FORECLOSURE SCAMS AND LAND PATENT COURT CASES

FRAUDULENT PRACTICES REGARDING LAND PATENTS

FORECLOSURE SCAM PERPETRATORS BUSTED IN CARLSBAD. Click on links below.

http://video.syndication.msn.com/v/Legacy.aspx?g=1dee61d9-1a0b-4ae7-943a-41ee996972d9&mk=en-ap&f=cadiu&fg=email

http://www.10news.com/news/16368003/detail.html?taf=sand

Bureau of Lands Managment warning on Land Patents

UNITED STATES DEPARTMENT OF THE INTERIOR - Public Notice

News Release

Brown Announces Arrest of Foreclosure Rescue Scam Artists

SAN DIEGO--California Attorney General Brown today shut down a team of scam artists that acquired deeds

to hundreds of homes in foreclosure by convincing desperate consumers to place their property in a “land

grant,” a phony and worthless real estate document.

Federal Land Grant Company—a San Diego-based business run by Bill Hutchings, his wife Xiaoke Li and

former wife Shawna Landis—tricked desperate homeowners into believing that they could protect their

homes from foreclosure by deeding their property to “federal land grants.” Land grant transfers, used

hundreds of years ago when the United States was still acquiring land from other countries, are no longer

recognized by any court or county assessor.

“There hasn’t been a legitimate use of the land grant since the conclusion of the Mexican-American war,”

Attorney General Brown said. “If some fast talking scam artist offers a quick escape from foreclosure using

archaic documents, be extremely suspicious.”

Federal Land Grant required homeowners to pay up to $10,000 to put their property in a so-called land gra

which the company claimed would prevent foreclosure. Federal Land Grant also tricked homeowners into

signing over the deed to their home and paying the company rent.

To make the meaningless grants appear legitimate, the company attached a land survey from when propert

was transferred to the United States by a foreign entity hundreds of years ago. In San Diego, for example,

the company attached a survey from the Spanish Land Grant of 1872 and said that the deed reinstated the

land grant and would protect homes from foreclosure.

State investigators confirmed from realty specialists in the Bureau of Land Management that a “federal land

grant” transfer is meaningless and there is no mechanism in California for establishing a land grant on

privately held land. Homeowners who are conned by the land grant scam are typically evicted from their

property at the completion of foreclosure proceedings and retain no legally recognizable title to their

property.

At least two Riverside County Superior Court judges, when faced with foreclosure sales involving so-called

land grants, did not give any consideration to the deeds and issued eviction orders sought by the lender.

Federal Land Grant often perpetrated their scam by inviting homeowners to attend weekly seminars on the

fraudulent land grant program. During these seminars, which had up to 50 participants, the company

convinced homeowners to enter a lease back scheme in which the homeowners transfer their property to

Federal Land Grant and then make monthly payments, purportedly for rent.

Investigators in the California Attorney General’s Office have discovered more than 280 properties in San

Diego and Riverside counties that have been transferred to Federal Land Grant or one of its affiliated

May 22, 2008

FOR IMMEDIATE RELEASE

Contact: Gareth Lacy (916) 324-5500

News & Alerts - California Dept. of Justice - Office of the Attorney General Page 1 of 2

http://ag.ca.gov/newsalerts/print_release.php?id=1561 5/22/2008

companies. An additional 65 properties have been transferred in counties including Los Angeles, Orange and

San Bernardino. At least 60 homeowners have had their homes sold through foreclosures.

Attorney General Brown today filed a complaint for an injunction and penalties against Federal Land Grant.

In addition to filing a complaint, the attorney general obtained a restraining order to halt the defendants’

illegal activities and an asset freeze so that the company’s money can be used to refund consumers. A

hearing for the preliminary injunction is set for June 5, 2008.

As a result of its business practices, Federal Land Grant allegedly violated California’s foreclosure consultant

and equity purchaser laws and California’s laws prohibiting deceptive and unfair business practices including

• Unlawfully acquiring title to property by falsely representing that it is necessary to put property into a “lan

grant” to stop foreclosure

• Making false statements regarding the existence of a mechanism to transfer property from private

ownership to a “federal land grant”

• Making untrue statements that consumers’ private property has been transferred to a “land grant” when

this is a legal impossibility.

• Telling homeowners that transferring title to the company will prevent homeowners from having to pay

their mortgage when the transfer merely strips homeowners of collateral for their mortgage and does not

relieve the debt itself.

A copy of the complaint and application for the restraining order are attached.

Yesterday, investigators from the San Diego District Attorney’s Office and FBI agents served arrest warrant

and three search warrants during one of the land grant seminars in San Diego. Arrested were the ringleade

William Hutchings, 62, Xiaoke Li, 43, both of Scripps Ranch in San Diego, Edgar Martinez, 30, and Diego Gi

38, on charges of conspiracy, grand theft, and deceitful practices as foreclosure consultants.

An arrest warrant for Shawna Landis, 29, of Sorrento Valley, has been issued. The San Diego District Attorney will

prosecute the criminal case.

“The defendants preyed on mostly non-English speaking, Hispanic homeowners who were in foreclosure,

claiming to offer assistance in preventing the victims from losing their home,” San Diego District Attorney

Dumanis said. “These transactions were illegal and left the victims even worse off than they were before.

Some of the victims have been evicted from their own homes when this scheme failed.”

The district attorney and FBI are asking all victims who signed properties over to defendants or the

companies to report the incident by calling the following hotline: (619) 531-4475

News & Alerts - California Dept. of Justice - Office of the Attorney General Page 2 of 2

http://ag.ca.gov/newsalerts/print_release.php?id=1561 5/22/2008

UNITED STATES of America, Plaintiff-Appellee, v. Arnold W. HILGEFORD, Defendant-Appellant

United States Court of Appeals, Seventh Circuit. - 7 F.3d 1340

Argued June 7, 1993.Decided Oct. 22, 1993

Andrew B. Baker, Jr., Asst. U.S. Atty., Dyer, IN, Robert N. Trgovich (argued), Fort Wayne, IN, for plaintiff-appellee.

Linda M. Wagoner, Fort Wayne, IN (argued), for defendant-appellant.

Before BAUER and KANNE, Circuit Judges, and ALDISERT, Senior Circuit Judge.*

KANNE, Circuit Judge.

Hard times and the loss of the family farms in Jay County, Indiana, produced a downward spiral of more desperate and more irrational behavior by the defendant, Arnold W. Hilgeford. By 1984 he had borrowed over one million dollars from Peoples Bank and the Farmer's Home Administration (FmHA) using the two farms he owned as security for the debt. In that year financial problems engulfed the defendant and the bank foreclosed on the mortgage it held on one of his farms. Peoples Bank then bought the farm at the foreclosure sale and the defendant was evicted.

In April, 1985, the defendant brought a quiet title action in federal district court. It was involuntarily dismissed. Several days after the dismissal he filed another quiet title action in federal court, claiming superior title to the land, based on a "land patent." This action was dismissed by the district court for lack of subject matter jurisdiction, and defendant was sanctioned for bringing a patently frivolous suit. Hilgeford v. Peoples Bank, 607 F.Supp. 536 (N.D.Ind.1985).

The defendant appealed the second dismissal and sanction, and again met with disappointment. In October of 1985 we concluded that the defendant's appeal was frivolous and was undertaken for the purposes of delay and harassment. Hilgeford v. Peoples Bank, 776 F.2d 176, 179 (7th Cir.1985). We sanctioned the defendant by assessing a fine of five hundred dollars.

In July, 1986, the defendant brought another suit in federal court against Peoples Bank alleging that he had been defrauded. This suit, like its predecessors, was found to be meritless. The court stayed the case pending defendant's payment of his fines for his earlier frivolous cases. Hilgeford v. Peoples Bank, 110 F.R.D. 700 (N.D.Ind.1986). Soon thereafter the defendant moved back to the farm, and was again evicted. The defendant then filed a writ of habeas corpus in federal court, directed against the bank and its personnel.

In December, 1986, the district court dismissed both the fraud claim, Hilgeford v. Peoples Bank, 113 F.R.D. 161 (N.D.Ind.1986), and the habeas corpus petition, Hilgeford v. Peoples Bank, 652 F.Supp. 230 (N.D.Ind.1986) and imposed sanctions on the defendant of a one thousand dollar fine for each action. The court noted that all four of defendant's lawsuits had been groundless, and were intended to harass Peoples Bank. It noted also that defendant had fabricated court documents, including a purported judgment against Peoples, based on a "jury trial" which had never occurred.

In January, 1986, the United States filed a foreclosure action on behalf of FmHA against the defendant's second farm. The defendant responded by attempting to file with the federal court an "Application for Writ of Possession Ex Parte," and a request for a temporary restraining order, both supported by "affidavits" which were filled with inaccuracies and outright lies. The district court refused to accept these documents for filing. The defendant then sought civil arrest warrants for persons who had "violated" the restraining order he had unsuccessfully sought. Again his actions were thwarted.

Having hit a stone wall in federal court, the defendant changed his course of conduct in 1987. He began a different campaign against various persons involved with the loss of his farms, and against those who had purchased one of the farms at the foreclosure sale. This conduct by the defendant consisted primarily of sending "bills" showing large sums of money due him. These were mailed virtually to everyone who had been involved in some way in his financial misfortunes. The defendant generated an immense amount of paperwork in this process. We describe only representative examples below.

In 1988, the new owners of the farm began to receive "rent due" bills for their use of what the defendant still claimed to be his property. He sent these "bills" on a regular basis. These amounts allegedly due him as "accounts receivable" were included on his 1988 tax return.

The defendant also sent "bills" to People's Bank commencing the same year. He claimed that he had satisfied his debt to them in 1986. The bills showed that the bank owed the defendant the amount the bank received in the foreclosure action, plus interest. The amounts shown on these "bills" were included by the defendant as accounts receivable on his 1988 tax return.

The defendant sent like "bills" to employees of the Jay County Auditor's office and Sheriff's Department, and to employees of the FmHA. He claimed all of these amounts purportedly owed to him as accounts receivable on his 1988 or 1989 tax returns.

The total amount defendant claimed to be owed as accounts receivable, $14,282,361.42. He reported on his 1988 tax return that he had paid this amount as "non-employee compensation." He listed as "taxes withheld" approximately the same amount. On this basis he filed a claim for a tax refund of $10,283,401.75.

Similar "billing" and fanciful calculation led the defendant to file a claim, in 1989, for a refund for overpayment of federal income tax of $23,773,227.21.

Not surprisingly the defendant was charged with mail fraud and filing false tax returns. He was convicted and sentenced to 12 months imprisonment.

We are again faced with a "shop worn" argument of the tax protester movement. The defendant in this case apparently holds a sincere belief that he is a citizen of the mythical "Indiana State Republic" and for that reason is an alien beyond the jurisdictional reach of the federal courts. This belief is, of course, incorrect. We addressed the same issue in United States v. Sloan, 939 F.2d 499 (7th Cir.1991). Defendant Sloan argued that he was a citizen of the state of Indiana, but not a citizen of the United States and therefore not subject to its laws. We discussed this proposition fully and concluded that it was "simply wrong." Id. at 501.

In a factually similar case, a recent appeal on the same basis was handled with appropriate despatch by the Eighth Circuit in United States v. Jagim, 978 F.2d 1032, 1036 (8th Cir.1992). Defendant therein claimed to be a citizen of the "Republic of Idaho" and not a U.S. citizen, and therefore outside the jurisdiction of the United States.

The Jagim court found this issue to be "completely without merit" and "patently frivolous" and rejected it "without expending any more of this Court's resources on [its] discussion." Id. We do the same.

The defendant claims that the court's instructions to the jury erroneously stated the law regarding "willfulness," the mental state which had to be proven to convict him of filing false tax returns under 26 U.S.C. § 7206(1). He also argues that the instruction amounted to a direction to the jury to convict.

Jury instruction 12 is a statement of the standard of culpability required to convict a defendant.1 The other relevant facts in the case are either undisputed or have been overwhelmingly demonstrated against the defendant. The trial judge rightly described instruction 12 as "the heart of the case."

During the conference on jury instructions, the defendant objected to the court's proposed instruction 12 and tendered an alternative instruction. He also gave a specific reason for his objection to the court's proposed instruction.

The paragraph of instruction 12 to which defendant objected reads as follows:

The purpose of the willfulness component is to avoid penalizing taxpayers who make innocent mistakes caused by the complexity of the tax code. A defendant does not act willfully if he believes in good faith that he is acting within the law or that his actions comply with the law. This is so even if the defendant's belief was not objectively reasonable as long as he held the belief in good faith. Nevertheless, you may consider whether the defendant's belief about the tax statutes was actually reasonable as a factor in deciding whether he held that belief in good faith.

The defendant argued that the paragraph is "irrelevant" because "this case is not about whether or not the tax code is complex." The defendant clarified this objection by pointing specifically to the language regarding the purpose of the willfulness requirement. He claimed that this language was "tantamount [to] directing a verdict for the government." The defendant also argued that "willfulness is an element of the crime ... [which] should not be watered down or diminished" by a statement of the historical origins of the requirement.

The defendant focuses on the language in this paragraph regarding the reasonableness of his belief that he had no duty to pay income taxes. He argues that if he could show that he had such a good-faith belief, then he could not have been acting willfully and hence he should not have been convicted.

The instruction given to the jury states that such a belief need not be objectively reasonable to be held in good faith. Defendant's proposed instruction contained virtually identical language. However, the instruction which was actually given contained a further sentence which specifically allowed the jury to consider the reasonableness of defendant's asserted belief that he was not violating the law when determining whether or not it accepts his claim that he held his belief in good faith.

Defendant's appeal on this issue is reduced to a claim that the inclusion of any language regarding the objective reasonableness of his belief prejudiced him and is grounds for reversal.

Cheek v. United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991) held that "[w]illfulness, as construed by our prior decisions in criminal tax cases, requires the government to prove that the law imposed a duty on the defendant, that defendant knew of this duty and that he voluntarily and intentionally violated that duty." 498 U.S. at 201, 111 S.Ct. at 610. To show willfulness, the government must show awareness of a legal duty.

Cheek also holds that "a claimed good-faith belief" does not have to be "objectively reasonable if it is to be considered as possibly negating the government's evidence purporting to show a defendant's awareness of the legal duty at issue." 498 U.S. at 203, 111 S.Ct. at 611. Both parties agreed to language in the instruction regarding this holding.

Cheek holds further that "[o]f course, the more unreasonable the asserted beliefs or misunderstandings are, the more likely the jury will consider them to be nothing more than simple disagreement with known legal duties imposed by the tax laws and will find that the government has carried its burden of proving knowledge." 498 U.S. at 203-04, 111 S.Ct. at 611-12. The instruction regarding the reasonableness of defendant's belief is clearly derivable from this language in Cheek.

In United States v. Benson, 941 F.2d 598 (7th Cir.1991), we held that "the reasonableness of a belief is a factor for the jury to consider in determining whether a defendant actually believed and acted on it. The more farfetched a belief is, the less likely it is that a person actually held or would act on that belief." Id. at 614 (citing to Cheek, 498 U.S. at 203-04, 111 S.Ct. at 611-12).

In United States v. Becker, 965 F.2d 383 (7th Cir.1992), we analyzed a jury instruction substantially identical to the one complained of here. The instruction in Becker stated that defendant's good faith belief that he complied with the law, even if his belief was objectively unreasonable, defeats the element of willfulness. The instruction in Becker concluded with this sentence: "Nevertheless, you may consider whether the defendant's belief about the tax statutes was actually reasonable as a factor in deciding whether he held that belief in good faith." Id. at 388. This sentence mirrors the sentence to which defendant objects in this case. We concluded in Becker that the instruction was a correct statement of the law. Id.

Finally, we note that in the recent appeal of the trial-on-remand of United States v. Cheek we ruled on this identical issue. The jury instruction contained the following language: "... [Y]ou may consider whether the defendant's stated belief about the tax statutes was reasonable as a factor in deciding whether he held that belief in good faith." Cheek, 3 F.3d 1057, 1063 (7th Cir.1993). We found that this instruction complied with Becker and with the Supreme Court's ruling in Cheek.

In conclusion, defendant was not prejudiced by the court's decision to use the contested paragraph of instruction 12. It is a correct statement of the law. There was no error.

In the years prior to his conviction in this case, the defendant generated a blizzard of complicated and groundless litigation, primarily involving his fruitless attempts to regain his two farms. Evidence relating to these various trial and appellate proceedings which he had initiated prior to his indictment in this case was admitted over the defendant's objection.

The defendant claims that admission of the evidence of this prior litigation is a violation of Federal Rule of Evidence 404(b), commonly known as the "prior bad acts rule."

Rule 404(b) states that:

Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident.

The defendant points out that the purpose of the rule is to see to it that the jury, when it convicts, does so for the offense charged and not for general bad character. This is a fair statement of the rule's purpose, and the first sentence of the rule serves this purpose by requiring exclusion of certain evidence. The defendant argues that the disputed evidence does not fall into any of the exceptions provided in 404(b).

The government responds that the evidence of trial and appellate court proceedings initiated by defendant was admitted not to disparage his character, but for two other reasons. First, the government claims that the evidence was used as proof that defendant's conduct was willful, which is a basic element of the crime with which he is charged. Thus, the government argues, the disputed evidence is not even subject to Rule 404(b) at all because it is directly probative of the crime with which defendant is charged. Second, the government claims that even if the evidence is subject to Rule 404(b), it falls within several of the exceptions listed in the rule. The government notes also that even if the admission of the evidence were error, it is not prejudicial because the other evidence against defendant was overwhelming.

When deciding if the "other acts" evidence was admissible without reference to Rule 404(b), we must determine whether such evidence was "intricately related to the facts of the case" at hand. United States v. Hargrove, 929 F.2d 316, 320 (7th Cir.1991) See also United States v. Carrillo, 561 F.2d 1125 (7th Cir.1977) (evidence of conduct which might have been the basis for state court prosecution admissible because it was "inextricably tied to basic elements of proof of filing false tax returns"). If we find the evidence is so related, the only limitation on the admission of such evidence is the balancing test required by Rule 403. This test permits the exclusion of relevant evidence if its prejudicial effect substantially exceeds its probative value. Id.

Had the trial court been required to decide whether the evidence was admissible under Rule 404(b), it would have had to apply a more elaborate, four part test which we set forth in United States v. Zapata, 871 F.2d 616, 621 (7th Cir.1989). However, the government is correct as to the status of the evidence objected to, so the trial court had only to apply the simpler balancing test.

When reviewing a district court's decision to admit evidence, we will reverse the court's decision only when we find an error which rises to the very serious, and uncommon, level of an abuse of discretion. Abuse of discretion only occurs when no reasonable person could take the view of the trial court. Libby by Libby v. Illinois High School Assoc., 921 F.2d 96 (7th Cir.1990).

The defendant's prior court proceedings established that he was aware that he no longer had title to the two farms which he had lost through foreclosure. The focus of the defendant's campaign of litigation was an attempt to regain title to the lost property.

The defendant claimed that he owned the property on his 1988 and 1989 tax returns. This claim appeared in the form of an "accounts receivable" figure he included on the returns. These "accounts receivable" were based on bills defendant sent to the proper owners of the farms, and to employees of Peoples Bank, and others who were involved with the foreclosure and sale of his two farms. These bills had no basis in fact. None of these persons owed the defendant any money.

The defendant maintained his pretense of ownership, despite the failure of numerous legal challenges to the loss of his property. Defendant included the amounts which he claimed were due to him when he falsely reported his income to the I.R.S. in 1988 and 1989. The government argues that the record of defendant's failed litigation proves that he knew that the returns, premised as they are on his ownership of the property, were false.

One of the necessary elements the government was required to prove to convict defendant of filing false tax returns was the elusive mental state of willfulness. Willfulness, as defined for purposes of criminal violations of the tax code, requires that the defendant had knowledge that he had a duty to pay, and that he voluntarily and intentionally violated that duty. Cheek, 498 U.S. at 200, 111 S.Ct. at 610. Evidence demonstrating that a defendant knew he did not own certain property, when he submitted a tax return premised on a claim that he did own the property, goes directly to this element.

The evidence of the defendant's prior litigation established that he knew that the "accounts receivable" figures he used on his 1988 and 1989 tax returns were false, and that he therefore acted voluntarily and intentionally--and thus willfully--in filing them. The evidence of prior litigation is therefore probative of an element of the government's case. The evidence of defendant's prior conduct is "intricately related" or "inextricably tied" to the facts in this case. It is therefore not subject to Rule 404(b).

It is left to the trial court to apply Rule 403 and determine whether or not the probative value of this evidence was outweighed by its prejudicial effect. As we noted above, the standard of review for this determination is abuse of discretion. There is nothing in the record which suggests that the trial court abused its discretion when making this determination.

The convictions of the defendant, Arnold W. Hilgeford, are AFFIRMED.

Instruction 12, in its entirety, reads as follows:

An act is done willfully if done voluntarily and intentionally and with the specific intent to do something the law forbids; that is to say with a purpose either to disobey or disregard the law.

Conduct is not willful if it is based upon accident, mistake, inadvertence or due to a good faith misunderstanding as to the requirements of the law.

While good faith has no precise meaning, it encompasses, among other things, an honest intention, an absence of malice and an honest intention to abstain from taking any unconscientious advantage of another.

As a general rule, ignorance of the law or mistake of law is no defense to a criminal prosecution.

In order to convict the defendant, you must find that the government has proven that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty.

If the government proves actual knowledge of the pertinent legal duty, the prosecution, without more, has satisfied the knowledge component of the willfulness requirement.

The reasonableness of a belief is a factor for the jury to consider in determining whether a defendant actually held a belief and acted upon it. The more farfetched a belief is, the less likely it is that a person actually held or would act upon that belief.

A defendant who knows what the law is and who disagrees with it does not have a bona fide misunderstanding defense. A persistent refusal to acknowledge the law does not constitute a good faith misunderstanding of the law. One is not immune from criminal prosecution if he knows what the law is but believes that it should be otherwise, and therefore violates it.

In determining the issue as to willfulness, you are entitled to consider anything done or omitted to be done by the defendant and all facts and circumstances in evidence which may aid in the determination of his state of mind. It is obviously impossible to ascertain or prove directly the operations of the defendant's mind; but a careful and intelligent consideration of the facts and circumstances shown by the evidence in any case enables one to infer what another's intentions were in doing or not doing things. With the knowledge of definite acts, we may draw definite logical conclusions.

Knowledge and belief are characteristically questions for the factfinder, in this case you, the jury.

Tax Protestor Cases Exhibit

("Damn, We Lost Again! And why is it that people who sell

tax protestor materials file their tax returns anyway . . .")

782 F.2d 670

STATE OF WISCONSIN, Plaintiff-Appellee,

Andrew F. GLICK, Joseph Birkenstock, Donald Leist, Michael Dewane, and

Samuel S. Misenko, Defendants-Appellants.

No. 85-2035, 85-2036, 85-2043, 85-2044 and 85-2258.

United States Court of Appeals,

Seventh Circuit.

Submitted Jan. 8, 1986.

Decided Jan. 24, 1986.

Charles D. Hoornstra, Asst. Atty. Gen., Madison, Wis., for plaintiff-appellee.

Andrew F. Glick, Whitelaw, Wis., Joseph Birkenstock, Michael

Dewane, Manitowoc, Wis., Samuel S. Miseko, Newton, Wis., for defendants-appellants.

Before POSNER, COFFEY and EASTERBROOK, Circuit Judges.

EASTERBROOK, Circuit Judge.

People saddled with mortgages may treasure the idea of having clean title to their homes. The usual way to obtain clean title is to pay one's debts. Some have decided that it is cheaper to write a "land patent" purporting to convey unassailable title, and to file that "patent" in the recording system. For example, Samuel Misenko, one of the appellants, drafted a "declaration of land patent" purporting to clear the title to an acre of land of all encumbrances. He recorded that "patent" with the appropriate officials of Manitowoc, Wisconsin. He attached to his "patent" a genuine patent, to a quarter section of land, signed by President Fillmore in 1851.

The theory of Misenko's new "patent" is that because the original patent from the United States conveyed a clear title, no state may allow subsequent encumbrances on that title. The patent of 1851 grants title to "Christian Bond and to his heirs and assigns forever." Misenko apparently thinks that this standard conveyancers' language for creating a fee simple "forever" bars all other interests in the land. We have held to the contrary that federal patents do not prevent the creation of later interests and have nothing to do with claims subsequently arising under state law. See Hilgeford v. Peoples Bank, 776 F.2d 176 (7th Cir.1985). We have consolidated five pro se cases arising from home-drawn "patents." All five began as criminal complaints charging the appellants with criminal slander of title, in violation of Wisc.Stat. s 943.60(1). The state's theory is that the "patents" are frivolous documents that confuse the system of recording interests in real property. Each appellant removed the criminal proceeding to federal court, invoking 28 U.S.C. s 1443. The district court remanded the cases to state court, and the appellants promptly sought review. [FN*]

FN* Although orders remanding cases are ordinarily not reviewable by appellate courts, see 28 U.S.C. s 1447(d) and Gravitt v. Southwestern Bell Telephone Co., 430 U.S. 723, 97 S.Ct. 1439, 52 L.Ed.2d 1 (1977), that statute permits appellate review when the removal was based on s 1443. Our jurisdiction is not defeated by the fact that Glick has been tried and convicted in the state court while the cases were pending here; a decision that the remand was improper would require Glick's conviction to be set aside. Cf. Mancusi v. Stubbs, 408 U.S. 204, 205-07, 92 S.Ct. 2308, 2309-10, 33 L.Ed.2d 293 (1972); Fosdick v. Dunwoody, 420 F.2d 1140, 1141 n. 1 (1st Cir.1970).

If self-drafted "land patents" are frivolous gestures, as we held in Hilgeford, then the removal of the state's prosecutions is frivolity on stilts. (Apologies to Jeremy Bentham.) Section 1443(1), which the appellants invoke, permits the removal of an action against a person "who is denied or cannot enforce in the courts of [the] State a right under any law providing for the equal rights of citizens of the United States...." A "law providing for the equal rights" means, in s 1443(1), a law guaranteeing racial equality. Georgia v. Rachel, 384 U.S. 780, 786-94, 86 S.Ct. 1783, 1786-91, 16 L.Ed.2d 925 (1966). "Denied or cannot enforce" means that the frustration of the right to racial equality is "manifest in a formal expression of state law" (id. at 803, 86 S.Ct. at 1796)--that a statute or authoritative decision announces that claims of the sort asserted are untenable within the state's judicial system. See also Johnson v. Mississippi, 421 U.S. 213, 219-22, 95 S.Ct. 1591, 1595- 96, 44 L.Ed.2d 121 (1975); City of Greenwood v. Peacock, 384 U.S. 808, 86 S.Ct. 1800, 16 L.Ed.2d 944 (1966).

Of the five appellants, only Glick asserts that he is the victim of racial discrimination. Glick, who is white, does not explain the nature of this discrimination. None of the appellants explains how the prosecutions for criminal slander of title offend any specific federal law securing racial equality. None explains how any state law frustrates all hope of implementing the federal right. The appellants say that the state courts are biased against them and that they are being prosecuted on account of the exercise of federal rights, but it has been established since City of Greenwood v. Peacock, supra, 384 U.S. at 827, 86 S.Ct. at 1812, that a person may not obtain removal just by alleging that "federal equal civil rights have been illegally and corruptly denied by state administrative officials in advance of trial, that the charges against the defendant are false, or that the defendant is unable to obtain a fair trial in a particular state court." Unless a federal statute provides "that no State should even attempt to prosecute [appellants] for their conduct" (id. at 826, 86 S.Ct. at 1811-12), they may not remove. No federal statute authorizes the filing of bogus "land patents" that confound recording systems. There is no colorable argument for removal. The district court properly remanded these cases.

Hilgeford held that the effort to use federal land patents to override subsequent interests in property was sufficiently frivolous to support an award of damages under Fed.R.App.P. 38. See 776 F.2d at 179. The combination of the claim found frivolous in Hilgeford with a frivolous effort to remove also supports a penalty. The difference is that these are criminal prosecutions.

We have been unable to find an award of attorneys' fees, or damages in lieu of attorneys' fees, against the defendant in any criminal case. Several considerations support a general reluctance to award attorneys' fees in criminal cases. First, most rules and statutes authorizing awards of fees-- e.g., 42 U.S.C. s 1988 and Fed.R.Civ.P. 11--apply only to civil litigation. Second, courts have tolerated arguments on behalf of criminal defendants that would be inappropriate on behalf of civil litigants. Many rules, starting with the special burden to show guilt "beyond a reasonable doubt," recognize the social interest in having a bias against conviction. Novel arguments that may keep people out of jail ought not to be discouraged by the threat of attorneys' fees. Third, the statute authorizing the imposition of costs against criminal defendants, 28 U.S.C. s 1918(b), implies that the costs are to be part of the sentence (if the defendant is convicted), and an appellate court therefore cannot use this grant of power. Section 1918(b) also uses "costs" in the usual sense, which excludes attorneys' fees. Compare United States v. Vaughn, 636 F.2d 921 (4th Cir.1980), with United States v. Glover, 588 F.2d 876 (2d Cir.1978). Fourth, when a defendant seriously misbehaves in the trial court, the judge may take the misconduct into account in imposing sentence. United States v. Grayson, 438 U.S. 41, 98 S.Ct. 2610, 57 L.Ed.2d 582 (1978). This reduces the need for a separate penalty in the form of attorneys' fees. Finally, there are practical and constitutional limits on the monetary sanctions that may be employed against indigent criminal defendants. See Bearden v. Georgia, 461 U.S. 660, 103 S.Ct. 2064, 76 L.Ed.2d 221 (1983). Although it is therefore no surprise that courts do not award attorneys' fees against criminal defendants who assert frivolous positions, we have not found any case suggesting that an award of fees, or of damages under Rule 38 in lieu of fees, is prohibited. Criminal defendants and their lawyers must abide by the rules that apply to other litigants, see Maness v. Meyers, 419 U.S. 449, 458-60, 95 S.Ct. 584, 590-92, 42 L.Ed.2d 574 (1975), including the principle that litigating positions must have some foundation in existing law or be supported by reasoned, colorable arguments for change in the law. See Rule 11 and, e.g., In re TCI, Ltd., 769 F.2d 441 (7th Cir.1985); Indianapolis Colts v. Mayor and City Council of Baltimore, 775 F.2d 177 (7th Cir.1985); Eastway Construction Corp. v. City of New York, 762 F.2d 243 (2d Cir.1985). Cf. Anders v. California, 386 U.S. 738, 744, 87 S.Ct. 1396, 1400, 18 L.Ed.2d 493 (1967); Jones v. Barnes, 463 U.S. 745, 103 S.Ct. 3308, 77 L.Ed.2d 987 (1983). An argument in the teeth of the law is vexatious, and a criminal defendant who chooses to harass his prosecutor may not do so with impunity. The time of prosecutors is valuable. If a defendant multiplies the proceedings, this takes time that could more usefully be devoted to other prosecutions. When a defendant makes an argument so empty that no responsible lawyer could think the argument supportable by any plausible plea for a change in the law the court may reply with a penalty.

We need not consider whether and when a court should impose sanctions on a criminal defendant who simply makes unsupportable arguments during the regular course of trial and appeal. (Perhaps sanctions imposed on counsel under 28 U.S.C. s 1927 would be more appropriate than sanctions on defendants.) These appellants have wrenched their cases from the regular course. Wisconsin filed simple criminal complaints. Instead of arguing their positions in the courts of Wisconsin, these appellants removed the cases, imposing costs on a new set of courts. These removals have distracted judges from serious cases and delayed the consideration of more substantial claims. The prosecutors must deal not only with three levels of review in state court but also with two (so far, and potentially three) tiers of federal courts.

These removals vexatiously multiplied the proceedings in the original sense of that phrase. And federal courts lack the principal weapons available to the state courts to prevent harassing litigation. Because the appellants will not be sentenced in federal court, the court cannot impose the costs of prosecution as part of the sentence or augment any sentence of incarceration under the principle of Grayson. It is attorneys' fees and damages under Rule 38 or nothing. An award of damages under Rule 38 in these cases will not stifle the vigorous defense of criminal charges. It will, however, ensure that the appellants and others like them think twice before removing to federal court criminal prosecutions that belong in state court. These petitions for removal had no conceivable foundation. Each defendant therefore is assessed $500 in damages under Fed.R.App.P. 38, in addition to double costs.

AFFIRMED.

Federal Land Bank of Saint Paul, a body corporate, Plaintiff and Appellee

Gordon G. Gefroh, Defendant and Appellant

Civil No. 11,051

Appeal from the County Court of Rolette County, Northeast Judicial District, the Honorable A. S. Benson, Judge.

AFFIRMED.

Opinion of the Court by Meschke, Justice.

Anderson & Dobrovolny, P.O. Box 997, Minot, ND 58702, for plaintiff and appellee. Submitted on brief.

Shelley Lashkowitz, Lashkowitz Law Offices, 15 Broadway, Suite 601, Fargo, ND 58102-4907, for defendant and appellant. Submitted on brief.

[390 N.W.2d 47]

Federal Land Bank of Saint Paul v. Gefroh

Civil No. 11051

Meschke, Justice.

Gordon G. Gefroh appeals from a judgment evicting him from his farm and granting possession of it to the Federal Land Bank of Saint Paul, and from an order denying his motion to vacate the judgment. Gefroh asserts that the Bank is barred by § 10-22-19, N.D.C.C., from maintaining this action in state court; and that, because title to the property stems from a federal land patent, it was immune from mortgage foreclosure. We reject both contentions and affirm.

During February 1984, the Bank obtained a judgment of foreclosure on Gefroh's property. Gefroh failed to redeem and the property was conveyed to the Bank by sheriff's deed in April 1985. The Bank then sued to remove Gefroh and to obtain possession of the property. Following a hearing, the county court decreed "the restitution and immediate possession" of the property to the Bank. The county court also denied Gefroh's subsequent motion to vacate this judgment.

Gefroh contends that the Bank is a "foreign corporation" within the meaning of § 10-22-19, N.D.C.C., and since it has not been issued a certificate of authority to do business in this state, it cannot bring this action.

Federal land banks are "federally chartered instrumentalities of the United States." 12 U.S.C. § 2011. See also Federal Land Bank of St. Paul v. Bismarck Lumber Co., 314 U.S. 95, 62 S.Ct. 1, 86 L.Ed. 65 (1941). Each federal land bank is a "body corporate" which has the power to "[s]ue and be sued." 12 U.S.C. § 2012(4). It is well settled that "[c]orporations created by the authority of the United States are not foreign corporations but have a legal existence in every state in which they may transact business pursuant to the authority conferred upon them by Congress." Federal Land Bank of Omaha v. Felt, 368 N.W.2d 592, 595 (S.D. 1985). See generally 17 Fletcher, Cyclopedia of the Law of Private Corporations § 8291 (1977). Thus, we conclude that the Bank, as a federally chartered corporation, is not a "foreign corporation" subject to § 10-22-19, N.D.C.C., and therefore it is not required to obtain a certificate of authority in order to maintain this action. Felt, supra. See also, § 10-22-01, particularly subsections (7) and (8), N.D.C.C.

Gefroh's assertion that his property was immune from mortgage foreclosure because title stemmed from a federal land patent is completely without merit. Even "an entryman on government lands, holding the same under the homestead laws, may give a valid mortgage thereon,..." Adam v. McClintock, 21 N.D. 483, 488, 131 N.W. 394, 396 (1911). Gefroh mortgaged his property to the Bank in return for a loan. Therefore, his property was subject to foreclosure action.

The judgment evicting Gefroh is affirmed.

Herbert L. Meschke

Ralph J. Erickstad, C.J.

Beryl J. Levine

Gerald W. VandeWalle

H.F. Gierke III

Tax Protestor Cases Exhibit

("Damn, We Lost Again! And why is it that people who sell

tax protestor materials file their tax returns anyway . . .")

505 N.E.2d 387

George M. BRITT and Anita C. Britt, Plaintiffs-Appellants,

FEDERAL LAND BANK ASSOCIATION OF ST. LOUIS, Yorkville National Bank,

John Doe, Jane Doe and All Unknown Parties, Defendants-Appellees.

No. 2-86-0248.

Appellate Court of Illinois,

Second District.

March 11, 1987.

Robert L. Collins, Carol Stream, for plaintiffs-appellants.

Herschbach, Tracy Johnson Bertani & Wilson, George F. Mahoney, III, Joliet,

for defendants-appellees.

Presiding Justice LINDBERG delivered the opinion of the court:

On November 8, 1985, plaintiffs, George M. Britt and Anita C. Britt, filed suit against defendants, the Federal Land Bank Association of St. Louis (Bank or defendant), Yorkville National Bank, John Doe, Jane Doe and All Unknown Parties, seeking to quiet title to property they formerly owned. Plaintiffs alleged in their verified complaint that the documents labeled "Land Patents" signed and recorded by them, conveyed or vested in them title superior to any other claims, including that which was acquired by defendant Bank in the foreclosure proceeding concluded in the circuit court of Kendall County. Plaintiffs' complaint further alleged that the Bank was wrongfully placed in possession of the foreclosed upon property by order of the circuit court of Kendall County entered May 6, 1985, nunc pro tunc April 24, 1985. It appears that on April 25, 1985, plaintiffs filed documents bearing the caption of a "Land Patent" in the office of the Kendall County Recorder of Deeds. The "Land Patents" begin, "I, George M. Britt & Anita C. Britt, bring up this land patent in my name." Attached as an exhibit to each of the documents entitled "land patents" is a copy of a land patent issued on July 1, 1841, by the General Land Office wherein the grantees were "Francis Evans" and "James Evans." On December 13, 1985, defendant Bank filed its motion to dismiss plaintiffs' complaint with prejudice pursuant to sections 2-619(a)(4) and 2-619(a)(9) of the Code of Civil Procedure (Ill.Rev.Stat.1985, ch. 110, pars. 2-619(a)(4) and 2-619(a)(9)), alleging plaintiffs' action was barred under the theories of res judicata and collateral estoppel. On January 21, 1986, plaintiffs filed their motion for a change of venue from the Honorable John Peterson. On January 27, 1986, plaintiffs' change of venue motion was granted, and the cause was transferred and assigned to the Honorable James Wilson for hearing. On February 28, 1986, the trial court heard arguments, and the plaintiffs' complaint was dismissed with prejudice.

Plaintiffs contend on appeal of the dismissal of their complaint that: (1) "American farmers under the acts of Congress of 1818, 1821 and 1823, have set up a solid basis made for [sic] the validity of Land Patent over all other titles and where these titles clash with local title, the Land Patent is superior;" (2) "it is well-settled that a Land Patent which has been recorded prior to a foreclosure sale gives a fee simple title to plaintiffs, and the title arising out of a foreclosure is not a real title at all, but only a color of title, inferior in every way to the plaintiffs' Land Patent;" and (3) plaintiffs' Land Patent can only be attacked in Alexandria, Virginia, and not in the circuit court of Kendall County.

Defendant Bank maintains that: (1) the judgment of foreclosure was entered March 22, 1985, the property was sold at a sheriff's sale May 8, 1985, and the order confirming the sale was entered May 24, 1985, and that plaintiffs are collaterally estopped from claiming superior title and that the foreclosure procedure was res judicata as regards plaintiffs' rights in the property; (2) the theories of res judicata and collateral estoppel underlying defendants' sections 2-619(a)(4) and 2-19(a)(9) (Ill.Rev.Stat.1985, ch. 110, pars. 2- 619(a)(4) and 2- 619(a)(9)) motion preclude relitigation of claims to the property; (3) in addition to the theories relied upon by the trial court, plaintiffs' claim of superior title is unsupported by any Illinois case law and has been rejected when raised in the Federal courts; and (4) attempts to gain superior title by the filing of land patents have been met by criminal sanctions. Supreme Court Rule 341(e)(7) (103 Ill.2d R. 341(e)(7)) provides, among other things, that an appellant's brief must contain citations to the relevant authority supporting the argument advanced on appeal. (See Village of Cary v. Jakubek (1984), 121 Ill.App.3d 341, 345, 76 Ill.Dec. 736, 459 N.E.2d 651; Michalek v. Village of Midlothian (1983), 116 Ill.App.3d 1021, 1039, 72 Ill.Dec. 402, 452 N.E.2d 655.) A court of review is entitled to have the issues clearly defined and to be cited pertinent authority. (Fuller v. Justice (1983), 117 Ill.App.3d 933, 943, 73 Ill.Dec. 144, 453 N.E.2d 1133; Pecora v. Szabo (1982), 109 Ill.App.3d 824, 825-26, 65 Ill.Dec. 447, 441 N.E.2d 360.) A contention that is supported by some argument but by no authority whatsoever does not satisfy the requirements of Supreme Court Rule 341(e)(7). (117 Ill.App.3d 933, 942-43, 73 Ill.Dec. 144, 453 N.E.2d 1133; Wilson v. Continental Body Corp. (1981), 93 Ill.App.3d 966, 969, 49 Ill.Dec. 412, 418 N.E.2d 56.) The well-established rule is that bare contentions without argument or citation of authority do not merit consideration on appeal. Deckard v. Joiner (1970), 44 Ill.2d 412, 419, 255 N.E.2d 900, cert. denied (1970), 400 U.S. 941, 91 S.Ct. 232, 27 L.Ed.2d 244; Fuller v. Justice (1983), 117 Ill.App.3d 933, 942-43, 73 Ill.Dec. 144, 453 N.E.2d 1133. While purporting to cite authority, generally, for what is set forth in their briefs as issues on appeal, plaintiffs have failed to comply with Supreme Court Rule 341(e)(7) (103 Ill.2d R. 341(e)(7).) We do not view the inclusion of citations to irrelevant authority scattered throughout their brief to constitute even an attempt to comply with the rule. In fact, plaintiffs' briefs are nothing more than a compilation of disjointed and nonsensical claims and legal conclusions totally unsupported by citations to the record or relevant legal authority. We may treat the issues raised as having been waived for failure to cite authority. 103 Ill.2d R. 341(e)(7). However, as the question of the legal significance of "land patents" on land titles may arise again, we undertake an analysis of the issue.

Defendant's motion to dismiss was based upon the bar of a prior adjudication, the foreclosure proceeding. Section 2-619(a) of the Code of Civil Procedure provides that a defendant may, within the time for pleadings, file a motion for dismissal of the action on the ground that the claim or demand asserted against defendant is barred by other affirmative matter avoiding the legal effect of or defeating the claim or demand. (Ill.Rev.Stat.1985, ch. 110, par. 2-619(a).) An affirmative matter under this section is something in the nature of a defense that negates an alleged cause of action completely or refutes crucial conclusions of law or conclusions of material fact unsupported by allegations of specific fact contained or inferred from the complaint. (Illinois Housing Development Authority v. Sjostrom & Sons, Inc. (1982), 105 Ill.App.3d 247, 252, 61 Ill.Dec. 22, 433 N.E.2d 1350.) Generally, the doctrine of res judicata is that an existing final judgment rendered upon the merits, without fraud or collusion, by a court of competent jurisdiction, is conclusive of rights, questions and facts in issue as to the parties and their privies and all other actions in the same or any other court of competent jurisdiction. (Housing Authority v. Young Men's Christian Association (1984), 101 Ill.2d 246, 251-52, 78 Ill.Dec. 125, 461 N.E.2d 959.) The principle of res judicata extends not only to questions which were actually litigated but also to all questions which could have been raised or determined. Spiller v. Continental Tube Co. (1983), 95 Ill.2d 423, 432, 69 Ill.Dec. 399, 447 N.E.2d 834; Kuehner v. Melliere (1969), 118 Ill.App.2d 348, 351, 255 N.E.2d 36.

The parties have disclosed no Illinois authority on whether the filing of what is alleged to be a "land patent" by the former mortgagors of property has any legal effect much less whether such a document filed after the entry of a judgment of foreclosure would have any significance. However, as defendant ably documents, the courts of other States and the Federal courts have spoken to the issue of the legal sufficiency of "land patents." These courts have rendered decisions upon a variety of issues based upon facts similar to the case at bar, where plaintiffs in a suit to quiet title filed a document described as a land patent and claimed superior title to that of the purchaser at the judicial sale of the property. Hilgeford v. Peoples Bank (7th Cir.1985), 776 F.2d 176; Hilgeford v. Peoples Bank (N.D.Ind.1985), 607 F.Supp. 536; Nixon v. Phillipoff (N.D.Ind.1985), 615 F.Supp. 890; Federal Land Bank v. Gefroh (N.D.1986), 390 N.W.2d 46; Timm v. State Bank (Minn.App.1985), 374 N.W.2d 588; Wisconsin v. Glick (7th Cir.1986), 782 F.2d 670. Because of the lack of Illinois case law on what appears to be a procedure without legal foundation in Illinois, we find the analysis of Judge William C. Lee of the U.S. District Court for the Northern District

of Indiana in Hilgeford v. Peoples Bank (Hilgeford v. Peoples Bank (N.D.Ind.1985), 607 F.Supp. 536) instructive. There, as here, the plaintiffs attempted to establish superior title to the property foreclosed upon by their mortgagee, the Peoples Bank. Judge Lee observed: "The 'patent' involved here is not a grant by the United States; it is a grant by the plaintiffs. The 'patent' here is not a grant to some other holder so as to pass title on to another party; it is a self-serving document whereby the plaintiffs grant the patent to themselves. This 'patent' does not involve or concern 'public land;' it relates to plaintiffs' private property. The court cannot conceive how these federal provisions are implicated here, and thus federal question jurisdiction is absent. Of course, the purported 'land patent' in this case fails for reasons independent of jurisdiction. As was noted before, the 'land patent' attached to plaintiffs' various filings is a grant of a land patent from the plaintiffs to the plaintiffs. It is, quite simply, an attempt to improve title by saying it is better. The court cannot conceive of a potentially more disruptive force in the world of property law than the ability of a person to get 'superior' title to land by simply filling out a document granting himself a 'land patent' and then filing it with the recorder of deeds. Such self-serving, gratuitous activity does not, cannot and will not be sufficient by itself to create good title.

* * *

Because this cause constitutes the third quiet title suit filed in this court within the past month on the basis of almost identical self-serving land patents (two of which were filed by these same plaintiffs), the court fears that other such suits will be filed unless a signal is sent that this court will not tolerate such obviously frivolous suits based upon documents which on their very face are legal nullities.

* * *

This cause falls squarely within the parameters of the type of frivolous claims that Rule 11 allows courts to issue sanctions for. It is based upon a purported land patent which indicates on its face that it is a self-serving document, drafted by the plaintiffs to grant themselves title to land, and which does not invoke any federal law or constitutional provision precisely because it is a blatant attempt by private landowners to improve title by personal fiat. Such lawsuits constitute a gross waste of precious judicial resources, for this court is forced to deal with patently frivolous lawsuits instead of addressing those suits on its docket which have merit and deserve close judicial scrutiny.

* * *

The court finds that a $250.00 fine is an appropriate sanction here. Further this order stands as public notice to all future litigants who may seek to file lawsuits based on the same type of self-serving, invalid 'land patent:' this court will issue Rule 11 sanctions for such lawsuits. This court stands ready to adjudicate any federal question arising out of a valid federal land patent which has been signed by the Secretary of the Interior (43 U.S.C. s 15) and involves a grant of title to public lands. However, this court will not countenance suits based upon self-serving documents and pet theories about land ownership such as this one. For the reasons stated above, this action is hereby DISMISSED for lack of jurisdiction pursuant to Federal Rules Civil Procedure 12(h)(3). Plaintiffs are hereby ORDERED to pay $250.00 to the Clerk of this court as a sanction for filing this lawsuit." 607 F.Supp. 536, 538-40. The United States Court of Appeals for the Seventh Circuit in affirming the judgment of the district court stated, inter alia: "The conclusion that this appeal is frivolous seems inescapable. The drafting and recordation of the Declaration of Land Patent was a blatant attempt by the Hilgefords to circumvent the Bank's mortgage and improve their title. The district court informed them twice within a month's time that this device did not improve their title or form the basis for federal jurisdiction. On appeal, the Hilgefords have completely failed to support their claim of jurisdiction by citing relevant authority or by refuting the district court's analysis. Our review of the briefs and records persuades us that this is vexatious litigation; an appropriate case for the imposition of sanctions. The Hilgefords have no support for their claims of superior title or federal jurisdiction. Their brief was also woefully inadequate. We can think of no other reason for this appeal other than delay, harassment, or sheer obstinancy. Reid [v. U.S. (7th Cir.1983) ], 715 F.2d [1148] at 1155. Accordingly, we award the Bank $500 in damages for this frivolous appeal in addition to the costs allowed by Federal Rule of Appellate Procedure 39." 776 F.2d 176, 179. In Federal Land Bank v. Gefroh (N.D.1986), 390 N.W.2d 46, a case with facts strikingly similar to the case at bar, and the Hilgeford v. Peoples Bank cases, the bank obtained a judgment of foreclosure. The plaintiff failed to redeem. The property was conveyed to the bank by sheriff's deed. The bank was then successful in its suit to remove the plaintiff from the property. On plaintiffs' appeal the Minnesota Supreme Court concluded: "Gefroh's assertion that his property was immune from mortgage foreclosure because title stemmed from a federal land patent is completely without merit. Even 'an entryman on government lands, holding the same under the homestead laws, may give a valid mortgage thereon, ...' [citation omitted]. Gefroh mortgaged his property to the Bank in return for a loan. Therefore, his property was subject to foreclosure action." (390 N.W.2d 46, 47.) The court affirmed the judgment of eviction. Nixon v. Phillipoff (N.D.Ind.1985), 615 F.Supp. 890, was another district court case involving an attempt to claim Federal jurisdiction by reason of the plaintiffs' "Land Patent". The district court said: "[t]his court has considered Nixon's land patent and found it to be a frivolous legal nullity that did not and could not affect the title to the mortgaged land at issue in the underlying foreclosure action." 615 F.Supp. 890, 894.

Under common law tradition, all private titles since Norman times have originated from title held by the sovereign. (1 Tiffany, The Law of Real Property s 13 (2d ed. 1920).) The seminal opinion in American jurisprudence analyzing the origin of sovereign titles and setting forth the principles by which conflicting title claims based upon competing sovereignties was authored by Mr. Chief Justice Marshall in Johnson & Graham's Lessee v. M'Intosh (1823), 21 U.S. (8 Wheat.) 543, 5 L.Ed. 681. There, Chief Justice Marshall outlined the means by which sovereigns acquire title (conquest, cession and treaty) and stated that by the Treaty of Paris in 1783: "[T]he powers of government, and the right to soil, which had previously been in Great Britain, passed definitively to the states." Johnson & Graham's Lessee v. M'Intosh (1823), 21 U.S. (8 Wheat.) 543, 5 L.Ed. 681, 691.

This sovereign title, which is absolute and encompasses on the part of the sovereign authority both ownership of the land and the right to govern the inhabitants thereof, is "allodial" title. This term is used in contradistinction to the term "fee simple title," which contemplates the highest title which may be privately held. (1 Tiffany, The Law of Real Property ss 6 and 13 (2d ed. 1920).) Fee simple title may freely be alienated by conveyance, mortgage or devise but still be subject to some claim of the sovereign. (1 Tiffany, The Law of Real Property ss 6 and 13 (2d ed. 1920).) In current usage, the holder of fee simple title is still subject to dispossession by the government, through due process of law, for nonpayment of real estate taxes and by eminent domain proceedings. The only correct premise supported by authority in the Britts' brief is that land held by the Federal government is not subject to the acts of the States. (Cf., Gibson v. Chouteau (1871), 80 U.S. (13 Wall.) 92, 20 L.Ed. 534; Clackamas County, Oregon v. McKay (D.C.Cir.1955), 226 F.2d 343.) What is totally incorrect is the implicit foundation of the Britts' position: that the land patent issued to "James Evans" and "Francis Evans" in 1841 conveyed the entire title of the Federal government, such that no interest arising by operation of State law can

attach to the title.

[A land patent is merely the deed by which the government passes fee simple title of government land to private persons. (63A Am.Jur.2d Public Lands s 70 (1984).) Once fee simple title is passed to an individual from the government, whether by land patent or otherwise, claims arising from conveyance or mortgage by that holder will be enforced against him. (Cf., Stark v. Starr (1876), 94 U.S. (4 Otto) 477, 24 L.Ed. 276; United States v. Budd (1891), 144 U.S. 154, 12 S.Ct. 575, 36 L.Ed. 384; see also 63A Am.Jur.2d Public Lands s 92 (1984).) Where, as here, a decree of foreclosure and sale has divested title from the former mortgagor, the mere fact that the mortgagor's claim of title may run directly back through his family to a 19th century patent is of no

consequence.

The assertion in the Britts' brief that they hold "fee simple allodial title" is untenable. The Britts have never held sovereign title and now have been divested of their fee simple title by due process of law in the foreclosure action.

The purported "perfected patent" filed by the Britts matches the description of similar documents filed in other States. In Wisconsin v. Glick (7th Cir.1986), 782 F.2d 670, the Seventh Circuit Court of Appeals described these "new land patents" in the following terms: "People saddled with mortgages may treasure the idea of having clean title to their homes. The usual way to obtain clean title is to pay one's debts. Some have decided that it is cheaper to write a 'land patent' purporting to convey unassailable title, and to file that 'patent' in the recording system." 782 F.2d 670, 671-72.

The "new patent" or "perfected patent" theory asserted on appeal, as it relates to the original patents, is also defeated by the estoppel effect of the foreclosure judgment. To the extent that the new theory may be construed as a separate and independent claim, it will be accorded the same treatment by this court that it has been accorded by the district courts of Indiana, Wisconsin and Minnesota and by the United States Court of Appeals for the Seventh Circuit. It is frivolous and without basis and should not be raised in the circuit courts of this State.

Defendant, Federal Land Bank Association of St. Louis, has moved in this court for the imposition of sanctions against plaintiffs and Robert L. Collins, their counsel. The motion, filed August 1, 1986, was ordered taken with the case. No objections to the motion have been filed, and the time for objections has long since passed. 103 Ill.2d R. 361(b)(2).

The gravamen of defendant Bank's motion is: "That Plaintiffs' complaint, as signed by their attorney, alleged allegations which were made without reasonable cause and are frivolous and unwarranted. In substance, the thrust of their complaint to quiet title is purportedly grounded on a [sic] Plaintiffs' 'allodial' fee simple title emanating from 'land patents' from the Plaintiffs for the benefit of the Plaintiffs.

* * *

That the Plaintiffs' complaint and attorney Robert L. Collins' conduct in signing, filing and attempting to prosecute it, hinders the judicial process and constitutes a gross waste of judicial resources requiring the court to deal with patently frivolous law suits instead of addressing those suits on its docket which have merit and deserve close scrutiny."

Section 2-611 (formerly section 41) of the Code of Civil Procedure (Ill.Rev.Stat.1985, ch. 110, par. 2-611) is an attempt by the legislature to penalize the litigant who pleads frivolous or false matters or brings a suit without any basis in law and thereby puts the burden upon his opponent to expend money for an attorney to make a defense against an untenable suit. (Ready v. Ready (1961), 33 Ill.App.2d 145, 161-62, 178 N.E.2d 650.) One of the purposes of section 2-611 is to prevent litigants from being subjected to harassment by the bringing of actions against them which in their nature are vexatious, based upon false statements or brought without any legal foundation. 33 Ill.App.2d 145, 162, 178 N.E.2d 650.

While this motion is made for the first time in the appellate court, we hold that it was timely. (Brooks v. Goins (1967), 81 Ill.App.2d 12, 225 N.E.2d 707.) We have held that the claim of plaintiffs to a title superior to that of defendant based upon plaintiffs filing with the recorder of deeds a document described as a "land patent" is frivolous and brought without any legal foundation. We, therefore, remand this case to the circuit court of Kendall County for a hearing only on the single issue of determining reasonable attorney fees and costs (see Voss v. Lakefront Realty Corp. (1977), 48 Ill.App.3d 56, 8 Ill.Dec. 109, 365 N.E.2d 347) expended by defendants in defense of the cause in the trial court. The hearing should be conducted by the judge who heard defendant's motion. (Boss v. Coe Investment Co. (1964), 45 Ill.App.2d 417, 195 N.E.2d 735.) The court should also assess reasonable fees and costs for defendant's defense of plaintiffs' appeal as a needless extension of a baseless lawsuit. Manchester Insurance & Indemnity Co. v. Strom (1970), 122 Ill.App.2d 183, 258 N.E.2d 150.

Defendant included in its motion for sanctions allegations of a violation by counsel, Robert L. Collins, of section 7-102 of the Code of Professional Responsibility (Ill.Rev.Stat.1983, ch. 110A, par. 7-102), which provides: "In his representation of a client, a lawyer shall not

* * *

(2) knowingly advance a claim or defense that is unwarranted under existing law, except that he may advance such claim or defense if it can be supported by a good-faith argument for an extension, modification, or reversal of existing law."

Defendant contends that the plaintiffs' complaint and attorney Robert L. Collins' conduct in signing, filing and attempting to prosecute it, hinders the judicial process and constitutes a gross waste of judicial resources requiring the court to deal with frivolous lawsuits instead of addressing those suits on its docket which have merit and deserve close scrutiny.

The appropriate forum for consideration of this allegation is the Attorney Registration and Disciplinary Commission of the supreme court. The supreme court has the exclusive authority to regulate the practice of law; it has the power to impose sanctions for unprofessional conduct so as to protect the public interest and guard the legal profession against reproach. In re Nesselson (1979), 76 Ill.2d 135, 137-38, 28 Ill.Dec. 498, 390 N.E.2d 857; In re Mitan (1979), 75 Ill.2d 118, 25 Ill.Dec. 622, 387 N.E.2d 278, cert. denied (1979), 444 U.S. 916, 100 S.Ct. 231, 62 L.Ed.2d 171. Accordingly, we deny that part of the motion.

Defendant's motion, taken with the case, is allowed in part, denied in part and remanded for a hearing and a determination of reasonable attorney fees and costs to be assessed against plaintiffs. The judgment of the circuit court of Kendall County is affirmed.

AFFIRMED.

MOTION ALLOWED IN PART, DENIED IN PART AND REMANDED.

Tax Protestor Cases Exhibit

("Damn, We Lost Again! And why is it that people who sell

tax protestor materials file their tax returns anyway . . .")

612 F.Supp. 253

Ronnie L.R. NIXON, Plaintiff,

The INDIVIDUAL HEAD OF ST. JOSEPH MORTGAGE CO., INC., et al., Defendants.

Civ. No. S 85-202.

United States District Court,

N.D. Indiana,

Fort Wayne Division.

June 26, 1985.

Ronnie L.R. Nixon, pro se.

Mark J. Phillipoff, Jones, Obenchain, Johnson, Ford, Pankow &

Lewis, South Bend, Ind., Frank A. Baldwin, Deputy Atty. Gen.,

Indianapolis, Ind., for defendants.

ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on the court's own sua sponte analysis of this cause. For the following reasons, this cause will be dismissed on the court's own motion. [FN1]

FN1. Defendant Martin filed a motion to dismiss while this order was nearly completed. It plays no significant role here.

Plaintiff is proceeding pro se. Pro se pleadings are to be liberally construed. Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972). The district court's role is to ensure that the claims of pro se litigants are given "fair and meaningful consideration." Matzker v. Herr, 748 F.2d 1142, 1146 (7th Cir.1984); Caruth v. Pinkney, 683 F.2d 1044, 1050 (7th Cir.1982). This court also recognizes that federal courts have historically exercised great tolerance to ensure that an impartial forum remains available to plaintiffs invoking the jurisdiction of the court without the guidance of trained counsel. Pro se motions and complaints such as the plaintiff's are held to less stringent pleading requirements; rigor in the examination of such motions, complaints and pleadings is inappropriate.

This is an action for a declaratory judgment and a preliminary injunction based upon an alleged "land patent." According to the amended complaint filed in this cause, plaintiff is a defendant in a mortgage foreclosure action in the LaPorte Superior Court in LaPorte County, Indiana. Plaintiff moved to dismiss that foreclosure action on the basis of a "land patent" which he drafted, executed, and recorded in the County Recorder of Deeds Office. Plaintiff filed this action to have this court declare his rights under the "land patent."

This case bears more than a passing resemblance to another case recently decided by this court. In Hilgeford v. Peoples Bank, Portland, Indiana, 607 F.Supp. 536 (N.D.Ind.1985), this court dismissed sua sponte a case based upon an alleged "land patent" drafted by the plaintiffs. The land patent in the Hilgeford case and the land patent in this case are identical in every aspect except for the names and property description contained in each. In Hilgeford, this court held that an action based upon a land patent drafted by a party in order to give that party rights within property is a legal nullity. The patent cannot support federal jurisdiction because it is a patently obvious attempt to create superior title in land through personal fiat. Any pro se litigant who can read or write knows that one cannot give oneself better title to land by simply saying so on a piece of paper. As this court said in Hilgeford, "the court cannot conceive of a potentially more disruptive force in the world of property law than the ability of a person to get 'superior' title to land by simply filling out a document granting himself a 'land patent' and then filing it with the Recorder of Deeds. Such self- serving, gratuitous activity does not, cannot and will not be sufficient by itself to create good title." 607 F.Supp. at 538. It is therefore obvious that this case must fail because the basis of the case--the "land patent"--cannot provide an adequate legal basis upon which plaintiff can claim any interest in the mortgaged property.

Even if the purported "land patent" in this case could somehow be considered sufficient to pass muster as a land patent under the statutes setting forth the statutory machinery for federal land patents, 43 U.S.C. s 1, et seq., the existence of this land patent would not be sufficient to create federal jurisdiction in this court. Case law clearly establishes that controversies about land do not present federal questions or federal question jurisdiction, even when one of the parties derived his title through an act of Congress. See State of Wisconsin v. Baker, 698 F.2d 1323, 1327 (7th Cir.), cert. denied, 463 U.S. 1207, 103 S.Ct. 3537, 77 L.Ed.2d 1388 (1983). As the Supreme Court itself has said: A suit to enforce a right which takes its origin in the laws of the United States is not necessarily, or for that reason alone, one arising under those laws, for a suit does not so arise unless it really and substantially involves a dispute or controversy respecting the validity, construction, or effect of such a law, upon which the determination of the result depends. This is especially so of a suit involving rights to land acquired under a law of the United States. If it were not, every suit to establish title to land in the central and western states would so arise, as all titles in those states are traceable back to those laws. Shulthis v. McDougal, 225 U.S. 561, 569-70, 32 S.Ct. 704, 706, 56 L.Ed. 1205 (1912). Plaintiff here attempts to argue that his patent falls under the federal laws concerning land patents issued by the United States, and that his rights arise out of the original patentee to the land, one George Pearson Buell, who received the original land patent in March, 1837. However, neither plaintiff's present land patent nor the original land patent can give rise to federal jurisdiction over this cause.

Finally, this court does not have the power to enjoin the state court mortgage foreclosure proceedings. The Anti-Injunction Act, 28 U.S.C. s 2283, prohibits the granting of injunctions to stay state court proceedings, including mortgage foreclosure actions. Ungar v. Mandell, 471 F.2d 1163 (2d Cir.1972); First National Bank & Trust Co. of Racine v. Village of Skokie, 173 F.2d 1 (7th Cir.1949).

Thus, this court is without jurisdiction to hear this cause, and lacks the power to order the injunctive relief sought. The case will therefore be dismissed for lack of jurisdiction pursuant to

Fed.R.Civ.P. 12(h)(3).

In Hilgeford, this court made clear that the sanction provisions of Rule 11 of the Federal Rules of Civil Procedure apply with full force and effect to frivolous claims under a purported "land patent" such as the plaintiff's. A "land patent" suit such as this falls squarely within the parameters of the type of frivolous claims that Rule 11 is designed to deter because "it is based upon a purported land patent which indicates on its face that it is a self-serving document, drafted by the plaintiffs to grant themselves title to land, and which do not invoke any federal law or constitutional provision precisely because it is a blatant attempt by private land owners to improve title by personal fiat." 607 F.Supp. at 539. Because such a land patent suit is a waste of precious judicial resources, this court specifically stated in Hilgeford that the Hilgeford order would stand as public notice to all future litigants that this court will issue Rule 11 sanctions for such frivolous lawsuits. Plaintiff in this cause received a copy of the Hilgeford opinion, and was specifically alerted to the possibility of Rule 11 sanctions by the court during a telephone conference held May 15, 1985. In blatant disregard of such notice, the plaintiff has persisted in this litigation despite its obvious lack of merit, including the filing of a motion for an emergency injunction and a request for oral argument. This type of activity in the face of clear warnings justifies the imposition of sanctions in this case. The attorneys for the three named defendants have worked diligently to defend against this frivolous suit. They filed five motions. They travelled from South Bend, Indiana and Indianapolis, Indiana to attend a status conference in Fort Wayne, Indiana, a conference which the plaintiff did not attend because of the expense involved. In short, defendants' counsel have spent a significant amount of time and money in order to defend a case which should never have been filed. The court therefore finds that an appropriate Rule 11 sanction is the award to the defendants of attorney's fees of Two Hundred Fifty Dollars ($250.00) for each of the two attorneys involved in defending this case.

The court wishes to reiterate its warning in Hilgeford that the filing of lawsuits based upon land patents which purport to grant a land patent unto one's self will draw immediate and severe sanctions from this court. The identical language of the "land patent" in this case and in the Hilgeford case suggest to this court that some party is responsible for the broad dissemination of the obviously false and frivolous legal concepts which have led to this suit and the suit in Hilgeford. If in fact someone has provided the plaintiff here with these spurious materials and arguments, the court notes that the plaintiff would have a solid claim for damages in the amount of the sanctions issued here for the misrepresentations which resulted in this frivolous lawsuit. The judicial waste occasioned by the continuous dissemination of these incorrect legal concepts will continue to draw the swift response of this court. The court hopes that this clear signal will discourage others from following such false prophets.

For the reasons stated above, the defendants' motion to dismiss is hereby GRANTED, and this cause dismissed in its entirety. Plaintiff is hereby ORDERED to pay Two Hundred Fifty Dollars ($250.00) each to defendants St. Joseph Mortgage Company and Donald D. Martin for attorney's fees incurred in this case as a sanction for filing this lawsuit.