Case Name: United States v. California & O. Land Co.
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1892-03-10
Citations: 49 F. 496
Docket Number: 
Parties: United States v. California & O. Land Co.
Judges: 
Reporter: Federal Reporter
Volume: 49
Pages: 496–506

Head Matter:
United States v. California & O. Land Co.
(Circuit Court of Appeals, Ninth Circuit.
March 10, 1892.)
Land Grants — Cancellation—Fraud—Bona Fide Purchasers.
In a suit by the United States to forfeit certain lands granted in aid of a military road, defendant claimed to be a bona fide purchaser under a deed which declared that the road company “does hereby alien, release, grant, bargain, sell, and convey” to the grantee, “his heirs and assigns, the undivided one-half of all the right, title, and interest” of the grantor “in and to all the lands lying and being in the state of Oregon, granted or intended to be granted to the state of Oregon by the act of congress approved July 2, 1S64, * * * and granted by the state of Oregon” to the grantor by Act Or. Oct. 24, 1864; “and the undivided one-half of the right, title, and interest ” of the grantor “ to said grant of land under the several acts aforesaid, whether'listed and approved or otherwise; also the undivided pne-half of all future right, title, interest, claim, property, and demand” which the grantor “may at anytime hereafter acquire to any lands by virtue of any further compliance with the requirements of said acts of congréss, together with the hereditaments and appurtenances; * * * to have and to hold the lands hereby granted unto” the grantee, “his heirs and assigns forever. ” ifeld, that this deed shows an intent to grant the lands themselves,, and not merely any interest which the grantor may have therein; and hence that It is not a more quitclaim, such as deprives the grantee oí the right to rely upon the plea oí an innocent purchase ior value. Han-toed, District Judge, dissenting.
Appeal from the Circuit Court of the United States for the District of Oregon.
Suit under Act Cong. March 2, 1889, to forfeit certain lands granted to the state of Oregon by Act Cong. July 2, 1864, to aid in the construction of a military road, and by the state to the Oregon Central Military Hoad Company by the act of October 24, 1864.
STATEMENT BY HANFORD, DISTRICT JUDGE, (DISSENTING.)
This cause has been heard twice í>y the United States circuit court for the district of Oregon, and once by the supreme court of the United States. The opinions of the circuit court on the first hearing and of the supreme court, each containing a full statement of the facts and circumstances from which the case has arisen, have been published, and reference thereto is made for the purposes of this opinion, in lieu of a more extensive and detailed statement. See U. 8. v. Road Go., 41 Fed. Rep. 493; U. 8. v. Road Go., Id. 501; U. S. v. Road Go., and kindred cases, 140 U. S. 599, 11 Sup. Ct. Rep. 988. After being remanded to the circuit court, the case went to trial upon issues joined by a replication to the pleas and answer of the defendant, the California & Oregon Land Company, denying the allegations of the said defendant that the several promoters and organizers of said company were bona fide purchasers of the land in controversy, for the full value thereof, without notice or reason to believe or suspect that there had been any fraudulent act committed or misrepresentation made affecting the title of their vendors, or that the wagon road, in aid of which the lands were granted, had not been wholly, seasonably, and properly completed in accordance with the requirements of the granting acts. The pleadings admit, but only by implication, that the wagon road was never constructed, and that the certificates given by the governor of Oregon were untrue. The only issue of fact in the case is made by the second plea, which is a negative plea, raising simply a question whether the defendant is entitled to the protection which a court of equity gives to bona fide purchasers of the legal title to real estate. The circuit court so construed the pleadings, and held the parties strictly within the limits of that issue in the introduction of evidence, and even made a ruling excluding all evidence offered on the part of the government to prove that the wagon road had never been constructed. Upon the final hearing the following decree was rendered by the circuit court:
“This cause was heard upon the bill, the amended pleas, and answer of the defendant, the California and Oregon Land Company, the replication thereto, the testimony and exhibits, and was argued by Mr. Franklin P. Mays, United States attorney, and Mr. Albert II. Tanner, of counsel, for the plaintiff, and Mr. Rufus Mallory, for said defendant; on consideration whereof the court finds that the certificates of the governor of Oregon, declaring the road mentioned in the bill to have been duly constructed, were truthfully made, without fraud or misrepresentation on the part of any one; and that said defend ant, the California and Oregon Land Company, is the purchaser of the land described in said bill from the Oregon Central Military Road Company, in good faith, for a valuable consideration, and without notice of any fraud or misrepresentation on the part of "said Oregon Central Military Road Company or any one else. It is therefore ordered, adjudged, and decreed that the said plea of said defendant be, and the same is hereby, sustained, and that said bill of complaint be, and the same is hereby, dismissed, as to said defendant, the California and Oregon Land Company.”
Franklin P. Mays, U. S. Atty., and Albert H. Tanner, Sp. Asst. U. S. Atty.
Rufus Mallory and W. C. Belcher, for appellee.
Before Hanford, Hawley, and Morrow, District Judges.

Opinion:
OPINION OF THE COURT.
Hawley, District Judge.
I am of opinion that the circuit court did not err in finding that defendant was the purchaser of the land in question in good faith, and for a valuable consideration, without notice of any fraud on the part of the Oregon Central Military Road Company or any one else. This finding is, in my opinion, fúlly sustained by the evidence, and the court was therefore justified in sustaining the defendant's objection to the testimony offered by complainant, after the defendant had rested its case, to show that said road had never been built, and that the certificates of the governor of Oregon that it was built were obtained by misrepresentation and fraud. In Iron Co. v. U. S., 123 U. S. 313, 8 Sup. Ct. Rep. 131, the court said:
"It is fully established by the evidence that there were in fact no actual settlements and improvements on any of the lands, as falsely set out in the affidavits in support of the pre-emption claims and in the certificates issued thereon. This undoubtedly constituted a fraud upon the United States, sufficient in equity, as against the parties perpetrating it, or those claiming under them with notice of it, to justify the cancellation of the patents issued to them. But it is not such a fraud as prevents the passing of the legal title by the patents. It follows that, to a bill in equity to cancel the patents upon these grounds alone, the defense of a bona fide purchaser for value without notice is perfect. "
Applying the principles therein announced to the facts presented by the record in this case, it necessarily follows that the question whether the road was actually built or not was wholly immaterial, unless it was shown that defendant was a purchaser with notice. Independent of the general principles of law that are always applied by courts where the plea of a bona fide purchaser for value is presented, the act of congress authorizing this and other suits to be brought to forfeit the lands hitherto granted expressly preserved the rights of such purchasers in the following language:
"Saving and preserving the rights of all bona fide purchasers of either of said grants, or any portion of said grants, for a valuable consideration, if any such there be. Said suit or suits shall be tried and adjudicated in like manner, and by the same principles and rules of jurisprudence, as other suits in equity are therein tried." 25 St. at Large, 851.
Without discussing the evidence, it is perfectly clear to iny mind that defendant was a bona fide purchaser for value without notice. This must be admitted, unless it be that the deeds from the Oregon Central Military Road Company to Pengra were quitclaim deeds pure and simple, and that a purchaser under a quitclaim deed cannot claim to be a bona fide purchaser for value. A full investigation of that question would ojien up a wide field of inquiry in regard to which I deem it unnecessary to enter at any length. There are numerous and many conflicting authorities upon this subject, which I shall not attempt to review. It is sufficient to say that, in my opinion, the weight of reason and authorities is made to depend upon the real character of the deed, as to whether or not it purports to convey, or does in fact convey, simply the speculative right, title, and interest of the party, or whether or not it purports to convey, and does in fact convey, the lands mentioned. If the deed is a quitclaim in the strict sense of that species of conveyance, then it will not support the defense of an innocent purchaser. "Whether the conveyance be a quitclaim or not is dependent upon the intent of the parties to it, as that intent appears from the language of the instrument itself. If the deed purporis and is intended to convey only the right, title, and interest in the land, as distinguished from the land itself, it comes within the strict sense of a quitclaim deed, and will not sustain the defense of innocent purchaser. If it appears that it was the intention to convey the land itself, then it is not such quitclaim deed, although it may possess characteristics peculiar to such deeds. Thu use of the word 'quitclaim' does not restrict the conveyance if other language employed in the instrument indicates the intention to convey the land itself." Garrett v. Christopher, 74 Tex. 453, 12 S. W. Rep. (67. The true character of the deed, and the real intent of the parties, is to be determined by the terms of the conveyance itself. 'Phis general idea, is fully recognized by the decisions of the supreme court of the United States. In Van Rensselaer v. Kearney, 11 How. 322, the court, in speaking of the effect of a deed hy way of release or quitclaim of the grantor's right, title, and interest, said:
"But-this principle is applicable to a deed of bargain and sale by release or quitclaim in the strict and proper sense of that species of conveyance; ami therefore, if the deed bears on its face evidence that the grantors intended to convey, and tire grantee expected to become invested with, an estate of a particular description or quality, and that the bargain had proceeded upon that footing between the parties, then, although it may not contain any covenants of title, in the technical sense of the term, still the legal operation and effect of the instrument will be as binding upon the grantor and those claiming under him, in respect to the estate thus described, as if a formal covenant to that effect had been inserted."
The language of the first deed, conveying an undivided one-half interest to Pengra, dated May 12, 1874, is as follows;
"The Oregon Central Military Road Company lias aliened, released, granted, bargained, and sold, and does hereby alien, release, grant, bargain, sell, and convey, unto the said B. J. Pengra, the party of the second part, his heirs and assigns, the undivided one-half of all the right, title, and interest of the said party of the first part in and to all the lands lying and being in the state of Oregon granted or intended to be granted to the state of Oregon by the act of congress approved July 2d, 1864, and granted by the state of Oregon to the said Oregon Central Military Road Company by an act of the legislative assembly of said state of Oregon approved October 24th, 1864, and the undivided one-half of the right, title, and interest of said party of the first part to said grant of land under the several acts aforesaid, whether listed and approved or otherwise; also the undivided one-half of all future right, title, interest, claim, property, and demand which the party of the first part may at any time hereafter acquire to any lands by virtue of any further compliance with the requirements of said acts of congress, together with the hereditaments and appurtenances. To have and to hold the lands hereby granted unto the said party of the second part, his heirs and assigns forever. "
From this language, as well as of all other conditions, reservations, and covenants in said deed expressed, it is clear to niy mind that the parties intended by this instrument to convey, and did convey, the land itself, and that it is not such a quitclaim deed as deprives defendant of the right to rely upon the plea of an innocent purchaser for value. The second deed contains the same language as the first. The deeds from Pengra to Colby and others are regular bargain and sale deeds of the land in question. From a careful consideration of all the evidence in the record, and of the principles of law applicable thereto, I am of opinion that the decision 'and rulings of the circuit court were correct. I am authorized to say that Judge Morrow concurs with me in the views I have expressed. The judgment of the circuit court is therefore affirmed.