Payne v. Central Pacific Railway Co.

Background

A railroad company (successor to the California and Oregon Railroad) built and completed its line as required by an 1866 land grant. The company filed an indemnity selection in the local land office on February 24, 1910, for replacement public lands after some originally designated sections were lost to earlier settlers. The selected lands were non-mineral, within the indemnity limits, supported by required proofs, and were forwarded to the General Land Office for approval. The Commissioner later canceled the list on January 16, 1915, because the lands had been included in a temporary executive withdrawal for a water-power site, and the Secretary of the Interior affirmed that cancellation.

Reasoning

The Court asked whether the withdrawal could block a previously made and valid indemnity selection. It explained that, after the railroad fully performed its obligations and properly filed a selection, the company acquired an equitable right to the lands that could not be defeated by a later executive withdrawal. The Secretary's and Commissioner's action departed from their duty because the selection complied with the grant and regulations, and the lands were not merely public lands subject to withdrawal once rights had vested. The Court therefore held that an injunction should issue to prevent the officials from canceling the selection and to require consideration of the selection on its merits.

Real world impact

The ruling protects a railroad's earned right to replacement grant lands when the company followed the law and regulations. It limits the ability of temporary executive withdrawals to erase vested land claims and directs federal land officials to process such selections on their merits. The decision orders an injunction to prevent injury to the railroad's property rights while the selection is finally decided.