A homesteader, after obtaining his patent, conveyed to a lumber
company all the standing timber on the land and other rights
therein pursuant to a contract made prior to the issuing of the
patent; subsequently he conveyed all his interest in the land to
one who thereupon claimed the timber on the ground that the prior
conveyance was void as violative of the land laws and land policy
of the United States.
Held that:
When the patent issues to a homesteader, the full legal title
passes to the patentee and he may do with the land that which he
sees fit.
An executed contract, voluntarily executed, without fraud or
duress, is binding, and cannot be repudiated by the party who
executed it, and one whose interest in land is acquired
subsequently to a conveyance thereof by the owner has no higher
right to question the conveyance than the grantor had.
Although the grantee of the timber might not have been able to
enforce the contract because void as made in violation of the land
laws of the United States, the conveyance, having been voluntarily
made after the issuing of the patent, could not be attacked on that
ground by the grantor or his subsequent grantee. Whether the
government itself could challenge the conveyance not decided.
In December, 1892, Esau Harness received a patent from the
United States for 160 acres of land in Lincoln County, Mississippi.
On January 28, 1893, he conveyed to the Norwood & Butterfield
Company all the pine timber on the land "and a right of way through
and across the land for roads, trams, or railroads, 100 feet wide."
This instrument was filed
Page 199 U. S. 336
for record February 10, and the complainant below (defendant in
error here) subsequently obtained a deed from the Norwood &
Butterfield Company. On January 30, 1893, the patentee conveyed his
entire interest in the land as security for supplies and
merchandise to be furnished by Hartman, the plaintiff in error
(defendant below), during the year 1893. This deed was filed for
record January 31, 1893. On December 14, 1894 the trustee therein
named sold and conveyed the land to Hartman.
This suit was brought in the Chancery Court of Lincoln County,
Mississippi, to establish the prior right of the complainant to the
timber and right of way. The bill charged that the defendant had
actual notice of the conveyance from the patentee to the Norwood
& Butterfield Company when he accepted the trust deed from the
patentee, and therefore that he was subordinated in right to those
claiming under the first conveyance, although it was not placed on
record until after the execution and record of the deed of trust.
It appeared in the testimony that, prior to the patent, the
patentee had contracted with the Norwood & Butterfield Company
to convey to it the timber and right of way. He himself testified
that he had made such a contract, both before and after he had
received the patent. The supreme court of the state, deciding in
favor of the complainant, 82 Miss. 494, considered the effect of
the contract made before the patent upon the validity of the
subsequent conveyance to the Norwood & Butterfield Company,
saying:
"We are driven to the conclusion that the decree of the court
below must have been the result of an opinion that the agreement
between Esau Harness and the grantor of appellant that, in
consideration of the advance money to perfect his homestead entry
and get his patent, Esau would sell the timber on the land in
controversy, was against public policy and void, and made void also
the subsequent sale of the timber to reimburse for that advance. We
are not in accord with that view. Rev.Stat. §§ 2290, 2291,
Page 199 U. S. 337
with Gould & Tucker's notes, vol. 1, p. 537. On the
testimony, we cannot escape the conviction that the appellee had
such notice as should put any reasonable man on inquiry, which
would have disclosed the existence of the conveyance of the timber
and right of way by Esau to the grantor of appellants."
"Reversed, and decree here in accordance with the prayer of the
bill."
MR. JUSTICE BREWER delivered the opinion of the Court.
For the purposes of this case, it may be conceded that the
contract made before the patent was, by virtue of the policy of the
United States, as disclosed in its statutes, void, and could not
have been enforced by the Norwood & Butterfield Company, but
the contract was not inherently vicious or immoral. It was simply
void because in conflict with the federal statutes.
Anderson v.
Carkins, 135 U. S. 483.
When the patent issued, the full legal title passed to the
patentee. He could do with the land that which he saw fit -- sell
or give it away -- and if he voluntarily conveyed it, he could not
thereafter repudiate the conveyance. He may well have thought that,
having received money from the company to enable him to pay for the
land, it was equitable that he should convey that interest which he
had agreed to convey. At any rate, he had a right to exercise a
choice in the matter, and, having exercised it, he at least, cannot
complain. Whether the government could challenge the conveyance we
need not determine, for if it had any right to interfere, it has
not chosen to do so. It is generally true that an executed
contract, voluntarily executed, without fraud or duress, is binding
and cannot be repudiated by the party who executed it. In
Bibb
v. Allen, 149 U. S. 481,
149 U. S. 497,
Mr. Justice Jackson, speaking for the Court, thus stated the
law:
Page 199 U. S. 338
"It is well settled by the authorities that the defense of the
statute of frauds cannot be set up against an executed contract.
Dodge v. Crandall, 30 N.Y. 294, 304;
Brown v. Farmers'
Loan & Trust Company, 117 N.Y. 266, 273;
Madden v.
Floyd, 69 Ala. 221, 225;
Gordon v. Tweedy, 71 Ala.
202, 214;
Huntley v. Huntley, 114 U. S.
394,
114 U. S. 400; Browne on
Statute of Frauds § 116. This rule proceeds and rests upon the
principle that there is"
"no rule of law which prevents a party from performing a promise
which could not be legally enforced, or which will permit a party
morally but not legally bound to do a certain act or thing, upon
the act or thing being done, to recall it to the prejudice of the
promisee, on the plea that the promise, while still executory,
could not, by reason of some technical rule of law, have been
enforced by action."
"
Newman v. Nellis, 97 N.Y. 285, 291."
St. Louis Hay & Grain Co. v. United States,
191 U. S. 159,
191 U. S.
163.
It is also well settled that one whose interest in land is
acquired subsequently to a conveyance thereof by the owner has no
higher right to question the conveyance than his grantor had. This
does not conflict with the rule that a conveyance fraudulent
against creditors may be set aside at their instance, for their
rights exist prior to the conveyance -- or, if not, the conveyance
was made with the purpose on the part of the grantor of defrauding
them out of debts subsequently contracted. Nothing of that kind
appears here. Hartman, at the time of the conveyance, had no claim
against the patentee. The conveyance was not made with the purpose
of subsequently contracting a debt and defrauding him out of
payment thereof. His trust deed was executed after the conveyance
to the Norwood & Butterfield Company, and for the purpose of
securing debts thereafter to be contracted, and he took with
knowledge of the conveyance.
The judgment of the Supreme Court of Mississippi was right, and
it is
Affirmed.
Page 199 U. S. 339
MR. JUSTICE WHITE, dissenting:
The reasons for my dissent are stated not only because of what
seems to me is the encouragement afforded to frauds on the
homestead law by the ruling now made, but also because of the
possible injurious consequences to arise from the application
hereafter of the assumed legal principles upon which the ruling is
based.
These are the facts: Harness entered the homestead. Before he
had performed the conditions required by the law of the United
States to entitle him to a patent, he made a contract with the
Norwood & Butterfield Company to convey to them, when he
received a patent, the pine timber on the land and a right of way
through and across the land for roads, trams, or railroads, 100
feet wide. Harness ultimately filed the proofs required by the acts
of Congress -- in other words, made an affidavit, as required by
law, to the effect that he had the sole interest in the land and
that there was an absence of interest in anybody else. Obtaining
the patent, he made the stipulated conveyance to the Norwood &
Butterfield Company, who afterwards conveyed to the Butterfield
Lumber Company, defendant in error. Before this deed, however, was
recorded, as required by the laws of Mississippi, Harness mortgaged
the land to Hartman, plaintiff in error, and the mortgage was at
once recorded. Thereafter, the deed was recorded. Soon afterward
the Butterfield Company filed its bill in a court of chancery in
Mississippi to establish its alleged prior rights under the deed
from Harness, and it was averred that Hartman accepted the mortgage
to him with notice of the prior transfer, and therefore took
subject to the deed.
That a federal question was present is conceded in view of the
fact that the Mississippi court applied the laws of the United
States in determining the validity of the contract and the deed.
Having decided that they were valid and that Hartman had notice of
the transaction before the execution of the mortgage, the state
court further held that the rights
Page 199 U. S. 340
of Hartman were subordinate to those conferred by the contract
and deed. I do not stop to demonstrate that a contract made by a
homesteader to convey to another, when a patent is obtained, a
right to strip the land of all the timber, and to vest in such
party a right of way for a tramway to make the removal of the
timber effectual, is void under the homestead laws of the United
States. This I do not feel called upon to do, because the Court, in
deciding this case, expressly assumes that the contract to convey
the timber was void, and bases its ruling upon that assumption,
citing
Anderson v. Carkins, 135 U.
S. 483. But at the same time it is declared that,
although the contract was void by virtue of the policy of the
United States as disclosed in its statutes, such contract was not
inherently vicious or immoral. The deduction seems to me to be
unwarranted. Considering a contract of this nature, in
Anderson
v. Carkins, it was said:
"There can be no question that this contract contemplated
perjury on the part of Anderson, and was designed to thwart the
policy of the government in the homestead laws to secure for the
benefit of the homesteader the exclusive benefit of his homestead
right. Such a contract is against public policy, and will not be
enforced in a court of equity."
And the doctrine of
Anderson v. Carkins, which is
conceded applies to this case, was reiterated in
Adams v.
Church, 193 U. S. 510,
193 U. S.
515.
It having been impossible for the homesteader, without fraud and
perjury, to execute the contract to strip the land of its timber
and give a right of way for a tramway to make the stripping
effectual, it seems to me that it cannot be said that it was not
immoral and vicious. And when the necessary effect of the contract
is thus fixed, it is submitted that it becomes at once patent that
decisions holding that executed contracts are not affected by the
statute of frauds have no application to this case, for, as said by
Mr. Justice Jackson in the case relied upon to demonstrate the
doctrine,
Bibb v. Allen, 149 U. S. 497:
"Contracts not in conformity
Page 199 U. S. 341
with the statute [of frauds] are only voidable, and not
illegal."
It is said, however, that Harness made a deed in accordance with
the contract, and this suit involves not the contract, but the
deed. But unless this proceeds upon the assumption that the
contract was merely voidable, and not illegal as being contrary to
public policy, it seems to me to be a plain misconception. This is
said since it cannot be that a court of equity will not enforce the
specific performance of a contract which is void as against public
policy, but yet will lend its aid to one of the parties by
enforcing a deed which permits the fruits of the void contract to
be realized.
As said in
Deweese v. Reinhard, 165 U.
S. 386 -- a case concerning the homestead laws:
"A court of equity acts only when and as conscience commands,
and if the conduct of the plaintiff be offensive to the dictates of
natural justice, then, whatever may be the rights he possesses and
whatever use he may make of them in a court of law, he will be held
remediless in a court of equity."
And especially must this be true where, as here, one of the
parties to an illegal and void transaction invokes the aid of
equity to give efficacy to perjury and a violation of public
policy.
But it is asserted that, whatever may be the right of the United
States to assail the conveyance in question, neither the grantor
nor his assignee has such right. Here again it seems to me clear
that the distinction has been lost sight of which exists between
contracts which are merely voidable and those which are void
because contrary to public policy. That in a case of the latter
character either party to the unlawful transaction or those in
privity with them may be heard to contest the right of one of the
wrongdoers to the active aid of a court of equity in making the
illegal act effective has long since been decided by this Court.
Harkness v.
Underhill, 1 Black 316,
66 U. S.
325.
I therefore dissent.
