Town of Greenhorn, an Oregon Municipal Corporation, Gail L. Poyser, Miles F. Potter, Lillian Potter and Guy Miller v. Baker County, Oregon

Baker County appeals from a judgment declaring that it has no interest in disputed property within the Town of Greenhorn, Oregon, and appointing a successor trustee to the property pursuant to 43 U.S.C. § 718 (1970), the Townsite Act. Because the case does not present a federal question, the district court lacked jurisdiction. We reverse.

FACTS

The Townsite Act, 43 U.S.C. § 718 (1970), provided that when public lands had been settled and occupied as a town site, if the town was incorporated, its corporate authorities had the right to enter the land at the proper land office “in trust for the several use and benefit of the occupants thereof, according to their respective interests.”

Greenhorn was a thriving town during Eastern Oregon’s mining boom in the 1800’s. It was incorporated in 1903 and, in 1912, Simeon Richardson, as mayor of Greenhorn, procured a patent in trust under § 718. He conveyed a few lots to the occupants in accordance with the statute, but the property subject to this suit was unoccupied and remained in trust.

Greenhorn eventually became a ghost town. In 1954, Richardson executed a quitclaim deed of his interest in Greenhorn to Baker County, but delivered the…