United States v. California & O. Land Co., 49 F. 496

OPINION OF THE COURT. Hawley, District Judge. I am of opinion that the circuit court did not err in finding that defendant was the purchaser of the land in question in good faith, and for a valuable consideration, without notice of any fraud on the part of the Oregon Central Military Road Company or any one else.

This finding is, in my opinion, fúlly sustained by the evidence, and the court was therefore justified in sustaining the defendant’s objection to the testimony offered by complainant, after the defendant had rested its case, to show that said road had never been built, and that the certificates of the governor of Oregon that it was built were obtained by misrepresentation and fraud. In Iron Co. v. U. S., 123 U. S. 313, 8 Sup. Ct.

Rep. 131, the court said: “It is fully established by the evidence that there were in fact no actual settlements and improvements on any of the lands, as falsely set out in the affidavits in support of the pre-emption claims and in the certificates issued thereon. This undoubtedly constituted a fraud upon the United States, sufficient in equity, as against the parties perpetrating it, or those claiming under them with notice of it, to justify the cancellation of the patents issued to them. But it is not such a fraud as prevents the passing of the legal title by the patents.

It follows that, to a bill in equity to cancel the patents upon these grounds alone, the defense of a bona fide purchaser for value without notice is perfect. ” Applying the principles therein announced to the facts presented by the record in this case, it necessarily follows that the question whether the road was actually built or not was wholly immaterial, unless it was shown that defendant was a purchaser with notice.

Independent of the general principles of law that are always applied by courts where the plea of a bona fide purchaser for value is presented, the act of congress authorizing this and other suits to be brought to forfeit the lands hitherto granted expressly preserved the rights of such purchasers in the following language: “Saving and preserving the rights of all bona fide purchasers of either of said grants, or any portion of said grants, for a valuable consideration, if any such there be.

Said suit or suits shall be tried and adjudicated in like manner, and by the same principles and rules of jurisprudence, as other suits in equity are therein tried.” 25 St. at Large, 851. Without discussing the evidence, it is perfectly clear to iny mind that defendant was a bona fide purchaser for value without notice. This must be admitted, unless it be that the deeds from the Oregon Central Military Road Company to Pengra were quitclaim deeds pure and simple, and that a purchaser under a quitclaim deed cannot claim to be a bona fide purchaser for value.

A full investigation of that question would ojien up a wide field of inquiry in regard to which I deem it unnecessary to enter at any length. There are numerous and many conflicting authorities upon this subject, which I shall not attempt to review. It is sufficient to say that, in my opinion, the weight of reason and authorities is made to depend upon the real character of the deed, as to whether or not it purports to convey, or does in fact convey, simply the speculative right, title, and interest of the party, or whether or not it purports to convey, and does in fact convey, the lands mentioned.

If the deed is a quitclaim in the strict sense of that species of conveyance, then it will not support the defense of an innocent purchaser. “Whether the conveyance be a quitclaim or not is dependent upon the intent of the parties to it, as that intent appears from the language of the instrument itself. If the deed purporis and is intended to convey only the right, title, and interest in the land, as distinguished from the land itself, it comes within the strict sense of a quitclaim deed, and will not sustain the defense of innocent purchaser.

If it appears that it was the intention to convey the land itself, then it is not such quitclaim deed, although it may possess characteristics peculiar to such deeds. Thu use of the word ‘quitclaim’ does not restrict the conveyance if other language employed in the instrument indicates the intention to convey the land itself.” Garrett v. Christopher, 74 Tex. 453, 12 S. W. Rep. (67. The true character of the deed, and the real intent of the parties, is to be determined by the terms of the conveyance itself. ’Phis general idea, is fully recognized by the decisions of the supreme court of the United States.

In Van Rensselaer v.

Kearney, 11 How. 322, the court, in speaking of the effect of a deed hy way of release or quitclaim of the grantor’s right, title, and interest, said: “But-this principle is applicable to a deed of bargain and sale by release or quitclaim in the strict and proper sense of that species of conveyance; ami therefore, if the deed bears on its face evidence that the grantors intended to convey, and tire grantee expected to become invested with, an estate of a particular description or quality, and that the bargain had proceeded upon that footing between the parties, then, although it may not contain any covenants of title, in the technical sense of the term, still the legal operation and effect of the instrument will be as binding upon the grantor and those claiming under him, in respect to the estate thus described, as if a formal covenant to that effect had been inserted.” The language of the first deed, conveying an undivided one-half interest to Pengra, dated May 12, 1874, is as follows; “The Oregon Central Military Road Company lias aliened, released, granted, bargained, and sold, and does hereby alien, release, grant, bargain, sell, and convey, unto the said B.

J. Pengra, the party of the second part, his heirs and assigns, the undivided one-half of all the right, title, and interest of the said party of the first

part in and to all the lands lying and being in the state of Oregon granted or intended to be granted to the state of Oregon by the act of congress approved July 2d, 1864, * * * and granted by the state of Oregon to the said Oregon Central Military Road Company by

an act of the legislative assembly of said state of Oregon approved October 24th, 1864, * * * and the undivided one-half of the right, title, and interest of said party of the first part to said grant of land under the several acts aforesaid, whether listed and approved or otherwise; also the undivided one-half of all future right, title, interest, claim, property, and demand which the party of the first part may at any time hereafter acquire to any lands by virtue of any further compliance with the requirements of said acts of congress, together with the hereditaments and appurtenances. * * * To have and to hold the lands hereby granted unto the said party of the second part, his heirs and assigns forever. ” From this language, as well as of all other conditions, reservations, and covenants in said deed expressed, it is clear to niy mind that the parties intended by this instrument to convey, and did convey, the land itself, and that it is not such a quitclaim deed as deprives defendant of the right to rely upon the plea of an innocent purchaser for value.

The second deed contains the same language as the first. The deeds from Pengra to Colby and others are regular bargain and sale deeds of the land in question. From a careful consideration of all the evidence in the record, and of the principles of law applicable thereto, I am of opinion that the decision 'and rulings of the circuit court were correct. I am authorized to say that Judge Morrow concurs with me in the views I have expressed. The judgment of the circuit court is therefore affirmed.