APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF NEBRASKA.
MR. JUSTICE BROWN, after stating the case as above, delivered the opinion of the court.
There are really but two questions involved in this case: (1) whether Patrick located this scrip and took these lands under the blank power of attorney and deed, as trustee for Sophia Felix; and (2) whether the plaintiffs are estopped by their own laches and those of Sophia Felix from insisting that Patrick shall be decreed to hold the lands for their benefit.
The facts of the case, briefly stated, are as follows: Sophia Felix, a half-breed Indian, was entitled under an act of Congress of July 17, 1854, 10 Stat. 304, c. 83, to certain scrip which might be located upon any unoccupied land subject to preemption or private sale, but it was expressly provided in the act that no transfer or conveyance of such scrip should be valid. In pursuance of this act, scrip was issued to her in 1857, to the amount of 480 acres. The scrip itself no being assignable, some person (who it was does not appear) obtained possession of such scrip to the amount of 120 acres from the said Sophia and her husband, (she having in the meantime married,) and also procured from them a power of attorney and quitclaim deed, bearing date March 31, 1860, and executed in blank. Nearly two years thereafter, and in November, 1861, these were turned over (by whom it does not appear) to Patrick, who located the scrip upon the lands in question, of which he had already been in possession for some time, and to which he had endeavored, though unsuccessfully, to acquire title by preemption, caused the name of William Ruth to be inserted as attorney in the power, and his own name as grantee in the quitclaim deed, after filling in the description of this property; and on July 25, 1863, procured from Ruth under his power of attorney a warranty deed to himself of the same property. The description of
the land in the quitclaim deed seems to have been defective, and in the meantime, viz.: July 3, 1863, a patent had issued to Sophia Felix. Patrick has been in possession of these lands ever since. A large part of the tract has been platted and recorded as an addition to the city of Omaha, and is divided into blocks and lots, intersected by streets, and a large part of the lands have been sold to purchasers, whose only notice of the infirmity in their title appears to have been the fact that the power of attorney and quitclaim deed were dated nearly two years prior to the scrip location.
1. The device of a blank power of attorney and quitclaim deed was doubtless resorted to for the purpose of evading the provision of the act of Congress that no transfer or conveyance of the scrip issued under such act should be valid. This rendered it necessary that the scrip should be located in the name and for the benefit of the person to whom it was issued, but from the moment the scrip was located and the title in the land vested in Sophia Felix, it became subject to her disposition precisely as any other land would be. In order, therefore, for the purchaser of this scrip from Sophia Felix to make the same available, it became necessary to secure a power of attorney or a deed of the land, and as the scrip had not then been located, and the person who should locate it was unknown, the name of the grantee and the description of the land must necessarily be left blank. Had the notary, who took the acknowledgment, observed these blanks, he would doubtless have declined to act until they were filled out, particularly in view of the fact that the grantors were Indians, and the scheme a palpable device to evade the law against the assignment of the scrip. It is pertinent in this connection to note the fact that the secretary of State, whose certificate was made in June, 1861, certified merely to the official character of the notary, while the clerk of the District Court of the county, whose certificate was made August 20, 1863, after the scrip was located, and the blanks in the instrument filled out, certifies that the same were executed and acknowledged according to the laws of the State of Minnesota. As the bill alleges that Patrick
obtained possession of these instruments while still in blank, he is clearly chargeable with notice that they were intended as a device to evade the law against the assignment of scrip.
Having, then, no right to locate the scrip for his own benefit, he must be deemed to have located it for Sophia Felix, and as her representative. It was declared by this court as early as 1810, in the case of Massie v. Watts, 6 Cranch, 148, that if an agent located land for himself which he ought to locate for his principal, he is in equity a trustee for his principal. In that case the defendant Massie had contracted with one O'Neal to locate and survey for him a mi treams, palitary warrant for 4000 acres in his name. Massie located the warrant with the proper surveyor, and, being himself a surveyor, fraudulently made a survey purporting to be a survey of the entry, but variant from the same, so that the land actually surveyed was not the land entered with the surveyor. This was done for the fraudulent purpose of giving way to a claim of the defendant's which he surveyed on the land entered for the plaintiff, whereby the plaintiff lost the land, and defendant obtained the legal title. This court held that Massie held such land as trustee for O'Neal. "But Massie," said Chief Justice Marshall, (p. 169,) "the agent of O'Neal, has entered and surveyed a portion of that land for himself, and obtained a patent for it in his own name. According to the clearest and best established principles of equity, the agent who so acts becomes a trustee for his principal. He cannot hold the land under an entry for himself otherwise than as trustee for his principal." This case was subsequently cited with approval in Irvine v. Marshall, 20 How. 558. So in Brush v. Ware, 15 Pet. 93, where an executor obtained a certificate for 4000 acres of land, and afterwards sold and assigned the same, when it appeared under the will that he had no right to sell the land, it was held that the purchaser to whom the patent was subsequently issued, took with notice of the prior title of the heirs, and was bound to make the conveyance asked from him. To the same effect are Stark v. Starrs, 6 Wall. 402, 419; Meader v. Norton, 11 Wall. 442, 458. And in Widdicombe v. Childers, 124
U.S. 400, 405, it was held that a person who had obtained a patent to lands which the patentee knew he had no right to claim, took the legal title subject to the superior equities of the rightful owner. In delivering the opinion, Chief Justice Waite said: "The holder of a legal title in bad faith must always yield to a superior equity. As against the United States his title may be good, but not as against one who had acquired a prior right from the United States in force when his purchase was made under which his patent issued. The patent vested him with the legal title, but it did not determine the equitable relations between him and third persons." See also Morris v. Joseph, 1 West Va. 256.
The substance of these authorities is that, whenever a person obtains the legal title to land by any artifice or concealment, or by making use of facilities intended for the benefit of another, a court of equity will impress upon the lands so held by him a trust in favor of the party who is justly entitled to them, and will order the trust executed by decreeing their conveyance to the party in whose favor the trust was created. It is of no consequence in this connection that Sophia Felix was ignorant of the defendant's acts, or of the trust thereby created, since she was at liberty, upon discovering it, to affirm the trust and enforce its execution. Bank of Metropolis v. Guttschlick, ...