McLeod v. United States

MORROW, Circuit Judge (after stating the facts as above). It is contended on behalf of the appellant that the titles to the land involved in these cases were conveyed by the patents and became vested in the appellant, who was a purchaser for value without notice of any fraud, and that such titles in him cannot be divested in these actions. In support of this contention, the appellant relies upon the decision of the Supreme Court in the case of Colorado Coal & Iron Co. v. United States, 123 U. S. 307, 8 Sup. Ct. 131, 31 L. Ed. 182. The bill of complaint in that case charged that the pre-emptors and patentees were fictitious persons, having no existence in fact, and that the pre-emption papers, together with the signatures thereto, were fraudulently manufactured by the conspirators named for the purpose of cheating and defrauding the United States of its title to the lands in question. The defendant set up as a defense that it was a purchaser of the lands in good faith for a valuable consideration, without any knowledge or notice of any or either of the fraudulent acts and conspiracies in the bill. It had been held by the Circuit Court that the charge in the bill that [263] the supposed pre-emptors and patentees were fictitious persons, having no existence, was sufficiently proved, and that consequently, there being no grantees, no legal title passed from the United States, and that, as the defendants acquired no legal tille by virtue of the supposed conveyances to them, they could noi claim protection as bona fide purchasers for value without notice of the fraud. The Supreme Court, after staling that “it is, indeed, an elementary doctrine of equity that, where a grantor lias been induced by fraud to part with the legal title to his property, he cannot reclaim it from subsequent innocent purchasers for value,” approached the question to be determined in the case wilh this statement: "Henee it becomes necessary, to support the decree oí 1he 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.” In other words, did it sufficiently appear from the evidence that the grantees were in fact the names of fictitious persons? The Circuit Court held that it did. Was it right in so holding*? This was the question presented to the Supreme Court. For the purpose of determining this question, the court proceeded to consider the preliminary question as to the “character and degree of proof necessary in such cases lo invalidate titles held by purchasers in good faith for value, and without notice, under patents issued by the United States.” The court found the answer to this preliminary question in the Maxwell Land-Grant Case, 121 U. S. 325, 379, 381, 7 Sup. Ct. 1015, 1029, 30 L. Ed. 949, where the court had said among other things: “We lake 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 loaves the issue in doubt.” With this rule before it, the court reviewed the evidence in the case tending to show the fact that the names of the grantees were fictitious, and found that it was not clear, unequivocal, and convincing upon that issue. On the contrary, the court found that: “There is no proof of any actual fabrication of the papers, tile 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 any one with their connivance are entirely unsupported by direct evidence.” Manifestly if this case has any hearing upon the question before this court, it is against the position taken by the appellant, for, had the evidence in the case before the Supreme Court been clear, unequivocal, and convincing to the effect that the grantees named in the patents did not in fact exist, but were fictitious persons, the court would have held with the Circuit Court 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. In the present cases there are no such issues. The grantees named in the patents were the names of fictitious persons used for the express purpose of carrying into effect a [264] conspiracy to defraud the United States of the title to its public lands. Upon this established fact, the conclusion follows that the title to the lands did not pass from the United States because there, were in fact ,no grantees. The appellant also cites the case of the United States v. Sierra Nevada Wood & Lumber Co. (C. C.) 79 Fed. 691. In that case the patent was issued by the United States in the name of Charles Musso, a half-breed Indian, but a real person. There was no fraud upon the United States in any of the proceedings in the Patent Office pri- or to the delivery of the patent, but the patent was delivered by an officer of the government by mistake to the wrong person who obtained it by forgery and by impersonating the grantee. The person who fraudulently obtained the patent conveyed the land to an innocent purchaser for value, and the court held that the title of the innocent purchaser could not be defeated by an action to cancel the patent. This case is cited for the evident purpose of supporting the contention that if there is a real person seeking to obtain the title in a fraudulent manner, and in carrying out his scheme he personates another to whom the conveyance is made, the fraud will not defeat the title in the hands of a subsequent innocent purchaser for value and without notice of the fraud. But this doctrine does not aid the appellant, since the real persons seeking to obtain title to the land in a fraudulent manner in these cases before the court were not personating real persons, who would be entitled to 'the land, as was the fact in United States v. Sierra Nevada Wood & Lumber Co. They carried out their scheme of fraud, not by personating real persons, but by using fictitious names; and, the patents being issued in such fictitious names, no titles passed for the reason that there were no real persons named in whom the titles could be vested. The titles therefore remained in the United States, and the fictitious names took nothing. We agree with the court below that the present cases clearly come within the principles announced in the case of Moffat v. United States, 112 U. S. 24, 5 Sup. Ct. 10, 28 L. Ed. 623. That was a case in which the register and receiver of public moneys of the land office at Pueblo, Colo., forged a complete record of two pre-emption entries, together with proofs of settlement and improvements thereon, one in the name of Philip Quinlan, and the other in the name of Eli Turner, both fictitious persons. The proofs purported to have been made by two witnesses who were also fictitious and mythical persons. The register and receiver also presented a quantity of college scrip, issued by the state of Florida in the name of the fictitious person, Philip Quinlan. In that case the title to the land appears to have become vested in innocent purchasers, and the court in affirming the decree of the lower court in confirming the patents used the following language : “The patents being issued to fictitious parties could not transfer the title, and no one could derive any right under a conveyance in the name of the .supposed patentees. A imtent to a fictitious person is in legal effect no more than a declaration that the government thereby conveys the property to no one. There is, in such case, no room for the application of the doctrine that a subsequent bona fide purchaser is protected. A subsequent purchaser [265] is bound to know whether there was, in fact, a patentee, a person once in-being, and not a mere myth, and lie will always be presumed to take liis conveyance upon the knowledge of the truth in this respect. To the application: of tills doctrine of a liona fide purchaser there must be a genuine instrument having a legal existence, as well ns one appearing on its face to pass the title. It. cannot arise oil a forged instrument or one executed to fictitious, parties, that is. to no parties at all, however much deceived thereby the purchaser may be.” ]t follows that the decrees in these cases must be affirmed, and it is-so ordered.