Summary
In State ex rel. McCullen v. Adams, 185 Miss. 606, 188 So. 551 (1939) the Court said, "since John Jordan was sufficiently familiar with the value of the land as to be willing to pay a cash consideration of $1,600 therefor" he was put on notice of the grossly inadequate price of $160 paid for the land by Adams in purchasing the same from the State Land Commissioner.
Summary of this case from Hill v. ThompsonOpinion
No. 33694.
May 8, 1939.
1. TAXATION.
Where application for purchase of land forfeited to state for taxes stated that land involved was all "cut over land," land commissioner was entitled to assume that the representation meant that the land had at some time been merely logged (Laws 1936, chapter 174, section 5).
2. TAXATION.
The concealment that a good portion of a tract of delta land, forfeited to the state for taxes, had been recently cleared, and resulting sale at a grossly inadequate price, constituted a fraud on the state (Laws 1936, chapter 174, section 5).
3. TAXATION.
The land commissioner is without authority to waive the answering of inquiries contained in application for purchase of land forfeited to state for taxes (Laws 1936, chapter 174, section 5).
4. TAXATION.
Where statute required filing of an application under oath and the giving of information called for therein as a condition precedent to right to obtain a patent to land forfeited by the state for taxes, such application constituted a part of patentee's muniment of title of which applicant's subsequent purchaser was charged with notice (Laws 1936, chapter 174).
5. TAXATION.
Where muniment of title showed that applicant for purchase of state land forfeited for taxes had paid only $160 therefor, and that application did not give all information required, purchaser who paid $1,600 for land from applicant who was unwilling to make unconditional warranty of title was not an "innocent purchaser for value without notice," and state was entitled to have patent to land cancelled (Laws 1936, chapter 174; Code 1930, section 6007 et seq.).
APPEAL from the chancery court of Washington county; HON. J.L. WILLIAMS, Chancellor.
Robertson Robertson, and R.L. Stainton, all of Jackson, and Chas. S. Tindall, of University, for appellants.
Fraud in the sworn application to purchase filed with the state land commissioner, R.D. Moore, was proved by the evidence and by all the circumstances surrounding the sale.
Fraud consists of anything which is calculated to deceive, whether it be a single act or a combination of circumstances, or acts or words which amount to a suppression of the truth, or mere silence, or other artifice by which a person is deceived, but to constitute a ground for avoiding a sale of personal property, the seller must have been under obligation to speak — mere silence alone not being sufficient.
Salter v. Aviation Salvage Co., 91 So. 340, 129 Miss. 217, 26 A.L.R. 987; 3 Words and Phrases (3rd Series), page 775; Smith v. State, 65 So. 564, 107 Miss. 486.
The initial step for a purchaser of state forfeited tax land to take is to file with the state land commissioner a sworn, written application to purchase. This procedure is not optional with the purchaser. It is mandatory and it places the applicant squarely under the duty of furnishing not only the desired information but the required information as shown by the questions in the printed application.
Chapter 174, Laws of 1936; Streeter v. State ex rel. Moore, 180 Miss. 31, 177 So. 54.
Every question asked and contained in the application to purchase and required to be answered, had a very definite reason for appearing therein, and the land commissioner, in preparing the form of application, deemed the facts about which questions were asked material and relevant to a proper knowledge and understanding of the present value of the land owned by the state. In the case at bar some of these questions were purposely ignored, and others answered falsely.
Griffith's Chancery Practice, page 657.
We submit that in the case at bar, the consideration of $160 for 160 acres of delta land with a good road along all of the north boundary, was shockingly inadequate and this inadequacy was conclusively proved when John Jordan paid $1600 cash for this land less than five months later.
The applicant was under a duty imposed by law to answer all questions contained in the application, and thus to furnish all information and data required. He could not answer some of the questions and ignore others and by silence and omission escape.
26 C.J. 1071; Salter v. Aviation Salvage Co., 129 Miss. 217.
The land commissioner did rely upon and was deceived by the fraudulent representations and the fraudulent ignoring of questions in the sworn application to purchase.
By valuing the land in controversy at the minimum price of $1 per acre and by selling the whole 160 acres of this rich delta farm land for $160, the state land commissioner clearly demonstrated and made manifest his reliance upon the representations made in the sworn application.
Streeter v. State, 180 Miss. 31.
If the judgment of the lower court is allowed to stand in this case, then Mrs. Hunter Adams, John Adams and George Adams will have been permitted to profit by their own wrong, and it is not a measly profit of a few per cent but exactly 100% profit.
We submit that the payment of $160 for a $1600 tract of land alone is enough to prove our case. The consideration was so grossly inadequate as to shock the conscience of even the most indifferent of mankind.
Petree v. Wright, 14 Miss. 647, 6 S. M. 647; 26 C.J. 1141.
Where a person ignorant of the real facts and having no ready means of information enters into a transaction as to the subject matter of which representations have been made which are material, the law will presume as a matter of fact that he relied on them.
27 C.J. 49, par. 179 (8); Wilson v. Carpenter, 91 Va. 183, 50 Am. St. Rep. 824; McNeer Dodd v. Norfleet, 113 Miss. 611, 74 So. 577; Vincent v. Corbett, 94 Miss. 46, 47 So. 641.
Fraud in the sworn application to purchase filed with the state land commissioner, R.D. Moore, was proved by the evidence and by all the circumstances surrounding the sale.
The land commissioner did rely upon and was deceived by the fraudulent representations and the fraudulent ignoring of questions in the sworn application to purchase.
Hudson v. Miller, 114 So. 820, 148 Miss. 783.
Ernest Kellner and Leroy Stockdale, both of Greenville, for appellees.
The evidence shows that no fraud was practiced on the State of Mississippi in the issuance of the patent to the appellee, Mrs. Hunter Adams.
The decision of the trial court that no fraud was practiced on the State of Mississippi in the issuance of the patent to the appellee, Mrs. Hunter Adams, presents a question of fact and under the uniform decisions of this court unless the decision of the trial court is manifestly erroneous it will be affirmed by this court.
We respectfully submit that the decision of the trial court that no fraud was practiced on the State of Mississippi in the issuance of the patent to the appellee, Mrs. Hunter Adams, is manifestly correct.
The appellee, John Jordan, was a purchaser for value and without notice. On this question John Jordan testified without contradiction that prior to his purchase of the land of the appellee, Mrs. Hunter Adams, he did not know her or her husband, and that he purchased the land through a third person. He testified that he knew the land had been patented to the appellee, Mrs. Hunter Adams, by the State of Mississippi, but that he made no investigation and did not know any of the facts in connection with the issuance of the patent to her. This testimony is not denied, and, therefore, the appellee, John Jordan, who paid $1600 cash for the land, was a purchaser for value and without notice of any fraud, if any existed, in the procurement of the patent by the appellee, Mrs. Hunter Adams. Upon this proof, under our statute, even conceding that there was fraud in the procurement of the patent by the appellee, Mrs. Hunter Adams, the rights of the appellee, John Jordan, will be protected.
Section 6028, Code of 1930.
The government cannot repudiate a patent on the ground of fraud and recover the land as against an innocent purchaser for value from the patentee.
50 C.J. 1116.
Argued orally by Stokes V. Robertson, for appellant.
Upon a final hearing of this cause on the merits, the court below dismissed the bill of complaint of the appellant wherein it was sought to cancel, as having been obtained through fraud, a certain State Land Patent issued on May 25, 1936, in the name of the appellee, Mrs. Hunter Adams, at a purchase price of $160, and covering 153 acres of land described as the NE 1/4 of S. 5, T. 16, R. 7, in Washington County, Mississippi, and which had been forfeited to the State for taxes; and also to cancel her deed of conveyance to the appellee John Jordan, executed on October 24th of that year, when the land was in the same condition as when patented, for a cash consideration of $1600.
Section 5 of chapter 174 of the General Laws of 1936 provides, among other things, that "any person desiring to purchase any state forfeited tax land shall make application in writing to the land commissioner for the purchase of such land, and shall state in such application: (a) . . . (b) . . . (c) . . . (d) . . . (e) . . . and (f). Such other specific information as the land commissioner with the approval of the governor may require. Each such application shall be properly sworn to before an officer authorized to administer oaths. The land commissioner may require such additional information with reference to the value of such lands, . . . as he may deem necessary."
The bill of complaint herein alleged the filing of an application in the name of the appellee, Mrs. Hunter Adams, by George Adams, Agent, for the land in question, stating that none of the land was in cultivation; that none of it was open or pasture lands; that it was all cut-over land; and that "the present value of the above described property is not in excess of $ ____," and that the purchase of the land was intended for the applicant's own use and benefit. The bill further alleged that the state land commissioner relied upon these representations, without any information or knowledge as to their truth or falsity except that furnished in the application. The appellees admitted in their answers that these representations were made and that they were relied upon by the land commissioner; and they then aver that the representations were true. The proof disclosed that the agent, George Adams, was in reality purchasing the land for John Adams, husband of Mrs. Hunter Adams, and taking the patent in his wife's name on account of the fact, as testified to by John Adams, that he had already received a patent for maximum area allowed a purchaser in one year, and that therefore the purchase was not made by the applicant for her own use and benefit; that George Adams was familiar with the nature and character of the land, since he testified that he went over it two or three times a few days before the filing of the application.
The proof further disclosed that beginning in the year 1932 and continuing into 1934 a former owner, A.E. Wilson, cleared a portion of the land each year until he had succeeded in opening up approximately 34 acres thereof, 6 acres of which was planted in cotton in 1934, after having been rendered almost free of trees, and that a good portion of the remaining 28 acres of the cleared land had been disced with a tractor, and that 9 acres thereof was along the roadside. This clearing had been done at an expense of about $265 in addition to the value of the time given to the work by Wilson and his son. Between the year 1934 and the date of the sale of the land by the State to the said Mrs. Hunter Adams in May 1936, under the patent aforesaid, this cleared land grew up in weeds, small bushes and briers, but it is shown that the cost of again preparing it for cultivation would be almost negligible in comparison with the cost of an original clearing. As heretofore stated, the application which purported to give the land commissioner the information desired as to the value of the land, and the filing of which is by the statute hereinbefore referred to made a condition precedent to the right of the applicant to obtain a patent, stated that there was no open or pasture land on the tract, when in truth and in fact the agent knew that there was then approximately 34 acres of open land thereon. Since the application stated that it was "all cut-over land," the land commissioner had a right to assume that the representation meant that the land had at some time been merely logged. It was correctly stated that none of it was then in cultivation, it being state land, if the applicant understood this representation was to be given a literal meaning, as the State was not farming. Manifestly, however, the concealment of the fact that a good portion of this tract of delta land had been so recently cleared was the principal inducement to the sale at such a grossly inadequate price; and constituted a fraud upon the State. Moreover, the applicant failed to answer other inquiries contained in the application, which the law imposed upon him the duty of answering, and which would have enabled the land commissioner to properly and intelligently determine a fair price to be charged therefor; and which information the commissioner was without authority to waive.
It was held in the case of Streater et al. v. State ex rel. Moore, Land Commissioner, 180 Miss. 31, 177 So. 54, 56, wherein the same George Adams acted as the agent in making the purchase from the State, that "the purchaser of state lands is required to give the Land Commissioner information as to the condition, occupancy, and value of the land, etc., as shown by the application therefor." Further that "the Land Commissioner, being a public officer, could not knowingly accept a fraudulent statement, and if he did so his act would not bind the state, for a public officer must act in good faith in representing the state." Since chapter 174 of the Laws of 1936, supra, requires the filing of an application under oath, giving the information called for therein, as a condition precedent to the right to obtain a patent, such application constituted a part of the patentee's muniment of title, and with which the appellee, John Jordan, as vendee of the patentee, was charged with notice. The patent was duly recorded in the chancery clerk's office of Washington County prior to the purchase by the appellee John Jordan, and the original was delivered to him along with his deed of conveyance from the patentee. The patent recited that it was issued under the provision of chapter 153, (section. 6007 et seq.) of the Code of 1930, and House Bill No. 275 of the Laws of 1936, meaning chapter 174 thereof; and since John Jordan was sufficiently familiar with the value of the land as to be willing to pay a cash consideration of $1600 therefor, the grossly inadequate price of $160 paid for the land as recited in the patent, then of record and delivered to him as aforesaid, should have put him on inquiry as to how it so happened that the State was induced to issue the patent for such a grossly inadequate consideration. The muniments of title, including the fraudulent application for the patent, would have disclosed the reason. Also, the mere fact that his grantor was unwilling to make an unconditional warranty of the title to him should have excited his interest in that behalf in connection with the recital in the patent as to the price paid to the State therefor. It was said in the case of Dead River Fishing Hunting Club v. Stovall et al., 147 Miss. 385, 113 So. 336, 337, that: "A purchaser of land is charged with notice not only of every statement of fact made in the various conveyances constituting his chain of title, but he is also bound to take notice of and to fully explore and investigate all facts to which his attention may be directed by recitals in said conveyance contained. The duty is also imposed on him to examine all deeds and conveyances previously executed and placed of record by his grantor — either immediately or remote — if such deeds or conveyances in any way affect his title. And if in any such deed or conveyance there is contained any recital sufficient to put a reasonably prudent man on inquiry as to the sufficiency of the title, then he is charged with notice of all those facts which could and would be disclosed by a diligent and careful investigation. Parker v. Foy, 43 Miss. 260, 5 Am. Rep. 484; Deason v. Taylor, 53 Miss. 697; Alliance Trust Co. v. Nettleton Hardwood Co., 74 Miss. 584, 21 So. 396, 36 L.R.A. 155, 60 Am. St. Rep. 531; Baldwin v. Anderson, 103 Miss. 462, 60 So. 578; Crago v. Vitter, 120 Miss. 103, 81 So. 646."
Wherefore, we are of the opinion that the claim of the appellee John Jordan, as an innocent purchaser for value without notice, within a legal sense, is not sustained by the proof in this case. In so holding, we are not departing from the rule that the finding of the chancellor on conflicting evidence will not be disturbed unless manifestly wrong, since there is but little substantial conflict in the testimony. We merely conclude that the court below was in error in holding that the undisputed facts did not constitute fraud, and that he was in error in holding under the record of the title that the appellee John Jordan was protected as an innocent purchaser for value without notice. If the State is to lose its lands through the fraud of purchasing agents merely because a patentee has subsequently conveyed the land to a person who has no actual knowledge of the fraudulent representations made in writing to the land commissioner, and where such subsequent purchaser has failed to avail himself of the means of obtaining the necessary information in regard thereto, then the way would be opened, by judicial construction, for defrauding the State of vast quantities of the tax forfeited lands which it now holds. It is desirable that these lands be sold and placed back on the land assessment rolls, but not through the perpetration of fraud on the State to that end. The Appellee was entitled to the relief prayed for in this case.
Reversed and decree here for the appellant.