To a bill in equity to cancel a patent of land from the United
States to a preemptor, solely on the ground that there was no
actual settlement and improvement on the land, as falsely set out
in affidavits in support of the preemption claim, the defense of a
bona fide purchaser without notice is perfect.
In a suit by the United States to cancel a patent of public
land, the burden of producing the proof and establishing the fraud
is on the government, from which it is not relieved although the
proposition which it is bound to establish may be of a negative
nature.
When a plaintiff's right of action is grounded on a negative
allegation which is an essential element in his case or which
involves a charge of criminal neglect of duty or fraud by an
official, the burden is on him to prove that allegation, the legal
presumption being in favor of the party charged.
In a proceeding in equity against an innocent purchaser to set
aside a patent of public land for fraud in which it is charged that
an officer of the United States who was concerned in its issue
participated, the burden of establishing his title is not cast upon
the defendant by raising a suspicion, however strong, of the
alleged fraud and wrongdoing of the officer if the officer could
have been examined, and was not.
In this case, the United States sought to cancel a number of
patents to preemptors, the lands having passed into the hands of an
innocent purchaser, on the ground that there were no actual
settlements and improvements,
Page 123 U. S. 308
but that the alleged preemptors were fictitious persons who did
not exist, and that these facts were known to the register and
receiver, through whose fraudulent act in this respect the patents
were obtained. Having established that there were no such
settlements and improvements, the plaintiffs introduced the
evidence of many witnesses residing in the vicinity that the
persons named in the patents had not resided there and were unknown
to the witnesses, but did not call the register and receiver, or
the solicitor through whom some of the patents were obtained from
the Land Office, or the officers who had witnessed and taken
acknowledgment of deeds purporting to convey the interest of the
patentees to the defendant.
Held that the burden was on
the government to produce so much of this further evidence as could
be obtained, and that in its absence, the United States had not
made all the proof of which the nature of the case was susceptible
and which was apparently within their reach.
In order to constitute the exemption of coal lands contemplated
by the preemption act under the head of "known mines," there must
be ascertained coal deposits upon the land of such an extent and
value as to make the land more valuable to be worked as a coal
mine, under the conditions existing at the time, than for merely
agricultural purposes.
The mere fact that there are surface indications of coal on
public land will not of itself prevent the acquisition of title to
the land under the preemption laws, nor will the fact alone that
after acquisition of such a title, the surface indications prove to
be veins which are, by a change of circumstances, profitably
worked, invalidate such a title.
In equity. The bill was filed in the name of he United States by
the Attorney General on January 22, 1880, the object and prayer of
which are to declare void and cancel sixty-one patents for as many
distinct pieces of land, situated at different places in Las Animas
County, in the State of Colorado, amounting in the aggregate to
9,565.95 acres. To the original bill the Southern Colorado Coal
& Town Company, a corporation organized under the laws of
Colorado, was the sole defendant. The patents in question were
issued at different times between October, 1873, and October, 1874,
upon preemption claims, under the act of 1841. In each case there
appeared to be filed all the necessary and proper affidavits, duly
verified before the register or receiver of the land office at
Pueblo, showing that the preemptors had entered and settled in
person upon the land on a day named and had made improvements
thereon, the nature of which were set out in detail, and that the
lands in question were nonmineral lands
Page 123 U. S. 309
and subject to preemption under the acts of Congress relating
thereto. Between May, 1873, and December, 1875, warranty deeds in
the names of the preemptors and patentees were made, acknowledged,
and recorded apparently conveying the premises to William S.
Jackson, as trustee, who represented a number of individuals who
had deposited money in his hands to be used in the purchase of
lands in Colorado. On June 1, 1876, by deed duly acknowledged and
recorded, but without covenant of warranty, Jackson conveyed and
released all these lands to the defendant, the Southern Colorado
Coal and Town Company. On January 20, 1880, that corporation was
consolidated with other corporations under the name of the
"Colorado Coal and Iron Company," to which, upon that date, the
lands in question were conveyed. Under date of February 1, 1880,
the coal and iron company made a mortgage covering the premises in
question, with others, to Louis H. Meyer, as trustee, to secure an
issue of bonds amounting to $3,500,000. On January 7, 1882, an
amendment to the bill was filed making the Colorado Coal and Iron
Company, the consolidated corporation, together with Meyer, the
trustee in the mortgage, parties defendant. The purchase price of
the lands to the government was $11,997.45, which was paid at the
time to the proper officer, $1,813.14 in cash and the remainder in
certificates known as agricultural college scrip, which by law was
receivable for that purpose.
It is charged in the bill that these patents were procured by
means of a fraudulent conspiracy entered into by and between Irving
W. Stanton, register of the land office, Charles A. Cook, receiver
for the land district at Pueblo, in Colorado, Alexander C. Hunt,
and others unknown, who, it is alleged, organized and had
incorporated the Southern Colorado Coal and Town Company. In
furtherance of this conspiracy, and as the means of accomplishing
its purpose, it is alleged
"that neither of the supposed preemptors of the land as
aforesaid described by their names, as stated in said several
proofs of preemption or in the said certificates of location, ever
settled upon the said lands or improved the same as represented in
said several proofs of preemption, and that no person or
persons
Page 123 U. S. 310
whatsoever, as represented in either of said certificates of
location, appeared or presented himself before said Stanton or Cook
or either of them at any time and made proof of preemption or
agricultural college scrip location, either as preemptor or as
witness for any preemptor as aforesaid described, as in and by said
proofs of preemption and location certificates, or either of them,
as aforesaid, is supposed, but that the same, and each of them, are
false and fraudulent, and were designed, made, and executed by said
Stanton and Cook and said Hunt, and the said persons to your orator
unknown, or some one or more of them, in the manner aforesaid, and
for the purpose of fraudulently depriving your orator of its title
to the said pieces of land."
It is further alleged that all the said supposed preemptors are
fictitious persons, and their names are fictitious names, and that
the supposed names that appear as witnesses to the said several
proofs of preemption are fictitious names, and that no such person
or persons, either as preemptors or as witnesses, have ever lived
or been known in the County of Las Animas, where said pieces and
parcels of land are located, and in fact that no such persons
exist.
It is further alleged in the bill
"that the aforesaid pieces and parcels of land are not
agricultural land, and are not suitable for agricultural or grazing
purposes, and are of no value for any purpose except for the coal
deposits therein contained. . . . That the said several pieces and
parcels of land contain large and valuable deposits of coal, and
that the said deposits of coal were known to the said Stanton and
Cook and said Hunt, and to the said person or persons to your
orator unknown, who wrote out, signed, and executed, or caused to
be written out, signed, and executed the several proofs of
preemption and nonmineral affidavits at the time the said several
proofs of preemption and nonmineral affidavits were made out,
signed, and executed."
It is also charged in the bill that the said Hunt was a
stockholder in the Southern Colorado Coal and Town Company, and
general manager of its business, and that the incorporators of said
company and the trustees thereof, including
Page 123 U. S. 311
William S. Jackson,
"knew at the time the aforesaid described land was conveyed to
said company by said William S. Jackson, as hereinbefore described,
that the several patents to said several pieces and parcels of land
had been fraudulently obtained from your orator, and knew that the
said several supposed preemptors and patentees were myths and
fictitious persons, and knew that the said Jackson had no right,
title, or interest in said land, or any part thereof."
The answer of the Southern Colorado Coal and Town Company, filed
November 2, 1881, specifically denies all the allegations of the
bill alleging fraud, and denies that the said lands, or any portion
of them, were mineral lands in the sense of not being lands capable
of being acquired under the preemption law, and sets up by way of
further defense that it was a purchaser of all the said lands in
good faith for a valuable consideration without any knowledge or
notice whatever of any or either of the pretended fraudulent acts
and conspiracies in the bill alleged. Louis H. Meyer, on June 5,
1882, answered to the same effect, and by a stipulation the answer
of the Southern Colorado Coal and Town Company was directed to
stand as the answer of the Colorado Coal and Iron Company.
Replications were duly filed, and the cause was heard on a large
amount of proofs, resulting in a decree in favor of the complainant
declaring all the patents in the bill mentioned, and the subsequent
conveyances of the land therein described to the defendants, to be
fraudulent and void and decreeing that they should be held for
naught and be delivered up to be cancelled. The present appeal is
from that decree.
It was held by the circuit court that the charge in the bill
that the supposed preemptors and patentees were fictitious persons,
having no existence, was sufficiently proved; that consequently
there being no grantees, no legal title passed from the United
States, and that, as the defendants acquired no legal title by
virtue of the supposed conveyances to them, they cannot claim
protection as
bona fide purchasers for value without
notice of the fraud. 18 F. 273.
Page 123 U. S. 313
MR. JUSTICE MATTHEWS delivered the opinion of the Court.
It is fully established by the evidence that there were in fact
no actual settlements and improvements on any of the lands, as
falsely set out in the affidavits in support of the preemption
claims, and in the certificates issued thereon. This undoubtedly
constituted a fraud upon the United States sufficient in equity, as
against the parties perpetrating it or those claiming under them
with notice of it, to justify the cancellation of the patents
issued to them, but it is not such a fraud as prevents the passing
of the legal title by the patents. It follows that to a bill in
equity to cancel the patents upon these grounds alone, the defense
of a
bona fide purchaser for value without notice is
perfect.
In reference to such a case, it was said by this Court in
United States v. Minor, 114 U. S. 233,
114 U. S.
243:
"Where the patent is the result of nothing but fraud and
perjury, it is enough to
Page 123 U. S. 314
hold that it conveys the legal title, and it would be going
quite too far to say that it cannot be assailed by a proceeding in
equity, and set aside as void if the fraud is proved and there are
no innocent holders for value."
Meader v.
Norton, 11 Wall. 442,
78 U. S. 458.
It is, indeed, an elementary doctrine of equity that where a
grantor has been induced by fraud to part with the legal title to
his property, he cannot reclaim it from subsequent innocent
purchasers for value. Hence, it becomes necessary, to support the
decree of the circuit court, to maintain, as that court declared,
that the legal title to the lands in question did not pass from the
United States by virtue of the patents, because there were in fact
no grantees. And it was that proposition of fact which, by the
proofs introduced into the cause, the United States undertook to
establish. The evidence on that point is found in the depositions
of fourteen persons examined as witnesses. They were called to
prove, and did prove, in the first place, in respect to the several
tracts of land in controversy, the facts that they had not been
settled upon and that no improvements had been made upon them by
any person. They also testified, in substance, that they were
acquainted at the time of the transactions with the lands, and were
acquainted with the people then living in Las Animas County, some
of them stating that they knew every white man residing at that
time therein; that with the exception of one person, named Martine,
there were no persons in the county at the time bearing the names
specified as preemption claimants, and no persons bearing the names
subscribed as witnesses to their statements, and that they never
saw or heard of persons residing in the county having such names.
This is the extent of this description of evidence, the weight of
which is to be estimated in connection with the fact that the
County of Las Animas, although sparsely settled, embraces an area
extending about 150 miles from east to west, and about 40 miles
from north to south. In corroboration of it, testimony was
introduced, on behalf of the United States, of experts in
handwriting with a view of establishing, by a comparison of the
documents, that they were fabricated, which, however, was met by
the opposing opinions of other experts called on
Page 123 U. S. 315
the part of the defendants. This evidence we think not only
inconclusive, but entitled to no weight, not at all supporting the
inference sought to be drawn, that the same handwriting is
traceable in the signatures of the various names. The conclusion,
if warranted at all, must depend upon the statements of the other
witnesses, the substance of whose testimony has already been given,
and such presumptions of fact or law as legitimately arise
thereon.
It is charged in the bill that these title papers were falsely
and fraudulently made by the register and receiver, combining with
Hunt and others unknown in a conspiracy for that purpose; but there
is no direct proof of such a conspiracy. It is sought to be
inferred from the fact that the preemption statements were falsely
made, and from the evidence tending to show that the persons named
were fictitious. There is no proof to connect the register and
receiver with such a conspiracy except the fact that the affidavits
purport to have been made before them and were certified to by
them. Hunt's connection with it rests upon the fact that he
procured deeds from the supposed patentees, conveying the lands to
Jackson in pursuance of a bargain with him. It may well be admitted
that if there were no actual persons who made applications as
preemption settlers, none who made and signed the necessary
declarations and affidavits, and no persons as witnesses who
attested the same, the register and receiver must have known the
fact, but the fact of the conspiracy depends upon prior proof that
the alleged transactions were mere fictions. The proof necessary to
justify that conclusion is supposed to be found in the facts
testified to by the witnesses, a summary of which has been
given.
It certainly does not follow that no such persons in fact
existed as a necessary conclusion from the testimony of these
witnesses that they knew no such persons as named in these papers.
The utmost that can be said, as was said by the learned judge of
the circuit court in delivering judgment in the case, is that
"if none of them was ever in the county, and no improvements
were ever made upon the land, then the proofs upon which the
patents issued were false, and the inference
Page 123 U. S. 316
that the papers were manufactured without the presence of any
persons bearing or assuming the names of the patentees is not more
unreasonable than would be the inference that sixty-one actual
persons committed perjury themselves, and suborned as many others
to perjure themselves as witnesses, in order to acquire the
title."
This, it is argued, establishes at least that it is more
probable that the grantees were fictitious than that they were real
persons, and that, in view of the difficulty if not the
impossibility of proving the negative proposition that no such
persons existed, and of the fact that the defendants connect their
title and right with a transaction which must have occurred with
these grantees if they had an actual existence, the burden of proof
is shifted from the United States to the defendants, and that, as
the latter introduced no evidence tending to show the fact as they
claimed it to be, the case of the complainants must be considered
as established by a preponderance of proof.
We have had recent occasion to consider the question of the
character and degree of proof necessary in such cases to invalidate
titles held by purchasers in good faith for value and without
notice under patents issued by the United States. In
The
Maxwell Land Grant Case, 121 U. S. 325,
121 U. S. 379,
it is said:
"The deliberate action of the tribunals to which the law commits
the determination of all preliminary questions, and the control of
the processes by which this evidence of title is issued to the
grantee, demand that to annul such an instrument and destroy the
title claimed under it, the facts on which this action is asked for
must be clearly established by evidence entirely satisfactory to
the court, and that the case itself must be entirely within the
class of causes for which such an instrument may be avoided. . . .
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
Page 123 U. S. 317
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 stated, 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."
It thus appears that the title of the defendants rests upon the
strongest presumptions of fact which, although they may be
rebutted, nevertheless can be overthrown only by full proofs to the
contrary, clear, convincing, and unambiguous. The burden of
producing these proofs and establishing the conclusion to which
they are directed rests upon the government. Neither is it relieved
of this obligation by the negative nature of the proposition it is
bound to establish. It is indeed sometimes said that a negative is
incapable of proof, but this is not a maxim of the law. In the
language of an eminent text writer:
"When the negative ceases to be a simple one -- when it is
qualified by time, place, or circumstance -- much of this objection
is removed and proof of a negative may very reasonably be required
when the qualifying circumstances are the direct matter in issue,
or the affirmative is either probable in itself or supported by a
presumption, or peculiar means of proof are
Page 123 U. S. 318
in the hands of the party asserting the negative."
Best on the Law of Evidence, Amer. ed. Boston, 1883, § 270. So
also
ibid., § 273:
"When a presumption is in favor of the party who asserts the
negative, it only affords an additional reason for casting the
burden of proof on his adversary; it is when a presumption is in
favor of the party who asserts the affirmative that its effect
becomes visible, as the opposite side is then bound to prove his
negative."
Also
ibid., § 276:
"This appears from the case of
Doe d. Bridge v.
Whitehead, 8 A. & E. 571, which was an ejectment by a
landlord against a tenant on an alleged forfeiture by breach of a
covenant in his lease to insure against fire in some office in or
near London, in which it was contended that it lay on the defendant
to show that he had insured, that being a fact within his peculiar
knowledge. The argument
ab inconveniente was strongly
urged,
viz., that the plaintiff could not bring persons
from every insurance office in or near London to show that no such
insurance had been effected by the defendant, and
Rex v.
Turner, 5 M. & S. 206;
Apothecaries' Co. v.
Bentley, R. & M. 159, and some other cases of that class,
were cited. But Lord Denman, C.J., in delivering judgment,
said:"
" I do not dispute the cases on the game laws which have been
cited, but there the defendant is in the first instance shown to
have done an act which was unlawful unless he was qualified, and
then the proof of qualification is thrown upon the defendant. Here,
the plaintiff relies on some thing done or permitted by the lessee,
and takes upon himself the burden of proving that fact. The proof
may be difficult where the matter is peculiarly within the
defendant's knowledge, but that does not very the rule of law."
"And in the same case, Littledale, J., said:"
"In the cases cited as to game, the defendant had to bring
himself within the protection of the statutes, and a like
observation applies to
Apothecaries' Co. v. Bentley. But
here, where a landlord brings an action to defeat the estate
granted to the lessee, the onus of proof ought to lie on the
plaintiff."
"And this ruling has been upheld by subsequent cases.
Toleman v. Portbury, L.R. 5 Q.B. 288;
Wedgwood v.
Hart, 2 Jurist, N.S. 288;
Price v. Worwood, 4 H.
& N. 512. "
Page 123 U. S. 319
Mr. Greenleaf states the rule in equivalent terms. He says, 1
Greenleaf on Evidence § 78:
"To this general rule that the burden of proof is on the party
holding the affirmative, there are some
exceptions, in
which the proposition, though negative in its terms, must be proved
by the party who states it. One class of these exceptions will be
found to include those cases in which the plaintiff
grounds his
right of action upon a negative allegation, and where, of
course, this negative is an essential element in his case."
And in § 80:
"So where the negative allegation involves a charge of
criminal neglect of duty, whether official or otherwise,
or fraud, or the wrongful violation of actual lawful possession of
property, the party making the allegation must prove it, for in
these cases the presumption of law, which is always in favor of
innocence and quiet possession, is in favor of the party
charged."
In the present case, the facts shown are in our opinion not
sufficient to overcome the presumption of innocence on the part of
the register and receiver of the land office. It is quite
consistent with these facts that real persons, whether under their
own or under assumed names, did actually appear before them and
make preemption claims. There is no testimony whatever tending to
establish directly any complicity on their part with the fraud
which may have been practiced upon them, and not through them. It
is certain that there were real persons acting in the matter. The
purchase price due on the entry of the lands was in fact paid.
There is no proof of any actual fabrication of the papers, the
genuineness of which is not negatived by any internal evidence. The
allegations in the bill that they were in fact manufactured by the
register and receiver and Hunt, or by anyone with their connivance,
are entirely unsupported by direct evidence.
It is alleged in the bill also that
"by the rules and regulations which then and since have governed
it in the issue of patents for land located with agricultural
college scrip, no patent was issued by your orator except on
presentation at its General Land Office by the person making such
location, his agent or his assign, of the duplicate certificate as
aforesaid delivered to the locator for the land for which a patent
is
Page 123 U. S. 320
claimed,"
and
"that after the forwarding by the said Stanton and Cook of said
supposed proofs of preemption, said agricultural college scrip,
said money, said nonmineral affidavit, and said duplicate
certificate, in each of the said pretended preemption claims as
aforesaid mentioned, to your orator's General Land Office at
Washington, the said Alexander C. Hunt, pretending to act as agent
of each of said supposed preemptors, presented to the officers of
the General Land Office such other duplicate certificate of
location, and requested said officers to cause a patent for each of
the said several pieces of land to issue from your orator to the
said supposed persons in each case purporting to claim and apply
for the same."
And it is added that the officers of the General Land Office,
confiding in the honesty of the register and receiver and believing
the statements contained in the proofs to be true, did issue its
patents therefor. The allegation is that the patents were issued to
Hunt. In point of fact, it appears from the evidence that a number
of patents were delivered to Britton and Gray W. P. Dunwoody, and
W. W. Cowling, respectively, through whom the duplicate
certificates were presented to the General Land Office for that
purpose. There is no allegation that these were not real persons,
nor are any charges made against them as participants in the fraud.
They professed to represent the parties entitled to the patents;
they must have known for whom in fact they were acting. There is
nothing to show that they were not accessible as witnesses. From
the correspondence in the record, it appears that Britton and Gray
were transacting business in the City of Washington, and that
Cowling was also a resident of the District of Columbia. None of
these parties was called by the government as witness. Whatever may
be said as an excuse for the failure to call Hunt and Stanton and
Cook, on the ground that they are charged with being the actual
conspirators in the fraud, no reason can be assigned for not
calling Britton and Gray Dunwoody, and Cowling.
Neither do we think the reason assigned as an excuse, on the
part of the government, for not calling the register and receiver
as witnesses is valid or satisfactory. One of them, it
Page 123 U. S. 321
was said at the bar, had died. But the other might and ought to
have been examined. He was one of its own officers, through whom
the government had received the price of the lands sold, and which
it has ever since retained. If his official conduct was impugned,
nevertheless his misconduct, if proved, was not imputable to the
defendants, and they should not be prejudiced by the odium of an
accusation against him. The United States had trusted him, and,
inspired by that confidence, the defendants also had relied upon
his official acts. In this faith they had paid full value for what
they had reason to believe was a perfect title. They were not
accused of any complicity with, nor had they any knowledge of, the
fraud charged. In the absence of direct proof of his guilt, the
government could not properly treat the defendants as his
confederates, nor deprive them of any defense which as a witness he
might be able to make for himself. The United States had no higher
interest at stake than to establish the truth and justice of the
transaction. It was due from it to these parties, whose estate this
suit was instituted to defeat, to produce and examine as witnesses
those who must have had the best knowledge of the facts, so as not
to force the defendants to explanations which, by the very theory
of their innocence and ignorance, they were incapable of making. To
raise a suspicion, however strong, of the fraud and wrongdoing of
its own officers is not enough to justify the government in casting
upon the defendants the burden of establishing their title.
In addition warranty deeds, made to Jackson as trustee, were put
in evidence by the government, reciting a consideration in each
case, amounting in the aggregate to $52,200, to the payment of
which Jackson also testifies. Each of these deeds was executed,
acknowledged, and recorded in conformity with law. They were
regular on their face, the acknowledgments purporting to have been
taken by public officers before whom, it is recited, the grantors
severally appeared and acknowledged their execution. These
officers, if called and examined as witnesses, would probably have
thrown some light upon the transaction, and should have been
examined upon the points in issue. It is to be presumed that they
could
Page 123 U. S. 322
have testified whether any persons in fact appeared before them
at the times and places named in their certificates, and whether,
if so, they were identified as being the persons named as grantors
in the deeds. None of them was in fact called on the part of the
United States, and no reason is assigned for not having done so. It
thus appears that the government did not make all the proof of
which the nature of the case was susceptible and which was
apparently within its reach.
On the other hand, the defendants, by their evidence, have fully
established all the steps by which they became connected with the
transaction. The lands were bought and paid for at their full value
by William S. Jackson, acting for himself and associates, who
united together for the purpose of making purchases of land in that
region, upon Jackson's belief and assurance of its ultimate value,
expecting it to increase by the building of railroads and general
growth of the country. He arranged with Hunt, who was engaged in
dealing in lands and had been governor of the territory, to pay for
titles to such lands as he might accept. Hunt submitted to him
descriptions of lands which he said he could control, from which
Jackson made selections. For these Hunt sent to Jackson deeds duly
executed, attested, and acknowledged, accompanied by receiver's
certificates in regular form, showing that the party named as
grantor was entitled to a patent. These he was advised by counsel
to accept, and did accept in good faith, as being equivalent to
patents. In many instances, the patents were issued before the
deeds were executed. Jackson had no connection whatever with making
the proofs of preemption and had no knowledge in reference thereto
except such as was disclosed by the deeds and certificates, in
reliance upon which, and without visiting the lands, or having them
examined, he bought. The deeds to Jackson were duly acknowledged
before competent officers by persons certified to be the grantors
therein named. The transactions were several, as regards the
various tracts of land, and successive, during more than two years,
the deeds being delivered within a period extending from May 2,
1873, to May 21, 1875. The circumstance that many of the
acknowledgments of the deeds were taken
Page 123 U. S. 323
in Arapahoe County before a notary in Hunt's office, while the
grantors purported to be residents of Las Animas County, was not
calculated to raise any suspicion of fraud, as Jackson supposed
that Hunt was dealing with the preemptors, and was procuring their
deeds to be executed for delivery to him, and it was natural to
expect that this would be done at Hunt's own office. In fact,
fourteen of the acknowledgments were taken before other officers,
and some of them in Las Animas County. That Jackson and his
assigns, the coal and town company, and its successor, the coal and
iron company, in good faith believed that they had acquired a valid
title to these lands is manifest from their subsequent dealing with
them. They not only paid full value for the lands in the condition
in which they were, but they made large investments thereon in the
way of improvements. At the time of the organization of the
consolidated company, there were upon the premises described in the
bill coke ovens and machinery in connection therewith, buildings
constituting the Town of El Moro, and coal mine improvements,
consisting of entries, rooms, gangways, tracks, chutes, repair
shops, houses, and store buildings. Coal was then, between six and
seven years after Jackson's purchase, being mined upon one quarter
section, and the Town of El Moro covered thirty or forty acres,
comprising twenty to twenty-five buildings, erected by various
individuals, to whom the company had sold lots in accordance with a
regular survey and map of the town site. The entire value of the
mine and coke improvements was estimated to be about $250,000. The
property was used by the company in connection with works which
they had established at South Pueblo for the manufacture of iron
and steel, on which there had been an expenditure of from one to
two millions of dollars, the coal and coke necessary for carrying
on which was obtained from the coal mines on part of the premises
in dispute. As against interests of this magnitude and value vested
upon a claim of title, the good faith of which on the part of the
defendants is absolutely unimpeached, the proof of a fraud which
renders their title absolutely void should be stronger than the
legal presumptions on which it may rightfully rest.
Page 123 U. S. 324
It is urged in argument by the Solicitor General that this case
cannot be distinguished from that of
Moffat v. United
States, 112 U. S. 24. The
two cases are undoubtedly similar in their general aspects, but
nevertheless differ in some particulars most material to the
decision. It is stated in the report of the case cited that "the
testimony taken fully established the truth of the allegations and
charges, except as to the knowledge by Moffat and Carr of the
alleged frauds." The charges proven, or to be taken as proven
therefore as set forth in the bill, were that the title papers in
the case were manufactured by a clerk in the office of the
receiver, and that the receiver was also the owner of the
agricultural college scrip used to pay for the lands located, and
that, for the purpose of locating the land with it in the name of
Quinlan, the register and receiver had inserted in a blank
endorsement his fictitious name and residence, and in that name had
located the scrip on the land, there being no such person nor any
settlement and improvement on the land, and that the duplicate
certificate on which the patent issued was presented to the General
Land Office by the defendant himself, who was thus brought into
direct connection with the officers who had committed the fraud,
and with the transaction before the issue of the patent. In that
case, Moffat did not offer his deed in evidence, was not examined
as a witness, and attempted no proof either of his own innocence,
or of the payment of value, but stood without explanation as to who
his immediate grantors were or how he came in contact with them.
The receiver was examined as a witness, but wholly failed to meet
the charges alleged against him. There was further proof tending to
show that the acknowledgments of the deeds to Moffat had been taken
without identification of the grantors from whom Moffat received
his deeds directly, and in respect to whom he must have had some
knowledge. These circumstances, in our opinion, clearly distinguish
that case from the present one.
There is, however, another ground on which it is contended by
the government that the patents described in the bill are void. It
is alleged that the lands in controversy were not subject to
settlement and sale under the preemption laws, being
Page 123 U. S. 325
"known mines" within the description of those laws. The Act of
September 4, 1841, 5 Stat. 455, c. 16, § 10, provided that no
preemption entry should be made on "lands on which are situated any
known salines or mines." By the Act of July 1, 1864, 13 Stat. 343,
c. 205, § 1, it is enacted
"That where any tracts embracing coal beds or coal fields
constituting portions of the public domain, and which as 'mines'
are excluded from the preemption act of 1841, and which under past
legislation are not liable to ordinary private entry, it shall and
may be lawful for the President to cause such tracts, in suitable
legal subdivisions, to be offered at public sale to the highest
bidder, after public notice of not less than three months at a
minimum price of twenty dollars per acre, and any lands not thus
disposed of shall thereafter be liable to private entry at said
minimum."
The language of the preemption act of 1841 is preserved in §
2258 of the Revised Statutes. The act of 1864 and its supplemental
Act of March 3, 1865, 13 Stat. 529, c. 107, were substantially
reenacted by the Act of March 3, 1873, 17 Stat. 607, c. 279, now
embodied in § 2347 of the Revised Statutes and the sections
immediately following. The force and meaning of the original
legislation remains unchanged. The subsequent provisions relate to
the classification and terms and mode of entry and sale of the coal
lands excluded from preemption by the laws on that subject. In
reference to coal lands, which are noted on public surveys and
plats as such, of course, it is not to be disputed that their
character is thereby made known so as to withdraw them from entry
under the preemption and homestead acts. Where this is not done it
remains, as in the present case, to determine how the character of
the lands is to be ascertained, so that they may be classified as
those "on which are situated any known salines or mines."
It is argued by the Solicitor General upon the facts as
disclosed by the evidence in this record that the lands covered by
these patents embraced "known mines" of coal, and that, as such
lands are expressly excepted out of the preemption laws, the
patents issued therefor were void for want of power on the part of
the officer to issue them, as decided in
Polk
v.
Page 123 U. S. 326
Wendall, 9 Cranch 87;
Minter v.
Crommelin, 18 How. 87;
Reichart
v. Felps, 6 Wall. 160;
Morton v.
Nebraska, 21 Wall. 660. In the last-named case,
Morton v. Nebraska, it was said (p.
88 U. S.
674):
"The salines in this case were not hidden as mines often are,
but were so incrusted with salt that they resembled 'snow-covered
lakes,' and were consequently not subject to preemption."
In
McLaughlin v. United States, 107 U.
S. 526, the decree of the circuit court cancelling the
patent, on the ground that it purported to convey lands as part of
a railroad grant which were excepted therefrom as mineral lands,
was affirmed. The Court said (p.
107 U. S.
528):
"It is satisfactorily proven, as we think, that cinnabar, the
mineral which carries quicksilver, was found there as early as
1863; that a man named Powell resided on the land and mined this
cinnabar at that time, and in 1866 established some form of
reduction works there; that these were on the ground when
application for the patent was made by the defendant McLaughlin as
agent of the Western Pacific Railroad Company, and that these facts
were known to him. He is not, therefore, an innocent
purchaser."
See Western Pacific Railroad Co. v. United States,
108 U. S. 510.
In the case of
Mullan v. United States, 118 U.
S. 271, after referring to the acts of Congress above
recited, the Court, speaking of the Act of July 1, 1864, said (p.
118 U. S.
277):
"This is clearly a legislative declaration that 'known' coal
lands were mineral lands within the meaning of that term as used in
statutes regulating the public lands, unless a contrary intention
of Congress was clearly manifested. Whatever doubt there may be as
to the effect of this declaration on past transactions, it is clear
that after it was made, coal lands were to be treated as mineral
lands. That the land now in dispute was 'known' coal land at the
time it was selected no one can doubt. It had been worked as a mine
for many years before, and it had upon its surface all the
appliances necessary for reaching, taking out, and delivering the
coal. That Barnard knew what it was when he asked for its location
for his use is absolutely certain, because he was one of the agents
of the coal company at the time, and undoubtedly acted in its
behalf in all that he
Page 123 U. S. 327
did. If Mullan and Avery were ignorant of the fact when they
acquired their respective interests in the property, it was because
they willfully shut their eyes to what was going on around them and
purposely kept themselves in ignorance of notorious facts. But the
evidence satisfies us entirely that they were not ignorant."
It will thus be seen that so far as the decisions of this Court
have heretofore gone, no lands have been held to be "known mines"
unless at the time the rights of the purchaser accrued there was
upon the ground an actual and opened mine, which had been worked,
or was capable of being worked.
In the case of
Deffeback v. Hawke, 115 U.
S. 392, the legislation on the subject was reviewed at
length. It was there held that no title from the United States to
land known at the time of sale to be valuable for its minerals of
gold, silver, cinnabar, or copper can be obtained under the
preemption or homestead laws, or the town site laws, or in any
other way than as prescribed by the laws specially authorizing the
sale of such land, except in the States of Michigan, Wisconsin,
Minnesota, Missouri, and Kansas. The Court said (p.
115 U. S.
404):
"We say 'land known at the time to be valuable for its minerals'
as there are vast tracts of public land in which minerals of
different kinds are found, but not in such quantity as to justify
expenditures in the effort to extract them. It is not to such lands
that the term 'mineral,' in the sense of the statute, is
applicable. . . . We also say lands known at the time of their sale
to be thus valuable in order to avoid any possible conclusion
against the validity of titles which may be issued for other kinds
of land in which years afterwards rich deposits of mineral may be
discovered. It is quite possible that lands settled upon as
suitable only for agricultural purposes, entered by the settler,
and patented by the government under the preemption laws, may be
found, years after the patent has been issued, to contain valuable
minerals. Indeed, this has often happened. We therefore use the
term 'known to be valuable at the time of sale' to prevent any
doubt's being cast upon titles to lands afterwards found to be
different in their mineral character from what was supposed when
the entry of them was made and the patent issued. "
Page 123 U. S. 328
It is not sufficient, in our opinion, to constitute "known
mines" of coal, within the meaning of the statute that there should
merely be indications of coal beds or coal fields of greater or
less extent and of greater or less value as shown by outcroppings.
The act of 1864 evidently contemplates a distinction between coal
beds or coal fields excluded from the preemption act of 1841 as
"known mines," and other coal beds or coal fields not coming within
that description. We hold, therefore, that to constitute the
exemption contemplated by the preemption act under the head of
"known mines," there should be upon the land ascertained coal
deposits of such an extent and value as to make the land more
valuable to be worked as a coal mine, under the conditions existing
at the time, than for merely agricultural purposes. The
circumstance that there are surface indications of the existence of
veins of coal does not constitute a mine. It does not even prove
that the land will ever be under any conditions sufficiently
valuable on account of its coal deposits to be worked as a mine. A
change in the conditions occurring subsequently to the sale,
whereby new discoveries are made, or by means whereof it may become
profitable to work the veins as mines, cannot affect the title as
it passed at the time of the sale. The question must be determined
according to the facts in existence at the time of the sale. If
upon the premises at that time, there were not actual "known mines"
capable of being profitably worked for their product, so as to make
the land more valuable for mining than for agriculture, a title to
them acquired under the preemption act cannot be successfully
assailed. In the present case, the testimony, in our opinion, does
not justify us in finding that at the time Jackson acquired his
title, there were upon any part of the premises in controversy any
"known mines" of coal in the sense of the statute.
For these reasons, the decree of the circuit court is
Reversed, and the cause remanded, with a direction to
dismiss the bill, and it is so ordered.