STATE OF CALIFORNIA ET AL.

Decided February 27, 1913.

SCHOOL INDEMNITY SELECTIONS-OIL LANDS-WITHDRAWAL.

No title is acquired under or by virtue of a school indemnity selection until the same has been approved by the Secretary of the Interior; and where the lands embraced in a selection are classified as oil lands and withdrawn under the provisions of the act of June 25, 1910, the Secretary is without authority to approve the selection in the face of such withdrawal; but it should be rejected, without prejudice to the right of the State to submit showing with a view to securing reclassification of the lands and to apply anew therefor in event of their restoration.

ADAMS, First Assistant Secretary:

October 17, 1911, counsel for the State of California and the Buena Vista Land and Development Company filed in the Department a petition, not verified, praying the Secretary of the Interior to exercise his supervisory power in behalf of the State of California and its transferee, the said company, and to issue to the Commissioner of the General Land Office a peremptory order directing that hearings in the matter of school land indemnity selections which had been theretofore ordered by his office and later indefinitely postponed, be had forthwith.

On or about March 12, 1912, the Honolulu Consolidated Oil Company filed in the Department its petition or motion for the cancellation of proffered school land indemnity selections and the clearing of the records of such applications, where the lands involved had been classified as oil in character and included in Presidential withdrawals pursuant to the act of June 25, 1910 (36 Stat., 847). This petition is supported by the affidavit of the president of the company which is corroborated by two witnesses, in order to show the company's interest. The concrete case called to the attention of the Department is that of proffered school land indemnity selection, serial 01915 (R. and R. 577), filed November 17, 1906, for the SW. 1, Sec. 4, T. 32 S., R. 24 E., M. D. M., Visalia land district, California.

On application of the State and its transferee, the Buena Vista company, the Commissioner of the General Land Office, on March 31, 1910, directed that a hearing be had for the purpose of determining the character of the land. On October 15, 1910, the hearing not having been had, the Commissioner, for reasons deemed by him sufficient, indefinitely postponed the hearing in said case as well as hearings theretofore ordered relating to numerous other proffered selections for lands within the above-mentioned township.

It being represented that the matters involved in the two petitions pertained essentially to similar questions, the petitioners and all parties interested were advised that oral argument would be heard before the Department on April 4, 1912, on which date counsel repre

senting the respective interests appeared and were heard. Prior to said hearing and on March 28, 1912, The Honolulu company had filed its brief in support of the petition pending. After the hearing counsel for the State and the Buena Vista company were granted opportunity to submit points and authority and the Honolulu company was permitted to file a reply brief. Upon the records of the land department and the papers and briefs filed by counsel, and the oral presentation made, the matters are submitted for decision.

The case as submitted involves the important question as to what procedure should be had in reaching a disposition of these proffered school land indemnity selections. The State and its transferee contend that the hearings heretofore ordered by the Commissioner and now standing indefinitely postponed should proceed with dispatch in order that all the facts and circumstances involved may be fully developed and disclosed for the information of the land department in making a proper disposition of the matter. On the other hand, the Honolulu oil company urges that the proffered selection above mentioned, viz., number 01915, and all others occupying a similar status, should be promptly rejected outright upon the present record without further proceedings in order that the face of the books and records of the land department may be cleared and freed of the notations of such applications.

The history of these lands is briefly as follows: In January, 1900, the lands in the township were alleged to be mineral in character and valuable for petroleum and were in effect withdrawn from agricultural appropriation. April 5, 1904, said lands were restored to agricultural entry. In 1906 the State of California made application to select said SW. 1, Sec. 4, assigning as base therefor a tract theretofore included in the Stanislaus National Forest, and, at about the same time, numerous other applications for indemnity school lands were presented. Thereafter the tracts sought to be selected by the State, as is claimed, were purchased by and transferred to the Buena Vista company. September 14, 1908, the lands sought to be selected were temporarily withdrawn from all forms of agricultural entry by the Department pending examination and classification. June 22, 1909, the lands having been examined by the Geological Survey, were reported and classified as petroleum-bearing lands and this classification was approved by the Department. By departmental order of September 27, 1909, these lands with others were withdrawn from mineral disposition. By the Presidential order of July 2, 1910, pursuant to the act of June 25, 1910 (36 Stat., 847), the prior withdrawal was ratified, confirmed, and continued in full force and effect

and subject to all of the provisions, limitations, exceptions, and conditions contained in the act of Congress entitled "An act to authorize the President of the 55736°-VOL 41-12-38

United States to make withdrawals of public lands in certain cases," approved June 25, 1910, there is hereby withdrawn from settlement, location, sale, or entry, and reserved for classification and in aid of legislation affecting the use and disposal of petroleum land belonging to the United States, all of those certain lands of the United States set forth and particularly described as follows.

On December 13, 1912, by further Presidential order pursuant to the authority of the same act, sections 2 to 18, inclusive, of said township 32 south, range 24 east, were included in Naval Petroleum Reserve Number 2. Said order is in part as follows:

It is hereby ordered that all lands included in the following list and heretofore forming a part of Petroleum Reserve Number 2, California Number 1, withdrawn on July 2, 1910, . . . . shall hereafter, subject to valid existing rights, constitute Naval Petroleum Reserve Number 2 and shall be held for the exclusive use or benefit of the United States Navy, until this order is revoked by the President or by act of Congress. To this end and for this public purpose, the order of July 2, 1910, is modified and the withdrawal of that date is continued and extended in so far as it affects these lands.

It is clear that so long as the Presidential order of withdrawal stands covering and including these lands, the preferred school indemnity selections can proceed no farther and can not be approved, listed, or certified to the State. Such selections are not among those classes of claims provided for or saved in express terms by any of the provisions of the withdrawal act or of the orders issued thereunder. These lands were classified as oil lands. The withdrawal orders issued have followed such classification and are based thereon. It may be that if any of these tracts should be satisfactorily established to be non-oil in character, the department would feel impelled to call such fact to the attention of the President and recommend to him that the outstanding order of withdrawal be modified so as to eliminate such nonoil areas. Without such modification these selections must remain in statu quo or be finally rejected and the records cleared.

With reference to the hearings ordered it may be noted that the Buena Vista Company's applications and the Commissioner's orders for such hearing were long prior to the passage of the act of June 25, 1910, and the withdrawal thereunder. The later directions given to indefinitely postpone such hearing were issued after the Presidential withdrawal and on or about October 15, 1910.

The State and Buena Vista company contend that having complied with all the rules and regulations governing State selections and done all things required thereby they are entitled to an adjudication as of the date of proferring such completed selection. With this the Department cannot agree. These proferred selections have not yet received the approval of the Secretary of the Interior. Until that approval is given the selections are not completed and are in reality only pending applications to select.

The selectors oppose this position. They argue that sections 2275 and 2276 as amended by the act of February 28, 1891 (26 Stat., 796), do not require the approval of the Secretary, and that such sections wholly supercede and displace the requirements of the act of March 3, 1853 (10 Stat., 257).

The act of February 28, 1891, is a general adjustment act and provides for a complete filling of the school grant and the ultimate adjustment of the State's rights thereunder. The State of California derives its grant of school lands through sections 6 and 7 of said act of March 3, 1853. By section 7 it is provided that where any preemption settlement shall be made upon any section 16 or 36 before survey, or where said sections may be reserved for public uses or taken by private claims

other land shall be selected by the proper authorities of the State in lieu thereof, agreeably to the provisions of the act of Congress approved on the twentieth day of May, eighteen hundred and twenty-six (4 Stat., 179), . . . and which shall be subject to approval by the Secretary of the Interior.

...

Said act of May 20, 1826, appropriated lands for the support of schools in certain townships and fractional townships not before provided for, and by section 2 thereof it is prescribed that such tracts of land shall be selected by the Secretary of the Treasury out of any unappropriated public lands within the land district.

By the act of February 26, 1859 (11 Stat., 385), general provision is made for supplying deficiencies in school grants. That act appropriates other lands of like quantity in lieu of such as may be patented by preemptors, and also appropriates and compensates for deficiencies where sections 16 and 36 are fractional in quantity or are wanting by reason of the township being fractional or from any natural cause. It is provided that the lands so appropriated “shall be selected and appropriated in accord with the principles of adjustment and provisions of the act" of May 20, 1826. This act is the basis of original sections 2275 and 2276 of the Revised Statutes.

The grant made by the act of 1853 to the State of California was directed to be construed in a certain manner by section 6 of the act of July 23, 1866 (14 Stat., 218, 220).

By the act of February 28, 1891 (26 Stat., 796), sections 2275 and 2276 were amended. Section 2275 reads in part:

Where settlements with a view to preemption or homestead have béén, of shall hereafter be made, before the survey of the lands in the field, which are found to have been made on sections sixteen or thirty-six, those sections shall be subject to the claims of such settlers; and if such sections, or either of them, have been or shall be granted, reserved, or pledged for the use of schools or colleges in the State or Territory in which they lie, other lands of equal acreage are hereby appropriated and granted, and may be selected by said State or Territory, in lieu of such as may be thus taken by preemption or homestead settlers. And other lands of equal acreage are also hereby appropriated and granted, and

may be selected by said State or Territory where sections sixteen or thirty-six are mineral land, or are included within any Indian, military, or other reservation, or are otherwise disposed of by the United States: Provided, where any State is entitled to said sections sixteen and thirty-six, or where said sections are reserved to any Territory, notwithstanding the same may be mineral land or embraced within a military, Indian, or other reservation, the selection of such lands in lieu thereof by said State or Territory shall be a waiver of its right to said section. . . . And it shall be the duty of the Secretary of the Interior, without awaiting the extension of the public surveys, to ascertain and determine, by protraction or otherwise, the number of townships that will be included within such Indian, military, or other reservation, and thereupon the State or Territory shall be entitled to select indemnity lands.

Section 2276 is in part as follows:

That the lands appropriated by the preceding section shall be selected from any unappropriated, surveyed public lands, not mineral in character, within the State or Territory where such losses or deficiencies of school sections occur.

From the foregoing it will be observed that the act of 1826, supra, provided that the Secretary of the Treasury should make the school selections. The California act of 1853 provides that the selections are to be subject to the approval of the Secretary of the Interior. The later acts cited do not by their express terms or by implication authorize indemnity selections otherwise than subject to the approval of the Secretary of the Interior.

The Supreme Court of California in Roberts v. Gebhart (104 Cal., 68; 37 Pac., 782), with reference to school indemnity, expressly held as follows:

In the first place, the selection made by the State upon application of the plaintiff was not approved by the Secretary of the Interior, and therefore such attempted selection did not give to the State any legal or equitable right to the land therein described. . . . It is the consent of the United States as manifested by the approval of the Secretary of the Interior, which gives legal efficacy to the application or selection made by the State, and without such approval neither the State nor its grantee is in a position to call in question any future disposition which the United States may make of the land embraced in the attempted selection.

In another case, Buhne . Chism (48 Cal., 467), arising under a selection of land in satisfaction of the grant to the State for the use of a seminary (Sec. 12, act March 3, 1853) the Supreme Court said:

We think the approval of the Secretary of the Interior was essential to a valid selection and location by the State and that it was incumbent upon the plaintiff to show affirmatively that he (the Secretary) had approved it.

It has been the uniform practice for the Secretary of the Interior to approve school indemnity selections.

In the case of Swank . State of California (27 L. D., 411) it was held (syllabus):

Prior to the approval of a school indemnity selection the land included therein, if mineral in character, is open to exploration and purchase under the mining laws of the United States.