The power to review and set aside the action of local land
officers exists in the general land department.
When an entry is cancelled, after due notice to the entryman,
and after a hearing in the case, it is conclusive against him
everywhere, upon all questions of fact, and it cannot be regarded
as a mere nullity when set up against his mortgagee, even though
such mortgagee had no notice of the proceeding to cancel the
certificate.
Such an entry does not transfer the title to the land, but
simply furnishes
prima facie evidence of an equitable
claim for a patent, and the use of the certificate for that purpose
is subject to be destroyed by its official cancellation.
This action was brought to foreclose a mortgage owned by the
plaintiff in error upon certain land in North Dakota which the
defendant in error claimed was his, and not subject to the lien of
the mortgage. It was brought in the proper state
Page 176 U. S. 449
court, and the trial resulted in a judgment in favor of the
defendant declaring him to be the owner of the land, that the
mortgage of the plaintiff in error was no lien upon it, and that it
should be cancelled as an apparent cloud upon the title of the
defendant.
The plaintiff appealed from this judgment to the supreme court
of the state, where it was affirmed, 6 N.D. 108, and the case was
brought here on writ of error.
The material facts are as follows: on January 6, 1881, one
Anderson filed in the proper land office at Fargo, in the then
Territory of Dakota, his homestead application to enter the land
which is involved in this action. On July 20, 1881, he appeared
before the register and receiver, and, under section 2301, Revised
Statutes, commuting his homestead to a preemption entry, made final
proof of his claim, which was allowed and a final certificate
issued, which was filed in the office of the register of deeds of
the proper county on July 25, 1881. After the filing of proof, and
on July 20, 1881, Anderson mortgaged the land to one H. E.
Fletcher, who, on June 20, 1882, assigned the mortgage to the
plaintiff. Both the mortgagee and the assignee acted in good faith,
and each instrument was executed for a valuable consideration.
On May 8, 1882, Anderson conveyed the land to one R. M. Ink, who
on April 7, 1883, conveyed the same to one J. S. Ink, and on
January 6, 1885, J. S. Ink conveyed the premises to the
defendant.
All of the above were warranty deeds and duly recorded.
On March 14, 1882, after the final proof had been made by
Anderson and passed upon by the register and receiver of the land
office, and the record had been transmitted to the General Land
Office at Washington, the commissioner held the entry of Anderson
upon said land and directed the register and receiver of the local
land office to hold the entry for cancellation upon the ground that
the testimony in the final proof made by Anderson for the land in
question was evasive and failed to show six months' residence.
On January 22, 1886, the defendant filed in the land office at
Fargo his application and affidavit to contest the entry of
Page 176 U. S. 450
Anderson upon the land on the ground that the proof furnished by
Anderson upon that entry was false and that the entry was
fraudulent, and in that affidavit he set forth that Anderson had
never established his residence upon the land and had never resided
thereon and never made the same his home as provided by the
homestead laws of the United States.
The Commissioner of the General Land Office thereupon ordered a
hearing before the register and receiver at Fargo between the
defendant and Anderson as to the truth of the allegations in
defendant's affidavit and application for contest. Due notice of
the hearing was given to Anderson by publication, in accordance
with an order of the register, which was granted upon an affidavit
that personal service could not be made upon him.
At such hearing, the defendant appeared with his witnesses and
gave evidence tending to establish the truth of the allegations in
his affidavit of contest, but no appearance was made or testimony
offered by Anderson, and after the hearing, the evidence taken
thereon was transmitted to the Commissioner of the General Land
Office at Washington who, on the 14th day of November, 1887,
directed the entry of Anderson to be cancelled as a fraudulent
entry, which the register and receiver of the land office at Fargo
thereafter did, and the entry was duly cancelled of record as a
fraudulent entry, and the defendant was notified thereof. From this
decision Anderson took no appeal.
After the final decision of the Commissioner of the General Land
Office upon the contest, and after the cancellation of the entry of
Anderson, the defendant made his homestead entry upon the land, and
on the 26th of April, 1893, submitted his final proof therefor,
which was passed upon by the register and receiver and placed of
record on that date, and a final certificate in due form was then
issued to him by the register and receiver, and thereafter, on July
6, 1893, the government issued to him a patent for the land, which
was recorded on October 25, 1893.
No notice of the cancellation of the homestead entry and
certificate of Anderson was ever given to H. E. Fletcher,
Page 176 U. S. 451
the mortgagee, or to the plaintiff herein, his assignee, and the
cancellation was made without actual notice of the decision of the
Commissioner of the General Land Office to either Fletcher or the
plaintiff, and neither Fletcher nor the plaintiff was served with
any notice of the contest of defendant involving the land, nor was
either made a party defendant in that contest.
After the cancellation and on June 15, 1891, plaintiff filed in
the United States land office at Fargo proof of its interest as
assignee of the mortgage, and moved that a patent be issued under
the provisions of section 7 of the Act of March 3, 1891, 26 Stat.
1095, 1098, c. 561, which motion was denied by the Commissioner of
the General Land Office on August 13, 1891, and, on appeal, by the
Secretary of the Interior on July 15, 1892.
The notes secured by the mortgage not having been paid, this
action was brought to foreclose the same, and the defendant set up
as a defense the facts in relation to the entry of Anderson and its
cancellation and the issuing of the patent to him as above set
forth.
MR. JUSTICE PECKHAM, after stating the facts, delivered the
opinion of the Court.
When Anderson obtained the decision of the register and receiver
upon his application for the land, it was subject to the power of
the land department to review the judgment of those officers, and,
upon facts showing that the entry was fraudulent, the department
had power to cancel it. This could be done upon the same evidence
which was before the register and receiver, and at least upon
notice to the party entering the land. Although the power to review
and to cancel is not arbitrary or unlimited, and does not
prevent
Page 176 U. S. 452
judicial inquiry in regard to its exercise in some appropriate
forum, yet it is unquestionable that the power of reviewing and
setting aside the action of the local land officers does exist in
the general land department.
Orchard v. Alexander,
157 U. S. 372,
where many of the cases upon the subject are gathered in the
opinion of the court.
In this case, the Commissioner of the General Land Office at
Washington held the entry of Anderson upon the land and directed
the register and receiver of the local office to hold such entry
for cancellation upon the ground that the testimony in the final
proof was evasive, and failed to show six months' residence.
Subsequently, and upon sufficient notice to him, the defendant
contested the entry of Anderson as fraudulent on the ground that
the proof furnished by him to procure it was false, that Anderson
had never established his residence upon the land and never had in
fact resided thereon, and had never made the same his home, as
provided by the laws of the United States.
A hearing was had before the register and receiver at Fargo, due
notice whereof was given to Anderson, who did not appear, and the
evidence taken upon the hearing was transmitted to the commissioner
at Washington, who, on November 14, 1887, directed that the entry
of Anderson upon the lands should be cancelled, and thereafter, in
the due and usual course of business, the register and receiver of
the local office at Fargo did cancel that entry of record.
If this were all, no question could be raised in regard to the
regularity and sufficiency of the proceedings which ended in the
cancellation of Anderson's entry.
The difficulty, however, arises from the fact that before the
entry was cancelled, and on July 20, 1881, Anderson mortgaged his
interest in the land to Fletcher, the mortgagee, who subsequently,
as stated, assigned the mortgage to the plaintiff in error. Through
various mesne conveyances, the defendant, on the 6th of January,
1885, became the owner of whatever interest Anderson had in the
land by virtue of his above-mentioned entry. Thereafter the
defendant filed his papers for a contest as to the validity of the
entry of Anderson, and although
Page 176 U. S. 453
Anderson was duly notified of the proceedings, neither Fletcher
nor his assignee, the plaintiff in error, had any notice of the
same. The plaintiff therefore contends that the whole proceeding in
the General Land Office, including the hearing on the contest
before the register and receiver at Fargo, was, so far as it was
concerned, an absolute nullity, and the cancellation of Anderson's
entry had in law no effect upon its claim to use the certificate as
evidence of Anderson's right to a patent. In our opinion, this
contention is not well founded.
The favorable decision of the register and receiver of the local
land office upon the claim of Anderson was, under the statute,
reviewable by the officers of the General Land Office, and the
officer of that department who directed the cancellation of the
entry had by law jurisdiction to make that direction. The
certificate was
prima facie evidence of the right of the
entryman to a patent, but the power rested with the land
department, upon proper notice, to set it aside and cancel the
entry, and thus take away from him that
prima facie
evidence.
United States v. Steenerson, 50 F. 504;
American Mortgage Company v. Hopper, 56 F. 67;
S.C. on
appeal, 64 F. 553. If the entry were cancelled arbitrarily and
without evidence or notice to him, it would not conclude him, and
he would, notwithstanding the decision, have the right to show that
his entry was valid and that he was entitled to a patent. And when
the entry has been cancelled upon due notice to the entryman and
after a hearing in the case, so that the cancellation is conclusive
against him everywhere upon all questions of fact, it cannot be
regarded as a mere nullity when set up against the mortgagee of the
fraudulent entryman, even though such mortgagee had no notice of
the proceeding to cancel the certificate. The cancellation of the
entry being valid as against Anderson, it left him without the
right to avail himself of it in any future claim he might make for
a patent, and it left his mortgagee also without the right to use
that entry as
prima facie evidence of Anderson's claim.
The mortgagee, as was remarked by the court below, had no vested
right to use the certificate as
prima facie evidence of
the right of the entryman to a patent, and after
Page 176 U. S. 454
its cancellation, the plaintiff in error could not so use it,
because it had been validly extinguished and cancelled in a
proceeding against the mortgagor, although the mortgagee had no
notice of such proceeding.
This result follows by reason of the character of the entry, and
of the certificate given thereon. It does not transfer the title to
the land from the United States to the entryman, and it simply
furnishes
prima facie evidence of an equitable claim upon
the government for a patent, and the use of the certificate for
that purpose is subject to be destroyed by the cancellation thereof
under direction of the department. This is the legal effect of such
certificates, and all who deal in them or found any right upon them
must be held to do so with full knowledge of the character of such
papers.
But the cancellation, although conclusive as to the entryman
upon all questions of fact, if made after notice to him, would not
be conclusive upon the mortgagee if made without notice to such
mortgagee and with no opportunity on its part to be heard. That is,
it would not prevent the mortgagee, before the issuing of a patent,
from taking proceedings in the land department and therein showing
the validity of the entry, or from proceeding before a judicial
tribunal against the patentee, if a patent had already issued, and
therein showing the validity of the entry; such proof in each case
would, however, have to be made by evidence other than the
certificate which had been cancelled. Had the mortgagee taken
either of these courses, it might have demanded in the one case,
upon proving the validity of the entry, that a patent should be
issued to the mortgagor or his grantees, leaving the land subject
to the lien of the mortgage, or if a patent had been issued, the
mortgagee might then have demanded relief against the patentee upon
proof of the validity of the entry, in a proceeding in court to
hold him as trustee. Although the mortgagee might have taken either
of the courses above suggested (and perhaps others), it took
neither of them. It relied on the absolute nullity of the
cancellation and proceeded to foreclose the mortgage as if the
certificate still subsisted and was evidence of the validity of the
entry. This was a conclusion not well founded.
Page 176 U. S. 455
If the plaintiff in error, even in this foreclosure suit, had
alleged that the entry had been cancelled and that a patent for the
land had been thereafter issued to the defendant, and had asked
that the patent so issued to him should be held by him in trust and
as security for the payment of the plaintiff's mortgage on the
ground that the entry had been improperly cancelled as to it, and
had proved on the trial that Anderson's entry was legal, it may be
that it would have been entitled to a judgment decreeing the
defendant a trustee of the title under his patent from the
government and providing for the sale of the land in order to pay
the mortgage, or some other appropriate relief might have been
granted. But this was not done, and the case must be decided upon
the record before us.
It is erroneous to state, however, that plaintiff in error has
admitted the entry was fraudulent. The facts are that, in the
statement agreed upon by the parties, it was admitted that in the
contest and upon the evidence therein submitted, the register and
receiver of the local land office decided as a conclusion of fact
that Anderson's entry was fraudulent. This is plainly no admission
of the fact itself, and in no way is the plaintiff in error thereby
precluded from showing that the entry was valid.
It is further contended that the defendant could not himself
take the title of Anderson and then contest before the land
department the validity of Anderson's entry, nor could he, having
succeeded in obtaining the cancellation of such entry, himself take
proceedings under the preemption or homestead act to obtain the
same land. Having procured the title of Anderson and then
instituted the contest in the land department, notice of which was
given solely to Anderson, it is contended that Anderson had no
longer any interest in defending his entry, and that the defendant
occupied the position of being the only party to both sides of the
contest, and could not therefore be permitted, after securing the
cancellation, to himself make an entry and obtain a patent for the
land; that, by reason of these facts, the cancellation was as to
the mortgagee an absolute nullity, and the mortgagee could maintain
its action to foreclose and sell the land under its
Page 176 U. S. 456
judgment of foreclosure the same as if no cancellation had taken
place.
But it must be remembered that Anderson was a grantor of the
land upon a warranty of title, and it is not clear he had no
interest in supporting his right of entry as valid and sufficient.
Ink had himself conveyed with warranty. Whether the defendant could
avail himself of the warranty under the facts regarding his own
action in being a mover in the proceeding to cancel the entry might
be doubtful, but at any rate there was a question which might cause
Anderson to endeavor to uphold his entry. It will be remembered,
too, that nearly three years prior to the conveyance to the
defendant, the Commissioner had held Anderson's entry for
cancellation on account of fraud. The defendant thus stood in
danger of a cancellation of that entry without notice to him, and
if an entry were then made by someone else, the defendant would be
without right to thereafter make an entry for himself. Could he not
anticipate that danger, and himself commence the contest?
As a mere grantee by deed, which conveyed the interest of
Anderson, the defendant did not take title under him within the
meaning of the rule which prevents one who takes title under
another from questioning that other's title, like a tenant taking
under his landlord. A simple grantee in a deed can set up another
title in a third party, and can himself claim title under such
party, and can deny the title of his grantor. He takes no title
under the grantor, and is at full liberty to deny the title of the
latter.
When the defendant therefore took his conveyance from Ink, it
may be assumed that he took all the title which came through Ink
from Anderson, but he was under no obligation to Anderson or to his
mortgagees to admit the validity of Anderson's entry, and had the
right to deny its validity and to make a contest before the land
department. The only objection to be urged against his proceeding
is that he gave no notice of the contest to the mortgagee. But it
was not the duty of the defendant to direct who should have notice
in such contest, for that was a matter for the officials of the
Page 176 U. S. 457
department, before whom the contest was inaugurated, to decide.
It was for them to determine who, if anyone, should be notified of
the contest, and the duty was not imposed upon the defendant. Of
course, he could give notice if he chose. If he did not, the person
who had any rights, if not notified at all, either by him or by the
department, could not be concluded by the decision of the contest,
and we hold now that the mortgagee was not thereby concluded, and
had the right, if possible, to subsequently show that Anderson's
entry was valid. But the cancellation of the entry and certificate
was not rendered a nullity because the mortgagee had no notice.
The character of the proceeding before the department must be
kept in mind. It is not like a proceeding in court. It is
administrative in its nature, and when the proceedings are
conducted in accordance with the provisions of law creating the
department and giving it jurisdiction, they may be upheld and the
decisions of the officers supported when not made arbitrarily and
without evidence.
If the defendant, in inaugurating his contest, were guilty of
any fraud, by means of which notice to the mortgagee was omitted or
Anderson induced not to defend his entry, and the defendant was
thus enabled to procure a decision as to the fraudulent character
of that entry, it might perhaps be that in such case the mortgagee
would have the right to make use of the original entry as still
prima facie evidence of Anderson's right to a patent, the
same as if the certificate had not been cancelled. But there is no
allegation of those facts in the bill, nor is there any proof in
this record which would sustain them if they had been alleged. The
action is not brought for that purpose, nor upon any such theory.
Unless the facts that the defendant had taken this conveyance of
Anderson's interest, and had subsequently commenced the proceedings
for a contest in regard to the entry of the latter, of which the
mortgagee had no notice, amount in law to a fraud by the defendant
upon such mortgagee, which nullifies those proceedings and leaves
the entry the same as if it had not in fact been cancelled, then
the cancellation made after notice to Anderson was valid, and it
deprived the
Page 176 U. S. 458
mortgagee of the use of the certificate as evidence of
Anderson's right to the patent while not in any way interfering
with the mortgagee's right to prove it by other evidence. In our
opinion, the facts stated do not prove fraud, as a legal
conclusion, on the part of the defendant, who had the right to take
the proceedings he did.
Plaintiff in error also contends that the motion made by it on
June 15, 1891, for the issuing of a patent to it as a
bona
fide encumbrancer of the land under the provisions of section
7 of the Act of March 3, 1891, entitled "An Act to Repeal
Timber-Culture Law, and for Other Purposes," 26 Stat. 1095, 1098,
should have been granted.
It will be seen that at the date of the passage of this act, the
entry of Anderson no longer existed, because on November 14, 1887,
it had been cancelled. The case of
Parsons v. Venzke,
164 U. S. 89,
decides that the act of 1891 applies only to entries existing at
the time of its passage. The claim of the plaintiff in error that
the cancellation was wholly void for all purposes cannot, as we
have seen, be supported.
Our conclusion upon the whole case is that the cancellation of
the entry was valid as regards Anderson, and that the effect of
such cancellation was to prevent the plaintiff in error from using
the entry as
prima facie evidence of the right of Anderson
to a patent, and under the pleadings, the plaintiff in error had no
right to a judgment of foreclosure. As the case was not brought or
tried on the theory that the defendant had only the legal title to
the land under his patent, and that such patent should be decreed
to be held by him in trust for the plaintiff to the extent of its
mortgage because the entry of Anderson was in fact valid and
proper, the plaintiff in error ought not to be obstructed in the
pursuit of any remedy which it may be advised it is proper to take,
by the use of the judgment herein as a conclusive adjudication
against it.
We therefore think it proper to modify the judgment by
striking out that portion which cancels the mortgage, and, as
modified, affirming the same without prejudice to the right of the
mortgagee to seek such other relief as it may be advised,
notwithstanding the adjudication of the judgment, and it is so
ordered.
