Court Opinion

ID: 8799247
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:25:11.585034+00
Date Added: 2024-06-11T17:03:48.759355
License: Public Domain

WOLVERTON, District Judge
(after stating the facts as above). As to the second further and separate answer, the .demurrer must be sustained, for the reason that the same question has been previously decided adversely to defendant in this cause. United States v. Jones (D. C.) 218 Fed. 973.
_ [1] The vital question presented by the third further and separate answer is whether a cause for deceit will lie where the alleged deceit practiced is concerning a matter not material to the subject of negotiation. The situation in brief is this: Under the general Homestead Act and other provisions of law having relation to specific territory or localities, and by virtue of sections 2304, 2305, R. S. (Comp. St. 1913, §§ 4592, 4593), and Act Jan. 26, 1901, c. 180, 31 Stat. 740 (Comp. St. 1913, § 5014), relating to the commutation of homestead entries in certain cases, honorably discharged soldiers who have made homestead entries are entitled to have the time of their military service deducted from the time of residence and cultivation required to entitle the homesteader to patent; one year’s residence being required notwithstanding military service. To illustrate: The time of residence under the general homestead law being 5 years, if an honorably discharged soldier had performed military service for 3 years, he would be entitled to have the time of that service deducted from the 5 years., and would be entitled to patent after having resided upon his homestead for the period of 2 years. Now, this regulation was applied by the government as to eight of the persons alleged to have made false and fraudulent final proofs respecting their homesteads. The proofs were of residence of from 13 to 20 months, and of military service to supple*222•ment the same to make out 3 years’ residence on the land, as required by the act of August 15, 1894. The final receipts were all issued prior to the expiration of the 3 years subsequent to entry upon the lands. ,
Properly construed, the act of August 15, 1894, does not admit of any such application. This is conceded, and the Interior Department has so construed the act as applied to the Siletz Indian reservation lands. See letter of Assistant Commissioner, to Register and Receiver, Oregon City, Or., of date July 2, 1902, In re Hattie C. Allebach, H. E. No. 12949. The act of August 15, 1894, as it applies to the Siletz reservation lands, requires -that 3 years’ actual residence on the land shall be established “by such evidence as is now required in homestead proofs” as a prerequisite to title or patent. This means actual residence for the term, not for a portion thereof supplemented by time of military or other service, and manifestly it should have been required of these eight homesteaders 'before final certificates were issued or patents granted to the lands comprised by their homesteads. In issuing the certificates and granting the patents, the Land Department acted under a clear mistake of law, and, even if it be conceded that the proofs submitted were true in every respect, and made in entire good faith, the entrymen were not entitled to title to the lands or to the patents.
Now, having gotten their patents on false proofs, which proofs, if true, would not have entitled them thereto, will the fraud and deceit thus practiced, if it may be so termed, afford grounds upon which the government may have relief in damages against the participants in the fraud? The proofs made were in no wise material to any inquiry pertinent to the establishment of the entrymen’s right to their patents. They were wholly irrelevant to the inquiry that might properly have been made; that is, an inquiry with a view to ascertaining whether 3 years’ actual residence had been made, with cultivation, improvements, etc., as required by the act of August 15, 1894. The general rule on the subject is tersely stated in American 'an4 English Enc. of Law, vol. 14, p. 59, as follows:
“To constitute fraud, a representation must be as to a material fact. With respect to this rule, there is no conflict of opinion, except sometimes in its application. A representation in relation to a fact that is not material to a contract, though it may he false and known to be false hy the person making it, and though it may be acted upon by the other party, is not fraud, either for the purpose of an action of deceit, or for the purpose of rescinding the contract.”
Then again, at page 62:
“It has been said that fraud is material to a contract, if the contract would probably not have been made if the fraud had not been practiced. This, however, is not always true. If a representation is not material, a person has rio right to act upon it, and, if he does, he is not entitled to relief or redress -on the ground of fraud. The question is not whether the person to whom the representation was made -deemed it material, hut whether it was in fact material.”
The rule that the false representations must be of a fact material to the contract or inquiry has the approval of the United States Su*223preme Court. See Marshall v. Hubbard, 117 U. S. 415, 6 Sup. Ct. 806, 29 L. Ed. 919. The Circuit Court in that case instructed the jury, among other things, that:
“Not only must the representations be made, not only must they be fraudulent, and not only must it appear that the party relied, and had a right to-rely, upon them, but it must also be shown that the representations were material to the contract or transaction which took place between the parties.”
Then, after so instructing the court said:
“I think, therefore, that upon the proofs the case is within the rule laid down by the Supreme Court of the United States, namely: The court can now see, upon the evidence that bears upon the question of materiality of the representations, and alleged injury to the defendant, that if the jury were to render a verdict against the plaintiff it would have to set that verdict aside.”
The court thereupon directed a verdict for the plaintiff, the fraud having been set up by the answer as a defense. On appeal to the Supreme Court, the action of the Circuit Court was affirmed, thus approving the holding of the Circuit Court. Other cases hold to the same principle, that the false representations must be of a fact material to-the contract or transaction to constitute actionable deceit. Saxby and Wife v, Southern Land Co., 109 Va. 196, 63 S. E. 423; Hall v. Johnson, 41 Mich. 286, 2 N. W. 55. In the latter case the court says:
“False representations, no matter how acted upon, will not be sufficient to set aside an agreement otherwise valid, unless they were material.”
See Missouri Lincoln Trust Company v. Third National Bank of St. Louis, 154 Mo. App. 89, 133 S. W. 357; Furneaux v. Webb, 33 Tex. Civ. App. 560, 77 S. W. 828; Anderson v. Adams, 43 Or. 621, 627, 74 Pac. 215.
The rule is further extended to comprise alleged false representations as to a fact of which the opposing party had knowledge, or which was patent to him, or of a fact upon which he had no right to rely. In either of such cases the action of deceit will not lie. Prince v. Overholser, 75 Wis. 646, 44 N. W. 775 (citing Slaughter’s Adm’r v. Gerson, 13 Wall. 385, 20 L. Ed. 627); Robins v. Hope, 57 Cal. 493. No misrepresentation concerning the state of a party’s own title to land can be treated as misleading to him. Russell v. Branham, 8 Blackf. (Ind.) 277. A party is not responsible for a misrepresentation of the legal effect of a contract. First National Bank of Elkhart v. Osborne et al., 18 Ind. App. 442, 48 N. E. 256.
Now, applying the doctrine as thus established by the authorities, it is perfectly manifest that the alleged false representations made by the proofs of the eight entrymen and their witnesses were wholly immaterial to the inquiry a.nd to the transactions of the entrymen with the government; and not only this, the representations were of facts upon which the government had no right to rely. The government knew the law and was cognizant of the proper interpretation thereof, and, having such knowledge, it could not be deceived by proofs that had relation to acts that could not in any way be construed as. a compliance therewith.
*224[2] The government seeks to meet this objection to the right of recovery by invoking the doctrine that a party who has effected his purpose through a misrepresentation cannot deny its materiality. Bigelow on Fraud, 497, citing also Fargo Gaslight & Coke Co. v. Fargo Gas & Electric Co., 4 N. D. 219, 59 N. W. 1066, 37 L. R. A. 593, and note. But the law cannot make that material which is absolutely not material, and so appears by the very transaction itself and the law governing the case. The law of estoppel cannot go so far as to make false representations made in one transaction binding in another and a totally distinct transaction.
[3] It is further suggested that the matter of materiality is for the jury, and not for the court.
“Concerning' the elements which go to make up a case of fraud, it is for the court and not for the jury to determine whether, e. g., an inducement held out by one party to another, which the latter professes to have acted upon, is material or not. * * * Generally speaking it is also for the court to interpret language of a perfectly plain nature, unaffected by external facts such as the particular circumstances in which it was used; when so modified, it is for the jury to declare its meaning. But when, as we have just said, the language is plain, and not subject to modification aliunde, the case is for the court; and this is true in principle, whether the language be written or oral. There is no question of the truth of this proposition when applied to written language; and there ought to be none in regard to oral statement, for no sound distinction can be drawn between the two cases.” Bigelow on Fraud, p. 139.
This quotation from Bigelow answers the objection. As it relates to the eight entrymen, I am impelled to the conclusion that the answer states a good defense.
[4] The case of Wells presents the question in a different aspect. Wells made application October 1, 1900, and commuted May 26, 1902. Under the statute (section 2301, R. S. [Comp. St. 1913, § 4589]) Wells was entitled to commute, if so entitled at all, upon making pro.of of settlement and of residence and cultivation for a period of 14 months. The act of August 15, 1894, requires actual residence. Adams v. Coates, 38 Land Dec. Dept. Int. 179.. Wells by his own testimony shows that he had not actually resided on his homestead anywhere near 14 months. He was asked, “How much time sincé entry have you actually lived upon the land ?” to which he answered, “Between the time of entry, viz., October 1, 1900, and the present time I have been there five times, remaining there each time from one to two weeks.”
The government knew from this testimony that Wells had not complied with the law. Notwithstanding, it issued to him the final receipt and later the patent. Being fully- aware of the situation, the government could not have been deceived by the proofs made. Even if true, the proofs did not entitle Wells-to his final receipt or patent. So that, in either aspect, the government could not have been defrauded of the land. If it be argued that the government relied upon the proofs, the natural and pertinent answer is that, knowing the law" and the requirements of Congress in such a case, it had no right to rely upon them, whether true or false, to the extent of approving the claim and issuing final réceipt and patent. Such being the situation, the government is not entitled to an action in deceit
*225The demurrer will be sustained as to the second further and separate defense, and overruled as to the third.
[5] As to the fourth, I am. still of the opinion that this is not the time to pass upon the question involved.
Judgment accordingly.