Diamond Coal Coke Company v. United States

• Decision Date: 06 April 1914
• Docket Number: No. 192,192
• Citation: 34 S.Ct. 507,233 U.S. 236,58 L.Ed. 936
• Parties: DIAMOND COAL & COKE COMPANY, Appt., v. UNITED STATES
• Court: U.S. Supreme Court

233 U.S. 236

34 S.Ct. 507

58 L.Ed. 936

DIAMOND COAL & COKE COMPANY, Appt.,

v UNITED STATES.

No. 192.

Argued January 28 and 29, 1914.

Decided April 6, 1914.

Messrs. C. F. Kelley, L. O. Evans, and B. M. Ausherman for appellant.

Solicitor General Davis and Mr. Karl W. Kirchwey for appellee.

Mr. Justice Van Devanter delivered the opinion of the court:

This was a suit by the United States, against an incorporated company engaged in coal mining, to regain the title to about 2,840 acres of land in Uinta county, Wyoming, theretofore patented to Thomas Sneddon and Daniel F. Harrison, and by them conveyed to the coal company. The patents, thirty-four in number, were issued under the homestead law upon what are called soldiers' additional entries. The applications for the entries were made at various dates beginning with May 1, 1899, and each application was accompanied by an affidavit, by either Sneddon or Harrison, stating that he was well acquainted with the land, had passed over it frequently, and could testify understandingly about it; that there was not, to his knowledge, any deposit of coal or other valuable mineral within its limits; that it was essentially nonmineral, and that the application was made with the object of securing it for agricultural purposes, and not of fraudulently obtaining title to mineral land. Mineral lands, including coal lands, are not subject to acquisition under the homestead law (Rev. Stat. §§ 2302, 2318, 2319, 2347-2351, U. S. Comp. Stat. 1901, pp. 1410, 1423, 1424, 1440, 1441), and these affidavits were made and submitted as proof that the character of the lands applied for was such that they properly could be acquired under that law. The land officers accepted the affidavits and the statements, therein as true, and allowed the entries and issued the patents.

The bill charged that the affidavits were false and that the entries and patents were procured in the execution of a fraudulent scheme to acquire known coal lands under soldiers' additional homestead entries; and the decisive issues in the case were, first, whether the lands were known to be valuable for coal when the applications for the entries were made, and, second, if they were, whether the coal company was a bona fide purchaser from the patentees. At the hearing the circuit court answered the first of these questions in the negative and gave a decree for the coal company; but upon an appeal to the circuit court of appeals that court answered the first question in the affirmative and the second in the negative, and reversed the action of the circuit court, with a direction that a decree for the government be entered. 112 C. C. A. 272, 191 Fed. 786. The present appeal was then taken by the coal company.

As the arguments of counsel have taken a wide range and in some respects have departed from the settled rules of decision applicable in cases like this, it will be appropriate to restate those rules before turning to the evidence. They are:

1. Questions of fact arising in the administration of the public-land laws, such as whether lands sought to be entered are mineral or nonmineral, are committed to the land officers for determination; and as their decision must rest largely or entirely upon proofs outside the official records, it is possible in ex parte proceedings, as was the case here, for applicants, by submitting false proofs, to impose upon those officers and secure entries and patents under one law, when if truthful proofs were submitted the lands could not be acquired under that law, but only under another imposing different restrictions upon their disposal. A patent secured by such fraudulent practices, although not void or open to collateral attack, is nevertheless voidable, and may be annulled in a suit by the government against the patentee or a purchaser with notice of the fraud. St. Louis Smelting & Ref. Co. v. Kemp, 104 U. S. 636, 640, 26 L. ed. 875, 876, 11 Mor. Min. Rep. 673; United States v. Minor, 114 U. S. 233, 240, 29 L. ed. 110, 112, 5 Sup. Ct. Rep. 836; Colorado Coal & I. Co. v. United States, 123 U. S. 307, 313, 31 L. ed. 182, 185, 8 Sup. Ct. Rep. 131; Burfenning v. Chicago, St. P. M. & O. R. Co. 163 U. S. 321, 323, 41 L. ed. 175, 176, 16 Sup. Ct. Rep. 1018.

2. The respect due to a patent, the presumption that all the preceding steps required by law were duly observed, and the obvious necessity for stability in titles resting upon these official instruments, require that in suits to annul them the government shall bear the burden of proof and shall sustain it by that class of evidence which commands respect, and that amount of it which produces conviction. Maxwell Land-Grant Case, 121 U. S. 325, 379-381; 30 L. ed. 949, 958, 959, 7 Sup. Ct. Rep. 1015; United States v. Iron Silver Min. Co. 128 U. S. 673, 676, 32 L. ed. 571, 572, 9 Sup. Ct. Rep. 195; United States v. Stinson, 197 U. S. 200, 204, 205, 49 L. ed. 724, 725, 25 Sup. Ct. Rep. 426; United States v. Clark, 200 U. S. 601, 608, 50 L. ed. 613, 616, 26 Sup. Ct. Rep. 340.

3. To justify the annulment of a homestead patent as wrongfully covered mineral land, it must appear that at the time of the proceedings which resulted in the patent the land was known to be valuable for minerals; that is to say, it must appear that the known conditions at the time of those proceedings were plainly such as to engender the belief that the land contained mineral deposits of such quality and in such quantity as would render their extraction profitable and justify expenditures to that end. If at that time the land was not thus known to be valuable for mineral, subsequent discoveries will not affect the patent. The inquiry must be directed to the situation at that time, as were the applicant's proofs and the finding of the land officers. If the proofs were not false then, they cannot be condemned, nor the good faith of the applicant impugned, by reason of any subsequent change in the conditions. 'We say 'land known at the time to be valuable for its minerals,' as there are vast tracts of public land in which minerals of different kinds are found, but not in such quantity as to justify expenditures in the effort to extract them. It is not to such lands that the term 'mineral' in the sense of the statute is applicable. . . . We also say lands known at the time of their sale to be thus valuable, in order to avoid any possible conclusion against the validity of titles which may be issued for other kinds of land, in which, years afterwards, rich deposits of mineral may be discovered. It is quite possible that lands settled upon as suitable only for agricultural purposes, entered by the settler and patented by the government under the pre-emption laws, may be found, years after the patent has been issued, to contain valuable minerals. Indeed, this has often happened. We therefore use the term known to be valuable at the time of sale, to prevent any doubt being cast upon titles to lands afterwards found to be different in their mineral character from what was supposed when the entry of them was made and the patent issued.' Deffeback v. Hawke, 115 U. S. 392, 404, 29 L. ed. 423, 426, 6 Sup. Ct. Rep. 95; Colorado Coal & I. Co. v. United States, 123 U. S. 307, 328, 31 L. ed. 182, 190, 8 Sup. Ct. Rep. 131; United States v. Iron Silver Min. Co. 128 U. S. 673, 683, 32 L. ed. 571, 575, 9 Sup. Ct. Rep. 195; Davis v. Wiebbold, 139 U. S. 507, 519, 35 L. ed. 238, 242, 11 Sup. Ct. Rep. 628; Dower v. Richards, 151 U. S. 658, 663, 38 L. ed. 305, 307, 14 Sup. Ct. Rep. 452, 17 Mor. Min. Rep. 704; Shaw v. Kellogg, 170 U. S. 312, 332, 42 L. ed. 1050, 1057, 18 Sup. Ct. Rep. 632; United States v. Plowman, 216 U. S. 372, 374, 54 L. ed. 523, 524, 30 Sup. Ct. Rep. 299.

As a further preliminary to considering the evidence, it should be observed that these lands, if purchased under the coalland law, would have cost $20 an acre, and also that the coal company could not have purchased directly, or indirectly through others, more than 320 acres, unless it expended $5,000 in opening and improving a mine, in which event the maximum would have been 640 acres. Rev. Stat. §§ 2348, 2350, U. S. Comp. Stat. 1901, pp. 1440, 1441; United States v. Trinidad Coal & Coping Co. 137 U. S. 160, 34 L. ed. 640, 11 Sup. Ct. Rep. 57; United States v. Keitel, 211 U. S. 370, 53 L. ed. 230, 29 Sup. Ct. Rep. 123. As before said, the entries here in question embraced about 2,840 acres.

Coming to the evidence, we find it voluminous, unreasonably so. Part of it sheds no light upon the issues, and was taken in disregard of the last of the rules just stated. That which properly may be considered very clearly establishes the following facts:

The proceedings in the land office began in May, 1899. Most of the applications were filed during that year and passed to patent in 1901. The others were presented and acted upon in succeeding years. The patents were all secured by means of affidavits and proofs, as before indicated, declaring that the lands were essentially nonmineral, were not known to contain any deposit of coal, and were sought for agricultural purposes, and not as mineral land. For many years the district in which the lands were situate had been known to contain coal. They were surveyed in 1874, and the surveyor reported one of the sections as coal land, the others being contiguous to lands similarly reported. This was shown in the field notes and upon the official plats. The lands were in a valley, 3 or 4 miles in width, bounded on the east and west by foothills. A thick bed of coal was disclosed in the eastern face of the western hills, but its quality was not such as to make it of commercial value. Along the western base of the eastern hills was the outcrop of another coal bed. This outcrop had been weathered down and in some places covered by the wash from above, but it could be traced upon the surface for several miles. It had been opened up at different places, and the openings disclosed a coal bed,...