U.S. v. Wharton

• Decision Date: 18 March 1975
• Docket Number: 73-2831,Nos. 73-2732,s. 73-2732
• Citation: 514 F.2d 406
• Parties: UNITED STATES of America and Rogers C. B. Morton, Secretary of the Interior, Plaintiffs-Appellants, v. Minnie E. WHARTON et al., Defendants-Appellees and Cross-Appellants. UNITED STATES of America and Rogers C. B. Morton, Secretary of the Interior, Plaintiffs-Appellees, v. Minnie E. Wharton et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 406

514 F.2d 406

UNITED STATES of America and Rogers C. B. Morton, Secretary of the Interior, Plaintiffs-Appellants, v. Minnie E. WHARTON et al., Defendants-Appellees and Cross-Appellants.

UNITED STATES of America and Rogers C. B. Morton, Secretary of the Interior, Plaintiffs-Appellees, v. Minnie E. Wharton et al., Defendants-Appellants.

Nos. 73-2732, 73-2831.

United States Court of Appeals, Ninth Circuit.

March 18, 1975.

Dick Snell, Atty., U. S. Dept. of Justice, Land & Resources Div., Washington, D. C., for plaintiffs-appellants.

Jane Edwards (argued), of Burns & Edwards, Portland, Or., for defendants-appellees.

OPINION

Before BROWNING and WRIGHT, Circuit Judges, and LINDBERG, ^* District Judge.

EUGENE A. WRIGHT, Circuit Judge:

The government appeals from a judgment of the district court ordering the Secretary of the Interior to issue a patent to 40 acres of public land claimed by the defendants under the Color of Title Act, 43 U.S.C. § 1068. The defendants cross-appeal, contending that the government should be estopped from claiming ownership of the land.

FACTUAL BACKGROUND

The facts stated in pretrial stipulations and in the district court's opinion are essentially these:

Curtis Wharton and his wife, Minnie, moved onto a tract of Oregon land some time prior to September 1919, when he filed an application to reclaim the land under the Desert-Land Entry Act of 1877 (now 43 U.S.C. § 321 et seq.).

The Land Office of the Department of Interior approved the application, and Wharton began to develop the land. He sank two wells, fenced 20 of the 40 acres, and cleared three acres for farming and bee-keeping. The state issued him a permit to appropriate water used for irrigation.

Under the Desert-Land Entry Act, Wharton was entitled to a patent upon payment of $1.00 per acre and a showing that he had reclaimed and cultivated the land. He worked the land as required but, because of family illness and destruction of much of his property by fire, he neglected to pay the $40 fee or show final proof of reclamation. The General Land Office cancelled his entry in February 1930.

The Whartons remained on the land without interference or objection by the government and reared there a family of nine children, all of whom are defendants here. Curtis Wharton died in 1949.

After 1930 there was no communication between the government and the Whartons until December 28, 1954, when Mrs. Wharton wrote to the Bureau of Land Management (BLM), requesting an opportunity to prove that the land was reclaimed. In March 1955, the BLM advised her for the first time that she was trespassing but that she would be notified what kind of application she could file to gain title. Having no further response, Mrs. Wharton wrote again in January 1956. In April of that year, the BLM again advised her she was trespassing but that she could refile an application under either the Homesteading Law or the Desert-Entry Act. For lack of money, she did not do so.

Mrs. Wharton remarried in 1957 and moved from the farm and her son, John, then returned to it. He called at the BLM office in Vale, Oregon, inquired how to obtain a deed to the property, and was told there was no way for him to get one.

In December 1966, John Wharton sought help from Representative Al Ullman and Ullman wrote promptly to the BLM. Almost five months later, when it was still possible to file an application for a patent under the homesteading laws or the Desert-Land Entry Act, the BLM answered that there was nothing the Whartons could do to obtain a patent. In May 1967, less than two weeks after its letter to Congressman Ullman, the BLM reclassified the land, making it impossible to obtain new desert-land entries.

Shortly thereafter, the BLM informed John Wharton that he was trespassing and ordered him from the land, the first time that a government representative had told any of the Whartons to vacate.

After the government sued for ejectment, the defendants counterclaimed, asking for a patent. The case was held in abeyance to permit them to seek one under the Color of Title Act, 43 U.S.C. § 1068(a). The application was denied by the Oregon State Office of the BLM, which was affirmed by the the Interior Board of Land Appeals. The district court held that the Board's decision was clearly erroneous, ordered the Secretary of the Interior to allow the Whartons to purchase the 40-acre tract in accordance with § 1068(a), and the government appealed.

GOOD FAITH UNDER COLOR OF TITLE ACT

The Color of Title Act, 43 U.S.C. § 1068(a) authorizes adverse possession claims against the United States. ¹

However, under Department of Interior Regulations, knowledge of federal ownership of the land in question negates the "good faith" required by the act. ² We upheld this interpretation of "good faith" in Day v. Hickel, 481 F.2d 473 (9th Cir. 1973), saying:

. . . it is not an unreasonable interpretation by the Secretary that possession of lands by one who knows the title is in the United States does not constitute a claim of title which is sufficient under the Act.

The Supreme Court has held that great deference should be given to the construction of a statute by an administrative agency. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965).

481 F.2d at 476.

The Board's denial of a patent was based primarily on the finding that the Whartons had knowledge of federal ownership of the land and thus were precluded from asserting a good faith color of title claim.

As a reviewing court, under 5 U.S.C. § 706(2)(A), (E) and (F), we may set aside agency actions, findings, and conclusions which are

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

(E) unsupported by substantial evidence . . . ;

(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.

In denying the Whartons a patent the Board followed its prior rulings and practices, and conformed to the Color of Title Act as interpreted by the Secretary of the Interior and by this court in Day v. Hickel, supra. The Board's action was therefore neither arbitrary, capricious, nor an abuse of discretion and was in accordance with the law.

An agency fact finding is subject to de novo review in two instances: when the action authorized is adjudicatory in nature and the fact finding procedure is inadequate, and in another instance not here relevant. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). The government concedes that the decision of the Board was adjudicatory in nature. However, the Whartons do not claim the fact finding procedure was inadequate, and we find nothing in the record to so indicate.

Absent de novo review a court may reverse an agency fact finding only if the findings of fact are not supported by substantial evidence. Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938). ³

The only disputed factual issue relevant here was the "good faith" nature of the claim that is, the extent of the Whartons' knowledge of federal ownership of the land. Although we might have come to a different conclusion on this issue, we cannot say that the Secretary's decision was not supported by substantial evidence as that term is defined above.

The district court thus erred in directing that a patent be granted the Whartons under the Color of Title Act.

ESTOPPEL AGAINST THE GOVERNMENT

The Whartons contend that if they are denied a patent under the Color of Title Act, the government should be estopped from claiming ownership of the land. The district court concluded that estoppel did not apply against the government. We disagree.

The government maintains that the rule is settled that estoppel cannot be invoked against the government, citing U.S. Immigration and Naturalization Service v. Hibi, 414 U.S. 5, 94 S.Ct. 19, 38 L.Ed.2d 7 (1973). In Hibi, a citizen of the Philippines petitioned for citizenship in September 1967 under the Nationality Act of 1940 which allowed certain aliens to obtain United States citizenship while serving in the United States Armed Forces during World War II. Under that Act a petition had to be filed by December 31, 1946. Hibi argued that the government was estopped from raising the statute of limitations because it had not advised him of his right to apply for citizenship while he was serving in the Army. The majority of the Court did not believe that simply failing to advise the respondent of his rights was sufficient to estop the government:

" 'As a general rule, laches or neglect of duty on the part of officers of the Government is no defense to a suit by it to enforce a public right or protect a public interest. . . . ' Utah Power and Light Co. v. U. S., 243 U.S. 389, 409, 37 S.Ct. 387, 391, 61 L.Ed. 791."

Hibi, 414 U.S. at 8, 94 S.Ct. at 21.

However, there was a vigorous dissent, and the majority qualified its holding by saying that, although the question of whether affirmative misconduct (rather than mere neglect) on the part of the government might estop it had been left open in Montana v. Kennedy, 366 U.S. 308, 314, 315, 81 S.Ct. 1336, 6 L.Ed.2d 313 (1961), no such conduct was involved in Hibi. The Court did not preclude invoking estoppel against the government.

In the case before us, the Whartons assert affirmative misconduct on the part of BLM officials, not merely a failure to advise them of their rights. John Wharton had approached government officials to determine what his family could do to gain title to the land. Those officials misrepresented to him that there was no way at a time when it was still possible to do so.

The government suggests that, even if it had told the Whartons prior to May 11, 1967 that they could file a new desert-entry application, such advice would have...