Fackler v. Ford

THIS was an appeal from the Supreme Court of the Territory of Kansas.

The facts of the case are stated in the opinion of the court.

It was argued by Mr. Carlisle, upon a brief filed by Mr. Badger and himself, for the appellant, and by Mr. Ewing and Mr. Coombs for the appellees.

The counsel for the appellant insisted that the agreement of November 23, 1856, was in violation of the fourth and fifth sections of the act of 31st March, 1830.

4 Stat. at L., 392.

We insist that the contract on which this bill is filed is in conflict with the provisions of both these sections, and tends immediately to defeat or obstruct the purpose of Congress. That purpose, in both sections, is to secure free and open contests at the sales of the public lands by auction. The fourth section prohibits any contract or agreement to induce or prevent any one from bidding at such sales. Here, the plain result and effect of this contract was to prevent the appellees from bidding for land which the contract shows that they desired to possess; and this was directly within the scope of the agreement and purpose of the parties. For how could it be consistent with the agreement, that the appellant should buy for himself and the other parties; that the other parties should bid against him-that is, against themselves? That they would not, was certain, because those other parties were by the agreement to pay to the appellant one moiety of the price at which the land should be bid off by him; and the agreement shows upon its face that it was well understood that the appellant would, as a settler on the land, buy it for the minimum price at which it was to be put up for sale; or, in other words, it was the expectation that there would in effect be no auction and no bid but that of the appellant, if the appellees did not enter the contest. And the agreement to pay the appellant ten thousand dollars beyond the price to be paid to the United States, shows that the land to be bought was known to be worth many times that price. It was therefore a plain, direct purpose of the contract to prevent the land from bringing a fair value, by stifling a contest, and excluding the only party besides the appellant desiring the land from bidding. And further, this understanding was so much a part of the contract, that the appellees could not have bid without violating the agreement on their part, and discharging the appellant from his part thereof. For to bid would have been to enhance the price, one-half of which the appellant was to pay, contrary to the obvious intent and purpose of the contract.

Now, all this is in plain contravention of the fourth section of the statute, which makes it an offence to bargain, contract, or agree with any person, that such person will not bid at any such sale, or even to attempt to make a bargain, contract, or agreement, for such purpose. Now, here was not only a contract, but an effectual one, by which the appellees were prevented from making a bid.

But further, the same section makes it an offence, by any 'combination or unfair management,' to hinder, or prevent, or attempt to hinder or prevent, any person from bidding; and though this primarily refers to the hindering of persons from bidding who are not parties to the combination or management, yet in this case, upon this contract, the combination or management with each other to procure the land at a less price, by preventing one of the parties, is seen to be within the mischief which the statute was intended to prevent; and whether the parties would or would not be indictable, yet the contract is in plain and evident conflict with the policy of the law, and therefore prohibited thereby.

But the contract is also manifestly a violation of the lastcited section-the fifth of the statute.

That section prohibits any and every contract or secret understanding made by one or more persons with another who proposes to purchase any such lands, to pay or give to such purchaser for such land a sum of money or article of property over and 'above the price at which the land may or shall be bid off,' and declares every such contract, &c., and 'every bond, obligation, or writing, of any kind whatsoever, founded upon or growing out of the same,' to be utterly null and void, and authorizes any party to such contract, &c., who may pay any such sum of money, &c., to sue for and recover back the same. Now, the contract in this case, we submit, falls, both literally and in spirit and intent, within the prohibition of this section. First, as to its letter. The parties came to an understanding for what the statute prohibited, and then entered into a written contract, which is void. Secondly, the whole scope and intent of the contract is in violation of the spirit of the law, which is, to secure a fair competition at the public sales. And both sections seek to accomplish that purpose-the former, by punishing any attempt to prevent bidding; the latter, by avoiding contracts between the parties, by which one should buy and sell to another at an enhanced price. The object is one-to insure fair competition. This is sought by both sections; and the contract in our case embraces both the modes of evading the enactment and accomplishing the mischief against which the statute was directed. There is, first, the attempt, by a bargain well devised and successfully carried out, to prevent competition, and procure the land at less than its value, by making it the interest of one party not to bid; then, there is, to accomplish the same purpose, the stipulation by that party to pay a price additional to that offered to and received by the United States at the auctionsale, and the actual payment thereof to the other party.

Now, it seems sufficiently obvious, that if such a contract will be enforced in a court of justice, for either party against the other, the object of the statute will be defeated. True, one or both the parties might have been, perhaps, indicted under the first section before the time of limitation had expired, and true, also, that one of the parties might, and may now, recover against the other the sum paid in violation of the law; but that is not the full measure of aid which courts of justice give in support of the law. The indictment may be barred by time; the recovery back of the money may be prevented by the statute of limitations; but courts act upon the principle of giving no relief to parties to an unlawful contract-one expressly forbidden by law, or growing out of or connected with one so forbidden, or which plainly violates the policy of the law-the end and object of the law-however such contracts may be framed or executed.

This case, we submit, falls within this principle, and the appellees are consequently not entitled to relief.

The counsel for the defendant contended, on the other hand, that the agreement was not in violation of either of these sections.

The fourth section was intended to protect the United States against combinations to prevent competition at the sales.

Now, this case does not come within the provisions of this fourth section; there is no such agreement as it contemplates, either alleged or proved. If that section stood alone, this would be simply a case where two or three men give two or three other men a sum of money, the latter of whom are to bid off two designated tracts of land for the common benefit, and divide the land equally between them.

2. But the contract does, we think, come within the fifth section of the same act, which was intended, not for the protection of the United States, but for the protection of the person who is made to pay a premium to another for bidding off land for him. It is to prevent the levying of black mail, by combinations of men, trespassers on the public lands, who assemble at the sales, and with rifle and revolver overawe honest bidders. It was intended for such cases. It is in these words:

'That if any person or persons shall, before or at the time of the public sale of any of the lands of the United States, enter into any contract, bargain, agreement, or secret understanding with any other person or persons, proposing to purchase such land, or pay or give such purchasers for such land a sum of money, or other article of property, over and above the price at which the land may or shall be bid off by such purchasers, every such contract, bargain, agreement, or secret understanding, and every bond, obligation, or writing of any kind whatsoever, founded upon or growing out of the same, shall be utterly null and void. And any person or persons being a party to such contract, bargain, agreement, or secret understanding, who shall or may pay to such purchasers any sum of money or other article of property, as aforesaid, over and above the purchase money of such land, may sue for and recover such excess from such purchasers in any court having jurisdiction of the same. And if the party aggrieved have no legal evidence of such contract, bargain, agreement, or secret understanding, or of the payment of the excess aforesaid, he may, by bill in equity, compel such purchaser to make discovery thereof; and if in such case the complainant shall ask for relief, the court in which the bill is pending may proceed to final decree between the parties to the same: Provided, every such suit, either in law or equity, shall be commenced within six years next after the sale of said land by the United States.'

The person of whom illegal exaction is made is not an offending, but, in the language of the act, the 'aggrieved' party. Courts of equity are opened to him; he may compel a disclosure by the offending party, and he may have a decree for 'such excess' as he has been compelled to pay. He may not, as seems to be supposed on the other side, recover back the actual purchase money, but only the excess, having his remedy in equity, as a matter of course, for the title to his land also. The fact that he has been swindled in the purchase, does not at all deprive him of his right to the land purchased. If the complainants had paid but $560, the actual price at which the land was bid off, they would have been entitled to their half of the land, beyond all doubt or question. But they were illegally required to pay an 'excess,' or not get the land. They paid it; the act of Congress says they are 'aggrieved,' and have a right to recover it back in equity. The act which gives them equitable remedy, which they had not, cannot be construed to take away that which they already had. It is not intended to aggrieve the person imposed on, but to redress his grievance.

Mr. Justice GRIER delivered the opinion of the court.