Opinion of the Court.

the right to such use shall not interfere with any prior right or claim to such waters when the law has been complied with in doing the necessary work." Levisee's Codes, 861.

Section 650 of the Code of Civil Procedure is as follows: "Any person settled upon the public lands belonging to the United States, on which settlement is not expressly prohibited by Congress, or some department of the general government, may maintain an action for any injuries done the same; also an action to recover the possession thereof, in the same manner as if he possessed a fee simple title to said lands." Levisee's Codes, 171.

The local custom is set forth in the findings to have consisted in the recognition and acknowledgment of "the right to locate water rights, and to divert, appropriate and use the waters of flowing streams for purposes of irrigation when such location, diversion and use does not conflict or interfere with rights vested and accrued prior thereto."

Thus, under the laws of Congress and the Territory, and under the applicable custom, priority of possession gave priority of right. The question is not as to the extent of Smith's interest in the homestead as against the government, but whether as against Sturr his lawful occupancy under settlement and entry was not a prior appropriation which Sturr could not displace. We have no doubt it was, and agree with the brief and comprehensive opinion of the Supreme Court to that effect.

The judgment is affirmed.

MR. JUSTICE BREWER was not a member of the court when this case was submitted, and took no part in its decision.

Statement of the Case.

SEARL v. SCHOOL DISTRICT NO. 2 IN LAKE COUNTY.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF COLORADO.

No. 1104. Submitted January 10, 1890.- Decided March 3, 1890.

A tract of land in Leadville, Colorado, was deemed by the municipal authorities to be the most convenient and proper situation for the erection of a school-house, which had become a necessity in that part of the town. The person in possession claimed under what was known as a squatter title. Another person laid claim to it under a placer patent from the United States. Both claims of title were known to the authorities, and were submitted by them in good faith to counsel for advice. The counsel advised them that the squatter title was good, and on the faith of that advice they purchased the lot from the person in possession, and built a school-house upon it, at a cost of $40,000. The claimant under the placer title brought an action of ejectment to recover possession. The municipal authorities, being satisfied that he must prevail, filed their bill in equity to enjoin him from proceeding to judgment in his action at law, and commenced proceedings under a statute of the state for condemnation of the tract for public use. The plaintiff in the ejectment suit appeared in the condemnation proceedings, and claimed to recover from the municipality the value of the improvements as well as the value of the land as it was when acquired by the municipality; and, being a citizen of Kansas, had the cause removed, on the ground of diverse citizenship, into the Circuit Court of the United States. It was there agreed that the value of the property, without the improvements, was $3000; and the court instructed the jury that they should find "that the value of said property at this date is $3000;" Held, that this instruction was correct. No vested right is impaired by giving to an occupant of land, claiming title and believing himself to be the owner, the value of improvements made by him under that belief, when ousted by the legal owner under an adverse title.

In exercising the right of eminent domain for the acquisition of private property for public use, the compensation to be awarded must not only be just to the owner, but also just to the public which is to pay for it.

SCHOOL DISTRICT No. 2, in the county of Lake and State of Colorado, filed its petition in the county court of that county against R. S. Searl, stating that long prior to the first day of July, 1881, it had been and then was, a school district duly

Statement of the Case.

and regularly organized; that on July 1, 1881, one Frances M. Watson was in the actual possession and occupancy, under a deed of conveyance to her, of certain lots in a certain block of an addition to the city of Leadville; that on the same day one Schlessinger was in the actual possession and occupancy under deed of conveyance to him of certain other lots; that said Watson and Schlessinger then were, and they and their grantors had for a long time prior thereto been, in the actual possession and occupancy of said lots, claiming the ownership thereof; that on that day the board of directors of the school district, having been duly authorized and directed so to do, purchased the lots from Watson and Schlessinger and they were conveyed to the district, the said lots being contiguous and together constituting but one tract or lot, not exceeding one acre; that the lots were situated within the boundaries of the school district, and were purchased for the purpose of a school lot upon which to locate and construct a school-house for the benefit of the school district and the people resident therein; that the school district entered into possession and occupation of the land on July 1, 1881, and proceeded to and did construct thereon a large, costly and valuable school-house, and ever since that time had been and then was in the possession and occupancy of said land, using the same for the purposes of a school; that since the purchase and entry into possession by the school district, the defendant, Searl, had acquired the legal title to the lots composing the school lot, the full title to the same having become vested in him on the second day of February, 1884; "that he is now the owner of said property, and that the title thereto acquired by your petitioner as aforesaid has wholly failed; that your petitioner made the purchases, entered into the possession, and constructed the school-house aforesaid in good faith, believing that it had good right so to do; that said school-house is located with reference to the wants and necessities of the people of each portion of said district, and was at the time of said purchases and is now necessary for the school purposes of said district, and that said land and school lot contain no more than is necessary for the location and construction of the school-house aforesaid and the

Statement of the Case.

convenient use of the school; that the compensation to be paid for and in respect of the property aforesaid for the purposes aforesaid cannot be agreed upon by your petitioner and the said defendant, the parties interested; and that the said defendant is a non-resident of the State of Colorado." Petitioner then averred that the value of the property did not exceed the sum of two thousand dollars; and prayed that the compensation to be paid by it to defendant for and on account of said property be assessed in accordance with the statute.

The defendant appeared and on his application the cause was removed into the Circuit Court of the United States for the District of Colorado. Upon the trial before the circuit judge and a jury, it was "agreed and admitted, among other things, that the premises appropriated were necessary for the petitioner and were taken for public use." And the following stipulation in writing was offered and read in evidence:

"For the purposes of the present hearing and trial only of the above-entitled action or proceeding, either in this court, where it is now pending, or in the Supreme Court of the United States, where it may be taken on appeal or writ of error, the following facts are agreed upon by and between the respective parties hereto, to wit:

"First. That a receiver's receipt was issued for the Sizer placer, United States survey No. 388, on the 16th day of April, A.D. 1881, out of the district land office of the United States at the city of Leadville, in the State of Colorado, to one Isaac Cooper, claimant.

"Second. That on the 18th day of May, a.d. 1881, a United States patent was issued to the said Isaac Cooper for the said Sizer placer.

"Third. That the land sought to be condemned in the present proceeding is a part of the said Sizer placer.

"Fourth. That since the 20th day of November, A.D. 1882, and before the institution of this proceeding, the said Isaac Cooper conveyed to the said R. S. Searl the said Sizer placer, and the said Searl by virtue thereof is now the owner and holder of the said patent title thereto.

"Fifth. That prior to the application for a patent to the

Statement of the Case.

said Sizer placer, and up to the time when the said school board purchased the same and took possession thereof, the land herein sought to be condemned was occupied, possessed and improved, and the ownership thereof claimed, by persons holding under what was called and known as a 'squatter title.'

"Sixth. That on or about the first day of July, A.D. 1881, the said school board purchased and took conveyances of the land now sought to be condemned, with the buildings and improvements thereon, made and erected by the said squatter occupants, from said occupants, and paid therefor the sum of thirty-five hundred ($3500) dollars.

"Seventh. That on or before the thirtieth day of July, A.D. 1881, the said school board went into actual possession of the lots described in the petition herein, and immediately commenced to build, and on the thirtieth day of January, A.D. 1882, prior to the institution of these proceedings, completed improvements, suitable and appropriate for educational purposes, at a cost to the said school district of forty thousand ($40,000) dollars; which property it has since possessed and occupied and still occupies for school purposes.

"Eighth. That at the time of the commencement of this action and the institution of these proceedings in condemnation, the land described in the petition herein, together with the improvements thereon so made by the school board as aforesaid, was of the value of forty thousand ($40,000) dollars.

"Ninth. That at the said times of taking possession and at the time of the commencement of this action and the institution of these proceedings in condemnation, the land described in the petition herein, without the improvements thereon made by the school board, was of the value of three thousand ($3000) dollars, and that the area of same is less than one acre.

"Tenth. That petitioner had knowledge of the issuance of a United States patent, covering the property sought to be condemned, prior to the purchase of the title which it subsequently purchased, and which was known as the squatter title.

"That prior to such purchase petitioner employed and paid reputable counsel to investigate said title, that the counsel so employed reported in favor of the validity of the so-called