United States v. Budd/Dissent Brown

Mr. Justice BROWN, dissenting.

Mr. Justice HARLAN and myself agree with the majority of the court in its construction of the timber and stone act of June, 1878, that it provides for the sale of lands valuable chiefly for timber, but unfit, at the time of such sale, for cultivation. From so much of the opinion, however, as holds that the purchase of these lands by the defendant Montgomery was bona fide, we are constrained to dissent.

The object of the act in question was to authorize the sale of timbered lands in lots not exceeding 160 acres to any one person, at a minimum price of $2.50 per acre; and, in furtherance of this object, it was provided, in section 2, that the applicant must make oath that he has made no other application under the act; that he does not apply to purchase the same on speculation, but in good faith to appropriate it to his own exclusive use and benefit; and that he has not, directly or indirectly, made any agreement or contract in any way or manner, with any person or persons whatsoever, by which the title he might acquire from the government of the United States should inure, in whole or in part, to the benefit of any person except himself.

The facts in regard to this particular entry are meager. It appears that Budd and Montgomery were both residents of Portland, Or., and that Budd carried on a stock stable there; that he entered the land on August 23, 1882, paid for it on November 10th, and conveyed it to defendant Montgomery on December 4th, for a nominal consideration of one dollar. Nearly three years thereafter he stated to a special agent of the land-office that he had taken up the land for his own benefit; that he had not sold it to anybody, but still held it, (a statement manifestly untrue;) that he was not sure that he had ever seen the tract, but had once gone into the neighborhood for that purpose; and that the land was 'in soak,' whatever that may mean. He refused to make an affidavit, but said he would make a statement. The tract for which he paid $2.50 per acre is shown to be worth $5,000, or over $31 per acre.

Did the case rest upon this statement alone, it must be conceded that the government had not proven enough to authorize an annulment of the patent subsequently issued. But it is a familiar rule that where a particular act is equivocal in its nature, and may have been done with fraudulent intent, proof of other acts of a similar nature, done contemporaneously or about the same time, are admissible to show such intent. Cases of fraud are recognized exceptions to the general rule that the commission of one wrongful act has to legal tendency to prove the commission of another. Such other acts always have a bearing upon the questions of fraudulent intent or guilty knowledge where they are in issue. Thus, a single act of passing counterfeit money is very little, if any, evidence that the party knew it was counterfeit, since the innocent passing of such money is an every-day occurrence; but if it be shown that the person accused made other attempts to pass the money, at or about the same time, or that he had other counterfeit money in his possession, the proof of scienter is complete. The same rule is frequently invoked in cases of alleged frauds upon the government. It was applied by this court, in Castle v. Bullard, 23 How. 172, to a case where the defendants were charged with having fraudulently sold the goods of the plaintiff; in Lincoln v. Claflin, 7 Wall. 132, to an action for fraudulently obtaining property; and in Butler v. Watkins, 13 Wall. 456, to an action for deceit in endeavoring to prevent a patentee from using his invention. The authorities are fully reviewed in Insurance Co. v. Armstrong, 117 U.S. 591, 6 Sup. Ct. Rep. 877, a case where a policy of life insurance was alleged to have been obtained for the purpose of cheating and defrauding the insurance company, and evidence was admitted that policies in other companies had been obtained with like intent.

In this connection the evidence shows that, in addition to Budd, there were 21 others, who, within the next few months, entered and paid for similar tracts of land, and within a few days thereafter conveyed them to the defendant Montgomery for the nominal consideration of $1. In two instances the land was deeded before the payment to the government. Thus, of four entries and payments November 10th, deeds were in all except one instance executed prior to December 15th; of three entries in December, deeds were made within two days in two cases, and the day before the payment in the other; of three payments on March 17th, for entries previously made, deeds were executed upon May 1st; of eleven payments in June, deeds were all made before the end of the month; and of one payment, made July 2d, a deed was executed June 26th. In all these cases except one the entries were witnessed by George F. White and George W. Taylor, White being an agent of Montgomery for examining timber lands. All of the lands covered by these 22 entries lie in the same township, except one, which lies in an adjoining township. In all the cases but two the acknowledgments were made before the same notarial officer. The deeds thus executed to Montgomery covered 3,000 acres, and, if valued on the basis of the valuation of the Budd land, would amount to about $100,000. Two witnesses swore that, in 1882, Montgomery requested them to take a timber claim, and offered to pay them $100 each for their rights and expenses.

These facts, with certain others stated in the opinion of the court, constituted the case of the government. While, if these facts stood alone, without opportunity for further explanation, it might be open to argument whether they established such a case of want of good faith as to call upon this court to annul the patents, we are clearly of the opinion that they are of such a nature as to call upon the defendants to produce the testimony within their reach to explain the suspicious circumstances attending these entries. As the case stands, the inference seems to us unavoidable, either that Montgomery bargained for these lands beforehand, or that he was most singularly fortunate in being able to purchase them so soon after their entry. Neither Budd nor Montgomery, nor their witnesses White and Rockwell, were put upon the stand, though all, or, at least, some of them, must have been cognizant of the entire facts connected with these transactions. 'It is certainly a maxim,' said Lord MANSFIELD, 'that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other side to have contradicted.' Blatch v. Archer, Cowp. 63. It has always been held that the omission of a party to testify as to facts in his knowledge in explanation of, or to contradict, adverse testimony is a proper subject for consideration both at law and in equity. McDonough v. O'Neil, 113 Mass. 92. The rule was thus stated by Chief Justice SHAW in the celebrated case of Com. v. Webster, 5 Cush. 295, 316: 'Where probable proof is brought of a state of facts tending to criminate the accused, the absence of evidence tending to a contrary conclusion is to be considered, though not alone entitled to much weight; because the burden of proof lies on the accuser to make out the whole case by substantive evidence; but when pretty stringent proof of circumstances is produced, tending to support the charge, and it is apparent that the accused is so situated that he could offer evidence of all the facts and circumstances as they existed, and show, if such was the truth, that the suspicious circumstances can be accounted for consistently with his innocence, and he fails to offer such proof, the natural conclusion is that the proof, if produced, instead of rebutting, would tend to sustain, the charge.'

It is said by Mr. Starkie, in his work on Evidence, (volume 1, p. 54:) 'The conduct of the party in omitting to produce that evidence in elucidation of the subject-matter in dispute, which is within his power, and which rests peculiarly within his own knowledge, frequently affords occasion for presumptions against him, since it raises strong suspicion that such evidence, if adduced, would operate to his prejudice.' The same rule is applicable even in criminal proceedings. 3 Starkie, Ev. 1253. See, also, 2 Poth. Obl. 340. It is said, however, in excuse, that when Budd made his application he filed an affidavit that he had made no agreement with any one; and that Budd and Montgomery each filed an answer under oath denying specifically any such prior agreement. This, however, answers but poorly for the testimony which these witnesses could give upon the stand. Our experience with human nature teaches us that men who are guilty of a transaction of this kind will not hesitate to put upon file a formal denial of their bad faith, and we hazard nothing in saying that the first impulse of an innocent man under such circumstances would be to offer himself as a witness in his own behalf, and vindicate his own conduct in the transaction. It is true that the government was at liberty to call upon these witnesses, but in so doing it would make them its own, vouch for their veracity and integrity, be bound by their statements, and be denied, except in the discretion of the court, the right of cross-examination, which is the one thing indispensable to bring out the facts as they actually existed. Even if the right of cross-examination be conceded, we do not understand that it changes in any way the obligation of the defendants to produce such explanatory testimony as is within their control. While it is true that, from the fact that a person has been guilty of fraud in one transaction, it is not necessarily implied that he has been guilty of it in another, the probability of a fraudulent intent is very greatly increased by the multiplication of transactions of a similar nature.

The evidence in this case tends to show that defendant Montgomery had, by this and other devices, appropriated to himself over 10,000 acres of land in and about this neighborhood. It is unnecessary to say that, however this may have been done, it is a practical defeat of the intention of congress. It certainly demands, and in this instance seems to have received, a searching investigation. When we see the most valuable portion of an immense domain, which has been reserved by the beneficence of congress for the benefit of actual settlers, or of small proprietors, being gradually absorbed by a few speculators, we are forced to inquire whether there is not a limit beyond which even a land patent of the United States begins to lose something of its sanctity.

We think the decree of the court below dismissing the bill should be reversed.