CES Wood V--the Battle for the Road

After the Prosser report was issued in October 1880, with the strong recommendation to the Secretary of the Interior to undo the grant to the Willamette Valley and Cascade Mountains Road Company ("WV"), thus leading to the forfeit of the lands back to the US Government, as I have detailed in the previous essay, Congress got into the act. The chain of events over the next few years is detailed most helpfully in the 1890 federal case brought against the WV, decided by Oregon's federal judge Matthew Deady (42 F. 351-63). Deady and Wood, who argued the 1890 case for the WV, sat together on the Portland Library Association Board. An interesting study would chart the interlocking memberships of boards and other civic organizations in Portland in the late 19th century...

Congressional (In)Action

Prosser's report was laid before congress and was referred to the committee on military affairs of the House of Representatives. Their Feb. 1881 report recommended that no action be taken by Congress. More specifically, their report said that they:

"do not feel called upon to investigate the disputed question of fraud arising from the ex parte testimony submitted, or warranted in expressing an opinion in regard to the same, but believe that to be a matter within the province of the judicial, and not the legislative, department of the government."

Thus, the great "punting contest" of 1881 began, where the executive branch brought the issue to the legislative, and then the latter punted it over to the judicial or back to the executive. The only problem with sending it to the executive was that there was no statute or authorization that would give the executive power to pursue the matter. Without that authorization, you can't bring a suit...and the judicial department can't act.

This action/inaction of 1881 didn't end the matter. One year later, on February 8, 1882 another communication from the secretary of the interior (there wasn't agreement whether these words should be capitalized in the 1880s, and so I will reflect that lack of unanimity here--with respect to congress, too!) came to congress containing further charges that the road wasn't completed properly. This 1882 matter was referred to the committee on public lands of the house of representatives and the committee on military affairs of the senate.

The senate report concurred with the 1881 house report, but went further to say, that

"the executive department of the government had ample authority in law to investigate the matter and, if necessary, to institute legal proceedings in the courts of the United States to secure a forfeiture of the grant, or any part thereof, for failure to comply with the terms and conditions thereof without any legislation or instructions from the legislative department."

Developments Late in 1882

So, the issue was "punted" back to the executive branch. In response, the secretary of the interior directed the commissioner of the general land office on July 5, 1882 to certify lands for patent. Previously, as I have earlier said, more than 107,000 of the 860,000 acres were patented. When patent for land was issued in October 1882, more than 440,000 additional acres were duly issued to the wagon road company (this lefts still more than 300,000 unpatented acres, which still had not been patented by the time of the legal suits in 1889/90).

But then a significant event took place. We do not know if it was part of a "deal" between parties or whether the WV lawyers saw that issues were really heating up and that there would, eventually, be a lawsuit on the issue, but there is evidence that after 1882 the WV company spent a considerable amount for road improvements and repairs. Legally speaking, the effect of this would be to blunt the edge from any later claim that the road was unimproved or somehow wasn't constructed in compliance with the July 1866 grant.

Judge Deady, obviously quoting from materials submitted to him in 1890, says the following:

"(thereupon) these defendants (i.e., WV and other individuals in the lawsuit), relying in good faith upon the action of the legislative and executive department of the government, were induced to, and did, before the passage of the act of 1889 (next essay), 'so alter and change their position in reference to such lands' as to 'render it inequitable and unconscionable for the complainant (i.e., the US Government) to assert any right..to forfeit or reclaim such lands'."

What a brilliant legal strategy...and this was all done before Wood took up the representation of the WV. Late in 1882 he was still a student at Columbia Law School in New York City.

The Specific Expenditures

Judge Deady went on to list the expenditures by WV between 1882 and the filing of the case in his courtroom late in 1889 (the case was decided on May 12, 1890):

$2,660.62 in securing issue of the patents
$29,885.79 for taxes levied on the land
$109,800.97 to agents and attorneys for grading, selecting, and platting all lands, and defending the possession of the same from adverse claimants and trespassers
$22,609.01 (minimum) the cost to sell "sundry parcels of land" with warranty of title
$86,805.75 in rebuilding and improving the road through its entire length, which has greatly increased the value of the lands along the road (note the way that this is calculated to appeal to a later court...)
$31,65171 for interest on all said sums of money.

The sum of all these expenditures was $280,754.03.

Conclusion

There is a lot of "padding" in these numbers, but the major point is that WV, desiring to protect its investment (Weill and LF had paid around $350,000 for the road in the 1870s), decided that it was best to invest fairly significantly in the improvement of the road. If their public relations department had put out a notice highlighting all these investments, it certainly would have stressed that these investments were "for the community" or for the benefit of travelers along the road and abutting landowners. A person with a greater streak of realism (or skepticism) would say that these improvements were mounted so that the legal case, which was sure to come, would have the most favorable outcome possible for the company.

The outlines of the "case" are becoming clearer--we can see how the WV would later argue: (1) we relied on the certificates of the Governor that the road was complete; (2) we had no idea that there might have been fraud in inducing this certification; (3) we had no legal need to go beyond the "official" certification in buying the land; (4) Thus, in legal terms, we were bona-fide innocent purchasers for value; and, in addition to all of this, (4) we are extremely "good guys" in that we made all these improvements after 1882.

The next essay brings us closer to the legal cases.

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