Petitioners Brief — Depaoli v. United States

The Supreme Court

OF Tat

Lnited States

Ocropen Trenm, A. DPD. 1945

No.

EP. Depaont and Lexa Deraort,

“ wite,

Petitioners,

Vs,

Usxirep States oF AMERICA,

Re sponde nt.

BRIEF IN SUPPORT OF PETITION FOR

WRIT OF CERTIORARI

(A) STATUTORY PROVISIONS TO SUSTAIN

JURISDICTION

The jurisdiction of the United States Supreme Court

iivoked under Seetion 240(a) of the Judicial Code

as amended, 28 U.S. C. A. 347, and under the Act of

June 7, 1924, Chapter 311, 43 Stat. 596; 25 U.S. Co A.

Section 421 (note), Appendix A.

(B) OPINIONS BELOW

The opinion of the United States Distriet Court for

the District of Nevada containing an extensive survey

lt

of the Yaets involved in the instant proceeding was ey

tered on the 25d day of November, 1942 (R. 223).

The judgement of the United States Distriet Court for

the Distriet of Nevada was entered on the 11th day of

hebrnary, 143 (R247). This case is reported in 47

Fed. Supp. 68s,

The opinion of the United States Cireuit) Court. of

Appeals for the Ninth Cireuit was entered on the 9th

day of December, 1943 (R. 267). This case is reported

in 139 Fed. (2nd) 225.

(C) STATEMENT OF FACTS

The essential facts of this case are not in dispute.

The action involves the right to possession of certain

real property located in Washoe County, Nevada, and

was instituted in the District Court of the United

States for the District of Nevada on the 4th day of

February, 1988 (R.2).

For approximately seventy-seven years prior to the

institution of said action and sinee the vear 1861, the

real property in question has been in the exelusive and

undivided possession of petitioners and their immediate

predecessors in interest who have continuously tilled,

cultivated and irrigated the same and broken and

cleared the same from uneultivated raw land. During

said period of time said petitioners and their imme-

diate predecessors in interest have improved the same

and constructed buildings, fences, ditehes and dams

thereon and used in connection therewith (R. 232).

At the time said real property forming the subject

17

matter of this action was settled upon, the public sur-

veys had not been extended to include said) lands, and

the same were open and unsurveyed (R. 252). Subse-

quent to the settlement of said real property there was

established what is known as the Pyramid Lake Indian

Reservation by exeentive order of Mareh 25, 1874. The

real property in question is included within the exterior

bonudaries of said Pyramid Lake Indian Reservation,

although the Indians for whom said reservation was

erented have never occupied, used or improved the same

and have never been in possession thereof,

On June 7, 1924, the Congress of the United States

passed an act entitled “An Act for the Relief of Set-

ders and Townsite Oecupants of Certain Lands in the

Pyramid Lake Indian Reservation, Nevada,” being

Chapter 31, Publie Laws of the United States (45 Stat.

306, Chapter 311). A copy of said Act is appended

hereto and forms Appendix A. Said Act was passed

expressly for the relief of petitioners herein and for

the relief of other white settlers similarly situated. Pur-

suant to the terms and provisions of said Aet and on

March 3, 1925, M. P. Depaoli, one of the petitioners

herein, who is recognized as a qualified applicant under

said Act, made petition to purchase the real property

involved herein, and in June of said year 1925, said

applicant made a quarter-payment upon the total ap-

praised value of said real property, said payment being

in the sum of $2,514.82. The application of said peti-

tioner was allowed and said initial quarter-payment was

retained. Thereafter, by reason of adverse economic

conditions and through no fault of said petitioner

Is

(R. 244), no additional payments were made upou the

purchase price of said real property and the General

Land Office allowed the matter to remain in status quo

although for the period from 1925 until Mareh 10, 1936,

various and sundry arrangements for payment were

made and negotiations were had regarding the purchase

of said property. On Mareh 10, 1936, the General Land

Office notified said applicant that the Secretary of the

luterior had ruled that all interest due on the unpaid

principal was required to be paid within thirty days

and that one-third of the remaining principal was re-

quired to be paid within six months and that failing

said payments the application of petitioner would be

cancelled without further notice (R. 240).

Said applicant failed to make said payment of in-

terest and principal pursuant to said last-named ruling

of the Secretary of the Interior and on May 15, 1956,

said Secretary of the Interior ordered the cancellation

of petitioner’s application.

Following said date and on August 11, 1936, said

petitioner paid the full balance of the purchase price

of said real property including interest, said payment

heing made to the Register of the United States Land

Office at Carson City, Nevada. Said final payment, in-

cluding interest, in the sum of $5,116.62 was forwarded

to the United States Land Office in Washington and

duly and regularly deposited with the Treasurer of the

United States, where the same was retained until April

17, 1939, after the institution of this action, upon which

last-named date a tender of said final payment was

made to said petitioner which tender was refused by

19

said. petitioner (R. 227, 243). No tender of the initial

payment of $2,014.82 has ever been made to petitioner.

Upon the basis of the foregoing facts, the District

Court of the United States for the District of Nevada

determined that an entry had been made upon the real

property in question by said M. P. Depaoli, as a result

of whieh a contract arose as between said M. P. De-

paoli and respondent herein, which said contract created

the relationship of vendor and vendee as between the

parties thereto, Said trial court further determined that

said contract, as a valid aud subsisting property right,

could not be forfeited under the cireumstances herein

presented by the arbitrary ruling of the Seeretary of

the Interior, but that the same could only be terminated

pursnant to general equitable principles governing suits

for caneellation of conveyances and the rescission of

contraets (R. 229).

Upon appeal, the United States Cireuit Court of

Appeals for the Ninth Circuit reversed the judgment

of the District Court of the United States for the Dis-

trict of Nevada upon the basis of the decision of United

States vs. Garaventa Land and Livestock Company, 129

Fed, (2nd) 416; (Appendix B), in which said last-

named case Cireuit Judge Healy dissented. Said deei-

sion of said Cireuit Court of Appeals in the instant

proceeding was written by said Judge Healy (R. 267).

It will be noted that said Judge Healy, who had dis-

sented in the ease of United States vs. Garaventa Land

and Livestock Company, stated that he was still of the

same opinion as expressed in his dissenting opinion in

said ease of United States vs. Garaventa Land and Live-

oh

ss

i

~0

stock Company, but that he was bound by the decision

of said Cirenit Court of Appeals in said case.

(D) SPECIFICATION OF ERRORS

The United States Cireuit Court of Appeals for the

Ninth Cireuit erred in the following particulars, to-wit;

(1) In holding that petitioner acquired no property

rights in the property involved by the making of his

entry thereon in the manner herein set forth.

(2) In holding that the entry in question did not

create a vendor-vendee relationship between respondent

and petitioner.

(3) In holding that equitable principles are inapplica-

ble as between respondent and petitioner in connection

with the cancellation of petitioner’s contract of pur-

chase and the forfeiture of his property rights there-

under.

(4) In holding that the Seeretary of the Interior had

the authority to arbitrarily declare a forfeiture of peti-

tioner’s right in the real property in question under the

provisions of the Act of June 7, 1924, Chapter 311, 45

Stat. 596, 25 U. S. C. A., Section 421 (note).

(E) ARGUMENT

It is petitioners’ contention that the writ of certiorari

should be granted by reason of the aforesaid errors

committed by the United States Cirenit Court of Ap-

peals for the Ninth Cireuit, which said errors have

resulted in the destruction of a property right existing

in) petitioners contrary to the provisions of the Fifth

21

Amendment to the Constitution of the United States of

\meriea since the destruction of said property right has

becn effected without due process of law.

Since an early date it has been well established by a

lone dine of authorities that when an entry has been

nade upon real property forming a portion of the pub

jc domain, the individual making said entry ‘tacquires

al) inceptive right to a portion of the unappropriated

soil of the country by the filing of his claim ***."* See

Chotard vs. Pope, 12 Wheat. (U. S.) 586.

In the case of Witherspoon vs. Duncan, 71 U.S. 210

(4 Wall. 210), this Court in 1867 determined as follows:

‘In no just sense ean lands be said to be public

lands after they have been entered at the Land

Office and a certifieate of entry obtained. If public

lands before the entry, after it they are private

property. Hf subject to sale, the Government has no

power to revoke the entry and withhold the patent,

A second sale, if the first was authorized by law,

confers no right upon the buyer, and is a void act.

According to the well-known mode of proceeding at

the Land Offices (established for the mutual con-

venience of buver and seller), if the party is en-

titled by law to enter the land, the receiver gives

him a certificate of entry reciting the facts, by

meaus of which, in due time he receives a patent.

The contract of purchase is complete when the cer-

tifieate of entry is exeeuted and delivered, and

thereafter the land ceases to be a part of the pub

lie domain. The Government agrees to make proper

conveyance as soon as it can, and in the meantime

holds the naked legal fee in trust for the purchaser,

who has the equitable title.’

It will be noted in said last-named case that no dis-

finetion was made between a cash and a donation entry,

o

ervrnap amen om |

yy)

This Court held in said case that whether the entry be

a cash entry or a donation entry, that when the same

Was made, irrespective of its nature, the particular land

in question became ‘tsegregated from the mass of pub-

lie lands, and becomes private property.’’ See also:

Orchard vs. Alevauder, WoT U.S. 372

MeMichael vs. Murphy, Wo U.S. 304,

Whitney vs. Taylor, 1O8 U.S. 85;

Sturr vs: Beck, 133 U.S. 542;

The Hastings & Dakota Railroad Company vs.

Whitney, 152 U.S. 357;

Denny vs, Dodson, 32. Fed. 899;

MeCime vs. Essig, 118 Fed. 273;

U.Sors. Northern Pacific Railway Company, 204

Fed. 485.

It is petitioners’ contention under the authorities

hereinabive set forth that when petitioner's application

for purchase was filed and accepted and when his ini-

tial cash payment was made upon the purchase price

of the real property in question, the ‘‘entry’’ upon said

real property was completed and that immediately there

arose in petitioner a property right in the real prop-

erty in question which said property right is of a par-

ticularly substantial character in view of the fact that

the same is coupled with a partial payment. If a prop-

erty right exists when an entry is made under the Gen-

eral Land Laws regardless of the payment of money,

an a fortiori ease is presented for the creation of a

property right when a partial payment is made con-

currently with the making of the ‘‘entry ’? There ean

he no question but that petitioner herein acquired a

property right in the real property involved as soon as

23

his partial payment had been made upon the purchase

price established for said real property. As a result of

cai application for purchase and its acceptance, and as

. pesult of the partial payment upon the purchase price,

4, coutract arose as between respondent and petitioners

creating the relationship of vendor and vendee.

i) is well settled that general principles of equity will

ordinarily govern in suits instituted by the United

States of America to secure the cancellation of a con-

vevance or the rescission of a contract. To this effect see

the following cases:

Pan American Petroleum Company vs. UL S., 205

U.S. 456, 506;

U.S. vs. Detroit Lumber Company, 200 U.S.

321, 339;

United States vs. Stinson, 197 U.S. 200, 204;

Reading Steel Casting Company ts. U. S. 268

U. S. 186.

Ay exception to the rule that equitable principles will

iw applied in suits by the United States to secure the

cancellation of contracts exists in eases wherein the

application of such equitable principles will operate to

frustrate the purpose of a law of the United States or

to circumvent public policy. See

Pan American Petroleum Company vs. U.S.

supra;

Causey vs. U. S., 240 U.S. 399, 402;

Heckman vs. U. S., 224 U. S. 418, 446;

U.S. vs. Trinidad Coal Company, 137 U.S. 160,

170.

It cannot be denied that in the instant proceeding a

=

2+

contraet existed as between respondent and petitioner

tor the purchase of the real property invelved in this

proceeding. To determine whether or not said contract

may be arbitrarily cancelled in derrogation of all equi-

table principles, we must first ascertain whether or not

the application of equitable principles will frustrate the

purpose of a law of the United States or circumvent

public policy, Since the proceeding in question Is predi-

cated pou an act of Congress, namely, the Aet of June

é, 1924, Chapter 311, 48 Stat. 596, 25 U. S.C. A. See-

tion 421 (note), herein referred to, it is petitioners’ con-

tention that said Aet speaks for itself in determining

its purpose and in determining the public poliey regard-

ing the matters covered thereby. The Act is entitled

“An Act for the Relief of Settlers and Townsite Oceu-

pants of Certain Lands in the Pyramid Lake Indian

Reservation, Nevada.’? The purpose of said act is indi-

cated by its tithe. Said Act has no purpose other than

to make it possible for petitioners and other persons

similarly situated to aequire title to the real property

which they and their predecessors in interest had occu-

pied, cultivated and improved for a period of time

extending beyond the creation of the Indian reservation

within whose boundaries said real property is situated.

In view of the express purpose of said Act, which is

declaratory of the public poliey of the United States

regarding the situation in question, it is impossible to

arrive at any conclusion other than that no purpose of

any law of the United States would be frustrated and

ho public poliey would be cirenmvented by an applica-

tion of the general principles of equity in) connection

2D

she cancellation of the contract in question. Since

vo law of the United States is frustrated and since no

wiilic policy of the United States is cireumvented, the

several principles of equity must be applied in deter

mine the rights of the parties under the contract in

ostion in view of the authorities hereinabove re-

ferred to.

I) connection with the respective equities of the

parties hereto, we wish to point out that as late as

December 19, 1929, the Commissioner of Indian Affairs

addressed a memorandum to the Secretary of the In-

sorior which said memorandum appears in the printed

report of hearings before the Committee on Indian

\tfairs, United States Senate, in the year 1937, in con-

yection with Senate Bill 840. Said memorandum in part

reads as follows:

“The white settlers have only such legal rights

as were extended to them by the Act of June 7,

1924, Dut their equities are unquestioned and in

view of all the facts and circumstances of this case,

not one of them may be charged with bad faith’ **

The Indians were not in possession when the white

settlements were made, the boundary lines of the

reservation were not clearly established, the Gov-

ernment offered no opposition to the settlers, and

their claims were bought and sold much in the same

manner of privately-owned lands. The new pur-

chasers took possession and no objection appears

to have been raised by the Government”’ (R. 244).

In view of this expression of the Commissioner of

lidian Affairs, in view of the fact that petitioners have

paid the full amount of the purchase price of the prop-

erty in question, and in view of the fact that respondent

will suffer no prejudice by a specific enforcement of the

"6

contract in question, how can it be said that equitable

principles will be best served by permitting the forfe

ture of petitioners’ property and contract rights und

by permitting the forfeiture of their initial payment, no

portion of which has been tendered in connection with

the cancellation of their contract?

In this connection we refer to the case of U.S. rs.

Budd, 45 Fed. 630, 144 U.S. 154, wherein the following

lanevuage is used:

“Tn considering the merits of the first of the

several grounds for canceling the patent, it is im-

portant to keep in mind that this is not like a pro-

ceeding to rescind a contract. The government has

not offered to return the money it reeeived for the

land; and, while it seeks to be restored to its origi-

nal title and possession, it does not pray to have

the parties on both sides placed in the position

which they occupied before its officers and agents

granted Budd’s application to enter the land under

this statute, and accepted the money. The ease is

prosecuted to secure an absolute forfeiture of all

the defendants* interests in the land, as well as the

money paid for it, and proceeded under the theory

that whatever is illegal and wrong in the transae-

tion is chargeable solely to the defendants. Now,

if all that is claimed by the government as consti-

tuting the first ground for eanceling the patent, both

as matter of fact and of law, were conceded, the

court would be unable to find any sueh fraud in-

tended, or misconduet on the part of the defendants,

as would afford either legal or equitable cause for

the confiscation of their property. At most it is only

claimed that this particular land, by reason of hav-

ing heen once offered at public sale, is exeluded

from sale under the Act of June 3, 1878. If this is

so, the sale of it to Budd under this statute was an

error, but only an error, and one for whieh the

officers and agents of the government are chiefly

er |

responsible; for upon them is cast the duty of ad

ministering the law according to its provisions, and

of holding all persons: seeking to obtain title to

lands from the government to a compliance with the

laws and regulations prescribed for the determina

tion of their rights. When the government of the

Vnited States seeks relief from a court of equity,

+ is as much bounden as any individual suitor hy

the rules of equity: it can obtain such relief only

when entitled to it) upon principles of equity and

eood conseience. U.S. rs. White, 17 Fed. Rep. 273,

S Sup. Ct. Rep. 890. It cannot, to correct: a mere

error in a transaction not tainted with crime and

frand, perpetrate so grave a wrong on its part as

to deprive its adversary of valuable property or a

sum of money without any compensation or equiva-

lent therefor. If this were a suit between two pri-

vate individuals the plaintiff would not be equitably

entitled to a rescission of his contract and restora-

tion of his title to the land without first on his part

repaying the purchase money which he had_ re-

ceived; and by the same rules of equity and justice

the right to the government to recover this land,

and also to hold the purehase money paid for it,

must be denied, unless a forfeiture of the defend-

ant’s rights on the ground of fraud or willful mis-

conduet ean be shown.”’

It is conceded that as between an ordinary vendor

and vendee a forfeiture would not be decreed in equity

under the cireumstances presented by the instant pro-

ceeding. To this effect see the following authorities:

Mosso vs. Lee, 53 Nev. 175; 295 Pae. 776;

Clark vs. London Assur. Cor., 44 Nev. 399; 195

Pae. 809;

Lake vs. Lewis, 16 Nev. 94;

Bishop vs. Stewart, 13 Nev. 29;

Irvine vs. Hawkins, 20 Nev. 384;

First Federal Trust Company vs. First National

Aa

Bank, 299 Fed. 355 at 357 (CLC. AL 9. from

Nev.)

Pomeroy’s Hquity Jurisprudence (oth Ed.), Vol,

Ly Sec. 440, page Sol et seq.

The mere fact that the United States is the vendor is

het an adequate reason for refusing to apply equitable

pritciples in connection with the termination of said

contract, See Uawited States Harness Company vs. Gra

ham, 25s Ped. 929. Failure to apply equitable principles

in connection with the cancellation of the contract. in

question amounts to a deprivation of petitioners® prop-

erty without due process of law. To this effect see the

ease olf Walker vs. MeLoud, 204 U.S. 802.

Petitioners further contend that in any event the

statute of June 24, 1924, herein referred to does not

authorize the Secretary of the Interior to arbitrarily

declare a cancellation of the contraet in question. In

this connection it will be noted that the statute itself

tnakes uo provision for the cancellation of an entry duly

made. The only power conferred upon the Secretary of

the Interior by said statute for the recovery of the pos

session of auy of the real property referred to in said

statute is contained in subsection 4 of said statute,

which provides as follows:

“That where an entry is not made within the

time specified, the United States shall enter upon

the premises and take possession thereof for the

use and benefit of the Piute Indians of Pyramid

Lake Indian Reservation.’

I) is clear that if an entry was not made within the

time provided by said statute, the right of entry and

Hossession immediately arose, However, in all Cases

tioners Im

{ me specified,

+H)

ore a entry was made within the time specified, a

tract arose, the eancellation of which could not be

eared under the provisions of said statute.

No right of possession and no right ef entry can he

vo)

reated by rule or regulation contrary to the express

jyavisions of said statute itself. Since the entry of peti

the instant proceeding was made within, the

said entry gave rise to a valid contract

hereinabove noted. Onee said contract came into

wvistence the right to take possession conferred by the

Satute no longer existed and thenceforth said contract

must be dealt with as any other contract creating a

vondor-vendee relationship.

While it is true that the Secretary of the Interior

promulgated rules and regulations governing the pur-

chase of the real property in question, none of said

rales or regulations provided tor a forfeiture or any

method tor the termination of contracts created under

aid statute. If it be said that a forfeiture may be de-

layed in the absence of any express provision therefor,

then it may with equal force be said that thé Secretary

of the Interior to satisfy any passing whim might from

time to time promulgate rules or regulations the effect

of which would utterly destroy the very purpose of the

Act and thereby frustrate the legislative intent of Con-

gress, Whose sole purpose was to provide aid and relief

for petitioners and other persons similarly situated.

Any rules and regulations adopted under said Act must

he authorized by the Act itself and any rules or regula-

tions purporting to assume or take power in excess of

the statute are void. See

30

Morrill vs, Jones, 106 U.S. 466;

Campbell vrs, UU. S., 107 U.S. 407;

Williamson vs. ©. S., 207 U.S. 425;

Meads vs. U. S.. 81 Fed. 684;

United States vs. George, 228 U.S. 14.

In the case of Michigan Land and Lumber Company

rs. Rust, 168 U.S. 589, this court states as follows:

“Tt is, of course, not pretended that when an

equitable tithe has passed the Land Department has

power to arbitrarily destroy that equitable title.”

It will not be denied that redress ean always be had in

courts When the officers of the Land Department have

withheld from a pre-emptioner his rights, when they

have misconstrued the law, or when any fraud or de-

ception was practiced which affected their decision, See

Halley vs. Diller, VS U.S. 476, 490; Sanford vs. San-

ford, 189 U.S. 642, 647.

If the decision of the United States Cireuit Court of

Appeals is permitted to remain unreversed, the ranch-

ing unit built around the real property in question will

he completely destroved, resulting in a situation where-

in petitioners will own and occupy alternate legal sub-

divisions with the real property in question, in a more

or less *tcheekerboard’’ fashion. This situation will pre-

vent the practical and economical use of any of the real

property by either petitioners or by the Indians, for

whose benefit the Pyramid Lake Indian Reservation was

created.

As heretofore indicated, the dams and ditches were

construeted for the purpose of irrigating the ranching

‘nvolved as a single operating property. The re

moval of the real property involved in the instant pro-

auting will destroy the entire irrigation system and

asefulness thereof, insofar as both parties are con

copped, thereby making it impractical Without the ex

peuditure of large sums of money to irrigate not only

jelitioners’ patented property, but also the real prop

erty involved in this suit in the event the same should

« held to belong to respondent.

The use has already been recognized in petitioners

rouse the water upon all of the land involved in the

anit. in the ease entitled **The United States of Amer-

ca vs. Orr Water Ditch Company, et al, In Equity,

Docket A-3, United States District Court for the Dis-

triet of Nevada’? (Unreported) (R. 241).

In conelusion, therefore, petitioners respectfully urge

that the deeision and decree to which the petition for

Writ of Certiorari is directed is contrary to and in Col-

Hiet with prior decisions of this court, that the same is

contrary to and in conflict with prior decisions of other

Cipenit Courts of Appeal, that the same is contrary to

and in conflict with generally established principles of

equity and that the same is erroneous and subject to

reversal,

Dated: Reno, Nevada, February.........- , 1944.

Witnuiam M. Kearney,

Counsel for Petitioners

Sipney W. Ropinson,

Of Counsel for Petitioners.

(\ppendix Follows)