such after the Government, by issuing a patent, has parted with the legal title."

There are two or three answers to this contention. In the first place, the headnote is not the work of the court, nor does it state its decision-though a different rule, it is true, is prescribed by statute in some States. It is simply the work of the reporter, gives his understanding of the decision, and is prepared for the convenience of the profession in the examination of the reports. In the second place, if the patent referred to in that headnote is a patent issued upon a wrongful entry, no such fact appeared in the case, because no patent was issued upon the entry charged to have been wrongful, but after that entry had been cancelled, a patent was issued to Diller on a new entry. If it refers to some other patent than one issued upon a wrongful entry, it has no pertinency, for the doctrine of relation never carries a patent back to the date of any other entry. than that upon which it is issued. And finally the headnote is a misinterpretation of the scope of the decision.

With reference to the other tracts and the denial of any relief, by accounting or otherwise, against the Detroit Company, it is contended that as prior to the issue of a patent the Land Department could have set aside the entries on account of the fraudulent contracts, the courts will now grant the same relief; and further, that inasmuch as the patents are by this decree cancelled and the title restored to the Government the Detroit Company must be regarded as a wrongdoer in respect to the timber which it took from the lands prior to the decree, and an accounting should have been ordered. But this ignores the fact that the Detroit Company acted in good faith and purchased the timber from those having an apparently perfect equitable title thereto. It becomes necessary to inquire what is the significance of a final receiver's receipt and the effect of a cancellation by the Land Department of such a receipt. The receipt is an acknowledgment by the Government that it has received full pay for the land, that it holds the legal title in trust for the entryman and will in due course issue to VOL. CC-22

him a patent. He is the equitable owner of the land. It becomes subject to state taxation, and under the control of state laws in respect to conveyances, inheritances, etc. Carroll v. Safford, 3 How. 441; Witherspoon v. Duncan, 4 Wall. 210; Simmons v. Wagner, supra; Winona & St. Peter Land Co. v. Minnesota, 159 U. S. 526; Cornelius v. Kessel, 128 U. S. 456; Hastings & Dakota R. R. Co. v. Whitney, 132 U. S. 357; Benson Mining Co. v. Alta Mining Co., 145 U. S. 428.

Indeed, in some of the opinions of this court, emphasizing the value of a receiver's receipt, there are expressions which seem to underestimate the significance of a patent. Wisconsin Central R. R. Co. v. Price County, 133 U. S. 496, 510; Deseret Salt Co. v. Tarpey, 142 U. S. 241, 251. For it must be remembered that the latter is the instrument which passes the legal title, and that until it is issued the legal title remains with the Government and is subject to investigation and determination by the Land Department. Barden v. Northern Pacific R. R. Co., 154 U. S. 288, 326; Michigan Land & Lumber Co. v. Rust, 168 U. S. 589, 592; Guaranty Savings Bank v. Bladow, 176 U. S. 448. But while until the issue of the patent the land is under the control of the Land Department, which, upon proper investigation and for sufficient reasons, may set aside the certificate of entry, yet this power of the Land Department cannot arbitrarily be exercised without notice to the entryman, and if improperly exercised the rights of the entryman may be enforced in the courts after the patent has issued to other parties. Guaranty Savings Bank v. Bladow, supra. It is true, as against the Government, and while the title remains in the Government, he may not be able to enforce his equity, because no action can be maintained against the Government, except upon contract, express or implied. United States v. Jones, 131 U. S. 1. But while he may not sue on his equity, he may protect that equity when sued by the Government. It is sometimes said that a legal title with an equity is paramount to an equity alone, but this is not strictly true unless the equities are equal, for sometimes a superior equity

may be adjudged paramount to a legal title and an inferior equity. Garland v. Wynn, 20 How. 6; Lytle v. Arkansas, 22 How. 193; Lindsey v. Hawes, 2 Black, 554; Wirth v. Branson, 98 U. S. 118; 2 Pomeroy's Eq. Jur. § 678, and following. But we need not stop to inquire what rights the Detroit Company will have after a patent has issued. It is enough now to hold that it can defend its equities against the suit of the Government.

It is a mistake to suppose that for the determination of equities and equitable rights we must look only to the statutes of Congress. The principles of equity exist independently of and anterior to all Congressional legislation, and the statutes are either annunciations of those principles or limitations upon their application in particular cases. In passing upon transactions between the Government and its vendees we must bear in mind the general principles of equity and determine rights upon those principles except as they are limited by special statutory provisions. And clearly upon those principles a party purchasing an equitable right is entitled to be protected in his purchase so far as it can be done without trespassing upon the rights of other parties. The statute provides that if an entry is wrongfully made it may, prior to patent, be set aside by the Land Department, the entryman forfeiting the money which he has paid. In other words, by the action of the Department the equitable title is cancelled and restored to the Government. It then has both the full title to the land and the money which had been paid for it. And this is the penalty which is imposed for the wrongful entry. Certainly when the Government retains the full price which it has placed upon the land and also recovers the land itself it is abundantly compensated for any wrong which has been attempted by the entryman. And a party who deals with such entrymanrelying upon the evidences of his entry, which are in all respects in form good and sufficient, and are an acknowledgment by the Government officials of a rightful entry-is justly entitled to the consideration of a court of equity. In this case, finding

the entrymen holding apparently valid equitable titles to the lands, it entered into contracts with them for the purchase of the timber. It cut and removed the timber-all in good faith. It is equitable that, having thus acted in good faith, it should not be held to account for the timber which it has already paid for and cut and removed in reliance upon these contracts. The Government has every dollar which it would have received in case of a perfectly valid entry, and has also recovered the land. Surely it is not just for it to ask further payment, and from a party who dealt in good faith with the entrymen, relying upon the titles which it had created. If the Detroit Company has taken some timber from the land it has once paid for it, and ought not to be compelled to pay a second time, and to the Government, which has already received full pay for the land, timber and all. It is inequitable to give to the Government not merely the land, and the price which it charged for the land, but also the value of the timber obtained by the Detroit Company. It is doubling the penalty which the statute imposes, or if not doubling, at least largely increasing it. We think the decision of the Court of Appeals was right, and it is

Affirmed.

MR. JUSTICE HARLAN and MR. JUSTICE MCKENNA dissent.

200 U.S.

Statement of the Case.

SOUTHERN PACIFIC RAILROAD COMPANY v. UNITED STATES.

APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE NINTH

CIRCUIT.

No. 141. Argued January 24, 1906.-Decided February 19, 1906.

Although a suit in equity cannot be maintained where there is an adequate remedy at law, and this objection may be taken for the first time in the appellate court, still, if not raised until then, the court need not, if the subject matter of the suit is of a class over which it has jurisdiction, dismiss the bill; and so held in regard to a suit brought by the Government, under an act of Congress, to recover from a railroad company the value of lands erroneously patented to and sold by it to numerous persons, some of whom were made defendants as representatives of the class, the bill also praying for cancellation of patents, quieting of titles, discovery and accounting.

Discovery, although now seldom the object of a suit in equity, and not always sufficient to uphold a suit when the full information is obtainable by proceedings at law, was a well-recognized ground of equity jurisdiction. When by mistake a tract of land is conveyed, and the vendee prior to discovery of the mistake, conveys to a bona fide purchaser, the original owner is not limited to a suit to cancel the conveyances and reëstablish his own title, but may elect to confirm the title of the innocent purchaser and recover of his own vendee the value of the land up to at least the sum received by him. The conveyance to the innocent purchaser is equivalent to a conversion of personal property.

The acts of March 3, 1887, 24 Stat. 556, of February 12, 1896, 29 Stat. 6, and of March 2, 1896, 29 Stat. 42, do not in providing for adjustment of railroad land grants, amount to a taking of the railroad companies' property without compensation because they confirm sales made to bona fide purchasers of lands erroneously patented to railroad companies and require such companies to account for and pay to the Government the amounts received by them from such purchasers up to the regular Government price.

THIS was a suit begun in the Circuit Court of the United States for the Southern District of California, by bill filed April 13, 1899. The parties named as defendants were the Southern Pacific Railroad Company, the trustees in certain mortgages, and a number of individuals sued as representatives