Syllabus.

this deed proved insufficient, by more than the whole of the fund in court, to pay the debt of Hitz to Jenks, secured by this deed; it was rightly held that Mrs. Hitz had no right as against Jenks to any part of this fund. This view disposes of the case, independently of the application of part of the fund to the payment of taxes accrued during the pendency of this suit; and even if the rents originally belonged to Mrs. Hitz, and not to her husband as tenant by the curtesy, which is by no means clear. Hitz v. National Metropolitan Bank, 111 U. S. 722. Decrees affirmed.

COLORADO COAL AND IRON COMPANY v. UNITED STATES.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF COLORADO.

Argued November 2, 1887. - - Decided November 21, 1887.

To a bill in equity to cancel a patent of land from the United States to a preëmptor, solely on the ground that there was no actual settlement and improvement on the land, as falsely set out in affidavits in support of the preëmption claim, the defence of a bona fide purchaser without notice is perfect.

In a suit by the United States to cancel a patent of public land the burden of producing the proof and establishing the fraud is on the Government, from which it is not relieved although the proposition which it is bound to establish may be of a negative nature. When a plaintiff's right of action is grounded on a negative allegation, which is an essential element in his case, or which involves a charge of criminal neglect of duty or fraud by an official, the burden is on him to prove that allegation, the legal presumption being in favor of the party charged.

In a proceeding in equity against an innocent purchaser to set aside a patent of public land for fraud in which it is charged that an officer of the United States, who was concerned in its issue, participated, the burden of establishing his title is not cast upon the defendant by raising a suspicion, however strong, of the alleged fraud and wrongdoing of the officer, if the officer could have been examined and was not.

In this case the United States sought to cancel a number of patents to preemptors, the lands having passed into the hands of an innocent purchaser, on the ground that there were no actual settlements and improvements,

Statement of the Case.

but that the alleged preëmptors were fictitious persons, who did not exist, and that these facts were known to the register and receiver, through whose fraudulent act in this respect the patents were obtained. Having established that there were no such settlements and improvements, the plaintiff's introduced the evidence of many witnesses residing in the vicinity that the persons named in the patents had not resided there and were unknown to the witnesses, but did not call the register and receiver, or the solicitor through whom some of the patents were obtained from the Land Office, or the officers who had witnessed and taken acknowledgment of deeds purporting to convey the interest of the patentees to the defendant. Held, that the burden was on the Government to produce so much of this further evidence as could be obtained. and that in its absence the United States had not made all the proof of which the nature of the case was susceptible, and which was apparently within their reach.

In order to constitute the exemption of coal lands contemplated by the preemption act under the head of “known mines," there must be ascertained coal deposits upon the land, of such an extent and value as to make the land more valuable to be worked as a coal mine, under the conditions existing at the time, than for merely agricultural purposes.

The mere fact that there are surface indications of coal on public land will not of itself prevent the acquisition of title to the land under the preemption laws; nor will the fact alone that after acquisition of such a title the surface indications prove to be veins which are, by a change of circumstances, profitably worked, invalidate such a title.

95

IN equity. The bill was filed in the name of the United States by the attorney general on January 22, 1880, the object and prayer of which were to declare void and cancel sixty-one patents for as many distinct pieces of land, situated at different places in Las Animas County, in the State of Colorado, amounting in the aggregate to 9565 acres. To the original bill the Southern Colorado Coal and Town Company, a corporation organized under the laws of Colorado, was the sole defendant. The patents in question were issued at different times between October, 1873, and October, 1874, upon preemption claims, under the act of 1841. In each case there appeared to be filed all the necessary and proper affidavits, duly verified before the register or receiver of the land office at Pueblo, showing that the preemptors had entered and settled in person upon the land on a day named, and had made improvements thereon, the nature of which was set out in detail, and that the lands in question were non-mineral lands,

Statement of the Case.

and subject to preëmption under the acts of Congress relating thereto. Between May, 1873, and December, 1875, warranty deeds in the names of the preëmptors and patentees were made, acknowledged, and recorded, apparently conveying the premises to William S. Jackson, as trustee, who represented a number of individuals who had deposited money in his hands to be used in the purchase of lands in Colorado. On June 1, 1876, by deed duly acknowledged and recorded, but without covenant of warranty, Jackson conveyed and released all these lands to the defendant, the Southern Colorado Coal and Town Company. On January 20, 1880, that corporation was consolidated with other corporations under the name of the Colorado Coal and Iron Company, to which, upon that date, the lands in question were conveyed. Under date of February 1, 1880, the Coal and Iron Company made a mortgage covering the premises in question, with others, to Louis H. Meyer, as trustee, to secure an issue of bonds amounting to $3,500,000. On January 7, 1882, an amendment to the bill was filed, making the Colorado Coal and Iron Company, the consolidated corporation, together with Meyer, the trustee in the mortgage, parties defendant. The purchase price of the lands to the Government was $11,997.45, which was paid at the time to the proper officer, $1813.14 in cash, and the remainder in certificates known as agricultural college scrip, which by law was receivable for that purpose.

It was charged in the bill that these patents were procured by means of a fraudulent conspiracy entered into by and between Irving W. Stanton, register of the land office, Charles A. Cook, receiver for the land district, at Pueblo, in Colorado, Alexander C. Hunt, and others unknown, who, it was alleged, organized and had incorporated the Southern Colorado Coal and Town Company. In furtherance of this conspiracy, and as the means of accomplishing its purpose, it was alleged "that neither of the supposed, preëmptors of the land as aforesaid described by their names, as stated in said several proofs of preëmption, or in the said certificates of location, ever settled upon the said lands or improved the same, as represented in said several proofs of preemption, and that no person or per

sons whatsoever, as represented in either of said certificates of location, appeared or presented himself before said Stanton or Cook, or either of them, at any time, and made proof of preëmption or agricultural college scrip location, either as preëmptor or as witness for any preëmptor as aforesaid described, as in and by said proofs of preëmption and location certificates, or either of them, as aforesaid, is supposed, but that the same, and each of them, are false and fraudulent, and were designed, made, and executed by said Stanton and Cook and said Hunt, and the said persons to your orator unknown, or some one or more of them, in the manner aforesaid, and for the purpose of fraudulently depriving your orator of its title. to the said pieces of land."

It was further alleged that all the said supposed preemptors were fictitious persons, and their names were fictitious names, and that the supposed names that appeared as witnesses to the said several proofs of preemption were fictitious names, and that no such person or persons, either as preemptors or as witnesses, had ever lived or been known in the county of Las Animas, where said pieces and parcels of land were located, and, in fact, that no such persons existed.

It was further alleged in the bill "that the aforesaid pieces and parcels of land are not agricultural land, and are not suitable for agricultural or grazing purposes, and are of no value for any purpose except for the coal deposits therein contained. That the said several pieces and parcels of land contain large and valuable deposits of coal, and that the said deposits of coal were known to the said Stanton and Cook and said Hunt, and to the said person or persons to your orator unknown, who wrote out, signed, and executed, or caused to be written out, signed, and executed, the several proofs of preëmption and non-mineral affidavits at the time the said several proofs of preemption and non-mineral affidavits were made out, signed, and executed."

It was also charged in the bill that the said Hunt was a stockholder in the Southern Colorado Coal and Town Company, and general manager of its business, and that the incorporators of said company and the trustees thereof, including

Citations for Appellants.

William S. Jackson, "knew at the time the aforesaid described land was conveyed to said company by said William S. Jackson, as herein before described, that the several patents to said several pieces and parcels of land had been fraudulently obtained from your orator, and knew that the said several supposed preëmptors and patentees were myths and fictitious persons, and knew that the said Jackson had no right, title, or interest in said land, or any part thereof."

The answer of the Southern Colorado Coal and Town Company, filed November 2, 1881, specifically denied all the allegations of the bill alleging fraud, and denied that the said lands or any portion of them were mineral lands in the sense of not being lands capable of being acquired under the preëmption law, and set up by way of further defence that it was a purchaser of all the said lands in good faith for a valuable consideration without any knowledge or notice whatever of any or either of the pretended fraudulent acts and conspiracies in the bill alleged. Louis H. Meyer, on June 5, 1882, answered to the same effect, and by a stipulation the answer of the Southern Colorado Coal and Town Company was directed to stand as the answer of the Colorado Coal and Iron Company. Replications were duly filed, and the cause was heard on a large amount of proofs, resulting in a decree in favor of the complainant, declaring all the patents in the bill mentioned, and the subsequent conveyances of the land therein described to the defendants, to be fraudulent and void, and decreeing that they should be held for naught and be delivered up to be cancelled. The present appeal was from that decree.

It was held by the Circuit Court that the charge in the bill, that the supposed preëmptors and patentees were fictitious persons, having no existence, was sufficiently proved; that, consequently, there being no grantees, no legal title passed from the United States; and that, as the defendants acquired no legal title by virtue of the supposed conveyances to them, they could not claim protection as bona fide purchasers for value without notice of the fraud. 18 Fed. Rep. 273.

Mr. Benjamin H. Bristow (with whom were Mr. Lyman