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SMITH ET AL. v. THIRD NATIONAL EXCHANGE BANK SANDUSKY

decided: May 21, 1917.

SMITH ET AL
v.
THIRD NATIONAL EXCHANGE BANK OF SANDUSKY, OHIO, ET AL.



ERROR TO THE SUPREME COURT OF THE STATE OF NEW MEXICO.

Author: Mcreynolds

[ 244 U.S. Page 185]

 MR. JUSTICE McREYNOLDS delivered the opinion of the court.

Defendants in error brought suit in the District Court, Dona Ana County, New Mexico, seeking judgment against plaintiff in error Smith upon his three notes for forty-five hundred dollars ($4,500) each and also foreclosure of the mortgage upon lands in that county given to secure them. Recovery was resisted upon the ground that although Smith was in actual possession of the lands under deed from Reinhart they belonged to the United States and were unlawfully in the vendor's possession when so conveyed without bona fide claim or color of title, contrary to the Act of Congress approved February 25, 1885, 23 Stat. 321; and that the notes were given in part payment therefor. The state Supreme Court affirmed a judgment in the bank's favor. Quotations from its statement will suffice to indicate the essential facts (20 N. Nex. 264):

"In 1851 the government of Mexico granted certain lands now embraced within the limits of Dona Ana County, this state, to the Colony of Refugio. The grant was similar to many others found in this state. Settlements were made upon it by many people, and individual

[ 244 U.S. Page 186]

     allotments were made from time to time by the commissioners.

"The territorial legislature, by the Act of March 7th, 1884, constituted the owners of lands within the limits of the grant a body corporate and politic under the name and style of the Grant of the Colony of Refugio, under which they were authorized by said act to sue and be sued and have perpetual succession.

"Many years ago the lands involved in this litigation, embracing some 400 acres were allotted to ten individuals, who subsequently, by separate deeds of conveyance, transferred the same to Leon Alvarez, probably some time in the 80's, but the date is wholly immaterial. From that time to 1909 various deeds were executed to divers parties, all of whom had possession and cultivated and improved the lands.Something like six or seven thousand dollars, possibly more, have been expended in improvements on the land in constructing irrigation ditches. In 1909 W.H. Reinhart claimed to be the owner of the lands, under deeds of conveyance, and was in possession of the same. In that year he conveyed the same to D. B. Smith, the appellant here, receiving perhaps one-half of the purchase money in cash, and to secure the balance took Smith's promissory notes, secured by a mortgage on the real estate. The notes aggregated $13,500.00. It is not disputed that Reinhart was the owner of said lands if the original allottees were invested with the legal title to the same.

"Some time prior to 1893, the grant was surveyed by Elkins & Marmon, and the lands in question here were within the limits of that survey. In 1893, the commissioners of the grant, acting under the power and authority conferred by the Act of March 7, 1884, instituted proceedings in the United States Court of Private Land Claims to have the title of said grant confirmed and settled. Leon Alvarez was one of the commissioners of the grant

[ 244 U.S. Page 187]

     at that time and acting as such. The title of the grant was confirmed and a survey was ordered to determine what lands were embraced within the limits of the same. This survey was made by the Surveyor General of New Mexico and reported to the court, and the title to the lands so embraced within the limits of such survey was confirmed in the Colony of Refugio. This survey, so made as aforesaid, embraced a smaller tract than did the Elkins & Marmon survey, and the lands in question here, together with other lands, were without the limits of the survey, made under the direction and by authority of the Court of Private Land Claims. The judgment of the Court of Private Land Claims establishing the boundaries and confirming the title to the lands within the limits of such survey, so made by the Surveyor General of New Mexico, was entered in the year 1903, and from which no appeal was taken.

"The parties owning land without the limits of the grant as confirmed, but within the Elkins & Marmon survey, continued in possession thereof and resided thereon with their families, and dealt with said lands as though they had been invested with the legal title to the same. No action was ever taken by the United States, so far as the record discloses, to dispossess them, although the legal title to said lands was in the United States. In 1909, when the deed to Smith was executed by Reinhart, a bill was pending before Congress to validate the titles of the bona fide claimants to said lands so found to be without the limits of the confirmed survey."

"Said lands were for many years, before and after the Mexican cession to the United States, in good faith considered to be a part of the Refugio Colony Grant, a Mexican Community Grant, and were so held in good faith by the owners of the said grant; and that the commissioners of the said grant, in good ...


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