Wisconsin Lumber Co. v. State ex rel. Gillespie

Anderson, L, delivered the opinion of the court. This is a bill by the state, the appellee, on the relation of the land commissioner, against the Wisconsin Lumber Company, the appellant, to have declared void the claim of appellant to a large quantity of land iu Issaquena and Sharkey counties, and “escheat” the same to the state. Appellant demurred to the bill. The demurrer was overruled, from which decree appellant was granted this appeal to settle the principles of the cause. The bill sets out substantially these facts: That in 1899 and 1900 H. B. Aden, W. G. Grubbs, and B. C. Johnson, desiring to purchase and get possession of a large quantity of the public lands belonging to the state in Issaquena and Sharkey counties, for the purpose of speculating therein, and being familiar with the statutes of the state limiting the purchase of such lands to not more than one quarter section by one person in any one year, entered into a scheme and conspiracy with ninety-six other persons (appellant not being one of the conspirators) “to directly or indirectly evade and contravene the provisions of the land office chapter [chapter 73] of the [Annotated] Code of 1892, especially section 2564 thereof.” That in furtherance of such scheme the said Aden, Johnson, and Grubbs, by and with the consent of-such other persons, on February 14, 20, 21, March 2 and 4, and April 3, 1899, and May 24, 1900, applied to and purchased from the state, through the land commissioner, a’ large quantity of the public lands in the names of such other persons, to whom patents were duly issued, which were recorded in said counties of Issaquena and Sharkey. “That all of said purchases were made for the sole benefit of the said Aden, Grubbs, and Johnson, for the purpose, as aforesaid, of indirectly acquiring said lands in contravention of said section 2564, Ann. Code 1892, and the preceding sections of the chapter, entitled Land Office, and were not made in good faith by the respective purchasers thereof. That in fact no money whatever was paid — 594 — by said parties, who appeared to be the purchasers of said lands, and to whom the patents were actually issued; but that the money so paid to the land office was paid by the said Aden, Grubbs, and Johnson for their own benefit as aforesaid.”’ That in furtherance of such conspiracy the said patentees, a few days after said patents were issued to them, conveyed all of said lands to either the said Johnson or the said Grubbs, some being conveyed to one and some to the other, to whom deeds were made and duly recorded in the deed records of the counties of Issaquena and Sharkey, and that afterwards, by various deeds, said lands wore conveyed by said Johnson and Grubbs “to a succession of vendees, until finally they were conveyed to one T. K,. Lyon, as shown by the different deeds recorded in the records of said counties.” That on October 29, 1907, and on July 15, 1908, the said Lyon conveyed all such lands to the appellant, a nonresident corporation, now in possession thereof, claiming title to the same. That by reason of such conspiracy and fraud the title to said lands never passed out of the state. That the patents were void ab initio, and therefore the appellant got no title thereto. There is no charge in the bill that appellant either knew of or participated in the alleged fraud; but that appellant was not a bona fide purchaser for value, because it had constructive notice of such fraud, as shown by the records of said patents and deeds, which constituted part of its chain of title. The bill contains a description of the lands, with the name of each patentee, the quantity of land patented to each, the price paid the state ($1 per acre), showing that there was not more than one quarter section purchased by any one of the patentees in either one of said years 1899 or 1900. The grounds of demurrer raise the question whether there is any equity on the face of the bill. It is contended that the case of State v. Delta & Pine Land Company, decided by this court in 1892, is conclusive of this — 595 — case in favor of appellant. That case, being nnreportecl, the opinion therein delivered is herein set ont: “State of Mississippi v. Delta & Pine Land, Co. “Woods, L, delivered the opinion of the court: “It would be rash to affirm that the state has ever had any fixed policy in its legislation touching what are known as its swamp and overflowed lands. The statutes providing for the disposition of these lands reflected the shifting views of the several legislatures which undertook to deal with them. The prices of the lands have varied, from time to time, by legislative enactment, from ten to fifty cents per acre. Now and then preference in purchase has been declared in favor of the actual settler upon the lands-; and the terms and conditions have varied from time to time. If there has ever been any fixed policy, it has extended no farther than that of putting the lands in the hands of private owners and so thereby subjecting them to taxation. “The manner of the acquisition of the patents to the lands embraced in this litigation neither violated the letter nor the spirit of acts 1877, c. 15. In the proviso to the third section of this act it is declared that no person shall be allowed to enter more than 21-0 acres of said lands under that act. What the purpose designed to be subserved by this proviso was, it is impossible now to say with any degree of certainty. That it was designed to secure homesteads to the patentees nowhere appears. There is no hint of any such purpose, either in this act or in any other general legislation touching the same subject-matter. The object contemplated may have been to prevent persons generally from being deprived of what was then esteemed the poor privilege of securing patents to these lands by preventing large entries by single individuals. If this was So, the record fails to show that any single person was deprived of the privilege by the particular manner employed in the sales of the lands in controversy. — 596 — “The lands were sold to a large number of persons and in tracts not exceeding 240 acres. How or by whom they were paid for is immaterial; and that they were quickly resold by the patentees at an advanced price confessedly is also fmma.terial. ■ There can be no decent pretense for contending that, under the law, the patentees were required to settle upon the lands or occupy them as homesteads. The sole condition of sale was the payment of an acreage price of twenty-five cents per acre by the patentee. Having entered the lands and paid for them, it was clearly the right of the owner to sell them as and to whom he would. We are unable to see that a contract to resell before entry at all affects the validity of the entries. Nor do we see how the fact that Evers advanced the purchase price of the lands to the patentees can be held to affect their right to subsequently resell at an increased price, even in pursuance of a contract made before the lands were entered. “Who was wronged by the course pursued? The state received the full price demanded for its lands, sold in tracts of 240 acres, and no private person is even suggested as having been prevented from making any purchase desired. No public policy was infringed, and tens of thousands of acres of lands held by the state were placed upon the tax rolls, and subjected to taxes in the hands of private owners. Who was injured? What wrong was' done ? Wherein was the spirit or letter of the law offended. The equities of the case are with respondents too. Eor nine years the state has acquiesced in the transaction without complaint or dissent. The lands have passed out of the hands of the patentees and their vendees, and have been borne during all these years upon the assessment rolls, and have been subjected to the burdens of taxation, in the hands of their owners, to the extent of thousands of dollars. The sales complained of were not made secretly or in a corner, but openly and with the full knowledge and long acquiescence of the state. — 597 — “The decree of the chancery court must be affirmed. “Affirmed.” It is contended for the state that the statute in question here (section 2564, Ann. Code 1892) is materially different from the’ statute construed in that case (the proviso to section 3, p. 34, Laws'1877), and therefore it is not authority for appellant. The last clause of section 3, p. 34, Laws 1877, provided: “That no person shall be allowed to enter more than 240 acres under the provisions of this act.” While section 2564, Ann. Code 1892, provided: “One person may purchase as much as one -quarter section of the public lands in one year, and no more; and all lands acquired, directly or indirectly, by any person in contravention of this and the preceding sections, shall escheat to the state, and all moneys and fees paid therefor shall be forfeited.” Is there any difference in the purpose and effect of these two statutes, beyond that of the maximum quantity of public lands allowed by each to be purchased by any one person ? Each declared, for the period it was in force, the public policy of the state with reference to such lands. . There is no real difference in the inhibition contained in the respective statutes. In the act of 1877 it is against any person being “allowed to enter more than 240 acres of land,” etc. In section 2465 it is against the “ ‘purchase’ by one person of more than one quarter in one year.” “Enter” and “purchase” in these statutes are convertible terms. The penalty added to section 2564, that “all lands •acquired, directly or indirectly,” in violation of law, “shall escheat to the state,” is the “universal penalty for the violation of such statutes, whether expressed or not.” If not written in the statute, the law writes it there. Eraud is fraud, whether perpetrated “directly or indirectly.” The law would write into the act of 1877 the penalty expressly written into section 2564. The term “shall escheat,” in section 2564, means nothing more than “shall be recovered,” or “shall be reclaimed.” — 598 — Section 2564 is subject to exactly the same construction as that put upon the act of 1877 by the court in State v. Delta & Pine Land Co., supra. We have examined the record in that case. the facts are strikingly similar to the facts of the case at band. The court said in that case : “The manner of the acquisition of the patents to the lands embraced in this litigation neithex; violated the letter nor the spirit of acts 1877, c. 15. * * * ppow by -whom they [the lands] were paid for is immaterial; and that they were quickly resold by the patentees at an advanced price confessedly is also immaterial. * * * We are unable to see that a contract to resell before entry at all affects the validity of the entries. Nor do we see how the fact that Evers advanced the purchase price of the land to the patentees can be held to affect their right to subsequently resell at an increased price, even in pursuance of a contract made before the lands were entered.” There is no escape from the conclusion that that case is decisive of this, in favor of appellant. The ruling in that case, however, is so manifestly unsound and mischievous in its effect that it is hereby overruled. Nevertheless, as contended by appellant, it was a rule of property, covering the period of the transactions here involved. It is the law of this case. To hold otherwise would violate section 16 of the Constitution of 1890 of the state, and section 10, art. 1, of the federal Constitution, denying tbe state the right to pass any law impairing the obligation of contracts. If a contract when made was valid under the laws of the state as then expounded and administered in its courts of justice, “its validity and obligation cannot be impaired by any subsequent action of legislation, or decision of its courts altering the construction of the law.” Hall v. Wells, 54 Miss. 289 (op. 301); Rowan v. Runnels, 5 How. 134, 12 L. Ed. 85; Ohio Life Ins. & Trust Co. v. Debolt, 16 How. 416, 14 L. Ed. — 599 — 997; Muhlker v. N. Y. & H. R. Co., 197 U. S. 544, 25 Sup. Ct. 522, 49 L. Ed. 872. These views render it unnecessary to pass on any other question raised. Reversed and remanded. Afterwards, on motion of the appellant, the appellee admitting that it would be useless to remand the cause for further proceedings, a final decree was rendered in appellant’s favor, denying the .complainant all relief and dismissing the suit.