Santa Fe Pacific Railroad Company, et al., Appellants, v. Secretary of the Interior, 830 F.2d 1168 (D.C. Cir. 1987)

The Department of the Interior denied an application by Santa Fe Pacific Railroad Company (Santa Fe) for a patent covering 14,632.72 acres of land in Arizona.¹  This ruling was upheld by the District Court²  and Santa Fe appeals. We find that the Department and the District Court misconstrued a provision of a 1955 statute known as the Recordation Act,³  which required the registration of certain unperfected rights to land. We accordingly reverse.I. BACKGROUND

In order to "secure the safe and speedy transportation of the mails, troops, munitions of war, and the public stores"⁴  to the West, Congress passed a series of statutes in the mid-nineteenth century giving railroad companies rights to public land adjacent to their lines.⁵  One such statute, typical of efforts to attract westward development by land grants, was enacted in 1866.⁶  This statute incorporated the Atlantic and Pacific Railroad Company (A & P), the predecessor of Santa Fe,⁷  and bestowed upon it a right of way to construct a railroad and telegraph line along a route of its choosing from Springfield, Missouri, to the Pacific coast.⁸  The statute also created two strips of territorial land, one on each side of the line, and gave A & P "every alternate section of public land, not mineral, designated by odd numbers, to the amount of twenty alternate sections per mile."⁹  The boundaries of grants of this kind have come to be known as "place limits," and in exchange for this land Congress reserved the use of the line for the benefit of the United States on whatever terms it saw fit to impose.¹⁰ 

Congress recognized, however, that in some instances earlier rights, such as homestead claims, would prevail over the railroad's interest in place lands. The statute thus conferred a right of substitution in those situations, providing that "other lands shall be selected by said company in lieu thereof, under the direction of the Secretary of the Interior," from an additional area of public land bounded by what are known as "indemnity limits"--two additional strips, each ten miles wide, adjoining the place-limit strips.¹¹  Thus, to the extent that any deficiency in land within the place limits remained in consequence of superior rights, land within the indemnity limits was to be made available to A & P.¹² 

In 1872, A & P filed a plat with the Secretary of the Interior designating the location of its line, thereby establishing its right to place land.¹³  Because preexisting claims took precedence over some of the place land, A & P, in 1887, chose 1,244,160 acres of indemnity land. The selection was rejected, however, because the Department of the Interior had not surveyed the land within the indemnity limits, which, according to the Department, rendered it "not subject to selection" at that time.¹⁴  Nonetheless, A & P began to contract with other parties to sell its interests in land granted to it by the 1866 Act. One such transaction ripened into a sale of 21,488 acres within Yavapai County, Arizona, within the indemnity limits--the land now in dispute--to the predecessors of Perrin Properties, Inc.,¹⁵  which was consummated by a deed duly recorded in Arizona.¹⁶  Ten years later, this land was included in Prescott National Forest.¹⁷ 

In 1914, Perrin petitioned the Department for an order compelling Santa Fe, the successor to A & P, to select the indemnity lands that had been sold to Perrin's predecessors in compliance with the terms of the 1896 contract of sale.¹⁸  The Department, noting in passing that some of this land still had not been surveyed, ruled that it had no jurisdiction to adjudge a contract dispute between private parties.¹⁹ 

No further legal activity by the parties occurred prior to 1940, when Congress passed the Transportation Act²⁰  to alleviate the growing burden on railroads from supplying the Government with transportation at below-market rates.²¹  This legislation allowed railroads that had received land grants from the Government to aid in the construction of their lines to charge the Government full commercial rates, on the condition that the railroads released any claim against the Government arising under railroad-construction acts.²²  The Act stated specifically, however, that it was not to be construed 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."²³ 

Santa Fe took advantage of this statute by filing a release of its claims.²⁴  As required by the Department's regulations, Santa Fe listed all of its sales to innocent purchasers for value, including the 1896 deed to predecessors of Perrin.²⁵  The Department accepted and approved both the release and the list.²⁶ 

Yet another hiatus in the activities of the parties, this one lasting 28 years, followed the filing of the release. During the interim, in 1955, Congress passed the 1955 Recordation Act, which required reporting within two years of certain unperfected claims to land, including "lieu selection ... right [s]."²⁷  The land sold to Perrin's predecessors was not registered under the Act.

In 1969, Perrin asked for a cash payment from the Department for the land in issue.²⁸  The Bureau of Land Management's rejection of this request was affirmed in 1973 by the Interior Board of Land Appeals on the ground that any selection right A & P and Santa Fe successively had with respect to indemnity land terminated when the release was filed by Santa Fe under the 1940 Act.²⁹  By the Department's reasoning, Perrin was not an innocent purchaser within the meaning of that Act because its predecessor in interest had not purchased title to the land but merely an inchoate right to acquire land,³⁰  and the release Santa Fe filed in 1940 extinguished the right asserted by Perrin.³¹ 

In 1977, Santa Fe applied for a patent to the land claimed by Perrin.³²  The Bureau denied the application for the same reason it had disapproved the cash payment requested by Perrin in 1969.³³  The Board added, however, that Santa Fe's right to indemnity land would have vested had such lands been sufficient to make up for the shortfall in place lands, and would not have been affected by the 1940 release filing.³⁴ 

Santa Fe appealed to the Board of Land Appeals, which rejected the Bureau's ruling that Santa Fe's right to the land had been forfeited by the 1940 release of claims. The Board held instead that there had been a deficiency in the indemnity lands to make up for losses in place lands, that the right to the land in controversy had vested, and that this right had been conveyed to Perrin's predecessors in title.³⁵  The Board denied the application for a patent, however, because Perrin's claim had not been reported pursuant to the Recordation Act.³⁶ 

Santa Fe sought review of this decision in the District Court,³⁷  which affirmed both the result and the reasoning of the Board.³⁸  An appeal was then taken to this court.

The parties agree that Santa Fe's interest in the land in suit vested, and that Perrin was an innocent purchaser for value within the meaning of the 1940 Act. Consequently, the only question before us is whether that interest fell within the purview of the Recordation Act. If the property involved here is encompassed by the Recordation Act, it has been extinguished by the failure to register the claim with the Department. Before examining the Recordation Act itself, however, we briefly examine the nature of the interest asserted by Perrin and the manner in which it arose.

The 1866 Act granted A & P the right to select land within the place limits. The right attached automatically to land within a given distance from the track, and the Supreme Court has several times held that no selection was essential to acquisition of title.³⁹  If there was a deficiency in land within the place limits because of preexisting rights, a selection from land within the indemnity limits ordinarily would become necessary.⁴⁰  But the courts have on several occasions ruled that if the land within the indemnity limits was itself insufficient to make up for deficiencies in place land, no selection was necessary, since all land within those limits had to be used to make up the losses in place land.⁴¹  These cases clearly hold that a right attaches to "specific land within the indemnity limits" without any need for selection.⁴² 

This principle was applied in favor of Santa Fe in earlier litigation before this court involving different indemnity lands. In Chapman v. Santa Fe Pacific Railroad,⁴³  the Aztec Land and Cattle Company had bought 98,690.83 acres of land within an indemnity belt from A & P. Santa Fe's release under the Transportation Act of 1940 listed Aztec as an innocent purchaser for value.⁴⁴  When Santa Fe made selections, they were turned down by the Department on the ground that "the land had not been ascertained and identified."⁴⁵  According to the Department, Santa Fe had not acquired any interest in specific land which it could convey prior to filing of its release.⁴⁶ 

On appeal, this court soundly rejected the Department's position. Constrained by the Supreme Court's holdings that no selection was necessary to vest the railroad's interest in indemnity land when such land did not fully satisfy losses in place land,⁴⁷  the court held that "Santa Fe did have a right which it could ... sell,"⁴⁸  and that Aztec as its grantee, was protected by the saving clause of the Transportation Act.⁴⁹ 

While the caselaw makes clear that no selection is needed under these circumstances, it is much less lucid in regard to exactly what sort of interest vested. The Chapman court, while characterizing the interest as less than "title," described it as a vested "right to choose or select lands."⁵⁰  The Department insists that because the 1866 Act contemplated selections from the indemnity belt "in lieu"⁵¹  of lands unavailable within the place limits, the right is a "lieu selection ... right."⁵²  The Department asks us to look to the historical nature of the interest, arguing that if, in its inception, the right involved selection, it is forever a selection right, regardless of how ultimately it is exercised and that such rights are therefore covered by the Recordation Act.⁵³  Santa Fe, in contrast, prefers to assess the interest that Perrin actually obtained. It contends that since, in accord with precedent,⁵⁴  no selection was ever needed, Perrin's interest did not fit within the Recordation Act's catchall phrase "lieu selection ... right," and thus was not subject to the requirement of registration.⁵⁵  Santa Fe notes that as soon as it appeared that the amount of indemnity land was too small to compensate for the losses in place land, an interest in all land remaining within the indemnity limits vested; and asserts that since no selection was required, the interest held by Perrin could not have been a "lieu selection ... right."⁵⁶  In Santa Fe's estimation, the Recordation Act's catchall phrase simply did not embrace the interest held by Perrin.⁵⁷ 

The expression "lieu selection ... right" obviously is not common. Standing alone, it does not afford a basis for choosing between the two opposing views of its tenor. Since the meaning Congress intended for this critical term is not apparent from the language itself, we search the statutory context of the catchall provision, its purpose and its legislative history for helpful clues.⁵⁸ 

Section 1 of the Recordation Act provides as follows: [A]ny owner of, and any person claiming rights to, Valentine scrip ...; Sioux Half-Breed scrip ...; Supreme Court scrip ...; Surveyor-General scrip ...; a soldier's additional homestead right ...; a forest lieu selection right ...; a lieu selection right conferred by the Act of July 1, 1898 ...; a bounty land warrant ...; or any lieu selection or scrip right or bounty land warrant, or right in the nature of scrip issued under any Act of Congress not enumerated herein (except the indemnity selection rights of any State, or the Territory of Alaska), shall, within two years from the effective date of this Act, present his holdings or claim for recordation by the Department of the Interior.⁵⁹ 

Thus, after identifying eight land-grant statutes to which it specifically applies, the Act extends its requirement to "any lieu selection ... right" as a catchall provision.

When, as here, a general term follows specific terms, the rule of ejusdem generis provides an aid to interpretation. "Ordinarily, it limits general terms which follow specific ones to matters similar to those specified."⁶⁰  In the present case, this rule suggests that the catchall provision should be read to include only rights similar in character to those conferred by the statutes enumerated. Without exception, the statutes referenced pertained to scrip, warrants, and other indicia of land rights issued as compensation to individuals for a variety of reasons. In each case, however, the rights attested to were not attached to land in any particular location; rather, they were entitlements to select from public lands much more generally.⁶¹ 

Santa Fe argues that since the statutes listed in the Recordation Act involved "floating selection rights unattached to particular land," the catchall phrase could not include rights, such as Perrin's that were confined in their exercise by specific indemnity limits.⁶²  The Department counters with the observation that the statutes referred to were similar to the 1866 Act in that they all provided for selections from public lands in lieu of something else;⁶³  therefore the Recordation Act did encompass rights such as Perrin's. The issue, then, is which of these readings is the more acceptable.

We begin our quest for the answer by reviewing the overall purpose of the Recordation Act as expressed in the committee reports accompanying the two versions of the bill before Congress. The House Committee on Interior and Insular Affairs stated that

the Department of the Interior urgently needs to know the amount of the various scrip and rights which remain to be satisfied, in order to formulate a procedure for satisfying them. As time goes by, the lands which could be used to satisfy such rights continue to dwindle and the possibility of accurate proof of the rights becomes more remote. The Department of the Interior therefore urges that a reasonable statute of limitation be imposed in order that these old accounts may be closed.⁶⁴ 

Throughout the long period during which recordation was not required, the Department did not know which parcels of land would be selected. The Recordation Act was intended to identify the public lands sought by the holders of these land rights and to bar claims of those who failed to record. Because the Department wished to satisfy these land claims, it asked Congress to require their recordation.⁶⁵ 

The lands available for selection under the railroad construction acts were severely limited in geographic scope. Upon the initial filing of a railroad's route location, the Department was alerted to the parcels of land that were granted within the place limits and to those subject to selection within the indemnity limits. In contrast, the Department had little or no idea as to the location of land that might be selected under authority of the enumerated scrip and warrant statutes. The Recordation Act's purpose of informing the Department of such claims to public lands was thus much less compelling in the context of the railroad construction acts. Since, however, the statutory purpose alone, though significant and suggestive, is hardly conclusive on the issue of legislative intent, we proceed to examine the legislative history of the catchall provision itself.⁶⁶ 

The general purposes of the Act--to require recordation of certain rights to land, and to impose a time-bar on both registration and enforcement of unrecorded claims to such rights--was fully developed at hearings conducted by the Subcommittee on Public Lands of the House Committee on Interior and Insular Affairs, and clearly expressed in the committee reports accompanying the bill in the House and the Senate. Moreover, the scope of the catchall provision was specifically addressed in several portions of the legislative history. Assimilating these two phenomena, we gain valuable insights into the meaning of that provision.

The bill from which the Recordation Act derives was originally drafted by the Department of the Interior⁶⁷  and introduced in 1951. The bill listed the eight statutes enumerated in the version enacted,⁶⁸  and gave a brief summary of each in a "Schedule of Information Concerning the Principle Scrip or Lieu Selection Rights and Bounty-Land Warrants, Which are Ouststanding and Which May Be Located on or Used as Payment for the Public Lands."⁶⁹  In a letter accompanying transmission of the bill, the Acting Assistant Secretary of the Interior stated that the schedule "sets forth the presently available information with respect to some of the principal classes of rights which would be affected by the bill."⁷⁰  Each type of scrip and warrant listed concerned rights to land unconfined to particular locations, and no mention was made of any of the railroad construction acts. When the bill was reintroduced, the same schedule was presented to the House.⁷¹ 

The completeness of the listing of statutes covered by the bill was of importance to the House Subcommittee. At the hearings on the bill in 1955, the Chief of Lands for the Bureau of Land Management in the Department, Harold Hochmuth, was questioned by Representative Saylor as to how many of the "scrip or lieu selections or other rights have been presented to the Department."⁷²  Mr. Hochmuth replied that he did not know, and was then asked to furnish this information.⁷³  Mr. Hochmuth later testified:

We searched our record to determine the number of patents, that is, titles to lands, which the Federal Government has given since 1946 for scrip, various types of scrip, and our records indicate, so far as we can determine, 37 patents were issued totalling 3,173 acres, approximately.

Now these were not the applications made during those years but [those] we finally finalized into patents. They may have been in the process for many, many years but, finally ended in patents issued.

I would like to make that a part of the record.⁷⁴ 

None of the "types of scrip" supplied for the record, however, was related to a railroad construction act.⁷⁵ 

Later during the hearings the Acting Assistant Solicitor of the Department, James A. Lanigan, was also questioned by Representative Saylor on the same subject. Their colloquy went as follows:

Mr. Saylor.... [H]ow many other Acts of Congress other than those which you have enumerated prior to that point in the bill are there?

Mr. Lanigan. I would not be able to answer that offhand. I can name a few that occur to me offhand. There are some that are not mentioned here, which are Porterfield scrip, Girard [sic ] scrip, McKee scrip, to name three of them. There may be others that I do not know offhand.

Mr. Saylor. In view of the fact that the Department knows of certain specific Acts of Congress which authorize these rights, why have you not seen fit to mention them in this piece of legislation?

Mr. Lanigan. I think that was just a matter of draftsmanship. We named the major outstanding types, but there are still portions of other types of scrip. Of course, there are some scrips that have been satisfied. But the ones that we named were the ones we felt were the major ones. However, we could add every other one that we know of if the committee wishes.

* * *

* * *

Mr. Saylor. Do you not feel this committee, if it passes this piece of legislation, should have included all of the known scrips by name rather than trying to get away with a catch-all phrase as has been used here on page 2, lines 4 to 6 of the bill?

Mr. Lanigan. We could add more varieties, but I would hate to see the catch-all phrase taken out. I think we can add every kind that we are aware of through our actions in recent years, but buried away in those many volumes of statutes sometimes there is an act in the nature of a scrip act that we might miss.⁷⁶ 

Several weeks later, the director of the Bureau of Land Management wrote to the chairman of the Committee on Interior and Insular Affairs as follows:

In its February 28 [1955] hearings on H.R. 2972, a bill to require the recordation of scrip, lieu selection, and similar rights, the Pfost subcommittee requested a list of the laws authorizing such rights. Enclosed is a list of such laws insofar as we have been able to identify them. It is quite probable that rights under many of the minor laws have already been fully satisfied.⁷⁷ 

This letter was reproduced in the House Report along with a list of statutes "which authorized scrip or related rights."⁷⁸  Included were the scrip types mentioned in the text of the Act, along with 28 other kinds of scrip. Although these statutes spanned a period of 107 years, the 1866 Act at issue today is not among them. Indeed, not one of these statutes relates to aid given in support of railroad construction.

We have set forth at some length the legislative history of the catchall provision because we believe that it is decisive. Each mention of the provision as it wended its way through Congress bolsters the conviction that land selection rights stemming from the railroad construction acts were not covered by the Recordation Act. First, high-ranking officials in the Department stated initially that they had included in the bill the "major" categories of land rights to be affected. When the House Subcommittee expressed concern over which unnamed categories would be subjected to the new law, the Department insisted that only some minor laws "buried away" were left uncovered by the major categories already identified in the bill. After the Department conducted a deliberate search for land rights that would be implicated, it provided a list of laws "insofar as [the Department had] been able to identify them." No railroad construction acts were included, and none of the listed statutes involve rights to lands in particular areas. Rather, each dealt with rights in public lands generally, unattached to any geographic location.⁷⁹ 

The Department urges that the "catch-all language was intended to reach beyond" the enumerated statutes.⁸⁰  It cannot explain, however, how a group of 82 statutes, enacted to facilitate construction of lines by 42 railroads, and granting rights to more than 150 million acres of land,⁸¹  and which were themselves subject to another recordation statute,⁸²  could have been "buried away"⁸³  to such an extent as to escape notice even by the Department.⁸⁴ 

We cannot believe that the Department simply overlooked the imposing array of vastly important railroad construction acts⁸⁵  when it searched for land selection rights that the forthcoming Recordation Act was to embrace. They certainly had been brought to the agency's attention, if indeed that was necessary, several years prior to consideration of the Act.⁸⁶  Moreover, according to the Department, all 42 railroads participating in the land grant had filed releases under the 1940 Act,⁸⁷  and the total area released to the Department was more than 8 million acres.⁸⁸  The argument that claims of this enormity could have been among those the Department intended to encompass within the Recordation Act, but could not be located because they represented but "small portions of ... scrip,"⁸⁹  strains credulity beyond the breaking point. The only explanation that makes sense is that land rights acquired under the railroad construction acts were of such a sufficiently different character that they were omitted from the schedule, and excluded as a category, of selection rights that the Department sought to affect by the bill that eventuated into the Recordation Act.

We think the indicia of intent in this case are so clear as to resolve definitively the ambiguity in the section of the Recordation Act that we interpret today. The members of the Subcommittee considering the bill were troubled by the inclusion of the open-ended catchall phrase and sought to clarify its scope. The Department, in response, furnished a list purportedly including all "the major outstanding types" of land rights intended to be covered,⁹⁰  and none of the fourscore railroad construction acts was listed. We thus are drawn inexorably to the conclusion that neither the drafter of the bill, nor the Subcommittee that considered it, nor the Members of Congress who pondered the committee reports accompanying it, would have had any reason to believe that rights emanating from the railroad construction acts were to be affected by the Recordation Act.⁹¹  Accordingly, we hold that the term "lieu selection ... right" does not intercept the right held by Perrin, and reverse the District Court's judgment and remand the case to that court for further proceedings consistent with this opinion.⁹² 

Reversed and remanded.