on account of these failures in its land grant, which claim was disallowed. The proofs show that the railroad company received the lands in controversy in good faith, under its grant, and that it has sold all of said lands to innocent purchasers for value.

1. The title of the granting act in question is "An act making a grant of alternate sections of the public lands to the state of Michigan," etc. The granting words are:

"That there be and hereby is granted to the state of Michigan, to aid in the construction of railroads, * every alternate section of land designated by odd numbers for six sections in width on each side of said roads." June 3, 1856, c. 44, 11 Stat. 21.

Act

The act expressly excepts "any and all lands heretofore reserved to the United States by any act of Congress, or in any other manner, by competent authority, for the purpose of aiding in any object of internal improvement, or for any other purpose whatsoever." It is now well settled that the grant in question was one in præsenti; that it was confined to public lands; and that lands not public at the date of the grant, viz., June 3, 1856, did not pass under it, even though they later, and before the date of definite location, became public lands. St. Paul & Pacific R. R. Co. v. Northern Pacific R. R. Co., 139 U. S. 1, 11 Sup. Ct. 389, 35 L. Ed. 77; Bardon v. Northern Pacific R. R. Co., 145 U. S. 535, 12 Sup. Ct. 856, 36 L. Ed. 806; United States v. Southern Pacific R. R. Co., 146 U. S. 570, 13 Sup. Ct. 152, 36 L. Ed. 1091; Northern Lumber Co. v. O'Brien, 139 Fed. 614, 71 C. C. A. 598; Id., 27 Sup. Ct. 249, 204 U. S. 190, 51 L. Ed. 438. The Indian treaty contained the clause:

"This agreement shall be obligatory and binding on the contracting parties as soon as the same shall be ratified by the President and Senate of the United States." 11 Stat. (2d Sess. 34th Cong.) p. 631.

The treaty therefore did not legally take effect until proclaimed by the President, viz., September 10, 1856. Shepard v. Northwestern Life Ins. Co. (C. C.) 40 Fed. 341, 347. The reservation of the lands in question by the President, for the purposes of the contemplated treaty, was by "competent authority," which has not been limited, by the decisions, to cases of actual prior appropriation or Congressional grant, but has been extended to withdrawals in advance of actual grant, and to meet anticipated appropriations. Wilcox v. McConnell, 13 Pet. 498, 10 L. Ed. 264; Grisar v. McDowell, 6 Wall. 363, 381, 18 L. Ed. 863; United States v. Payne (D. C.) 8 Fed. 883, 888; United States v. Leathers, 6 Sawy. 17, Fed. Cas. No. 15,581. The lands reserved were therefore excluded from the subsequent railroad grant, even although it turned out that such reserved lands were not needed for the purpose for which the reservation was made, unless the railroad grant contained a clear declaration of an intent to include them. Wolcott v. Des Moines Co., 5 Wall. 681, 688, 18 L. Ed. 689; Wolsey v. Chapman, 101 U. S. 755, 768, 25 L. Ed. 915; Wisconsin Central R. R. Co. v. Forsythe, 159 U. S. 46, 54, 55, 15 Sup. Ct. 1020, 40 L. Ed. 71; Spencer v. McDougal, 159 U. S. 62, 15 Sup. Ct. 1026, 40 L Ed. 76; Northern Pacific R. R. Co. v. Musser-Sauntry Co., 168 U. S. 604, 607, 610, 18 Sup. Ct. 205, 42 L. Ed. 596; Northern Lumber

Co. v. O'Brien, 139 Fed. 614, 71 C. C. A. 598; Id., 27 Sup. Ct. 249, 204 U. S. 190, 51 L. Ed. 438.

The reservation clause employed in the grant in question has been attached to all railroad land grants since 1850. The words "public lands" have been held to designate such land as is subject to sale or other disposition under the general laws, but not such as is reserved by competent authority, for any purpose or in any manner, although no exception is made of it. Leavenworth, etc., R. R. Co. v. United States, 92 U. S. 733, 746, 749, 23 L. Ed. 634; Williams v. Baker, 17 Wall. 144, 21 L. Ed. 561; Newhall v. Sanger, 92 U. S. 761, 763, 23 L. Ed. 769; No. Pacific R. R. Co. v. Musser-Sauntry Co., 168 U. S. 609, 18 Sup. Ct. 205, 42 L. Ed. 596; United States v. So. Pacific R. Co., 146 U. S. 570, 13 Sup. Ct. 152, 36 L. Ed. 1091; Northern Lumber Co. v. O'Brien, 139 Fed. 614, 71 C. C. A. 598; Id., 27 Sup. Ct. 249, 204 U. S. 190, 51 L. Ed. 438.

The provision in the granting act for indemnity in lieu of lands sold or pre-empted does not indicate an intention to grant any but public lands. Leavenworth, etc., R. R. Co. v. United States, supra. The fact that the withdrawal was conditional upon the land being required for the purposes of the treaty, and that the Indians were to have no rights in them until after legislation should invest them with the legal title, does not destroy the effectiveness of the withdrawal. Wolcott v. Des Moines Co., supra; Wolsey v. Chapman, supra; Williams v. Baker, 17 Wall. 144, 21 L. Ed. 561; Homestead Co. v. Valley R. R., 17 Wall. 153, 21 L. Ed. 622; Wisconsin Central R. R. v. For sythe, supra; Spencer v. McDougal, supra; No. Pacific R. R. Co. v. Musser-Sauntry Co., supra.

The construction put upon the grant by the Land Department, as not excepting lands reserved for Indian purposes, cannot legally prevail against a clearly correct legal interpretation. Wilcox v. McCon nell, 13 Pet. 511, 10 L. Ed. 264; Wisconsin Central R. R. Co. v. Forsythe, 159 U. S. 46, 61, 15 Sup. Ct. 1020, 40 L. Ed. 71, and cases there cited. If the views above expressed are correct, it results that the lands in question were in contemplation of law reserved from the grant of June 3, 1856, and did not legally pass thereunder.

2. It does not follow, however, that complainant is entitled to relief here. Complainant is in a court of equity, and such court will not "give its aid in the assertion of a mere legal right, contrary to the clear equity and justice of the case." Jones v. New York Guar anty Co., 101 U. S. 628, 25 L. Ed. 1030. The fact that the complainant is the United States does not affect the rule. In order to recover, it must show the same equities as if it were a private party, United States v. Flint, 4 Sawy. 42, 58, Fed. Cas. No. 15,121; United States v. Detroit Lumber Co., 200 U. S. 321, 339, 26 Sup. Ct. 282, 50 L. Ed. 499. The equities of the case are opposed to the recognition of the claim presented. The United States and the defendant railroad company entered into a contract by which the railroad company, in consideration of building the road, was to receive certain lands. It was contemplated that on performing its contract it should receive the full amount granted. Wisconsin Central Railroad Co. v. Forsythe, 159 U. S. 46, 60, 15 Sup. Ct. 1020, 40 L. Ed. 71. The railroad company has

performed its contract in full. Its failure to receive its full quota of lands is to the extent of five times the amount for which payment is now asked. By the undisputed testimony, the railroad company has received the lands in question not only in good faith on its own part, but under a good faith construction put upon the grant by the government's Land Department. By like undisputed proofs, all the lands in question have been sold to, and are held by, good faith purchasers. whose titles are required by law to be confirmed. In no event, therefore, can the patents be canceled; nor could complainant be granted relief beyond a money judgment for the minimum government price of $1.25 per acre. To award such money judgment would not be to "adjust" the grants, for there are no longer any indemnity lands which could be substituted, but would result, through a technicality, in accomplishing an obvious injustice, for although technically, when the grant took effect, viz., at its date, the lands in question were reserved from sale, and thus did not legally pass; yet when the line was definitely located, and, when the lands were certified, they had been released from the reservation, and were public lands, subject to sale and to disposition by Congress. No other disposition has in fact been made of them, and the rights of no others have intervened. Moreover, before the grant was made (June 3, 1856), the Indian treaty had been actually signed (July 31, 1855), the Land Commissioner's order thereon had treated only the lands embraced in the treaty as reserved (August 1, 1855), and the Senate had amended and ratified the treaty (April 15, 1856), and nothing remained for a proper return to the public domain of the lands here in question but the assent by the Indians to the Senate amendments and the proclamation by the President. The government, in certifying the lands, simply carried out the obvious understanding of both parties to the grant, and did what Congress ought equitably to have authorized, and what it is assumed it would have directed had the grant been then construed as excluding the lands formerly conditionally reserved for Indian purposes, but at that time released from such reservation. The construction put by both parties upon the grant was in accordance with the general construction of such grants on the part of the government for some years before and until some years after the certifying of the lands, viz.: That the status at the time of the filing of the map of definite location, rather than at the date of the grant, governed. Meanwhile, acting upon the construction put by the government upon the grant, the railroad company has for many years paid taxes upon the lands in question, in excess of the government price of the lands. More than this, since the filing by the railroad of its map of definite location, the United States has disposed of more than 23,000 acres of such lands, which were properly available to the railroad company under its grant. It may well be that the railroad company has no legal remedy on acCount of its failure to receive all the lands contemplated, but equity forbids that it should be compelled, under the circumstances here shown, to pay the United States for land to which, as between it and the railroad company, the latter is equitably entitled. The case clearly comes within the decision in United States v. Winona, etc., R. R. Co., 165 U. S. 463, 17 Sup. Ct. 368, 41 L. Ed. 789 (decided since the filing

of the bill in this cause), which case involved similar facts, and was brought under the same statutory authority. The language used by Justice Brewer, in that case, at pages 474 and 475, of 165 U. S., 17 Sup. Ct. 368, 41 L. Ed. 789 is peculiarly applicable to the facts presented here.

It follows that complainant is not entitled to any of the relief prayed. The bill should be dismissed, and decree entered confirming the titles of the individual purchasers.

SELMA WATER CO. v. CITY OF SELMA.

(Circuit Court, S. D. Alabama, N. D. April 2, 1907.)

No. 254.

1. INJUNCTION-BREACH OF COVENANT-EQUITABLE INTERFERENCE.

It is not requisite that a breach of covenant shall have been actually committed in order that an injunction may be issued; it being sufficient that defendant insists on its right to perform the act in question, which, if done, will constitute a breach.

[Ed. Note. For cases in point, see Cent. Dig. vol. 27, Injunction, 9-13, 111-115.]

2 SAME-FRANCHISE-VIOLATION.

Complainant acquired a franchise from defendant city for the exclusive right to maintain and operate waterworks in the city until July 12, 1915: the city reserving the right to purchase the works by paying an agreed or appraised value. Complainant alleged that in April, 1906, the city au thorized the issuance of bonds to purchase or construct a waterworks plant, and that in November the city passed an ordinance directing that the finance committee of the council and the mayor take further proceedings for the purchase of the water plant or "for building and equipping a water plant." whereupon the city notified complainant of its desire to purchase. Defendant in its answer admitted that complainant had an exclusive franchise to maintain waterworks in the city until July 12, 1915. and denied any intention to violate such franchise. Held, that the fact that the ordinances authorized the issuance of bonds for the purpose “of constructing," as well as purchasing, a water plant, did not show an intention on defendant's part to violate complainant's franchise, and was therefore insufficient to justify the issuance of an injunction.

[Ed. Note. For cases in point, see Cent. Dig. vol. 27, Injunction, { 9-13.]

In Equity. On a motion for a preliminary injunction.

The bill avers that on July 12, 1890, the municipality of Selma and the complainant entered into a contract, by which said municipality granted to the complainant the exclusive right and franchise to construct, maintain, and operate waterworks in said city of Selma for public and private supply of water therein for the period of 25 years from that time, and it avers that the con plainant did construct and has maintained and operated said waterworks since the execution of said contract, and now has and holds as a vested right under said contract the exclusive right and franchise to construct, maintain, and operate waterworks in said Selma for public and private supply of water there in, and further avers that by said grant said Selma did exclude itself during said 25 years from constructing, maintaining, and operating a waterworks for the purpose aforesaid in said city of Selma, on certain considerations and conditions set out in said contract unnecessary to be mentioned here, excep that it was agreed by complainant that it would sell said waterworks to said municipality of Selma if said municipality should so elect after the expiration

of five years from the date of the contract, and, if the parties could not agree as to the price to be paid to complainant, then said works might be purchased by defendant at an appraised value to be determined by appraisers as in the contract provided.

The bill avers that on February 26, 1906, the municipal authorities of Selma adopted an ordinance ordering an election to be held on April 2, 1906, for the purpose of allowing the qualified voters of Selma to vote upon the question whether or not bonds of the said city of Selma to the amount of $150,000 should be issued by said city for the purpose of purchasing or constructing a waterworks plant, and that the result of said election was in favor of the issuance of said bonds.

The bill further avers that complainant's exclusive right and franchises under said contract do not expire until the 12th of July, 1915, and that until that time said Selma has no right to construct, maintain, or operate waterworks, and no right to issue bonds to build or construct waterworks for the public and private supply of water in said city.

The bill further avers that on November 5, 1906, Selma passed an ordinance that the finance committee, with the mayor added, be authorized to take such further action as they may deem best for the purchase of the water plant, or for building and equipping a water plant.

The bill also avers that the city of Selma had, the right to purchase complainant's waterworks, and that on December 7, 1906, it notified the complainant of its desire to purchase the same under its right to do so as provided by the contract.

The bill avers that, if Selma is permitted to issue said bonds and construct waterworks and furnish said city and inhabitants with water, the complainant's franchise will be greatly and seriously impaired, and it prays that the defendant be enjoined from assuming to abrogate and take away the franchises and contract rights of complainant.

Mallory & Mallory, for complainant.

Pettus, Jeffries & Pettus, for defendant.

TOULMIN, District Judge (after stating the facts). The gravamen of the complaint is that the complainant has contract franchises and rights which the defendant has violated, and which will be greatly and seriously impaired thereby.

The motion for a preliminary injunction is submitted on the bill and answer and affidavits in connection therewith. If the contract rights of the complainant are clearly established, and the violation of them is apparent, an injunction may be granted. It is not requisite that a breach of covenant against which preventive relief is sought shall have been actually committed. It is sufficient ground of interference that defendant insists upon its right to do the act in question; but equity will not assume that the defendant intends to violate its Covenant, and will not interfere unless it is manifest that a breach is intended. 2 High on Injunctions, p. 744, § 1137. "An injunction pendente lite ought not to be issued except in clear cases of right." Amelia Milling Co. v. Tenn. C. I. & R. R. Co. (C. C.) 123 Fed. 811. It is admitted by defendant in its answer that the complainant, as averred in its bill, has the exclusive right and franchise to construct. maintain, and operate waterworks for public and private supply of water in the city of Selma until the expiration of said contract, to wit, the 12th of July, 1915. The contract rights of the complainant being established, the first question to be considered is: Is it clear or apparent that there has been a violation of these rights, or that such violation is intended, by the defendant?