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er was held to be barred by the limitation provided by the charter. In Telford's Case the charter provided that, in the absence of a contract with the owner, a grant should be presumed, and the owner barred from recovering the land or compensation unless he should, within five years after the road was constructed over his land, sue for damages as provided by the charter. There is no statute in Tennessee prescribing the effect of a survey for a proposed line of railway, nor providing for such a survey as a preliminary to a condemnation, nor allowing its registration. Given two condemnation proceedings seeking to appropriate the same land, priority should doubtless be accorded to the proceeding first begun upon the principle “qui prior est tempore potior est Lewis, Eminent Domain, § 306; Elliott on Railroads, § 927; Lake Merced Water Co. v. Cowles, 31 Cal. 215. The appellant acquired no title or interest in the land by merely commencing a proceeding for its appropriation, nor the landowner any right to require the petitioner to take the land it sought to appropriate. The purpose to appropriate may be abandoned even after the assessment of damages. Stacey v. Vt. Cont. R., 27 Vt. 39, 7 Ency. Pl. & Pr. 626, 673; Dimmick v. Council Bluffs R. Co., 58 Iowa, 637, 12 N. W. 710; Schreiber v. Chicago, etc., R. Co., 115 Ill. 340, 3 N. E. 427; Matter of Military Parade Grounds, 60 N. Y. 319; First Nat. Bank v. West River R. Co., 49 Vt. 167. The only right which can be said to result from mere priority of time in the institution of such a proceeding is an equitable right of priority over a later effort to acquire the same property for a like purpose, whether by a like proceeding or contract with notice, actual or constructive. The case of Barre Railroad Co. v. Montpelier Companies, 61 Vt. 1, 17 Atl. 923, 4 L. R. A. 785, 15 Am. St. Rep. 877, and similar cases therein cited, stands upon the effect of the filing and registering of a definite survey and location made in pursuance of statute law. That case, and those upon which it rests, are placed upon the ground that by the requirement of a definite survey, and its registration, the Legislature intended that thereby a prior right to appropriate the lands pointed out should inure, and that this right is a lien or right or interest in the land, which would ripen into a title upon a purchase or condemnation. Mere priority of right accorded to one petitioner over another, upon the ground of priority in time should not have any retrospective operation, so as to give precedence over an earlier acquisition of the same right of way by contract. A proceeding to condemn is, in substance, a proceeding to compel a sale by the owner to the petitioner, and is justified only when the purpose for which the land is to be used is a public one. Under the statutes of most of the states such a proceeding can only be resorted to when the parties. have been unable to agree upon terms of sale. Ency. Pl. & Pr. 476, and cases cited. But in Tennessee the statute does not require that any effort shall be made for acquiring the property desired by private treaty, and there is no constitutional objection to a proceeding for condemnation before failure of negotiations. Bigelow v. Miss. Cent. R. Co., 2 Head, 624. Nevertheless, the proceeding to compel an appropriation is at least but a substitute for an acquisition by contract, and no superior equity is acquired by the institution of a suit for the purpose of condemnation over a prior agreement for the acquisition

of the same interest, valid between the parties, especially when this prior right was known to the petitioner when he started his proceeding. Treating the question as one of priority between mere equities, and each as equally innocent, that claimant first in order of time has, by virtue of that circumstance, the better right. He who is superior in time, in the absence of some higher equity, has, by virtue of that circumstance alone, the better right to the matter in dispute. Broom's Legal Maxims, p. 348. The case of M. & St. P. R. Co. v. Chicago, M. & St. P. R. Co., 116 Iowa, 681, 88 N. W. 1082, is much in point, and in its reasoning supports our conclusion.

The express provision of section 1848 is that "all parties having any interest in such land may be made defendants, and the proceedings will only cover and affect the interest of those who are actually made parties; unborn remaindermen being, however, bound by proceedings to which all living persons in interest are parties." To accord priority to such a petitioner over the interest acquired by a conveyance prior in date, though unrecorded, would be to bind and affect an interest not made a party, and in the teeth of the statute.

The registry statutes can have no important bearing, as under the Vermont statute construed in Barre R. Co. v. Montpelier Companies, 61 Vt. 1, 17 Atl. 923, 4 L. R. A. 785, 15 Am. St. Rep. 877, for the reason that there is no statute requiring or authorizing the registration of a railroad survey. Neither is a petitioner for condemnation in any sense a purchaser or a creditor within the purview of the registration statutes. If the complainant had actually acquired the right of way over the Luttrell land, and title had been vested by decree or deed, without notice of the prior purchase by the Southern Railway Company of the same easement, there would be much reason for holding it to be a bona fide purchaser under the case of Wilkins v. McCorkle (Tenn.) 80 S. W. 834, where the Tennessee Supreme Court held that a complainant under a rescission bill, who obtained a decree canceling a conveyance and revesting title without notice of an unrecorded deed by the defendant conveying the same land to a stranger, was a bona fide purchaser within the registration law. But that case is not applicable here, because the complainant acquired no charge, lien, title, or other interest before it had full notice of the conveyance to the Southern Railway Company.

3. But if the nonregistration of the Luttrell deed made it invalid as to the petitioner for condemnation of the land therein conveyed, although in no sense a creditor or purchaser, unless it had notice, then we are of opinion that knowledge of the fact that a contract for the construction of this very spur track over the identical route here in controversy had been concluded between the plants to be served and the Southern Railway Company, and that an agreement had been made for the conveyance of the requisite rights of way, is notice whether a conveyance had been executed or not. No one is an innocent purchaser for value who buys with knowledge of a prior sale of the same land by parol. Such a sale is not void, but voidable at the election of the parties only under the well-settled construction of the Tennessee statute of frauds; and a purchaser with notice of such an executory sale or contract is not a bona fide purchaser without notice within the

Tennessee registration statute. In this view of the case, we need not enter upon a consideration of the question as to whether the facts known were such as to devolve upon the complainant actual knowledge that an agreement for acquisition of this right of way existed, for whether that agreement was in parol or writing was of no importance to it. If the contracting parties elected to carry it out, it did not lie in the mouth of complainant to say that because it was not yet a written agreement it was invalid. Brakefield v. Anderson, 87 Tenn. 211, 10 S. W. 360; King v. Coleman, 98 Tenn. 562, 571, 40 S. W. 1082; Phillips v. Kimmons, 94 Tenn. 562, 29 S. W. 965.

Upon the whole case we see no reason for disturbing the order of the court below, which is therefore affirmed.


(Circuit Court of Appeals, Eighth Circuit. July 28, 1904.)
No. 2,009.


The title of a bona fide purchaser of lands subsequent to the issue of the patents is superior to the equitable claim of the United States to avoid the patents and the title under them for fraud or error in the issue of the former.


Purchasers in good faith, without notice, for value, of the equitable title evidenced by receivers' final receipts upon which patents subsequently issue, have a complete defense of a bona fide purchase unassailable by a suit of the United States to avoid the patents and the titles under them for fraud, perjury, or error in the procurement of the former.


Receivers' final receipts are notice to purchasers of the equitable title they evidence, that they are voidable by the Land Department for fraud or error at any time before the patents issue upon them, but they are not notice that the equitable titles they disclose were procured by fraud, perjury, or irregularity. On the other hand, they are prima facie evidence that the lands they describe were honestly and regularly entered, and that the entrymen who obtained them are entitled to the patents for the land. 4. EQUITY RIGHTS OF GOVERNMENT AND OF INDIVIDUALS.

The equities of the United States appeal to a court of chancery with the same, but with no greater or less, force than those of an individual in like circumstances.


Where equities are equal, the law prevails. A court of equity will not interfere at the suit of a holder of a prior equitable title or claim to deprive an innocent purchaser for value of a junior equitable estate of a legal estate or advantage which he has subsequently bought or obtained after notice.


Where a vendor presents conveyances to himself prima facie valid, and assures the purchaser that his title under them is perfect, no duty to in

¶ 1. See Public Lands, vol. 41, Cent. Dig. § 368.

vestigate farther is imposed upon the buyer in the absence of other facts and circumstances suggesting investigation.


The concurrence of the essential elements of good faith, absence of notice, payment of value, and legal estate in the purchaser at one time constitutes a complete defense of a bona fide purchase. The order in which these elements were acquired is not material.

(Syllabus by the Court.)

Appeal from the Circuit Court of the United States for the Western District of Arkansas.

For opinion below, see 124 Fed. 393.

This is a suit to avoid 44 patents issued under the stone and timber act of June 3, 1878, c. 151, 20 Stat. 89 [U. S. Comp. St. 1901, p. 1545], and all conveyances of the patented lands or of the timber upon them. The patentees and their immediate and remote grantees are defendants and appellees. The suit was commenced on April 5, 1902. The United States alleged in its amended bill that each of the patentees agreed before entering the land that the entry should be made for the Martin-Alexander Lumber Company, a corporation of Arkansas; that, if no such agreement was made, each patentee made his or her entry on speculation; that immediately after the lands were entered each of the entrymen and each of the entrywomen, with the exception of three, conveyed the timber growing on his or her land to the Martin Company; that patents were issued to all these lands between February 23, 1900, and May 9, 1901, and that on January 14, 1901, the Martin Company sold and assigned all the contracts for the timber on the lands to the Detroit Timber & Lumber Company, a corporation of Michigan, which had knowledge of the character of the entries and of the frauds which had been perpetrated in making them. The Detroit Company answered that the lands were regularly and lawfully entered and patented; that 41 of the patentees sold the timber on their lands to the Martin Company shortly after they entered them; and that on January 14. 1901, it purchased the timber contracts and all the other property of the Martin Company. It denied that the lands were entered on speculation, and that any agreement had been made that any of them should be entered for the benefit of the Martin Company. It denied that it had any notice or knowledge that any of the lands had been fraudulently entered before it purchased and paid for the timber contracts, or before the lands were patented; and averred that it bought and paid value for them in good faith, without notice of any fraud or defect in the title to them. The answer of the Martin-Alexander Company presents the same issues as that of the Detroit Company. The answers of the other defendants, if there were such, do not appear in the record, because the land without the timber is of no value. The salient facts disclosed by the evidence at the final hearing were these: The Martin-Alexander Lumber Company had a sawmill in the vicinity of the lands which are the subject of this controversy, and it was desirous of obtaining timber to manufacture into lumber. E. B. Martin owned 58% per cent. of the stock of this corporation, and, with the exception of one share, A. V. Alexander controlled all of the remainder, which was owned by himself, his wife, and J. O. Means. Copeland was an employé of the company, and an intelligent and influential man. He obtained a copy of the act of June 3, 1878, consulted with one of the officers of the local land office relative to its proper construction, and told Alexander and Martin that he knew honest men who he thought would enter land of the government under this act if they could borrow the money to pay for it. Martin replied that he would loan such men money for that purpose. The stumpage value of the timber was 50 cents per thousand feet, and the Martin Company was offering and paying that price. At this price the average value of the timber on each 160 acres of this land was about $40 in excess of the government's price for the lands, which was $2.50 per acre, so that an entry was likely to entail no loss, and might yield the entryman some profit. Copeland informed some of his acquaintances of this situation and of the law, and asked them if they would like to enter some of the land. Others applied to him for this information, and he imparted it. The men and women thus informed made

the entries upon which the patents in suit are based. They were poor, and unable to pay for the land without borrowing money. Copeland assisted them to select the land and to make their entries. They made two journeys to the local land office, one to make their applications and one to pay for the land and obtain their final receipts. The Martin Company paid their traveling expenses upon these trips and the fees for the publication of the notices required by the statute. Twenty-five of the 44 patentees were employés of the Martin Company and 10 were wives of employés. When the time came to pay for the lands, the company loaned to each one of the patentees the amount required for that purpose, and he or his companion or agent paid for the land, and obtained the final receipt. Within a few days after the final receipt was obtained he made a promissory note for the amount he had paid for the land and interest at 8 per cent. per annum. He then made a written agreement with the Martin Company that in consideration of $1 and of the covenants recited therein he "has bargained, sold, and conveyed" unto the company all the timber and trees upon the land, and the right to enter and take them; that the company will pay him 50 cents per thousand feet scale measure for the lumber in the trees; that it has paid him the amount which he had borrowed and paid for the land, and that it will pay him the balance beyond that amount and 8 per cent. interest in monthly payments as the timber is cut and removed from the land. Upon the execution of this contract the note was canceled and surrendered. The transaction with all the entrymen but two and with all the entrywomen but one took the form which has been described. Two of the entrymen and one of the entrywomen refused to give notes or make timber contracts. although they borrowed the money and used it to pay for their lands. These three defendants entered their land July 5, 1900, and in April, 1901, they sold and conveyed it to the Detroit Company, through an agent of the latter, for the amount of their debts for the borrowed money and $75 each. The 44 entries were made at various times between August 21, 1899, and September 6, 1900, and the timber contracts were made immediately after the respective entries were completed. Patents were issued for all these lands prior to May 9, 1901. Thirteen of these patents were issued before January 14, 1901, and 40 before May 1, 1901. On January 14, 1901, the Detroit Timber & Lumber Company purchased all the property of the Martin Company for $60 000 and the assumption of its debts. The office and place of business of the Martin Company was in Pike City, Ark.: that of the Detroit Company in St. Louis, Mo., and U. L. Clark was its president. About December 20, 1900, Alexander went to St. Louis, and applied to Clark to purchase the property of the Martin Company for the Detroit Company. He requested Clark to purchase Martin's interest and to let him retain his interest. Clark declined, and told him that the Detroit Company would not purchase unless it could buy the entire property. Alexander then asked to be permitted to take stock in the Detroit Company for his interest. Clark replied that the latter company had no stock to sell; that he could not promise any; and that the purchase must be of the entire property of the Martin Company for cash; but that the Detroit Company might increase its stock, and, if it did so, it was possible that Alexander might obtain some. Alexander thereupon agreed that the entire property should be sold, and that he would sell his interest for cash at the same rate the Detroit Company should purchase Martin's interest, if the latter company did not increase its stock and pay him in that. Thereupon Clark sent the Detroit Company's inspector to Arkansas, and he examined the lands, and reported the amount of timber on them. Clark then went to Arkansas, and agreed with Martin to pay him $35.000 for his interest and that of J. O. Means on the basis of $60,000 for the entire property. Thereupon, on January 14, 1901, the board of directors of the Martin Company resolved that it sold all its property to the Detroit Company for $60,000 cash and the assumption of its liabilities; that the $60,000 should be divided among its stockholders in this way: to E. B. Martin, $34.850, to Mrs. B. M. Alexander, $24.850, to A. V. Alexander, $150, to J. O. Means, $150; that the sums due Martin and Means were then paid in cash by the Detroit Company, that the payment of the sums due the Alexanders was deferred until their application for stock of the Detroit Company was determined, and that, to relieve Martin, who resided in Chicago, from further attendance, his stock was transferred to Clark and to the Detroit Company, and

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