United States v. Allen
| Decision Date | 26 January 1910 |
| Docket Number | 1,072. |
| Citation | 180 F. 855 |
| Parties | UNITED STATES v. ALLEN et al. |
| Court | U.S. District Court — Western District of Washington |
Elmer E. Todd, U.S. Dist. Atty., and Henry M. Hoyt, Sp. Asst. U.S atty.
Graves & Murphy, for defendants Helen Pack Wilson and Wilson Coal Company.
The object of this suit is to cancel a patent issued to the defendant Helen Pack Wilson, covering the northwest quarter of section 10 in township 14 north of range 1 west of the Willamette meridian, situated in Lewis county in the Vancouver land district, in this state. Defendants Watson Allen and wife are merely nominal parties and have filed a disclaimer. The defendants really interested in the controversy are Helen Pack Wilson and Wilson Coal Company. As the basis of the suit, complainants charge that the patent was obtained by fraudulent evasion of the provisions of the statutes (Rev. St. Secs. 2347-2351 (U.S. Comp. St. 1901, pp 1440, 1441)) governing the disposition of the vacant coal lands of the United States. The evidence leaves this issue free from doubt. The contention of the government is so clearly established that any detailed reference to the proof would be a work of supererogation. The important facts however, may be recapitulated.
Some time prior to the year 1901, R. A. Wilson and his son George B. Wilson became aware of the existence of coal on certain public lands in Lewis county. They and several of their acquaintances filed declaratory statements in the Vancouver land office for the acquisition of a number of quarter sections of such lands; all the claims either adjoining or being in close proximity. When the time came for making entry and payment, the proceedings thus initiated were suffered to lapse, probably by reason of inability to make payment in accordance with the terms of the statute, $3,200 for each claim. Among those who filed these declaratory statements and allowed them to lapse was L. G. Wilson, a nephew of R. A Wilson. The several members of the Wilson family were evidently acting in concert and composed in fact an association of persons formed for the purpose of acquiring coal lands. Their conduct clearly proves this. R. A. Wilson was the head of the association and managed and directed the proceedings for all. After the abandonment of the first proceedings, he was still of the opinion that a successful financial venture could be made by the acquisition and development of these coal lands, and in February and March, 1901, he caused new declaratory statements to be filed, as follows:
These several locators were all acting in concert, and R. A. Wilson was their joint representative. Helen Pack Wilson and Minn Marie Wilson are his unmarried daughters, who at that time, and for a considerable time thereafter, lived with him at his home in Seattle. Katie Roberts Wilson is the wife of L. G. Wilson. Later Virgil R. Wilson, another nephew of R. A. Wilson, made application to enter as coal lands the southwest quarter of the same section 10 above mentioned, on the understanding that he would receive about $500 for his services in procuring the land and would turn it over to the interests controlling the other claims. Neither R. A. Wilson nor any of his associates had sufficient means to make payment for the lands at the land office and provide for development work, and they endeavored to find some person who would finance their enterprise. In May, 1901, R. A. Wilson made the acquaintance of P. C. Richardson and succeeded in making a financial arrangement with him. Richardson did not have much money, but he had some Seattle real estate and a steamboat on the Yukon river, both of which he expected to be able to convert into cash, and to realize therefrom about $21,000 for the business venture. Pursuant to this understanding between R. A. Wilson and Richardson, the Sterling Coal Company was formed under the laws of the state of Oregon; its capital stock being fixed at $500,000, and the incorporators being R. A. Wilson, George B. Wilson, and one resident of Oregon who had no real interest in the company. When that company was organized, R. A. Wilson and Richardson's attorney made a written proposition to the company reciting that they held title by warranty deed to 1,040 acres of coal and timber land in Lewis county, Wash. (describing it), giving its estimated value as $500,000 and offering to sell and convey it to the company in full payment of the capital stock. This proposition the company accepted. The lands so described included the quarter section involved in this suit and the other lands above described, though none of the claims had then reached the stage of payment and entry.
To assure the company that the proposition would be carried out, the several locators (including Helen Pack Wilson and Minn Marie Wilson) made deeds conveying the lands to R. A. Wilson, and he executed a declaration of trust stating that he held the conveyances in trust for the company. None of the deeds nor the declaration of trust was placed on public record. Richardson succeeded in selling his Seattle property and paid $8,300 into the hands of George B. Wilson as treasurer of the Sterling Coal Company. Richardson also put the Yukon river steamboat at the disposition of the company; but nothing was ever realized from that asset, chiefly by reason of the subsequent falling out between the Wilsons and Richardson. In March, 1902, Helen Pack Wilson and Virgil Wilson duly entered their claims at the Vancouver land office. The $6,400 paid to the government at that time for these two claims was taken from the treasury of the Sterling Coal Company by George B. Wilson and was a part of the money which Richardson had realized from the sale of his Seattle lots. The funds of the Sterling Coal Company also paid for the development work done on the claims and probably paid the expenses of the witnesses who went to Vancouver to testify before the land office authorities at the hearing at the time of entry. Before the time for entry arrived, however, the attorney representing the Wilsons before the land office stated to them that the lands could not be legally entered while the deeds executed to R. A. Wilson in trust for the company were outstanding, and the deeds were therefore returned to the grantors and destroyed. About the beginning of the year 1902, R. A. Wilson and Richardson each endeavored to secure for himself control of a majority of the stock of the Sterling Coal Company, with the result that at the annual meeting held in January of that year Richardson and persons friendly to him succeeded in voting a majority of the stock, whereupon R. A. Wilson and George B. Wilson withdrew from the stockholders' meeting. From that time forward the Wilsons and Richardson were antagonistic, and shortly thereafter a complete break took place between the Wilsons and the Sterling Coal Company. The Wilsons have never admitted that the money paid to the government for the two patented claims was the same money that Richardson had paid into the treasury of the Sterling Coal Company, but that such is the fact is too plain for argument. Richardson made a total loss, so far as the evidence shows, of his investment in that company. In due course in the months of June and September, 1902, the patents in the usual form issued to Helen Pack Wilson and Virgil R. Wilson for the two quarter sections embraced in their entries.
On September 15, 1903, the Sterling Coal Company brought a suit in equity in this court, the bill being verified by Richardson as secretary, in which Robert A. Wilson, Helen Pack Wilson, Minn Marie Wilson, Kate Roberts Wilson, and L. G. Wilson, her husband, Salomon Lauridsen, Henry Kamps, and James R. Winston, were defendants. The prayer of the bill was that it be adjudged that Robert A. Wilson in the proceedings leading up to the acquisition of these claims acted as agent and trustee of the Sterling Coal Company, that the company be decreed to be the owner of the claims patented to Helen Pack Wilson and Virgil R. Wilson, and that the company have a conveyance thereof. To this bill R. A. Wilson, Helen Pack Wilson, and Minn Marie Wilson severally demurred. After argument the demurrer was sustained by Judge Hanford in a written opinion in which he called attention to the vagueness of many of the allegations and said:
'If it can be determined from the averments of the bill, after indulging in all fair inferences, that anything was agreed to with respect to the assignment of coal claims to be...
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