SAN PEDRO & CANON DEL AGUA CO v. US , 146 U.S. 120 (1892)

Suit brought by the United States against the San Pedro & Canon del Agua Company in the district court of the first judicial district of the territory of New Mexico to set aside a patent for certain lands. A decree was entered dismissing the bill, which was reversed on appeal to the territorial supreme court, and a rehearing was there applied for and denied. See 17 Pac. Rep. 337. Defendant appeals. Affirmed.

Statement by Mr. Justice BREWER: [146 U.S. 120, 121]   On February 12, 1844, Jose Serafin Ramirez, a citizen of the republic of Mexico, and a resident of Santa Fe, in the department of New Mexico, petitioned the governor of that department for a grant of a tract of land known as the 'Canon del Agua,' together with the confirmation of the title to a mine claimed as an inheritance from his grandfather. The material part of the petition is as follows:

'I apply to your excellency in the name of the donation laws of the 4th of January, 1813, and 18th of August, 1824, and in the name of the Mexican nation, asking for a tract of vacant land known as the 'Canon del Agua,' near the placer of San Francisco, called 'Placer del Tuerto,' and distant from that town about one league, more or less.

'The land I ask for is vacant, and without owner, and I solicit it because I have no possession or property by which I can support my family. The boundaries solicited are: On the north, the road leading from the placer to the Palo Amarillo; on the south, the northern boundary of the grant of San Pedro; on the east, the spring of the Canon del Agua; on the west, the summit of the mountain of the mine known as 'My Own,' as will appear by the accompanying document No. 1, for which I ask your ratification and that of the departmental assembly, in the manner that I received it, as an inheritance from my grandfather, Don Francisco Dias de Moradillos; and I ask that this title be ratified according to the mining ordinances dated [146 U.S. 120, 122]   in the year 1813, title 5, article 1; in view of all of which I pray and request your excellency to grant me possession of the mine, to work it, and the land which it embraces, which is about one league, for cultivation and pasturing my animals, and for grinding ore and smelting metal.

'Jose Serafin Ramirez.

'Sante Fe, February 12, 1844.'

To which petition the departmental assembly and the governor thus responded:

'Departmental Assembly of New Mexico. In session of to-day the departmental assembly decrees that Don Serafin Ramirez, auditor of the departmental treasury, and the other heirs of Don Francisco Dias de Moradillos, deceased, have a right, as grandchildren, to the mine referred to in the petition, and title of possession and property, as expressed in the mining laws; and further decrees that his excellency, the governor of the department, in conformity with the colonization laws, shall grant the tract of land prayed for.

'Martinez, President.

'Thomas Oztiz, Secretary.

'Sante Fe, February 13, 1844. And in answer to your petition I grant you the tract asked for, and revalidation of the title to the mine, which are inclosed herewith. God and liberty.

Mariano Martinez.

'To Don Serafin Ramirez, auditor of the departmental treasury, Santa Fe.'

The same year juridical possession of the tract was given, the description in the certificate thereof being: 'On the north, the road of the Palo Amarillo; on the south, the boundary of the Rancho San Pedro; on the east, the spring of the Canon del Agua; on the west, the highest summit of the little mountain of El Tuerto, adjoining the boundary of the mine known [146 U.S. 120, 123]   as 'Inberited Property,' from this date, according to the colonization laws of the republic.'

By the treaty of Guadalupe Hidalgo, in 1848, (9 St. p. 922,) the territory of New Mexico was transferred to the United States. In 1859, Ramirez filed with the surveyor general of New Mexico his petition, asking official recognition by this government of his grant. The description in this petition was:

'The quantity of land claimed is five thousand varas square, making one Castilian league, and bounded on the north by the placer road that goes down to the yellow timber; on the south, the northern boundary of the San Pedro grant; on the east, the spring of the Canon del Agua; on the west, the summit of the mountain of the mine known as the property of your petitioner, as appears by the original title deeds accompanying the notice, numbered 1, 2, 3, 4, 5.' A hearing was had on this application on the 10th day of January, 1860. The surveyor general reported in favor of the grant, and on June 12, 1866, congress passed the following act of confirmation:

'An act to confirm the title of Jose Serafin Ramirez to certain lands in New Mexico. Be it enacted by the senate and house of representatives of the United States of America in congress assmbled, that the grant to Jose Serafin Ramirez of the Canon del Agua, as approved by the surveyor general of New Mexico January twenty, eighteen hundred and sixty, and designated as number seventy in the transcript of private land claims in New Mexico, transmitted to congress by the secretary of the interior January eleven, eighteen hundred and sixty-one, is hereby confirmed: provided, however, that this confirmation shall only be construed as a relinquishment on the part of the United States. and shall not affect the adverse rights of any person whatever. Approved June 12, 1866. 14 St. p. 588.'

On August 9, 1866, a survey was made by a deputy surveyor, under the direction of the surveyor general of New [146 U.S. 120, 124]   Mexico. This survey, after approval by such surveyor general, was forwarded to the land department at Washington, and on July 1, 1875, a patent was issued granting the land with boundaries as established by this survey. The following is a plat of the property as surveyed and patented:

In 1866, Ramirez conveyed the property to Cooley and others, from whom, in 1880, it passed to the present defendant. Thereafter, and on September 15, 1881, this suit was commenced by the United States in the district court of the first judicial district of the territory of New Mexico, to set [146 U.S. 120, 125]   aside the patent and annul the title conveyed thereby, on the ground of fraud in the survey. An answer was filed, proofs were taken, and the case went to final hearing before the district court. By that court, on February 16, 1885, a decree was entered in favor of the defendant dismissing the bill. From such decree an appeal was taken to the supreme court of the territory, which, on January 28, 1888, reversed the decision of the district court, and entered a decree in favor of the government, setting aside and annulling the patent and the survey upon which it was based, from which decree the defendant has appealed to this court.

George Hoadly, for appellant.

[146 U.S. 120, 130]   A. X. Parker, Asst. Atty. Gen., Warren, Ferguson & Bruner, and Thomas Smith, for the United States.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.

The supreme court of the territory, at the request of the defendant, made and certified a statement of the facts in the case. This is in accordance with the act of April 7, 1874, (18 St. p. 27,) which, in section 2,-a section providing for the exercise of the appellate jurisdiction of this court over the judgments and decrees of territorial courts,-reads: 'That on appeal, instead of the evidence at large, a statement of the facts of the case in the nature of a special verdict, and also the rulings of the court on the admission or rejection of evidence, when excepted to, shall be made and certified by the court below, and transmitted to the supreme court, together with the transcript of the proceedings and judgment or decree.' Construing this statute, it was held, in the case of Improvement Co. v. Bradbury, 132 U.S. 509, 514 , 10 S. Sup. Ct. Rep. 177, that 'the authority of this court, on appeal from a territorial court, is limited to determining whether the court's findings of fact support its judgment or decree, and whether there is any error in rulings, duly excepted to, on the ad- [146 U.S. 120, 131]   mission or rejection of evidence, and does not extend to a consideration of the weight of evidence or its sufficiency to support the conclusions of the court. Stringfellow v. Cain, 99 U.S. 610 ; Cannon v. Pratt, Id. 619; Neslin v. Wells, 104 U.S. 428 ; Hecht v. Boughton, 105 U.S. 235 , 236; Gray v. Howe, 108 U.S. 12 , 1 Sup. Ct. Rep. 136; Eilers v. Boatman, 111 U.S. 356 , 4 Sup. Ct. Rep. 432; Zeckendorf v. Johnson, 123 U.S. 617 , 8 Sup. Ct. Rep. 261.' Hence, notwithstanding the large volume of testimony taken and used in the court below has been incorporated into the record sent to us, we are not at liberty to review that testimony for the purpose of ascertaining whether the findings in the statement of facts are or are not in accordance with the weight of the evidence. This narrows materially the range of our inquiry.

The first proposition of the appellant is that the United States has no interest in the controversy, and did not in good faith institute and prosecute this suit. This claim rests upon the fact that in the record is found the following letter:

'Department of Justice, Washington, October 17, 1883. F. W. Clancy, Esq., 1426 Corcoran St., Washington, D. C.-Sir: To your inquiry whether the United States will pay the costs incurred in the case against the San Pedro and Canon del Agua Company, I answer that the United States has no beneficial interest in the proceeding. It was instituted at the instance of parties who claimed a right to the possession of the lands. Upon their request special counsel were appointed by this department to commence and carry on the suit, but they were not to be compensated by the United States, and it was the understanding of this department, as in other similar cases, that whatever costs and expenses were incurred in the preparation and conduct of the case should be paid by the parties on whose petition the proceedings were instituted. I must decline, therefore, for the government, to pay said costs and expenses, or any part thereof. Very respectfully, Benjamin Harris Brewster, Attorney General.' [146 U.S. 120, 132]   Apparently the attention of the court below was not called to this letter, nor any action taken in reference to it. It simply appears as a paper filed by some one in the clerk's office, and by the clerk, of his own motion, incorporated into the record. Mr. Clancy, to whom the letter was addressed, was up to January, 1883, the clerk of the court in which the suit was pending; subsequently, although, so far as the record discloses, not till after October, 1883, he became one of the counsel for defendant.

There are several reasons why the claim of the defendant in this respect cannot be sustained. In the first place, we have no assurance that the letter is genuine. Such a paper does not prove itself. It was not offered in evidence. The court took no notice of it. It was addressed, not to an officer of the court or a counsel in the case, but to a stranger. The clerk, by merely filing such a document, does not adjudicate that it is in fact that which on its face it purports to be.

Again, even if it be regarded as the letter of the attorney general, it does not contain any such statement as precludes the government from maintaining this action. There is nowhere an intimation that Attorney General MacVeagh, the predecessor of the writer of the letter, when commencing the suit, was not acting in the utmost good faith, and in the belief that the government had a pecuniary interest in the lands, or was under an obligation to third parties, which it could protect only by setting aside this patent; and, while the letter declares that the United States has no beneficial interest in the controversy, it does not deny that the United States is under obligation to other parties respecting the relief invoked; and that, it is now settled, is sufficient for maintaining an action to set aside a patent. U. S. v. Tin Co., 125 U.S. 273 , 8 Sup. Ct. Rep. 850; U. S. v. Beebe, 127 U.S. 338, 342 , 8 S. Sup. Ct. Rep. 1083,-in which latter case it was said: 'And it may now be accepted as settled that the United States can properly proceed by bill in equity to have a judicial decree of nullity and an order of cancellation of a patent issued in mistake or obtained by fraud where the government has a direct interest, or is under an obligation respecting the relief invoked.' See, [146 U.S. 120, 133]   also, U. S. v. Missouri, K. & T. Ry. Co., 141 U.S. 358, 380 , 12 S. Sup. Ct. Rep. 13.

But, chiefly, the statement made by the supreme court shows that in fact there were parties to whom the United States was under obligation in respect to the relief invoked, and also that the government had a direct pecuniary interest in the relief sought. The application for a grant described a tract of vacant land near the placer of San Francisco, called 'Placer del Tuerto,' and distant from that town about one league, more or less. This town, with a varying population of a few hundreds, perhaps thousands, of people, was in existence before the application of Ramirez for the grant, at the date of the annexation of New Mexico to this country, and at the time of the survey and patent. The inhabitants held their possessions by the indefinite and unrecorded titles of dwellers in Mexican villages. By the treaty of cession, as well as the general law in respect to the acquisition of foreign territory, the United States was bound to respect all existing rights, and, among them, the rights and titles of these inhabitants. Yet the survey and patent included the town. It is true that the act of confirmation as well as the patent recites that it is only a relinquishment on the part of the United States, and is not to affect the adverse rights of any person, and it is very likely that the equitable titles of the inhabitants could be established notwithstanding the patent; but the government owed it to them not to burden their equitable rights by an apparently adverse legal title, and, having been induced to do so through the fraudulent acts of the patentee and his associates, it is discharging a moral obligation, at least, when it takes steps to set aside such patent, and to relieve them from the apparent cloud on their title.

Further, the statement of facts finds that-'Outside of the boundary line of the said Canon del Agua grant as granted to said Ramirez by the government of Mexico there was at the time when the supplemental bill in this cause was filed a mining property of great value, known as the 'Big Copper Mine,' yielding valuable quantities of both copper and gold. There were also numerous other mines of the precious metals east of the Canon del Agua spring. [146 U.S. 120, 134]   These mines were and are upon a part of the public domain of the United States, but within the lines of the said grant as fraudulently extended by Ramirez and his confederates aforesaid. The defendant, as shown by its answer to the supplemental bill at the time of the filing of the same, actually occupied and possessed said Big Copper mine, and was extracting ore therefrom, claiming the legal right to do so as against the United States, and was also in possession of the land upon which said other mines were situated, and also claiming the right to the same. The defendant was not so in possession under the mineral laws of the United States as a locator, or claiming under or through any locator by virtue of such mining laws, but was in possession under and by means of the said fraudulent survey, and was claiming under the agricultural patent to Ramirez, the action of the surveyor general thereon, the confirmation by congress, the survey and patent thereunder, the lawful right to hold said mines and extract therefrom the precious metals for its own use, to the exclusion of the United States therefrom, and in defiance of the mineral laws of the United States, predicating such claim of right upon mesne conveyances from parties holding under and by virtue of said patent.

'The possession of the said mine by the defendant as aforesaid, and the manner in which the same is being worked and carried on, is such as to prevent other mining prospectors from locating thereon or making any claim or acquiring any title thereto by location and development under the mining laws of the United States, and, if permitted to continue, would enable the defendant, under claim of legal title, which does not exist, to continuously extract therefrom large quantities of valuable precious metals, and thus greatly to lessen the value of said property, and to hinder and delay the development thereof, and to prevent location thereon and development under the mining laws of the United States. The claim of said defendant constitutes a cloud upon a title to the said mines and upon the right of the United States to open the same to be prospected, located, and developed as mineral land, and deprives it of the revenue which would [146 U.S. 120, 135]   otherwise accrue to it, from such settlement and development.'

The United States has, therefore, a pecuniary interest in maintaining this action, that it may recover possession of these mines and secure to itself the revenue naturally derivable therffrom.

This last matter is also a sufficient answer to the second point made by the appellant, and that is that the prosecution of this suit is barred by laches, for it is well settled that when the government has a direct pecuniary interest in the subject-matter of the litigation the defenses of stale claim and laches cannot be set up as a bar. U. S. v. Oregon Cent. Military Road Co., 140 U.S. 599 , 11 Sup. Ct. Rep. 988, and cases cited in the opinion.

The third point of appellant is that much of the testimony of John B. Treadwell, and the exhibits attached thereto, were incompetent, and should have been excluded, and, because they were not the decree of the supreme court of the territory, ought to be reversed. Mr. Treadwell was a special agent and examiner of surveys for the land department. After this suit had been commenced, he was directed by the land department to proceed to the disputed territory, and make an examination as to the survey. He did so, and, besides making surveyes and taking photographic views, he also obtained 13 affidavits of witnesses, selected by himself, as to boundaries, etc. When called as a witness, he produced these affidavits as part of his testimony, and gave his conclusions as to the proper boundaries of the grant, based partly, at least, upon the information obtained from them. After his deposition containing these matters had been filed in the case, and before the hearing in the district court, two motions were made by the defendant,-one to strike out the entire deposition, and the other to suppress parts of it. Both were overruled, and no exception taken. The district court, as heretofore stated, found for the defendant, and entered a decree dismissing the bill. An appeal having been taken to the supreme court of the territory, the entire record was transferred to that court. There, no new motion to strike out this deposition, or any part of it, was presented, nor were the [146 U.S. 120, 136]   two motions made in the district court renewed in the supreme court, or action asked of that court thereon. Obviously the defendant, relying upon its success in the district court, with this testimony in the case and before the court, did not deem the matter of sufficient importance either to renew the motions made in the district court or to file additional ones, and so let the case pass to the consideration of the supreme court with all the testimony, including this deposition, unchallenged. But our inquiry is limited to the rulings of the supreme court of the territory. It is its judgment which we are reviewing. By the appeal the case was transferred as a whole from the district court to the supreme court. The rulings of the former court did not bind or become those of the latter, either as to the admission or rejection of testimony or the decree to be entered. All the testimony taken and filed in the one court was spread before the other, and was apparently proper for its consideration. If the defendant had wished to narrow the examination of that court to any portion of the testimony, it should by appropriate motion to it have challenged the supposed objectionable parts. Counsel, appreciating this necessity of the case, has endeavored to show that the supreme court did in fact rule on the admissibility of this testimony, but we think his contention is not borne out by the record. Certainly no new motion was filed in the supreme court, or any entry made of a renewal of the motions in the district court, or of a decision thereon; and, if error is to be predicated upon any ruling of the lower court, it would seem that the ruling should affirmatively and distinctly appear. And in this connection notice may well be taken of rule 13 of this court: 'In all cases of equity ... heard in this court no objection shall hereafter be allowed to be taken to the admissibility of any deposition, deed, grant, or other exhibit found in the record as evidence, unless objection was taken thereto in the court below, and entered of record; but the same shall otherwise be deemed to have been admitted by consent.' 3 Sup. Ct. Rep. x.

Upon what grounds does counsel contend that the supreme court did rule upon this matter? In the order of the court refusing the petition for rehearing is the following: [146 U.S. 120, 137]   'The court ... does now overrule such petition, and refuses to grant the same, for reasons set forth in an opinion by Chief Justice Long.'

This was the second reason assigned for rehearing:

'(2) The court bases its conclusion as to the location of said Sierra del Tuerto largely upon ex parte affidavits taken by one John B. Treadwell, without notice to any one, or opportunity for cross-examination, improperly injected into the record of the court below after all the proofs on both sides were closed, which defendant moved to strike out and suppress before the final hearing, as is shown by the record.'

And in the opinion is this statement.

'The defendant has filed a petition for rehearing, assigning therein twelve reasons why the same should be granted. The ... second ... points made are but a repetition of those urged both in oral argument and in the printed briefs, and already fully considered and determined. They present no new consideration, and are fully met by the opinion.'

But this does not show that any motion was made in the supreme court, or any ruling had thereon. The second reason assigned is that the court based its conclusion upon this improper testimony. It is true, reference is made to a motion to suppress, but it is only by way of description of the improper matter, and the motion referred to is one 'shown by the record,' and the only such motion is the one made in the district court. The record shows none in the supreme court.

Again, it is insisted that the denial of the rehearing (one of the grounds therefor being that already stated) is in itself a sufficient objection and exception to the testimony. But when the petition for rehearing was filed, the case had been decided. A petition for rehearing is no more significant than a motion for a new trial, which, as well settled, presents no question for review in this court. Further, it would be strange if a case could be submitted on certain testimony and decided, and then the defeated party could, by motion for a new trial or petition for rehearing, compel the striking out of a part of that testimony, and thus a retrial of the case. By not challenging [146 U.S. 120, 138]   the objectionable testimony until after the decision, he waives his right to challenge it at all.

Again, after the decision the defendant made application for a statement of the facts of the case, and also the rulings of the court on the admission and rejection of the evidence, to be transferred to this court, which motion was consented to by the United States, and a statement of facts prepared. Thereafter the defendant moved to have included in such statement the testimony of Treadwell, the rulings of the district court on the motions, and also the rulings of the supreme court upon said testimony, which motion was denied, and, on complaint of the defendant that the statement did not contain any rulings of that court on the admission or rejection of evidence, and especially with respect to the testimony of John B. Treadwell, and the exhibits filed therewith, the supreme court said: 'The motion for an additional finding touching the admission of the deposition, map, and exhibits of John B. Treadwell has been considered. The appeal was taken by the United States. There being no cross appeal by the appellee, we decline to review the action of the court below, as that is not before us on this appeal, and overrule said motion, and decline any action upon it for reasons stated.'

Whatever may be thought of the reason given by the supreme court, the fact appears from this language that present action only was invoked, which was action after the decision; and, further, that such action was only in reference to a review of the ruling of the district court. Indeed, not only is the silence of the record conclusive against any motion in the supreme court to exclude the testimony, or any action by that court in the way of exclusion, but also the fair inference from all the matters presented by counsel, if that after the decision it was sought to get from the supreme court only some review of the ruling of the district court on the motion to exclude the testimony. We cannot we view the action of the district court, and no action was taken by the supreme court prior to the decision. The appellant can therefore take nothing by this contention.

Again, it is insisted that upon the facts of the case the [146 U.S. 120, 139]   appellant is entitled to a reversal. But clearly this is untenable. The statement of facts is plain, to the effect that the survey was inaccurate and obtained by fraud. The force of this is not obviated by the fact that Griffin, the surveyor, was not found to have been a party to the fraud. The wrong is the wrong of the patentee; and the fact, if it be a fact, that he did not secure the wrongful assistance of all the officers of the government connected with the survey, does not make his wrong any the less. It may be, as Chief Justice Long intimates, that Griffin, the surveyor, was innocent; that he was misled by the misrepresentations and fraudulent acts of others; but, if it be, as found by this statement of facts, that the survey was erroneous, that it and the patent were obtained by fraud, and that the patentee was a party to such fraud, that is enough to sustain a decree setting aside the survey and the patent, and leaving the defendant to whatever rights may exist under the original confirmation.

Finally, it is insisted that the defendant was a bona fide purchaser, but the findings of fact do not warrant this conclusion. The president of the company, and a large stockholder, together with others interested, visited the property before the purchase. They were warned of the adverse claims. They examined the land, and could easily perceive the situation of some of the points named in the description, and also the presence, within the limits of the patent, of this town of San Francisco. Indeed, it is distinctly stated in the findings that 'the said defendant, through its said company, had notice, in fact, by the means aforesaid, of the adverse claim to said grant, and, in addition thereto, information sufficient to put it on inquiry as to the fraud alleged in the bill of complaint.'

Undoubtedly, upon the facts as found and stated by the court, the defendant was not entitled to hold as a bona fide purchaser.

These are all the matters complained of, and in them finding no error, the decree of the supreme court of the territory is affirmed.