Smith v. Mariner

5 Wis. 551 | Wis. | 1856

Lead Opinion

By the Court,

Oole, J.

The testimony taken upon the hearing of this cause does not materially vary the case as it stands upon bill, answer and replication. It, therefore, becomes necessary, for a proper understanding of the charge of fraud and mistake, which are relied upon as grounds of relief in this case, to look at the principal allegations of complainant’s bill, containing that charge, and such parts of the answer of the defendant, Mariner, as are responsive thereto.

The bill was filed in the Circuit Court of Milwaukee county, on the 8th of June, among other matters, stating in substance, that on the 15th of June, 1850, at a sale of school and university lands in the county of Milwaukee, in accordance with the provisions of chapter 24, Revised Statutes, Clinton Walworth became and was the purchaser of lot No. 18, in the southeast quarter of section 16, town 7, north of range 22 east, containing seven and 19-100 acres, for the sum of $539.97, of which he paid at the time of purchase $54.97 of the purchase money, and $18.38 for interest upon the balance unpaid up to January 1, 1851, taking from the commissioners a duplicate certificate, bearing date upon that day, in which the purchase of the lot, at the time, and for the amount and for the payment of the sum aforesaid, were recited and admitted, and in which said certificate it was provided that if the said Walworth, his heirs or assigns, should within ten years, pay the balance of the purchase money, interest annually in advance, at the rate of 7 per cent., and the taxes properly assessed thereon; that then said Walworth, his heirs or assigns, should be entitled to a patent for the said lot; and that the certificate also provided that in case of default in the payment of the balance of the purchase money when due, or of tbe interest and taxes as aforsesaid, that then tbe commissioners might take possession of, and resell tbe said lot.

And further, that tbe certificate was properly assigned by Walworth to complainant on tbe 24th day of June, 1850, and that be took possession of tbe lot; also, that be paid the interest in advance for tbe year 1851, but neglected to pay tbe interest due for 1852 and 1853 ; that after default, and at any time before a re-sale of tbe lot by tbe commissioners, he bad a right to redeem by paying 'the interest due, with 5 per cent, upon tbe purchase money, and all costs occasioned by tbe delay, and revive the said certificate thereby in its full original force.

That in tbe latter part of July, 1858, be was informed that tbe lot was advertised for sale on tbe 11th of August, 1853, for tbe non-payment of tbe interest, but that be bad never seen tbe notice of sale; and that on the 4th of August previous to tbe sale he applied to tbe defendant, Mariner, for a loan of money to enable him to pay tbe interest, damages and costs, and revive bis contract, stating to Mariner that be was informed the lot was advertised for sale on tbe 11th of August.

That Mariner declined accommodating him with tbe money, saying that be bad not got it to spare, and also saying that be bad understood that tbe sale bad been published for tbe 11th, and' bad sent money to pay interest due upon bis lots advertised to be sold at tbe same time as complainants; but that he^ need not be in a burry, as tbe sale of the lot would not take place until tbe 29th of August, as be bad learned from a letter sent to him by bis agent at Madison, which letter was to that effect, and that there could be no mistake about it.

Further, that the sale did take place on tbe 11th of August, at which time tbe lot was sold, and bid in by Mariner through bis agent at Madison ; and tbe complainant alleges that the only reason why be did not pay tbe interest, &c., before tbe 11th, was, that be fully believed tbe statements and representations of Mariner as to tbe time the sale would take place; and that tbe first intimation be received to tbe contrary of such statement was from Mariner, who informed him directly after the sale, that the lot bad been sold and bid off for him by bis agent.

The bill charges, that at tbe time of making these representations, in reference to the time of the sale, Mariner knew they were false, knew that complainant owned the certificate, knew when the sale would take place, and had employed an agent at Madison to attend the sale, and bid off the lot for himself, Mariner ; that these statements and representations, in connection with the previous arrangement for purchasing the lot, and the subsequent purchase, were calculated to deceive, and did deceive him, the complainant, and were a fraud upon his rights.

The bill prays for an answer, under oath, and that Mariner be decreed to assign over the certificate to the complainant upon being paid the amount of his disbursements and interest on the same.

Mariner answered, under oath, admitting the complainant had a claim to the lot set forth in the bill, and states that on or about the 8th of June, 1853, he was at Madison, and while there was informed that the delinquent school and university lands were advertised For sale, and that the sale would take place on the 1st day of August, next thereafter; that he then employed an agent to attend the sale, and bid for him upon such lands; that he returned to Milwaukee about the 20th of June, and shortly-after met the complainant in the street, and had a conversation with him concerning the lot in controversy; that complainant said he knew the lot was advertised for sale, and that he meant to redeem it if he could get the money to do so, and asked the defendant? to loan him the necessary funds for that purpose; to which request the defendant replied that he had no money to loan, and should have to borrow money to pay interest for himself, and that afterwards, and about the 3d day of August, the defendant had another conversation with the complainant, in which he told him that he had SGnt the money to pay his interest, but that he need not have been in so great a hurry, for he had a letter from his correspondent at Madison, -saying that the sale would not take place till the 19th, and that he thought that the letter was reliable, that he should depend upon it, but did not say there could be no doubt but the sale would take place on the 19tb. Mariner further says that these statements were made to the complainant in casual conversations; tliat it was the best information upon the matter he possessed, and that when he gave it he believed it to be true; also when he made these statements, he gave his authority and means of information ; and that they were made concerning a matter of which the complainant had equal facilities for knowing. He denies that he knew, previous to such sale, that it would take place on the 11th of August; insists that the only persons from whom he even heard that the sale would take place on that day was the complainant — and that he supposed, up to the 80th of July, and until after he had sent the money to pay his own interest, that it would take place upon the 1st of August.

In the allegations in the bill above set forth it will be seen that the complainant charges Mariner with telling what was false in reference to the time of sale, knowing himself when it would be, and that he made these statements with a fraudulent purpose, with the intention to induce him to act upon them, so that he might obtain an undue advantage over complainant by buying in the land for himself. If these allegations were sustained by the answer of Mariner, or established by the proofs, it would constitute a clear case of fraud. “ For,” says Justice Story (1 Eq. Jur., § 192), “ where the paTty intentionally, or by design, misrepresents a material fact, or produces a false impression, in order to mislead another, or to entrap or cheat him, or to obtain an undue advantage of him; in every such case there is a positive fraud, in the truest sense of the terms; there is an evil act with an evil intent; dolum malum ad circumre niendum. To the same effect are the cases of Pasby vs. Truman (3 Durnf. and East, 23); Evans vs. Bicknell (6 Ves. 193); Taylor vs. Ashton (11 M. & W. 400).

But Mariner most distinctly and pointedly denies, in his answers, that when he had these conversations with the complainant, he knew the sale was advertised for the 11th of August, or would take place upon that day. On the contrary, he says that his impression, up to the 30th of July, had been, that it was advertised for the 1st of August; and that he had acted upon this presumption by remitting money to pay interest upon his own lots. He states he told the complainant he had received a letter from his agent at Madison, saying the sale would take place on the 19th of August; that he thought the letter was reliable; thus giving just such information as he possessed, the correctness of which he did not doubt. If Mariner had received a letter of this import, and we must presume he had, as his answer in this respect is uncontradicted, and we think this matter is strictly responsive to the bill, it was natural he should place confidence in its statements. This sale was to take place at Madison, where the writer of the letter lived, and the notice of sale was given in the newspaper published there. The writer therefore possessed superior means of information about the sale, and it is not surprising that Mariner trusted him. But it is made a matter of observation in the argument, and properly, too, that this letter was not produced upon the hearing, or its absence accounted for; and it is said this circumstance casts suspicion upon the truth of the answer. And so, to some extent, perhaps it does. Still we have said we considered this part of the answer as being responsive to the bill, and consequently by a familiar rule of practice, must stand until overcome by at least one witness, and strong corroborating circumstances.

Another circumstafice relied upon by the complainant to show a meditated fraud, is, that Mariner had employed an agent to bid upon this property, and that he concealed that fact from him. It will be admitted that Mariner had a perfect right to bid at this sale, as much so as any citizen. He says that he employed an agent for that purpose when at Madison, in June. Nor was he, in conscience and duty, bound to disclose this to the complainant ? Or will the concealment of that fact authorize us in inferring that it was done with a fraudulent motive ? There was no peculiar relation, no fiduciary character existing between the parties. And I think he might innocently withhold from the complainant the knowledge of his having employed an agent to bid upon the land.

Stress is laid upon another matter, that Mariner came to the ■ complainant on the 3d of August, and communicated this wrong information as to the time of sale. But it does not very clearly appear whether the complainant applied to Mariner,' or whether the latter put himself in the way of the complainant and volunteered the information. Mariner says that the statements about the sale were made in casual conversations. There does not seem to have been any purpose or design to mislead, and in the absence of that most important ingredient of fraud, I think it quite immaterial whether Mariner sought him or not.

Again; it is said. to be wholly immaterial whether Mariner thus misrepresented a fact he knew to be false, or made an assertion about the sale not knowing it to be true ; for that the affirmation of what one does not know or believe to be true, is equally in morals and law as unj ustifiable as the affirmation of what is known to be positively false. And that even if the party innocently misrepresents a fact by mistake, it is equally conclusive ; for it operates as a surprise and imposition on the other party. 1 Story Eg. Jur., § 193. In answer to the first proposition it is sufficient to say, that Mariner swears he gave the complainant such information in regard to the sale as he possessed, giving his means and source of information, and believing it at the time to be true.

And upon the point of mutual mistake, it must be borne in mind, that this was a public sale, that notice of the time it would take place, had to be by law, and was actually given in a newspaper published at Madison ; that the means of information as to the sale were open to both parties; that Mariner had no control over the sale or over the commissioners, under whose directions it was to be made; and further, Mariner had not been employed professionally or otherwise to ascertain when the sale would take place. Neither were the complainant and Mariner holding the relation of contracting parties. Had they been upon a treaty for any contract, and had Mariner made a false representation upon the subject of the contract innocently, without any fraudulent motive, by which the complainant was misled, equity would grant relief and compel Mariner to make the representation good. To that effect are the cases of Buxton vs. Lister (3 Atk. 385); McFerson vs. Taylor et al. (3 Cranch, 270); Smith vs. Richards (13 Peters, 26); East vs. Mathews (2 A. K. Marsh. 192); Taylor vs. Fleet (1 Barb. Sup. Ct. R. 473); Lewis vs. McLemon (10 Yer. 206); Adams Eq. p. 176 et. seq., cited upon complainant’s brief, and many others of tbe same import found in tbe boobs. Or bad not tbe means of information about tbe sale been equally open to tbe parties, and bad tbe complainant applied to Mariner, being a party immediately interested in tbe subject matter of inquiry, as in Pearson vs. Morgan (2 Bro. Ch. R. 305); Burrows vs. Lock (10 Ves. 472); or Bacon vs. Bronson (7 J. Ch. R. 193); and bad been misled, be would bave been entitled to relief. But sucb was not tbe case. These parties bave a casual conversation about a public sale, and tbe defendant states be is informed and believes it takes place several days after it does. At this sale tbe land is bid in for tbe defendant by an agent employed some weeks before. In consequence of this misinformation tbe complainant says be did not redeem bis land before sale. Suppose tbe land had not been bid in by Mariner, but by somebody else, could tbe complainant bave sustained an action at law for damages against Mariner, for misleading him as be did ? Tbe answer is obvious. He could not, unless be could show that be bad sustained damage, not by tbe mistake, but by tbe fraudulent design and deceit of the defendant. If be could not sustain his action at law for damages arising from this mistake, I am unable to see, bow, under tbe circumstances of this case, and tbe relation of tbe parties to tbe sale, subject matter, and each other, be can be relieved from tbe consequences of the mistake in a court of equity.

But tbe complainant places bis title to relief upon another ground. It is insisted that tbe object of tbe forfeiture provided for in tbe act, for tbe sale of tbe school lands, was to secure tbe payment of tbe unpaid purchase money, and that, therefore, this case falls within tbe principle applicable to all cases of penalties and forfeitures intended to secure the payment of money only. I am unable to accede to this proposition. Section 15, chapter 24, R. S., provides that in case of non-payment of principal or interest, when due, according to tbe terms of tbe certificate of sale, sucb certificate shall become void from tbe time of sucb failure, and tbe purchaser shall forfeit all right and interest in tbe land. Subsequent provisions authorize the commissioners to advertise and sell forfeited school lands. This is not a contract between parties, where compensation can be given for the breach of a condition, or for the non-payment of money when it fell due; but it is a case where, by express enactment, the right and interest of the purchaser in the land are to determine upon default in paying principal or interest as it becomes due. Now, is it competent for this court to relieve against such a forfeiture ? to say that the legal consequences expressly declared by the statute shall not ensue ? Can it say that where the law prescribes there shall be a forfeiture, there shall be none; and for instance here, say that the second sale shall be null and void; thus virtu ally repeal and nullify an act of the legislature ? I should require very clear and strong authority to show that courts had done this, before I would presume to go that length. But we have been referred to no case where a court has thus interfered to mitigate a forfeiture imposed by statute. The cases of Peachy vs. The Duke of Somerset (1 Str. R. 447); Keating vs. Sparrow (1 B. & Beat. 373, 374, also cited in Leading Cases in Eq., Vol. II part 2, p. 448), whatever they may determine, certainly give no countenance to this doctrine, but the contrary. And those cases are relied upon by Justice Story to sustain the very opposite doctrine, in see. 1326, Vol. If Kq. Jur. The expression of the legislative will is, in this case, most clear and explicit; shall it be defeated upon the ground and for the reason that the law is harsh and severe in its character ? Grant that the law is oppressive, inequitable, rigorous in its operation; that by its provisions the purchaser, on the least default, occasioned, perhaps, by a temporary inability to obtain money to pay what was due on the certificate, or by misfortune, was liable to lose all his rights under the sale; yet I cannot see that he can annul or disregard those provisions. I do not feel called upon at this time to attempt a vindication of this act of the legislature, and to show that it is not justly obnoxious to any such strictures. But I remark in passing, thabsection 16 enables the purchaser, at any time before a re-sale, to revive the original contract by paying the amount due with interest, and all costs occasioned by the delajr, and five per cent, damages on tbe purchase money. Besides tbe re-sale could not take place without -notice thereof being given in some newspaper. That was done in tbe present case, and it appears the re-sale did not take place until a year and a half after the first default was made. But it is not for us to pass upon the sound policy and wisdom of this law. Such considerations are properly addressed to the legislature, :which has power to repeal or amend it. We can only inquire whether the act as it now stands, is in conflict with any provision of the constitution of this state. And this brings us to the last, and most difficult and important point in the case.

And in entering upon the discussion of this point, I observe, that while I should feel it to be a very delicate and unpleasant duty to. declare an .act of the legislature unconstitutional,.particularly one like that under consideration, undér which, so many sales of real- estate have been made, and so many rights become vested, yet I should feel it to be a duty from which I could not shrink, in a case free from all rational doubt.. But if such a case were not presented, if I can give to the constitution and the law a reasonable interpretation, such an one as will permit the law to stand, I then feel it to be my imperative duty so to do, and declare the law valid. . And this is a rule as I understand of all courts, which will not, in a doubtful case, pronounce an act of the legislature to be contrary to the constitution.. 4 Whea. 625; Cow. 564. But to return to the question, is chapter 24, B. S., in those provisions relating to the sale of the school lands, in conflict with section 8, article 10, of the Constitution of this state ? The first two clauses of that section of the constitution are the only ones which have .any bearing upon the question and read as follows:

“ Provision shall be made by law, for the sale of-all the school and university lands, after they shall have been appraised; and when any portion of such lands shall be sold, and the purchase money shall not be paid at the time of the sale, the commissioners shall take security by mortgage upon the land sold, for the sum remaining unpaid, with seven per cent, interest thereon, payable annually, at the office of the treasurer. The commissioners shall be authorized to execute a good and sufficient conveyance to all purchasers of such lands, and to discharge any mortgages taken as security, when the sum due thereon shall have been paid.”

What is the obvious meaning, scope and design of this provision ? It evidently contemplates that the school lands, or a part of them, at least, might be sold upon credit; that thel egis-lature, in the exercise of its discretion over them, looking to the situation of the country, the educational interests of the state, and the best method of enlarging the school fund, might thus determine and provide. But what is the nature and kind of the sale here spoken of, and which was contemplated by the constitution to take place ? In its popular and general sense, the word “sale” does not always convey the same precise meaning. We speak of a man’s having made sale of his farm, when he has only made a contract to sell. In the above provision the word is used in a more restricted and technical sense. It is here used to denote a transaction, where the fee to the land sold passes out of the state, and becomes absolutely vested in the purchaser. That this is the nature of the sale here spoken of, is apparent from the Context. -For it provides, that when such a sale is made upori credit- — that is, a sale within the purview of its provisions ■ — the commissioner shall take security by mortgage upon the lands sold, for the sum remaining unpaid. Now, the giving of a mortgage, in its general acceptation, implies the conveyance of the légal estate, as security for the payment of a debt. The sale then contemplated by the constitution, and intended to be regulated by it, was a sale, in the absolute sense of the term, where and by which the purchaser becomes completely vested with the legal title to the land sold. And when that took place, and the money was not all paid at the time, then the commissioners were to take security bj' way of mortgage. And why were they required to take a mortgage in such a case ? What was the object and end of the constitutional provision? What evils was it intended to prevent, what mischief to guard against? Was it designed to protect the purchaser of the school lands ? to guard his interests? to establish the mortgage relation between him and tli?. state, for tbe purpose of giving him the benefit of an equity of redemption? Or bad it an entirely other and different object in view ? Was not its main, its primary, its only object, the protection of the school fund? to guard that from being squandered and lost? to prevent the legislature from making any provision for the sale of the school lands upon credit, without having, at least, the land sold as security for the debt? Otherwise, the legislature might have provided for the sale of the lands upon credit, permitting personal security to be taken, or security upon lands where the title was doubtful, or of less value than those sold. Hence, this restriction upon the legislature and the commissioners, that when the lands should be sold upon credit, and the title pass out of the state, and become fully vested in the purchaser, a mortgage, by way of security, should be taken upon the lands sold. Such seems to be the meaning, scope and end of the constitutional provision. Does the statute violate it as thus interpreted ?

A material distinction will be at once noticed between the sale contemplated by the constitution, and the one which takes place under the provisions of the statute. For though by the statute the school lands are sold upon credit, and though the word “ sale ” frequently occurs in the statute, yet that word has a different signification in the statute from what it has in section 8, article 10. This is manifest from the connection in which it is used. The sale made under the statute is not attended with the same legal consequences as the one spoken of in the constitution. The fee to the land does not pass by it to the purchaser; it remains in the state. Section 19 says: “ The title or fee of all school and university lands shall remain in the state until patents shall issue for the same, and no such patent shall issue except upon full payment of the purchase money and interest.” By the sale mentioned in the constitution, the purchaser acquired, or would acquire, a perfect title to the lands — the right of possession and the right of property. He would be the substantial owner of the land, and might exercise the rights of an owner over it, providing, of course, he did not commit acts of waste. But I think the estate acquired by the certificate of sale is inferior to that of a mortgagor. He bas tbe right to the possession for the purpose of cultivation and improvement. But this right is liable to be forfeited under the act, and by the very terms of the certificate, upon default in paying principal or'interest, or taxes, as they become due, or thirty days thereafter. Section 24 would likewise seem to limit and qualify this estate. See also section 106. But, however this may be, I think the nature of the sale provided for under the statute different from the one contemplated by the constitution, and to which the constitutional inhibition applies.

Furthermore, it seems to me that the main purpose, the great objects of the constitutional provision, are completely accomplished by the statute. If, as already observed, that object were the preservation of the school fund, holding the land as security for the sum due, that end is fully obtained. The state does now hold the lands as security until all is paid. The means of security proposed by the statute, are less expensive, equally safe, and in all respects for the state, more desirable than the giving of a conveyance and taking a mortgage. The situation of the purchaser might have been better, and his interests more secure, if upon the sale, the lands had been conveyed to him in fee, and a mortgage taken by the state. But the school fund, and the interests of the state, would not be as well protected as now; and should the law be declared unconstitutional for that reason ? Is it a good and solid objection to the validity of this law, that it proposes a method of disposing of the school lands, equally, if not more, efficacious and safe, and as fully accomplishing all the objects of the constitution as the method prescribed in that instrument? It will not be denied that 'in the absence of this constitutional inhibition, the legislature might have made any provision for the sale of the lands it had deemed proper, applying the proceeds to the purposes of the grant. Its power over them is now restricted, so that they cannot be sold upon credit, transferring the title, without taking mortgage security.

It would be fatal to the complainant’s case to hold this act unconstitutional, and the sales under it null and void. He derives title from a sale under the act, and if that should fall, his rights ■wceuld fall with it. To escape this inevitable conclusion, be is forced to maintain that the law is not wholly unconstitutional, but is rather an act of imperfect.legislation; that the legislature having acted upon the subject matter and attempted to make provisions for the sale of these lands, but not having conformed in all respects to the requirements of the constitution, it is in the power of this court, and its duty, to supply the defect and effectuate the objects of the constitution. I have already stated that I conceive these objects more fully attained by the statute. But suppose I am wrong, it is not very intelligible to my mind how this , court can supply the defect. It possesses no legislative power. That is vested in the legislature. To the legislature also belongs the duty of making provision for the sale of the lands. If it has acted imperfectly, can the court interfere and make a law for it ? Can this court say, “true, the legislature has attempted to make provision for the sale of these lands, but has failed," or not made a suitable provision, and therefore I will make it ?” It is said to be analogous to a ease where equity aids a defective execution of a power in order to effectuate the intention of the parties. Courts of equity do this undoubtedly, so that the manifest intention and object of the parties may not be defeated by any blunder or mistake they have made. I do not think the analogy holds good, for the reasons already suggested. .But suppose it does, and that it is competent for. the court, not only to expound the law as it is, but to give it new scope and import, as it conceives it should have ; is the attitude of the complainant’s case improved if we hold the sales under the act good, and- that the certificate of sale stands at once in place of a deed conveying the fee and a mortgage-for the purchase money ? If the certificate of sale is considered to be an equitable .mortgage, is there not upon the re-sale a statute foreclosure of the equity of redemption ? True, the statute says nothing about foreclosing an equity of redemption. The statute goes upon the idea that the certificate is rather a contract of sale, than an absolute sale and conveyance of the title: that the fee remains in the state until the patent issues. But by the re-sale it does most clearly profess to to cut off and bar all the rights and interest of the purchaser under the certificate, whatever those rights may be. If upon the re-sale the land brings more than sufficient to pay the amount due upon the certificate, interest, costs and five per cent, damages on the purchase money, the residue goes to the original purchaser. Sec. 17. The act also provides that he shall be paid for his improvements upon the land. Secs. 24, 30, 31, 45, 46. Rut it seems to me that all his rights, legal and equitable are barred and cut off under the act by the re-sale, so that in whatever light I view the case, it seems to me the decree of the court below in dismissing the complainant’s bill, must be affirmed, with costs.

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Dissenting Opinion

Smith, J.,

dissenting. There are one or two questions involved in this case which, in magnitude and importance, rise far above the other matters submitted for our consideration, affecting not only the parties to this suit, but extending to most of the transactions of the school-land department. It has, therefore, been long and frequently under consideration, and has received all the study and care which we have been able to bestow upon the subject. Having arrived at a conclusion which, in my mind, admits of no doubt, I deem it my imperative duty to state that conclusion as briefly as possible.

. To understand fully the questions involved, it becomes necessary to examine the constitution of the state, and the various statutory provisions in relation to the disposition and saie of the school lands. And it is worthy of remark, in the outset, that these lands, set apart for the purpose of raising a fund for the support of education, were deemed of such primary importance that the people were unwilling to leave the disposition, of them altogether to the discretion of the legislature, but restricted the power of that body certain constitutional enactments.

Section 7 of article 10 of the Constitution provides as follows: “ The secretary of state, treasurer and attorney-general shall constitute a board of commissioners for the sale of the school and university lands, and for the investment of the funds arising therefrom.”

“ Section 8. Provision shall be made by law for tbe sale of all school and university lands after they shall have been appraised, and when any portion of such lands shall be sold, and the purchase money shall not be paid at the time of sale, the commissioners shall take security by mortgage upon the land sold for the sum remaining unpaid, with seven per cent, interest thereon, payable annually at the office of the treasurer. The commissioners shall be authorized to execute good and sufficient conveyances to all purchasers of such lands, and to discharge any mortgages taken as security, when the sum due thereon shall have been paid.”

Immediately after the organization of the state government, the legislature, in view of, and, as they doubtless supposed, in obedience to the requirements of the constitution, devised and adopted a system designed to fulfill all the requirements of that instrument, and to dispose of the school lands and their proceeds in conformity with its injunctions. Accordingly an act was passed, developing and defining the system so adopted, which is found substantially in the Eevised Statutes, in chapter twenty-four, entitled “ Of the school and university lands, the sale and superintendence thereof, of the investment of the funds arising therefrom, and the powers and duties of the commissioners of said lands.”

The declared object of this act is to provide for the sale of the school lands. No other disposition of them is contemplated or intimated. Every section and phrase of the chapter having reference to such disposition conveys the idea of a sale. The language used throughout is that of “ sale and purchase,” “ vendor and vendee.” It seems to be impossible to conceive that the legislature had any other object in view than that of a sale of the lands. And it is equally certain, that the main, leading idea of the act is, that these lands shall be sold upon credit. How, then, can it be possible otherwise than that the constitutional inhibition, or rather regulation, must apply that the security for the unpaid purchase money shall be by way of mortgage, and that all the rights and relations between the state and such purchaser must be those of mortgagor and mortgagee ?

It would be a laborious task to refer to, or to quote, all the provisions of the act in question going to show that the disposition of the lands thereby authorized is essentially that of a sale; so intended by the legislature — so considered by the purchaser, and so in law and in fact. Without going over and reciting the whole of these provisions of chapter twenty-four, it will answer the present purpose to refer to a very few, out of the very many, and to the one, and it is believed the only one, which can in any degree tend to reduce the disposition of the lands authorized by the act below the character of a sale.

And first, the title of the act expressly declares the object and intent of the legislature. It was not to lease the lands, not to contract them for sale, not to pledge their usufruct, not to create an equitable lien upon them, but for the “ sale and superintendence thereof, and for the investment of the funds arising from the proceeds therefrom.” Investment of what funds ? Not from those arising from the superintendence of them, for none such could arise to any considerable amount, but from the sale thereof. This is clear and certain from the fact that no other superintendence of the lands, except that of sale, which could produce any revenue, is authorized by the act. It is true the commissioners may protect the lands from spoliation, but the “ proceeds ” spoken of are those arising from the sale, and nothing more nor less.

Their every step in the programme of procedure is prescribed in order for the appraisal, price, sale, purchase, payment for, and on payment of conveyance in fee of the lands.

The first section of chapter 24 follows very nearly the language of section 7 of article 10 of the Constitution, thus showing that the act was passed in reference to, and, no doubt, as was intended to be in conformity with the mandates of that instrument, declaratory of the persons who should be commissioners for the superintendence and sale of the school and university lands, and for the investment of the funds arising therefrom. The second section provides that the said commissioners shall, before the 15th day of December, 1850, “ offer for sale, at public auction, all the lands, &c.,” and that they may have the power to withhold from such “sale,” &c.

Provision is made also in the the act for preemption rights that had accrued or that might accrue. Td what has the term preemption reference but to a sale, prospective indeed, but nevertheless the right of purchase and the obligation to sell, and the terms .fixed upon the like credit as of other sales ?

Section 4 fixes the minimum-price at which the lands may be bought. The next section provides that all lands shall be sold at public auction in the county in which they are situated, upon public notice being given; the auction sale is to be continued from day to day, precisely after the manner of the public lands of the United States. Each tract is to be offered for sale separately at the minimum price, and is to be struck off to the highest bidder; but if the minimum price is not bid, the tract is to be set down as “ unsold.”

Section 10 prescribes the terms of payment on which the lands are offered for sale: “ The terms of payment on the sale of all school and university lands shall be not less than ten per cent, nor nrore than seventy-five per cent, of the purchase money to be paid at the time of sale, as shall be determined by the commissioners, and interest on the balance to be paid the first day of January next following,- and the balance of the principal in one or more installments at any time within ten years from the time of sale, at the option of the purchaser, with like interest payable annually in advance.” Upon the close of the sales, each day, the purchaser is required to pay the amount of purchase money required by the terms of sale, and in case of failure the lands are to be again offered; and moreover, in case he refuses or neglects to make such payment before the lands are again offered, he is liable to a penalty of twenty-five dollars for every tract on which he makes such default; After the lands have been thus offered at public sale, they are subject to private sale, at-the office of the commissioners, and are there sold at the appraised value, and a certificate given as in other Gases. ■

Now, in view of this language and of these provisions, did or did not the legislature intend a sale of these lands'? If they did not intend a sale, what did- they intend? What does this language mean ? In case a “ purchaser ” bids off a tract of land at one of these “ auction sales,” and pays down at tbe time of 11 sale ” seventy-five per cent, of tbe “ purchase money,” does be thereby become a purchaser or not? If not, what relation does he bear to the transaction ? If he is a purchaser, how, under the constitution, shall the remaining twenty-five per cent, of the purchase money be secured? The constitution says by mortgage on the land sold. Is there any possibility of construing this transaction into anything else than a sale ? — a sale, too, executed so far that a court of equity may enforce a conveyance in conformity with the constitutional requirement ? Here is no contract or agreement to sell at a future day, but it is a present operative contract of sale. The purchaser takes possession and assumes dominion. The minds of the parties have met, the amount required to be paid down is paid and received; it is complete except only the written evidence of its execution, which, as before said, equity would enforce.

But this act provides, that-upon the sale of the lands as before described, the commissioners shall issue to .the purchaser a certificate of such sale, specifying the purchase price, the amount paid down, the amount remaining due, when payable, &c., and it is further provided, that “ the title or fee of all the school and university lands shall remain in the state, until patents shall issue for the same, and no such patent shall issue except upon full payment of the purchase money and interest.” The constitution, however, is mandatory to the commissioners, to take security by mortgage upon the land sold, for the amount, remaining unpaid at the time of sale.

This statute also provides, that in case of the non-payment of either principal or interest when due, according to the terms of the certificate of sale, such certificate shall become void from tbe time of such failure, and the purchaser shall forfeit all right and interest in the land described in such certificate, and the commissioners may take immediate possession thereof and resell the same in the manner provided.

In view of the constitution before quoted, was it competent for the legislature to forfeit in such manner the right and interest which the purchaser acquires by his purchase at such sale ? He has paid part of tbe purchase money but not all, and that which remains unpaid must be secured in a constitutional manner. That manner is by mortgage on the land sold. The effect of the constitution is, to create the relation of mortgagor and mortgagee between the state and purchaser, whenever part of the purchase money remains unpaid at the time of sale, and it is not in the power of the legislature to alter that relation.

In view of these provisions of the statute, together with many others which I cannot quote at length, it is impossible for me to bring my mind to any other conclusion — nay, every other conclusion is repelled by my reason and judgment — than that the act of the legislature provided for, and contemplated a sale of the school and university lands upon a credit, and for nothing else-If the disposition of the lands prescribed by the act is not a sale, then it is a cheat, a fraud, utterly unworthy of the state or its officers. But as we have before seen it is a sale, it was intended to be a sale, the language of the act induced all persons to believe that it was to be understood and treated as a sale, and to treat the transaction differently now would be, as I am compelled to say, a deception and a fraud upon purchasers. Indeed, there can be no purchaser but upon a sale. They are correlative terms, and it is impossible for me by any device of reasoning to impair their force. The conclusion is irresistible, that if these lands were sold, and the whole purchase money was not paid at the time of sale, security for the balance was required by the constitution to be taken by mortgage on the land sold. If not so taken in fact, it would attach in equity and be enforced, like other equitable mortgages. The relation of the purchaser to the state would be that of a mortgagor, to whom all the rights and incidents of such relation would necessarily apply, and among them the equity of redemption.

If these views be correct, it follows, either that the disposition of the school lands in accordance with the provisions of chapter 24 of the Revised Statutes, is unconstitutional and void, or that such disposition can be held to be a good sale in equity, evidenced by the written memorandum, or certificate, part of the purchase money having been paid, and the state an equitable mortgagee for tbe remainder. That this latter is the correct position I have no manner of doubt. Transactions of a similar kind between individuals are frequently so construed and enforced. Such a construction'would carry out the plain intention of the constitution, which necessarily overrides the statute, whenever the latter is repugnant, and establishes the equity of redemption, resulting from the transaction, and which the constitution contemplates and creates.

It is apparent therefore, if these views be correct, that the provisions for the absolute forfeiture of the right and interest of the purchaser in the lands, on the failure to pay the balance and interest on the day mentioned in the certificate, are repugnant to the constitution, because they are incompatible with the constitutional rights of such person as a mortgagor, and that the forfeiture and re-sale of the lands mentioned in the complainant’s bill were illegal and void.

I do not deny the legislature the power of providing a mode of foreclosing the equity of redemption which attaches to these transactions, other and different from the ordinary mode. But they have not done so, nor made any attempt to do so. Until some other mode is adopted for that purpose, the ordinary proceeding for foreclosure must be followed. The taking possession of the lands and offering them for re-sale is not a foreclosure. The forfeiture does not become absolute so that the lands may be retaken and sold, until the equity of redemption is extinguished in some way. To call the proceedings prescribed by the statute for taking possession of forfeited lands and reselling them, a form of foreclosure would be a gross perversion of terms. They are advertised as other lands, sold as other lands ; the original purchaser having, it is true, a right of preemption until the day of sale, if he shall be so fortunate as to ascertain it. The idea of foreclosing an equity of redemption cannot be gathered from all these provisions. Indeed, to admit that this is a form of foreclosure would be fatal to the whole act, as it would admit the constitutional right of a mortgagor in a credit purchaser, which the statute seeks to evade. To deny to the purchaser the rights of a mortgagor, on the ground that there was no sale under the statute, and tben to maintain that such, rights have been foreclosed under the same statute, is equally uncandid and unjust, not to say irrational and absurd. It is blowing hot and cold in the same breath.

Much reliance is placed upon the ,19th section of chapter 24, which is as follows:

“ The title or fee of all school and university lands,: shall remain in the state until patents shall issue for the same, and no such patent shall issue, except upon full payment of : the purchase money and interest.”

To give this section the full effect contended for, would be to nullify the provisions of the constitution, that the lands may be sold on credit. No title shall pass until patent given, and no patent shall be given until full payment, and, therefore, no payment, short of the full amount shall constitute a sale; in other words that the patent is the sale, and not the agreement of the parties.

The term sale is evidently the same in the constitution as in the statute.

It is contended, that inasmuch as this section provides that the title or fee shall not pass until the patent issues,- and the patent shall not issue until full payment; therefore, there is no sale of the lands, until full payment is made, and patent issued. In other words, that the disposition of the lands prescribed by the statute, is a contract for sale, and not a sale.

Such a construction however, does violence, not only.to the language, but to the obvious intention and idea of the whole act. From the commencement to the close, from the title to the last word, a sale of the lands, nothing less than a sale, is contemplated and provided for. Even if the absolute passing of the title were essential to constitute a legal sale, that is to say, a sale, full, absolute and perfect in law, every one knows that it is not so held in equity. But it is not so in law. The delivery of the deed is not the sale of the land. It is, indeed, the .evidence of its consummation, but not the fact of sale. Whether the legal title passes or not at the time, of the sale, it is none the less a sale, and if all other conditions of the sale are fulfilled, thé conveyance will be enforced by the proper court.

It is the primary rule in the construction of contracts, to ascertain and carry out the intention of the parties. The certificate issued, and the constitution and statute form the contract. The certificate and the statute, leave no doubt that the parties regarded the transaction as one of sale. They never could have used such language, had not the idea of sale been the all engrossing one. The legislature thought they were making provision for the sale of the lands as the constitution commanded them, and there is no doubt, that they supposed, by withholding the title until full payment, by the 19th section, they were accomplishing precisely the same thing as though they had conveyed the title, and taken back a mortgage. In the one case, the title is withheld by the vendor as security for the balance of the purchase money; in the other, the title is conveyed, and retaken by way of mortgage for the same object. It is not difficult, but it is every day practice for a court of equity to carry into effect such contracts according to the intention of the parties. Why not do so in this case? I can perceive no valid objection.

It is one of the most common functions of a court of equity to decree and compel the execution of proper conveyances, when the stipulations of a sale have been complied with.

In this case, the complainant or his assignor thought himself a purchaser, the vendor (the state) called him a purchaser, gave him possession, he paid down the part of the purchase money required. Without any constitutional provision, specific performance of the contract of sale could be enforced. Without any constitutional provision, the state would have an equitable lien upon the land, for the balance of the purchase money, but the effect of such provision is to create this relation, indepénd-ent, and in defiance of statutory enactments, and to secure the rights of the respective parties in this relation.

It is asked whether the constitution prohibits the legislature from disposing of, or using the school lands in any other manner than that therein prescribed. I answer, certainly not. The legislature may lease tbem, or use tbem in other modes. But tbe constitution does require of tbe legislature to mate provision for tbe sale of these lands, and it commands, that if sold on credit, tbe balance of tbe purchase money not paid down, shall be secured by mortgage on tbe land sold. And this plain, positive injunction of that instrument ought not to be evaded by a mere change of forms or names. It seems to me to be too clear to admit of further argument or illustration.

And there was wisdom in such constitutional provision. Had the legislature adhered to it, there could not possibly have been any fictitious issue or abstraction of certificates, there could have been no withholding of lands from sale, but in the manner prescribed by valid law. The record would necessarily show, from time to time, and day to day, the precise quantity and tracts sold, and the rights of all parties would be secured. Mistakes might occur under this as under any possible system, but they would be necessarily unfrequent, easily and early corrected, with little inconvenience, and no loss either to the state or the purchasers. But allow this wise provision of the constitution to be frittered away, or evaded by mere subterfuges, forms, or technical terms, such as contracts for sale, agreements to sell at a future day, certificates that such and such persons had agreed to purchase, or would agree to purchase hereafter, and the door is opened to every scheme of fraud and mal-administration that can be conceived. Adhere to the constitution, and the lands and the fund are safe, but depart from it, evade it, or disobey it, and all may be lost. Much more might be said concerning the imperative necessity of adhering most strenuously to the constitution in this respect, and of exacting implicit obedience to its mandate, but enough has already been said to justify me in insisting upon its strict application.

I have not the slightest doubt but that the transaction under the statute is in legal effect a sale, and that the certificate is evidence thereof, and that the state becomes thereby an equitable (perhaps in view of the constitution a legal) mortgagee of the lands sold for the balance of the purchase money, and that the purchaser becomes thereby a mortgagor, and entitled to all the rights of such, and among them the right of redemption until legally foreclosed.

It has been said that to convey the lands on sale, and take a mortgage for the unpaid purchase money, is impracticable. How so ? The conveyance or patent may be in few words, as well as the mortgage, furnished in blank, and the labor of issuing them can be but little more than that of the certificates used. But even if the labor were more, the constitution is imperative, and must be obeyed, although it may require a little more work. All attempts to evade or escape from the injunctions of the constitution, in this as well as all other departments, must inevitably result in confusion, if not disaster.

Case Details

Case Name: Smith v. Mariner

Court Name: Wisconsin Supreme Court

Date Published: Jul 1, 1856

Citation: 5 Wis. 551

Court Abbreviation: Wis.