Although several cases cancelling patents for fraud have been
decided by the district court without opinion, if the same decree
was entered in all the cases and all were alike in their main
features, although varying in details, and the circuit court of
appeals affirmed all the decrees with an opinion stating that fraud
in the entry was proved and that the grantee was charged with
knowledge, the two courts must be deemed to have concurred in their
findings, and the rule that, under such conditions, their
determinations upon questions of fact, in absence of clear error
will not be disturbed, applies.
While a patent obtained by fraud is not void or subject to
collateral attack, it may be directly assailed by the government in
a suit against the patentee or grantee, and such a suit can only be
sustained by proof producing conviction.
Despite satisfactory proof of fraud in obtaining the patent, if
the legal title has passed,
bona fide purchase for value
is a perfect defense; but it is an affirmative one which the
grantee must establish in order to defeat the government's right to
cancel a patent which fraud alone is shown to have induced.
Boone v.
Chiles, 10 Pet. 177.
203 F. 263 affirmed.
Page 236 U. S. 398
The facts, which involve the validity of certain land patents
issued under the homestead laws of the United States, are stated in
the opinion.
Page 236 U. S. 400
MR. JUSTICE HUGHES delivered the opinion of the Court.
These five cases, although involving separate transactions, may
conveniently be considered in a single opinion. The suits were
brought by the United States to annul certain land patents
* issued under the
homestead laws upon
Page 236 U. S. 401
the ground that the respective entrymen had defrauded the
government in securing the patents in that they had not actually
resided upon the land and cultivated it as required by the statute,
the statements in their proofs upon commutation being false.
Rev.Stat. § 2301. It was further averred that the Wright-Blodgett
Company, the appellant at the time of its purchase of the
respective tracts, had notice through its agents of the fraud which
had been perpetrated by the entrymen. The appellant answered in
each case, disclaiming all knowledge of the alleged fraud, and
setting up that it was a
bona fide purchaser for value
after the issuance to the entrymen of the final receipts. The cases
were separately heard and in each, upon pleadings and proofs, a
decree was entered cancelling the patent. Upon appeal, the circuit
court of appeals affirmed the decrees. The opinion of that court
stated that it found "that fraud in the homestead entry" was
proved, and that the appellant was "charged through their active
agents on the ground with knowledge of the fraud."
Page 236 U. S. 402
The appellant urges that it does not appear that the two courts
concurred in their findings, as the cases were decided in the
district court without opinion and, in three of the cases, there
was testimony which, according to the government, tended to show
that the transactions were fraudulent not only because there had
not been the residence and cultivation required by the statute and
stated in the proofs, but also because of agreements prior to the
commutation proofs to sell the lands to the appellant. But the
district court rendered its decree in the five cases on the same
day; in two of these, it is not suggested that there was evidence
of such anticipatory agreements, but the same decree was entered
and must have proceeded on the evidence as to the lack of residence
and cultivation. While the facts in the several cases vary in
details, they are so far alike in their main features with respect
to residence and cultivation as to make it absolutely impossible to
assume that any different conclusion of fact was reached by the
district court in the three cases than that at which it arrived in
the two others. The two courts must be deemed to have concurred in
their findings, and, in accordance with the well settled rule,
their determination upon mere questions of fact will not be
disturbed, unless clear error is shown.
Stuart v. Hayden,
169 U. S. 1,
169 U. S. 14;
Towson v. Moore, 173 U. S. 17,
173 U. S. 24;
Texas & Pacific Ry. v. Railroad Commission,
232 U. S. 338,
232 U. S. 339;
Washington Securities Co. v. United States, 234 U. S.
76,
234 U. S. 78;
Gilson v. United States, 234 U. S. 380,
234 U. S. 384.
An examination of the record fails to disclose any such error in
the finding as to the fraud of the entrymen, and it is not
necessary to recite the evidence.
It is insisted, however, that in the finding as to the standing
of the appellant there was involved an erroneous application of the
law. In substance, the argument comes to this -- that, in a suit by
the United States to cancel a patent upon the ground of fraud,
where the land is held
Page 236 U. S. 403
by a grantee of the entrymen, the government must establish that
the grantee is not a
bona fide purchaser for value; that
this must be shown by proof of a clear and cogent character, and
that, measured by this standard, the government's case was not made
out. This contention proceeds upon an erroneous view of the
governing principles as repeatedly set forth in the decisions of
this Court. These principles may be briefly restated: where a
patent is obtained by false and fraudulent proofs submitted for the
purpose of deceiving the officers of the government, and of thus
obtaining public lands without compliance with the requirements of
the law, while the patent is not void or subject to collateral
attack, it may be directly assailed in a suit by the government
against the parties claiming under it. In such case, the respect
due to a patent, the presumption that all the preceding steps
required by the law had been observed before its issue, and the
immense importance of stability of titles dependent upon these
instruments demand that suit to cancel them should be sustained
only by proof which produces conviction.
United States v.
Minor, 114 U. S. 233,
114 U. S. 239;
Maxwell Land-Grant Case, 121 U. S. 325,
121 U. S. 381;
United States v. Stinson, 197 U.
S. 200,
197 U. S.
204-205;
Diamond Coal & Coke Co. v. United
States, 233 U. S. 236,
233 U. S. 239.
And, despite satisfactory proof of fraud in obtaining the patent,
as the legal title has passed,
bona fide purchase for
value is a perfect defense.
Colorado Coal v. United
States, 123 U. S. 307,
123 U. S. 313;
United States v. Stinson; Diamond Coal & Coke Co. v. United
States, supra; United States v. Detroit Lumber Co.,
200 U. S. 321;
United States v. Clark, 200 U. S. 601. But
this is an affirmative defense which the grantee must establish in
order to defeat the government's right to the cancellation of the
conveyance which fraud alone is shown to have induced. The rule as
to this defense is thus stated in
Boone v.
Chiles, 10 Pet. 177,
35 U. S.
211-212:
"In setting it up by plea or answer, it must state the deed of
purchase, the
Page 236 U. S. 404
date, parties, and contents briefly; that the vendor was seised
in fee, and in possession; the consideration must be stated, with a
distinct averment that it was
bona fide and truly paid,
independently of the recital in the deed. Notice must be denied
previous to and down to the time of paying the money and the
delivery of the deed, and if notice is specially charged, the
denial must be of all circumstances referred to from which notice
can be inferred, and the answer or plea show how the grantor
acquired title . . . The title purchased must be apparently
perfect, good at law, a vested estate in fee-simple. . . . It must
be by a regular conveyance; for the purchaser of an equitable title
holds it subject to the equities upon it in the hands of the
vendor, and has no better standing in a court of equity. . . . Such
is the case which must be stated to give a defendant the benefit of
an answer or plea of an innocent purchaser without notice; the case
stated must be made out; evidence will not be permitted to be given
of any other matter not set out."
See also Smith v. Orton, 131 U.S.
appendix,
lxxv, lxxviii;
Colorado Coal Co. v. United States,supra; United
States v. California &c. Land Co., 148 U. S.
31,
148 U. S. 41-42;
United States v. Stinson,supra; Story's Eq. Pl. §§ 805,
805a, 806; 2 Pomeroy, Eq.Jur. §§ 745, 784;
Jewett v.
Palmer, 7 Johns.Ch. 65, 68;
Seymour v. McKinstry, 106
N.Y. 230;
Graves v. Coutant, 31 N.J.Eq. 763;
Sillyman
v. King, 36 Ia. 207;
Prickett v. Muck, 74 Wis.199;
Bank v. Ellis, 30 Minn. 270;
Lewis v. Lindley, 19
Mont. 422. In
United States v. Detroit Lumber Co., supra,
the circuit court of appeals found that the Detroit Company was a
purchaser in good faith, and this Court, reviewing the facts,
reached the same result. The company had no knowledge or intimation
of wrong until long after the issuance of the patents. In
United States v. Clark, supra, both courts below had found
that Clark had no actual knowledge of the alleged frauds or of
facts sufficient to put
Page 236 U. S. 405
him upon inquiry. Clark, his agents and advisers testified that
they did not know or suspect anything wrong. (200 U.S., p.
200 U. S.
608.) The defense of
bona fide purchaser for
value was completely made out, and what is said in the opinion must
be read in the light of that fact. Nothing was shown to impair the
case which the defendant had established, and there was no
intention to depart from the well settled rule to which we have
referred.
In the present case, the appellant had its agents upon the
ground, and it has been found that through these agents it had
knowledge of the fraud. The contention that, as the government had
alleged notice through particular agents, it could not be shown
that the company had acquired knowledge through other agents than
those named is without merit; the allegation in the bill as to the
particular agents was surplusage. Upon the question of fact, with
respect to
bona fides in its purchase, both courts below
have found against the appellant, and the record does not show any
error requiring the reversal of the decrees.
Decrees affirmed.
MR. JUSTICE McREYNOLDS took no part in the consideration and
decision of this case.
* In No. 151, the entry was made October 19, 1898, by Joe J.
Hicks; commutation proof was offered June 11, 1901, and final
certificate issued July 6, 1901; on July 10, 1901, the entryman
sold the land to the appellant. Patent was issued April 1,
1902.
In No. 152, the entry was made April 10, 1899, by Walter O.
Allen; commutation proof was offered June 11, 1901, and final
certificate issued July 8, 1901; on July 10, 1901, the entryman
sold the land to the appellant. Patent was issued July 5, 1902.
In No. 154, the entry was made January 13, 1900, by Elijah Z.
Boyd; commutation proof was offered May 18, 1901, and final
certificate issued May 24, 1901; on June 21, 1901, the entryman
sold the land to the appellant. Patent was issued February 15,
1902.
In No. 155, the entry was made May 4, 1899, by Samuel S. Akin,
Jr., commutation proof was offered August 17, 1901, and final
certificate issued September 18, 1901; on September 28, 1901, the
entryman sold the land to the appellant. Patent was issued April 1,
1902.
In No. 156, the entry was made January 31, 1900, by Samuel E.
Bryers; commutation proof was offered August 17, 1901, and final
certificate issued September 18, 1901; on September 28, 1901, the
entryman sold the land to the appellant. Patent was issued April 1,
1902.