Krizek, Chester F.

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Fraud: Public Lands; Bona Fide Purchasers

Marquette University Law School

Marquette Law ReviewVolume 12Issue 1 December 1927 Article 16Fraud: Public Lands; Bona Fide PurchasersChester F. KrizekFollow this and additional works at: http://scholarship.law.marquette.edu/mulrPart of the Law CommonsThis Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. It has been accepted for inclusion inMarquette Law Review by an authorized administrator of Marquette Law Scholarly Commons. For more information, please contactmegan.obrien@marquette.edu.Repository CitationChester F. Krizek, Fraud: Public Lands; Bona Fide Purchasers, 12 Marq. L. Rev. 76 (1927).Available at: http://scholarship.law.marquette.edu/mulr/vol12/iss1/16MARQUETTE LAW REVIEWfor crime, or to let. them starve for their imbecility, society can preventthose who are manifestly unfit for continuing their kind." The courtpoints out that the principle that sustains compulsory vaccination isbroad enough to cover the cutting of the Fallopian tubes.7 And theysay that three generations of imbeciles are enough.Thus we can draw the rule that a state law authorizing sterilizationof mental defectives under careful safeguards are valid under theFourteenth Amendment of the United States Constitution, and do notdeny due process and equal protection of the law.There apparently is no such legislation in Wisconsin; at least, thewriter has not been able to find any relative statute or law within theconfines of the Wisconsin Statutes.AL WATSON, '28Fraud: Public Lands; Bona Fide Purchasers.The late case of Independent Coal and Coke Company v. UnitedStates,' was in the nature of an ancillary suit brought by the govern-ment, in aid of a former, for the restoration to the government ofsome 5,500 acres of public lands located in Utah, title to which wasprocured by a fraud perpetrated upon the land officers of the UnitedStates. The government had, in 1894, granted these lands to the Stateof Utah to aid in the establishment of an agricultural college, certainschools and asylums, and for other purposes.The lands were later purchased from the state, upon applicationand agreements, supported by affidavits that such lands were non-mineral and did not contain deposits of coal. In January, 1907, theUnited States brought the first suit against the purchasers of the lands,and founded its action upon the charge that the procurement of thelands was had by the employment of fraud and misrepresentation, asthe purchasers had, at the time of the certification, been fully cognizantof the presence of coal deposits on the lands. The litigation resultedin a judgment for the government. Milner v. United States2 andUnited States v. Sweet.3A decree was subsequently entered by the district court declaringthat the United States "is the owner" and "entitled to the possession"of the lands in question, and perpetually enjoining the defendants fromsetting up a claim to such premises. This declaration was firmly estab-lished by a later affirmation by the Supreme Court.The resultant holding of the second suit was to the effect that oneacquiring title to public land through the title of a state subsequent tothe certification by the United States to the state takes subject to theequities of the United States existing at the time of the certifica-tion. Furthermore, intervention by the state, as a party, wasdeemed unnecessary, even though an agent of the government; uphold-ing Williams v. United States,4 wherein this court said, "The state was7 acobson v. Massachusetts, 197 U.S. II; 25 S. Ct. 358; 49 L. Ed. 643; 3 Ann.Cases 765.'47 Sup. Ct. Rep. 714, 71 Law. Ed. 758.1'43 C.C.A. 13, 228 Fed. 431, 439.245 U.S. 563, 38 Sup. Ct. Rep. 193.'138 U.S. 514, 34 Law. Ed. 1026, II Sup. Ct. Rep. 457.NOTES AND COMMENTnot an intentional party to any wrong on the general government. It isthe dignified and proper course to be pursued by a state to leave to thedetermination of the courts the question of right between the govern-ment and the alleged wrongdoer, and conform its subsequent action tothat determination."In consideration of this subject it is not out of place to observe thatrecognized authorities have consistently maintained that a fraudulentprocurer of a conveyance may not defeat the defrauded grantor or pro-tect himself from the consequences of his fraud by having the title con-veyed to an innocent third person. Numerous authorities sustain theforegoing principle, the leading of which are Moore v. Craweford,5 andMcDaniel v. Sprick.6The Supreme Court of Wisconsin has adjudicated that such fraudwill prevent a re-acquisition from a succeeding bona fide holder exceptwhen such obviously fraudulent taint continues to or reattaches to thetransaction on the basis of equitable principles which obligate restitu-tion. In Troy City Bank v. Wilcox,7 the foremost Wisconsin authorityon this principle, it is conclusively stated that a bona fide purchase ofan estate, for a valuable consideration, purges away the equity from theestate, in the hands of all persons who may derive title under it, withthe exception of the original party, whose conscience stands bound bythe violation of his trust and meditated fraud. If such estate becomesrevested in him, the original equity will re-attach to it in his hands.Likewise, a purchaser with notice of an outstanding equity, despitea transfer to an innocent purchaser for value, may not on a later re-purchase hold free of such equity. Of the many authorities adheringto this doctrine, which is national in scope, the exceptionally wellreasoned case of Clark v. McNeal,8 is a valuable reference.Thus, from the learned opinion of Mr. Justice Stone in IndependentCoal and Coke Company v. United States, supra, we can deduce withgreat clarity, that the obligation of restitution, having its inception ina fraudulent transaction, persists as to every interest afterwards ac-quired by a tainted contract, or enjoyed as the fruit of such fraud.The decree in this litigation was based firmly on recognized equitableholdings, and the opinion subtly instills the doctrine that the court willdeal firmly and without equivocation with those who perpetrate fraudupon the states and their public lands granted by the national govern-ment.CHESTER F. KRIZEKInsurance: Automobile liability insurance; Direct liability ofInsurer.In Ducommun v. Strong et al," the Supreme Court of Wisconsin an-nounced a proposition which has given rise to much apprehension amonginsurance companies doing business in this state. It will also affect the130 U.S. 122, 128; 32 Law. Ed. 878, 880; 9 Sup Ct. Rep. 449.0269 Mo. 424, 249 S.W. 6II.7 24 Wis. 671.a 114 N.Y. 287, II Am. St. Rep. 638, 21 N.E. 4o5.214 N.W. 616.

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Fraud: Public Lands; Bona Fide Purchasers

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