your office and directing patent to issue upon the facts of record under the provisions of said section 7.

It is alleged that said Tobias filed his pre-emption declaratory statement No. 25,199 for said land on July 14, 1883, upon which he made final proot on November 24, 1883; that on March 29, 1884, said Hale purchased said land for a valuable consideration and in good faith; that James H. Tallman made a loan on said property in good faith, and that the contest was not made against said entry until November 28, 1885, which was more than two years after the issuance of the final certificate upon said final proof; that the seventh section of said act covers this case exactly, and the transferee and also the bona fide mortgage should be protected."

The record shows that said Tobias made Osage cash entry No. 16,958 of said tract on April 5, 1884. On November 28, 1885, said Roberts applied to be allowed to contest said entry because it was fraudulent and made in the interest of said Hale. His application was allowed and a hearing duly ordered and set for March 17, 1886. On the last named date said Hale by his attorney, filed an affidavit in the local office alleging that he had bought said land in good faith and without knowledge of any fraud on the part of the entryman, and asked to be allowed to intervene and introduce evidence in his own behalf. This request was granted, but no action being taken by said Hale the case was decided in favor of the contestant on January 12, 1887.

On July 1st 1886, after the initiation of said contest said Hale mortgaged said tract to said James H. Tallman. After the decision of the local office upon said contest in favor of the contestant, said Hale made a second motion to have the case re-opened, and that he be allowed to introduce evidence in his own defense. This motion was granted and a new hearing was set for February 22, 1887, at which said parties appeared and submitted testimony, and upon the evidence offered, the local officers again decided in favor of the contestant.

On appeal your office found that

The proof shows by a great preponderance that this entry was fraudulent and made in the interest of Hale; and that evidence is almost entirely wanting of an actual bona fide settlement by the claimant at the time he made the filing, or at any other time,

and said entry was held for cancellation. This decision was affirmed by the Department on February 25, 1891, as aforesaid.

The decision of the Department when rendered, was correct upon the record as then presented, and there was no error in not directing patent to issue under the provisions of said act of March 3, 1891, for it was not in existence at the date of said decision.

The sole question arises whether upon the record as now presented, the 7th section of said act of March 3, 1891, confirms an entry fraudu lent in its inception, transferred and mortgaged by the transferee prior to March 1, 1888, when at the date of said mortgage the entry is

being attacked upon the records of the local office as fraudulent and made in the interest of the transferee, which allegations are satisfactorily proven, resulting in the cancellation of the entry as above set forth.

Said section has been the subject of very careful consideration by the Department, and instructions have been formulated for the guidance of the chiefs of divisions in your office. (12 L. D., 450.)

The only provision of said section applicable to the case at bar is the one stating that

All entries made under the pre-emption, homestead, desert land, or timber culture laws, in which final proof and payment may have been made and certificates issued, and to which there are no adverse claims originating prior to final entry and which have been sold or incumbered prior to the first day of March 1888, and after final entry to bona fide purchasers, or incumbrancers, for a valuable consideration, shall, unless upon an investigation by a government agent, fraud on the part of the purchaser has been found, be confirmed and patented upon presentation of satisfactory proof to the Land Department of such sale or incumbrance.

In said instructions (p. 452) it was stated that

A bona fide purchaser or encumbrancer within the meaning of said section is one who, relying in good faith upon the receiver's final receipt, has, by way of purchase or encumbrance acquired an equitable interest in the land, and being, at the date of such purchase or encumbrance, without actual notice of fraud or violation of the law on the part of the entryman. If the proof should show that the entry was procured by the entryman through fraud, but fails to show any participation in such fraud, or actual notice thereof, by the purchaser or encumbrancer, the case will pass to patent, notwithstanding the fraud on the part of the entryman.

The mortgagee did not file any notice of his interest in the local office, and, hence, was not entitled to any notice of the cancellation of said entry. American Investment Co., 5 L. D., 603; Van Brunt v. Hammon et al., 9 L. D. 561; John J. Dean, 10 L. D., 446; Otto Soldan, 11 L. D., 194: Robinson v. Knowles, 12 L. D., 462.

The mortgagee is bound to know the status of the land at the date of his mortgage. Although a final certificate may have been issued at the date of the mortgage, yet, if the entry had, in fact, been canceled at that date it would not be confirmed.

In the case of Robert L. Garlichs (12 L. D., 469-471), the Department said

Garlichs was bound in law to know the status of this land, and the condition of the title, or rather the want of title. The most ordinary diligence would have ascertained its defects. He could not be considered an innocent purchaser, if he had claimed to be such.

The same ruling must be held to be applicable to an incumbrancer. He is bound to know the status of the land at the date of the sale or mortgage. If the final proof has not been made and the certificate has not issued, or, if having been issued it is duly canceled on the records of the local office, can the vendee or mortgagee shut his eyes, pay out or loan his money on the faith of the certificate issued perhaps many years before, when the entry has already been canceled, and claim to be an innocent

purchaser? I think not. The law never intended that a man should wilfully shut his eyes to the condition of the land as shown by the record, at the very time the purchase or loan was made.

In the case of Brush v. Ware (15 Peters, 93-111) the supreme court in answer to the claim of the respondent that he was a bona fide purchaser for a valuable consideration without notice, said—

The question is not whether the defendant, in fact saw any of the muniments of title, but whether he was not bound to see them. It will not do for a purchaser to close his eyes to facts-facts which were open to his investigation by the exercise of that diligence which the law imposes. Such purchases are not protected.

.....

No principle is better established than that a purchaser must look to every part of the title which is essential to its validity.

In the case of Mullan v. United States (118 U. S., 271-277) the supreme court said

if Mullan and Avery were ignorant of the fact (character of the land) when they acquired their respective interests in the property, it was because they wilfully shut their eyes to what was going on around them, and purposely kept themselves in ignorance of notorious facts.

If, as the Department held in Robinson v. Knowles (12 L. D 462), a transferee who has not filed a notice of his claim in the local land office, can not question the validity of the proceedings against an entry, then Tallman has no standing in this case.

Since, it clearly appears that said entry was fraudulent and made in the interest of the transferee; that fraud has been found on the part of the transferee prior to March 1, 1888 that said mortgagee filed no notice with the local officers of his mortgage, and at the date of said mortgage said contest was pending against said entry, of which, the mortgagee was bound to take notice, it must be held that said entry does not come within the provisions of said section 7, and is not confirmed thereby.

Upon a careful consideration of the whole record I am of the opin ion, and so decide, that said motion must be and it is hereby denied.

RAILROAD LANDS-ADJUSTMENT-ACT OF MARCH 3, 1887.

ST. LOUIS, IRON MOUNTAIN AND SOUTHERN R. R. Co.

The act of March 3, 1887, is mandatory in character, and calls for judicial proceedings for the recovery of title, when the record shows that land has been erroneously certified or patented on account of a railroad grant, and such grant is unadjusted.

The right to bring a suit in the name of the United States exists only when the government has an interest in the remedy sought by reason of its interest in the land, or fraud has been practiced upon the government and operates to its prejudice, or it is under obligation to an individual to make his title good by setting aside the fraudulent patent, or duty to the public requires such action.

An expired pre-emption filing of record at the date when the grant becomes effective does not warrant proceedings for the recovery of title under said act, where no right is asserted under said filing.

Demand for reconveyance under said act should not include lands that are also embraced within entries that have passed to patent. In such cases the parties may be left to an assertion of their rights in the courts.

Secretary Noble to the Commissioner of the General Land Office, Novem ber 16, 1891.

With your office letter of August 18, 1888, was forwarded an adjustment of the grant made by the acts of February 9, 1853 (10 Stat., 155), and July 26, 1866 (14 Stat., 338), to the State of Arkansas, to aid in the construction of the Cairo and Fulton Railroad now the St. Louis, Iron Mountain and Southern Railroad.

This adjustment shows that charging the company with all lands heretofore certified or patented on its account, leaves the grant yet deficit more than six hundred thousand acres.

Upon this adjustment, it appears, however, that certain lands have been erroneously certified on account of this grant.

These erroneous certifications have been divided into four classes as follows:

B

Those tracts embraced in entries made prior to the time the company's rights attached under its grant, and which are still of record uncanceled.

c

Those tracts covered by pre-emption filings which were of record uncanceled at the date of the definite location of the road.

D

Those tracts which were embraced in entries of record at the date of the definite location of the road, but which have since been canceled.

E

Those tracts forming parts of sections not of the number prescribed in the acts making the grant.

A rule has been served upon the company to show cause why these lands should not be reconveyed to the United States in accordance with the provisions of the act of Congress approved March 3, 1887 (24 Stat., 556), to which response has been made by its land commissioner suggesting certain errors in the lists as originally prepared, which errors you state in your letter of transmittal have been corrected.

As to the lands embraced in lists B, D and E, there can be no ques tion but that under the decisions of the supreme court the certification or patenting of the same was erroneous.

Kansas Pac. Ry. Co. v. Dunmeyer (113 U. S., 629); Hastings and Dakota Ry. Co. v. John D. Whitney (113 U. S., 357).

In regard to the lands embraced in list "C", you report that they are all offered lands, and that the filings, excepting those of Louisa Boone and James Allen, had expired by limitation of law prior to the time the company's right attached, and as to the filing by Boone, there is some question upon this point, the record of the case being incomplete, there being no date of settlement alleged.

On the expiration of the statutory period fixed for making proof and payment under a pre-emption filing, without such proof and payment having been made, the presumption arises that any claim that had. attached under said filing has been abandoned, and no longer exists.. Northern Pacific R. R. Co. v. Stovenour (10 L. D., 645).

No one appears to be asserting claim under these filings, and with the exception of the filing by Allen, the rule should be dismissed.

As to the tract embraced in the filing by Allen (which filing was a subsisting claim at the date of the definite location of the road), the certification on account of the grant was erroneous. Randall v. St. Paul and Sioux City R. R. Co. (10 L. D., 54).

The act of March 3, 1887 (supra), is mandatory in character, and calls for judicial proceedings for the recovery of title, when the record shows that land has been erroneously certified or patented on account of a railroad grant, and such grant is unadjusted. Winona and St. Peter R. R. Co. (9 L. D., 649).

You will therefore demand of the company a reconveyance of the lands embraced in lists B, D and E, and the tract included in the preemption filing by James Allen, embraced in list "C", and at the expiration of ninety days from the date of such demand, you will make due report to this Department of the action of the company in the premises.

I might add, however, that any tracts covered by entries upon which patents have also issued, should be eliminated from the demand. In such cases, i. e., where two patents are outstanding, the parties should be left to their remedies before the courts.

The right to bring à suit in the name of the United States exists only when the government has an interest in the remedy sought by reason of its interests in the land, or fraud has been practiced on the government and operates to its prejudice, or it is under obligation to some individual to make his title good by setting aside the fraudulent patent, or the duty to the public requires such action. United States v. San Jacinto Iron Co. (125 U. S., 273).

The demand should be served either personally, or by registered let ter, upon the officers of the company, or some one holding sufficient authority to receive and acknowledge service of such demand. Union Pacific Ry. Co. (12 L. D., 210).

In this connection, I would state that if there are any lists or selec2565-VOL 13—36