APPEAL FROM THE UNITED STATES CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT.
MR. JUSTICE BREWER, after stating the case, delivered the opinion of the court.
The burden of complaint in this case is, that the Circuit Court erred in restricting the scope of the inquiry. The government sought to introduce testimony to show that the road was never in fact constructed, as required by the act of Congress; and also that the certificates of the governors, made as provided by section 4 of the act of 1864, were obtained by fraud and misrepresentation, as averred in the bill. But all of this testimony was excluded, and the inquiry limited to the single question whether the Land Company was a bona fide purchaser.
The first plea of the Land Company recited the fact that three several certificates had been issued by governors of the State of Oregon, to the effect that the road had been completed as required by the act of Congress, and added, "that each of said several certificates was made honestly and in good faith and without any fraudulent intent or procurement or false representation by any person whomsoever." But upon application to the Circuit Court this clause in the plea was stricken out, leaving it to contain simply an averment of the certificates of the governors; and as these had been set out at length in the bill, there was no issue of fact presented by this plea. The other plea was that the Land Company was a
purchaser in good faith, and to that question, as heretofore stated, the inquiry was restricted.
There was no error in this ruling. The decision of this court, as reported in 140 U.S. 599, was that "the decree of the Circuit Court, so far as it dismisses the bill, must be reversed and the case be remanded to that court with a direction to allow the plaintiffs to reply to and join issue on the pleas," and the mandate which was sent to the Circuit Court recited this direction. That decision was the law of this case for the subsequent proceedings in that court. There was no adjudication that the pleas were insufficient in law; on the contrary, the plain implication of the opinion was that they were sufficient, and the question which was remanded to that court for inquiry was as to their truthfulness. There was no adjudication of insufficiency and no rehearing ordered on that question. If the government was not satisfied with the decision, it should have called our attention to it, and have sought a modification or enlargement of the decree. The Circuit Court properly construed it, and proceeded in obedience thereto to permit the government to join issue on the pleas, and to entertain an inquiry as to their truthfulness, and that was the only matter open for inquiry.
Indeed, that would have been the rule if there had been no decision of this court, and if in the first instance issue had been joined on the pleas. It is true that the statute directed that these suits be brought "to determine the questions of the seasonable and proper completion of said roads," and "the legal effect of the several certificates of the governors;" and upon that counsel for the government insists that its mandate was that there should be full inquiry as to these matters; but that statute also provided "that said suit or suits shall be tried and adjudicated in like manner and by the same principles and rules of jurisprudence as other suits in equity are therein tried;" and the unquestionable right of a defendant in an equity suit is to let the facts averred in the bill go unchallenged, and by plea set up some special matter, which, if established and sufficient, will defeat any recovery. Even if it were within the competency of Congress to compel every
party named as defendant to a suit in equity brought by it, to bear all the expenses and submit to all the delay of a prolonged inquiry into the truth of the facts averred in the bill, it is obvious from the language we have quoted from the statute that Congress did not intend to deprive any party of the rights ordinarily vested in defendants in suits in equity. If the sole purpose were to ascertain by judicial investigation whether the roads were in fact completed as required, that purpose could have been accomplished by making defendants only the original parties, the wrongdoers. If other parties than they were made defendants, as is the fact here, such parties, within the terms of the statute, had the right by plea to set up any special matter which as to them constituted a full defence; and as between such parties and the government, the inquiry, by settled rules of equity, was then limited to such matter.
In Farley v. Kittson, 120 U.S. 303, 314, 315, 316, the nature and functions of a plea were fully discussed. It was said: "But the proper office of a plea is not, like an answer, to meet all the allegations of the bill; nor like a demurrer, admitting those allegations, to deny the equity of the bill; but it is to present some distinct fact, which of itself creates a bar to the suit, or to the part to which the plea applies, and thus to avoid the necessity of making the discovery asked for, and the expense of going into the evidence at large. Mitford Pl. (4th ed.) 14, 219, 295; Story Eq. Pl. §§ 649, 652.
"The plaintiff may either set down the plea for argument, or file a replication to it. If he sets down the plea for argument, he thereby admits the truth of all the facts stated in the plea, and merely denies their sufficiency in point of law to prevent his recovery. If, on the other hand, he replies to the plea, joining issue upon the facts averred in it, and so puts the defendant to the trouble and expense of proving his plea, he thereby, according to the English chancery practice, admits that, if the particular facts stated in the plea are true, they are sufficient in law to bar his recovery; ...