ERROR TO THE SUPREME COURT OF THE STATE OF OREGON.
MR. JUSTICE FIELD, after stating the case, delivered the opinion of the court.
By the Code of Oregon the findings of the court in an equity case of this kind are as conclusive as similar findings would be in an action at law. Hill's Annotated Laws of Oregon, sec. 397. They must therefore be taken as correct in the disposition of the question before us, they not having been set aside of qualified by any subsequent action of the court below. And upon them it is contended that the amendment to the declaratory statement of the defendant made in 1884, by which he was enabled to include within it the land in controversy, never occupied or improved by him, but at the time in the possession of the plaintiff, was in effect a second declaration of a preemptive right to a different tract from the one originally claimed by him, and was allowed in disregard of the express prohibition of the statute, Rev. Stat. § 2261, or upon a plain misconstruction of its provisions, and gave no jurisdiction to the land department to treat the land thus in
cluded as part of his preemption claim, and that but for the amendment the land would have been awarded to the plaintiff.
It is objected to this contention that the question as to the defendant's right as a preemption claimant to the land in controversy was a matter to be determined by the land department, where it was considered. It is true the determination of that department in matters cognizable by it, in the alienation of lands under the laws of the United States, cannot be collaterally impeached, where its enforcement is sought.In ejectment the question always is who has the legal title for the demanded premises, not who ought to have it. In such cases the patent of the government issued upon the direction of the land department is unassailable. But whilst the patentee holds the legal title his equitable relations to other parties are not thereby affected. That title, with important qualifications hereafter mentioned, is as much subject to control as the title to land held by him derived from private sources. If one takes a title in his own name, whilst acting as agent, trustee or guardian, or in any other fiduciary capacity, a court of equity will, upon a showing of the fact in an appropriate proceeding, subject the lands to proper trusts in his hands or compel him to transfer the title to the party equitably entitled to it. Nor does it matter whether the party takes the title in his own name in good faith, under the belief that he can thereby better manage the property to the advantage of those for whom he is acting, or in compliance with their wishes, or whether from an intention to defraud them of their rights therein. In either case a court of equity will control the legal title so as to protect the just rights of the true owner. Townsend v. Greeley, 5 Wall. 326, 335; Estrada v. Murphy, 19 California, 248. All this is but common knowledge, and the doctrine is constantly invoked for the protection of the rights of parties against the mistake, accident or fraud of agents or parties acting in a fiduciary capacity, and little difficulty is experienced in enforcing it, where the property held is not claimed under the adjudication of a court or other tribunal affirming the title of the holder; as, for instance, upon the determination of a department like that established
to supervise proceedings for the alienation of the public lands. In these latter cases the action of a court of equity is limited so as not to interfere with the rightful exercise of the powers entrusted to the department. The conclusions of the department are not even then open to review for alleged errors in passing upon the weight of evidence presented, for that would be to make a court of equity a court of appeal from its decisions, which was never contemplated.
But where the matters determined are not properly before the department, or its conclusions have been reached from a misconstruction, by its officers, of the law applicable to the cases before it, and it has thus denied to parties rights which, upon a correct construction, would have been conceded to them, or where misrepresentations and fraud have been practised, necessarily affecting its judgment, then the courts can, in a proper proceeding, interfere and control its determination so as to secure the just rights of parties injuriously affected. Quinby v. Conlan, 104 U.S. 420, 426; Baldwin v. Stark, 107 U.S. 463, 465. In such cases a court of equity only exercises its ordinary jurisdiction to prevent injustice from a misconstruction of the law or the machinations of fraud.
The misconstruction referred to must be, as stated, of the law applicable to the case as established. Of this misconstruction we have an instance in Silver v. Ladd, 7 Wall. 219, where it was held by the Commissioner of the General Land Office and the Secretary of the Interior that the donation act of Oregon did not allow an unmarried woman to take as a settler, on the ground that she was not the head of a family. But this court decided that in this determination the officers misconstrued the law, and upon a bill in equity, filed by her son against subsequent patentees of the United States of the lands, held that relief should be afforded by directing a transfer of the title to him from such patentees.
And the misrepresentations and fraud mentioned necessarily affecting the judgment of the department, must be such as have prevented the unsuccessful party from fully presenting his case, or the officers of the government from fully considering it; such as have imposed upon its jurisdiction or turned
its attention from the real controversy. It must also appear that but for such imposition and fraud the determination would have been in favor of the plaintiff, and have entitled him to the patent for the land in dispute. Lee v. Johnson, 116 U.S. 49, 50; ...