Freese v. Scouten

The opinion of the court was delivered by HoiítoN, C. J.: The answer of the defendant Charles E. Lewis alleged that the entry of the land mentioned in the mortgages executed by Edward Seouten had been canceled on September 8, 1888, by the commissioner of the general land office of the United States. If nothing further appeared in the case, this would be conclusive; because this court will presume that it was done upon sufficient evidence and in ac cordance with the rules of the land department. (Swigart v. Walker, 49 Kas. 100; Fernald v. Winch, 50 id. 79.) Section 2283 of the Revised Statutes of the United States provides that these Osage Indian trust lands shall be “sold to actual settlers ... in accordance with the general principles of the preemption laws, . . . under the direction of the commissioner of the general land office.” The supplemental acts of May 28, 1880, further provide that the land depart [352] ment shall prescribe all necessary rules and regulations for the disposition of these lands. If Edward Scouten was not an actual settler on the mortgaged land at the date of his entry, with the qualifications of a preemptor, he was not entitled, under the United States statute and the rules and regulations of the land department of the United States, to purchase or obtain any interest in the land. The commissioner of the general land office of the United States, before the issuance of the patent, had full authority, upon a valid contest, to pass and decide upon the qualifications of an applicant to enter and purchase a tract of the Osage trust land. If the entry of Scouten to the mortgaged land was illegal and fraudulent, Scouten obtained no title thereto or interest therein, and the Showalter Mortgage Company obtained no legal or equitable interest by its mortgage or tax certificates, and the plaintiff, the assignee of the mortgage company, standiug in the shoes of the company, acquired no more rights than the mortgagee; that is, nothing. (Kohn v. Barr, 52 Kas. 269, 34 Pac. Rep. 880.) But to the answer of Lewis, the plaintiff replied that, on March 10, 1885, at the time that Scouten made his entry of the land, he was an actual settler thereon, having all the qualifications of a preemptor, and that, within the terms of the Uuited States statutes, he became the legal purchaser of the land, paid in full for the same, and received his final certificate; that he afterwards executed the mortgages of which the plaintiff is now the owner and holder; that the alleged contest between Lewis and Scouten over the land was in pursuance of a fraudulent conspiracy entered into between them for the purpose of defeating the liens of the mortgages, and that the cancellation of the entry of Scouten, by the commissioner of the general laud office, was procured by their fraudulent agreement and conspiracy; that neither the Showalter Mortgage Company nor the plaintiff had any notice of such proceedings; and that, having been procured by fraud, without notice, the cancellation is wholly void. As to the entry of [353] Osage Indian trust laud, see United States v. Edward, 33 Fed. Rep. 104: Grisgby v. Smith, (ruling of Secretary Noble, July 17, 1889), 7 Dec. Dep. Int. 98. If the commissioner of the general land office was imposed upon by a collusive and fraudulent contest between L;wis and Scouten, without any merit therein, but instituted for the s de purpose of apparently changing the title and interest of the mortgaged land From Scouten to Lewis, to cheat and d>,fraud the Showaiter Mortgage Company, or the plaintiff, its as-signee, neither the mortgage company nor the plaintiff is concluded thereby. It is conceded that neither had notice of such proceedings. If such were actually the case, the cancellation by the commissioner was obtained by the fraud of Scouten and Lewis, to deprive others of their legal rights in the laud. The purchaser of Osage Indian trust land, after having complied with the law and received his final certificate, may lawfully remove from the land, or sell or mortgage it. The subsequent settlement of another upon such land, if entered and paid for by the legal applicant, is subject to the applicant’s right. (Grigsby v. Smith, supra.) Deeds, contracts, judgments, decrees and orders to which parties may resort to cover fraud, and through which they attempt to impose upon others or to obtain unfair and illegal advantages, will not be permitted by the courts to obstruct justice, or to impair the lawful rights of others not parties thereto. A judgment or decree obtained by fraud clearly established binds no court, and may be attacked in a collateral proceeding by a stranger. As was said by this court in Redden v. Tefft, 48 Kas. 302: “Fraud and crime have no standing in the courts upon which to build ‘rights or equities. Whatever fraud creates, justice will destroy.” In view of the allegations of the reply, the trial court should have received the evidence offered to prove that Lewis purchased this land from Scouten, or bis grantee, before his entry, and afterwards-entered into a collusive and fiaudulent contest with Scouten to set aside his entry, for the purpose of defeating the mortgages which had been executed by Scouten. [354] Farther, it was also error to sustain the demurrer to plaintiff’s petition for a new trial, in view of the allegations of the newly-discovered evidence of the collusive and fraudulent agreement and conspiracy of Lewis and Scouten to obtain the cancellation of the entry of Scouten, and thereby to defraud the mortgage and tax holders. If all that is alleged in the reply and in the petition for a new trial shall be established upon another hearing, then Lewis will hold' the land subject to the mortgages and tax liens. If, under such circumstances, a patent were to issue to Lewis from the United States, he would hold the legal title of the land in trust for Scouten, at least to the extent of the mortgage and tax liens thereon. The judgment of the district court will be reversed, and the cause remanded for a new trial. All the Justices concurring.