United States v. Sierra Nevada Wood & Lumber Co.

HAWLEY, District Judge. These are bills in equity to cancel a patent issued September 15,1864, by the United States to W. tí. Chapman, as the agent and attorney in fact for one Charles Musso, upon the ground of fraud. The five cases were tried together. The principles of equity applicable thereto are the same in each case. Has the government, upon the facts stated, shown such a superior equitable right to that of the defendants to the lands in question as to entitle it to recover? From the stipulated facts it is apparent that the controlling question in each case is whether the defendants, being bona fide purchasers of, and having the legal title to, the lands herein involved, without knowledge of the fraud committed upon the government in obtaining the patent through which they derived their title, are entitled to a decree. This question, in the light of the adjudicated cases, is too well settled in favor of the defendants to require any extended discussion. The undisputed facts affirmatively show that a fraud was committed upon the United States, sufficient in equity, as against the parties perpetrating it, or' ihose claiming under them with notice of it, to justify the cancellation of the patent. But it is manifest that the fraud that was committed was not such as prevented the passing of the legal title by the patent. This being true, it necessarily follows that, to a bill in equity to cancel the patent upon this ground, the defense of a bona fide purchaser, for value, without notice, is perfect. Boone v. Chiles, 10 Pet. 177, 209; Colorado Coal & Iron Co. v. U. S., 123 U. S. 307, 8 Sup. Ct. 131; U. S. v. California & O. Land Co., 1 C. C. A. 330, 49 Fed. 695 496; Id., 148 U. S. 31, 41, 13 Sup. Ct. 458; U. S. v. Dalles Military Road Co., 2 C. C. A. 419, 51 Fed. 629, 638; Id.. 148 U. S. 49,13 Sup. Ct. 465; U. S. v. Winona & St. P. R. Co. 15 C.C. A. 96, 67 Fed. 948, 960; U. S. v. Southern Pac. R. Co.. 76 Fed. 134,137. The reason ior protecting innocent purchasers holding the legal title is that a court of equity only acts upon the conscience of the parly, and, if he has done nothing which taints it, no demand pan attach upon it, so as to give jurisdiction in equity. Clear and strong as the equity of the United States in these cases must be admitted be, it is self-evident that it is no clearer or stronger than that of the innocent purchasers of the legal title to the lands, who paid a valuable consideration therefor, and have made many valuable improvements thereon in good faith, without any notice of the illegal acts committed by (.he person or persons who wrongfully and fraudulently obtained the patent from the United States. Justice and equity der mand that they should have protection and relief. Tin ¡y committed no fraud. They have acted with a clear conscience, and are not guilty of any wrong. They relied, and liad the right to rely, upon the patent issued by the government in a ease where it had the unquestioned jurisdiction and right to issue the patent. The fact that the government was imposed upon is not their fault. They cannot be held responsible for the fraud of others, of which they had no notice. The United States has no equitable title to the lands which is superior to the rights of the defendants and bona, tide; purchasers thereof. A decree in each case will be entered in favor of the defendants.