138 F. 294 | 9th Cir. | 1905
Lead Opinion
after making the foregoing statement, delivered the opinion of the court.
From the view we take of 'this case it becomes unnecessary to decide whether all, or any, of the various frauds alleged by the
There are, then, but two questions presented by the record, both of which are simple and of easy solution, although they are made the subjects of most elaborate briefs by counsel. The first contention on the part of the government, and the one most strenuously insisted on, is that the appellee is not a bona fide purchaser of the lands in suit, for the reason that at the time of his respective purchases the legal title thereto remained in the government; that he got, at best, but an equitable title under the receiver’s receipts issued to the various entrymen and entrywomen, and their conveyances to Cobban, and his conveyances to the appellee, which equitable title the appellee must be held to have known was subject to be defeated by the government, should it afterwards find that the lands were not the subject of disposition under the acts of Congress under which the title was undertaken to be acquired, or should it be found that there was fraud or error in the proceedings taken for the acquirement of such title.
So long as the appellee held the equitable title only, the contention on the part of the government is undoubtedly well founded, was not questioned by the court below, and is not questioned by the counsel for the appellee. Indeed, it could not be successfully questioned, for it is the well-established doctrine of the courts, both supreme and subordinate. Hawley v. Diller, 178 U. S. 476, 20 Sup. Ct. 986, 44 L. Ed. 1157, and cases there cited. But in the present case the counsel for the government go further, and insist that the same right continues in the government after the issuance of its patent in confirmation of the sale, not only against the patentee, but also against an innocent purchaser for value of the equity, then possessed also of the legal title. And counsel for the government repeatedly ask in their briefs if it is possible that such a right exists in the government up to the time of the issuance of its patent and does not exist the very day after. We answer yes, for the reason that in the one case the innocent purchaser for value has not the legal title, and in the other case he has. Let us put the counsel’s proposition in another way: If it exists the day after the patent is issued, it manifestly continues indefinitely, for neither the statute of limitations nor laches runs against the government. What, then, becomes of the security intended to be given by such an instrument? The innocent holder for value under such a patent
“The receiver’s final receipts were not notice of fraud and perjury in their procurement. They were notice of honesty and legality in the proceedings that induced their issue. They were prima facie evidence that those who received them had the right to patents to the lands, and they raised the legal presumption that entrymen and officers alike had complied with the law. They were notice to the Detroit Company of the power of the Land Department to avoid them'for fraud or error before the patents were issued, and of no other defect or danger, and the authorities cited for complainant express no different opinion. The Detroit Company took its equitable title to-the timber subject to this notice, and subject to the possible exercise by the Land Department of this power. That department exercised the power, as the legal presumption was that it would exercise it, by affirming the validity*300 •of the voidable titles, and by issuing the patents upon them. Here the effect of the notice from the purchase of the equitable titles ceased. The only reason that purchase gave notice of a voidable title was the fact that it did not acquire the legal title. The moment the legal estate inured to the benefit of the Detroit Company by the issue of the patents without notice of any fraud or irregularity in their procurement, its defense of a bona fide purchase was complete. It contained every essential element of a complete defense except the legal title before the patents were delivered. It was the lack of the legal title, and that alone, that made its defense vulnerable in the Land Office. When the patents had issued, the power of the Land Department had ceased, and the Detroit Company’s position was conditioned by every attribute of that ■of a bona fide purchaser. Conceding that the indispensable elements of such a defense are absence of notice of the fraud or defect, good faith, payment of value, and the legal estate, it is not material at what time or in what order the purchaser acquires them. It is only necessary that they all concur in him at the same time. It is indispensable to this defense that the consideration should be paid before notice of the defect. But it is not essential that it should be paid before or at the time the title is conveyed. It is sufficient if the payment is completed at any time before notice of the defect is received. It is not more essential that the legal title should be secured before or at the time when the consideration is paid. It is enough if it is acquired before notice of the alleged fraud or perjury is fastened upon the purchaser.”
These views seem to us to be entirely correct, and we think they sufficiently answer the main point of counsel for the appellant in the present case, which, of course, assumes that the appellee was an innocent purchaser for value of the equitable title to the lands in suit.
But it is also claimed on the part of the government that the appellee was not an innocent purchaser of the equitable title, but, on the contrary, knew or had good reason to know, at the time of his respective purchases, of the alleged frauds on the part of Cobban, Griswold, Catlin, and the respective entrymen and entrywomen. On this point the allegations of the bill are:
“And your orator charges that the said defendant, William A. Clark, well knew in a general way, if not in detail, at the time the said conveyances of all of said lands were made to him by said Cobban, the facts hereinbefore stated, and well knew, and had good cause to know, that the said lands had been entered in violation of the laws of Congress under which said entries were made, and that the several parties had entered the same for hire and upon speculation, and for the purpose of enabling him, the said defendant, to procure title to the same by evasion and violation of said laws of Congress.”
In the opening brief of counsel for the appellant this contention •is not very strongly urged, but in their brief filed in reply to that of the appellee it is much insisted on, and it is there in effect claimed that the appellee was in fact a party to those alleged frauds. .We are of the opinion that the evidence does not sustain either of those contentions. In the first place, if the appellee had been willing to become a party, with Cobban and the others named, to the alleged frauds upon the government, or if Cobban had been acting as the agent of the appellee, as is alleged in the bill, it is passing ■strange that the appellee should have paid Cobban $217,571.25 for the timber and lands in question, as the counsel for the government admit that he did.' Cobban, it is claimed, paid only the government price of $2.50 an acre for the lands, $100 to each of the entry-men and entrywomen, and the incidental fees and expenses, and it.
“We take the general doctrine to be that when in a court of equity it is proposed to set aside, to annul, or to correct a written instrument for fraud or mistake in the execution of the instrument itself, the testimony on which this is done must be clear, unequivocal, and convincing, and that it cannot be done upon a bare preponderance of evidence which leaves the issue in doubt. If the proposition as thus laid down in the cases cited is sound in regard to the ordinary contracts of private individuals, how much more should it be observed where the attempt is to annul the grants, the patents, and other solemn evidences of title emanating from the government of the United States under its official seal. In this class of cases, the respect due to a patent, the presumptions that all the preceding steps required by the law had been observed before its issue? the immense importance and necessity of the stability of titles dependent upon these official instruments, demand that the effort to set them aside, to annul them, or to correct mistakes in them should only be successful when the allegations on which this is attempted are clearly étated and fully sustained by proof. It is not to be admitted that the titles by which so much property in this country and so many rights are held, purporting to emanate from the authoritative action of the officers of the government, and, as in this case, under the seal and signature of the President of the United States himself, shall be dependent upon the hazard of successful resistance to the whims and caprices of every person who chooses to attack them in a court of justice; but it should be well understood that only that class of evidence which commands respect, and that amount of it which produces conviction, shall make such an attempt successful.”
The testimony of the appellee is positive and clear that he knew nothing of the circumstances attending the entries of the various tracts of land in question by the respective entrymen and entry-women or the conveyances from them to Cobban, and that he never suspected that they were obtained by any fraudulent, unlawful, or irregular means, but that, on the contrary, he bought and paid for them in good faith, relying upon the advice of his attorney in respect to the regularity of the proceedings and the validity of the title, and upon his agents as to the quality and quantity of lumber they contained. In these respects the appellee’s testimony is corroborated by that of his attorney, general manager, and timber agent. It may be added that the officers of the Land Office where
We are of the opinion that the judgment of the court below is right, and it is accordingly affirmed.
Dissenting Opinion
(dissenting). I think there is enough in the record which is before us to show that facts came to the knowledge of the defendant in error and his agents sufficient to put them upon inquiry as to the manner in which the lands were obtained from the United States. The deeds from the various entry-men to Cobban showed that the latter was carrying out a large and comprehensive scheme to obtain the lands. Seventeen of those deeds were made on September 16, 1899, 39 were executed on November 11th, and 33 were executed on November 13th. The deeds also showed that the final receiver’s receipts had been issued but a short time before the execution of the deeds. Some were issued but two days before the deeds. Others were issued at intervals of from one week to three or four weeks prior to the deeds. These are significant facts, and indicated a concert of action, of which Cobban was the engineer. The evidence shows, also, that the inspection of these lands by the defendant’s agents was contemporaneous with the entries, and that large sums were loaned by the defendant in error to Cobban, to be used by him for the purpose of obtaining title to these lands. There are many other facts and circumstances in the evidence pointing to the conclusion that the defendant in error knew enough of the methods by which the lands were obtained to put him upon inquiry.