United States v. Union Pacific Railroad Company

PETITIONER:United States
RESPONDENT:Union Pacific Railroad Company
LOCATION:Military Stockade

DOCKET NO.: 97
DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 353 US 112 (1957)
ARGUED: Jan 23, 1957
DECIDED: Apr 08, 1957

Facts of the case

Question

Audio Transcription for Oral Argument – January 23, 1957 in United States v. Union Pacific Railroad Company

Earl Warren:

Number 97, United States of America versus Union Pacific Railroad Company.

Mr. Solicitor General.

J. Lee Rankin:

Mr. Chief Justice, may it please the Court.

This is an action where the United States seeks an injunction against the Union Pacific Railroad Company for its taking gas and oil from under the right of way in a small area of an 80-acre section in the State of Wyoming.

The question that is presented is whether the grant by the United States to the respondent in the year 1862 under the terms of “the right of way through the public lands for the construction of said railroad and telegraph line” conveyed the title to oil and gas deposits underlying the right of way so that respondent may remove or dispose of such deposits.

The issue in the case entirely turns upon the construction of the statute.

The statute is set out on pages 2 and 3 of the Government’s brief.

I’d like to call to your attention briefly the terms which we think the controversy turns upon.

You will note in Section 2 that — that there is a grant of the right of way and a provision for materials for the railroad’s construction.

And, the right of way grant, like that in the Great Northern case, is of “the” right of way, not “a” right of way, and also includes the right to take from lands adjacent to the land of the road earth, stone, timber, and other materials for construction thereof.

The grant is to the extent of 200 feet on each side of the line of the road.

And, Section 3 is the section in regard to what is generally called place lands.

It involves the section that provides for the financing of the road, providing the lands by means of which it was thought the railroad would be induced and able to finance the construction necessary to complete it.

And, in that section, there is a proviso, after providing the large number of acres that would be allowed to the railroad if it accomplished the construction provided, about halfway down on page 3, that all mineral lands shall be excepted from the operation of this Act.

And, I dwell upon the word “Act” because the legislative history in regard to that is quite important in the eyes of the Government.

There are several rules of construction that apply to the statute or in the grant in this case and are generally recognized.

One of them is that any grant of this type by the sovereign must be strictly construed that it shall be liberally construed in regard to accomplishing the purpose by which the grant was made.

And, if all, you are trying to determine the rights that will pass under the grant, that it must be strictly determined in accordance with the explicit and clear terms of conveyance in the Act of grant.

Now, the legislative history of this particular proviso was that, in the House, they first had a provision for Act, that is, that the mineral lands that were not to be covered by the grant would be limited to the Act generally.

And then, it was amended in the House to apply only to that particular section which would have the effect of applying the reservation of the mineral lands under the grant of the Act only to the place lands in Section 3.

Then, when the bill got to dissent without any explanation, we were able to discover the Senate changed and put back in the word “Act,” so that the reservation of the grant of the entire Act should not apply — should apply to the entire Act, all sections and not merely to the Section 3 in which the proviso was contained.

Now, there’s a difference between the Government and the respond in regard to the purpose of that change.

It’s contended by the respondent that the change was made so that subsequent sections of the same Act, which provided for other railroads to be or to have certain place lands and have certain financing assistance through such lands, would have the provisions of that section apply to it and that, therefore, the word “Act” was inserted for that purpose.

But, the Act provided that these subsequent grants should, in all cases, be upon the same terms and conditions in all respects as provided in this Act for the construction of the railroad and telegraph line first mentioned.

The Government contends that you don’t have to insert the word “Act” in the proviso at all to make that, the whole provision in regard to the prior sections of the right of way grant and the Section 3 place lands grant, apply.

That the only purpose that Congress could have had was to carry out its purpose of withholding mineral lands from the grant involved under this Act.

William J. Brennan, Jr.:

In — in the House that — that word was “section”?

J. Lee Rankin:

It was, first, “section” and then it was changed — it was, first, “Act” and then it was changed to “section” in the House.

Then, in the Senate, it was changed to “Act” and the House agreed to “Act” change, so that the bill as finally passed was “Act.”

William J. Brennan, Jr.:

No discussion of it at all?

J. Lee Rankin:

No.

But, it does seem to us that it shows a considerable deliberation when the history shows that it was, first, a provision of Act and then changed to “section” deliberately by the House.

And then, the Senate changed it to “Act” and the House agreed to “Act,” so that there was complete agreement in the final terms that was passed in — as “Act.”

Harold Burton:

Does that mean then, in the case of mineral lands, there shall not be any place lands taken from the mineral lands?

J. Lee Rankin:

We construe it as meaning that not only should there be no mineral lands in any place lands that were granted under the Act, but that there could be no mineral lands involved or mineral rights involved in the right of way which was part of the same Act.

Harold Burton:

Isn’t there a distinction between mineral lands and mineral rights?

J. Lee Rankin:

There is, and in the history of Congress dealing with this subject, it did, in time, get around to the consideration of mineral rights as distinguished from mineral lands.

And, the court of appeals relied upon that as one of the principal grounds for its holding.

Harold Burton:

It would be necessary, wouldn’t it, for the right of way to go straight ahead, whether there are any mineral lands there or not.

J. Lee Rankin:

Yes, that’s true, but we think that the — the action of Congress in the history of the time was such that Congress want to make as clear as it possibly could still making it possible for the railroad to go through to withhold minerals and that was the fundamental purpose that Congress was trying to carry out by this action in the proviso and also the history of the period at the times.

Harold Burton:

It said nothing in Act about mineral rights in that question.

J. Lee Rankin:

No, there is not.

It says mineral lands and not mineral rights.

Now, the history of the period indicates very clearly that the Congress was very much interested in mineral lands and minerals and the potential for the country in the development of minerals from the period of 1849, with the great discovery in California and the gold strike, and it was upper most in their mind.

Also, it must be kept in our minds that, at that time, in considering this history, gold was selling for $16 an ounce and that if Congress happened, by purposely or inadvertently, to include great gold strikes within this grant, that they might very probably be far more valuable than all of the lands that they were trying to provide to aid this construction.

But, throughout this period, from 1849 to 1862, the Congress was very careful in showing its intent that it should withhold the mineral lands from any grants to railroads or others.

This Court held, in view of that history, in a grant to the State of California and another grant to the State of Utah of school lands in certain alternate sections that even though those grants said nothing about the withholding of mineral lands with the proviso such as we have in this grant — this Act of 1862, that it was the history and the intention of Congress during this period to protect these very valuable minerals and it was the purpose of Congress by that Act.

And, although there was no such statement in two — in both of those cases, that the grant to the State of California of the school lands did not include any mineral lands within its grant and the grant to the State of Utah did not include any such lands within its grant.

Felix Frankfurter:

Could you tell us the date of those granting Acts?

J. Lee Rankin:

The granting Acts of the —

Felix Frankfurter:

California and Utah.

J. Lee Rankin:

— California and Utah were before 1862.

I think they were sometime between 1850 and 1862.

They were before 1862.

Felix Frankfurter:

Is there a body of the Act in other — other than those two grants to the states from which you are arguing a pattern and — withholding it did not require explicit as to the expression of the parties?

J. Lee Rankin:

Well, there was a pattern that was followed that’s described in the mining company case by this Court in which it dealt with the California lands school grants in which it — the Court described the history and said that it was the purpose of the Congress for the period from about 1849 or 1850 onto 1866 to withhold all mineral lands from any grants and that, during that period, the Congress was trying to decide and determine upon a program for the handling of mineral lands and how they could be acquired.

Felix Frankfurter:

By withholding, did that mean by a specific — by exquisite reservation or that reservation was implied merely by what is granted?

J. Lee Rankin:

Very largely, by the way it was granted and by virtue of other provisions where they would not even permits the lands — the mineral lands to be surveyed, so that there couldn’t be any preemption or entries or other action in accordance with the homestead and other special law.

Felix Frankfurter:

It would involve it indicated it.

J. Lee Rankin:

Well, it seems to us that it indicated how clearly Congress wanted to do that.

Felix Frankfurter:

That’s how such a statute, where you quickly prevail, raise and unfold on the reservation.

They just wanted to mark it up and infer the disposition, certainly.

J. Lee Rankin:

That’s right.

Felix Frankfurter:

And, here, you derive the reservation from your facts that the land, the mineral will grow, if they would, and the grant would merely do.

You’re restricted to the face of the grant.

There’s nothing beneath or above it, is there?

J. Lee Rankin:

Yes.

And, the grant should be construed where it’s in behalf of the whole country in such a way as to try to carry out the purpose of the Congress in making it and, certainly, it was not necessary to have this railroad constructed that it be able to explore for business purposes and extract oil and gas any more than it was to explore for gold or precious metals in this area.

Felix Frankfurter:

But, your argument is that there wasn’t an implied conveyance of a fee.

J. Lee Rankin:

That’s right.

Felix Frankfurter:

That’s what it gets down to, isn’t it?

J. Lee Rankin:

Now, the — the Court has said, in several cases that we have to deal with, that there was a limited fee in connection with — with grants under this very Act of the right of way.

And, we think that those cases do not need to be overruled, that if they are not extended to cover oil and gas which was not — has never been considered by this Court before with regard to this particular Act and if they are limited to the facts of those cases and what the Court was trying to deal with in allowing the right of way to be used in a manner that would be properly contemplated for the railroad purposes, that the cases present no real problem to the Court.

But, to try to extend them to cover oil and gas which even at this late date, almost 94 years later, it’s the first time that it’s being asserted in the courts, that they have any such right and, certainly, is not necessary or closely related in any way to the railroad operation or what Congress had in mind at that time.

Now, we concede, as argued in the — by respondent in the brief, that the Government was eager to have the railroads constructed in the West during this period, and there’s no question about that and the Government concedes.

But, the — at the same time, the Congress was very explicit and careful not to make grants that would include the minerals and mineral rights in connection with these lands and to try to withhold, in every way that it could conceive at the time, the mineral lands from any exploitation or being given away in relation to these grants.

Now, it has been said in the Great Northern case by the Court that the United States did make lavish grants in connection with these railroad grants.

Particularly talking about that case, the Northern Pacific is probably the most extravagant or elaborates grants and the Union Pacific was also very substantial large grants.

But, if you take into account the fact that the Government was, in one section, placing a value of $1.25 per acre on the lands, if they were not sold within a certain time, that they would be open for sale at that price.

You could see that the United States was trying to evaluate the grant that it was making in relation to the problem to be solved in providing for the construction of this railroad.

Well, if you would try to apply that to oil and gas values, which were even then developed in 1862 in this country, and the State of Pennsylvania where we had 3 million barrels of oil being produced, and it’s fair to assume Congress was aware of that situation, that the grant, in — in — if you would construe it to include minerals and gas and oil and other rights of that type, would certainly be almost beyond calculation.

Earl Warren:

We’ll recess now.

Mr. Solicitor General, you may proceed.

J. Lee Rankin:

Mr. Justice Burton asked me about the — the date of the grant to California and also to Utah.

The date of the grant to California was 1853.

I also said that the grant to Utah was earlier and it was in 1894, which was considerably after even the Great Northern grant probably due to the fact of the time it became a state, but it was not in this prior period.

Charles E. Whittaker:

Do you happen to know anything about the mineral — if there was a method of getting mineral lands, was it not about this time?

J. Lee Rankin:

There was very largely under the local regulations of the various areas and they — the miners —

Charles E. Whittaker:

But there is congressional enactment for it, wasn’t there?

J. Lee Rankin:

There were some congressional enactments, too, that provided for leases and that the Government should have royalties covering some areas in Indiana and Missouri and some others, and then, the Congress had recognized the local mining laws that had been established by the miners.

J. Lee Rankin:

And, in view of these great gold strikes and the interest the whole country had, the Congress determined to look into the entire matter and see what should be done.

And, it wasn’t until 1866 that they developed a considerable program for the acquisition of mineral lands and how it could be done, and so forth.

That is referred to by respondents in their brief and they talk about the fact that this was one way to get the mineral lands or the minerals, under the right of way, developed.

The argument seems rather shallow to us in view of the fact that it’s almost 100 years after the grant and they’re just starting to try to develop them as far as oil and gas is concerned.

But, furthermore, when Congress did see fit to provide for the — a manner in which you could acquire or obtain title to mineral lands, they were very careful to put certain limitations on it.

One of which was that you had to make some development of at least $100 a year, a total of $500, in order to be able to get title to it.

And, another was that you were limited to the extent of the vane that you would be able to get the title to the land above and — and be able to explore as a mineral right, and that even a group or association could only follow a vane or a load for a certain distance.

So, there was a deliberate attempt on the part of Congress, when it did address itself to this particular problem, to try to avoid the monopoly and to also encourage and require a considered and careful policy of developing the minerals rather than being able to transfer them to somebody like this concept would be where they could hold them for 100 years or 1000 years and just have them in the ground without having the benefit of their development for any interest of he country.

Harold Burton:

But, even in 1862, the phrase “mineral land” as it appears in the statute wasn’t just a way of saying land that might have minerals under them, was it?It was — it was a legal phrase that had a meaning of its own.

So — so, you could identify what they meant when they said mineral land.

J. Lee Rankin:

It was generally contemplated as lands that would have minerals and the Government would then — it was provided that the Government would, through the Department of Interior, determine whether the lands did have minerals and they would then be opened up after that determination for preemption and entry, and so forth.

Harold Burton:

When they said except mineral lands, they meant except those kinds of lands that the Government had designated in — in some manner as mineral lands, not all lands that might possibly have minerals under them.

J. Lee Rankin:

All that the Government would designate either then or at some future date prior to the time that the title was acquired to them.

There — the — this Court has dealt with the question of where the minerals were discovered after the lands were sold — the place lands were sold by the railroad and held that they still could pass a good title because it was necessary to the granting aid that they’d be able to get money to — for the construction purposes.

But, it wasn’t — Congress knew that the minerals had not all been discovered and that Government had not been able, in — back at this date, to cover all of these area and determine the extent of the mineral lands.

So, that was in the process, but the term “mineral lands” meant lands that were — that did contain minerals and that would be so determined by the Government as it examined the various tracks of land that were in public ownership throughout the country.

William J. Brennan, Jr.:

Well, there must have been some of that done at this time.

J. Lee Rankin:

Some of it had been done.

William J. Brennan, Jr.:

It’s a regular, I suppose, regulations of the Department of Interior in response to the legislation of Congress that identified the mineral land.

To take — take the place land here in Section (a) of so and so that hasn’t — that had not been declared to be a mineral land by the Department of the Interior.

J. Lee Rankin:

Yes.

William J. Brennan, Jr.:

If anyone got that piece of property and, later, the whole vane was discovered on it or coal or whatever it was.

They didn’t lose their title, did they?

J. Lee Rankin:

No.

William J. Brennan, Jr.:

Or did their — their title didn’t right them until that particular section had been passed on, is that what you’re saying?

J. Lee Rankin:

Well, in part, it was the practice to try to — for the Government to try to determine whether they were mineral lands as rapidly as they could.

And, the vast areas, that’s one of the difficulties that developed in the history here which I will try to relate to you, vast areas were withdrawn from entry and the right to acquire title as settlers after this grant because the railroads were given an opportunity to make a choice of certain sections of lands and they — the grant did not define exactly just what sections they would get.

They would get the ultimate sections within a certain area but that area had to be within a certain distance of the right of way or the line of the railroad, and the railroad had not — the line of the railroad had not yet been fixed.

And, it was, later, determined that it would start from Omaha and go at the most direct route West, but it could have varied probably several hundreds of miles in trying to comply with that.

But, then, it was the policy of the Government to try to withdraw large areas of these lands from settlement during the period that the railroad was trying to determine whether some of these were mineral lands and so designated by the Department of Interior and, therefore, not open to them and they had to take other lands in place of them.

J. Lee Rankin:

And, the settlers became very unhappy with the situation because, in effect, held these lands back so that they couldn’t settle on them at all while the railroad was making up its mind as to just where the route would be and also what lands it would take.

William J. Brennan, Jr.:

Yes, but the railroad had either within its power or subject to the approval of the Government to locate its railroad, and then, it did have a choice within 10 miles of — of that mine.

J. Lee Rankin:

That’s right.

William J. Brennan, Jr.:

It had a choice of everything except mineral lands.

J. Lee Rankin:

That’s right.

William J. Brennan, Jr.:

And, that was at the time that the Act was passed?

Both of those things were in the Act.

Now, was there a — then a legal provision as to how the railroad could tell what were these mineral lands?

J. Lee Rankin:

Well, the practice was —

William J. Brennan, Jr.:

Was it the legislation of Congress that fixed it?

J. Lee Rankin:

The practice was for the Department of Interior to proceed to ascertain insofar as they could and, of course, as a matter of fact, they did not and that gave rise to some disputes later on where they discovered minerals after the time that the railroad had taken them as place lands and settlers claimed that they were entitled to them against the interest of the railroad.

And, this Court held that, for the purpose of the grant, it was necessary that they’d be able to pass the title to them and that, once the Government had made a determination that they were not mineral lands, that that was — that would have to be conclusive on the Government.

Does that answer your question?

I’m sorry.

William J. Brennan, Jr.:

Mr. Solicitor General, are there other grants, in addition to this one, which raises the question who would get it?

J. Lee Rankin:

Yes, probably the one that the Court would be familiar with is the one involving the Great Northern, which was in 1875.

And, it expressly did not include any place lands at all.

So, it only involved a right of way and the same language as far as being “the” right of way and not “a” right of way, as characterized as in this grant.

And, the Court held there that oil and gas was not included in the grant.

Now, there were two other provisions in that grant that are different than this, in this case, in 1862.

One of them was a provision that if the railroad right of way or line should go through a canyon, defiled, or passed, that that would have to be used in common with any other railroad that came along.

And, another was that, the — as soon as the right of — the line was established, that that should be entered upon the county land titles or records and, after that date, any conveyances by the Government would have to be subject to it.

Now, the Court relied on those three things in addition to the policy in the 1875 grant in the Great Northern case in deciding that the gas and oil did not pass through the railroad.

And, there is — in the history, there is an explanation for the reason for each of those other provisions in the right of way in the Great Northern case.

The canyon, defiled, or passed provision was inserted, according to the history, because railroads would get established and have their line determined through a pass in that — the area in the Great Northern, and then, they would not go ahead with the construction but they would, be able to — because they had the only practicable way through the mountains at that point, be able to sell that line to a great advantage, and all have a monopoly.

And, the Congress was trying to meet that problem that had developed in its experience in making that provision.

And, of course, it had not occurred in the Union Pacific because, at that time, they were only considering three different ways.

One was the Southern line, and one was the central, and one was the Northern.

And, it was in its later period of the history that they try to provide for additional railroads in the Northern area.

Then, on the latter provision, the — that was inserted because the country had developed to such an extent between 1862 and 1875 where the settlers which were more — quite limited in earlier period, were going out into this country and were very unhappy and complaining to Congress because the railroad was so slow in taking up its particular grants and place lands and establishing its line, and that the — a right to settle was held up until that was completed.

J. Lee Rankin:

So, by this device of providing that all conveyances would be subject to this as soon as the line was established and would be recorded on the local land offices, they were trying to take care of those complaints of the settlers and be able to go ahead with the transfers and conveyances to settlers instead of having — having to hold the matter in abeyance for such a long period of time and having them unhappy about not being able to enter and develop them.

The Court also relied in the Great Northern case upon the principle that these grants should be strictly construed in favor of the Government, that they should be construed as — with regard to their purpose liberally so as to carry that out, that the Court could find no reason for any purpose in the grant of the railroad right of way and the grant that was made by Congress to believe that oil and gas was contemplated or intended in any regard in connection with it.

There was nothing to indicate it in the history and the history of the times.

The Court said that the legislative policy changed, and that was a very important consideration of the Court in the Great Northern case in regard to the 1875 grant.

And, the Government concedes that the policy changed, but the policy changed from time to time as we moved through this era from the discovery of gold in the 1849 on.

And, it first — the grant to the Illinois Central was one of the cases relied upon.

It wasn’t decided by this Court.

It was decided by the Illinois Court and Court of Appeals, and this Court did not examine the question.

It was a grant of 1850 in which where the grant was made to the State of Illinois.

And, there was no provision and no — of any kind in regard to withholding mineral lands.

Then, when the grant was made by the State of Illinois to the railroad, they made the grant of the right of way and the lands in fee, simple, and so recited in so many words.

And, the Court relied a great deal upon that terminology that, in 1862, the history shows that Congress had progressed to the place where it wanted to make very certain that these mineral lands would be withheld, and it so did.

Then, we get down to 1875 with the Great Northern grant, and they didn’t give them any place lands of any kind.

They just gave them the right of way.

And, later on, we get on to the 1909 period in which Congress tried to separate the surface from the minerals, dealing with the mineral rights question.

But, it’s contended by the respondent that that showed that Congress knew the difference between mineral rights and mineral lands and was doing that for the deliberate purpose of treating them as a reservation of mineral rights and preserving the minerals in that manner.

The Government contends that that wasn’t the purpose of it at all.

We recognize there is a difference, but Congress was trying to protect mineral lands, any lands that had minerals on them, from prior to 1862 right on through.

And, in 1909, it was trying to deal with the problem of the surface use of those lands, and the history shows it.

And, at that time, when it tried to separate and did separate it, the provision in regard to the reservation of mineral rights and the surface use of the lands by the legislation in 1909, the history shows that it was for the purpose of making available to settlers the right to use those — the surface.

And, the settlers were complaining that the minerals — mineral lands reservation was withholding these lands from their use, that the development of the minerals in the lands would not, in any way, interfere with the use, in — to a very large extent, of the surface and that they would be — the one would be separated from the other in the grant that they could make use of large areas of the country which are then — then —

William J. Brennan, Jr.:

Tell me, what — what title interest did the railroad get under this grant, as you see?

J. Lee Rankin:

Well, they claim that, under some decisions of this Court, they have a limited fee or a base fee, a fee of simple title except for the right of the fees.

William J. Brennan, Jr.:

They’re feasible if they don’t do certain things.

J. Lee Rankin:

If they didn’t complete the railroad and they have to also maintain it under the grant.

William J. Brennan, Jr.:

Well, what was the Government’s position as to the interest?

J. Lee Rankin:

Well, the Government contends that the Congress isn’t bound by any such conveyancing rules as to the form of the state under general principles of conveyancing.

It’s a question of what was intended by the Congress in the — in the grant and the purpose of the grant, what Congress was trying to accomplish.

And, it’s contended by the Government it’s very plain that Congress didn’t want to grant any minerals to this railroad because of the way the history developed and the way it expressly provided otherwise.

And, therefore, that you don’t have to reach the question of the character of the estate and that, seems to us, is demonstrated by the Great Northern case.

J. Lee Rankin:

That the Court there held that the railroad only got an easement, but it wasn’t necessary to the decision to even go that far because it was clear from the history that it was never intended to give them the right to drill for —

William J. Brennan, Jr.:

If I — if I can quote correctly some of the answers you gave Mr. Justice Reed, you suggested that, as to a given piece of land, what ultimately might be the interest might depend upon when, if at all, this determination whether there were minerals in the land had been made, when, if at all, the line of the right of way had been established and agreed upon, and when, if at all, certain other things had been accomplished.

Is that right?

J. Lee Rankin:

Yes.

Now, if you —

William J. Brennan, Jr.:

Well, that certainly strikes me as meaning they got no interest at all until all these things are done.

J. Lee Rankin:

Well, they probably wouldn’t because the difficulty is that you see they were to start out in Omaha and go the best route they could to the West, straight West as possible, in general terms.

Now, that is so general and, ordinarily, it would be construed as an easement, if any kind of a right was passed.

William J. Brennan, Jr.:

But that right of way was going to be surveyed.

It’s going to be laid down and determined on before they — they could determine whether there are 10 miles on each sidewise.

J. Lee Rankin:

That’s right.

So, then —

William J. Brennan, Jr.:

And, once they had determined where that was, wasn’t there some provision that it had to be approved by the Government or something?

Could they put the railroad any place they pleased?

J. Lee Rankin:

Well, they had a very large —

William J. Brennan, Jr.:

Discretion.

J. Lee Rankin:

— discretion about putting it because the grant was just not as explicit as later grants.

William J. Brennan, Jr.:

It’s very explicit, to me at least, if you want to say where the — where the mines would run.

J. Lee Rankin:

Well, it became more explicit, it seems to me, Mr. Justice.

There were several things involved in making it explicit though, and one of them was, of course, as to the line itself.

As soon as it was defined, then they were to make a record of it and advise the Government, and so forth.

But after —

William J. Brennan, Jr.:

So, they did do that?

They did —

J. Lee Rankin:

Yes.

William J. Brennan, Jr.:

— set that out and they defined it.

J. Lee Rankin:

Yes.

But, after that, then, those —

William J. Brennan, Jr.:

They — did they have to accept that or approve it or something?

J. Lee Rankin:

Well, they were to advise the Government of it and, I presume, it was implicit that there would be a general approval.

William J. Brennan, Jr.:

Their — it was their choice rather than the Government’s?

J. Lee Rankin:

Yes.

And then, even after that though, the question of whether the mineral lands had been determined depended upon whether the Government had been able to reach all of that problem and pass upon it before they passed the lands to anybody else.

William J. Brennan, Jr.:

Well, now, did — did the Government ever determine whether some of these lands was mineral lands with implication here?

J. Lee Rankin:

Well, this is just the right of way itself.

William J. Brennan, Jr.:

Well, that’s what I’m talking about.

J. Lee Rankin:

And so, the —

William J. Brennan, Jr.:

Did they ever determine that any part of the right of way was mineral land?

J. Lee Rankin:

Not that I know of.

They —

William J. Brennan, Jr.:

Do you — you — what’s the argument then, that you —

J. Lee Rankin:

That the —

William J. Brennan, Jr.:

— the Government can now determine that it’s mineral lands and take it back?

J. Lee Rankin:

No, that there was never any intention that mineral lands on the railroad be granted and has any kind of a —

William J. Brennan, Jr.:

From the right of way.

J. Lee Rankin:

— fee right —

William J. Brennan, Jr.:

From the right of way.

J. Lee Rankin:

That’s right.

That it was only the place lands because there was no need for that type of grant in order that it passed this railroad through the country and be able to maintain — construct and maintain a railroad over this line.

But, it was as to the place lands that there was a need for this action to determine whether they were mineral lands or otherwise.

William J. Brennan, Jr.:

Well, do I get that to mean distance?

Since all we are concerned with in this case is the oil and gas rights underlying the —

J. Lee Rankin:

Right of way.

William J. Brennan, Jr.:

— right of way itself.

J. Lee Rankin:

That’s right.

William J. Brennan, Jr.:

Your point is that all was given was the right of way without any of the underlying mineral rights, whether or not there ever was a determination by the Government that they were mineral lands, is that it?

J. Lee Rankin:

Yes, except for one thing.

I have to qualify that further because of the subsequent history.

There was an amendment in 1866 in which they said that mineral lands, the Congress said, shall not include iron and coal in the definition.

But, they also further said in that Act that mineral lands shall not be understood to be conveyed in any way by this Act, in which they amended the prior Act.

William J. Brennan, Jr.:

Well, I’m — the thing that confuses me, I think, is — I gather now, you’re making a distinction between place lands and the right of way.

J. Lee Rankin:

Yes.

William J. Brennan, Jr.:

That there may have been interest in the place lands which depended upon and were determined by Government decisions whether or not some of those place lands were or were not mineral lands.

J. Lee Rankin:

That’s right.

William J. Brennan, Jr.:

Is that true?

J. Lee Rankin:

Yes.

William J. Brennan, Jr.:

That’s not so as to the right of way.

As to the right of way, the Government’s position is that nothing went but the right to use the surface for the railroad, that any minerals underneath, with the exception of this 1866 Amendment, were retained.

J. Lee Rankin:

Yes.

William J. Brennan, Jr.:

Is that it?

J. Lee Rankin:

The only further thing would be that there would have to be support on — support for the railroad that they would get that much right in the — under surface.

William J. Brennan, Jr.:

Yes.

Felix Frankfurter:

Is it proper to add that — is it appropriate to add, in addition to what you said, that what they got — what mineral lands were conveyed was determined, as a matter of fact, by the landowners and the Interior Department?

J. Lee Rankin:

That’s right.

Felix Frankfurter:

Whether it was or wasn’t mineral land, it was an administrative determination on Section 3 of the Act.

J. Lee Rankin:

That’s correct.

Felix Frankfurter:

The statute itself neither defined nor limited what mineral — what was conveyed by mineral lands, either technical or whatever you call them, technological matters that left to be assumed, just as it would assume knowledge of the Department of the Interior as the landowners upon such land, is that right?

J. Lee Rankin:

That’s correct.

William J. Brennan, Jr.:

But the — as I understand that the Department of the Interior has never determined that these were mineral lands?

Felix Frankfurter:

It would come before it, wouldn’t it?

J. Lee Rankin:

So far as I know, it never had the — the question presented to it as far as whether or not these are mineral lands as such because that didn’t apply, according to the Government’s position, to the right of way.

Now, the question has come up, a number of times, as to whether or not the oil and gas extraction rights on the right of way were within the grant.

And, it’s been the consistent position of the Government for 50 years in any number of decisions that — that there was no such grant in the — in this grant, the Act of 1862, or the subsequent grants to the railroads.

And, Congress has passed an Act in 1930 in which it said that all such rights should have to be obtained by a lease and it belonged to the Government.

William J. Brennan, Jr.:

Where — is the 1866 Act printed in here?

J. Lee Rankin:

The 1866 Act is not.

I have it before me and I can quote that language if you’d like.

“And, the term “mineral land,” wherever the same occurs in — in this Act and the Act to which this is an amendment, shall not be construed to include coal and iron lands.

And, any lands granted by this Act or the Act to which this is an amendment shall not defeat or impair any preemption, homestead, swamp land, or other lawful claim nor include any Government reservation or mineral lands, or the improvements of any bona fide settler or any lands returned denominated as mineral lands.”

William J. Brennan, Jr.:

We still have the same problem of what is a mineral land.

J. Lee Rankin:

Yes, but —

William J. Brennan, Jr.:

Mr. Solicitor General, may I ask finally whether it’s necessary to the position the Government takes that we accept your construction of that proviso that all mineral lands shall be excepted from the operation of this Act?

J. Lee Rankin:

No.

William J. Brennan, Jr.:

Is that necessary to your —

J. Lee Rankin:

No, I think that is a guide to the —

William J. Brennan, Jr.:

To make weight?

J. Lee Rankin:

— to the intention of Congress in connection with the matter.

But, it seems to me, the paramount thought of the Court in dealing with this problem should be what would Congress intend to do and what was necessary to accomplish what they were after, which was the construction of this railroad.

William J. Brennan, Jr.:

Well, now, where are we going to get that, from legislative history or what?

J. Lee Rankin:

Well, I think the legislative history and also the history of the times which is treated in the Great Northern and also in a number of the cases we cite indicating that — including the Mining Company case by this Court in which the Court recognized that there was no purpose on the part of Congress to make conveyance of these mineral lands and transfer them, that there was a purpose to withhold for the protection of the interest of the country.

Felix Frankfurter:

Do you agree?

William J. Brennan, Jr.:

I gather, then, that the change from “section” to “act” in the proviso you think is reflective of the general concept that that’s all the Government intended to give at the time.

J. Lee Rankin:

That’s right.

It indicated it for that purpose.

Felix Frankfurter:

Would you agree that a good way to start is to read Section 2 and 3?

J. Lee Rankin:

I didn’t get —

Felix Frankfurter:

Would you agree that a good way to start with this problem is to read Section 2 and 3, and see what they direct themselves to?

J. Lee Rankin:

That’s right.

I think that’s where it turns and, also, whether or not you need to have oil and gas back in 1862 to accomplish the purposes of — that Congress was trying to accomplish in providing for the construction of this railroad.

Harold Burton:

You mentioned something about administrative interpretations.

There weren’t any for a long, long time, were there?

J. Lee Rankin:

That’s right and that’s because nobody asked for it.

And, it also seems to me, it’s pretty strong evidence against any claim of this type that nobody even raised the question for as long as they did.

Harold Burton:

But there is no interpretation that carries out your point of view from the administrative end of it for many years.

J. Lee Rankin:

That’s right.

It was about 50 years later.

But, I do think they are — they’re not contemporaneous.

I won’t claim that.

Harold Burton:

Because they’ve learned a lot in those 50 years.

J. Lee Rankin:

Well, I don’t think it’s that so much, although that could contribute to it.

J. Lee Rankin:

But, even when you think that it’s, even today, almost 100 years later that this question comes up in the form of litigation, the fact that it wasn’t even raised 50 years ago and we don’t have a case until 100 years later, it seems to me, pretty important as to how reasonable it is to claim that gas and oil was intended by Congress.

Felix Frankfurter:

What territory is involved by the issue that is now before us?

What — what’s the scope of the area?

J. Lee Rankin:

Well, the —

Felix Frankfurter:

I mean, in this case alone.

J. Lee Rankin:

No.

The — the area involved is about 500,000 acres.

It’s 9800 running miles of right of way and about 50 acres to the mile.

Felix Frankfurter:

Are you saying that the claim that is now before us, as been recognized below, was not made until this suit was started?

J. Lee Rankin:

That’s my understanding.

I’d like to reserve the balance of my time.

Earl Warren:

You may, Mr. Solicitor General.

Mr. Clary.

William W. Clary:

May it please the Court.

Right at the start, I would like to further come to the Solicitor General’s last comment that the claim wasn’t made until 100 years later.

As we look at it, the shoe is entirely on the other foot.

The Government never claimed this until 100 years later.

The Union Pacific has only assumed that it owned this right of way and has dealt with it as an owner.

And, there is a finding in the record which is not challenged that, in making leases of apportions of its right of way, presently not needed for railroad purposes, it had always reserved the right to cancel the lease in order to develop oil and gas, that that’s been a very long standing practice.

Hugo L. Black:

That’s on the right of way land?

William W. Clary:

On the right of way land.

So that, the facts are that the —

Hugo L. Black:

Where is this —

William W. Clary:

It’s on page 13 of the record, finding number 8.

No, that is — yes, finding number 9.

So that, the facts are that this case arises because the Government, after 100 years or nearly 100 years, for the first time, has claimed, as far as the Union Pacific knows, that it now owned or had a right to take the minerals out from under the Union Pacific right of way.

William J. Brennan, Jr.:

Mr. Clary, am I correct that right of way is uniformly 400 feet in width, isn’t it?

William W. Clary:

It is a strip of land, Your Honor, 400 feet in width, as so defined in Section 2 of the Act.

Felix Frankfurter:

In places —

William J. Brennan, Jr.:

And where first towns have grown up along the right of way, I suppose you sometimes conveyed.

William W. Clary:

In the early days, conveyances were made and they were held invalid in some of the early cases, and there have been congressional statutes validating those.

But, after the case of Townsend versus Northern Pacific, which held that the right of way was inalienable and could not be acquired by adverse possession or by grant, there have been no such conveyances.

William J. Brennan, Jr.:

Have there been leases?

William W. Clary:

Yes.

William J. Brennan, Jr.:

For industrial —

William W. Clary:

It’s a —

William J. Brennan, Jr.:

— sites?

William W. Clary:

— common practice, the matter, I might say, I think I may safely say of common knowledge.

Anyone riding on a railroad may see that it was within the 400 strip.

The portions of the right of way which are not immediately needed for railroad purposes are used for a variety of other usage.

Some of them contribute to railroad operations and many do not.

Everything from motor courts and signboards and things of that sort, residents are — and their lease for profit had never been considered that that is a violation of the condition upon which the right of way was granted.

Of course, those things are — do not interfere with the operation of the road and —

William J. Brennan, Jr.:

It’s down the existing main line right of way, I believe —

William W. Clary:

Yes, sir.

William J. Brennan, Jr.:

That the possible grant —

William W. Clary:

Yes, Your Honor.

This is the main line right of way.

William J. Brennan, Jr.:

There are no branch lines.

William W. Clary:

Well, there are many branch lines.

William J. Brennan, Jr.:

But not — but none involved here.

William W. Clary:

But, the question that’s involved here, in a strictly technical sense, is — is only 80 acres.

The principal may involve the entire thousand miles right of way.

We’re aware of that.

But, the case arises over an attempt by the Union Pacific to drill for oil upon one small segment of its right of way in the State of Wyoming, adjoining which, the United States has the mineral rights to 80 acres of land.

And, the United States claims that it has the mineral right under that piece of right of way and seeks to enjoin the drilling of that particular well.

That is the precise question.

Of course, we have the broader implications of — to — of the principles which may be established.

Felix Frankfurter:

Any production in the right of way?

William W. Clary:

I beg your pardon?

Felix Frankfurter:

Any production of oil and minerals?

William W. Clary:

So far as I know, there is none at this time on the Union Pacific right of way.

I suspect there is on other railroad rights of way.

William J. Brennan, Jr.:

They never drilled out of wells, did they?

William W. Clary:

The Union Pacific, as far as I know, has never drilled any — or any oil on its right of way until this attempt.

This, of course, was — was temporarily stopped by this suit.

Now, I think that, in regard to some of the question that had been asked, might — I might be able to clarify the situation if I point out that, in our view, there are two separate and distinct grants made in this Act.

The grant by Section 2 was a grant of a strip of land 400-feet wide.

It’s for a named purpose, namely, the construction of a right of way.

Well, I will discuss later the authorities which we maintain, hold, and determine that that is a grant of a fee.

The other grant which is entirely separate is a grant of lands, alternate sections on either side of the road, which are called place lands because there were indefinite limits, I suppose.

And, those grants are made in the same Act but in a separate section.

Now, as to those grants of these place lands entirely outside the 400-foot strip, there is no doubt but that there is a — an exception of mineral lands from those place lands.

That exception has been given effect consistently in this way.

Under the Act, after a certain time, a railroad is entitled to receive a patent to those place lands.

It is the administrative duty of the Department of the Interior to determine before the issuance of the patent whether or not they are mineral lands.

If they are mineral lands, no patent was issued and that, of course, has happened in many instances.

If — if they are not determined to be mineral lands, the Department of the Interior issues a patent under a well set of principles of law and decisions of this Court.

If after the patent issues, minerals should be found notwithstanding the fact that they were considered non-mineral, the — the entire title has vested by the patent and it — the United States can’t take back the minerals.

That was the decision in the pleading case of Burke versus Southern Pacific, which I’ll cite a little later.

William J. Brennan, Jr.:

When — when did they issue these patents?

William W. Clary:

Well, they’ve been issued over a period of many years, Your Honor.

William J. Brennan, Jr.:

There must have been some — something that caused the issuance of the patent.

William W. Clary:

Well, the first thing that was done was that the railroad laid out its line of track and then, answering your question, there were no specific restriction as to where it might go, except there were termini.

It had to start at a place on the Missouri on the 100th meridian which will be designated by the President of the United States, and was so designated.

And, it had to connect — it had to go to the Pacific Coast and it was suppose to connect with the Central Pacific Railroad which it was building eastward from California, and it did connect with the Central Pacific at a place known as Promontory Point in Utah in 1869.

The — this same Act granted the Central Pacific a similar right of way in place lands.But, between those points, there was no restriction as to where the lines would be built, except Section 8 of the Act which provided that the line must go in the most direct and practicable, I believe the words are “the most direct and practicable route — continuous route.”

As we said here this morning, it couldn’t go around mineral lands or it couldn’t jump over mineral lands.

It had to cross mineral lands when it came to them, and the Government here has frankly conceded that the exception of mineral land, which is found in Section 3 of the Act and as to which they talk about the mineral policy, cannot possibly apply to the right of way because you cannot accept lands out of a railroad right of way and have a railroad.

Felix Frankfurter:

Would the — Mr. Clary, would the — if the right of way — if the road has to go through mineral lands that wasn’t, and crosses the injunction, would the minerals that meets the right of way also go to the railroad?

William W. Clary:

Well, our position is, and I — I’m coming to that now —

Felix Frankfurter:

Take your time.

William W. Clary:

— that the grant of the right of way was a grant of a fee and, therefore, the minerals in the right of way pass with the fee.

Felix Frankfurter:

I understand that.

It’s a general proposition, but if — as I also understand, unless you correct me, that it may have a right of way over what is — what are mineral lands and, therefore, excepted by Section 3 — by the proviso of Section 3.

In that stretch of the right of way, would the right of way grant carry with it the minerals?

William W. Clary:

We think it would, Your Honor, very definitely and —

Felix Frankfurter:

Whether it’s mineral land or not?

William W. Clary:

We think whether it was mineral or not, and we think the decisions clearly support that.

Charles E. Whittaker:

Excuse me, Mr. Clary.

Let me —

William J. Brennan, Jr.:

I don’t understand.

William W. Clary:

I beg your pardon?

William J. Brennan, Jr.:

I don’t understand yet when the acquisition or what triggered the issue of the patent.

William W. Clary:

When the Act was passed, the railroad, and this was amended in 1864 in order to increase the place lands, it was provided that, in Section 4 of the Act, that if it should appear that 40 consecutive miles of said railroad and telegraph line had been — had been completed and equipped in all respects as required by the Act, then upon the certificate of the Commissioners who are appointed for the Government, happens — should issue conveying the right and title to the said land to said company.

In other words, the patents were supposed to issue as each 40 miles was completed.

As a matter of fact, I do not think that actually happened.

Many of them were delayed —

William J. Brennan, Jr.:

Yes, but —

William W. Clary:

— because of the determination of whether it was mineral or homestead or whether there were exceptions or reservations —

William J. Brennan, Jr.:

But that was what gave —

William W. Clary:

— but that is the factor.

William J. Brennan, Jr.:

— the authority for the issuance of it and, before they were issued, I understand you to say that there was a decision as to whether there were any mineral lands within that area.

William W. Clary:

Well, there was supposed to have been a decision before the patent was issued as to whether it was mineral land.

If —

William J. Brennan, Jr.:

What — what shows us that that was a part of the regulation?

Was there a regulation to that effect?

William W. Clary:

Well, the —

William J. Brennan, Jr.:

Or is the record clear on that?

Is that the difficulty, that the record isn’t clear?

William W. Clary:

The decisions — the —

William J. Brennan, Jr.:

There must have been a declaration made by —

William W. Clary:

Nothing —

William J. Brennan, Jr.:

— the Secretary of the Interior to someone as to what was mineral land sometime —

William W. Clary:

When —

William J. Brennan, Jr.:

— before the patent.

William W. Clary:

When the railroad applied for a patent under the clause which I read, it was the duty of the Secretary under the law to determine whether the land was of the kind to which a patent should issue, whether it was mineral or non-mineral, or whether it was reserved.

Now, that is found in the general duties and conscience of the Secretary.

In the case of Burke that I mentioned, as specifically held that it was the function of the Secretary of the Interior to — to make that determination before he issued the patent.

But, once the patent was issued, that’s final, title passes and nothing is reserved and there’s no policy of reservation of any minerals and patents as the Solicitor General has said in Title of 1909.

William J. Brennan, Jr.:

Mr. Clary, getting back to the right of way for a moment.

I gather, after this grant under the 1862 Act, something remained to be done to locate the right of way, did it not?

William W. Clary:

The railroad it’s — of course, there had been three surveys of transcontinental routes made during the 1950s, but they’re — the — after the Act was passed, the railroad had to survey and actually locate the precise line, and it did so.

William J. Brennan, Jr.:

That’s the 400 feet.

William W. Clary:

That was the 400 feet.

William J. Brennan, Jr.:

Now —

William W. Clary:

They located the center line of that.

William J. Brennan, Jr.:

Now, how long was it after the grant that that was completed?

William W. Clary:

About two years, if I —

William J. Brennan, Jr.:

And when is it in — what is your position as to when in point of time you acquired what you say was a fee?

William W. Clary:

There are decisions of the Courts on that which hold that we acquired it either at the date of the grant or at the date of the filing of that exact line.

We say it doesn’t make any difference in the case.

That is in the Stewart case.

In the case of Missouri, Kansas, and Texas versus Roberts, it was definitely settled that the right of way passed to the railroad at least “upon the construction of the road, if not earlier.”

That’s as close as I can answer your question.

Although the grant is commonly spoken of by the Courts as a grant in praesenti, upholding grant which became definite upon the location of this line or, if not then, upon the actual construction of the railroad which was completed in —

William J. Brennan, Jr.:

Now, all — all the discussion you’ve been having with Mr. Justice Reed on the matter of patents is — is not pertinent at all to the interest you acquired or settled, —

William W. Clary:

I don’t —

William J. Brennan, Jr.:

— alleging and claiming or acquiring it from —

William W. Clary:

— I think it is, Your Honor.

William W. Clary:

Merely, it — it merely explains the structure of the Act, but — but this matter of patenting of the patents of the alternate sections, we say, has nothing whatever to do with the right of way and the rights acquired under it.

Felix Frankfurter:

May I comment in for one or two more decisions, Mr. Clary.

Restricting myself entirely to what you claim under Section 2, the right of way, did the Secretary of the Interior claim any part at all in the formalities of the grant?

William W. Clary:

I don’t think so, Your Honor.

Felix Frankfurter:

Did he grant formally a formal document?

William W. Clary:

The grant itself conveyed the title.

Felix Frankfurter:

Yes, but where — is the grant expressed in a formal document?

And, if so, where is that?

William W. Clary:

There is no formal document here.

Felix Frankfurter:

All you do is you draw the line and that’s the —

William W. Clary:

The decisions of the Courts, which I would like to cite in a few minutes, hold that the grant itself was the conveyance.

The grant is better than the document.

Felix Frankfurter:

When you say grant, do you mean what the statute gave you?

William W. Clary:

Yes, I mean Section 2.

Felix Frankfurter:

All right.

William W. Clary:

That’s the grant.

Felix Frankfurter:

It has become —

William W. Clary:

That is a —

Felix Frankfurter:

That becomes a section as soon as you drew the line.

William W. Clary:

That is right.

Felix Frankfurter:

Is that it?

William W. Clary:

It’s a —

Felix Frankfurter:

There are no legal documents at all.

William W. Clary:

None whatever.

It’s a legislative grant.

It’s a grant by acts of the legislature in which the granting words “be” and “are hereby granted” are used right in the statute.

The Court said when those words are used, title pass.

Felix Frankfurter:

And that may —

William W. Clary:

As soon —

Felix Frankfurter:

— and that may include land which, in another connection, the Secretary of the Interior has found to be mineral land.

William W. Clary:

That’s certainly true because the —

Felix Frankfurter:

I follow.

William W. Clary:

— the land in the other connection —

Felix Frankfurter:

All right.

William W. Clary:

— is in the place lands.

Felix Frankfurter:

In place lands.

Harold Burton:

When you complete your survey, you must file a certified map of some kind.

William W. Clary:

That is right.

As soon as the survey — as the actual survey of the road is completed, which I think took about two years, a map —

Felix Frankfurter:

Where is it filed out?

William W. Clary:

That was filed with the Secretary of the Interior.

A map of the definite location of the road was filed, I think, in about two years.

Felix Frankfurter:

Does he have to approve of the land?

William W. Clary:

The law didn’t require him to approve it.

But, then —

Felix Frankfurter:

So that, what it really means is this is what Congress has written in Section 2 and you’re the master of turning it into reality, is that right?

William W. Clary:

I don’t know if I understand your question.

Felix Frankfurter:

Well, section — Congress granted this Act in 1862 and gave you whatever rights regarding the Section 2, and you determine what those rights are, typically speaking.

William W. Clary:

Well, we —

Felix Frankfurter:

This is — I mean, you determine where they are.

William W. Clary:

We determine where they are by —

Felix Frankfurter:

All right.

William W. Clary:

— but the termini, as I said, are fixed.

Felix Frankfurter:

Well, fixed by what then?

William W. Clary:

By the statute, so that there couldn’t be — and the general route had to follow — it had to go from a point on the 100th meridian somewhere near Omaha to San Francisco and — so that there wasn’t so much leeway as they might think, but —

Felix Frankfurter:

So that our question, the problem before the Court, and this is a fair statement, the problem before the Court is to construe Section 2 with such aids to construction as are appropriate for the Court in determining what the statute means.

William W. Clary:

I think that is right; whether Section 2, as we maintain, granted the fee or limited fee which included the minerals.

We maintain that it did.

Earl Warren:

Well, Mr. Clary, your position is then that the grant under Section 2, so far as mineral rights is concerned, is — is broader than the — than the same right granted under Section 3.

William W. Clary:

Yes, Your Honor, in the sense that there was a specific exception of mineral lands in Section 3.

Earl Warren:

And you — in Section 2, you take without reservation —

William W. Clary:

Without any —

Earl Warren:

— of any kind.

William W. Clary:

— without any exception or reservations, and that is what this Court has held.

We — that’s what we base our —

William J. Brennan, Jr.:

Then, the provision in Section 4 that it had to be approved as having been properly constructed, and so forth, and — and then authorizing the patent.

No patent was issued for the right of way lands.

William W. Clary:

No, no patent was ever issued with the right of way lands.

William J. Brennan, Jr.:

But, you didn’t have a right of way granted to you, actually located, until you had built your 40 miles and had it approved by the Commissioners appointed by the President.

William W. Clary:

Well, we — it was located by the survey but the —

William J. Brennan, Jr.:

But, it had to be approved.

William W. Clary:

It had to be approved before the patent was issued.

William J. Brennan, Jr.:

So, you — you really did not know where your alliance were until you had the approval under Section 4, didn’t you?

William W. Clary:

Well, I might have to — had to prove them, but they were built each 40 miles.

William J. Brennan, Jr.:

Yes.

William W. Clary:

We didn’t know whether the Secretary would — would approve that.

The Commissioners would approve it, of course, until they had approved it but, as each 40 miles progressed, why, patents were issued.

Whereas, —

Harold Burton:

And that’s what marked your lines.

William W. Clary:

And that’s what made it finally definite, yes, sir.

Felix Frankfurter:

Would it disturb the plain order of your argument if you went straight to the point that they said you were coming and, in answer to Chief Justice’s question, you gave us an ambiguous answer and said, “and the decisions of this Court so held.”

Would you mind coming to that, by the way?

William W. Clary:

I’d be very glad to.

Felix Frankfurter:

But don’t, if your order of argument suggests another.

William W. Clary:

Well —

Felix Frankfurter:

Of course, if that’s so, then it’s the property that matters, we often observe what we previously held of our other decisions.

William W. Clary:

The — we based that conclusion on — on three different arguments.

One is the general historical background of this grant, which I had planned to discuss first.

The second is the decisions of this Court, which I mentioned.

And, the third is the mineral policy of the United States, which we believe supports our position.

William W. Clary:

Now, that was the order in which I had planned to present the case and, if there’s time, I would like to present something on each of those three points.

Speaking, first, of the historical background of this Act, it’s important to consider that the year 1871 was the dividing point in the history of railroad land grants.

It was the end of one era and the beginning of another.

The objectives of railroad legislation prior to 1871 were succinctly described in the classic work entitled Railroad Transportation by Arthur Twining Hadley, the president of Yale University in 1885.

And, he said that early railroad legislation in the United States was devised for the object of securing railroad construction.

The only theory was that the railroad would not be billed as fast as they were needed.

Now, it was in order to meet that need that these combined grants which began in the 1950s with Illinois Central Grant, combining a grant of land for a right of way and place lands to help finance the road, was begun.

That was the beginning of the policy.

The first of these grants was the Illinois Central Grant of 1850.I should say, however, that that was a grant, as — as counsel has said, to the State of Illinois but it was on behalf of the Illinois Central Railroad.

And, the grant which the Court construed in Illinois Central case in the — in the Seventh Circuit was the grant from the United States to the State of Illinois which is, of course, the basis of Illinois’ title.

Illinois then transferred the property to the Illinois Central Railway.

It was that grant which the Court of Appeals held conveyed the right of way and fee together with the minerals.

Now, when it came to the time of the civil war, it was obvious that a transcontinental railroad was a necessity, a political and military necessity, to connect California with the rest of the union.

And, there were many intelligent people at that time who thought that a railroad over the Rocky Mountains and the Sierra Nevada was an impossibility, that the difficulties would be insurmountable.

I think it’s important to bear in mind that the purpose of the Union Pacific grant was to induce people to engage in this then hazardous enterprise.

And, this Act should be construed with that purpose in mind, with the idea that the purpose of Congress was to induce people to engage in this enterprise, and the first Act was insufficient to accomplish that end.

And, in 1864, they had to increase the place lands before it was finally accomplished.

Now, it’s been held with the Court, I will cite in a moment, and the Court of Appeals in the present case held that the inclusion of the right of way in this grant was an important part of this inducement.

It was in the late of this historical background and in view of this purpose that this Court said in the Great Northern case, which involved the later Act, that when Congress made outright grants of alternate section and along with the grants of the right of way, it was not surprising that the courts had held that the right of way conveyed these grants as limited fees.

But, the policy which led to this conclusion that these were limited fees was radically changed in 1871.

Again, to quote Hadley, “the reaction between 1870 and 1873 was sudden and widespread.”

That reaction was brought about, as the Solicitor General said in part, by a pressure of homesteaders who wanted to take up these lands and, as a result, Congress passed a resolution in 1872 that there would be no more place land grants to railroads.

Another, perhaps more important, reason was that by 1872 or by 1875, the main transcontinental routes had already been laid out and provided for by grants and there was no need for these inducements on place land and other grants.

However, that — that was when the Court came to the Great Northern case.

They were construing the Act of 1875.

The Court, in that case, accepted the premise, which I’ll state, that the grants prior to 1871 conveyed limited fees in the rights of way.

And, they found that, because of the change of policy and because of the particular provisions which were mentioned by the Solicitor General, that only an easement was conveyed.

One of those provisions is particularly significant, I mean, of the Act of 1875.

That was the provision at the location of each right of way.

It should be noted on the plaque in the local land office and, thereafter, any homesteader could acquire title to the land subject to the right of passage of the railroad which, obviously, has characteristics of an easement.

William W. Clary:

But, the point that we make here is that this type of limitation and all the other practice which led the Court to conclude that the 1875 Act conveyed only an easement are totally absent from the 1862 Act.

The 1862 Act made a present absolute grant in granting language of a strip of land 400 feet wide subject to no condition or limitation except that the railroad be built and operated.It was not a grant, in general terms, to permit anyone to construct the railroad anywhere, as was the 1875 Act, but it was a grant to a designated grantee to procure the construction of the railroad between certain designated points.

Now, I come to the cases which Your Honor suggested that I refer to.

The Court of Appeals, in the present case, noted that the extent of the estate conveyed in the right of way in the pre-1871 grant has been before the Court many times and it cited seven decisions of this Court as being the most important.

I believe that there were seven in this Court or perhaps six to this Court and, plus, the Illinois Central case.

The Court of Appeals summed up the holdings of these decisions by saying that, considering the time and circumstances, the history which I’ve outlined, it must be held that Congress intended to convey a limited fee upon the implied condition of reverter to the United States in the event the company seized to use or retain the land for the purposes for which it was granted.

That was the only limitation.

Now, I do not think it would be necessary nor is there time for me to discuss all seven of these cases, but there are two or three of them that I would like to mention specifically.

One is the case of New Mexico versus United States Trust Company.

In that case — that case involved a grant to the Atlantic and Pacific Railroad Company of 1866.

I believe that, later, became Santa Fe.

It is practically identical with the Union Pacific grant.

However, it had a provision in it which excepted the right of way from taxation within the territory.

The territory of New Mexico claimed that the right of way was an easement and, therefore, the buildings and structures upon it could be taxed as personal property.

So, the power of the territory to tax was held to depend on the nature of the estate granted, that is, whether it was a fee or an easement.

The Court held that the grant was a grant of the land itself, not of a mere right of passage.

It based this upon the earlier case of Missouri, Kansas, and Texas — it based it, in part, on the earlier case of Missouri, Kansas, and Texas versus Roberts in 152 U.S.in which the Court, in passing on a similar grant, decided specifically that it conveyed the fee.

But, here is the interesting thing about the New Mexico case.

New Mexico claimed that, in the Roberts case, the distinction between a fee and easement had not been raised and, therefore, it presumed that I would think they — to suggest that the Supreme Court had overlooked it.

But, the Court held that the issue of title was involved in the Roberts case and said pointedly that the difference between an easement and a fee would not have escaped the attention of the author of the opinion and that of the whole Court with the inevitable consequences which would depend upon such a difference.

Of course, the Court knew what the different consequences that would follow from a fee or an easement.

And, in the New Mexico case, it was held that a consequence of fee ownership that the improvements became a part of the realty and, hence, were not taxable as personal property.

And so, in the present case, by the same token, the minerals are a part of the — of the realty and passed with the fee.

Another case I would mention briefly is the case of Clairmont versus the United States in 225 U.S.551.

I merely want to quote one sentence from this case, which was written by Mr. Justice Hughes speaking for the entire Court.

This had reference to the Northern Pacific right of way which is practically identical with the Union Pacific Right of Way Act.

Mr. Justice Hughes said, and I want to quote his exact words, “by the grant of Congress, the railroad company obtained the fee in the land constituting the right of way.”

With all respect to the Solicitor General, I frankly do not understand how, in his brief, he can brush aside so lightly this very forthright statement.

I cannot help but think that when Mr. Justice Hughes used these familiar legal expressions, he meant them in their true legal sense.

Hugo L. Black:

What was the controversy?

William W. Clary:

The controversy was the question whether the — a person arrested on a train of the Northern Pacific was within Indian country or not within Indian country.

And, if he was — if the right of way was held solely as an easement, it would have been within the Indian Country.

I’m not saying, Your Honor, that — that this was the holding in the case.

I was careful to say that it was a statement of Mr. Justice Hughes but, as such, to me, it carries a very great deal of weight.

Now, the one other case that I would like to discuss is Northern Pacific versus Townsend in 190 U.S.267.

This case involved the right of way granted to the Northern Pacific, which I just mentioned, involved the question whether a title to a question of the right of way could be acquired by adverse possession.

The Court held that the decision turned upon the nature of the estate granted in the Act of Congress.

And, on the authority of the New Mexico on other cases specifically held that the fee passed by the grant in Section 2.

There, Your Honor, if I may refer to Mr. Justice Frankfurter’s question, is a specific reference to Section 2 of the Great Mellon Act which is identical — I mean, the Northern Pacific Act which is, we say, identical with the Union Pacific Act and which says that the fee passed.

Now, of course, it’s a matter of common — it’s common in the law for a grant of a fee to be limited or qualified by a condition that the lands will be used for a particular purpose and, at — upon the cessation of that use, it will revert to the grantor.

And, that is exactly what the Court held in the Townsend case.

I’d just like to quote this one sentence, “the substantial consideration inducing the grant was the perpetual use of the land for the legitimate purposes of the railroads, just as all the land,” and notice, again, they say “the land,” “had been conveyed in terms to have and to hold the same so long as it was used for railroad right of way.”

William J. Brennan, Jr.:

Incidentally, do either of those grants have anything comparable to this proviso of Section 3?

William W. Clary:

Yes, Your Honor, both the Northern Pacific and the Atlantic Pacific grant had exceptions of mineral lands in — in the place land grant.

William J. Brennan, Jr.:

By a phrase this is —

William W. Clary:

I think the phrase is —

William J. Brennan, Jr.:

— subject to the operation of this Act?

William W. Clary:

Yes, Your Honor.

The phrase I believe is identical in both those facts.

Earl Warren:

Is that the language that you just read in the Townsend case and others in Northern Pacific, was that essential to the decision?

William W. Clary:

Well, we think it was.

Yes, Your Honor.

We think that the Court said it was.

It said that the nature of the — that the decision depended on the nature of the estate granted.

That is the basis upon which the Court made its decision.

Charles E. Whittaker:

What do you call the Atlantic and Pacific case?

What’s — what’s the name of the case?

William W. Clary:

That is New Mexico versus United States Trust Company, 172 U.S.

Now, just — we come to one more point on the — on the legal effect of this grant of a fee for a named purpose.

The Court of Appeals, after holding on the basis of these cases that the right of way had been granted as a limited fee, applied a well-settled rule that, so long as the estate continues, the owner has the same right to remove minerals as an owner in fee simple.

William W. Clary:

We have cited authority on that.

Which case was that?

That was this present case.

I’m saying that the Court, Your Honor, that the Court of Appeals in our case said that the holder of a limited fee has the same right to extract the minerals as the holder of a title in fee simple.

And —

Hugo L. Black:

Did you cite any other cases on that?

William W. Clary:

Well, we have cited a number of cases in our brief and I would like to read one right now.A — a sample case, a very typical case, a state case is Davis versus Skipper 125 Texas 364, where the plaintiffs who held a possibility of reverter in lands which had been granted for church purposes and they were not permitted to enjoin the search from billing for all.

The Court in that case said so long, and this we think applies specifically to this present case, “so long as there is no abandonment of the land for church purposes, the trustees of the church may use the land to the extent of producing oil and gas there from.

And, conversely, the holder of a mere possibility of reverter has no as such estate as authorizes him to maintain an injunction to prevent such use of the land.”

That is a very old rule and we have cited authorities in our brief supporting it all the way, from Blackstone and Kent down to the restatement of property in which there is no kind of question to what that is as a rule of real property law.

Now, we say this applies — this is not a local rule.

It is not a rule of any particular state.

It is a general rule of property law, and it applies here because of the holding of the Townsend case, was that the purpose of Congress was to withhold only the right of reversion in order to ensure, as far as possible, the perpetual use of the land for the operation of the railroad.

And, since that is the only right reserved, the right to the minerals under the objective rule vested in the owner of the limited fee.

Hugo L. Black:

Are you saying that — I don’t know what section is that.

Are you saying that the weight of authority among the state is that when a right of way —

William W. Clary:

I say that’s a general authority —

Hugo L. Black:

— when a right of way is conveyed —

William W. Clary:

I say —

Hugo L. Black:

— it gives the railroad the right to export the oil?

William W. Clary:

I say that when a limited fee is conveyed to anybody, a railroad or anyone else, and the grantor reserves only a right of reverter in the event of abandonment that the right to take the minerals belongs to the owner of the limited fee and not to the holder of the reverter or —

Hugo L. Black:

Is there a right of reverter stated here in this section?

William W. Clary:

Is what?

Hugo L. Black:

Is there a right of reverter stated in this section?

William W. Clary:

There is no right of reverter in this section, Your Honor, but the Court in the Townsend and other cases have held that under the grant of Section 2, there is an implied condition of reverter if the railroad ceases to use the land for a railroad.

Hugo L. Black:

But that’s less than a fee, isn’t it?

William W. Clary:

Well, certainly.

Well, it is not less than the fee.

It’s one kind of a fee.

It’s a limited fee.

William W. Clary:

It’s a fee simple so long as it lasts.

It’s — it’s less than a fee, Your Honor, only in the sense that it may end at some future time.

The limitation is on the duration of the estate not on the quality or extent of it.

But, so long as the fee is not forfeited by cessation of a use, the owner of the fee has all the rights of an owner in fee simple.

That is the principle which I say has thoroughly established both the state and federal law.

Hugo L. Black:

I rather thought, or maybe I’m wrong about it but, generally, a fee is recognized that the transfer of land completely, immediately, all the interest in perpetuity.

William W. Clary:

Well, there — that is a fee — what Your Honor has described would be commonly called a fee simple absolute, —

Hugo L. Black:

Yes.

William W. Clary:

— but there are — there are qualified determinable or diffusible fees.

Hugo L. Black:

Less than that?

William W. Clary:

Well, they’re —

Hugo L. Black:

Well —

William W. Clary:

They’re less than fee simple absolute, but my point is that the difference is in the duration of the estate, not in the quantity of it.

And, this is a fee which, so long as it lasts, carries with it all the incidents of a fee simple absolute.

Now, it may terminate if the Union Pacific should go out of business and abandon its railroad, then the fee would revert.

But, until that time happens, the — the Union Pacific owns the fee and had all the incidents of the owner of a fee simple absolute subject to that one limitation.

That’s why it’s called a limited fee.

Charles E. Whittaker:

Do those decisions say whether, in the event of abandonment, title is reacquired only upon reentry or automatically?

William W. Clary:

Your Honor, as far as I know, there’s never been a decision on that, but —

Charles E. Whittaker:

But there are distinctions.

As I recall it from law school, the possibility of reverter is one thing but a right of reentry for conditions broken is another.

William W. Clary:

That is true, but that has to do with the remedy which the holder of the reversion would apply, namely, whether the reverter would be automatic or whether the holder of the possibility of reverter would have to do something affirmative.

There has never been a decision on that but, as far as I know, it never happened.

But, we think it’s totally immaterial in this case because, in either of those cases, the rights of the holder of the unlimited or conditional fee is the same, and they are the same as the owner — as the holder of a title in fee simple.

Now, I have yet to come to my answer to counsel’s argument that we should read a reservation of minerals into this grant because of mineral policy.

We think it’s vital in this case to distinguish between an exception of mineral lands from a general grant and a reservation of mineral rights from a grant of a particular piece of land.In the case of an exception, nothing would ever passes.

The title doesn’t pass at all to the excepted lands.

But, when you have a grant reserving mineral rights, it brings into play a completely different principle.

The title to the land does pass but there is a separation of the underlying minerals from the rest of the estate.

Such a case was before the Court, I believe, only a week or two ago or later, Minerals versus United States.

William W. Clary:

That was a case of a mineral reservation.

I don’t think it has any relation to this except to illustrate what a mineral reservation is, as compared with an exception of mineral land.

Now, the cases cited and relied upon by the Solicitor General regarding the policy are all cases which refer to an exception of mineral lands and there is no suggestion in any of these cases that there was any policy of reserving mineral rights.

Now, petitioner concedes that that exception of mineral lands could not apply to the right of way.

But — and, it should be added that the grant of the right of way itself contained a no reservation of mineral rights.

Therefore, petitioner is forced to argue not that mineral land should be excepted from the right of way, but that the Court should read into Section 2 a reservation of mineral rights on the basis of federal policy.

And, we think the history of the federal policy, which we’ve outlined in detail in our brief, does not support that argument.

The policy of granting a fee in reserving minerals was not fully developed until 1916, and such a reservation could not have been intended by Congress in 1862.

During the last half of the 19th Century, the policy of Congress regarding both mineral and agricultural land was to encourage their development just as rapidly as possible.

And, Congress believes that the most effective way to do this was to segregate mineral lands on the one hand, and agricultural lands on the other, and provide for a disposition of each class of land under a different set of laws.

But, in making this segregation, there was no intention of withholding mineral land from development.

On the contrary, the mineral lands could be filed upon and patented after 1866 as readily as agriculture lands.

Felix Frankfurter:

Mr. Clary.

William W. Clary:

And, —

Felix Frankfurter:

May I ask you a question, I hope I’m not pressing too much.

I understood you to say that the relief of this land or apportionment of this land are and may be, by the railroad, put to use for other uses, at least in one part, is that right?

William W. Clary:

In certain portions of the 400-foot step.

Felix Frankfurter:

And, now, in the Townsend case, which I’ve know read for the first time and it’s been uncommonly short opinion by Mr. Justice White, they might be a little short.

I learned from that, they couldn’t — the railroad could not alienate it because that would be to make a just use of the grant.

It may grant its own purpose.

It may consider this for 99 years or what we — what ultimately make the railroad is.

William W. Clary:

I intended to cover that point, Your Honor, if I get to it.

Felix Frankfurter:

All right.

William W. Clary:

I don’t think the Townsend case prohibits the railroad itself.

Felix Frankfurter:

From selling?

William W. Clary:

Well, it prohibits them from selling but it doesn’t prohibit it —

Felix Frankfurter:

Not in 99 years.

William W. Clary:

I think it would prohibit it from making any alienation — I don’t — of its land for any long period, but I don’t think it prohibits it from, itself, making other uses which do not interfere with the operation of the railroad.

Felix Frankfurter:

And, if these other uses to which you referred earlier are its own businesses?

William W. Clary:

No, they may not be.

William W. Clary:

They may be anything.

Felix Frankfurter:

Well, if they may be anything —

William W. Clary:

But in —

Felix Frankfurter:

That would be —

William W. Clary:

— in every instance —

Felix Frankfurter:

That would be the case that troubles them.

William W. Clary:

In every instance, Your Honor, the railroad would reserve the right to repossess that land the moment it needed it for railroad purposes.

There’s a full discussion of that in the brief.

I don’t know whether — I should like to discuss this question of mineral policy a few moments and then, if I have time, I will take up —

Earl Warren:

Could the railroad sell the land in this right of way subject to the reversionary right of the Government?

William W. Clary:

I don’t think, Your Honor, it could sell it at all.

It had no —

Earl Warren:

Why couldn’t it — if it has the fee subject to this reversionary right?

William W. Clary:

The Court —

Earl Warren:

Why couldn’t it sell what it had — what it owns if it has the fee?

William W. Clary:

The Court held in the Townsend case that it could not alienate that right of way.

Earl Warren:

Well, isn’t that inconsistent with the fee?

William W. Clary:

It’s not inconsistent with a limited fee for the use granted for the purposes of the railroad.

Earl Warren:

Well —

William W. Clary:

That would, in effect, be an abandonment, yes.

Earl Warren:

Is mining for the purposes of the railroad?

William W. Clary:

I beg your pardon?

Earl Warren:

Is mining or developing for oil for the purposes of the railroad?

William W. Clary:

But — developing the grant does not limit the railroad from the use of the land so long as it operates the railroad for other purposes which are not inconsistent.

Earl Warren:

But, what is or what would there be to prevent them from selling the land subject to the reversionary right of the Government in — in the event that —

William W. Clary:

The only —

Earl Warren:

— in the event that the railroad was —

William W. Clary:

One time, I thought they could do that.

And, the Townsend case held that because the grant was made for the purpose of the operation of a railroad, they could not alienate it, but there are many cases which are cited in our brief that hold — that hold that the company itself may temporarily use — use portions, portions of the railroad not presently needed for railroad purposes, for any other legitimate purpose which does not interfere with the operation of the railroad.

And, that is a universal practice of railroads.

William W. Clary:

It was never been held to constitute a forfeiture and it since — it’s neither a forfeiture nor a ground for injunction.

And, here, the Union Pacific is using a very small piece of — it’s proposing to use a very small piece of right of way, not presently needed for the railroad, to drill an oil well on.

There’s no interference.

The Court has found that it does not interfere, so that there — there is nothing inconsistent with that for the use of the railroad, but it must maintain title under the Townsend case or it could abandon its title completely, then it would revert.

Charles E. Whittaker:

Then it could lease, apparently, to oil companies to do this?

William W. Clary:

It could lease providing it always preserved the right to repossess the land if needed for railroad purposes, and that —

Charles E. Whittaker:

Well, suppose that — suppose —

William W. Clary:

In every lease the railroad has ever made is the right to repossess when it’s needed.

Charles E. Whittaker:

Well, suppose an issue of interference with a proper conduct for the railroad should be raised merely from the fact that you made the lease, and the Government part by the extent of the operations —

William W. Clary:

After —

Charles E. Whittaker:

— by the oil company under the lease, then, what happens?

William W. Clary:

That issue was raised in the trial court here, but the Court found that the proposed operations would not interfere with the operations of the railroad and, in the court of appeals, that finding was not challenged.

On this matter of — of mineral policy, the purpose of accepting mineral lands from the operation of — from the alternate sections was not to prevent the development of the mineral lands, but to keep them from being taken up and patented as agricultural lands, so that they might be patented as mineral lands.

The policy of the Government was to patent both types of land under separate laws at nominal prices without any royalty.

There was no attempt to hold them back.

So that, a reservation of minerals in the right of way — to read in such a reservation of minerals in the right of way would be inconsistent with the federal policy of that kind.

Now, the policy of reserving minerals and granted land, separating the mineral rights from the estate, did not develop until after the withdrawals by President Roosevelt and Taft in the 1900s for reasons which I will not have time to go into but, because the segregation policy had not, at that time, was not working successfully, the — there had been abuses because coal lands had been taken up as agricultural — as agricultural lands and, so, those lands were withdrawn until a — a segregation could be made.

As a result of that withdrawal, the Secretary of the Interior, Garfield, in 1907, recommended what he called a brand new policy of separating the minerals and granting the surface.

That was a new concept in the history of mineral policy in the United States, and that policy was first put into effect with regard to coal lands in 1862, I beg your pardon, in 1909 and became general in 1916.

As to the Stock-Raising Homestead Act, all minerals were excepted from patents under those Acts.

And, the Leasing Act of 1920 completed the — the development of this new policy of reserving mineral rights in granted lands.

And, so, we think it follows that, in 1862, Congress not only did not, but would not, under any circumstances, have reserved minerals from the grant of this right of way.

Now, one final point, the Solicitor General has argued that the rule of strict construction prevents the minerals from passing.

We had cited the cases in our brief, which I won’t have time to discuss, but I will say that it is definitely settled that, as of that period of time, in — that when the title passed, once the patent was issued, as we said with regard to the place lands, the minerals passed with it.

It makes no difference whether the title passed by virtue of a patent or by a statute.

We maintain that title passed by the statute of 1862 and these decisions hold that when that title passed, minerals passed without any special mention.

It has never been held that there’s any rule so strict that a grant by the United States in words which commonly convey a fee do not pass all the incidence of a fee but that there must, in addition to that, be spelled out what go with a grant of a fee.

The United States, when it grants land and fee, grants land and fee as anyone else does.

If it uses its words that have that legal meaning which, as I pointed out, were used here, as stated in the excerpt I read from Mr. Justice Hughes’ opinion.

Earl Warren:

Mr. Clary, before you finish, may I ask just one question about the wording in this Act that the Solicitor General commented on.

Earl Warren:

He said that the mineral reservation, first, was as to this section.

William W. Clary:

Yes, sir.

Earl Warren:

No, first, as to the “Act,” then, they changed it in the House to the “section.”

And then, in the Senate, they changed it back to the “Act” and that, now, it says there’s — the minerals shall be reserved in — in all lands —

William W. Clary:

In the Act.

Earl Warren:

— in the Act.

William W. Clary:

That’s —

Earl Warren:

What —

William W. Clary:

— true.

Earl Warren:

What —

William W. Clary:

Well —

Earl Warren:

Since you’re next in that —

William W. Clary:

That is the correct statement of what happened, but it seems to us that it’s immaterial because counsel himself concedes that the exception, even though it says in this Act, cannot apply to the right of way.

We think that the reason the word “Act” was put in there was because, in Sections 9, 13, and 14 there are grants to five other railroads in — which carry place lands in order to make sure and — and not to have to repeat the mineral exception in each one of those five grants.

It would be perfectly natural for Congress to say, “Well, we’ll make this exception here apply to the entire Act.”

But, even though it says that, the physical conditions are such that it couldn’t apply to the right of way, as stated and conceded by counsel.

And, in order to get around that, counsel wants the Court to read into the Act a reservation which we claim is a totally different kind of an animal, if you’ll pardon the expression, and was not conceived by Congress until — before 1909 and would never have been thought of then.

Thank you very much.

Earl Warren:

Mr. Solicitor General.

J. Lee Rankin:

Mr. Chief Justice.

William O. Douglas:

What do you say to the argument that the exception in Section 3 and Section 2 says the exception means all mineral lands shall be excepted but the right of way must go through whether there are mineral underlying the land?

J. Lee Rankin:

I think it could apply to the subsurface without any question and I think that Congress intended, in view of the history of the period, to reserve the minerals and was trying to do it in every way possible and that’s why they made the change from “Section” to “Act.”

William O. Douglas:

Do you think mineral lands mean mineral rights?

J. Lee Rankin:

I think that it was so considered by Congress at that time and that the history of the later development in which they distinguished between surface rights and mineral rights was due to the entirely different factor of trying to make the surface available to settlers and that they were trying to make every protection they could for the minerals of this country.

Tom C. Clark:

The preservation then would apply, too, wouldn’t it?

J. Lee Rankin:

It — it would apply as far as subsurface rights are concerned.

Tom C. Clark:

It’s all you’ve got coming in here, isn’t it?

J. Lee Rankin:

Yes.

Now, it seems to me —

William J. Brennan, Jr.:

Excuse me, may I — may I get this clear now, Mr. Solicitor General.

William J. Brennan, Jr.:

I think, just before you sat down, I had asked you whether you were relying upon the proviso as if it were written into Section 2, are you or not?

J. Lee Rankin:

Well, I’m not — I thought your question, Mr. Justice, was whether or not that was our sole reliance.

It is —

William J. Brennan, Jr.:

I guess that’s the way I phrased it.

J. Lee Rankin:

It is not our sole reliance.

We think that the history of period is a very important —

William J. Brennan, Jr.:

But one of your arguments and one of the propositions upon which you do rely is that that proviso is to be read into two as if it appeared there?

J. Lee Rankin:

Yes.

Now, in regard to that same matter, counsel answered the Chief Justice saying that there was — the reason for the word “Act” was that it was in trying to provide for these other railroads in the subsequent sections, but if you — and that they didn’t want to have to repeat that statement throughout each section and the subsequent sections about the other railroads.

But, it seems to me, that answer is inadequate because, as I had already described in my prior argument, the — they fully said that these — the earlier provision was to apply, in all respects, to each one of these railroads.

And, the Congress didn’t see fit to describe the grant in detail in the subsequent sections at all.

It referred back to the prior sections to find out what the grant was.

Now, if they’re going to look there for the grant, they certainly shouldn’t have to worry about finding the same provision that they’re using in “Act” to apply to it.

So that, that explanation seems entirely inadequate for the reason for putting — for the Congress going through the procedure.

Now, if the House had only put in “Act” in the first place, that might be one thing, and if that’s all the history of it.

It wouldn’t be nearly as convincing, at least to me, as for them to have rejected that selected section and then, in the Senate, put “Act” back and the House accepted it.

It shows a legislative purpose that should not be denied.

Now, counsel has also suggested that the Congress was perfectly willing to have these lands made available for mineral rights, the mineral lands, to the public.

But, this Court has dealt with that very problem and dealt with it in detail concerning the history of these times.

And, in the decision of the Mining Company case in 1880 about the California grant, it goes into detail how careful Congress was to try to protect these minerals.

And, it said “during this period, or from 1849 to 1866, the system of a disposition of the public lands in general had to be introduced in California,” and grants of land were made to the state for various purposes, also, to railroad companies.

And, in all these, the attention of Congress was necessarily turned to the distinction between mineral lands and the ordinary agricultural lands of the other western states to which similar laws had applied.

This distinction is no more plainly manifested than in this Act of 1853.

And, it goes on to say, “We say that this introduce a new principle and preemption for, except in very few cases, no right of preemption had before existed until the lands were surveyed so that the preemptor could designate by the description of the congressional survey the precise land to which this preemption test.”

But, this right of preemption on unsurveyed lands was, by this statute, to last but one year, and so careful was Congress to protect mineral lands from sale and preemption that, as we have already shown by the proviso of Section 3 of the Act, the surveyors were forbidden to extend their surveys over them.

Now, I’d like to say one word about the 400-foot right of way grant in Section 2.

It might be considered that that is a lavish grant and, therefore, some construction should be made from that.

It should be assumed that it was intended by Congress to be used for some other purpose than just railroad purposes.

But, that came up during the legislative history of this Act, and the motion was made and amendment was proposed to reduce it to 200 feet, 100 feet on each side.

And, it was then explained that it was necessary in some areas of the mine because of the passes and the difficulty of building the road to have the 400 feet.

J. Lee Rankin:

And, therefore, it — the amendment was abandoned and they left it at the 400-foot size, but it was because it was claimed that it was needed for railroad purposes that that was given.

Now, I’d like to also call attention to the fact that this Court said in the Great Northern Railway case that if the railroad tried to get a right of way by eminent domain, it got nothing but an easement, which seems to me important in trying to construe what would be intended in a situation of this kind.

Now, the Government doesn’t deny that a very valuable part of the inducement of this building of this railroad was this right of way, but it wasn’t the gas and oil.

It wasn’t the gold or the silver or any precious minerals that were involved.

The inducement was the fact that you just couldn’t get a right of way across the lands of the United States unless it was granted to you.

You can’t get anything like that by eminent domain.

And, therefore, it was absolutely necessary that they get such a right in order to build the railroad, but they were interested and it was a vital importance politically and to the war itself that was going on that this railroad be built.

But, in spite of such client, the Congress was careful to try to protect the country in regard to these mineral rights.

Felix Frankfurter:

May I ask you one more question before you sit down, Mr. Solicitor.

I’ve read, I think, all the cases on which reliance is placed, and I think, if I may say so, you are quite right in saying that not one of them exists in this recite — in this recited issue, the adjudication.

J. Lee Rankin:

That’s right.

Felix Frankfurter:

But I’m also impressed by the fact, in reading your assertion, that various judges, various members of this Court, and at least one or two Congresses, with land problems more particularly on mind, so that this particular problem did characterize this, what was different in Section 2 has a grant which is, in scope, very different from a mere right of passage.

Indeed, in one of the opinions which Mr. Justice makes the distinction between a mere right of passage and easement to a natural person and what was given here to the railroad for public purpose.

What I would like to ask of you is whether such — if such a, what shall I say, an additive for this grant by judges when their minds weren’t on it but they read the statute innocent, whether that is already — already an important language and weighty testimony or as I come to reading this statute in the light of urging that it’s certainly time to try and find out what the interests are.

J. Lee Rankin:

Well, I think it is, insofar as it was necessary to the holding in a particular case, but it seems to me that the Court was trying to solve that problem and it — and then, went back to the general law or language of conveyance instead of directing its attention to what the intent of the Congress was in the specific Act and what they were trying to accomplish, as this Court has done over the years in trying to construe Congressional Acts.

And, if they did that, you wouldn’t have to characterize the estate in any way in order to give the protection that was necessary in each of those cases in order to maintain the railroad.

William J. Brennan, Jr.:

Would you say that —

J. Lee Rankin:

And, I argue that —

William J. Brennan, Jr.:

Would you say that, Mr. Solicitor General, even though, as I understand it, two of those cases involved grants where this proviso in haec verba appears?

J. Lee Rankin:

Well, one of them was a case of adverse possession question and the other was whether or not the United States could convey part of the right of way.

William J. Brennan, Jr.:

But, suppose — I understand — as I understand Mr. Clary, in two of those cases, two — involved two grants with the precise proviso that we have before us here.

J. Lee Rankin:

Well, but they didn’t involve the question of whether these minerals are oil and gas rights or mineral rights were passed or to be with — or reserved by the Congress.

William J. Brennan, Jr.:

So, you say then we ought to pay no significance to the fact that the grants did have that provision since the issue of mineral rights was not involved either case.

J. Lee Rankin:

No, and I point to the Great Northern case as one which this Court did do the very thing of looking to see what the intentions — intention of Congress was, what the history of the moment was, the history of the whole period was, and whether, under all of that, it was intended to pass oil and gas rights.

It found that they did.

Felix Frankfurter:

Anything could do, 36 in number there.

J. Lee Rankin:

Yes, that’s right.

Earl Warren:

Very well.