United States v. Trogler

• Decision Date: 20 October 1916
• Docket Number: 4684.
• Citation: 237 F. 181
• Parties: UNITED STATES et al. v. TROGLER et al.
• Court: U.S. Court of Appeals — Eighth Circuit

237 F. 181

UNITED STATES et al. v. TROGLER et al.

No. 4684.

United States Court of Appeals, Eighth Circuit.

October 20, 1916

Archibald A. Lee and Eugene B. Lacy, Asst. U.S. Atty., both of Denver Colo. (Harry B. Tedrow, U.S. Atty., of Denver, Colo., on the brief), for appellants.

Edwin H. Park, of Denver, Colo., for appellees.

Before SMITH and CARLAND, Circuit Judges, and AMIDON, District Judge.

AMIDON District Judge.

The United States brought an action in the federal court for the district of Colorado to set aside certain patents for coal lands. Among the parties to that litigation were the original patentees and Keitel, who had secured the patents through dummy entrymen, and also many subsequent claimants of interests in the property. Among the latter were the appellees here, William A. Trogler and F. W. Keitel. The Commonwealth Trust Company, which held a trust deed to secure a loan of $25,000 upon the property, was also a party to that suit, as were the Dorseys, who were the beneficiaries of the trust deed. This suit was filed in March, 1910. Thereafter a suit was brought in the same federal court by the trust company to foreclose the trust deed. Everybody having any interest in the property, including the appellees here, were parties defendant to that bill. While the government suit to cancel the patent was still pending, the suit to foreclose the trust deed passed to the usual decree establishing the validity of the trust deed, the fact that it was a lien upon the land, and directing a sale of the property to pay the amount due, $37,200.56. The government of course, was not a party to the foreclosure suit, because it could not legally be made a party. The land was sold pursuant to the decree in that suit, and, before the entry of a decree in the suit by the government to cancel the patent the period of redemption expired, and the Dorseys, who were purchasers at the foreclosure sale, became entitled to a deed. After the title of the Dorseys thus became complete, the suit by the government passed to judgment. The decree found that the patents were obtained fraudulently, and that the government was entitled to their cancellation, except as against good-faith purchasers and incumbrancers of the property. It likewise found that the trust deed was taken without any notice of the fraud, and for value, and adjudged it to be a valid charge upon the property. The deed of trust covered a large number of tracts of land, among these the northeast quarter of section 26, township 8 north, of range 87, which is the property primarily involved here. As to that quarter section there were no good-faith purchasers except the holders of the trust deed. As to the other tracts covered by the trust deed there were other parties having valid rights. At this point it is important to call attention to the fact that the government was not bound by the proceedings that had taken place in the suit to foreclose the trust deed. In the hope that the government might save the northeast quarter of section 26, the decree in the government suit ordered that all the tracts covered by the trust deed be again sold, directing that the tracts, exclusive of the northeast quarter, be first sold, and if sufficient should be realized from their sale to satisfy the trust deed, then the government was to take the northeast quarter free and clear of all claims, and if it should be necessary to sell the northeast quarter, the decree provided that, if sold for more than enough to satisfy the balance of the trust deed, then that the money be paid into court, and the government receive the surplus.

In order to understand this litigation it is important to keep in mind that the trust deed was held to be valid, not only in the suit for its foreclosure, but in...