# Opinion — Booth-Kelly Lumber Co. v. United States

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386002_0550%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opinion
- **Published:** January 1, 1915
- **Citation:** 237 U.S. 481

## Text

LE se RABANNE NEO EMRE IE LLP OEE AE BILE APIO Ay

BOOTH-KELLY LUMBER COMPANY v. UNITED
STATES.

APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE
NINTH CIRCUIT.

No. 258. Argued May 4, 5, 1915.—Decided May 17, 1915.

Judgment of the Circuit Court of Appeal cancelling patents for timber
lands on the ground of fraud affirmed, the explanations of the
grantee who claimed to be a bona fide purchaser without notice
failing to escape the effect of incontrovertible facts which showed
participation in the fraud.

203 Fed. Rep. 423, affirmed.

TuE facts, which involve the validity of patents to land
alleged by the United States to have issued as the result
of fraud in the entries, are stated in the opinion.

Mr. A. H. Tanner, with whom Mr. A. C. Woodcock

and Mr. John Van Zante were on the brief, for appellant:

There is nothing in the Timber and Stone Act to prevent

the entrymen from borrowing the money to pay the ex-
VOL. CCXXXVII—31

482 OCTOBER TERM, 1914.
Argument for Appellant. 237 U. 8.

penses of making the entries and to pay the government
price for the land. United States v. Detroit Timber Co.,
124 Fed. Rep. 393; Lewis v. Shaw, 70 Fed. Rep. 289, 294;
Hoover v. Salling, 110 Fed. Rep. 43, 47; United States v.
Richards, 149 ‘Fed. Rep. 443; United States v. Barber
Lumber Co., 172 Fed. Rep. 948, 960; United States v.
Williamson, 207 U.S. 425; United States v. Biggs, 211 U.S.
507; S. C., 32 L. D. 349; S. C., 34 L. D. 129; Larson v. Weis-
becker, 1 L. D. 422; Appeal of Ray, 6 L. D. 340; Halling
v. Eddy, 9 L. D. 337; Church v. Adams, 37 Oregon, 355;
Wilcox v. John, 21 California, 267; Norris v. Heald, 12
Montana, 282; James v. Ta‘nter, 15 Minnesota, 512;
Gross v. Hofeman, 91 Minnesota, 4; Fuller v. Hunt, 48
Iowa, 163.

Upon making his initial filing on a timber claim the
entryman may sell or agree to sell the claim, or borrow
money on it, or do as he pleases with it without violating
any of the provisions of the Timber and Stone Act. United
States v. Williamson, supra; United States v. Barber
Lumber Co., 172 Fed. Rep. 948, 960; United States v.
Kettenbach, 175 Fed. Rep. 463, 466.

A deed, though absolute in form, if intended as security,
is a mortgage, and it may be shown to be such by parol
evidence. Peugh v. Davis, 96 U. 8. 332; Brick v. Brick,
98 U. 8. 514; Cabrera v. Bank, 214 U. 8. 224, 230; Russell
v. Southard, 12 How. 139; Hall v. O’Connell, 52 Oregon,
164; Kramer v. Wilson, 49 Oregon, 333.

When the Government calls the entryman as a witness
on its behalf it is bound by his testimony unless overcome
by countervailing evidence. United States v. Barber Lum-
ber Co., 172 Fed. Rep. 948, 960; Choctaw &c. Ry. Co. v.
Newton, 140 Fed. Rep. 225, 250; United States v. Budd,
144 U.S. 154.

As to the character of evidence required by a court of
equity to set aside a patent attention is called to the
following decisions: United States v. Budd, 144 U. S.

BOOTH-KELLY CO. v. UNITED STATES. 483
237 U.S. Opinion of the Court.

154, 162; Maxwell Land Grant Case, 121 U. S. 325, 379;
Colorado Coal Co. v. United States, 123 U.S. 307,317; United
States v. Marshall Mining Co., 129 U. S. 579, 589; United
States v. Stinson, 197 U. S. 200, 204; United States v.
Clarke, 200 U.S. 601, 608.

The declarations of a person after he has parted with
the title to real estate are not admissible against his grantee
to defeat or destroy the title. Dodge v. Freedman’s Bank,
93 U. S. 379, 383; Phillips v. Laughlin, 99 Maine, 26;
Vrooman v. King, 36 N. Y. 477.

Mr. Assistant Attorney General Knaebel, with whom
Mr. S. W. Williams was on the brief, for the United States.

Mr. Justice Homes delivered the opinion of the court.

This is a bill in equity brought by the United States for
the cancellation of five patents for timber lands issued to
the four individual appellants and one Jordan, all of whom
subsequently conveyed the lands to the Booth-Kelly Lum-
ber Company. The ground of the bill is that the entries
were made pursuant to an understanding with the Com-
pany for the purpose of conveying the title to it, in fraud
of the law. The defendants, except Jordan, answered
jointly, denying the fraud, and the Company set up that
it was a purchaser for value without notice. The answer
was sworn to by the manager of the Company. After-
wards it was amended by agreement so as to allege that
the defendants Ethel and Lucy La Raut were still the
equitable owners of the land patented to them and that
their warranty deeds to the Company were in fact mort-
gages to secure repayment of advances made to them.
The bill was taken for confessed against Jordan, and both
courts found for the Government as to the land conveyed
by him. The Circuit Court of Appeals, reversing the de-
cree of the Circuit Court, found for the Government as to

OCTOBER TERM, 1914.
Opinion of the Court. 237 U.S.

the other lands also and ordered a decree for the United
States. 203 Fed. Rep. 423.

The issue is purely one of fact upon matters with regard
to which the Circuit Court seems to have been prevented
from coming fo the same conclusion as the Circuit Court
of Appeals rather by the presumption in favor of the
patents than by its belief in the testimony for the defence.
As both courts agreed about Jordan in accordance with
his own statement on the stand, we shall reéxamine only
the cases of the La Rauts.

The La Rauts were poor, two of them being in the em-
ployment of the Company, and they were connected by
marriage with the manager of the Company, Booth. As
the result of an arrangement with Booth, the nature of
which is the point in controversy, by Booth’s direction the
man who was looking out for the Company’s timber pur-
chases reported claims for the La Rauts in the neighbor-
hood of the Company’s extensive tracts. Booth directed
Dunbar, the bookkeeper of the Company, to see to the
furnishing of the money. The La Rauts were taken to
inspect the land, so that they might make the necessary
affidavits, but beyond that appear to have known nothing
and to have made no inquiries at any time. The Com-
pany paid their expenses and, through their hands, the
land office fees, the cost of publication and the purchase
price—all the bills, in short. On May 7 and 8, 1902, they
received their certificates of title and in July executed
deeds, Booth testifies, to him, certainly either to him or to
the Company. At or about the same time each received
$100 just as Jordan did, whose claim was one of the same
group and filed at about the same time. These deeds were
not recorded, and were destroyed; there is some indication
in the evidence that the destruction was at the time of a
Government investigation into land frauds, but the proof
is not clear. In 1904 the patents were issued and were de-
livered to one Alley by the Land Office. Alley secured

BOOTH-KELLY CO. ». UNITED STATES. 485
237 U. 8. Opinion of the Court.

them at the request to John F. Kelly, vice president of the
Company. The Company ever since has paid the taxes
and exercised dominion over the land. In 1907 new war-
ranty deeds were executed to the Company by the La Rauts,
Ethel and Lucy receiving $25, seemingly in connection with
their conveyances, and later Stephen and his wife $50, each.

Booth and Ethel La Raut, now Mrs. Lewis, meet the
inference naturally to be drawn from the facts thus far
stated, by testifying that it was agreed between them that
Booth would get timber claims for her and the other three,
carry them, and advance the money necessary until they
were able to dispose of the property—which would seem
to imply that they bought the land for speculation, con-
trary to their affidavits, but of course denies that they
bought for the Company. Both Ethel and Lucy La Raut
were called by the Government and both asserted that
they bought for themselves, that they still owned the
land, and that their deeds were executed only as security
for the advances that the Company had made, and there
is some corroboration of Booth as to details, but the evi-
dence for the defendants is overborne by the whole course
of what was done. A part of it is discredited by the es-
tablished falsity of similar testimony in the matter of
Jordan. The claims of Stephen A. La Raut and Alice La
Raut his wife, are disposed of by Mrs. Applestone,
daughter of Alice by a former husband, if she is believed.
She says that in 1902 her mother told her that she had
taken up a claim for Mr. Booth and was to get $100 and
that her step-father took up his claim for the same reason,
and that he said that he had received $100 also. The
story is confirmed by the behavior of the parties con-
cerned. For after Stephen La Raut and his wife had made
their last deeds to the Company, when, according to
Booth, Stephen wanted to go to Canada and to dispose of
his land, and applied to Booth, Booth turned him over to
Kelly, gave him no information as to the value of the

OCTOBER TERM, 1914.
Opinion of the Court. 237 U.S.

claims and let him sell them for fifty dollars in addition
to the hundred dollars that each had received in 1902, al-
though they clearly were worth a great deal more. Booth’s
actual conduct is inconsistent with his having entertained
a benevolent scheme, and the sum paid is hardly recon-
cilable with Stephen and his wife being owners of the land.

If the defendants’ case fails as to these two claims it
hardly can succeed as to the others, for according to them
all were taken under a single arrangement for all. And
there is further evidence that Booth’s account cannot be
accepted. We will not encumber the reports with lengthy
statement of details, but apart from evidence of other
fraudulent claims in the same group with these, the books
of the Company which were under Booth’s eye tell a dif-
ferent story from his. The ledger showed no names, but
the journal account under each name charges them with

$400, the price of the land, and $100 which each received ~

(with a small additional item for Stephen) and then on
July 31, 1902, charges the whole $500 to stumpage, the
general account of the Company for the purchase of land.
There the accounts end, and thereafter the lands were
carried on the Company’s land account. The actual ex-
penses other than the foregoing never were charged to
them at all, but all, including the later payments of $25
and $50 went without specification into the stumpage ac-
count. There are attempts to explain all this by alleged
oral statements that Booth held himself responsible, as
there is a lame effort also to get rid of the original sworn
answer, the inconsistencies of which with the subsequent
testimony we have not stated at length. We think it
enough to say that the explanations fail to escape the
effect of the incontrovertible facts.

Decree affirmed.

Mr. Justice McReyno ps took no part in the consid-
eration and decision of this case.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386002_0550%3A2. Public record. Not legal advice.