Orrell v. Bay Manufacturing Co.

Truly, J.,

delivered the opinion of the court.

On the 31st of July, 1899, Henry Hode and' his wife executed a lease contract conveying to G-. S. Leatherbury & Company certain turpentine rights in the pine timber on a quarter section of land then in possession of said Hode by virtue of an incomplete homestead entry thereof. At the date of this contract the homestead entry of the said Hode to the land in question had not been perfected and no final certificate and patent from the United States government was issued until the year 1903. On' the 17th of February, 1903, Hode and his wife, after the homestead entry was perfected, executed a “turpentine lease” on the same timber to J. 0. Orrell, appellant, and under that lease Orrell entered on the land and began to box the timber preparatory to the gathering of the rosin from the trees. Appellee, which by assignment had become the holder of the lease granted to Leatherbury, filed its bill in the chancery court and procured an injunction restraining the appellant Orrell and Hode and wife from using any of the timber for turpentine purposes, and from in any manner interfering with or trespassing on the rights of appellee. On motion to dissolve the injunction the case was heard on the pleadings and an agreed statement of facts. The motion to dissolve was overruled, and from the interlocutory decree rendered an appeal was granted to settle the principles of the cause. On this appeal appellants contend that they are entitled to the turpentine rights in the timber in question. They base their claim on two grounds: 1. That the lease from Hode to the assignor of appellee was made while the land was yet the property of the United States government, and is therefore void. 2. Because the contract by virtue of which ap-pellee claims is contrary to the public policy of the United States government in dealing with its homestead lands, and consequently specific performance thereof will not be decreed by a court of equity.

The lease in question is as follows: “In consideration of the sum of $50.00, the receipt of which I hereby acknowledge, I hereby lease and convey for a period of three years from the time the boxes are cut to the firm of G-. S. Leatherbury & Co., of Silver Hill, Miss., all the pine timber on my land suitable for turpentine purposes on the lands in Hancock county described as West 1-2 of Southeast 1-4 and the East 1-2 of the Southwest 1-4, sec. 20, Tp. 6, Eange 15 West, lease not to exceed fifteen years. I also state that I have leased my lands for the improvement of same. Containing about 160 acres said timber to be worked by Gr. S. Leatherbury & Co., for turpentine, for which I am to receive the sum of $100 per crop of 10,000 boxes, the above sum of $50 being the first payment thereon, the remainder to be paid when the boxes are cut, said Gr. S. Leather-bury & Co., their assignees and representatives, shall have the right to work and use said boxes for a period of three years without further rental, and shall have the right of way through any and all of my lands for the purpose of cutting, dipping, and hauling.same. Witness our hand the 31st day of July, 1899.

HeNby X. Hode.

Maby X. Hode.

The lease made, to Orrell after final certificate and patent had been issued is practically identical in terms with the one above set out. In the agreed statement of facts on which the (motion to dissolve was heard, it is recited, “that the question to be decided upon this motion is as to the superiority of the respective leases as a question of law.” The question presented a consideration of the rights and duties of persons making application to secure homesteads in the public lands of the United States. Under section 2289 of the U. S. revised statutes, as amended by the Act of 1891 (26 Stat. at L., 1098), a settler making application for a homestead' is required to file an affidavit stating that he “will faithfully and honestly endeavor to comply with all the requirements of law as to settlement, residence, and cultivation necessary to acquire the lands applied for, that he or she is not acting as agent of any person, corporation, or syndicate in making' such entry, nor in collusion with any person, corporation, or syndicate to give them the benefit of the land entered or any part thereof or the timber thereon.” IJpon making and filing this affidavit and the payment of a certain small sum proportionate to the amount of land applied for, the entryman acquires certain rights in the land and the timber growing thereon. He acquires a privilege of pre-emption, and is clothed with the right and power to protect his entry from intrusion or trespass. While against the government he, perhaps, acquires no vested interest in the land allotted him, against all else he acquires the right to an absolute and undisturbed possession and control which, upon compliance with other provisions of the homestead law, as to occupancy, cultivation, and .non-alienation, may eventually ripen into ownership. Prior to the time at which, by issuance of patent, he acquires indefeasable title to the land constituting his entry, his interest in the standing timber thereon is to a certain degree limited, and'the government forbids the commission of waste, and may, under section 2461, TJ. S. revised statutes, prosecute criminally for the cutting and removal of trees therefrom, unless for certain recognized and necessary purposes.

In Shivers v. United States, 159 U. S., 491, 40 L. Ed., 233, the settlers right is stated thus: “By analogy we think the settler upon a homestead may cut such timber as is-necessary to clear the land for cultivation, or to build him a house, outbuildings, and fences, and, perhaps, as indicated in the charge of the court below, to exchange such timber for lumber to be devoted to the same purposes; but not to sell the same for money, except so far as the timber may have been cut for the purpose of cultivation. While, as claimed in this case, much money might be used to build, enlarge, or finish a house, the toleration of such practice would open the door to manifest abuses, and be made an excuse for stripping the land of all its valuable timber. One man might be content with a house worth $100, while another might, under the guise of using the proceeds of the timber for improvements, erect a bouse worth several thousands. A reasonable construction of the statute— a construction consonant both with the protection of the property of the government in the land and of the rights of the settler — we think, restricts him to the use of the timber actually cut, or the lumber exchanged for such timber and used for his improvements, and to such as is necessarily cut in clearing the land for cultivation.”

It is seen from this that the settler has no right to dispose of the timber for any purpose not incident or reasonably necessary to the consummation of the object for which the land is allotted to him; he has no right to sell the timber for purposes of speculation or profit. After the expiration of five years from the date of original entry the settler, upon making certain proof as to ocupancy, cultivation and kindred matters, and filing an affidavit as provided by section 2291 of the revised statutes, “That no part of such land has been alienated,” except for certain specified public purposes, is entitled to receive a patent which vests in him the title of the government.

The argument on the part of appellants is that the lease for turpentine purposes, under which appellee claims, is, in the meaning of section 2291, an “alienation” of a part of the land, and as this contract was made prior to the final divestiture of the title from the government that Ilode could not have acquired the patent to the land without committing perjury and fraudulently concealing the fact, that he had executed this conveyance. This argument is based upon an extention of the principle announced in Anderson v. Carkins, 135 U. S. L. Ed., 272. That was a case where a settler, prior to the issuance of final certificate, entered into a contract obligating himself to convey a portion of the land when the title should be finally acquired from the government, and it was there decided that a court of equity would not enforce specific performance of a contract which necessitated for its fulfillment the commission of perjury by the settler, and wbieb was evidently designed to tbwart tbe public policy of the government in reference to homestead entries. The contract sought to be enforced in that case was flagrantly violative of the distinctly expressed policy of’the government forbidding alienation of any part of the land granted the homesteader.

In order to ascertain whether the instrument under which appellee claims was in violation of the statute forbidding alienation we must first ascertain the meaning of the word “alienation,” as used in this connection, and in passing to this consideration should bear in mind that all provisions of law in restraint of alienation are to be strictly construed.

“Without entering upon an extended discussion of the subject, it is sufficient to say that the law does not favor restraints upon alienation, and nothing short of a positive provision to that effect will justify the court in holding that a statute imposes such restraints.” Knight v. Leary, 54 Wis., 469.

The provision as to alienation in section 2291 is “that no part of .such land has been alienated except as provided in section 2288.” Turning to section 2288 we find that the alienation therein permitted is of a definite quantity of the land itself — not a lease of the land, not an interest in the timber, not a lien on the land, but “a part of the land.” It has been repeatedly held that a mortgage or other lien on the land does not come within a prohibition against an alienation, the 'reason being that while the lien may finally result in an alienation, it is not in itself a violation of the limitation placed upon the right of the owner.

“Alienation Is the voluntary and complete transfer from one person to another, and, if it be concerning the transfer of property, it involves the complete and absolute exclusion, out of him who alienates, of any remaining interest, or particle of interest, in the thing transmitted. It involves the complete transfer of tbe property and possession of land, tenements, or other things to another.” Stark v. Duvall, 7 Okla., 217.

“The alienation prohibited by the statute is an absolute alienation of the land, or a part thereof.” Mudgett v. R. R. Co., 8 Land. Dec. Dept. Int, 243; Wilcox v. John, 40 Pac., 880; Dickenson v. Bridges, 147 Mo., 235; Weber v. Laidler, 26 Wash., 144; Meinholdt v. Wallers, 102 Wis., 289; Hot Springs R. R. Co. v. Tyler, 36 Ark., 205; Full v. Hunt, 48 Iowa, 166.

United States v. Fryberg, 32 Fed. Rep., 195, and Teller v. United States, 117 Fed. Rep., 577, are cases in which the statement of facts discloses that prior to the issuance of a patent to the land, and before final proof of residence and cultivation, the settler in possession under his incomplete title had sold for profit a large part of the merchantable timber on his entry, and suits for the value of the timber had been instituted by the government and were then pending, yet notwithstanding the existence of these facts was known to the proper department, the settler was permitted to perfect his title to his homestead and the patent, when issued, was held to relate back to the time of the original entry and to protect the settler and his vendee against civil suit for damages. United States v. Ball, 31 Fed. Rep., 667.

And in the Teller case, supra, the following significant language is used: “Defendant’s purchase of the timber from Muli-son (the settler), and payment for it to enable Mulison to perform his contract with the government and to obtain title to the land was lawful and unobjectionable had he allowed the timber to stand until Mulison had so obtained title.”

And yet if the sale of the timber was an “alienation” condemned by law, as contended by appellants, not only would it not have been lawful and unobjectionable, but would have precluded-the settler from receiving a patent to the land. Ratfield v. McKay, Copp’s Public Land Laws Decisions, 256.

. From these considerations we are led to the conclusion that a sale of the standing timber by a settler prior to the issuance, of his final certificate, while in direct violation of the rights vested in him by his incohoate entry, is still not an “alienation” of a part of the land within the purview of setcion 2291, and that a settler who, having without warrant or legal right, sold standing timber on his homestead allotment, still makes the affidavit required by that section in order to perfect his title, does not thereby commit perjury. The conclusion above announced is decisive of the first proposition relied upon by appellants, even when stated most strongly in their favor.

If an absolute sale of the standing timber is not such an act as will prevent the issuance of patent, it inevitably follows that grant of a lease of short duration and for a specific use, not contemplating either the cutting or destruction of the timber, will not have such effect. For it has been expressly decided that the granting of and operating under a lease for turpentine purposes, such as the one here considered, was not a sale of the timber, was not violative of any statute pertaining to the public domain allotted as homestead entries, and did not render the parties operating thereunder amendable to the criminal laws devised to protect timber on public lands from depredation and destruction. Leatherbury v. United States, 32 Fed. Rep., 180.

And in a recent case, after full consideration, the court says: “It is conceded that the purpose of the act in question is to protect the public lands. Taking a comprehensive view of the various provisions to which we have alluded, and bearing in mind the definitions we have suggested as applicable to the terms used in the statute, the legislative intent seems to have been-to secure that protection by-preventing the unauthorized ■cutting down, removal, or destroying of the timber trees growing thereon, and the unauthorized removing’ and destroying of such timber trees as have been already felled or cut down, or as might be felled or cut down from time to time; and it is not at all apparent to ns that it was the intent of the legislature to make the ‘cutting and boxing of pine trees on public lands of the United States for turpentine purposes’ a criminal offense. We think it not a matter of common knowledge that such cutting and boxing of pine trees destroy the value of the trees as timber, or that it has a tendency even to retard the growth of the trees. It is, however, we think, a matter of common knowledge, of which we may take notice, that on March 2, 1.831, and long before that date, the ‘turpentine business’ was an industry most prevalent in all the parts of the country where there were pine trees growing on public lands, and, if it had been the intention to protect these public lands from the ravages of that business, it would have been easy to make that intention clear by the use of appropriate words.” Bryant v. United States, 105 Fed. Rep., 943.

From this broad field of research we glean the following-general principles as defining the rights of the homestead settler after preliminary certificates of entry and before final proof is made:

1. To occupy the land, to protect it from trespass by others, and to use it for all purposes incidental to its cultivation, and with the view of complying with the obligations imposed by the grant.

2. To cut and remove therefrom the timber only when necessary for the improvement of the land and in the ordinary preparation of his “farm for tillage.”

3. líe has no right to fell timber or permit it to be done by his vendee for the purposes purely of speculation or profit. Such act is prohibited and would render him and his vendee liable to prosecution, both civil and criminal, but does not constitute an alienation of a “part of the land” and presents no legal obstacle to the issuance of a patent upon proper final proof.

4. A lease of timber for turpentine purposes is not forbidden by any express statutory provision.

Assuming these deductions to be logically sound, and making an application to the facts of the concrete case presented by this record, it becomes apparent that Hode violated no law in making the lease under which appellee claims, and, consequently, such contract was not void as being in derogation of a statute. This disposes of the first contention of appellants.

The remaining contention of appellants is that conceding that the granting of a turpentine lease does not contravene the express provision of the statute prohibiting the cutting of sanding timber and restraining the alienation of any part of the land comprised in the homestead allotment, nevertheless specific performance of the contract under which appellee claims will not be by a court of conscience decreed because the contract, if not inherently illegal, is still in violation of the public policy of the United States government in dealing with its homestead lands, and the case of Anderson v. Carkins, supra,, is also relied upon in support of this position. But in St. L. M. & Co. v. Montana Mining Co., 171 U. S. R., 43, L. Ed., 322, the case involving the legality of a bond for title entered into before issuance of patent to a part of the land embraced in a mining claim, and where the chief, if not the sole, contention was “that the bond was given contrary to equity, good conscience, and public policy,” the court, speaking through Justice Miller, says: “The supreme court of Montana ruled that in the absence of statutory prohibition there was no reason in law or equity, where the contract sought to be enforced, should be held illegal, and we concur in this disposition of the federal question suggested. The public policy of. the government is to be found in the constitution and laws, and the course of administration and decision.”

And the validity of the contract was upheld and enforced as not contravening any statute or any “fundamental principle of law recognized as the basis of public policy.”

Tbe court further states that the case of Anderson v. Carkins, supra, “was disposed of on different grounds,” and that case is considered and distinguished by showing that the contract there under review was condemned because its consummation contemplated perjury on the part of the settler.

Again, in United States v. Trans-Missouri Freight Ass'n 166 U. S., 340, it is said: “The public policy of the government is to be found in its statutes, and when they are not distinctly spoken, then in the decisions of the courts and the constant practice of the government officials, but when the lawmaking power speaks upon a particular subject, over which it has constitutional power to legislate, public policy in such a case is what the statute enacts.” ’

The inference clearly to be drawn from'the cases last cited and the authorities on which they are based, -is this, that contracts are not in violation of the public policy of the government unless either prohibited by express terms or the fair implication of a statute, or' condemned by some decision of the courts construing the subject-matter. In the instant case the contract sought to be enforced is not violative of any statute, and, so far as we have been able to ascertain, has never been condemned by the decisions of any federal court nor by the ruling of any department or official of the government, and does not of itself thwart the policy of the government which is to “secure for the homesteader the exclusive benefit of his homestead right.” The only authority to the contrary directly in point is Milliken v. Carmichael, 33 So. Rep., 9, where^ upon identical facts the' supreme 'court of Alabama arrives at the opposite conclusion. • The reasoning of the court is not given, but apparently the decision, declaring-the lease to be -a contract to convey an interest in-'the land, and consequently void and nonenforceable because prohibited on grounds of public policy,- is based upon -what to us- appears to be an unwarranted extension of the reasoning in Anderson v. Carkins, supra. But that case, as hereinbefore pointed out, dealt not with a lease for a short term of the use of timber, but with an alienation and conveyance of a part of the land itself, a contract which could only be effectuated by the commission of deliberate fraud and perjury. In our judgment the cases are not'parallel.

Finally, in this connection, it is urged that specific performance of the prior lease contract made by Hode cannot be decreed, and that he is not estopped by his conduct in making that contract from making a subsequent one. This fallacious argument is based upon an attempted application of the well-recognized principle of law that one cannot be held to be es-topped from doing what he has the right to do by proof that he had previously committed an act or entered into a contract which was forbidden by law, and that a court of equity will not enforce a contract which is illegal or contrary to public policy. The abstract accuracy of this proposition of law may be conceded, but its application to the case at bar is strained and farfetched. Hode had a right to contract with the assignor of appellee for the turpentine lease, whether that lease was to begin at once or not until after his homestead entry was perfected.' Whether enforceable while the homestead entry was still incomplete we are not called on now to say, but when-the patent was issued divesting the title from the government and vesting it in Hode, this related back to the date of the original entry, not only' for the benefit of the settler himself, but it also inured to the benefit of those with whom he had dealt, whether lienors or lessees, and validated all contracts previously, entered into which were not expressly violative of the statutes of the Hnited States. United States v. Fryberg, supra; Teller v. United States, supra; Heath v. Ross, 12 Johns, 140.

: We have not in this case chosen to rely upon the previous decisions of our court in which this principle has been impliedly recognized. .

The exact point .here decided was not there presented or' argued, but after careful review of all tbe authorities cited, in which' a painstaking research has been brought to our notice, We are confirmed in our view as to the correctness anl soundness of the principles heretofore announced and hereby reaffirmed. Hartman v. Butterffield Lumber Co., 82 Miss., 494; s. c., 34 So. Rep., 328; Anderson v. Wilder, ante, 606; s. c., 35 So. Rep., 875; Sandford v. Estabulchie Lumber Co., ante 478; s. c., 36 So. Rep., 10.

The fact that in those cases the proceeds of the timber were applied to the improvement of the land, or the payment to the government of the purchase money, does not, as contended.by appellants, distinguish them from the case at bar. United States v. Murphy, 32 Fed. Rep., 383; Teller v. United States, 113 Fed. Rep., 273.

The general principles of law herein announced support and strengthen the conclusions there reached.

The true rule is that all contracts in reference to homestead allotments, not in violation of express statute or fundamental principles of public' policy, though made prior to grant of patent, may, after the title is invested from the government, be enforced, and are within the “efficacious reach of the doctrine of estoppel.”

We hold, therefore, that the lease for turpentine purposes entered into by and between Hode and appellee’s assignor, is valid and enforceable, and that the doctrine of estoppel applies and protects appellee in the full and undisturbed enjoyment of its rights thereunder.

In view of the importance of the question, the earnest arguments of counsel, and the statement that this was a test ease, submitted so that the opinion herein might serve as a guide in the decision of numerous others, we have based this opinion upon the general principles of law applicable to all similar cases. In the instant case the correctness of the conclusion is affirmed1 and assured by the consideration that the lease in question was only for a term of three years after the boxes were cut, and contained no stipulation, and the pleadings contain no affirmative allegation that the use of the timber under the lease was to begin before the final perfecting of the title, or that in fact any timber was boxed or cut until after title was divested from the government. While these considerations are absolutely decisive of the questions presented by this record, we prefer to base our decision upon the general propositions hereinbefore announced.

From the foregoing considerations it follows that the action of the chancellor in refusing to dissolve the injunction was correct and is affirmed*, and the case remanded for further proceedings in accordance herewith.