Full opinion text
CLARK, Circuit Judge. The appellee, Santa Fe Pacific Railroad Company (hereafter referred to as Santa Fe), is a corporation created by Act of March 3, 1897, c. 374, 29 Stat. 622. The defendants are Oscar L. Chapman, Secretary of Interior, and Marion Clawson, Director of the Bureau of Land Management. The Santa Fe is the successor to the Atlantic and Pacific Railroad Company (hereafter referred to as the Atlantic and Pacific). The land grant was made to the latter under the Act of July 27, 1866, c. 278, 14 Stat. 292, and Santa Fe is fully vested with all the rights of the Atlantic and Pacific granted under the said Act in and to the lands thereby granted. Congress, by the Act of July 27, 1866, granted the right of way through the public domain for the building of a railroad from Missouri to the Pacific Coast. To aid the construction, the Atlantic and Pacific was granted the odd-numbered sections of public lands for 40 miles either side of its projected line; this area is described as the “place” limits. The Act also granted the right to select within an additional 10 mile limit known as the “indemnity” limits, sufficient lands to make up any deficiency in the “place” limits arising from homestead entries, preemptions, mineral lands, etc. On March 12, 1872, the Atlantic and Pacific filed with the Secretary of Interior a map of definite location, and thereafter the railroad was constructed. As of the date of filing this map, as stipulated by both parties, the rights to the lands granted became fixed and determined. United States v. Northern Pacific Ry. Co., 1921, 256 U.S. 51, 41 S.Ct. 439, 65 L.Ed. 825. On February 3, 1886, the Atlantic and Pacific contracted to sell 1,000,000 acres at 5O5! per acre to the Aztec Land and Cattle Company, Limited (hereafter referred to as Aztec). This 1,000,000 acres comprised all the odd-numbered sections within certain described boundaries. Part of the land being sold was within the “place” limits, and at least 98,690.83 acres were within the “indemnity” limits of the grant. The stated consideration of $500,000 was paid by Aztec to Atlantic and Pacific. In 1886 and 1894 the Atlantic and Pacific conveyed as much land as was then surveyed to Aztec. On August 17, 1898, the above mentioned 98,690.83 acres together with other lands were withdrawn by executive proclamation for a forest reserve described as the Black Mesa Reserve, pursuant to Section 24 of the Act of March 3, 1891, c. 561, 26 Stat. 1095, 1103, 16 U.S.C.A. §471. On November 7, 1905, Santa Fe, as successor to Atlantic and Pacific, and in settlement of the claim of Aztec for so much of the said lands as had not at the time been conveyed to Aztec, executed a deed to Aztec which recited that Atlantic and Pacific had previously conveyed to Aztec 576,701.-91 acres of the lands described in the above contract dated February 3, 1886. It further stipulated that Aztec was entitled to an additional 423,298.09 acres, and remised, released and quitclaimed to Aztec all right, title and interest of the Santa Fe, as successor to the Atlantic and Pacific, in and. to approximately 423,270.35 acres described in the said deed, which included the before-mentioned 98,690.83 acres. On April 11, 1921, United States v. Northern Pacific Ry. Co., supra, was decided by the Supreme Court, and at pages 66-67 of 256 U.S., at page 442 of 41 S.Ct., Mr. Justice Van Devanter stated: “ * * * after the company earned the right to receive what was intended by the grant it was not admissible for the government to reserve or appropriate to its own uses lands in the indemnity limits required to supply losses in the place limits. Of course, if it could take part of the lands required for that purpose, it could take all and thereby wholly defeat the provision for indemnity. But it cannot do either. The ‘substantial right’ conferred by that provision (Weyer-hauser v. Hoyt, supra [219 U.S. 380, 31 S.Ct. 300, 55 L.Ed. 258]), cannot be thus cut down or extinguished. (Sinking Fund Cases, supra [99 U.S. 700, 25 L.Ed. 496]).” The executive proclamation of August 17, 1898, was not effective to withdraw the lands which included the 98,690.83 acres and the rights of Santa Fe were unimpaired up to and including the time this decision was rendered. Now, on September 18, 1940, Congress enacted and the President approved the Transportation Act of 1940, c. 722, 54 Stat. 898. Section 321(b) of Title III, Part II, of the Act, 54 Stat. 954, 49 U.S.C.A. § 65, provided certain rate benefits for those land grant railroads which released within a specified period any claims to lands they might have against the United States. This Section further stipulated: “Nothing in this section shall be construed as requiring any such carrier to reconvey to the United States lands which have been heretofore patented or certified to it, or to prevent the issuance of patents confirming the title to such lands as the Secretary of the Interior shall find have been heretofore sold by any such carrier to an innocent purchaser for value or as preventing the issuance of patents to lands listed or selected by such carrier, which listing or selection has heretofore been fully and finally approved by the Secretary of the Interior to the extent that the issuance of such patents may be authorized by law.” [Emphasis supplied.] On December 18, 1940, pursuant to the provisions of Section 321(b) of the Transportation Act, and of the regulations of the Secretary of the Interior thereunder, Santa Fe filed a release of “ * * * any and all claims of whatever description to lands, interests therein, compensation or reimbursement therefor on account of lands or interests granted, claimed to have been granted, or -claimed should -have -been granted by any act of the Congress to Santa Fe Pacific Railroad Company or to any predecessor in interest in aid of the construction of any portion of its railroad.” This release, was accepted and approved by the Secretary of Interior on March 1, 1941. On June 26, 1942, the Santa Fe -filed selections in the form prescribed by the Secretary of Interior of the land previously sold to Aztec. Those selections were denied and rejected by the Commissioner of the General Land Office on the ground that “ * * * the land had not been ascertained and identified so that the railroad acquired any interest in specific land which it could convey prior to the filing of its release and that, therefore, its transferee is not protected under- the saving clause of Section 321(b) of the Transportation Act.” On May 1, 1943, the Santa Fe appealed to the Secretary of Interior from the decision of the Commissioner of the General Land Office rejecting the said selections and after an adverse ruling moved for a rehearing which was denied. On March 16, 1944, Santa Fe filed its complaint in the present suit, seeking an injunction restraining the Secretary from rejecting the selection of lands and the application for the patent, and praying for a writ in the nature of mandamus directing him to proceed to determine the right of Santa Fe to have patented the lands in question, notwithstanding the release. Both plaintiff and defendant moved for summary judgment and the lower court granted the plaintiff’s motion and denied that of the defendant. On appeal to this court we held in Krug, Sec. of Int., v. Santa Fe Pac. R. Co., 1946, 81 App.D.C. 288, 158 F.2d 317, 320, that the decision as to the defendant’s motion was correct, hut that the lower court should not have granted the plaintiff’s motion for a summary judgment. In holding that the Secretary of Interior’s motion for summary judgment was properly denied we stated: “While it is true that, as a general rule, selection is necessary to vest any right to specific indemnity land in the grantee, the Supreme Court has long recognized an exception where there is a deficiency of indemnity land to satisfy losses in place.” This was in effect what the Supreme Court held in United States v. Northern Pacific Ry. Co., supra. The appellants first contend that the release given by Santa Fe is not excepted from the operation of the Transportation Act since Santa Fe had no “title” to the lands which could have been sold to Aztec and confirmed by patent. It is obvious that if the railroad did have a title which it could sell that the lands sold are excepted from the release. The Santa Fe does not contend that it had legal title to the lands it sold. What then was the Santa Fe’s interest? The Supreme Court has consistently treated the right to select “place” lands as a vested interest, and, further, it has also treated the right to choose “indemnity” lands in lieu of “place” lands as just such a vested interest. These vested interests arise from the contract between the parties. United States v. Northern Pacific Ry. Co., supra. This vested interest, in the last analysis, consisted of nothing more than the right to choose or select lands. Being assured by this right the Santa Fe’s predecessor sold its right to select 1,000,000 acres of land. Before that sale the Santa Fe could have selected for itself after the land had 'been surveyed, but after the sale Santa Fe was bound to exercise its choice for Aztec. Any failure on Santa Fe’s part would have rendered it liable in damages. In the light of these facts we feel Santa Fe did have a right which it could and did sell. In the United States v. Northern Pacific Ry. Co. case, supra, Mr. Justice Van De-vanter said, in effect, that the government could not deprive these land grant railroads of their rights to “place” and “indemnity” lands. And that is in effect what the government is trying to do here. At first no surveys were made which would have enabled the Santa Fe to make selections. Then the specific 98,690.83 acres and other lands were withdrawn as part of a forest reserve. Consequently, no selection could have been made until after the decision in the Forest Reserve case, United States v. Northern Pacific Ry. Co., supra. It should be remembered that the railroad must select indemnity lands under the direction of the Secretary of Interior, and that officer has consistently ruled no selection can be made or approved until the lands in question are surveyed. The government cannot take advantage of its own wrong or at least its own failure to act. We hold that the right of selection vested at the earliest time there was a deficiency of indemnity lands to satisfy losses in place. The government, by additional surveys could not defeat the Santa Fe’s right of selection. The District Court found as a fact that a deficiency did in fact continue up to 1940 and consequently no selection was necessary to vest title in the Santa Fe. This finding was adequately supported by the evidence and in this conclusion we concur. If there was a deficiency in the indemnity lands to satisfy losses in place, and we so hold, then no selection was necessary by Santa Fe to vest this right in the. railroad. This was our decision when this case was before this court the last time, Krug v. Santa Fe Pacific Railroad Co., supra, and we affirm our conclusion there. The appellants next contend that there was no valuable consideration for Santa Fe’s quitclaim deed to Aztec as Santa Fe was under no obligation to select the land for Aztec; this, it is alleged, prevented Aztec from being an innocent purchaser for value within the meaning of the Transportation Act. As we have indicated, Santa Fe was under a duty to select these lands for Aztec. Any other merit in this contention is destroyed by the fact we must agree with the District Court that Aztec was an “innocent purchaser. for value” within the meaning of the Transportation Act, supra. That term, as therein used, must be defined in its ordinary commercial sense unless a contrary definition be shown. The term innocent purchaser for value has long been interpreted by our courts as one who purchases in good faith and for value. Not even the appellants will contest the fact that half a million dollars is value; that sum has been paid. There has been no showing that either Aztec or Santa Fe acted in bad faith. The appellants predicate their claim that Aztec was not an innocent purchaser for value on the fact that there was no legal obligation of Santa Fe to select. When that argument fails, and it does here, so must their contention that there was no valuable consideration. Finally, the appellants contend that the administrative conclusion involved the exercise of discretion, and since it was not plainly wrong is impregnable to mandamus. The appellants have not contended that the Secretary of Interior’s decision is not subject to judicial review. From what we have already stated we must conclude the Secretary was plainly wrong. His department in effect was seeking by its own wrongful action or failure to act to deprive this railroad of its vested right to select. That right arose from the contract between the government and the railroad when the railroad undertook to build its line. We agree with the rule of law as cited by the appellants in United States ex rel. Simpson v. Wilbur, 1931, 283 U.S. 414, 51 S.Ct. 502, 75 L.Ed. 1148. Determinations by an administrative agency should not be reversed by means of injunction or mandamus merely because the court may have reached another conclusion. They can only be overturned when the administrative action is unreasonable or plainly wrong. But we do 'hold that the action by the Secretary was unreasonable and plainly wrong. The appellants again state the law correctly when they argue that mandamus will lie against executive or administrative officers only when their duty in a particular-situation is so plainly prescribed as to be-free from doubt and equivalent to a positive command. Work v. U. S. ex rel. Rives, 1925, 267 U.S. 175, 45 S.Ct. 252, 69 L.Ed. 561. The only duty which the Secretary must perform is purely ministerial. He-need only issue the patents. Consequently, we do not hesitate to grant mandamus and. injunctive relief. Affirmed.
Chief Judge STEPHENS dissents from this opinion and wil-1 file his dissent later. Dissenting Opinion by Chief Judge Harold M. Stephens to Opinion of Court Filed Herein November 15, 1951 Filed March 4, 1952 STEPHENS, Chief Judge (dissenting).. I am unable to agree with the disposition of this case by the court. I feel obliged to set forth my views at some length. This is an appeal from a final judgment entered January 14, 1949 by the United' States District Court for the District of' Columbia. The judgment enjoined the-appellants, the Secretary of the Interior,, the Assistant Secretary of the Interior, and the Director of the Bureau of Land Management of the Department of the Interior, from rejecting, on certain specified grounds, an application for the selection, of and the issuance of a patent to some ■ ninety-eight thousand acres of land (98,-690.83 acres) located in Arizona. The application had been filed by the appellee-Santa Fe Pacific Railroad Company in. the interest of the appellee Aztec Land & Cattle Company, Ltd. The judgment directed the appellants to proceed to a determination of the application in question without reference to a release executed by the appellee Santa Fe Pacific Railroad Company under Section 321(b) of the Transportation Act of September 18, 1940, 54 Stat. 898, 954-5, 49 U.S.C.A. § 65. Hereafter, for convenience, the appellants will sometimes be referred to as the Government, and the appellees as Santa Fe and Aztec, respectively. I The case out of which the appeal arises has its background in the Act of July 27, 1866, 14 Stat. 292, in the Act of June 7, 1924, c. 291, Title 1, 43 Stat. 486, and in Section 321 of the Transportation Act of September 18, 1940, referred to above. An understanding of the questions involved in the appeal requires an acquaintance also with certain rulings of the Supreme Court concerning the meaning and proper application of statutes enacted by Congress in aid of transcontinental railroad construction needed for the development of the West in the period following'the Civil War. The Act of July 27, 1866 was one of such statutes. That Act, entitled “An Act granting Lands to aid in the Construction of a Railroad and Telegraph' Line from the States of Missouri and Arkansas to the Pacific Coast”, incorporated the Atlantic and Pacific Railroad Company, hereafter sometimes referred to as Atlantic and Pacific, and granted to that company a right of way, including necessary ground for station buildings, workshops, depots, machine shops, switches, sidetracks, turntables and water stations, and granted to the company every odd-numbered alternate section of public land, not mineral and not reserved, sold, granted or otherwise appropriated and free from pre-emption or other claims or rights, to the amount of twenty alternate sections per mile on each side of the railroad line as definitely located through the territories of the United States and ten alternate sections of land per mile on each side of the railroad line through any state. The Act provided also that if any of the lands so granted were found at the time of definite location of the railroad to have been previously granted, sold, reserved, occupied by homestead settlers, or pre-empted or otherwise disposed of, the grantee railroad should have the right to select other lands in odd-numbered sections, in lieu of the sections or parts of sections lost, not more than ten miles beyond the first designated limits of the grant. The first designated limits of the grant under such statutes became known as the “primary” or “place” limits, and the lands therein as “place” lands. The further limits of ten miles beyond the place limits became known as the “indemnity” limits, the odd-numbered sections within those extended limits as “indemnity” lands, or “lieu” lands, and the selections made within those extended limits, in lieu of losses in the place limits, as “indemnity” selections. The Act further provided that Atlantic and Pacific should be a post route and military road, subject to the use of the United States for postal, military, naval and all other Government service, and also subject to such regulations as Congress might impose restricting the charges for such use. The rulings of the Supreme Court— concerning the meaning and proper application of such statutes as the foregoing —were made in certain decisions which, for full appreciation of their pertinence to the instant case, must be stated at some length: In Payne v. Central Pac. Ry. Co., 1921, 255 U.S. 228, 41 S.Ct. 314, 65 L.Ed. 598, the Act of July 25, 1866, c. 242, 14 Stat. 239, granted lands for railroad construction. A selection of indemnity lands had been made, but before formal approval thereof by the Secretary of the Interior, he withdrew for a waterpower site the lands selected. The suit was to enjoin the Secretary and the Commissioner of the General Land Office from canceling the selection. The Court held that by virtue of the selection the rights of the railway company had attached and that the withdrawal by the Secretary was illegal and that the Secretary should be required to dispose of the selection on its merits, unaffected by the withdrawal. In brief, the decision stands for the proposition that a withdrawal by the Government of indemnity lands after they have been selected by the railroad company is void. The theory of the decision was that on filing a selection in full faith and compliance with the requisites for a patent to a particular tract the railroad becomes the equitable owner thereof, and for that reason a subsequent withdrawal of the lands selected is legally ineffective. The Court said: “Rightly speaking, the selection is not to be likened to the initial step of one who wishes to obtain the title to public land by future compliance with the law, but rather to the concluding step of one who by full compliance has earned the right to receive the title.” The Payne case served as a background for the decision in United States v. Northern Pac. Ry. Co., 1921, 256 U.S. 51, 41 S.Ct. 439, 65 L.Ed. 825, commonly referred to in the reports as the “Forest Reserve case.” In that case a withdrawal by the Secretary of the Interior of indemnity lands was made before selection and was held void. The Northern Pacific Railroad Company, the predecessor in interest of the Northern Pacific Railway Company, was incorporated and granted lands by the Act of July 2, 1864, c. 217, 13 Stat. 365. Under that Act, as modified and supplemented by a Joint Resolution of May 31, 1870, 16 Stat. 378, the railroad company on several occasions prior to 1904 attempted to select lands within -the indemnity limits of the grant for the purpose of satisfying place land losses. For the reason that at that time the lands were still un'surveyed the Secretary of the Interior refused to consider the selections. In 1904 the Secretary made a temporary withdrawal of the lands, still unsurveyed, for the purpose of preventing an acquisition of any claim to them pending an inquiry into the desirability of adding them to the forest reserves. On April 5, 1905, a survey having been completed, the plat thereof was filed. Immediately thereafter — on that same day — the railroad company filed its selection. The lands selected were necessary to fill up place land losses. Thereafter (at a date not described in the opinion of the Court) patents were inadvertently issued to the railroad company by the Secretary of the Interior notwithstanding his previous temporary withdrawal of the lands. In 1906 the Secretary made the temporary withdrawal permanent. The action in the case was by the Government to cancel the patents as inadvertently issued. It was contended by the Government that no right to lands within the indemnity limits attached, either generally or specifically, until they were selected by the railroad company and that up to the time of selection the Government was free to reserve the lands for its own purposes and thereby to cut off the right of selection even where the losses in the place limits exceeded the available land in the indemnity limits, and although the railroad company’s purpose to claim the lands in the indemnity limits was asserted at the earliest opportunity. The railroad company urged, to the contrary, that where (through preemption, homestead entries or other disposals) -the lands in the indemnity limits had been so far diminished that all that remained of them were needed to supply the losses in the place limits the Government was not at liberty to reserve the remaining indemnity lands, or any of them, for its own uses and thereby to cut off the railroad company’s right to claim them. The theory of the company was that, as against the Government, the remaining indemnity lands were appropriated to the fulfillment of the Government’s obligation under the grant and that the company had a vested right in the fulfillment of that obligation. The Supreme Court sustained the contention of the company. The Court ruled tha-t the land grant statute was in effect a proposal to the company that if it would undertake construction of the railroad it would receive in return the lands comprehended in the grant, and that upon acceptance of that proposal and construction of the railroad and acceptance thereof by the President the proposal was converted into a contract to the performance of which by the Government the company became entitled as a result of having performed its part. The Court was of the view, citing the Payne case, that the provision relating to indemnity lands was as much a part of the grant and contract as the one relating to place lands; that it was the purpose of Congress in making the grant to confer a substantial right to lands within the indemnity limits in lieu of place lands lost, and that such right was within the protection of due process clause of the Constitution. Specifically the Court held, therefore, that after the railroad company had earned the right to receive the lands comprehended in the grant the Government was not free to reserve or to appropriate to its own use the lands in the indemnity limits which were required to replace place land losses. The Court said: “While it often has been said that under such a grant no right attaches to any specific land within the indemnity limits until it is selected, an examination of the cases will show that this general rule never has been applied as between the Government and the grantee where 'the lands available for indemnity were not sufficient for the purpose. Its only application has been where either the rights of settlers were involved, or the lands available for indemnity exceeded the losses, thereby making it essential that there be a selection and identification of the particular lands sought to be taken. This distinction is illustrated in St. Paul & Pacific R. R. Co. v. Northern Pacific R. R. Co., 139 U.S. 1 [11 S.Ct. 389, 35 L.Ed. 77.] The question there presented was whether there was any need for a selection where no right of a settler was involved and the lands ■available for indemnity were not sufficient to supply the losses. By reason of this insufficiency it was ruled that the lands in the indemnity limits necessarily were appropriated to satisfy the losses and that no selection was required. The court said [139 U.S. at page 19, 11 S.Ct. at page 395]: ‘As to the ■objection that no evidence was produced of any selection by the Secretary of the Interior from the indemnity lands to make up for the deficiencies found in the lands within the place limits, it is sufficient to observe that all the lands within the indemnity limits only made up in part for these deficiencies. There was, therefore, no occasion for the exercise of the judgment of the Secretary in selecting from them, for they were all appropriated.’ ” [256 U.S. at pages 65-66, 41 S.Ct. at page 442], Although the case was thus decided by the Supreme Court under the theory advanced by the railroad company the Court found it necessary to remand the case for further proceedings for the purpose of determining the question of the asserted deficiency in the lands within the indemnity limits 'to satisfy place land losses. In brief, the decision of the Court in the Forest Reserve case stands for the proposition that where indemnity lands are insufficient to fill up place land losses withdrawal of the same by the Government prior to selection is legally ineffective. As a result of the remand of the Forest Reserve case there was ultimately decided by the Supreme Court a third case, United States v. Northern Pacific Ry. Co., 1940, 311 U.S. 317, 61 S.Ct. 264, 85 L.Ed. 210, a part of the rulings in which are pertinent to the instant appeal. That case arose as follows: Upon the decision of the Forest Reserve case it became apparent to the Government that if the indemnity claim of the railroad, including a right to withdrawn lands in the event of a deficiency in unwith-drawn lands to satisfy place land losses, were sustained, much of the land withdrawn for forest reserve purposes would be diverted from the same. A Joint Committee of Congress appointed to investigate the conflicting claims of the Government and the railroad to withdrawn indemnity lands recommended the enactment of legislation authorizing a suit by the Attorney General to procure a final determination of the respective rights of the Government and the railroad, to the end that the grant should be finally adjusted and the interests of both the Government and the railroad fully protected. This resulted in the Act of June 25, 1929, 46 Stat. 41, 43 U.S. C.A. § 921 et seq. That Act declared forfeited to the United States certain claimed rights asserted by the railroad to indemnity lands within the boundaries of any national forest or any other Government reservation and directed that the railroad should receive from the Government such compensation, if any, as the courts should hold due for the loss of the lands forfeited. The Act directed the Attorney General to institute an action to determine all questions of law and fact germane to complete adjudication of the respective rights of the Government and the company under the Act of July 2, 1864 and the Resolution of May 31, 1870, as amended; the Act established venue in, among others, the United States District Court for the Eastern District of Washington. Pursuant to the Act, the Attorney General caused a bill to be filed in the district court mentioned. After proceedings before a master the court rendered a decision holding the railroad entitled to patents to certain lands outside the reserves and to compensation for certain lands within them. Thereafter, Congress, by the Act of May 22, 1936, 49 Stat. 1369, 43 U.S.C.A. § 925 note, authorized a direct appeal to the Supreme Court. Errors were assigned to the district court’s decree by both the Government and the railroad. Also, the Government put forward certain claims which, if sustained, would have precluded any recovery by the railroad. These were separately discussed in the opinion of the Court, written by Mr. Justice Roberts. Two of the claims, numbers 7 and 15, resulted .in rulings pertinent to the instant appeal. Claim 7 read as follows: "The claim that no compensation should have been awarded because unsurveyed public lands were available for selection, and the company failed to show that it would, or could, have selected and obtained all of the withdrawn lands." [311 U.S. at page 342, 61 S.Ct. at page 275] The district court had found that on March 1, 1898, just prior -to the first forest withdrawal, the railroad had unsatisfied losses of 5,946,664 acres under the grant of July 2, 1864 and that the total lands available for selection, as of that date, were 1,137,508 acres- — leaving a deficiency of 4,809,156 acres; -that the deficiency in the grant under the Joint Resolution of May 31, 1870, excluding available land in second indemnity limits, at March 1,. 1898, was 593,656 acres, and that there had been ever since a deficiency in respect of that grant. In making these findings, the district court computed as lands available for selection only non-mineral surveyed vacant lands. The railroad asserted that in this the district court was right. But the Government insisted that vacant unsurveyed lands were ‘available’ as indemnity to the railroad, notwithstanding a concession that, . as lands selected must be identified, the railroad could not select them until they had been surveyed. The Government urged that the railroad failed to show that there were not ample unsurveyed lands within the indemnity limits to offset losses in the place limits at the -time of the withdrawals. The Government added that, inasmuch as homesteaders might, in the interim, have obtained prior rights by actual settlement of the unsurveyed lands, it was a matter of speculation whethl er the railroad would ultimately have obtained adequate indemnity, even if unsurveyed lands had not been withdrawn for forest reserve purposes. The Government, further urged -that, if the district court had treated unsurveyed lands as available for indemnity selection, there would have been no deficiency at the dates of the withdrawals. The Supreme Court held that these contentions of the Government could not be sustained. It said that the decision turned on the inquiry as to what lands were available to the railroad for selection at the time of the respective governmental withdrawals. The Court pointed out that in the first place, the railroad could not select mineral lands. It then commented that by Section 3 of the Act of July 2, 1864 it was provided that, whenever any of the place lands granted, which shall have been, prior to the time of definite location of the road, “granted, sold, reserved, occupied by homestead settlers, or pre-empted, or otherwise disposed of, other lands shall be selected by said company in lieu there of, under the direction of the Secretary of the Interior, in alternate sections, and designated by odd numbers . . [311 U.S. at page 344, 61 S.Ct. at page 276]. The Court then said: “The fact that the lands in the indemnity limits are, before survey, subject to be taken by pre-emptors and settlers, and thus ultimate satisfaction of the railroad company may bo defeated, does not justify the Government itself in reserving lands contained within those limits and thus rendering impossible the company’s obtaining them. This was definitely held in the Forest Reserve Case. “Much was said in argument as to the meaning of the phrase ‘lands available as indemnity’ as used in that case. It seems clear that un-•surveyed lands are not available to the company under the Act of 1864. It will be observed that the company must select indemnity lands under the direction of the Secretary of the Interior. That officer has invariably ruled that no selection can be made or approved until the lands in question are surveyed. “This ruling was necessitated by the very terms of the Act of 1864, which requires selection of alternate sections designated by odd numbers. Obviously, until surveyed, no odd-numbered sections could exist. Unsurveyed lands are not public lands.” [Footnotes omitted] The Court then concluded, on this subject, as follows: “The decision in the Forest Reserve Case, supra, did not suggest any different view. The allegation of deficiency in indemnity lands in that case, found in the stipulation of the parties, was that the lands were those odd-numbered sections which the defendant was entitled to select under the regulations of the Land Department. This could only mean, and the decision could only have gone upon the view that it meant, that the surveyed lands within the indemnity limits were deficient to meet the selection rights of the railroad company. The case is not an authority, as the Government contends, for the proposition that unsur-veyed vacant lands within the indemnity limits are to be considered as available to the company in ascertaining whether the Government has reserved to itself lands as to which the company has selection rights. Under the doctrine of the Forest Reserve Case the challenged withdrawals for forest and other governmental purposes left the indemnity lands available to the company deficient to satisfy its rights of selection. “The holding was that the withdrawals were void and the company’s rights remained as if the withdrawals had never been made. If and when any of the withdrawn lands were surveyed the company was entitled to select them, as it did in the Forest Reserve Case.” [311 U.S. at page 345, 61 S.Ct. at page 277] The Government argued further that, ■even though the withdrawals for governmental purposes created such a deficiency of lands available for selection that, to satisfy the grant, the railroad would have been compelled to select lands within the withdrawn reserves, nevertheless, in orde-r to obtain the indemnity for the deficiency so created, the railroad was bound to prove that it would have selected lands within the reservation, and what lands it would have selected, before it could claim compensation from the Government for the deprivation of its right to select. The majority of the Supreme Court ruled that this position was untenable. The Court said: “Under the ruling in the Forest Reserve Case it was the obligation of the Government to refrain from any action which would deprive the company of its right of selection in accordance with the terms of the grant. When the United States withdrew the lands for forest and other reserves it signified its purpose to retain them for its own use and not to allow the company or anyone else to obtain them, any law or contract to the contrary notwithstanding. We think the company’s right of selection, to the extent of the deficiency in the grant, remained available as to the withdi-awn lands, provided the lands selected were such as are defined in the grant. The Government’s contention that no one can say how soon the lands would have been surveyed and selected if they had not been withdrawn and reserved, or, if they had remained unsurveyed and not withdrawn, what areas would have been taken up by settlers and pre-emptors, does not avail to abrogate or qualify the company’s right to exercise its privilege of selection notwithstanding the withdrawals. Moreover, the argument ignores the repeal of the pre-emption laws by the Act of March 3, 1891.” [311 U.S. at pages 346-347, 61 S.Ct. at pages 277-278] [Footnotes omitted] Claim 15 was in the following terms: “The claim that the United States is liable to account to the Railway Company only for the ascertained deficiency at the time of withdrawal.” [311 U.S. at page 364, 61 S.Ct. at page 285] In respect of this the Court ruled: “In its brief upon reargument the Government takes the position that even if the withdrawals left the grant deficient in lands lying in the second indemnity limits, the United States is liable to account to the Railway Company only for the amount of such deficiency. The District Court held that if a given withdrawal had the effect of leaving within the indemnity limits an insufficient acreage to satisfy the selection rights of the company the withdrawal was a breach of the Government’s obligation because thereby the Government dis-enabled itself to carry out that obligation. The consequence which the District Court attached to such action on the part of the Government was that the lands withdrawn were, notwithstanding the withdrawal, still open to selection by the company if and when surveyed. The court below thought that, as the company was entitled, under the terms of the grant, to exercise its selection rights with respect to the withdrawn lands in these circumstances, the Act of 1929 contemplated that it should be compensated for the deprivation of that right. “We think that the District Court was right and that the Government’s position that it is liable to account only for any deficiency in the vacant lands at the time of withdrawal is not in accord with the granting act of 1864. The Forest Reserve Case, supra, supports the decision below. It is clearly there held that if, by the Government’s own act in withdrawing lands from the indemnity limits, it leaves insufficient vacant land available for selection the company thereby becomes entitled to select lands within the indemnity limits. That is exactly what was done by the company which brought about the litigation in the Forest Reserve Case. The decision is clear to the effect that, assuming the grant was deficient (which was the matter the court could not determine on the record then presented), the company was entitled to select lands within the reserve.” [311 U.S. at pages 364-365, 61 S.Ct. at pages 285-286] It has been noted at the outset of this topic I that the Act of July 27, 1866, constituted the Atlantic and Pacific Railroad Company a post route and military road, subject to the use of the United States for postal, military, naval, and all other government services, and subject also to such regulations as Congress might impose restricting the charges for such Government use. By the Act of June 7, 1924, also referred to above, it was provided in respect of charges for transportation by land grant railroads subject to regulation by Congress that: "... hereafter payment shall be made at such rates as the Secretary of War shall deem just and reasonable and shall not exceed 50 per centum of the full amount of compensation, computed on the basis of the tariff or lower special rates for like transportation performed for the public at large, for the transportation of property or troops of the United States over any railroad . . . which was aided in its construction by a grant of land on condition that such railroad should be a post route and military road, subject to such regulations as Congress may impose restricting the charge for such Government transportation, and such payment shall be accepted as in full for all demands for such service.” But on September 18, 1940, Congress enacted, and the President approved, the Transportation Act of 1940, above cited. The purpose of Section 321 thereof, so far as is here pertinent, was to relinquish the existing right of the United States to reduced rates for transportation by a land grant railroad in consideration of a release by such railroad of any claim which it might have against the United States “to lands, interests in lands, compensation, or reimbursement on account of lands or interests in lands which had been granted, claimed to 'have been granted, or which it is claimed should have been granted to such carrier or . . . predecessor in interest . . ..” Section 321(b) provided, -however, that: “Nothing in this section shall be construed as requiring any such carrier to reconvey to the United States lands which have been heretofore patented or certified to it, or to prevent the issuance of patents confirming the title to such lands as the Secretary of the Interior shall find have been heretofore sold by any such carrier to an innocent purchaser for value or as preventing the issuance of patents to lands listed or selected by such carrier, which listing or selection has heretofore been fully and finally approved by the Secretary of the Interior to the extent that the issuance of such patents may be authorized by law.” [54 Stat. at pages 954-955] II On March 16, 1944, Santa Fe and Aztec filed in the district court the complaint which initiated the action out of which this appeal has arisen. The allegations of the complaint — stating them only so far as necessary to an understanding of the questions involved in the appeal — were, in substance and effect, as follows: Santa Fe sues in its own right and also as-successor to the Atlantic and Pacific Railroad Company and as successor to the land grant to that company under the Act of July 27, 1866. Santa Fe is vested with the rights of Atlantic and Pacific in and to the lands granted Atlantic and Pacific by that Act. On March 12, 1872, Atlantic and Pacific filed with the Secretary of the Interior its map of definite location, and thereafter the railroad was constructed and the rights of Atlantic and Pacific-to the lands granted became fixed and determined. The grant as finally fixed extended along the line of the railroad from a point in what is now the State of New Mexico through what are now the States of New Mexico and Arizona to the west boundary of Arizona at the Colorado River. On February 3, 1886, Atlantic and Pacific by contract sold to Aztec-for fifty cents per acre approximately one-million acres of land within the limits of the grant in the then Territories of Arizona and. New Mexico comprising all of the odd-numbered sections within certain described boundaries. Tile lands sold were designated and described by section, township and range, although at that time unsurveyed. A part of the lands sold were within the place limits of the grant and a part within the indemnity limits. Subsequently, in 1886 and 1894, so much of the lands as were then surveyed were conveyed by Atlantic and Pacific to Aztec by deed duly recorded. In 1905 the remainder of the lands sold, both surveyed and unsurveyed, wore, by quitclaim deed recorded, conveyed to Aztec by Santa Fe as successor to Atlantic and Pacific. Included in the lands so sold and conveyed to Aztec were the 98,690.83 acres of land in suit. All of these were and are within the indemnity limits of the Atlantic and Pacific grant. (A description, as set forth in the complaint, of the lands in suit is given in the margin.) In 1887 Atlantic and Pacific filed with the Secretary of the Interior a selection of certain of the lands within the indemnity limits of the grant, including the lands in suit, for the purpose of satisfying losses in the place limits. But that selection was rejected by the Secretary upon the ground that the lands were then unsurveyed and therefore not then available for selection. No other selection of the lands in suit has been made by Atlantic and Pacific or by Santa Fe until the selection made in an application of June 26, 1942, below described. On August 17, 1898, the lands in suit were withdrawn by Executive Proclamation of that date for the Black Mesa Forest Reserve, and such lands are now included within what are known as Coconino and Sitgreaves National Forests. At the time of this withdrawal and for sometime prior thereto and at all times since then the losses in the place limits of the Atlantic and Pacific grant exceeded the surveyed lands within the indemnity limits available for selection, and to that extent there has been a deficiency in the grant since sometime prior to the withdrawal of August 17, 1898, which has at no time been less than 100,000 acres. On December 18, 1940, Santa Fe filed with the Secretary of the Interior, pursuant to Section 321(b) of the Transportation Act of September 18, 1940, and regulations of the Secretary prescribed thereunder, a release of “any and all claims of whatever description to lands, interests therein, compensation or reimbursement therefor on account of lands or interests granted, claimed to have been granted, or [sic] claimed should have been granted by any act of the Congress to Santa Fe Pacific Railroad Company or to any predecessor in interest in aid of the construction of any portion of its railroad.” That release was accepted and approved by the Secretary on March 1, 1941. At the time of filing the release Santa Fe also filed with the Secretary, in compliance with regulations prescribed by him under Section 321(b) of the Transportation Act of 1949, a list of all innocent purchasers for value to whom Santa Fe, or its predecessor Atlantic and Pacific, had sold any of the unpatented lands within the limits of the Atlantic and Pacific grant prior to September 18, 1940, with a description of the lands so sold. That list included the name of Aztec Land & Cattle Company and a description of the lands sold to that company as above set forth. On June 26, 1942, Santa Fe filed with the Commissioner of the General Land Office (now the Bureau, of Land Management) in the Department of the Interior an application for the selection of, and issuance of patent to, the lands described above as lands sold to an innocent purchaser for value prior to September 18, 1940, and excepted from the release filed by Santa Fe pursuant to Section 321(b) of the Transportation Act of 1940, and subject to selection and patent as indemnity lands acquired for the satisfaction of place land losses in the grant under the Act of July 27, 1808. On April 8, 1943, the Commissioner notified Santa Fe and Aztec of the denial and rejection of that application upon the ground that “the land had not been ascertained and identified so that the railroad acquired any interest in specific land which it could convey prior to the filing of its release and that, therefore, its transferee is not protected under the saving clause of section 321(b) of the Transportation Act.” On or about May 1, 1943, Santa Fe appealed to the Secretary of the Interior from the decision of the Commissioner rejecting the application. On January 8, 1944, the Assistant Secretary of the Interior, acting for the Secretary, affirmed the decision of the Commissioner. On January 27, 1944, Santa Fe filed with the Secretary of the Interior a motion for rehearing. On February 8, 1944, that motion was denied by the Assistant Secretary of the Interior. The lands in suit are within the indemnity limits of the Atlantic and Pacific grant under the Act of July 27, 1866, and are non-mineral public lands, not reserved, sold, granted, or otherwise lawfully appropriated, and are free from pre-emption or other claims or rights. The withdrawal of such lands for forest reserve purposes on August 17, 1898, was void because at the time of the withdrawal there was, as alleged above, a large deficiency in the grant, and the lands were then and have ever since been appropriated to satisfy losses in the place limits. The release filed by Santa Fe pursuant to Section 321(b) of the Transportation Act of 1940 is not applicable to the lands in suit because they were expressly excepted therefrom, having been sold prior to September 18, 1940, to Aztec, an innocent purchaser for value. The action of the Secretary in rejecting the selection of the lands in suit and the application for a patent thereto by Santa Fe, in the interest of Aztec as purchaser of the lands, was based upon an erroneous construction of the applicable laws, was arbitrary and beyond the authority of the Secretary and was in violation of the vested rights of Santa Fe and Aztec and casts a cloud on their title to such lands. Santa Fe and Aztec prayed for a decree enjoining the Government from rejecting the selection of the lands in suit and the application for a patent thereto, and directing the Government “to determine the right of . . . Santa Fe . . . to select the lands in question and to the issuance of a patent, without regard to the . . . release” filed by Santa Fe under Section 321 (b) of the Transportation Act of 1940. Upon the filing of the complaint in the district court by Santa Fe and Aztec the Government, without then filing an answer, filed a motion for summary judgment in its own favor upon the ground that there was no genuine issue as to any material fact and that the Government was, therefore, entitled to a judgment as a matter of law. To the Government’s motion there were attached certain exhibits. Santa Fe and Aztec also filed a motion for summary judgment in their own favor upon the ground that the pleadings filed, namely the complaint, the Government’s motion for summary judgment, and the exhibits attached thereto, showed that there was no genuine issue as to any material fact and that Santa Fe and Aztec were, therefore, entitled to judgment granting, as a matter of law, the relief prayed for in their complaint. Later, but before hearing on the two motions, the Government filed an affidavit stating that for the reason that it was of the opinion that the release filed by Santa Fe on December 18, 1940 barred the right of Santa Fe and Aztec to the lands in question, the Government had no reason in its decisions of January 8 and February 8, 1944 (the decisions affirming the rejection by the Commissioner of the General Land Office of Santa Fe’s application for the selection of and issuance of a patent to the lands in suit — and denying Santa Fe’s motion for rehearing) to pass upon, ana that it had made no determination as to, the truth or falsity of the allegation of the complaint that the losses in place lands had exceeded the surveyed lands within the indemnity limits of the grant at all times since before August 17, 1898, or of the allegation that the lands in question were non-mineral public lands, not reserved, sold, granted, or otherwise lawfully appropriated, and free from pre-emption or other claims or rights, or of the allegation that Aztec was an innocent purchaser for value of such lands. The affidavit stated further that the Government was, in consequence, without knowledge or information sufficient to form a belief as to the truth of those allegations and, therefore, denied the same. The case was submitted to the district court on the two motions for summary judgment and the exhibits and affidavit referred to. The district court denied the motion of the Government and granted that of Santa Fe and Aztec and entered final judgment in their favor. The Government then appealed from that judgment to this court. This court ruled that the Government’s motion was properly denied but that the summary judgment in favor of Santa Fe and Aztec shouíd not have been entered, and the court reversed the same and remanded the case for further proceedings in accordance with its opinion, if and when an answer was filed by the Government. Krug v. Santa Fe Pac. R. Co., 1946, 81 U.S.App.D.C. 288, 158 F.2d 317. The opinion of this court, written by then Chief Justice Groner, stated, as reasons for the decision, in substance and effect the following: The Government upon its motion for summary judgment had argued .to the district court — and had insisted upon the appeal — that the existence of a deficiency of indemnity lands to make up place land losses was not material since Santa Fe had made no selection of lauds and without selection had no i terest which could be conveyed to Aztec. If that contention of the Government was correct, then its motion for summary judgment should have been granted by the district court; but if the contention was not correct, and if the theory of Santa Fe and Aztec that formal selection was unnecessary when a deficiency of the indemnity lands existed was correct, then, though a summary judgment should not have been entered in favor of the Government, neither could such a judgment be properly entered for Santa Fe or Aztec — for the reason that if their theory was correct the Government was not prepared to admit the fact of a deficiency, i. e., there was a genuine issue as to a material fact. And — ruled the court— the contention of the Government was incorrect and the theory of Santa Fe and Aztec was correct — and the district court rightly so decided: because while it is true that, as a general rule, selection is necessary to vest any right to specific indemnity lands in a railroad grantee, the Supreme Court has long recognized an exception where there is a deficiency of indemnity land to satisfy place land losses. (Here the opinion cited United States v. Northern Pac. Ry. Co., 256 U.S. 51, 65, 41 S.Ct. 439, 65 L.Ed. 825, the Forest Reserve case.) The fact that the lands in suit were withdrawn for inclusion in a national forest reserve did not operate to defeat such rights as Santa Fe and Aztec may have had in the lands. (Here the opinion cited United States v. Northern Pacific Ry. Co., 311 U.S. 317, 61 S.Ct. 264, 85 L.Ed. 210.) Therefore, the court was of the view — according to Judge Groner’s opinion — that “in the circumstances described in the complaint, — if proved on the trial — ” the lands involved in the suit were identified without the formality of a selection, and as a result the right of Santa Fe attached and the issuance of a patent to the lands became a duty of the Secretary of the Interior. (Here the opinion cited St. Paul & Pacific v. Northern Pacific, 139 U.S. 1, 11 S. Ct. 389, 35 L.Ed. 77, the case relied upon, as appears above, by the Supreme Court in its decision in the Forest Reserve case.) Then followed the ruling described above. In short, this court in thus remanding the case for further proceedings in the district court accepted the legal theory of Santa Fe and Aztec which underlay their complaint that selection of indemnity lands is unnecessary when a deficiency to fill up place land losses exists; and the court remanded the case for a hearing on the question of fact as to the existence of a deficiency “in the circumstances described in the complaint, — if proved on the trial.” It is important to note that “the circumstances described in the complaint,” i. e., the allegations of the complaint in respect of a deficiency, were, as appears above, that there had been a deficiency of indemnity lands to fill up place land losses from sometime prior to August 17, 1898, the date of the withdrawal, and “at all times since” which at no time had been less than 100,000 acres. It was this continuing deficiency upon which the case of Santa Fe and Aztec was based, not upon a deficiency for a lesser period of time than that described. Clearly, under the remand, if such a deficiency was shown Santa Fe and Aztec were to prevail. But it is equally clear that if such a deficiency was not shown the Government was to have judgment — because it was not in dispute that Santa Fe had made no selection and the court, in its opinion by Judge Groner, recognized that as a general rule, that is, in the absence of a deficiency, selection is necessary to vest a right to specific indemnity lands in the railroad under the land grant statutes. The foregoing limitations of the remand, and the rulings upon which they were based, became the law of the case. After the remand of the case to the district court the Government filed an answer to the complaint of Santa Fe and Aztec. The answer admitted all of the allegations of fact in the complaint except the allegation as to a deficiency, the allegation that Aztec was a bona fide purchaser for value of the lands in suit, and the allegation that at the time of the asserted 1905 conveyance of the lands in suit to Aztec by Santa Fe some of the lands had been surveyed. All of those allegations of fact were put in issue by the Government’s answer. The answer denied also the allegations of the complaint that the lands in suit were “sold” and “conveyed” by Santa Fe to Aztec. But those allegations were really allegations of law, i. e., they were intended as assertions that an interest in the lands had arisen in Santa Fe and become the subject of the contract of sale and deeds referred to in the complaint. The Government, by its denial, apparently ■did not intend to deny the execution of a contract of sale or the execution and recordation of deeds, but only to raise an issue of law as to whether an interest in the lands in suit had arisen in Santa Fe which could be transferred to Aztec. That is to say, the Government was contending that there was no deficiency of indemnity lands as alleged, but on the contrary an excess, and that, as there was admittedly no selection of the lands in suit prior to the enactment of the Transportation Act of September 18, 1940, no interest in the lands had ever arisen in Santa Fe which could be the subject of a sale to Aztec. The Government was relying upon the general rule recognized in the Payne and Forest Reserve cases that where there is an excess of indemnity lands to satisfy place land losses no right attaches to any specific lands within the indemnity limits until they are selected. After the filing of the answer by the Government a stipulation of facts was entered into between the Government and Santa Fe and Aztec and filed with the district court. The facts agreed upon included all of the facts alleged in the complaint which were not put in issue by the answer. They included also facts relevant to the deficiency issue, and facts relevant to an issue of estoppel which was not, in terms, raised by the complaint and answer, but which, as will appear below, is a subject of contention on this appeal. The facts agreed upon which are relevant to the issue of estoppel were the following: On November 30, 1931, the Commissioner of the General Land Office submitted to the Secretary of the Interior in an “office letter” a statement of a “tentative readjustment” of the grant of July 27, 1866, to Atlantic and Pacific. That readjustment included a statement of the place land losses and of the indemnity lands available to fill the same and included within such indemnity lands the vacant lands, both surveyed and unsurveyed, within the indemnity limits. That readjustment and the “theory under which it was made” was approved by the Assistant Secretary of the Interior on December 9, 1931. On December 16, 1931, a statement of the readjustment as approved was sent to the law firm of Britton and Gray in Washington, D. C., representing Santa Fe. Britton and Gray thereafter filed a protest with the Commissioner taking exception to treating in the readjustment the vacant unsurveyed lands in the indemnity limits as available for indemnity. On March 22, 1932, the Commissioner, with the approval of the Assistant Secretary of the Interior, ruled as follows: « * * “In the adjustment of railroad grants having indemnity limits such as the grant here in question, it has always been the uniform and accepted rule, to charge against