Bm'OBTEB,
vol. 50. eI aL
UNITED STATES ". STEENERSON
(CwCUCt Own oj .Appeal8, Eighth Circuit. May 16, 1899.)
No. 1i7.
t.
lI'OB TnIB... When the ownership of ,logs lIo11f!gecHo have been out on land belonging to the depends Up!>n ,the ownel'!!hlp of the land,the title to the land may be lnvesttgated and deterDllned in an action of repleVin hrought by the United StllteB to recoYel1 logs., , ,
The commissi,pner of the general land otllce, by virtue of the general power of sup&l'vis!9bvested in him over the acts ,of the register and receiver of the locallal:ld ofllpes, milo' cancel a pre-eJDption entrJ',.and the finaleertiftcate issued to tbe preemptor, on the ground that the entry fraudulently made and void' under Rev. St. U. 8.12262. "','
'
was
&. BAMIl-VALIDITY-COLLATnAL ATTAOK.
,
Whellsuch cancellation has been made the pre-emptor haa no such final adjudi. cation in lHa,faVor in tl:is'cmifidlte isslied'by the local oftlces as that his right to 'the lanll: can DOt. be or tbat the invalidity Of the certificate be adjlldicated in a bro,ugb,t for thatpurvose. 'And tnerefore,in an action Of replevin by,the United States for logs cut on public land!"whtch 4efendant ,claims by virtue ,of the can<;eled entry and certificates, the'United states is entitlild't.o introduce evidenee ofsuchcaneellation, and that the etltry, 'Was fraudu,len,t1 r," made by the,pre.eJDPtor for the purpose of enabling strip tbe land of , OJ' ENi:'Ry-:"EvIDIlNCB':'-'RIlPLEVIN.' , , '
,.
In, the ,Circuit Court of' the, lJttited States for the District of Minnesota::. '" . , ReplevIn b;y the StateS against Christopher Steenerson and others, copart.ners as the, Clear Water Land & Logging COmpany" Hugh Thompson, :Marcus Johnson,for certain logs. ' There was judgment ,Judgment reversed.
in error. . .
Fran'k'B., Kellogg, and a.. A.. Severance, for defendanta ' .. . Before >(JA,LDWELL, Circuit Judge, and SHIRAS,District Judge.
S1I1RM3,J)istrlct Judge. " the for a proper understanding of by record' in this case are as follows: In SepteIllper, 1883, made a pre-emption entry of the S. W. t ofsection 33, township,J47 range 38 W., situated in Beltramicount;y, :Milln. 24J1884, be filed a declaratory statement of pre-emption, o.n,a on 1884,made tinar proof of entry, includIng the payments,aud received a certificate from the receivero,f the land'office at CrooJrston, Minn., showing payment in f\l,¥ for the Jand qamed. On the the was issued to hiIQ. Hanson "executed ,11> 'deed of the land to Andrew Steenerson, who 'was a pt1-rtnt1r)nthe defendant firm,known as the "CIE\ar Water Land ,That company, ?ul'ing 1885-86, la9d named abont 754,000 feet of logs, and placed them cut from in the waters of the Clear Water rh;er.On the 29th of April, 1886, the United States brought the present action in the United States circuit for the district of Minnesota to recover possession of said logs, a.
the.
UNITED STATES V. STEENERSON.
505
writ of replevin being issued and levied, the defendant company giving bond under the provisions of the state statute, and thereby regaining possession of the logs levied on. The case was tried by the court, a jury being waived. On behalf of the United States it was proved that the land named had formed part of the public domain, and that no patent had ever been issued therefor, and that the logs in question had been cut from the trees growing thereon. On behalf of the defendants it was proved that Hans Hanson had enh:red the land as above stated, and had obtained the receiver's certificate, showing final payment in November. 1884. and that the defendant company had cut the logs after that date under right and title derived from Hanson. Thereupon, on behalf of the United States, evidence was offered tending to show that Hanson did not enter the land for the purpose of actual settlement and residence, as required by the provisions of the statute authorizing pre-emption entries, but for the sole purpose of enabling the defendant firm to strip the land of the timber growing thereon; that said firm employed him to make the entry in their interest, and for the purpose named, paying him the sum of $500 for so doing; that the amount of timber cut was far more than was needed for the actual cultivation or improvement of the land; and that, in pursuance of such illegal bargain, as soon as Hanson obtained the certificate showing final payment upon the land. he executed a conveyarwe thereof to one of the defendant firm; and that in the year 1890 the commissioner of the general land office canceled the entry made by Hanson and the final certificate issued to him, on the ground that the entry was not made in good faith, but merely for the purpose of enabling the defendant firm to strip the land of the timber growing thereon. The evidence thus offered was, upon objection made, ruled out, to which ruling exceptions were duly taken, and thereupon judgment was renthe court holding that, "until the indered in favor of the validity of the certificate had been judicially ascertained and declared by some tribunal having authority to invesligate the case and so adjudicate, the United States had no such title or right of possession to the logs in controversy as would enable it to maintain replevin." It is well settled that the United States can maintain an action of replevin to retake logs wrongfuily cut from land belonging to the govemment, and, where the ownership of the logs is dependent upon the question of the title of the lands from which the logs were cut, that issue may be investigated and determined in the action of replevin. Thus in U. S. v. Cook, 19 Wall··591, an action in replevin, brought to recover possession of logs cut upon an Indian reservation in Wisconsin by the Indians occupying the same, and by them sold to the defendant, Cook. the supreme court decided that the fee title of the lands was in the United States; that the Indians had the right of occupancy,but not the right to cut the timber for purposes of sale merely; that such cutting. was waste; that, "under such circumstances, when cut, it became the property ofihe United States absolutely, discharged of any rights of the Indians therein. The cutting was waste, and, in accordance with wellf'lettled principles, the owner of the fee may seize the timber cut, arrest
FlilDERALREPOR'£EB, vol. 50, '1 and that the of the property In, Sch'/'.tletl,'be1:g.v),t!a:m,rtW/fI" .21 Wall. 44i: title to' certain,piuelogs cut from lands state of Wisconsin to aid ,in the constr\lction of railroads . ;defendant was the agent of the state, and the controversy:. was,in fact, between the plaintiff and.the state, it being admitted that the plaintiff bad the actual posses8ion (i)f; the logs when the same were seized by the agent of the 8tate, from wbom. the plaintiff rethat rights of the parties plevied them.'rhesupreme court ownership of, the .lImd .from which the logs were cutrand, :investiglt'tingthat question,theconrt found that the title remained in the state,and, ,so finding, held that"The tltletd l:;helandrem'aining in the state\ the lumber cut upon the land belonged to the' state. Whilst the till'lb(!r: wall standing it constituted a part of the realty; I being severed, ,from the ·soil ,its' charaeter,was, changed;· it be-. came persollalty· .,ut title was a;{fectljld; iP continued, as previously, land,.and could be pursued wherever it tbeproperty of .the oWQ(lr ·. ,All the relw'dies were 'open t() the owner which the law affoi'ds in otiier cases of the removal or conversion , o'f personal property." ,. ,', ' . : '.' "
proceed in trover
:
In Beechl:r v· Wetherby U. 8.5J7 ,-an action in replevin for log!,! cut from a sectioDofland situated inWiscPnsin,-tbe plaintiff claimed title to the land under patents iSsued by .the United States in 1872, and the defendantander patents from the state, iasued in 1865 and 1870. The land had at one time been occupied i by the Mel1Ol;nOnee Indians, but it was claimed that the fee passed, to the. state upon its admission to the Union, and when the Indians cense(j, to occupy it, the right of followed the fee, and hence the land and the right to the timberthllreon became wholly vested in'the state,and henCe passed to the defendants under the patents issued by the s1late. Thus the right to the logs was shown to be dependent upon the ownership of the land ,from which they had been.cut,amdlthat issue required the determination of the question whether the fee of the land. passed- to the state by force of the grant contained in the actlof congress unde:rwhich Wisconsin became a state in the Union, or whether the fee' passed ,by tIiepatents subsequently issued ·by:theUnited States. 'l'he court, aftars. full examination pfthe' facts prp.sented on the record I held that the title oUhe land had passed to the 'state, andtlierefore the plaintiffacquil'ed nothing under the patents issued to him at a subsequent date, and hence had no property in or right to. the timberin dispute. These decisions of the court of last resort settle beyond cavil the propositions that standing timber isa part oLthe realty 'uponwhichit grows; that,'1VheDsevered therefrom, its character changes to personalty I butthe title thereto.is not affected by such severance; that, if cut and carried' away bya wrongdoer, the owner of the land may retake the timber wherever found; that, when thus retaken by means of a writ of replevin, it isopeh to both' parties in the repleVin action to assert title to the realty from which the, timber was cut, as proof of the ownership of the timber; that, when conflicting claims to the title of the
UNITED STATES ,,: STEENERSON.
507
realty are thus asserted, it becomes the duty 'of the court to determine, in the replevin action, whiQh party has the better title to the realty, in order-to determinethe ownership or the timber. From the facts disclosed' on the record now before us it appears that the title to the realty from which the timber was cut was squarely at issue between the parties. The ownership of the logs was clearly dependent upon the question of theownersbip or the land, to which both parties asserted title, and hence it became the duty 'of the court to investigate and adjudicate that issue. On behalf of the United States it was proven that the land was originally part of the public domain, and that no patent orothe! grant oHitle had been made. To meet the prima fame case thus- made, the defendants proved that Hanson had made a preemption entry of the land, had completed the requisite payments and obtained the receipt or certificate of the receiver of the local land office showing such payment in full. Thereupon it was proposed, on behalf of the United States, to introduce evidence tending to show that the entry made by Hanson was not in good faith, and was in fact fraudulent, and mRde solely for the purpose of enabling the defendant firm to strip the land of the timber, and that the commissioner of the land office had canceled the entry on the ground of fraud. The trial court held that, until the validity of the certificate of final payment had been judicially ascertained and declared by some tribunal having authority to investigate the case, the United States had no such title or l:ight of possession to the logs in contro\'ersy as would enable it to maintain replevin. As we gather it from the record, the court held that the entry made by Hanson, and the issuance to him of a certificate of final payment by the receiver of the local land office, regardless of the question of fraud in such entry, conveyed, as against the United States, the title and consequent right of possession of such realty to the pre-emptor in such sense that the United States, in order to revest the title in itself, must institute judicialproceedings to set aside the apparent or defeasible title vested in the pre-emptor and his grantees. In su pport of this view many decisions of the supreme court are cited by counsel, in which it is held that, when the right to a patent for lands has once become vested in a purchaser or pre-emptor, the same are segregated from the public domain, are no longer subject to entry, and the vested right to the patent thereto is equivalent to a patent actually issued. . See CarroU v. Safford, 3 How. 441; Witherspoon v. Duncan, 4 Wall. 210; Stark v. Starrs, 6 Wall. 417; Myers v. Croft, 13 Wall. 291; Wirth v. Branson, 98 U. S. 118; Bimmort8 v. Wagner, 101 U. S. 260; Dejfeback v. Hawke, 115 U. S. 405, 6 Sup. Ct. Rep. 95; Cornelius v. Kessel, 128 U. S. 456, 9 Sup. Ct. Rep. 122. The principle on which these decisions are based is that when a homesteader or pre-emptor has, in good faith, performed all the acts which, under the provisions of the statutes of the United States, are necessary to complete his right to the land, then he becomes, equitably, the owner of the same, and the United States holds the naked legal title as a trustee for his benefit. For the protection of his rights, thus acquired, it is held that in a contest involving the title of the land an established
508,
FEDERAL REPORTER ,vol.
50."
right to.8: patent will be deemed to pe the equi of a patent. Th is rule, however, has been adop.ted solely as a.means fo.r the protection of those who have, in good faith" established a right to a pate.!t by performance of the requisite conditions. The finlll certificate or receipt acknowledging paymellt in full. and signed by the officers of the local land office, is notin terms nor in legal effect a conveyance of the land. It is merely evideMe on behalf of the Flirty to whom ·it is issued. In a contest involving the title to land,c w1::lerein a personcla,ims adversely to the United States, it is open to,such claimant, rwtwithstanding the legal title remains in the United States, to prove that by performance on his part of the requisite acts he has become the equitable owner of the land, and that the United States holds the legal title in trust for him; but, as the claimant in sucbcase has not received a patent or formal conveyance, and has not ,become possessed of the legal title, he is required to show performance, on his part, oitha. acts which, when done, entitle him, under the law, to demand a patent of the land. When evidence of this kind is offered on behalf on thl;l claimant it is open to the United States to meet it by proof of any fact or,facts which, if established, will show that the claimant has not become thereal owner of the realty. If it be true, in a given CMe, that the entry of the land was not .made in good faith,but in fraud of the law, certainly it cannot be said that the claimant has become the equitable owner of the land, and that the United States is merely a.trustee holding ,the legal title for his benefit. Fraud vitiates any transaction based thereon, and will destroy any asserted title to property, no matter. in whl\t form the evidence of such title may exist. The Amistad, 15 Pet. 518; Leagu8 v. De Young, 11 How. 185. It is well settled in Minnesota that in an action of replevin, wherein title to property is claimed under a. deed of assignment or other formal conveyance, the validity .thereof . may be attacked .on the ground of fraud, and such iSl3ue may be determined in the replevin proceedings. Blackrnwn v. Wheaton, 13 Minn. 326, (Gil. 299;) Tupper v. Thurnpson, 26 Minn. 385, 4N. W. Rep. 621; Furrrtan v. Tenny, 28 Minn. 77, 9 N. W. Rep. 172. When it is desired to obtain the cancellation of a deed or patent conveying the legal title of realty on the ground of fraud it is necessliry to invoke the aid of /lo court of equity, but where the relief sought is nqt equitable in it!J .nature a court of law is certainly competent to adjudicate the iSsull;offraud. In the case at bar itis not claimed that a patent to the land had been issued, and therefore the legal title remained in·the United States. The circuit court in effect held that proof of entry and the execution.of the receipt showing final payment deprived the United States of the title to the land, regardless of the question whether. such entry and payment were made in good faith or fraudulently, and that, before the. United States could maintain its right. to the logs in controversy, it must, by the adjudication of some proper tribunal, set aside and cancel the title to the realty held by Hanson under his pre-emption entry. It cannot be questioned that the land department is primarily charged with the duty of supervising the disposition of the public domainj and in cases within its jurisdiction, and
UNITE!) STATES
v.
STEENERSON.
509
w.herein final action has been had authorizing the disposition of land, such action cannot be collaterally assailed. Steel v. Smelting Co., 106 U. S. 447, 1 Sup. Ct.· Rep. 389; Smelting Co. v. Kemp, 104 U. S. 636; Davi8 v. Wiebbold, 139 U. S. 507, 11 Sup. Ct. Rep. 62.8. Thus, if it appears that under the direction of the land office, a patent has been issued to a pre-emptor, or that the right of the pre-emptor to a patent has been finally adjudged in his favor by the department, and nothing remains to be done but the ministerial act of issuing and delivering the patent in accordance with the judgment of the department, then the right of the pre-emptor is by a final judgment of the land department in his favor, which cannot be collaterally assailed; but if it appears in a given case that when, in the proper course of busine&s, the commissioner of the land office was called upon to determine whether the pre-emptor was entitled to a patent, he adjudged that the entry was fraudulent and therefore void, then the claimant is without a final adjudication in his favor and he must resort to other evidence to sustain his claim. It is broadly affirmed on behalf of defendants that the land department had no power to cancel the final receipt for any reason, and that the act of the commissioner in so doing was a nullity. This is the equivalent of the proposition that the issuance of a final receipt or certificate of payloentby the receiver of a local land office ends the control of the department o'ver the land, and deprives the United States of the title thereto, which is certainly not the law. Thus it is said in BeU v. Hearne, 19 How. 262, that"The commissioner of the genel'al land office exercises a general superintendence over the.subordinate officers of his department, and is clothed With liberal powers' of control, to be exercised for the purpose of justice, and to prevent the consequences of inadvertence, il'l'egularity, mistake, and fraud in the important and extensive operations of that office for the disposal of the pUl1lic domain." And in Cornelius v. Kessel, 128 U.S. 456, 9 Sup. Ct. Rep. 122, it is declared that. "The power of supervision possessed by the commissioner of the general land office over the acts of the register and receiver of the local land offices in the disposition of the public lands undoubtedly authorizes him to correct and annul entries of land alJowedby them where the lands are not subject to entry, or the partieEl do not possess the qualifications reqUired, or have preViously entered all that the law permits. The exercise of this power is necessary to the due administration of the land department. If an investigation of the validity of such entries were required in the courts of law before they could be canceled, the necessary delays attending the examination would greatly impair, if not destroy, the efficiency of the department. But the power of supervision and correction is not an unlimited or arbitrary power. It can only be exerted when the entry was made upon false testimony, or without authority of law. It cannot be exercised so as to deprive any person of land lawfully entered and paid for. By such entry and payment the purchaser secures a vested interest In the property, and a right to a patent therefor, and can no more be deprived of it by order of the commissioner than he can be deprlved by such order of any other lawfully acquired property." In the light of these decisions of the supreme court it cannot be successfully maintained that the commissioner of the general land office had
510
'flDERAL 'hPoRTltR vol. 50>
'power action of'the officers o(the iOda! land toant;lul tbnt'tbe Wasfi'audul13rit,'and.sustain(!id,bv but it,il! equally sucb action 'of' 'the, cd,m'ri'isJioner; being, practically ex parte, is not'tfuuclUsiVe, and that it 'issti,lr: to Hanson'. and his grantees to' a'right to me land' by' ptHVing, a valid' entry on his part and byhihi of acts complete a prf'-emption entryj.,J'On the trial below the defendants undertook to assert title to the ownership'of the logsin dispute, by proving entl'y',thefiling of declaratory statement· required by section 2262 bfth,e'Revised paymenf to the receiver. To overcome this evidence the 'United S,tntes .offered show that' the entry so made was fnilldutetit, and the lfeclaratory statement was false, and therefore no tme right to the lartdvested in Hanson or in his' grantees, they being active participantsiQ'stichfraud, such being the express declaration of section 2262 of the Revised Statutes; which reads as follows: "Before any person claIming the benefit of this chapter is allowed to enter lands he'shall make oath' betore the recei veror register of the land district in wihiuh the 'fund is situated that he has never had the benefit of any right or section twenty-two hundred and fifty-nine; that he is not of three hundred and twenty acres of land in any st."\te or tory;. he has not settled lIpon and improved such land to sell the same on bnt in good faith to appropdate it to his own exclusive use; and that he lias not, directly 'or indirectly, made any agreement or contract, in any way or manner. with any person whatsoever, by which the title which he the ,government of the United States shOUld inure, in whqleQr;in part, to the ,p,enefit of any person except himself; and, if any peroath swears falsely in th/l,pllemises, heshall forfeit the money have paid for ,such lanli, and all right and title to the same; and or C,onv13yance which he may have, except in the hands of bona fide pm'chasers, for a valuable consideration, shall be null and void, except as pro,vided in section twenty-two hundJ"ed and eighty-eight. ... ... ..... , THe which the United States sought to introduce tended to prove that Hanson entered the land, not for settlement and improvehim for his o",n benefit, but for the express benefit of the logging.Mmpany, and under an agreemeQt;with them to convAy the land assopn,Q,& it could be done. in order .that the company, under guise of right, might strip the land of the timber growing thereon. Such facts, if proveD,would certainly show that Hanson never acquired a valid title, or equitable, to the land as against the UnitedStates, and as the defefJdants, in support of their .right to the logs cut from the land, put in evidence the entry and declaratory statement made by Hanson, it was opEln to the United States to prove that such entry was in violation oFthe"sta4;ute, and the statement was false, and therefore no rights were acquired thereunder by Hanson or by his grantees, who aided in the perpetrati!?,n oftbe fraud thus ,We. bold, therefore, that it 'to rule out the evidence offered by the United States. The ah'ould have beelladmitted with euch other competent testimony as either of the parties might have offered upon the question of the validity of the entry made by Hansonj that question being one involved in the issues in the case, and one which it was the duty of the court to deter-
to
DIGH'l'B TEMPLA:r&'&
INDEllNlTY 00··· DEBBY.
511
xqlne in, order to adjl!ldi<:ate the oWIlerahip of the logs; The judgment of the court below i/l,tht;lrefore reversed, and the cause ja l'eOUlnded with ,iDstrnctions to srant;a'new ,,'
KmGHTS TE1tJPLAR
&
MASONS'
LiFE No-ln.
INDEMNI'1'Y
00.
fl. BERRY
et tJl.
Oop,'rtof AppeaZl, Eighth. ·Otrautt. May 18,;1899.) L ..dR.I'Bi'lhWfCllf-CoN'PLIC'l' 0., LAW8-'-Loo1Jl 0.. Co'BTBAC'l'.
, Rev. Btdio.S 5.i}82'. Ilroviding thllt, "in all suits upon policies of insurance on life i8fjued, "it shall be no defense tbat the blsured committed suicide, unless suicide in aI1Plyin8" lor policy, any stipulation in the policy to the OoJitrary notwitbstanding, applies to aU life insurances, whether issued by 88ses!!fllent or premiwncompanies, otherWise provided by statute. .. B.urE-RlIi:rau. OJ' ACT. ,.' . ' Aots Mo.l88T, regulating assessment life. insurance companies, is 10); to companies" doing business under thiS act, " and further provides" tliai nothing herein contained shall subject any OOl'foz;,tion doing busill;ess under thisaot tc a'llyother'provisions or requirements * except as herem set forth." Held, that an 'assessment company whioh has not'complied with the requirements of the act Q8nno,tbehea!d section 10 repealed,80 far as applicable 110 assessment compames, the provision of Rev. St. Mo. I 5982, annulling stipulations against payment of insurance in case of swcide. No force can be given an argument that assessment insurance was Dot within the contemplation of the legislature at the time of tbe enactment of Rev. St. Mo. S 6982, in the absence of facts "hoWing that business on that plan was 110t carried on at that time in the state. . I. B.urB-AstBsshNT AND bllQJ'iT SoOIIITIES. An ,aBfessment "life indemnity company," having no lodges. or social, charitable, benevolent, or literary features, and neither paying sick dues, nor giving other at, tention to;members in distreBf or poverty, is a life insuranoe company, all4 iIIlubject to the.rilgulationa imJ?086d by the insurance laws, as distingUished from the laws relating to co-operatlve benevolent societies, although its insurance is COJl,fined in practice, but not by itilCharter, to members of the Masonic fraternity. Rep, 489, aftirmed.
to'
A poliRY .of insurance, ,4oesnot become a binding oontraot until Its delivery, IS governed by the laws olthe state in which the insured Uves,. to whom it was'there delivered by a l'tlsideilt agent of the company, although it was exeouted and (latedat the company's in another ltate. ' '
.
..
In Error to the Circuit Court of the United States for the Western Dismct of Missouri. Action by William Berry and others against Knights Tetnplar & MaIOns' Life Indemnity Company. Trial to the court. Judgment for plaintiffs. Defendant brings error. Affirmed. Samuel P. H'U8lUn and Th0rna8H. Pa'1'1'ish, for plaintiff in error. F. H. Bacon, GeorgeHall,snd E. M. Harbe:r, for defendants in error. Before SANBORN, Circuit Judge, and SRmAS, .District Judge. SHIRAS, District Judge. 'On the 6th day of July, 1885, the Knights Templar & M:Ssons' Life Indemnity Company issued a policy ofinsurance upon thelife·of John B. Berry, wherein it was provided that upon due