United States v. Hyde

• Decision Date: 15 November 1909
• Docket Number: 1,127.
• Citation: 174 F. 175
• Court: U.S. District Court — Western District of Washington
• Parties: UNITED STATES v. HYDE et al.

174 F. 175

UNITED STATES v. HYDE et al.

No. 1,127.

United States Circuit Court, W.D. Washington.

November 15, 1909

Elmer E. Todd, U.S. Dist. Atty.

H. S Griggs, for defendants Sawyer and Truxbury.

DONWORTH District Judge.

This suit is brought to set aside a patent issued July 22, 1902 to F. A. Hyde & Co., a California corporation, conveying the N.E. 1/4 of section 24, in township 11 N., of range 4 E. of the Willamette meridian, situated in Lewis county, Wash. The patent was issued under the following statutory provisions:

'That in cases in which a tract covered by an unperfected bona fide claim or by a 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 to cover the tract selected: Provided further, that in cases of unperfected claims the requirements of the laws respecting settlement, residence, improvements, and so forth, are complied with on the new claims, credit being allowed for the time spent on the relinquished claims. ' Act June 4, 1897, c. 2, 30 Stat. 36 (U.S. comp. St. 1901, p. 1541).

Under this statute the Secretary of the Interior established certain rules or regulations for its administration. Of these, rules 16 and 18 are as follows:

'16. Where final certificate or patent has issued, it will be necessary for the entryman or owner thereunder to execute a quitclaim deed to the United States, have the same recorded on the county records, and furnish an abstract of title, duly authenticated, showing chain of title from the government back again to the United States. The abstract of title should accompany the application for change of entry, which must be filed as required by paragraph 15, without the affidavit therein called for.'

'18. All applications for change of entry or settlement must be forwarded by the local officers to the Commissioner of the General Land Office for consideration, together with report as to the status of the tract applied for.'

The base land, of which a conveyance was made to the United States for the purpose of selecting the land now in question, consisted of a quarter section in the Pine Mountain and Zaca Lake Forest Reserve in California, described as the S.E. 1/4 of section 36, township 6 N., range 26 W. of the San Bernardino meridian. For convenience I will hereafter refer to that section merely as 'section 36.' The bill was filed October 17, 1905, and names as defendants, Frederick A. Hyde, John A. Benson, F. A. Hyde & Co., a corporation, Alfred C. Truxbury and wife, and W. H. sawyer and wife.

The evidence shows the facts to be as follows:

In the year 1898 A. J. Stein was a barber doing business in San Francisco. F. A. Hyde was one of his customers. Some time before March 3d of that year Hyde asked Stein if he had any friends that would like to take up land. Stein answered that he thought he could get them. Hyde asked him if he could get 10, and he said he thought so. Stein thereupon arranged with a number of friends, relations, and acquaintances, about 10 altogether, to sign such papers as Hyde should request. Hyde paid Stein about $20 for his entire services, and paid the men who did the signing from $10 to $12.50 each. One of the men whom Stein procured was William Schlipf, a neighbor. Schlipf went to a notary's office and signed some papers, the nature of which he does not remember. He did not read them and took no interest in the transactions. He signed several papers on different occasions, and perhaps a year or two elapsed between the signings. The record evidence shows that on March 3, 1898, Schlipf signed an application to purchase all of section 36, stating therein, among other things:

'That I desire to purchase the same for my own use and benefit, and for the use or benefit of no other person or persons whomsoever, and that I have made no contract or agreement to sell the same.'

This application was sworn to by Schlipf, and was filed in the office of the state surveyor general of California on March 5, 1898, together with a power of attorney from Schlipf, authorizing Hyde to file the application and to receive the certificate. On August 22, 1989, the surveyor general approved the application and directed that the land be sold in accordance therewith, and on October 17th following a certificate of purchase was duly issued by the register of the state land office, declaring Schlipf to be the purchaser of section 36 and entitled to a patent on completing payment of the balance of the purchase price, which was at the rate of $1.25 an acre. In the office of the recorder of Santa Barbara county, Cal., there was filed at the request of Hyde on August 4, 1899, an assignment of the certificate of purchase and a deed from Schlipf to Hyde conveying all of section 36; both instruments bearing date October 26, 1898, and appearing to have been acknowledged by Schlipf that day. On February 12, 1900, formal patent in the usual form was issued by the state of California to Hyde as grantee, conveying section 36. Schlipf did not pay any part of the state's price for the land ($800), and the whole amount must have been paid by Hyde. On February 24, 1900, Hyde and wife by quitclaim deed conveyed section 36 to F. A. Hyde & Co., a California corporation. This deed and the patent were filed for record with the county recorder on March 15, 1900. The articles of incorporation of F. A. Hyde & Co. are in evidence, and thereby it appears that at the time of incorporation Hyde owned 996 of the 1,000 shares constituting the capital stock. On March 2, 1900, there were filed for record with the county recorder a number of quitclaim deeds in due form from F. A. Hyde & Co. to the United States, all dated and acknowledged February 27, 1900, two of which conveyed, respectively, the N. 1/2 and the S. 1/2 of the S.E. 1/4 of section 36, aggregating 160 acres. These conveyances were evidently made for the purpose of serving as a base, under the statute and regulations, for the selection of lieu lands outside of the forest reservation. The genuineness of the signatures purporting to be made by Schlipf on some of the papers is questioned by complainants; but I see no reason to doubt that whatever purports to bear his signature was in fact signed by him.

This was the situation of affairs at the time that defendants Sawyer and Truxbury became connected with the subject-matter of this suit. They reside, respectively, at Worcester, Mass., and North Tonawanda, N.Y., and are lumbermen of mature age and large experience, owning timber lands in different parts of the country. They together visited Puget Sound in 1899, with a view of considering the advisability of investing in timber lands. In Tacoma they made the acquaintance of Angus McDougall, a timber cruiser there residing. They arranged that McDougall should buy timber lands for them in Lewis county and vicinity, and shortly after sent out Chas. Hill as their financial and business representative to act for them in making the purchases. The original idea was to buy from private owners; but while Truxbury and Sawyer were on the ground they were informed in a general way of the law permitting the exchange of lands within forest reservations for vacant land in the public domain, and learned that parties who had surrendered lands in forest reservations were offering their rights for sale. These rights were commonly spoken of as 'forest reserve scrip.'

Hill came to the state of Washington early in 1900, and, acting with McDougall, acquired altogether for Truxbury and Sawyer about 12,000 acres of timber land in Lewis and Cowlitz counties. Of this about 5,000 acres were acquired from the United States by means of lieu selections. 'Forest reserve scrip' was at that time offered for sale by numerous parties, including railroad companies, individuals and private corporations. Hill obtained price quotations from a number of these. He met Benson at Tacoma in February, and had some negotiations with him. At Benson's suggestion Hill took up the matter with Hyde by correspondence, addressed to the latter at San Francisco. This resulted in the purchase of a quantity of rights by Hill from F. A. Hyde & Co. Hill returned east by way of San Francisco, where he met Hyde and bought more. Between 4,000 and 5,000 acres of rights were bought in this way from F. A. Hyde & Co. The price paid ranged from $3.85 to $4.50 an acre. There was no particular certificate or document constituting the 'scrip.' As evidence of the right to select and acquire the government land in the particular case now in controversy, F. A. Hyde & Co. delivered to Hill, or to McDougall, an abstract of title to the base lands down to and including the deed of relinquishment to the United States,...