Close v. Stuyvesant

3 L.R.A. 161, 132 Ill. 607

• Court: Illinois Supreme Court
• Decided: May 10, 1890
• Status: Published

Opinion

Mr. Justice Bailey

delivered the opinion of the Court:

The pleadings and evidence on the part of the complainant. are sufficient, prima facie, to entitle him to a decree for the. specific performance of the contract alleged in the bill, and1 the questions to be considered therefore are those which arise upon the case made by the defendant. The contract sought to be specifically enforced is for the exchange by the defendant of his interest in certain pieces of real property in Chicago for about 4320 acres of land in Osborne county, Kansas, known as the complainant’s “Osborne County Ranch.” There is no controversy as to the identity, description or title of the defendant’s Chicago property, the only questions litigated being those which pertain to the validity of the complainant’s title to a portion of -the Kansas lands. It'is admitted that the complainant is the owner in fee and able to convey a good title to 2400 acres of said lands, but it is insisted that as to the residue he has no title which the defendant should be compelled to accept as a consideration for the performance of his contract to convey to the complainant his Chicago property.

The complainant offered no evidence tending to prove the representation by the complainant alleged in the answer, that all the lands embraced in the ranch, with the exception of one or two eighty-acre tracts, had been patented, nor any evidence tending to prove the averments of the answer in relation to a subsequent agreement or understanding between him and the complainant that the circumstances under which the latter obtained title to a portion of his lands were suspicious, and that it would be unjust and inequitable to force said lands-upon the defendant without giving him suitable security against a failure of title. The defense then is based solely upon the evidence tending to show defects or infirmities in the complainant’s title.

It appears that 1930 acres of said land had been conveyed to the complainant by - warranty deeds executed by various-parties who had entered the same under the provisions of the pre-emption and homestead laws of the United States, and obtained proper certificates of entry from the register and receiver of the local land office. Of this land, 1380 acres were entered by nine different purchasers under the pre-emption laws and 640 acres by four different parties under the homestead laws. At the time the bill was filed no patents seem to have been issued to the purchasers for any portion of this land¿ but at the date of the decree patents had been issued for three of the tracts entered under the homestead laws and the fourth had been approved by the proper officers of the General Land Office and sent to the recorder’s division, which had charge of the issuing of patents, to be patented. Of the nine tracts entered under the pre-emption law, two had been approved for patents and sent to the recorder’s division to be patented, and the residue, containing 960 acres in all, were in the preemption division awaiting examination.

It can not he doubted that these certificates of entry, if obtained in good faith and after a due compliance with all the requirements of the pre-emption and homestead laws, vested in the holders of the certificates a complete equitable title to the lands. Their certificates vested in them the absolute right, even as against the United States, to the possession, control and enjoyment of the land, and their title was one which they had a perfect right, at any time after their certificates were issued, to convey to others. Myers v. Croft, 13 Wall. 391; Robbins v. Bunn, 54 Ill. 48; Coleman v. Allen, 75 Mo. 333; Knight v. Leary, 54 Wis. 459. In this State, under our stat-ute, such certificates are held to be evidence of legal title, and for most purposes to be equivalent to a patent, and it is suggested that a similar effect is given to them by the statutes of Kansas. How that may be we can not judicially know, as the record furnishes us no evidence as to what the laws of Kansas are, and we are not permitted to take judicial knowledge of the laws of another State.

The defense, however, rests upon the allegation that said certificates of entry were obtained in fraud of the pre-emption and homestead laws of the United States. It is alleged that the several parties who made said entries did so by the procurement and for the benefit of the complainant; that they resided on said lands only for a sufficient time to make a merely colorable and formal compliance with the law, and then filed their final proofs and obtained certificates of entry, and immediately conveyed the tracts entered by them respectively to the complainant in pursuance of a previous agreement and understanding between him and them made prior to the date of the final proofs.

There can be no doubt, if these allegations are sustained by the evidence, that the entries were in violation of law and a fraud upon the United States. It was clearly the policy of Congress, in passing the pre-emption and homestead laws, to confine the benefits of those laws to actual settlers upon the public lands, and to prohibit all contracts and understandings entered into prior to the issuing of the final certificates of entry, by which the benefit of the entry would inure directly or indirectly to any third party. All assignments and transfers of the pre-emption right are declared to be null and void, and it is provided that any person claiming the benefit of such preemption, before he shall be allowed to enter the lands preempted, shall make oath before the register or receiver of the land district in which the land is situated, stating, among other things, that he had not settled upon and improved such land to sell the same on speculation, but in good faith to appropriate it to his own exclusive use, and that he had not directly or indirectly made any agreement or contract in any way or manner with any person whatever, by which the title which he might acquire from the Government of the United States should inure, in whole or in part, to the benefit of any person other than himself. Eev. Stat. of U. S. secs. 2262, 2263.

The decision of the ease then must turn upon the effect to be given to the evidence tending to sustain the defendant’s allegation of fraud. In considering that question it should be remembered that the defendant does not take upon himself the burden of proving that the entries were fraudulent by evidence which would justify a court, having jurisdiction of that question, in pronouncing them fraudulent and cancelling them for that reason. All the defendant is bound to show is that the title which the complainant is prepared to tender him is doubtful. “It is sufficient if the facts throw a cloud on the title and render it suspicious in the minds of reasonable men.” Snyder v. Spaulding, 57 Ill. 480. “A purchaser can not be compelled to take a doubtful title, which will expose him to the expense and hazard of litigation.” Hoyt v. Tuxbury, 70 Ill. 331. In Pyrke v. Waddingham, 10 Hare, 1, which was a bill by a vendor for a specific performance, the question as to title turned upon the construction to be given to a particular will, and the Vice Chancellor was strongly of the opinion that the title was.good; but as he was unable to found his opinion upon any general rule of law, or upon reasoning so conclusive as to satisfy him that other competent persons might not entertain a different opinion, or that the purchaser taking the title might not be exposed to substantial and not merely idle litigation, he refused a decree of specific performance. It was there held that a doubtful title which a purchaser will not- be compelled to accept, is not only a title upon which the court entertains doubts, but includes also a title which, although the court has a favorable opinion of it, yet may reasonably and fairly be questioned in the opinion of other competent persons; for the court has no means of binding the question as against adverse claimants, or of indemnifying the purchaser, if its own opinion in favor of the title should turn out not to be well founded; that if doubts as to the title arise upon a question connected with the general law, the court is to judge whether the general law on the point is or is not settled; and if it is not, or if the doubts as to the title may be affected by extrinsic circumstances, which neither the purchaser nor the court can satisfactorily investigate, specific performance will be denied. The rule thus laid down as to the species of doubt which ought to prevent a court from enforcing specific performance was adopted in the later case of Mullings v. Trinder, L. R. 10 Equity, 449.

' It is not easy to lay down any precise rule as to the amount of doubt necessary to induce a court of equity to decline a specific performance. It is said in Sugden on Vendors, 385, that, to enable equity to enforce a specific performance against a purchaser, “the title to the estate ought, like Casar’s wife, to be free even from suspicion,” although perhaps the rule does not seem to be usually enforced with quite the degree of strictness which this statement would imply, the doctrine generally adopted being that there must be something more than mere speculation, theory or possibility. There is, however, a very uniform concurrence in the rule, that where there is a reasonable donbt as to the-validity of the title, the court will not specifically enforce a contract of purchase.

In Sturtevant v. Jaques, 14 Allen, 523, which was a bill for specific performance, the court said “In order to maintain this bill, the plaintiffs must prove that the title they offer to convey is good beyond a reasonable doubt, and will not expose the defendant to litigation.” In Swain v. Fidelity Ins. Co. 54 Penn. St. 455, it is said: “It is a well settled rule in equity, not to enforce specific performance of a contract in favor of a vendor of real estate, unless he is able to offer a marketable title which is beyond reasonable uncertainty.” So, in Swayne v. Lyon, 67 Penn. St. 436, the rule is laid down as follows: “It is well and wisely settled, that under a contract for the sale of real estate, the vendee has the right not only to have conveyed to him a good but an indubitable title. Only such a title is deemed marketable; for otherwise the purchaser may be buying a lawsuit, which will be a very serious loss to him both of time and money, even if he ultimately succeeds. Hence it has been often held that a title is not marketable where it exposes the party holding it to litigation.”

In Speakman v. Forepaugh, 44 Penn. St. 363, this question is discussed as follows: “When a vendor goes into a court of equity and asks for a decree that his vendee by articles shall specifically perform the agreement, he is bound to offer a title that is more than what the court may pronounce good. That is sufficient for a court of law, but it is an invariable rule in chancery that a purchaser shall not be compelled to accept a doubtful title, or what in some of the cases is called an unmarketable title. And every title is doubtful which invites and exposes the party holding it to litigation. In the opinion of the court it may be good, but if its validity depends upon some facts resting in the knowledge of some party or writings not before the court; if there be a color of an outstanding title which may prove substantial, though there is not enough in evidence to enable the chancellor to say that it is so, a purchaser will not be held to take it, and encounter the hazard of litigation with an adverse claimant.”

“Formerly the practice was to decide for or against the valid.ity of the title, and compel the purchaser to take it as good or dismiss the bill because it was- held bad. But this rule was objected to as absurd and unjust, and it has long since been changed. A court of equity will not now compel a purchaser to accept a title which is so doubtful that it may expose him to litigation, though the court may believe it good. For the decree of the court is in personam and not in rem, and it binds only those who are parties to the suit, and those claiming through them, and in no way decides the question as against the rest of the world. If therefore there is a reasonable chance that some third person may raise a question against the owner of the estate, after the completion of the contract, the court will not compel him to accept it.” Richmond v. Gray, 3 Allen, 25. See also, Owings v. Baldwin, 8 Gill, 337; Butler v. O’Hear, 1 Desau. Eq. 382; Bispham’s Eq. sec. 378; Pomeroy’s Specif. Perform, of Cont. secs. 201-208; Waterman’s Specif. Perform, of Cont. secs. 409-413; Fry’s Specif. Perform, of Cont. sec. 859 et seq.

Let us consider the evidence in the light of these well recognized principles, and see whether it is sufficient to throw a reasonable doubt upon the validity of the complainant’s title, so .as to make it the duty of a court of equity to refuse a decree of specific performance. Sometime before any of the parties who made the entries in question W'ent upon said land for the purpose of making pre-emptions or establishing homesteads, the complainant had acquired title to about 2400 acres of the land in question, with a view of establishing thereon a cattle ranch. When and in what manner he obtained his title to that portion of his ranch is not shown, nor is it material. The land he thus owned lay in two separate bodies of somewhat irregular shapes, from one half mile to one mile apart, the land lying between them, and much if not all the land lying adjacent being government land. None of said government land was subject to private entry, and the only mode in which the •complainant could obtain title thereto was by conveyance from others wrho might enter it under the pre-emption and home.stead laws. Most of the entries of land by the parties in question were made near the same time, or at least during a period •of less than four months. Thus, all the entries by pre-emption and one of the homestead entries were made during the period •extending from July 9, 1884, to the 30th day of the following October. One homestead entry was made on the -24th day of the preceding April, one May 10,1885, and the remaining one was made about November 15, 1886, by a party who had previously entered one of said tracts under the pre-emption laws. The lands thus entered embraced all the lands lying between the two tracts already owned by the complainant, except one forty-acre tract, and other lands adjoining and in the immediate vicinity, thus forming, with the exception of two tracts separated a short distance from the main body, a continuous and relatively compact body of land. One tract of 320 acres lay eighty rods, and one of 160 acres one hundred and sixty rods, from the main body. The plat of said lands which the parties put in evidence 'shows that said detached tracts lie on or near streams of water, which may explain the circumstance of their being selected instead of the lands immediately adjoining the main tract.

Several of the settlers are shown to have been in the employ of the complainant. While said settlements were being made, or very shortly thereafter, the complainant built a fence upon the external boundary of the entire ranch, thus enclosing his own land and that of the settlers in one enclosure, and it seems that from that time he had practically the possession and use of the entire enclosure for pasturing and herding his cattle, and so far as appears, this was wholly without objection on the part of the settlers. It is true they seem to have cultivated a small portion of their respective tracts, but it does not appear, except perhaps in one instance, that the pieces of land cultivated were in any way fenced off or otherwise protected from the complainant’s cattle, and in most cases the inference from the evidence is very strong that no crops yvere harvested. A small house was built'upon each tract, but in some instances at least, they appear to have been built by workmen in the complainant’s employ, and the evidence tends to show, that the houses so built were paid for by money furnished by the complainant;

The settlers as a rule seem to have been poor persons, and presumably without the necessary funds to improve and pay for their land, but it appears that in every ease where the settlement was made under the pre-emption law, the settler, instead of availing himself of the long term of credit which the law gives, entered and paid for his land at the expiration of the shortest period at which such entry could be made, and in the eases where the settlements were made under the homestead law, each settler, instead of occupying his land for the period of five years and then obtaining his patent without paying the government for the land, as under the law he might have done, availed himself, at the expiration of six months from the date of his settlement, of the privilege given by the homestead law of commuting his homestead right for a cash entry. In some cases the evidence furnishes a ground for a reasonable inference that the money with which the land was entered and paid for was furnished directly by the complainant.

But doubtless the most important circumstance shown by the evidence is, that every one of said settlers, almost immediately after obtaining their certificates of entry, conveyed their lands to the complainant. Of these conveyances, one was made the day the certificate of entry was issued, one the second day thereafter, one in four days, two in five days, three in nine days, and the remaining five within a period not much longer. There is some evidence tending to show that ethe prices paid by the complainant were much less than the fair cash value of the land after entry, thus giving some ground for the conclusion that the prices paid were made up of the government price and a reasonable compensation to the settlers for their services.

It is worthy of remark that circumstances similar to some of those above stated have received consideration by the Department of the General Government which has charge of the administration of the Land Laws, and have been held to have a tendency at least to show fraud in making the eñtries. Thus, in Chrisinger’s case, 12 Copp’s Land Owner, 289, Mr. Secretary Lamar, in affirming a decision of the Commissioner of the General Land Office sustaining a cancellation of a commuted homestead entry, said: “The proffer of commutation proof within the shortest possible period after entry, suggests naturally that the settler intended from the first to avail himself of his statutory right of purchase, and invites special .scrutiny into his qualifications and compliance with the re-r •quirements of the laiv.” The Commissioner of the General Land Office, in a letter of instruction to the Register and Re•ceiver at Yankton, Dakota, said: “The selling of land soon after making proof, coupled with slight residence and meagre improvements, is evidence of the fact that the claimant did not take advantage of the homestead law for the purpose of securing a home, but in order to secure a tract of land for speculative purposes. Under these circumstances the claim •can not be allowed.” 12 Copp’s L. O. 265. Again, in his letter ■of instruction to special agent Rowe, ib. 193, the Commissioner said: “If a settler abandons or sells his claim immediately .after entry, or removes therefrom his house, or fails to cultivate the same, such acts are prima facie evidence of -bad faith and speculative intent, and taken in connection with slight improvement and doubtful residence, will forfeit the residence entry.”

While the foregoing are the opinions of mere ministerial officers, or at most of officers charged with the performance of ■quasi judicial functions, they are entitled to consideration because they express the views of those officers who are charged by law with the official responsibility of administering the Land Laws, and because they embody, as we may presume, the principles upon which the General Land Office will act in passing upon and either approving or rejecting the entries in -question which appear to he still awaiting examination. If the circumstances under which said entries were made were such that, under the law as it is administered by the General Land Office, they are liable to rejection and cancellation, that liability alone is doubtless such defect of title as a court of •equity ought not to compel the defendant to assume.

The complainant, it is true, introduced evidence tending to rebut the inferences to be drawn from the various facts above mentioned, the most important portion of which consists of his own testimony in which he denies having made any arrangement or agreement or of having had any understanding with any of the settlers before they made their final proofs, in relation to buying their lands.

Among the proofs offered by the defendant were also certified copies of the final proofs made by the settlers before the officers of the local land office, in which each made the affidavit prescribed by the pre-emption and homestead laws. These papers were offered, however, as the record recites, “not as proof of the facts therein stated, but for the purpose of showing what the witnesses testified to before the local officers.” Some question is raised as to whether these affidavits should be considered as evidence of the truth of the statements therein made, notwithstanding the form of the offer. While the intention of the defendant in offering them to limit their effect to the purpose of showing the mode in which the settlers complied with the provisions of the law in relation to final proofs, is not stated with entire accuracy, yet the form of the offer is such that no one can mistake the defendant’s intention to limit the ■evidence to that one purpose. For that purpose they were competent, but for no other. When documents are competent for one purpose and incompetent for all others, the party offering them has a right to protect himself against their use as evidence upon any other question by limiting his offer to the specific purpose for which they are competent. When offered in that manner, the other party obtains no right to use them as evidence upon any other issue. Had the affidavits in question been offered and received generally, probably a different rule would have been applied, but as the offer was made, they were clearly incompetent for any other purpose than that for ■which they were offered.

If the complainant had desired to corroborate his own testimony by that of the settlers, he should have produced them in court or have taken their depositions, and under the circumstances, the entire absence of the testimony of the settlers lays a foundation for an inference unfavorable to him.

But, under the law applicable to the case, as is abundantly shown by the authorities above cited, we are not called upon to determine decisively whether the complainant’s title is good or bad. It is enough that the circumstances were sufficient to throw upon it doubt and discredit, or, in other words, that there was evidence in any substantial degree tending to impeach it. “Titles may sometimes depend for their validity upon presumptions in reference to some collateral acts, facts or events which perhaps are incapable of proof by direct evidence, and the rule seems to be settled that a title sustained by such a presumption will be held free from doubt, and forced upon a vendee, whenever the circumstances of the case are such that, had it been pending before a jury, the judge would have directed them peremptorily to find the fact in accordance with the presumption; but the title will be held too doubtful to be forced upon the vendee, whenever the circumstances would have been submitted to the jury for them to find in conformity with or against the presumption.” Pomeroy on Specific Perform. of Cont. sec. 205; Fry on Specific Perform, of Cont. sec. 871.

We are of the opinion that the decree is contrary to the evidence, and it will therefore be reversed and the cause will be remanded to the Superior Court for further proceedings with leave to either party to introduce further evidence if he shall be so advised.

Decree reversed.

Mr. Justice Craig, dissenting.