State v. Hyde

• Decision Date: 08 January 1918
• Citation: 88 Or. 1,169 P. 757
• Parties: STATE v. HYDE ET AL.
• Court: Oregon Supreme Court

169 P. 757

88 Or. 1

STATE v. HYDE ET AL.

Supreme Court of Oregon

January 8, 1918

Appeal from Circuit Court, Crook County; T. E. J. Duffy, Judge.

Action by the State against F. A. Hyde and others. From a judgment in favor of the State, the defendant named and various other defendants appeal. Modified.

This is a suit brought to set aside deeds to upwards of 14,000 acres of land in Crook county which formerly belonged to the state of Oregon. The suit is based on an alleged conspiracy to which the defendants Hyde, Schneider, and others were parties, to secure these lands in fraud of the public policy of the state as defined by its statutes providing for the sale of its lands. Most of the defendants are joined as parties on the allegation that they assert some interest in the property adverse to the claim of the state.

The second amended complaint on which the case was tried alleges that an act of Congress approved June 4, 1897 (chapter 2, 30 Stat. 36), contained the following provision:

"That in cases in which a tract covered by an unperfected bona fide claim or by patent, is included within the limits of a public forest reservation the settler or owner thereof may if he desires to do so, relinquish the tract to the government, and may select in lieu thereof a tract of vacant land open to settlement not exceeding in area the tract covered by his claim or patent; and no charge shall be made in such cases for making the entry of record or issuing the patent; * * * provided further, that in cases of unperfected claims the requirements of the laws respecting settlement, residence, improvements, etc., are complied with on the new claims, credit being allowed for the time spent on the relinquished claims."

It is alleged that shortly after the enactment of this legislation the defendant Hyde conceived the fraudulent purpose of acquiring the properties involved in this case, which were then a part of the school lands granted by Congress to the state of Oregon. Hyde's plan was alleged to be to procure a large number of applications to purchase these lands; the purchasers assigning their contracts immediately, and Hyde securing thereby state deeds running to him or parties selected by him and acting with him. The statute for the disposition of state lands in force at that time was as follows:

"When any person desires to purchase any of the lands of this state mentioned in section 3617, he shall file an application * * * with the said board of commissioner(s) which application shall contain a precise description of the land applied for, according to the United States survey thereof, and be accompanied by the affidavit of the applicant, taken before some notary public or county clerk to the effect that he is over eighteen years of age, and is a citizen of the United States, or has declared his intention to become such and a resident of this state, that he has not directly or indirectly made any previous purchase of land from this state, or any for him, which together with the land described in the application exceeds three hundred and twenty acres; that the proposed purchase is for his own benefit, and not for the purpose of speculation; that he has made no contract or agreement express or implied, for the sale or disposition of the land applied for in case he is permitted to purchase the same and that there is no valid adverse claim thereto by any actual settler." Hill's Code, § 3618.

The scheme alleged in the second amended complaint contemplated the control by the defendant Hyde of the lands described therein and his conveyance of the same to the United States as a basis for the selection of lands equal in area on the public domain. The steps taken in pursuance of this scheme are alleged with particularity in the second amended complaint. Plaintiff sufficiently avers that the applications so secured were made on behalf of Hyde and for his benefit; that the affidavits made by the applicants were false in so far as they alleged that affiants were purchasing for their own benefit and that they had made no contract, express or implied, for the disposition of the property; that the result was the acquisition by a nonresident of the state of many thousands of acres of Oregon school land although the laws of Oregon contemplate that its lands shall be sold only to residents of the state and in quantities not exceeding 320 acres to each person. Plaintiff charges that this result was brought about by direct purchase from the state, inasmuch as the applications were all made for Hyde's benefit and the lands were all paid for with Hyde's money. It is alleged that the titles were taken in the names of the defendants Hyde, Sherman, Schneider, Morris, Baldwin, and Clarke; that these parties executed and recorded deeds of relinquishment to the United States and thereupon undertook to select lands in lieu of those relinquished. It is alleged that the conspiracy resulted in the acquisition by Hyde of about 47,000 acres of land and the patenting to him and his associates of about 10,000 acres of selected lands in lieu of a like acreage relinquished. It is averred that subsequent to November, 1902, adverse proceedings were instituted in the General Land Office against the remaining selections, that these proceedings are still pending, and that the General Land Office refuses to patent any of the remainder of the selected lands. The thirtieth paragraph of the second amended complaint is as follows:

"That the United States of America has at all times and does now refuse to accept the deeds of defendants C. W. Clarke and F. A. Hyde for the lands hereinbefore first described, and has at all times and does now refuse to accept title to said lands for the reason that the said lands were fraudulently acquired from the state of Oregon, as hereinbefore alleged, and the said United States of America and the officers thereof having charge of the public lands in the United States have never at any time determined or decided that said F. A. Hyde and C. W. Clarke were the owners of the lands attempted to be conveyed by them to the United States and have never decided or determined that the said C. W. Clarke and F. A. Hyde are entitled to the lands attempted to be selected in lieu of said lands hereinbefore first described, and the said officers of the United States have for a long time and now do maintain and assert that the United States acquires no interest in the lands designated as base under the Act of June 4, 1897, until the Land Department has determined that the selector is the owner of the base land and is entitled to a patent to the lands selected in lieu thereof; that no such determination has ever been made as to the lands hereinbefore first described or for the lands attempted to be selected in lieu thereof."

Facts are alleged in great detail to excuse the delay in bringing suit.

It may be said parenthetically that, in the administration of the act of 1897 above quoted, a nomenclature has come into use under which the state lands surrendered are called base lands and the properties claimed in lieu thereof are known as selected lands.

The defendants, other than those charged with the conspiracy, are alleged to claim an interest in the base lands grounded on conveyance of the selected lands made to them by Hyde and Clarke. It is averred that these rights are subsequent and inferior to the rights of the state. It is charged that the lands are unoccupied and that Hyde is insolvent.

Plaintiff prays for a decree adjudging that it is owner of the property described, quieting its title as against the several defendants and canceling the state deeds issued for the property in question. In case this relief is denied in whole or in part, plaintiff prays that it may be adjudged to be the owner of the equitable title to the selected lands, that the defendants may be charged as trustees for plaintiff in any interest held by them in said selected lands, and finally that the defendant Hyde be required to account to plaintiff for all moneys received by him from lands sold in lieu of the lands of the state of Oregon surrendered by him.

Attached to the second amended complaint is an exhibit showing the particulars as to each piece of land conveyed by the state, its various transfers, and the date of its relinquishment to the United States; also, the date of the selection made in lieu of it. A large majority of these selections were made in the years 1899 and 1900, quite a number in 1901, a very few as late as 1904, and one in 1910.

The defendants E. A. Hyde, Western Lumber Company, Willamette Pulp & Paper Company, Martin Barrett, Cedar Sheep Association, Mrs. Theodore Hampe, Riverside Land & Livestock Company, Rock Springs Land & Cattle Company, and Alger Logging Company demurred to the complaint. The demurrers were based in part on an alleged defect of parties in that the United States was not joined as a party defendant. The demurrers were overruled, and thereupon these defendants answered. The defendants C. W. Clarke Company, Anaconda Copper Mining Company, O. S. Lewis, and Henry Hewitt, Jr., also answered. All of these answers deny the allegations above quoted making up the thirtieth paragraph of the second amended complaint and all other allegations to the effect that title to the base lands had not vested in the United States; all answering defendants alleged affirmatively that the United States is the owner of the base lands and is a necessary party defendant.

All of the answering defendants except Hyde and C. W. Clarke Company alleged the conveyance to them respectively of specified portions of the selected lands in consideration of moneys paid by them without notice of any fraud or irregularity. The defendant C. W. Clarke Company alleged...