DURANGO LAND & COAL CO. v. EVANS et al.

DURANGO LAND & COAL CO. v. EVANS et al. (Circuit Court of Appeals, Eighth Circuit. April 12, 1897.) No. 854. 1. Public Lands—Bill Attacking Decision of Land Department. It is not sufficient, in a bill which seeks to show that a decision of the land department was procured by fraud and imposition, to allege that an affidavit was filed in a land office containing false allegations as to facts in issue in the proceeding in which the decision was made, but, in order that the complainant in such a bill may have a re-examination of such issues, it must be alleged and proved that such false testimony has affected the decision, and led to a result that otherwise would not have been reached; it must be shown that some trick, artifice, or deceit was practiced, preventing a full and fair trial in the land department, or preventing the officers thereof from considering the issues, and reaching a proper decision. 3. Same—Pleading. A bill which seeks to attack a decision of the land department, on the ground that the officers thereof have misconstrued or misapplied the law, must set out the evidence, and state what the department found the material facts to be, in such a manner that the court can separate the department’s findings of fact from its conclusions of law; and unless the findings of fact are disclosed, or enough undisputed facts are disclosed to make it plain that error of law was committed, and the complainant was thereby deprived of its rights, such a bill cannot be sustained. 8. Same—Contest in Land Office—Notice. It is not necessary that notice of a contest before the land department between claimants under conflicting entries of public land should be given to the predecessors in interest of such claimants, who have parted with all their title, when the present claimants of the land are notified, and lake part in the proceedings. Appeal from the Circuit Court of the United States for the District of Colorado. This was a bill filed by the Durango Land & Goal Company, the appellant, in the circuit court of the United States for the district of Colorado, against Roger O. Evans, Reese G. Carlisle, John Tetard, Sprigg Shackleford, and Frank Adams, the appellees, to restrain them from prosecuting any 'suits at law against the appellant, with respect to certain coal lands which were alleged to be in the possession of the appellant; and to restrain them as well from making any conveyance, either by way of sale or mortgage, affecting the title to said lands: The bill further prayed that the appellees, who held the legal title to said lands under a patent theretofore issued by the United States, might be adjudged to hold the same in trust for the appellant, and that they might be compelled to transfer all their right, title, and interest in said lands to the appellant. The grounds upon which such relief was asked were thus stated in the complaint: It was averred, in substance, that on December 1, 1881, Byron McMaster made a cash entry of the lands in controversy, the same being situated in Gunnison county, Colo., by paying to the receiver of the land office of the United States, at Leadville, Colo., the price demanded therefor, as fixed by the laws of the United States; that, on or about said last named day, the usual duplicate final receipt for the money so paid was issued by said receiver to the said McMaster; that on or about December 26, 1882, said receiver's receipt was duly recorded in the official records of Gunnison county, Colo.; that on or about December 26, 1881, William A. Bell, as trustee, purchased the lands in controversy from said McMaster for value, and received a warranty deed therefor, without notice of any adverse claims thereto; that on or about January 1, 1S82, said Bell leased said lands for the term of 99 years to the Colorado Coal & Iron Company, a corporation of Colorado; that said lessee entered into possession of said lands under said lease, opened and developed coal mines thereon, and expended in improvements about $250,000; that ever since said date the Colorado Coal & Iron Company, or its transferee, the Colorado Fuel & Iron Company, or the complainant, the Durango Land & Coal Company, had been, and then were, In the open, actual, notorious, and continuous possession of said lands, and had been engaged during said period in mining and extracting coal therefrom; that during all of said period the complainant, or its predecessors in interest, had paid all taxes and assessments levied thereon; and that on or about the Sth day of January, 1885, the lands in controversy were duly conveyed by the aforesaid William A. Bell to the complainant, the Durango Land & Coal Company, which had purchased the same for value and in good faith, in reliance upon the title thus acquired by it from said Bell, under and by virtue of the aforesaid entry made by the said Byron McMaster. The bill of complaint contained the following additional averments, stating the same in hsec verba: “(6) And your orator, further complaining of the said defendants, says that on or about, to wit, the 27th day of June, 1892, and nearly ten years after the said entry of and payment for said lands by the said McMaster, and after the said improvements had been made as aforesaid thereon, said defendant Koger O. Evans, fraudulently and wrongfully claiming, or pretending to claim, some interest in said lands adverse to the title of your orator, filed in the local land office of the United States at Leadville, in said state of Colorado, an affidavit to the effect that he (the said Evans) had, at some time previous thereto, filed a coal declaratory statement on said lands, and, among other things, alleged therein, upon information and belief, that said entry of the said McMaster was not made for his own use and benefit, and he (the said Evans) made application therein to enter said lands himself. But your orator alleges that at some time prior to the entry of said lands by the said McMaster, and on or about, to wit, the 21st day of October, 1880, the said Evans filed in the United States land office at Leadville, in said state of Colorado, a paper purporting to be a coal declaratory statement, in which he (the said Evans) stated, among other things, that he had discovered and developed coal mines on said lands, and had taken possession of said lands, which statements, your orator alleges, were willfully and knowingly false and untrue, in this, to wit: that he, (the said Evans) never discovered any coal thereon, and never took possession of said lands or any part thereof, and never made any improvements of any kind or description thereon; and therefore your orator says that the said pretended entry and filing of the said Evans were fraudulent and void, and that he (the said Evans) acquired no rights thereby. And your orator further alleges that the said Evans, after filing the said pretended coal declaratory statement, wholly and completely abandoned the said lands and all claims thereto, and absolutely failed to make or attempt to make any final proof of payment therefor within the time, and as required by the coal land laws of the United States, although he was duly notified by the said land office to appear and show cause why his said pretended filing should not be canceled. (7) And your orator alleges that on or about the 27th day of June, 1892, the said defendants, who, during all the time aforesaid, resided near said lands in controversy, and had personal observation and knowledge, at the time they transpired, of all facts hereinbefore stated relating to the said lands, and to the said entry of the said McMaster, and to the purchase of the said lands by the said Bell and your orator, and of the lease and of the operations and improvements carried on and made as aforesaid, conspired and confederated together, for speculative purposes and in bad faith, to deceive the land department of the United States, and to unlawfully and fraudulently obtain from the United States a pretended title to said lands, and to defraud your orator and said lessee of their rights therein, and to unlawfully and fraudulently obtain the benefit of the improvements so made as aforesaid, and to extort from them large sums of money; and, so conspiring and confederating together for said purposes, they, the said defendants, made, or procured to be made, and presented to and filed in the said United States land office, certain statements, applications, and affidavits, alleging, among other things, that said Evans had expended money in developing coal mines on said lands, and that he was at that time in actual possession of said lands, and that he made the entry for his own use and benefit, and not directly or indirectly for the use and benefit of any other party; whereas, in truth and íd fact, * * * the said Evans had never opened or developed any coal mine or mines on said lands, and never discovered any coal thereon, and he was not then, nor had he ever been, in the actual or other possession of said lands or any part thereof; and that he (the said Evans) did not make said entry for his own use or benefit. But your orator alleges that, on the contrary, the only coal ever discovered on said lands', or any part thereof, was discovered by your orator, its grantor, or said lessee or transferee; and that the only coal mines •ever developed or existing- or opened on said lands, or any part thereof, were opened, developed, and worked by your orator, or its grantor or lessee or transferee, as aforesaid; and that said Evans made said pretended entry for the joint use and benefit of himself and the other defendants herein, and under and in pursuance of a prior agreement made by and between them, to the effect that said lands and all pretended claims against your orator and said lessee or transferee should, upon entry and patent, be divided between them. And your orator is informed and believes, and so alleges, that said defendants, and each and every of them, were at said time, and are now, disqualified to enter the said coal lands, or any other coal lands, by reason of the fact that they and each of them had previously exhausted their right in that respect. (8) And your ■orator further alleges that, deceived, misled, and imposed upon by the said false .and fraudulent statements, applications, and affidavits of the said parties as •aforesaid, and without notice either to the said McMaster, or to the said Bell, or to the said lessee or transferee, and without any appearance on behalf of them or any of them therein, the said land department of the United States, contrary to law, and in violation of the statutes of the United States in such case made and provided, proceeded, or pretended to proceed, to a so-called ‘hearing’ or ‘contest’ to determine the respective rights of the said McMaster’s and Evans’ entry; that such proceedings were thereupon had in said pretended contest or hearing that the United States land department canceled, or pretended to cancel, the said entry of the said McMaster, and did, on or about the •31st day of December, 1894, allow, or attempt to allow, the said entry of the said Evans, and thereafter, and on or about the 28th day of February, A. D. 1895, issued to him a patent for said lands, or a portion thereof. And your •orator alleges that the said action, finding, and decision of the United States land department were contrary to law, and without authority of law, and were in violation of the statutes of the United States and of the rights of .your orator, its grantor and lessee, among other things, in this, to wit: that by reason of the .acts and things done and performed by the said McMaster, his grantee, and the said lessee and transferee, as hereinbefore set forth, the said entry of the said McMaster should have been allowed, and a patent of the United States .should have been issued to him by the said land department, and the said pretended entry of the said Evans should have been disallowed and canceled; that there was no evidence before the said land department at said hearing • or contest showing that the said entry of the said McMaster was unlawful or invalid in any respect; and that there was no evidence in said pretended contest upon which the said pretended entry of the said Evans should or could legally have been allowed; that no notice of said pretended hearing or contest was ever given the said McMaster, or the said Bell, or said lessee, the Colorado ■Coal & Iron Company, or its transferee, the Colorado Fuel & Iron Company, and that neither they nor any of them appeared or were represented at said hearing or contest; that your orator, its grantor, and said lessee or transferee have been in continuous, notorious, and open possession of the said lands from about the-day of November, 1881, up to and until about the 27th day of June, 1892, without any notice or knowledge of any adverse or other claim to said lands, or any portion thereof, on the part of the said defendants, or any of them; and that during said time, and long subsequent thereto, and up to a very recent date, your orator, its grantor, or said lessee or transferee, have made ■the said improvements and have paid the said taxes on said lands as aforesaid, —all of which was well known to the said defendants, and all of which facts were entirely disregarded by the said United States land department in said ■pretended hearing or contest; that neither the said Evans nor any of the other defendants ever discovered any coal on said lands, nor did they, or any of them, .at any time take possession of the said lands, or any part thereof, nor did they, or any of them, ever at any time make, or attempt to make, any improvements of any nature on said lands, or any part thereof; that the said Evans did not ■make said pretended entry for his sole use and benefit, but the same was made or attempted to be made for tbe joint use and benefit of all defendants herein, in pursuance of tbe prior agreement between them, and for the purpose of defrauding tbe United States government, and for tbe purpose of depriving your orator and said lessee of their rights in said premises, in violation of the statutes of tbe United States; that the said Evans bad, at tbe time of bis said pretended entry, exhausted all bis rights, powers, and privileges to enter or take up coal lands under tbe laws of tbe United States; that tbe said Evans absolutely and completely abandoned any and all right, title, and claim which ne might have had in or to said lands long prior to bis said pretended entry, and absolutely failed to make final proof and payment for said lands within tbe time prescribed by tbe statutes of the United States in such case made and provided, and failed and omitted in bis said pretended coal declaratory statement to show or claim that be had discovered any coal on said lands, or tbbt be bad opened a mine thereon, or that be bad taken possession thereof: and that be (tbe said Evans) absolutely abandoned tbe said pretended fifing on said lands long prior to bis said pretended entry; and that after said abandonment tbe land department of tbe United States erroneously, and in violation of tbe statutes of tbe United States in such case made and provided, allowed him to renew tbe same, and to appear and be beard at said alleged contest or bearing, all of which facts were entirely disregarded and ignored by tbe said land department of tbe United States in said contest or hearing, wherein and whereby tbe said MeMaster’s entry was disallowed, and which facts, if properly considered, and tbe laws of tbe United States applicable thereto properly and legally construed by tbe said United States land department, would have resulted in tbe cancellation of tbe said pretended entry of the said Evans, and tbe allowance of tbe said MeMaster’s entry, and tbe issuance of a patent to him. Wherefore your orator says that for tbe reasons hereinbefore set forth, and for other and divers matters, facts, and things occurring in and at said pretended bearing or contest, tbe said land department erred, and violated tbe laws of tbe United States in such case made and provided, and more particularly the said act of congress above mentioned, in allowing the said Evans’ entry, and in issuing said patent to him.” Tbe bill further averred, in substance, that, since tbe issuance of said patent to tbe said Evans, be bad conveyed to his co-defendants Carlisle, Tetard, and Shackleford a certain interest in the lands in controversy; that the defendant Adams claimed, or pretended to claim, some interest in or lien upon said lands under and by virtue of a mortgage executed by Evans; and that tbe said defendants were asserting and claiming a title to sáid lands under tbe entry of Evans, and were denying tbe validity of the title asserted by tbe complainant, which depended upon the validity of tbe entry made by said McMaster. Tbe defendants filed a general demurrer to said bill, which, upon a hearing thereof, was sustained, and tbe bill was thereupon dismissed. Tbe case comes to this court on appeal from tbe order sustaining said demurrer, and dismissing tbe bill of complaint. Lucius M. Cuthbert and David C. Beaman (Henry T. Rogers and D. B. Ellis with them on the brief), for appellant. John-R. Smith and Sprigg Shackleford (S. D. Crump with them on the brief), for appellees. Before SANBORN and THAYER, Circuit Judges, and LOCH-REN, District Judge, Rehearing denied May 24, 1897. [MAJORITY — THAYER, Circuit Judge,] THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court. The bill shows affirmatively that on October 21, 1880, Roger 0. Evans filed a declaratory statement against the coal lands in controversy, under the provisions of sections 2347, 2348, and 2349 of the Revised Statutes of the United States; that Byron McMaster was permitted to make a subsequent cash entry of the same lands on December 1, 1881; and that, in view of the conflicting claims thus created, a contest was inaugurated before the land department of the United States, which resulted in the cancellation of the entry made by McMaster, and in the issuance of a patent to Roger C. Evans. The allegations in the bill respecting these proceedings in the land department are very vague and unsatisfactory. The bill simply advises us that Evans filed an affidavit in the local land office at Leadville on June 27, 1892, charging that the entry by McMaster was not made for his own use, and that he (Evans) subsequently obtained a patent for the land in controversy. The further course of the proceeding before the land department, after the affidavit was filed, is not described with any detail or certainty, and but for a casual allusion, made in the brief of counsel for the appellant, to a decision rendered by the secretary of the interior, we should be in doubt whether the contest ever reached the secretary, or was terminated by the decision of some inferior officer of the land department. Enough appears, however, to justify us in presuming, as against the complainant company, that a contest was duly inaugurated by Evans against said company; that it had due notice of Evans’ claims, and opportunity to defend; that it did defend; that the contest ran its course in the prescribed way through the department until it reached the secretary of the interior; and that a patent was ultimately awarded to Evans. Viewed in this aspect, the case at bar is one in which the complainant seeks to set aside and, impeach the judgment of the land department; and the doctrine is too well settled to admit of any controversy that the decisions of that tribunal upon questions properly pending before it can only be annulled when such fraud or imposition is shown to have been practiced as prevented the unsuccessful party in a contest from fully presenting his case, or the officers composing the tribunal from fully considering it, or when such officers have themselves been guilty of fraudulent conduct, or when it is made to appear that, upon the case as established before the land department, the law applicable thereto was misconstrued or misapplied. If fraud is charged as a ground for annulling a decision of the land department, it is not enough that false testimony or forged documents have been employed; but it must be made to appear that such false testimony has affected the decision, and led to a result which otherwise would not have been reached. And inasmuch as the findings of the land department on questions of fact are conclusive, when the charge is that the land department has erred in the decision of a mixed question of law and fact, what the facts were, as laid before and found by the department, must be shown, so as to enable the court to see clearly that the law has been misconstrued. These propositions have been so frequently stated and applied that it is hardly necessary to repeat them. Lee v. Johnson, 116 U. S. 48, 50, 6 Sup. Ct. 249; Quinby v. Gonlan, 104 U. S. 420, 426; Marquez v. Frisbie, 101 U. S. 473, 476; Vance v. Burbank, 101 U. S. 514, 519; Smelting Co. v. Kemp, 104 U. S. 636, 640; Moore v. Robbins, 96 U. S. 530; Shepley v. Cowan, 91 U. S. 330, 340; Johnson v. Towsley, 13 Wall. 72; Sanford v. Sanford, 139 U. S. 642, 11 Sup. Ct. 666. Tested by these rules, we think the allegations of the bill were insufficient to warrant the reliei prayed for, and that the demurrer thereto was properly sustained. Inasmuch as no patent had been issued when the contest was inaugurated, the land department had power to cancel the entry of McMaster, and to determine which of the two entrymen had the superior right to the-land. The questions adjudicated, therefore, were within the jurisdiction of the land department, and its decision cannot be assailed for want of power to hear and decide the case. Mortgage Co. v. Hopper, 29 U. S. App. 12, 12 C. C. A. 293, and 64 Fed. 553, and cases-there cited. Turning, then, to the allegations of the bill which attempt to show that the decision-of the land department was procured by fraud and imposition, it will be observed that the only fraudulent acts alleged are that certain affidavits were filed in the land office by Evans and his associates, alleging that Evans had expended money in developing coal mines on the land in controversy; that he was in actual possession of the lands at the time; that he made-his alleged entry for his own use; and that all of such statements contained in the affidavits were false. Aside from a general allegation of conspiracy among the defendants to fraudulently and unlawfully obtain a patent for the lands in dispute, the foregoing are the only specific fraudulent acts which the bill charges or describes; but, obviously, the issues tendered by these affidavits were the very issues which the land department was appointed to try and determine, and they were each issues of fact, concerning which the-finding of the land department is final and conclusive, unless such-finding was induced by fraud. In the contest pending before the department, the complainant company had an opportunity to show, as it now contends, that all the aforesaid statements were false; and, within the doctrine above stated, it was its duty to have made such showing before the land department, and it will not be excused for failing to do so unless it alleges and proves that some trick, artifice, or deceit was practiced, which prevented it from obtaining a full and fair trial of the issues, or which prevented the officers of the land department from considering the same, and reaching a proper decision. It must be apparent, we think, from a careful reading of the complaint, that no such fraud is alleged, and that, if the circuit court had entered upon a hearing of the issues presented by the bill, it would simply have retried the very case which was tried by the land department. The question whether the bill discloses that, upon the case as presented to the officers of the land department, those officers misconstrued or misapplied the law, remains to be noticed. A fundamental defect in the bill in this respect is that it fails to set out the evidence which was laid before the land department, or to state what the department found the material facts to be, in such a manner that the court can separate the department’s findings of fact from its conclusions of law, and see clearly wherein a mistake of law has been made. It is alleged in one paragraph of the bill “that there was no evidence before the said land department at said hearing or contest showing that the said entry of the said McMaster was unlawful or invalid in any respect, and that there was no evidence in> said pretended contest upon which the said pretended entry of the said Evans should or could legally have been allowed.” These allegations, however, merely state the opinion of the pleader with reference to the evidence which was laid before the department, and’ for that reason they are merely conclusions of law. To enable a court to decide whether the conclusions so stated are right or wrong,, all the testimony with respect to which the aforesaid opinion is expressed should have been set out, inasmuch as the question whether there is any evidence tending to establish a given fact is a question of law, which can only be determined after all the testimony has been, considered and examined. Our attention is also directed to other allegations of the bill, which charge, in substance, that, at the time of his entry on the lands in controversy, Evans had exhausted his power to take up coal lands-under the laws of the United States; that he completely abandoned all his right, title, and interest to the lands long prior to his pretended entry; and that he failed to show in his declaratory statement that he had discovered any coal on said lands, or had opened a mine-thereon. These allegations are made without any apparent reference to the contest before the land department, or to the evidence-with respect to such allegations which may have been laid before the department in the course of the contest, or to the findings of the-department with respect thereto. The allegations are made precisely as they might be if the issues tendered were open to consideration in-the case at bar, entirely unaffected by the findings and decision of the land department. This theory is erroneous. The contest having been tried and determined before a special tribunal constituted for that purpose, its judgment can only be overturned for errors of law, by showing that it misconstrued or misapplied the law applicable to the case made before the land department, and the bill of' complaint does not advise us what evidence was produced before the department relative to Evans’ qualifications to enter coal lands, or-relative to his acts of abandonment. This court cannot say that the law was misconstrued by the officers of the land department,, unless their findings upon questions of fact are disclosed, or enough-undisputed facts are disclosed, which were proven before the department, to make it plain that an error of law was committed, and that the complainant company was therebv deprived of its rights. Marquez v. Frisbie, 101 U. S. 473, 476; Sanford v. Sanford, 139 U. S. 642, 647, 11 Sup. Ct. 666. No decision by the land department would have any weight, or afford any protection to a successful litigant in that department, if, without any statement of what the facts: were as presented to the department, the whole controversy could' be opened in the courts by general allegations, such as are found in the present bill, that the successful litigant had exhausted his-right to enter land, or was otherwise disqualified, or had abandoned his entry. These are matters which were properly cognizable before the land department when the contest was pending. The presumption is that all such questions were brought to the attention of the department, and were duly considered and properly decided. The-burden was on the complainant, therefore, when it sought to reopen the controversy for errors of law, to show what the facts were before the land department to which the law was applied. We are forced to conclude that, by the averments of the present bill, this burden was not successfully discharged. It is insisted, however, that the bill states a cause of action, and sufficiently shows an error of law, such as invalidates the decision of the land department, within the ruling made in the case of Sanford v. Sanford, supra. This position, we think, is untenable. In the case referred to, which was a suit to enjoin an action of ejectment brought by the' holder of a patent, the proceedings before the land department in which the patent had been obtained showed beyond controversy that the patentee had been allowed to file a second declaratory statement against certain land, which was not embraced in his first pre-emption claim, while he continued to hold and occupy the land that he had originally entered. The court held that the filing of such second pre-emption claim was expressly prohibited by section 2261 of the Revised Statutes of the United States, and that it clearly appeared that the land department had misconstrued the law, and deprived the plaintiff of his rights, by permitting such second filing to be made, and in issuing a patent thereon. It was on this ground alone that relief was afforded to the plaintiff against the action of the land department. We fail to see that the decision in question lends any support to the complaint which was filed in the case at bar. It is finally contended that the action of the land department in canceling the McMaster entry, and in granting the patent to Evans, was void, because the bill shows that no notice of the contest which was inaugurated by Evans was given either to McMaster, or Bell, or to Bell’s lessee. It is worthy of comment that the bill contains no direct averment that the complainant company had notice of the contest, but, in view of its failure to allege that no such notice was given, it must be presumed that it was duly notified of the proceedings in question; that it took an active part therein; that it had full opportunity to assert before the land department all the defenses against the Evans entry which it now makes; and that it was eventually defeated. Under these circumstances, we are of opinion that the action of the land department in canceling the McMaster entry is binding upon the complainant, unless such action is successfully assailed for fraud or mistake of law, notwithstanding the fact that its predecessors in interest, who had parted with all of their title to the land in dispute, were not notified of the pending controversy. It results from these views that the demurrer to the bill was properly sustained, and the decree of the circuit court is therefore affirmed.