Southern Pacific Railroad v. Terry

California Supreme Court Aug 27, 1886 No. No. 11439Published

Before: McKee

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Holding. The court held that a railroad company's circular inviting settlers to occupy land and promising them a right of first purchase created a binding contract of sale once a settler accepted the offer by occupying and improving the land. Consequently, the company could not eject a qualified settler who had tendered the purchase price in favor of a non-settling applicant.

Issues

Whether a railroad company's circular inviting settlement and offering a right of purchase created a binding contract with an actual settler.
Whether the railroad company could lawfully eject a settler who had fulfilled the terms of the circular and tendered the purchase price.
Whether the railroad company's land agent had the authority to award the land to a non-settling applicant over an actual settler.

Disposition. affirmed

Quotations verified verbatim against the opinion

“the offer which it made to sell its lands to actual settlers having been accepted by the defendant, who settled upon a portion of the lands, constituted a contract of sale”

“As vendee of the land, the defendant was therefore rightfully in the possession at the commencement of the action”

“The land agent of the company had therefore no power to award to Randall the land of which the defendant was in possession as an actual settler.”

Synopsis

Contract for Sam of Land—Acceptance of Offer Contained in Circular— Railroad Lands.—The action was brought to recover the possession of certain land forming part of the railroad lands of the plaintiff. The defendant settled upon the land, under the provisions of a printed circular issued by the plaintiff, inviting settlers to go upon its lands and occupy and use them until the company was ready to sell, and giving to snch settlers the right to purchase on certain terms and conditions, all of which the defendant had complied with, except the completion of the purchase, which the plaintiff refused to permit. Held, that the acceptance by the defendant of the offer contained in the circular constituted a contract of sale, and established the relation of vendor and vendee between the plaintiff and the defendant, and that as the defendant was rightfully in possession, the plaintiff could not recover.

McKee, J. This is an action of ejectment. The demanded premises are a portion of the railroad lands of the Southern Pacific Eailroad Company, the plaintiff in the action.

Defendant settled upon the lands under the provisions of a printed circular issued by the railroad company, inviting settlers to go upon its lands and occupy and use them until such times as it would be ready to sell, when, upon an application to buy, made to the land agent of the company, the company would sell, at prices based upon the value of the lands, “to such persons as were then in possession by occupation and cultivation or improvements.” To such persons the circular declared:—

“If the settler desires to buy, the company gives him [485]the first privilege of purchase at the fixed price, which in every case shall only be the value of the lands, without regard to the improvements.

“It must be understood that the°application of a speculator, or of a person who does not improve or occupy the lands, will not, although received first, take precedence or priority of that of the settler, whose application may perhaps be filed last of all.

“The actual settler in good faith will be preferred always, and the land will be sold to him as against every other applicant.”

In due time after the issuance of the circular, the company graded its lands, and fixed the price per acre at which it proposed to sell to settlers upon the lands. The defendant was notified of the fact; and on the 22d of June, 1883, he applied to the land agent of the company to purchase the demanded premises, upon which he and his family were then residing, and which he had occupied, cultivated, and improved since 1882; and in connection with his application, he tendered the twenty per cent of the purchase price required by the circular of the company, and offered to comply in all other particulars with its terms and conditions. But the plaintiff denied his application, and refused to sell him the land “on any terms whatever.”

That the company could not legally do, because the offer which it made to sell its lands to actual settlers having been accepted by the defendant, who settled upon a portion of the lands, constituted a contract of sale, and established the relation of vendor and vendee between the company and the defendant as a bona fide settler. (Boyd v. Brinckin, 55 Cal. 427.)

Southern Pacific Railroad v. Terry

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