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The supreme court held that the action was barred by the statute of limitations; that the company was estopped from asserting title by reason of the circumstances; and that: "Where, through the negligence and laches of a railroad company, the occupancy by others of portions of the right of way granted to it by the government has ripened into title by adverse possession, the company cannot set up the defense that the right of way was granted for public purposes only, and that it would be against public policy to permit either its abandonment by the company or the acquisition of adverse rights therein by way of estoppel or of the bar of the statute of limitations.”

that a map of definite location was filed Oc- | ing within the rule holding the grant of the tober 4, 1880, prior to the acquiring of the right of way effective from the date of the title to the land in question by the defend-act. St. Joseph & D. C. R. Co. v. Baldwin, ants or their predecessors or grantors; and 103 U. S. 426, 26 L. ed. 578. that said railroad had been continuously operated since its construction. The defendants, answering, claim title by patent from the United States government. The land was acquired under the pre-emption and homestead acts, respectively, and all the defendants or their grantors have been in quiet, peaceful, undisturbed, and undisputed possession of said land for more than ten years immediately prior to the commencement of this action, many of them for nearly twenty years. Valuable improvements have been made by the defendants, the said land consisting of town lots in the city of Spokane, and having been platted and laid out as additions to the city of Spokane by the defendants or their grantors after acquiring title to the same from the United States government. During all these years no claim whatever to these lands has been made by the appellant. It has stood by and seen improvements made thereon, and, in the case of defendant Brown, an agreement was entered into between him and General Sprague, who was then the general superintendent of the Northern Pacific Railroad Company, that they would plat their lots so that the streets of the addition which the railroad company was dedicating would correspond with and meet the streets which Brown was dedicating to the city of Spokane, and the agreement was carried out by arranging the streets in accordance therewith. therewith. These streets have been used by the public for from ten to eighteen years. The testimony shows that, in addition to the improvement which these defendants have made upon their lots, many thousands of dollars have been paid by them for assessments levied upon abutting land for the improvement of streets running through this right of way; that the appellant has never paid these assessments; that they have never been assessed to the appellant, and that no question has ever been raised by the appellant as to the right and obligation of the defendants to pay the same. While the record does not show that any of the lands owned by the defendants were deeded to them by the appellant, it does show that the Northern Pacific Railroad Company has deeded to other parties lots in the city of Spokane situated within the 400 feet of right of way, upon which valuable improvements have been made by its grantees."

It may be added that it was only as to some of the parcels that the filing of the map of definite location and the construction of the railroad preceded the filing of the entries. But we regard the case as fall

As before stated, on the 4th day of May, 1903, the decision of this court in Northern P. R. Co. v. Townsend, 190 U. S. 267, 47 L. ed. 1044, 23 Sup. Ct. Rep. 671, was announced. We there ruled that individuals could not, for private purposes, acquire by adverse possession, under a state statute of limitations, any portion of a right of way granted by the United States to a railroad company in the manner and under the conditions that the right of way was granted to the Northern Pacific Railroad Company. At the same time it was not denied that such right of way granted through the public domain within a state was amenable to the police power of the state. And we said: "Congress must have assumed, when making this grant, for instance, that in the natural order of events, as settlements were made along the line of the railroad, crossings of the right of way would become necessary, and that other limitations in favor of the general public upon an exclusive right of occupancy by the railroad of its right of way might be justly imposed. But such limitations are in no sense analogous to claim of adverse ownership for private use."

We are not prepared to overrule that decision, and tested by it, the judgment in this case must be reversed. But we were then dealing with the original right of way, which was of a width of 400 feet. April 28, 1904, an act of Congress entitled "An Act Validating Certain Conveyances of the Northern Pacific Railroad Company and the Northern Pacific Railway Company," was approved (33 Stat. at L. 538, chap. 1782), reading as follows:

"That all conveyances heretofore made by the Northern Pacific Railroad Company or by the Northern Pacific Railway Company, of land forming a part of the right of way of the Northern Pacific Railroad, granted by the government by any act of Congress,

are hereby legalized, validated, and con- | he may have originally entered under a void firmed: Provided, That no such conveyance grant of sale. But his claim ripens into shall have effect to diminish said right of a perfect title and becomes absolute, if such way to a less width than one hundred feet possession is not disturbed within the time on each side of the center of the main track prescribed. As is said by 3 Washburn on of the railroad as now established and main- Real Property, 5th ed. p. 176: tained.

"Sec. 2. That this act shall have no validating force until the Northern Pacific Railway Company shall file with the Secretary of the Interior an instrument in writing, accepting its terms and provisions."

The terms and provisions of the act were accepted by the railway company June 22, 1904, and the acceptance, duly certified, was filed in the Interior Department July 7, 1904.

""The operation of the statute takes away the title of the real owner, and transfers it, not in form, indeed, but in legal effect, to the adverse occupant. In other words, the statute of limitations gives a perfect title. The doctrine is stated thus strongly because it seems to be the result of modern decisions, although it was once held that the effect of the statute was merely to take away the remedy, and did not bind the estate, or transfer the title."" 25 Wash. 388, 54 L. R.

In Townsend's Case it was said, among A. 530, 87 Am. St. Rep. 768, 65 Pac. 556. other things:

"Manifestly, the land forming the right of way was not granted with the intent that it might be absolutely disposed of at the volition of the company. On the contrary, the grant was explicitly stated to be for a designated purpose, one which negated the existence of the power to voluntarily alienate the right of way or any portion thereof. The substantial consideration inducing the grant was the perpetual use of the land for the legitimate purposes of the railroad, just as though the land had been conveyed in terms to have and to hold the same so long as it was used for the railroad right of way. In effect the grant was of a limited fee, made on an implied condition of reverter in the event that the company ceased to use or retain the land for the purpose for which it was granted Congress having plainly manifested its intention that the title to and possession of the right of way should continue in the original grantee, its successors and assigns, so long as the railroad was maintained, the possession by individuals of portions of the right of way cannot be treated, without overthrowing the act of Congress, as forming the basis of an adverse possession which may ripen into a title good as against the railroad company." 190 U. S. 271, 272, 47 L. ed. 1046, 1047, 23 Sup. Ct. Rep. 672, 673.

The act of April 28, 1904, in view of our decision in that case, was obviously intended to and did have the effect to narrow the right of way to 200 feet in width, so far, at least, as, outside of that strip, the original right of way had been parted with.

The rule in the state of Washington as to adverse possession is thus stated by the supreme court in this case:

"One holding land adversely to the rights of another can be devested only by the action of the other, even with a better right, within the time prescribed by the statute of limitations; and this is true, even though

In Sharon v. Tucker, 144 U. S. 533, 543, 36 L. ed. 532, 535, 12 Sup. Ct. Rep. 720, 722, where the statute of limitations in force in the District of Columbia was applied, Mr. Justice Field, speaking for the court, said: "It is now well settled that, by adverse possession for the period designated by the statute, not only is the remedy of the former owner gone, but his title has passed to the occupant, so that the latter can maintain ejectment for the possession against such former owner, should he intrude upon the premises. In several of the states this doctrine has become a positive rule, by their statutes of limitations declaring that uninterrupted possession for the period designated to bar an action for the recovery of land shall, of itself, constitute a complete title. Leffingwell v. Warren, 2 Black, 599, 17 L. ed. 261; Campbell v. Holt, 115 U. S. 620, 623, 29 L. ed. 483, 485, 6 Sup. Ct. Rep. 209."

This was quoted in Toltec Ranch Co. v. Cook, 191 U. S. 532, 538, 48 L. ed. 291, 292, 24 Sup. Ct. Rep. 166, 167, and it was remarked:

"Adverse possession, therefore, may be said to transfer the title as effectually as a conveyance from the owner; it may be considered as tantamount to a conveyance."

So far as title to portions of the right of way could be lawfully acquired from the railway company, defendants below, appellees in the supreme court had acquired title to their parcels by adverse possession, and occupied the same position as if they had received conveyances, which the act of April 28, 1904, operated to confirm. The act is remedial, and to be construed accordingly. The lots of some of the defendants were outside of the 200 feet. The lots of others were partly within and partly without the strip. But the act was passed after the judgment of the supreme court was rendered, and while the case was pending here, and it must be left to the state courts to

deal with the matter in the light of the con- | State, in favor of the Northern Pacific Railclusions at which we have arrived.

In Kansas P. R. Co. v. Twombly, 100 U. S. 78, 25 L. ed. 550, which was a writ of error to the supreme court of the territory of Colorado, the act authorizing the action was repealed while the writ was pending in this court, and we, in the exercise of appellate jurisdiction, declined to send the case back to the court below with instructions to enter a judgment of nonsuit, and affirmed the judgment because we found no error.

In the present case, the parties will not be compelled to resort to some form of original proceeding to obtain relief under the act of April 28, 1904, as, apart from that statute, the decree must be reversed, and thereupon the record will be open for such adjudication as the then situation may

demand.

In No. 88, writ of error dismissed; in No. 102, decree reversed and cause remanded for further proceedings not inconsistent with this opinion.

Mr. Justice Harlan was of opinion that the decree of the state supreme court should be affirmed for the reasons given, and, therefore, dissented.

(197 U. S. 9)

way Company, in an action of ejectment to recover possession of a part of its right of way, and remanded the cause, with directions to dismiss the action. Reversed.

See same case below, 28 Wash. 353, 92 Am. St. Rep. 840, 68 Pac. 882.

The facts are stated in the opinion. Messrs. C. W. Bunn and James B. Kerr for plaintiff in error.

No brief was filed for defendants in error.

Mr. Chief Justice Fuller delivered the opinion of the court:

This was an action of ejectment brought by the Northern Pacific Railway Company in the superior court of Kittitas county, Washington, to recover possession of part of its right of way, the land being partly within and partly without a right of way of 200 feet in width. Defendants asserted title by virtue of a homestead application, filed May 24, 1883, final proof July 12, 1888, and patent September 27, 1889; and adverse possession for the period named in the statute of limitations. Judgment was entered in favor of the railway company, and defendants carried the case by appeal to the supreme court of Washington, which held the statute of limitations applicable, reversed the judgment below, and remanded the case with directions to dismiss the action. 28 Wash.

NORTHERN PACIFIC RAILWAY COM- 353, 92 Am. St. Rep. 840, 68 Pac. 882.
PANY, Piff. in Err.,

v.

AUGUST HASSE and

Wife.

The grant of right of way, unlike the land grant, was effective from the date of the act, Hasse, His and the fact that the railroad was not built until after defendants' entry does not affect the disposition of the case. St. Joseph & D.

Adverse possession of railroad right of C. R. Co. v. Baldwin, 103 U. S. 426, 26 L.

way.

This case is governed by the decision in Northern P. R. Co. v. Ely, ante, p. 302.

[No. 118.]

ed. 578; Bybee v. Oregon & C. R. Co. 139 U. S. 663, 679, 35 L. ed. 305, 308, 11 Sup. Ct. Rep. 687.

The judgment must be reversed on the authority of Northern P. R. Co. v. Townsend, 190 U. S. 267, 47 L. ed. 1044, 23 Sup. Ct.

Submitted January 6, 1905. Decided Feb- Rep. 671, and remanded for further pro

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ruary 20, 1905.

N ERROR to the Supreme Court of the State of Washington to review a judgment which reversed a judgment of the Superior Court of Kittitas County, in that 25 S.C.-20.

ceedings not inconsistent with the opinion of this court in Northern P. R. Co. v. Ely, 197 U. S. 1, 25 Sup. Ct. Rep. 302, 49 L. ed. Judgment reversed.

Mr. Justice Harlan dissented.

-

(196 U. S. 516)
FRANK D. THOMPSON, Trustee in Bank-
ruptcy of Herbert E. Moore, Bankrupt,
Plff. in Err.,

HENRY FAIRBANKS.

Courts-when Federal courts will follow decisions of state courts-bankruptcy-preference--enforcement of mortgage lien on after-acquired property.

1.

Whether and to what extent a chattel mortgage covering after-acquired property is valid is a local question on which the decisions of the state courts will be followed by the Federal Supreme Court in determining whether the taking possession of the mortgaged chattels after condition broken amounted to a preference voidable by the mortgagor's trustee in bankruptcy.

2. The decision of a state court as to whether a

conveyance by a bankrupt was made with intent to defraud creditors does not present a Federal question which can be considered by the Federal Supreme Court on writ of error

to a state court.

8. The enforcement in Vermont of the inchoate lien of a valid recorded chattel mortgage covering after-acquired property, by taking possession of such property with the mortgagor's consent after condition broken, as authorized by the mortgage, without fraud, but with knowledge of the mortgagor's insolvency and contemplated bankruptcy, and with the intent to make the lien available for the payment of the mortgage debt before other complications by way of attachment or bankruptcy should arise, does not amount to a preference voidable by the trustee in bankruptcy, although such action was taken within four months of the filing of the petition in bankruptcy, where the mortgage was executed long before that

time.

4. The trustee in bankruptcy has no greater rights as against the bankrupt's chattel mortgagee, who has taken possession of after-acquired property under the mortgage, than he otherwise would have, because of the existence, at the time of the taking such possession, of an attachment and second chattel mortgage which were both dissolved by the bankruptcy proceedings, being respectively levied and given within four months of the filing of the petition in bankruptcy.

[No. 117.]

to review a judgment of the supreme court of the state of Vermont in favor of the defendant in error. 75 Vt. 361, 56 Atl. 11. The facts upon which the judgment rests are as follows: On the 30th day of June, 1900, Herbert E. Moore, of St. Johnsbury, in the state of Vermont, filed his voluntary petition in bankruptcy in the United States district court for the district of Vermont, and on the 3d day of July, 1900, Moore was by the court duly adjudged a bankrupt, and on the 15th of September, 1900, the plaintiff in error was appointed a trustee in bankruptcy of Moore's estate, and duly qualified. He commenced this action in the county court of Caledonia county, in the state of Vermont, on the first Tuesday of June, 1901, against the defendant Fairbanks, to recover from him the value of certain personal property alleged to have belonged to the bankrupt Moore on the 16th day of May, 1900, and which was, as alleged, sold and converted by Fairbanks, on that day, to his own use, the value of the property being $1,500, as averred in the declaration. The defendant filed his plea and gave notice that upon the trial of the case he would give in evidence and rely upon, in defense of the action, certain special matters set up in the plea. The case was, by order of the county court, and by the consent of the parties, referred to a referee to hear the cause and report to the court. It was subsequently heard before the referee, who filed his report, finding the facts upon which the decision of the case must rest. He found that before June, 1886, the bankrupt Moore bought a livery stock and business in St. Johnsbury village, in the state of Vermont. At the time of this purchase the defendant was the lessor of the buildings in which the business was conducted, and it continued to be carried on in those buildings. Moore, in making the purchase, had assumed a mortgage then outstanding on the property, and a short time before March 1, 1888, the defendant assisted him to pay this mortgage by signing a note with him for $1,425, payable to the Passumpsic Savings Bank of St. Johnsbury.

Submitted January 6, 1905. Decided Febru- Subsequently defendant signed notes, which,

IN

ary 20, 1905.

N ERROR to the Supreme Court of t State of Vermont to review a judgment which affirmed a judgment of the County Court of Caledonia County, in that State, in favor of defendant in an action by the trustee in bankruptcy to recover from the bankrupt's mortgagee the proceeds of a sale of the mortgaged property. Affirmed.

with accrued interest, were merged in one, dated March 1, 1900, for $2,510.75, due on demand to said savings bank, signed by the bankrupt and by the defendant as his surety. This note had not been paid when the case was referred to the referee. The defendant also signed other notes payable to the First National Bank of St. Johnsbury, which were merged into one, and, by various payments made by Moore, it was reduced to

See same case below, 75 Vt. 361, 56 Atl. 11. $525, and on June 4, 1900, it was paid by

Statement by Mr. Justice Peckham:
The plaintiff in error, by this writ, seeks

the defendant. All these notes had been signed by the defendant to assist Moore in carrying on, building up, and equipping his

livery stable and livery business, and as be- | Moore became embarrassed, and finally, tween them the notes belonged to Moore to pay. On April 15, 1891, Moore gave the defendant a chattel mortgage on the livery property to secure him for these and other debts and liabilities. The property was described in the mortgage as follows: "All my livery property, consisting of horses, wagons, sleighs, vehicles, harnesses, robes, blankets, etc., also all horses and other livery property that I may purchase in my business or acquire by exchange."

The condition contained in the mortgage was, that if Moore should "well and truly pay, or cause to be paid, to the said Henry Fairbanks all that I now owe him, or may owe him hereafter by note, book account, or in any other manner, and shall well and truly save the said Henry Fairbanks harmless, and indemnify him from paying any commercial paper on which he has become or may hereafter become holden in any manner for my benefit as surety, indorser, or otherwise, then this deed shall be void; otherwise of force."

shortly prior to March 5, 1900, he became and continued wholly insolvent. On May 16, 1900, the defendant, acting under the advice of counsel, and with the consent of Moore, took possession, under the mortgage of April 15, 1891, of all the livery property then on hand, and on June 11, 1900, caused the same to be sold at public auction by the sheriff. It is for the net avails of this sale, amounting to $922.08, which the sheriff paid to the defendant, that this suit is brought. The Passumpsic Savings Bank on September 15, 1900, proved its note of $2,510.75 as an unsecured claim against the bankrupt estate of Moore, as the mortgage held by the bank as security had been given by Moore in March, 1900, to defendant, and by him assigned to the bank within four months of the filing of the petition in bankruptcy.

as plaintiff in the Ryan attachment suit, and to have the lien of Ryan's attachment preserved for the benefit of the general cred

For the purpose of defeating the effect of the defendant taking possession of the livery property under his chattel mortgage of April, 1891, the trustee in bankruptcy preThis mortgage was acknowledged, and the sented a petition to the United States disaffidavit, as provided by the Vermont stat-trict court of Vermont for leave to intervene ute, was appended, showing the justice of the debt and the liability contemplated to be secured by the mortgage, and the mortgage was duly recorded on the 18th day of April,itors. 1891, in the St. Johnsbury clerk's office, by the town clerk thereof. On March 5, 1900, Moore gave the defendant another chattel mortgage on this livery stock, which, on March 23, 1900, defendant assigned to the Passumpsic Savings Bank, and that bank has ever since been its holder and owner. This mortgage was given to secure defendant against all his liabilities for Moore.

On the 7th of May, one John Ryan sued out a writ in assumpsit against Moore to recover some $500, and an attachment on the livery stock was levied in that suit by the deputy sheriff. This attachment remained in force until dissolved by the bankruptcy proceedings, and the suit is still pending in the state court of Vermont.

Under the agreement contained in the chattel mortgage of April, 1891, Moore made sales, purchases, and exchanges of livery stock to such an extent that on March 5, 1900, there only remained of the livery property on hand April 15, 1891, two horses. These sales, exchanges, and purchases were sometimes made by Moore without communication with or advice from the defendant, and frequently after consultation with him. The livery stock, as it existed on May 16, 1900, was all acquired by exchange of the original stock, or with the avails of the old stock, or from the money derived from the business. Some years after the execution of the chattel mortgage of April 15, 1891,

This petition was dismissed by that court. The referee found that the defendant and his counsel knew, when he took possession of the livery property, under his mortgage, that Moore was insolvent, and was considering going into bankruptcy. The referee also found that he did not intend to perpetrate any actual fraud on the other creditors, or any of them, but he did intend thereby to perfect his lien on the livery property, and make it available for the payment of his debt before other complications by way of attachment or bankruptcy arose, and he understood at that time that it was probable that the Ryan attachment would hold good as against his mortgage. All the property of which defendant took possession was acquired by Moore with the full understanding and intent that it should be covered by the defendant's mortgage of April 15, 1891.

Mr. Edward H. Deavitt for plaintiff in error.

Messrs. C. A. Prouty, Harry Blodgett, and Jonathan Ross for defendant in error.

Mr. Justice Peckham, after making the foregoing statement of facts, delivered the opinion of the court:

This is a contest between a trustee in bankruptcy representing the creditors of the bankrupt, and the defendant, the mortgagee in a chattel mortgage dated and executed

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