its immediate object enforcement. or establishment of it lawful righ t, claim, or demand agamst the land lD question. There is no intermediate claim .no ' It follows that the demurrer is overruled.
NORTHERN
PAC.
R. Co. v.
BARDEN
et al.
(Oircuit Oourt, D. Montana.
June 12, 1891.)
1.
RAILROAD GRANTS-ExCEPTIONS-MINERAL LANDS.
The provision of Act Cong.July 2, 1864, (13 St. 365,) granting land to the Northern Pacific Railroad Company, "that. all mineral lands be, and the same are hereby excluded from the operation of this act, " applied' only to "known" mineral lands: The lands granted being the odd-numbered sections within a certain distance of the road owned by the United Stntes at the time when the road should be definitely fixed, and a plat thereof filed in the land-office, to exclude land from the operation of the grant as mineral land it must have been known to be such at the time of such definite location and filing.
SAMll.
KNOWLES,
J.,
At Law. On demurrer to complaint. Demurrer toa complaint inan action to recover possession of portions of section 27, township 10 N., range 4 W., P. M. Montana. Plaintiff alleges its incorporation under the act of congress of Julv 2, 1864, (13 51. 365,) for the purpose of building the Northern Pacific Railroad; that by that act there was granted to plaintiff every alternate section of public land not mineral, designated by odd numbers to the amount of 20 sections per mile, on each side of such railroad line as said cOrrlpanymight adopt through the territories of the United States, whenever, on the line thereof, the United States had full title, not reserved, sold or granted, or otherwise appropriated,and free from pre-emption, or other claims or rights, at the time When the line of said road should be definitely fixed, and a plat theieof filed in the office of the commissioner of the general land-office; also other provisions of the act; that plaintiff duly accepted the terms and conditions of in the 111 ode prescribed by law, within two years after the passage of the act, to-wit: on December 24, 1864; that the general route of said toad extending through the state of Montana, was,; duly fixed, on February 21, 1872; that the said lands in question in EW,i.d section 27are within the 40 miles of the line of said raih:oad assofi:xed,and were on said February21, 1872, public lands to which the United States had full title, not reserved, sold, granted, or 'otherwiseappropriated,and free from pre-emption. or. other claims or rights; that at the date of said act, July 2, 1864, and the date of fixing said line of general fOute, to-wit: February 21, 181;2, no part of said land in question was known 'fll'ineral land, but said land was morevalu-