Stanley v. Schwalby
162 U.S. 255 (1896)

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U.S. Supreme Court

Stanley v. Schwalby, 162 U.S. 255 (1896)

Stanley v. Schwalby

No. 653

Submitted January 10, 1896

Decided March 23, 1896

162 U.S. 255

Syllabus

Neither the Secretary of War nor the Attorney General nor any subordinate of either is authorized to waive the exemption of the United States from judicial process, or to submit the United States or their property to the jurisdiction of the court in a suit brought against their officers.

In an action of trespass to try title under the statutes of Texas, brought by one claiming title in an undivided third part of a parcel of land, and possession of the whole, against officers of the United States occupying the

Page 162 U. S. 256

land as a military station and setting up title in the United States, a judgment that the plaintiff recover the title in the third part, and possession of the whole jointly with the defendants, is a judgment against the United States and against their property.

The United States are not liable to judgment for costs.

In order to charge a purchaser with notice of a prior unrecorded conveyance of land, he or his agent in the purchase must either have knowledge of the conveyance or at least of such circumstances as would, by the exercise of ordinary diligence and judgment, lead to that knowledge; vague rumor or suspicion is not sufficient, and notice of a sale does not imply knowledge of an unrecorded conveyance.

A conveyance of land by a city to the United States in consideration of the establishment of military headquarters thereon to the benefit of the city is for valuable consideration.

A purchaser of land for valuable consideration and without notice of a prior deed takes a good title although his grantor had notice of that deed.

Even where, as in Texas, a purchaser taking a quitclaim deed is held to be affected with notice of all defects in the title, a purchaser from him by deed of warranty is not so affected.

The United States, by warranty deed duly recorded, purchased land from a city for a military station in consideration of the benefits to enure to the city from the establishment of the station there. The attorney employed by the United States to examine the title testified that the city acquired the land by quitclaim deed, describing it as "known as the McMillan lot;" that he had information of a sale to McMillan, but satisfied himself that he had not paid the purchase money, and searched the records, and ascertained that no deed to him was recorded, and advised the United States that the title was good. There was no evidence that the attorney had any other means of ascertaining whether a deed had been made to McMillan. Held that the evidence was insufficient in law to warrant the conclusion that the United States took no title as against an unrecorded conveyance to McMillan.

Where the judgment of the highest court of a state against the validity of an authority set up under the United States necessarily involves the decision of a question of law, it is reviewable by this Court on writ of error whether that question depends upon the Constitution, laws or treaties of the United States or upon the local law or upon principles of general jurisprudence.

An action to recover the title and possession of land against officers of the United States setting up title in the United States, and defended by the District Attorney of the United States, was dismissed by the highest court of the state as against the United States, but judgment was rendered against the officers upon the ground that they could not avail themselves of the statute of limitations. This Court, on writ of error, reversed that judgment and remanded the case for further proceedings. The highest court of the state thereupon held that the United States were a party to

Page 162 U. S. 257

the action, and decided, upon evidence insufficient in law, that the United States had no valid title, because they took with notice of a prior conveyance, and gave judgment against the officers for title and possession and against the United States for costs. This Court, upon a second writ of error, reverses the judgment, and remands the case with instructions to dismiss the action against the United States, and to enter judgment for the individual defendants, with costs.

This was an action of trespass to try title, brought in the District Court of Bexar County in the State of Texas by Mary U. Schwalby, joining her husband, J. A. Schwalby, against David S. Stanley, William R. Gibson, Samuel T. Cushing and Joseph C. Bailey, to recover a parcel of land in the City of San Antonio.

The original petition was filed February 23, 1889, and, as amended by leave of court December 2, 1889, alleged that Mrs. Schwalby was seized and possessed in fee simple of an undivided third part of the land, and she and her husband were entitled to the possession of the whole, and that the defendants, without any right or title, ousted them from the possession thereof, and prayed

"judgment for the recovery of the title to one third of said premises, and possession of the whole thereof, for costs of said suit, and for general relief."

The individual defendants, and

"the United States, by their attorney, Andrew J. Evans, acting by and through instructions from the Attorney General of the United States, here exhibited to the court,"

(but not at that time made part of the record) filed an amended answer in which they pleaded not guilty, and set up, among other defenses, that the title to the land was in the United States, and the individual defendants had and claimed no title therein, but were lawfully in possession thereof as officers and agents of the United States, and specially pleaded that the City of San Antonio, in 1875, purchased the land and on June 16, 1875, conveyed it to the United States with no notice of the plaintiffs' claim, and the United States were innocent purchasers for valuable consideration, and that from June 16, 1875, to the bringing of this action, the United States had been in the actual, peaceable, and adverse possession of the land, continuously enjoying and improving it, no taxes being due thereon -- under deed duly recorded

Page 162 U. S. 258

and "under title, and color of title, from and under the sovereignty of the soil, down to the defendant, the United States, duly registered" -- and therefore pleaded the statutes of limitations of the State of Texas of three, five, and ten years, and also that the United States had made permanent and valuable improvements on the land.

The plaintiffs, by supplemental petition, excepted to the answer, so far as it was filed in behalf of the United States, upon the ground that the United States were not a party defendant, and that neither the district attorney nor the Attorney General of the United States had authority to submit for adjudication in the courts of the State of Texas the rights of the United States of America, as well as upon the ground that the pleas of the statutes of limitations of the State of Texas constituted no defense to the action, because the United States were neither bound by nor protected by those statutes, and because the plaintiffs could not in any court bring suit against the United States, and to the pleas of the statutes of limitations replied that on January 18, 1871, and long before their adverse possession commenced, the plaintiff Mary U. Schwalby was lawfully married to her co-plaintiff, and had ever since continued to be a married woman.

Joseph Spence, Jr., intervened by leave of court and filed a petition similar to the principal one, likewise claiming an undivided third part of the land.

The parties submitted the case to the decision of the court without a jury. At the trial, the following facts were proved or admitted:

The common source of title, through whom all parties -- the plaintiffs, the intervener, and the United States -- claimed this land was Anthony M. Dignowity.

On September 13, 1858, he executed to Amanda J. Dignowity, his wife, a general power of attorney to sell and convey his real estate, and by virtue thereof she on May 9, 1860, executed a warranty deed to Duncan B. McMillan of this parcel, reciting the payment by him of a consideration of $100. This deed was acknowledged on the same day before William H. Cleveland, notary public, but was not recorded until September

Page 162 U. S. 259

30, 1889. McMillan died in Louisiana in February, 1865, intestate, a widower, leaving three children. Mary, the female plaintiff, who was born September 11, 1848, was married to J. A. Schwalby January 18, 1871, and was still his wife when this action was tried; Sarah, who was born August 3, 1854, married to one Neely February 14, 1875, and died August 17, 1878, leaving two children, who were still living, and Duncan W. McMillan, born November 2, 1850, who by deed dated and acknowledged March 26, 1889, and recorded March 29, 1889, conveyed his interest in this land to the intervener, Joseph Spence, Jr.

Dignowity died in April, 1875, and by his will, admitted to probate April 22, 1875, devised and bequeathed all his property to his wife, and made her independent executrix, with full power of sale and disposition of all his property, and requiring of her no bond or inventory. By deed of quitclaim and release dated May 1, 1875, and recorded June 1, 1875, the widow, in her own right and as independent executrix, for the consideration of $1,500, conveyed to the City of San Antonio four lots of land, one of which was that now in question, described as "lot number one, in block number two, known as the McMillan Lot,'" with special warranty against all persons claiming by, under, or through Dignowity or his estate. By warranty deed in the statutory form, dated June 16, 1875, and recorded October 21, 1875, the City of San Antonio conveyed the four lots to the government of the United States of America for military purposes,

"in consideration of one dollar paid to the said City of San Antonio by the said government, the receipt whereof is hereby acknowledged, and for divers and other good and sufficient consideration thereunto moving."

The defendant Stanley, being called as a witness for the plaintiffs, testified as follows:

"Myself and the other defendants were in possession of the lot when this suit was brought. I am a brigadier general in the United States army. My codefendants are officers in the United States army. We took, held, and hold such possession as such officers of the United States army. The government of the United States took

Page 162 U. S. 260

actual possession of the land in controversy in the year 1882. The land sued for is part of the military reservation of the United States of America at San Antonio. We hold possession under the United States of America. According to my understanding, the United States first took possession of this lot in the year 1875 or 1876. It was then open prairie. We do not claim title to the land in our own right, but hold it for the United States. The United States have made the following improvements upon the lot in controversy before the institution of this suit [stating them]. These improvements were made since the year 1881. Before that, the lot was open prairie. I never heard of a claim against this land until the commencement of this suit."

Mrs. Dignowity, in a deposition taken by the plaintiffs July 23, 1889, before William H. Houston, notary public, but introduced in evidence by the defendants, after being shown her deed to the City of San Antonio, dated May 1, 1875, testified as follows:

"Lot 1 in block 2, named in that deed, was called by me the 'McMillan Lot' because it was the habit of my husband during his lifetime, whenever he sold a city lot, to mark the name of the purchaser in pencil on the map and, when the lot was paid for, to write the name in ink. I presume I found this lot marked in the name of McMillan in pencil, and therefore called it the 'McMillan Lot.' This is the only explanation I am now able to give. . . . I must have known in some way that the lot had been sold, and a payment made on it, and I know of no other way I should have known it except as stated above. . . . I have no recollection of ever making a deed to Duncan B. McMillan of lot 1 in block 2, though I may have done so. If such a deed was made by me twenty-nine years ago, I do not see why it was not recorded, unless perhaps the full purchases money had not been paid. . . . I do not know who was in possession of the lot from 1860 until my husband's death in 1875, but believe it was unoccupied. I do not know that it was claimed by anyone but him. I paid the taxes on it during that time. I never took actual possession of the lot, but continued to pay the taxes until it was sold to the city. I never had said lot in

Page 162 U. S. 261

actual possession, and never had a tenant on it. . . . Neither Duncan B. McMillan nor anyone for him nor any of his heirs ever claimed an interest in the lot in suit in this case from 1860 to 1875 to my knowledge. When I sold the lot in controversy to the City of San Antonio, I acted in good faith. I believed for some reason that Duncan B. McMillan had some claim on the lot, or I should not have specially quitclaimed it to the city."

In a second deposition, taken by the defendants December 31, 1889, she testified:

"I am in my seventieth year, and reside in San Antonio. . . . I have seen the original of the deed from me to Duncan B. McMillan, dated May 9, 1860. I was shown the deed by Captain William Houston. I have never seen it but that one time, since it was executed by me, until today. I carefully examined it, and it is a genuine deed. I don't know why said deed was never recorded until a few months ago. I don't know whether I ever delivered possession of the lot in controversy to Duncan B. McMillan, or his agent for him, formally, or not. I paid taxes on the land until it was sold subsequently. I don't remember of receiving but fifty dollars on the transaction, and think that was paid before the date of the deed. I don't recollect anything more than that I was paid fifty dollars on the trade, and I executed the deed, and acknowledged it before Mr. Cleveland, and left it with him. . . . I have not seen Duncan B. McMillan since 1860. He was then on his way home to Louisiana. . . . I do remember W. H. Cleveland. He was a lawyer in good standing about the year 1860. He did at times attend to business both for myself and husband. I have owned and sold considerable real property in Texas, and still own property, and have experience in dealing in lands and city lots. . . . The deed from me to McMillan recites a consideration of $100, but I do not recollect of receiving but fifty. I received fifty dollars, as before stated. My husband never received a cent. I don't know anything about what other persons may have received. I know nothing of any note. I don't know anything about the money having been paid to Cleveland. If it was, I don't know anything about it. "

Page 162 U. S. 262

George C. Altgelt, being called as a witness for the defendants, testified:

"I am plaintiff's attorney. I do not know Mrs. Mary U. Schwalby personally. I received the deed to Duncan B. McMillan from Amanda J Dignowity, attorney in fact for Anthony M. Dignowity, by mail. It was sent to me by Joseph Spence, Jr., who is a lawyer and land agent of San Angelo, Tom Green County, Texas. I never saw Mrs. Schwalby."

James H. French, a witness for the defendants, testified:

"I was mayor of the City of San Antonio in 1875, at the time the city purchased the property from Mrs. Dignowity. The city paid the consideration, $_____, to Mrs. Dignowity in 1877. The government building -- -the officers' quarters -- were placed upon the Dignowity property. The city had the title examined by A. J. Evans. When the city purchased from Mrs. Dignowity and paid the money, the city had notice of this claim -- that is, the claim of D. B. McMillan. We had this notice from Mrs. A. J. Dignowity. Mrs. Dignowity refused to give a warranty deed to the lot in controversy. I, as mayor of the city, had notice of the McMillan claim at the time the city purchased. There was no consideration paid direct from the government to the city for the property. It was a donation from the city to the government. The city never received any consideration from the government for the conveyance, but, by reason of the establishment of the military headquarters here, the city has received a thousandfold benefit on the consideration paid by it to Mrs. Dignowity."

Andrew J. Evans, being called by the defendants, testified:

"I, as United States District Attorney for the Western District of Texas, in 1875 made an examination of the title to the lot in controversy and traced the title back to the case of Lewis v. City of San Antonio. I examined the records of deeds for Bexar County, Texas, and did not find any deed of record from Dignowity, and after I had made the examination, I believed the title was good. I so advised the department at Washington, and upon my advice the government took the deed from the city in good faith."

Upon cross-examination, Evans testified:

"I made the examination

Page 162 U. S. 263

of the title as United States attorney, and advised that the title was good. I saw the deed from Mrs. Dignowity as executrix, etc., to the City of San Antonio, read it, and had notice of all its recitals. I had information of the sale to Duncan B. McMillan, but I satisfied myself that he had never paid the purchase money."

He was then asked,

"When you read the deed from Mrs. Dignowity to the City of San Antonio, and saw there the lot in dispute was quitclaimed, and described as being "known as the McMillan Lot,'" did not these facts create in your mind a suspicion that the title to this lot was not all right?"

To this question the witness answered, "They did not."

There was no evidence beyond that above stated bearing upon the question whether the deed from Dignowity to McMillan was ever delivered, or upon the question whether the United States took the deed from the City of San Antonio with notice of a previous conveyance to McMillan.

The District Court of Bexar County sustained the plaintiff's exceptions to the pleas of the statutes of limitations and ordered those pleas to be struck out, overruled the other exceptions of the plaintiffs, and gave judgment for the plaintiffs and the intervener against the individual defendants and the United States for two-thirds of the title to the land, and for possession jointly with the defendants of the whole, and for costs, and allowed to the United States the value of their improvements. On March 24, 1890, the United States and the other defendants appealed to the Supreme Court of the State of Texas, which on March 4, 1892, ordered the judgment to be set aside and the action dismissed as against the United States, and affirmed the judgment as against the individual defendants. Stanley v. Schwalby, 85 Tex. 348. Upon a writ of error sued out by the United States and the other defendants, the judgment of the Supreme Court of Texas was reversed by this Court at October term, 1892, and the case remanded for further proceedings not inconsistent with its opinion, reported 147 U. S. 147 U.S. 50. The supreme court of the state thereupon vacated its own judgment, reversed the judgment of the district court, and remanded

Page 162 U. S. 264

the case to that court for such further proceedings.

In that court, leave to file an amended answer was then requested by the individual defendants, with whom, as the record stated,

"come also the United States of America, by their attorney, Andrew J. Evans, who is United States Attorney for the Western District of Texas, duly appointed and commissioned as such, and who so appears for the said United States of America by direction of the Attorney General of the United States of America,"

and who, as evidence of such direction, exhibited and filed a letter dated April 18, 1889, from the Secretary of War to the Attorney General, relating to this suit, and requesting that "the proper United States attorney be instructed to appear and defend the interests of the United States in this matter," and a letter dated April 20, 1889, from the Attorney General, enclosing the letter of the Secretary of War, and, "in compliance with his request," instructing the district attorney "to appear and defend the interests of the United States involved therein."

Leave being granted, the United States, by the district attorney, "by direction of the Attorney General, as heretofore exhibited to the court," together with the individual defendants, filed two pleas in bar: (1) that this was an action, nominally against the individual defendants, "but in fact against the United States of America, a sovereign corporation not liable to suit in this Court, or any other, in the absence of an act of Congress;" (2) that the action was against the property of the United States, and, in connection with each of these pleas, alleged that the individual defendants were officers in the military service of the United States, in possession as such of this land, under and by direction of the President of the United America, the commander in chief of the army and navy of the United States, and not of their own volition, will, or wish, and that neither of them ever pretended to hold or have possession, or right of possession, or title, or color of title, of the land as individuals, and that this suit was but a palpable device to maintain an action at law against the United States and their

Page 162 U. S. 265

property, and should not be further maintained, and also pleaded not guilty, and that the United States had held adverse possession in good faith, under a warranty deed made to them in 1875 by the City of San Antonio, and without knowledge or suspicion of any adverse title, and that the United States were innocent purchasers of the land for a valuable consideration, without notice of the plaintiffs' unrecorded claim, and set up the statutes of limitations, and a claim for improvements, as in their former answer.

The case was again tried by the district court without a jury, and the same evidence introduced as at the first trial. The court overruled the first and second pleas in bar and adjudged that Spence, the intervener, take nothing by his petition; that the plaintiffs recover from the individual defendants one undivided third part of the lot in question, and the sum of $126.66 for their use and occupation of that part, and costs, and be put in joint possession with the defendants, and that the United States be allowed the sum of $333.33 for improvements.

Thereupon, as the record stated,

"all parties, to-wit, the plaintiff, the intervener, the defendants, and the United States of America in open court excepted to the judgment of the court and gave due notice of appeal."

And a report or statement of the case, called in the Texas practice a "Statement of Facts, or Agreed statement of the Pleadings and Proof" (the material parts of which are given above), was made up by the parties and certified by the judge. Tex.Rev.Stat. of 1879, §§ 1377, 1414; Stat. April 13, 1892, c. 15, § 24.

Upon a writ of error sued out by the United States, and an assignement of errors by the defendants, and upon cross assignments of errors by the plaintiffs and by the intervener, the case was taken to the court of civil appeals for the Fourth supreme Judicial District of the State of Texas, which affirmed the judgment, except as to the allowance for improvements, and thereupon, "proceeding to render such judgment as should have been rendered by the court below," adjudged that the plaintiffs recover of the individual defendants one undivided third part of the land [describing it], and the sum of $126.66 for the use and

Page 162 U. S. 266

occupation of that part, with interest thereon from the date of the judgment below, and costs, and

"have their writ of possession against said defendants, and all other persons who have entered said premises since the filing of this suit on the 23d day of February, 1889, placing them in joint possession with the defendants;"

that Spence, the intervener, take nothing by his suit, and

"that the plaintiff in error, the United States of America, who voluntarily made itself a party in the court below, take nothing by its plea, and pay all costs of this Court and of the court below."

The opinions on rendering that judgment, and on denying a motion for a rehearing, are reported, under the name of United States v. Schwalby in 8 Tex.Civ.App. 679, 685.

The Supreme Court of the State of Texas denied a petition of the United States for a writ of error from that court to the court of civil appeals. The Chief Justice of the court of civil appeals refused to allow to the United States a writ of error to bring up the case to this Court. The present writ of error was thereupon sued out by the individual defendants and the United States, and was allowed by a justice of this Court.

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