In 1858, C. located a bounty land warrant issued to L. under the
Act of March 3, 1855, c. 207, taking a certificate of location,
which was recorded in the office of the recorder in the county in
which the land was situated. No patent was issued. In 1864, under
authority of the Act of June 23, 1860, c. 203, but without notice
to C., the Secretary of the Interior cancelled that warrant. It was
admitted that the assignment upon it, purporting to be that of L.,
was a forgery. On the records of the Land Department up to 1886, it
appeared that a full and equitable title to the land had passed to
C., and in that year, D., having obtained conveyances from C.,
applied to the Land Department for leave to purchase on payment of
the regular price, and his application was granted. Meanwhile the
land had been sold for nonpayment of state taxes, and the tax title
had passed into H. D. commenced suit against H. to quiet title, and
the Supreme Court of Iowa sustained the decree of the trial court
in his favor.
Held:
Page 165 U. S. 145
(1) That as the supreme court of the state held that the
equitable title apparently conveyed by the proceedings in the
United States Land Office in 1858 was of no effect, and the tax
titles based thereon of no validity, it was apparent that a right
claimed under the authority of the United States was denied, and
therefore this Court had jurisdiction.
(2) That, though a formal certificate of location was issued in
1858, there was then in fact no payment for the land, and the
government received nothing until 1888; that during these
intervening years, whatever might have appeared upon the face of
the record the legal and the equitable title both remained in the
government; that the land was therefore not subject to state
taxation; that tax sales and tax deeds issued during that time were
void; that the defendant took nothing by such deeds; that no
estoppel can be invoked against the plaintiff; that his title dates
from the time of payment in 1888; that the defendant does not hold
under him, and has no tax title arising subsequently thereto, and
that there was no error in the decision of the supreme court of the
state.
This case comes up on error to the Supreme Court of the State of
Iowa. The facts are these: on May 19, 1858, Robert Craig located
bounty land warrant No. 27,911, issued to William Long under the
Act of Congress of March 3, 1855, 10 Stat. 701, upon the land in
controversy, and obtained from the proper land officer a
certificate of location. This certificate was recorded in the
office of the Recorder of Carroll County, the county in which the
land is situated. No patent was issued thereon. On February 1,
1864, the Secretary of the Interior cancelled the land warrant
under authority of an Act of Congress of date June 23, 1860, 12
Stat. 90. This act provided that whenever it should appear that any
land warrant was lost or destroyed, whether the same had been sold
or assigned by the warrantee or not, the Secretary of the Interior
should cause a new warrant to be issued, which new warrant should
have all the force and effect of the original, and upon such action
the original warrant was to be deemed and held to be null and void,
and any assignment thereof fraudulent; and, further, that
"no patent shall ever issue for any land located therewith
unless such presumption of fraud in the assignment be removed by
due proof that the same was executed by the warrantee in good faith
and for a valuable consideration."
The second section authorized the Secretary
Page 165 U. S. 146
to prescribe such rules and regulations as might be appropriate
for carrying the act into effect. It was alleged in the petition
filed in this case that, the assignment on the warrant purporting
to be that of Long, the warrantee, was a forgery, and this
allegation was admitted by the defendant. The action of the
Secretary was taken without, so far as appears, any notice to
Robert Craig. Nothing was done, either in the local land office or
in the Land Department at Washington, to formally cancel the
certificate of location. Up to the year 1886, the records of the
Land Department showed on their face a full equitable title passing
to Robert Craig by virtue of his certificate of location, and
payment therefor in a land warrant. During these years, the land
was subjected to taxation by the officers of Carroll County, Iowa,
and was sold for nonpayment of taxes, and the titles under such tax
sales passed to Bernhard Hussman, defendant below.
In 1886, William H. Durham, plaintiff below, having obtained
conveyances from Craig, applied to the Land Department for leave to
purchase the land upon payment of the regular price. This
application was granted under authority of Rule 41 of the
Department of the Interior, published on July 20, 1875, which reads
as follows:
"When a valid entry is withheld from patent on account of the
objectionable character of the warrant located thereon, the parties
in interest may procure the issuance of a patent by filing in the
office for the district in which the land is situated an acceptable
substitute for the said warrant. The substitution must be made in
the name of the original locator, and may consist of a warrant,
cash or any kind of scrip legally applicable to the class of lands
embraced in the entry."
The money, $150, was paid by Durham in 1888, and a patent
issued, of date October 3, 1889, to Robert Craig, his heirs and
assigns. It recited a payment by "F. M. Hunter, trustee for Robert
Craig," and was delivered to said trustee, to be held until the
rights of these parties could be judicially determined. Thereupon
Durham commenced this suit in the District Court of Carroll County,
Iowa, to quiet his title as against the defendant, holding the tax
titles. The district court entered
Page 165 U. S. 147
a decree in his favor, which was affirmed by the supreme court.
88 Ia. 29.
MR. JUSTICE BREWER, after stating the facts in the foregoing
language, delivered the opinion of the Court.
A motion to dismiss was submitted by the defendant in error, but
as the supreme court of the state held that the equitable title
apparently conveyed by the proceedings in the United States land
office in 1858 was of no effect, and the tax titles based thereon
of no validity, it is apparent that a right claimed under the
authority of the United States was denied, and therefore this Court
has jurisdiction.
On the merits of the case, we remark that while it is
undoubtedly true that when the full equitable title has passed from
the government, even prior to the issue of a patent conveying the
legal title, the land is subject to state taxation,
Carroll v.
Safford, 3 How. 441;
Witherspoon v.
Duncan, 4 Wall. 210, yet until such equitable title
has passed, and while the land is still subject to the control of
the government, it is beyond the reach of the state's power to tax.
Railway Company v.
Prescott, 16 Wall. 603;
Railway
Company v. McShane, 22 Wall. 444;
Tucker v.
Ferguson, 22 Wall. 527,
89 U. S. 572;
Colorado Company v. Commissioners, 95 U. S.
259. Therefore the validity of the tax titles held by
plaintiff in error depends upon the question whether the equitable
title to the land had passed from the government to Craig.
We remark in the second place that under such a tax law as
exists in Iowa, there is no privity between the holder of the fee
and one who claims a tax title upon the land. The latter title is
not derived from, but in antagonism to, the former. The holder of
the latter is not a privy in estate with the holder of the former.
Neither owes any duty to the other, nor is
Page 165 U. S. 148
estopped from making any claim as against the other.
Hefner
v. Insurance Company, 123 U. S. 747,
123 U. S. 751;
Turner v.
Smith, 14 Wall. 553;
Crum v. Cotting, 22
Ia. 441; Burroughs on Taxation 346.
Neither can it be said that, on the issue of a patent, the title
by relation always dates of the time when the certificate of
location was issued. A title by relation extends no further
backward than to the inception of the equitable right. If no
equitable right passed by the surrender of the land warrant and the
certificate of location in 1858, but only by the payment of the
money in 1888, the legal title created by the issue of the patent
has no relation back of this later day. In other words, the United
States does not part with its rights until it has actually received
payment, and if, by mistake, inadvertence, or fraud, a certificate
of location (which is equivalent to a receipt) is issued when in
fact no consideration has been received, no equitable title is
passed thereby, and a conveyance of the legal title does not
operate by relation back of the time when the actual consideration
is paid. These views have been recognized in Iowa as elsewhere.
Thus, in
Reynolds v. Plymouth County, 55 Ia. 90, it
appeared that certain forged and counterfeit agricultural college
scrip was located upon a tract of land, and that after the issue of
the certificate of location and before any patent, state taxes were
assessed and levied thereon. Thereafter the forgery was discovered,
the locator substituted genuine scrip or money, and a patent was
issued. The court held that the taxes thus assessed and levied
during the interval between the original illegal entry and location
and the subsequent substitution of genuine scrip or money were
invalid, saying:
"In order to protect a title or to attain the ends of justice,
the courts will, under the doctrine of relation, which is a fiction
of law, hold that a title began at the date of an entry or location
upon the public lands. But this doctrine cannot be invoked to
burden the holder of a title and require him, in violation of
justice, to pay taxes when he held neither the equity nor title of
the lands."
A similar doctrine was announced in
Calder v. Keegan,
30 Wis. 126.
See also Gibson v.
Chouteau, 13 Wall. 92,
Page 165 U. S. 149
in which this Court, on page
80 U. S. 101,
said:
"The error of the learned court consisted in overlooking the
fact that the doctrine of relation is a fiction of law adopted by
the courts solely for the purposes of justice, and is only applied
for the security and protection of persons who stand in some
privity with the party that initiated proceedings for the land, and
acquired the equitable claim or right to the title. The defendants
in this case were strangers to that party and to his equitable
claim, or 'equitable title,' as it is termed, not connecting
themselves with it by any valid transfer from the original or any
subsequent holder."
It is, however, said by counsel for plaintiff in error that, as
it does not appear that any notice was given to Craig, the finding
of the Secretary of the Interior that the assignment was a forgery,
and the order directing the cancellation, cannot be regarded as
binding upon Craig, or affecting the rights vested in him by the
surrender of the land warrant and the issue of the location
certificate. In other words, as in this respect the Secretary of
the Interior is a tribunal with limited and special jurisdiction,
proof of notice to the parties interested is essential to sustain
the validity of any adjudication. Not questioning the proposition
of law as thus stated, there are two sufficient answers to its
applicability to the present case: first, as Craig and those
claiming under him thereafter dealt with the government upon the
assumption that the adjudication was binding, one who is not in
privity with them cannot challenge their acceptance of that
adjudication, and secondly, on the record, the parties hereto have
admitted that the assignment of the warrant by Long to Craig was a
forgery. Craig therefore had no title to the warrant, and this
formal surrender by him of the instrument was an invalid act,
neither defeating the title of Long nor releasing the government
from its promise to convey to Long or his genuine assignee the
specified number of acres.
The case therefore stands in this way: confessedly, though a
formal certificate of location was issued in 1858, there was then
in fact no payment for the land, and the government received
nothing until 1888. During these intervening years,
Page 165 U. S. 150
whatever might have appeared upon the face of the record, the
legal and the equitable title both remained in the government. The
land was therefore not subject to state taxation. Tax sales and tax
deeds issued during that time were void. The defendant took nothing
by such deeds. No estoppel can be invoked against the plaintiff.
His title dates from the time of payment in 1888. The defendant
does not hold under him, and has no tax title arising subsequently
thereto.
With respect to the suggestion of counsel that it is a hardship
that one who has changed wild land into a farm, and greatly
improved it, should, after the lapse of many years, be deprived of
the benefit of those improvements by reason of an undisclosed
defect in the record title, it is sufficient to say that there is
nothing in this record to indicate that the defendant ever made any
improvements, or expended a dollar otherwise than in paying for the
tax title. We cannot, of course, take the intimation of counsel in
the brief as evidence of a fact not appearing on the record.
Further, so far as the money paid for taxes is concerned, it is
familiar law that a purchaser of a tax title takes all the chances.
There is no warranty on the part of the state. Beyond this, the
statutes of Iowa contemplate a return of taxes when it is disclosed
that the land was not subject to taxation. 1 McClain's Rev.Stat.
1888, § 1387, p. 353. We see no error in the decision of the
Supreme Court of Iowa, and it is therefore
Affirmed.
