United States v. Cooksey

• Citation: 275 F. 670
• Decision Date: 03 October 1921
• Docket Number: 3551.
• Parties: UNITED STATES v. COOKSEY et al.
• Court: U.S. Court of Appeals — Ninth Circuit

275 F. 670

UNITED STATES v. COOKSEY et al.

No. 3551.

United States Court of Appeals, Ninth Circuit.

October 3, 1921

Rehearing Denied Dec. 5, 1921.

This appeal, together with appeals in 23 companion cases, was taken from a decree dismissing a suit to cancel a patent for lands alleged to have been fraudulently obtained in violation of the provisions of the Timber and Stone Act (Act of Congress June 3, 1878, amended by Act of August 4, 1892 (Comp. St. Secs. 4671-4673, 4988, 10216)). Cooksey's Case is taken as representative.

The complaint alleges that the entryman swore falsely, in that he swore that he applied for land named in the application for his own benefit, whereas, before making his application, he had agreed to convey the land to the Curtis, Collins &amp Holbrook Company; that that company knew of the fraud and procured Cooksey to make the entry for its benefit. The defense of bona fide purchaser is relied upon. Upon reference, the master found that the entries had been made under prior illegal agreements between the entrymen and one Tuman, but that the Curtis, Collins & Holbrook Company had no notice of such illegal arrangements and was an innocent purchaser. The substance of the findings is:

In 1901, Tuman endeavored to interest C. H. Holbrook, Sr., in certain timber land in California. At that time persons owning lands within the limits of the national forests could reconvey them to the United States and select in lieu other lands of equal area outside of the national forests. In December, 1901, Holbrook, as party of the first part, and J G. Curtis and T. D. Collins, as parties of the second part agreed among themselves in writing as follows:

For a consideration of $1 from each of the parties to the other, and the promises contained, Holbrook agreed to sell Curtis and Collins 42,380 acres of timber land in California, and to have title vested in Collins and Curtis as in the manner set forth in the contract at $7.50 per acre. The timber lands were described in a schedule. Holbrook was to obtain title to the 42,380 acres of forest reserve land for which he was to receive from the United States a like quantity of the timber lands, title to be secured to Curtis and Collins in the following manner:

The forest reserve lands were to be deeded to Thompson, trustee, to be held in trust by him in pursuance of the terms of the agreement. Curtis and Collins were to deposit $200,000 in bank to be used in purchasing forest reserve land at not exceeding $5 per acre. Payments were to be made by the bank to the owner of the forest reserve lands upon proper certificate of a designated attorney and the trustee, upon the written request of Holbrook, was to deed the forest reserve lands to the United States and to make application for the timber land, and when title had been acquired to the timber land and upon notice from Holbrook that he had been fully paid, the trustee was to convey to Curtis and Collins, or to whomsoever they might direct. When title was acquired to the 42,380 acres, Holbrook was to be paid the balance of the purchase price named as $115,600, and should receive 789 shares of the stock of a corporation to be formed and certain sums in cash and the balance in interest-bearing promissory notes of Curtis and Collins. The corporation was to have a capital stock of $500,000, divided into 5,000 shares of $100 each, and Curtis and Collins were to deed the lands to the corporation, and 3,156 shares were to be issued to Curtis and Collins, 1,844 shares to remain in the treasury. Holbrook was to be a director and was vice president and general manager. It was further provided that, if Holbrook could not secure title to the whole of the 42,380 acres of land by forest reserve, he might secure such titles through any other legal means or source, but in no event should he or the persons deeding the same be paid for the lands thus acquired until the title thereto was certified to be good by the attorney and deeded to the trustee, and when so certified the bank should pay for the land.

Holbrook and his son acquired the necessary scrip, paying therefor from $3 to $5.50 per acre. Tuman was interested with Holbrook, but this was not generally known. When Holbrook reported that it was difficult to obtain forest reserve scrip, he advised Curtis and Collins that there were other valuable public lands, title to which could be secured under the Timber and Stone Law. Curtis and Collins were satisfied provided good title would be obtained, and pursuant to oral agreement title was acquired under the Timber and Stone Law to about 30,000 acres, including the lands involved in these suits. The timber and stone entries were made through agents of Tuman. One of the agents was told by Tuman that money would be advanced, if necessary, to pay for the land, and that thereafter the entrymen could sell at a profit of $100 above all expenses, and the agent would receive a location fee of $25 for each claim that Tuman purchased. Such agreements were carried out, the money was furnished by Tuman, and when the land was entered and the entryman was paid $100 above all expenses deeds were taken in the name of Charles E. Gregory, who was not known to the entryman, and whose name was used by Tuman and Holbrook. Nearly all the timber and stone entries were made in the last half of 1902, and the deeds to Gregory were made soon after proof by the entrymen, but were not recorded until June, 1904. Gregory deeded to the corporation, Curtis, Collins & Holbrook Company, but knew nothing about the lands and merely permitted his name to be used. The Curtis, Collins & Holbrook Company was organized August 14, 1902, the incorporators being J. G. Curtis and his son, D. G. Curtis, T. D. Collins and his son, E. S. Collins, Charles H. Holbrook and his son, Charles H. Holbrook Jr., and Irving F. Moulton. Gregory assigned the contracts involved to the company at different times up to 1904, but none of the deeds were recorded until October, 1909, and some were not...