State v. Hyde

169 P. 757 | Or. | 1918

Lead Opinion

McOAMANT, J.

1. All of the appellants assign error on the refusal of the court to dismiss the suit on the ground that the United States is a necessary party defendant. This point was raised by most of the appellants on demurrer and by all of them the question was reserved by answer. It is averred in tbe thirtieth paragraph of the second amended complaint that “the United States of America has at all times and does now refuse to accept the deeds of defendants O. W. Clarke and F. A. Hyde for the lands hereinbefore first described.” This allegation imports that there was no delivery of the deeds. It is elementary that in the absence of delivery the grantee in a deed acquires no rights thereunder. It elsewhere appears in plaintiff’s pleading that the deeds executed to the United States and conveying the base lands in controversy were recorded, but it has been held that the recording of a deed by the grantor without the consent of the grantee does not constitute delivery: Bogard v. Bar-han, 56 Or. 269, 276, 277 (108 Pac. 214). As to so much of the land as was held in the name of Hyde and Clarke the allegations are therefore sufficient to dispense with the joinder of the United States as a party, and the demurrers, in so far as they are based on this ground, were properly overruled.

2. Issue was joined by appellants on the allegations of the second amended complaint as to the refusal of the United States to accept the deeds to the base lands. In determining the effect of the evidence directed to this issue it becomes material to examine the act of 1897 and the federal decisions construing it. The statute first came before the United States Supreme Court for consideration in the case of Cosmos Exploration Co. v. Gray Eagle Oil Co., 190 U. S. 301 (47 L. Ed. 1064, 23 Sup. Ct. Rep. 692, 24 Sup. Ct. Rep. 860). It was there held that the administration of the act was vested in the General Land Office; that it was empowered to adopt rules fixing the procedure by which base lands could be surrendered and selected lands acquired; and that the rules adopted were reasonable. The sixteenth rule so approved is as follows:

“Where final certificate or patent has issued, it will he 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.”

The Court, speaking through Mr. Justice Peckham, says:

“Counsel insists that the act of June 4, 1897, constitutes a standing offer on the part of the Government to exchange any of its ‘vacant land, open to settlement’ for a similar area of patented land in a forest reservation, and that whenever a person relinquishes to the Government a tract in a forest reservation and places his deed to the Government of record as required by the Land Department rules, and selects in lieu thereof a similar area of vacant land open to settlement that such offer of the Government has thereupon been both accepted and fully complied with, and that a complete equitable title to the selected land is thereby vested in the selector.

“But even the complete equitable title asserted by complainant must, as it would seem, be based upon the alleged right of the local land officers to accept the deed and approve the selection, even though such approval may be thereafter the subject of a review in the nature • of an appeal from the action of the local officers. There must be a decision made somewhere regarding the rights asserted by the selector of land under the act, before a complete equitable title to the land can exist. The mere filing of papers cannot create such title. The application must comply with and conform to the statute, and the selector cannot decide the question for himself.

“We do not see how it can be successfully maintained that, without any decision by any official representing the Government, and by merely filing the deed relinquishing to the Government a tract of forest reserve land and assuming to select a similar area of vacant land open to settlement, the selector has thereby acquired a complete equitable title to the selected land. The selector has not acquired title simply because he has selected land which he claims was at the time of selection vacant land open to settlement, nor does the filing of his deed conveying the land relinquished and the abstract of title with it show necessarily that he was the owner of the land as provided for by the statute. So far as his action goes, it is an assertion on his part that he was the owner in fee simple of the land he proposed to relinquish, and that the deed conveys a fee simple title to the Government, and also that he has selected vacant land which is open to settlement, and that therefore he is entitled to a patent for such land. These assertions may or may not be true. * *

“It is certain, as we have already remarked, there must be some decision upon that question before any equitable title can be claimed — some decision by an officer authorized to make it. * *

“What may be the decision of the Land Department upon these questions in this case, cannot be known, but until the various questions of law and fact have been determined by that department in favor of complainant it cannot be said that it has a complete equitable title to the land selected.”

The court in that ease was concerned particularly with the question of whether an equitable title to the selected lands had passed to the applicants. But the decision is instructive on the effect of a deed to the base lands. It is held that although the act of 1897 is a standing offer by the United States to exchange one class of lands for another, the exchange is not effected by the mere filing of the papers. In Clearwater Timber Co. v. Shoshone County, 155 Fed. 612, 620, it is held that title to the selected lands does not pass until final approval of the selection by the Commissioner of the General Land Office. If the title to the selected lands cannot vest in the applicant without acceptance of the base lands by the General Land Office, it is fairly inferable that title to the base lands cannot pass to the United States until this bureau accepts the transfer. It is said in Pacific Live Stock Co. v. Isaacs, 52 Or. 54, 64 (96 Pac. 460), that:

“Neither party acquires any legal or equitable title in the lands proposed to be exchanged until the acceptance or final consummation thereof.”

The construction which we place upon the decision in Cosmos Exploration Co. v. Gray Eagle Oil Co., accords with its construction by the Interior Department. In George Austin, 33 L. D. 589, 590, the Secretary of the Interior says:

“Relinquishment of lands and selection of others in lieu thereof under the Act of June 4, 1897, is essentially a contract of exchange. The relinquisher proposes to vest in the United States title and to select an equal area. The court held in Cosmos Exploration Co. v. Gray Eagle Oil Co., 190 U. S. 301, 312, 313 (47 L. Ed. 1064, 23 Sup. Ct. Rep. 692, 24 Sup. Ct. Rep. 860), that the relinquisher’s acts by filing of papers are but a representation that he has title, and that some decision upon the validity of that title must be made by some authorized officer before equitable title vests. Until such decision is made the title is sub judice. It may happen, and frequently has happened, that the title so tendered is' upon examination found to be defective, encumbered, or even wholly bad and irremediable. In such case it is rejected, and the United States refuses to approve the selection or to give title to public lands in exchange.”

It is squarely held by the federal court for this district in United States v. McClure, 174 Fed. 510, that title to the base lands does not pass to the United States until the deed is accepted by the General Land Office.

The act of 1897 again came before the federal Supreme Court in Roughton v. Knight, 219 U. S. 537 (55 L. Ed. 326, 31 Sup. Ct. Rep. 297). This case involved the right of a party who had conveyed land in a forest reserve to the United States and had deposited the deed with accompanying abstract in a United States land office, but who had neglected to select lands in lieu of this base until after the repeal of the act of 1897. In this respect he had not complied with the regulations and the court held that he had not . lost title to the base lands. Mr. Justice Lurton said:-

“Manifestly there must be an acceptance of,the relinquishment by someone authorized to decide upon its sufficiency, and an assent to the particular selection made in lieu. * *

“That a proposal for an exchange of land within a forest reservation for lands outside may be withdrawn before acceptance is an obvious proposition. There having been no contract in force between this appellant and the Secretary of the Interior at the date of the repeal, he had no right to save under the exceptions in the repealing act.”

3. The Arizona court has held that title to the base lands vests in the United States on the filing for record of the deeds of relinquishment: Territory v. Perrin, 9 Ariz. 316 (83 Pac. 361). But the construction of a federal statute is for the federal courts and it is for us to follow the rule which they announce.

The latest case in the Supreme Court of the United States construing the act of 1897 is Daniels v. Wagner, 237 U. S. 547 (Ann. Cas. 1917A, 40, L. R. A. 1916A, 1116, 59 L. Ed. 1102, 35 Sup. Ct. Rep. 740). In this case it is held that the power of the General Land Office in administering the act in question is not arbitrary; that when it has adjudged that the applicant has complied with the regulations, he becomes equitable owner of the selected lands and that the General Land Office has no power to approve a junior entry of these lands or to issue a patent to such junior entryman. Under the facts of that case the selected lands had never been passed for patent; all that had been done was to approve of the application as made in conformity to law and the regulations of the Department. It must be borne in mind that all transactions had under the act of 1897 are exchanges of real property. Title to the selected lands cannot pass to the applicant until title to the base lands has passed to the United States. The case of Daniels v. Wagner therefore decides that title to the base lands passes to the United States when the application is approved by the General Land Office. The title so acquired may be voidable for fraud or mistake; the General Land Office may have power for good cause to rescind its approval and withhold patent to the selected land. It is enough for present purposes that, under the construction given this federal statute by the federal Supreme Court, title to the base lands passes to the United States on the acceptance of the deed and the approval of the selection by the General Land Office.

It remains to apply these principles to the facts disclosed by the record. The evidence shows that deeds to the great bulk of the acreage of the base lands were filed with the registers and receivers of the land offices for the districts in which the selected lands were located; that these deeds were regular in form; that they were executed in each case by the party who had acquired on the face of the records the title originally held by the State of Oregon; and that in each case the United States was grantee. The grantors in these deeds parted with control over them. The deeds were left with the proper officers of the grantee. In each case the deeds were accompanied with abstracts of title showing that these deeds were effectual to pass title and that the lands were free from tax liens and other encumbrances.

Based on these relinquishments of base lands applications were made to select equivalent designated acreage on the public domain. As to the lands tabulated as Supplement A to this opinion, aggregating 10,204.43 acres, the applications were approved by the General Land Office. As to the lands tabulated as Supplement B, aggregating 3,638.75 acres, the record fails to show any such approval. As to the lands tabulated as Supplement C, aggregating 251.56 acres, the record fails to show that the lands were ever offered to the General Land Office.

4. The first question which confronts us on this record is whether this controversy as to the lands listed in Supplement A can be litigated without the presence in court of the United States as a party. In its essence the suit is one for the cancellation of deeds whose execution has been induced by fraud. The state’s grantee has conveyed each parcel of the land involved, either directly or by .mesne conveyances, to the United States. These deeds have been delivered and recorded.

While the deeds were executed and recorded by the grantors without the knowledge of the grantee, they were placed of record pursuant to a standing offer made by the grantee to accept these lands in exchange for other lands owned by it. The deeds with accompanying evidences of title were subsequently accepted by the officers of the grantee who were authorized to speak for it in that behalf. Clearly these deeds when so accepted passed title to the base lands to the United States. While the General Land Office has instituted adverse proceedings against the corresponding seleetions on the public domain, there has been no reconveyance by the United States of the base lands, nor have the deeds to these base lands been returned to the grantors, as was done in Roughton v. Knight, 219 U. S. 537, 548 (55 L. Ed. 326, 31 Sup. Ct. Rep. 297). It is true that the United States will not knowingly accept title to base lands acquired by fraud: Ex parte Hyde, 194 Fed. 207, 214, 215; Thomas B. Walker, 39 L. D. 64; Hiram M. Hamilton, 39 L. D. 607. It may be that for this reason the title of the United States to these lands is defeasible, but the United States is not before us as a party. Can a grantor whose deed has been secured through the fraud of the grantee litigate the question of title arising out of the grantee’s fraud, in the absence of the successor in interest of the grantee to whom the property has been conveyed?

Talbott v. Leatherbury, 92 Md. 166 (48 Atl. 733), was a suit to set aside a deed alleged to have been executed in fraud of the grantor’s creditors. The deed created a trust in favor of the grantor’s children.- These children were not joined as parties, but the lower court nevertheless entered a decree canceling the conveyance. This decree was reversed on appeal, the court saying:

“The deed may have been fraudulent in fact and may have been executed under such circumstances as to have induced a court of equity to set it aside upon a proper application made for that purpose by the creditors of the grantor. Before, however, a decree to set it aside could have properly been passed, the well-settled principles of equity pleading required that all parties having any interest in the property under the terms of the deed should have been brought before the court, and have had an opportunity to answer the bill and be heard in their own behalf.”

It is a rule universally recognized that in a suit for the avoidance or cancellation of a deed, the successor in interest of the grantee is an indispensable party defendant: Wait on Fraudulent Conveyances (3 ed.), § 131; Bump on Fraudulent Conveyances (2 ed.), 536; Cook v. Lake, 50 App. Div. 92 (63 N. Y. Supp. 818, 820); Sage v. Mosher, 28 Barb. (N. Y.) 287, 289; Hammond v. Hudson River Iron etc. Co., 20 Barb. (N. Y.) 378, 383; Gray v. Schenck, 4 N. Y. 460; Stillwell v. Stillwell, 47 N. J. Eq. 275 (20 Atl. 960, 24 Am. St. Rep. 408); Terhune v. Sibbald, 55 N. J. Eq. 236 (37 Atl. 454); Simon v. Ellison, 90 Va. 157 (17 S. E. 836); Smith-Dimmick Lumber Co. v. Teague, 119 Ala. 385 (24 South. 4, 10); Sloan v. Hunter, 56 S. C. 385 (34 S. E. 658, 660, 879, 76 Am. St. Rep. 551); Low v. Pratt, 53 Ill. 438.

The rule announced in the foregoing authorities is but an application of the general principle that jurisdiction will not be exercised when the court is without power to énforce its adjudication: State v. North American Land etc. Co., 106 La. 621 (31 South. 172, 87 Am. St. Rep. 309, 318-320); Western Union Tel. Co. v. Western etc. R. R., 8 Baxt. (67 Tenn.) 54, 61; 7 R. C. L. 1029. It is said in Broom’s Legal Maxims, 209, that:

“The law will not itself attempt to do an act which would be vain.”'

It is a principle of the law of mandamus that the writ will not issue when the court lacks power to enforce it: High on Extraordinary Legal Bemedies (3 ed.), 14; 18 B. C. L. 139, 140; State v. Perrine, 34 N. J. L. 254, 257.

Specific performance will not be granted where the court is powerless to compel obedience to the decree: 36 Cyc. 572; Fry on Specific Performance (5 ed.), § 830, p. 417; Whitney Company v. Smith, 63 Or. 187, 191, 192 (126 Pac. 1000); Bannerot v. Davidson, 226 Pa. St. 287 (75 Atl. 417).

Where, pending an appeal, conditions change so as to deprive the court of power to grant the relief sought, the appeal will be dismissed: State v. Grand Jury, 37 Or. 542 (62 Pac. 208); Moores v. Moores, 36 Or. 261, 264 (59 Pac. 327); Portland v. Investment Co., 59 Or. 598 (117 Pac. 991).

Cantwell v. Barker, 62 Or. 12, 14 (124 Pac. 264), was a suit to enforce specifically a contract for the purchase of real property. It Was held that a purchaser at execution sale of the interest of the vendor was a necessary party defendant.

In the absence of the United States as a party no court can pass a decree which would be effectual to restore these lands to the State of Oregon. The decree of the lower court was ineffectual for that purpose. No careful purchaser would pay value for these lands in the absence of a decree or a conveyance terminating the interest which the United States holds and which is apparent on the face of the Crook County records.

The record shows that the federal officials have co-operated with plaintiff’s counsel in marshaling the evidence adduced in this case,' and from this circumstance it is argued that the United States desires these lands restored to the State of Oregon. If this is so, the desire could be made effective by a reconveyance of the lands, by a disclaimer filed in the cause or by an appearance which would qualify the Oregon courts to determine the controversy.

It is argued by plaintiff that certain of the letters approving selections involved in this case should be disregarded because they were written by officials of the General Land Office who had accepted bribes to expedite the selections and that certain additional letters should be ignored because the selected lands were unsurveyed. We think these matters cannot be litigated in the absence of the United States as a party. When the deeds to the base lands were accepted, the United States acquired a title. It may have been a bad title, subject to be divested by a court of competent jurisdiction, but the title cannot be adjudicated in a cause to which the United States is not a party.

5. Plaintiff cites The Siren, 7 Wall. (U. S.) 152 (19 L. Ed. 129); The Davis, 10 Wall. (U. S.) 15 (19 L. Ed. 875), and other authorities to the effect that the United States cannot be sued without its consent. This precept does not authorize this court to pass a decree which we cannot enforce. The principle that the United States cannot be sued without its consent does not vitalize decrees which are ineffective because the United States was not before the court as a party. The case of United States v. Insley, 130 U. S. 263 (32 L. Ed. 968, 9 Sup. Ct. Rep. 485), is instructive. The United States had recovered judgment against Moses McElroy and this judgment was a lien on a piece of property subject to a prior mortgage. Pending a foreclosure suit to which the United States was not a party, an execution was sued out on the government’s judgment and the property was purchased by the United States. The foreclosure suit ’passed to decree, the property was sold and in due time the purchaser received a sheriff’s deed. After the lapse of many years the United States brought suit to redeem and recovered a decree. It was held that the absence of the United States as a party rendered the foreclosure decree ineffectual to pass an indefeasible title to the purchaser at foreclosure sale. The inability of plaintiff to sue the United States did not differentiate the ease from any other case where the facts were identical. The general rule is that the inability of plaintiff to secure service upon or appearance by a necessary party defendant will not justify a court in determining the controversy in his absence. It is said in Wait on Fraudulent Conveyances (3 ed.), Section 131:

“It is the plaintiff’s misfortune if he is unable to secure the presence of the necessary parties.”

In the case of Maxwell Land etc. Co. v. Hermiston Bank etc. Co., 70 Or. 218 (139 Pac. 921), we have a binding authority on the precise question involved here. Plaintiff in that case was the owner of a large body of land adapted to irrigation from the reservoirs and ditches constructed by the reclamation service of the United States in Umatilla County. It entered into an agreement with the United States to the effect that its lands should be sold “on the same conditions and under the same burdens as were provided for the sale of the United States lands in said project” and to insure fulfillment of its agreement it conveyed its lands to the defendant as trustee. Subsequently it brought suit against the trustee to cancel and set aside this trust deed, alleging that the United States had defaulted in the performance of its obligations under the contract. The Hermiston Bank and Trust Company, grantee in the trust deed, demurred on the ground that there was a defect of parties in that the United States had not been joined as a defendant. This demurrer was sustained and the suit was dismissed. The decree of the Circuit Court was affirmed on appeal. Mr. Justice Eakin said:

“The terms of the trust deed and the consideration therefor are provided and fully appear in the contract, and it is not possible to intelligently dispose of the case without construing the terms of the contract to ascertain whether there has been a breach thereof. This cannot be done without the presence of the parties affected by it. It is not a question of whether the trustee is an agent of the government or of the reclamation service. The trust deed cannot be considered alone. It is only a part of the execution of the contract, and thereby the reclamation service is a party to the deed as much as if signed by it, and both have to be considered together. This cannot be done without the presence of the contracting parties.

“The grounds alleged for cancellation and breach of the contract are defaults of the reclamation service, and not of the defendant, which is only the holder of the title. Such defaults or breaches cannot be determined in the absence of the party in default. He must have his day in court. Therefore, the Circuit Court did not err in sustaining the demurrer and dismissing the suit. ’ ’

This decision is in harmony with two recent opinions of the federal Supreme Court. Louisiana v. Garfield, 211 U. S. 70 (53 L. Ed. 92, 29 Sup. Ct. Rep. 31), was a suit brought to establish the title of the state of Louisiana to certain swamp-lands claimed by it and to enjoin the Interior Department from disposing of them. On an examination of the record it appeared that the case raised questions of law and fact upon which the United States would have to be heard. It was therefore held that the United States was a necessary party and there was no jurisdiction to determine the controversy in its absence.

This case has been followed by the court in an opinion announced March 6, 1917, in New Mexico v. Lane, 243 U. S. 52 (61 L. Ed. 588, 37 Sup. Ct. Rep. 348). This was a suit brought by the State of New Mexico to restrain the Secretary of the Interior and the Commissioner of the General Land Office from patenting forty acres of land which the state claimed as a part of its grant for school purposes. The court found that the defendants, had exceeded their authority and were plainly in the wrong. It was nevertheless held that the United States was an indispensable party defendant and the suit was dismissed because it was not before the court.

The cases last cited are the latest expression from the federal Supreme Court on the subject. They are difficult to reconcile with some of the earlier cases on which plaintiff relies. All of the cases cited by plaintiff can be readily distinguished from the case at bar. United States v. Lee, 106 U. S. 196 (27 L. Ed. 171, 1 Sup. Ct. Rep. 240), was an ejectment suit brought against the custodians of the Arlington Heights property in Virginia. They defended on the ground that the United States had acquired the property at a tax sale and that they held possession under authority of the United States. The court divided five to four on the question so raised. The majority opinion holds that the assertion by a defendant of a claim in behalf of the United States does not oust the jurisdiction of the court to try an action of ejectment; that if the claim so asserted is without merit, the fact that it is asserted on behalf of the United States does not require the court to withhold the property from its true owner. The tax title of the United States was adjudged to be invalid.

This opinion followed the decision of Chief Justice Marr-h-at/t, in Osborn v. Bank of United States, 9 Wheat. (U. S.) 738 (6 L. Ed. 204). In this case it was held that, notwithstanding that the eleventh amendment to the federal Constitution forbids a United States court to entertain a suit against a state, injunction will lie to restrain a state officer from seizing property under a state tax statute which, is unconstitutional. Davis v. Gray, 16 Wall. (U. S.) 203, (21 L. Ed. 447), upheld the right to enjoin state officials of Texas from seizing a land grant which the legislature had undertaken to forfeit.

In all the foregoing cases the courts were competent to enforce their, adjudications. They were able to determine the controversies because their judgments and decrees could operate on persons over whom they had jurisdiction. In this case we are dealing with unoccupied land. The legal and record title stands in the United States. The decree, to be effective, must operate directly on the United States.

It is held in The Siren, 7 Wall. (U. S.) 152, 154 (19 L. Ed. 129), and The Davis, 10 Wall. (U. S.) 15 (19 L. Ed. 875), that when the’United States voluntarily appears, it waives its exemption so far as to allow the adverse party to try out setoffs to the extent of the demand asserted by the United States. In this case the United States asserts no demand and has made no appearance.

The cases of Louisiana v. Garfield, New Mexico v. Lane and Maxwell Land Co. v. Hermiston Bank & Trust Co. are in point and are binding upon us. Under the rule announced by these authorities we are without power to determine the controversy in so far as it relates to the property listed in Supplement A.

6, 7. It is suggested that these appellants are in no position to take advantage of the absence of the United States as a party. We think this is the one question on which they are clearly entitled to be heard. The appellants, other than Hyde and C. W. Clarke Company, have paid valuable considerations for powers of attorney executed in their favor by the grantors in the deeds which relinquished the base lands to the United States. These powers are twofold. One of them authorizes the selection of lieu lands of equivalent acreage to the base lands surrendered and the other authorizes the sale of the selected lands. These powers so given were to be exercised in the names of the grantors of the United States, but they were powers with an interest and were irrevocable during the lifetime of the grantors aforesaid: Hunt v. Rousmanier, 8 Wheat. (U. S.) 174, 202 (5 L. Ed. 589); Frink v. Roe, 70 Cal. 296, 309, 310 (11 Pac. 820); 1 Mechem on Agency (2 ed.), § 576. The record shows that these powers have been exercised. Under them lieu lands have been selected and these selected lands have been conveyed to Western Lumber Company, Willamette Pulp and Paper Company and other appellants. In some cases there have been subsequent transfers of these selected lands. These appellants, other than Hyde and C. W. Clarke Company, are in possession of the selected lands. They are entitled, in protection of their titles to the selected lands, to claim that the United States is owner of the base lands and as a corollary to that claim they are entitled to urge that there is no jurisdiction to determine this controversy in the absence of the United States as a party.

In so far as this contention relates to the property listed in Supplement A, we are of the opinion that the position of these appellants is well taken and as to this branch of the controversy the decree should be one of dismissal without prejudice. It is but just to Hon. George M. Brown, the Attorney General, and to Mr. John O. Bailey, who has ably assisted him in the preparation and trial of this case, to say that they are in no wise responsible for the condition of the record ■which precludes relief as to most of the lands involved. It appears that Mr. Brown made a trip to Washington and that he earnestly requested the Commissioner of the General Land Office, the solicitor of the Interior Department and other officials of the federal government to enter an appearance in this suit on behalf of the United States. This request was persistently pressed upon these officials, but in vain. Their refusal to enter such appearance puts the United States in the position of retaining title to the base lands listed in Supplement A, withholding patents to the corresponding selected lands and refusing to consent to the adjudication of the questions in dispute, the existence of which is the only possible excuse for the inconsistent attitude of the government.

8. It remains to determine the rights of the parties in the lands listed in Supplements B and C. The deeds to these properties. have never been accepted by the United States. It has never been determined by the Genera! Land Office that the grantors in those deeds had title or that the deeds were effectual to pass title to the base lands to the United States. The effect of these deeds is clearly and concisely stated by Judge Bean, sitting in the United States District Court for Oregon, in United States v. McClure, 174 Fed. 510, 512:

“But the title does not pass to the land offered in exchange until the deed is accepted. The mere execution and recording of a deed and the tender thereof vests no title in the government. Until the deed and title are examined and approved, it is a .mere assertion by the applicant of his title and right to make the selection. * * But the equitable, if not the legal, title remains in him. The deed and tender thereof am mints to nothing more than an offer by the owner to exchange one tract of land for another, and the title does not pass to either party until the exchange is effected.”

As is pointed ont by Mr. Justice Lurton in Roughton v. Knight, 219 U. S. 537, 548 (55 L. Ed. 326, 31 Sup. Ct. Rep. 297), an offer to exchange lands under the act of 1897 is like any other offer in that it may be withdrawn at any time. The fact that these lands have been offered to the United States has not transferred to the United States any interest in them and there is no reason why we should not determine the controversy in its relation to these lands in the absence of the United States as a party.

The first question to be noted is one of fact. Were the applications to select these lands fraudulent, as alleged by plaintiff?

9. The conspiracy is clearly proved. In the summer of 1898 the defendant Hyde sent the defendant Schneider to Oregon to secure applications from residents of Oregon to purchase state lands located in forest reserves. He gave Schneider letters of introduction and put at his disposal bank accounts in Portland and Salem banks. Through the facilities so given him Schneider secured the assistance of a number of Oregonians of large local acquaintance. It is unnecessary to name these parties, four of whom have since died leaving relatives who reside within the state. One of these men was operating a quarry in Lincoln County. He took with him from Salem a number of blank applications to purchase state lands and blank assignments of contracts of purchase. He induced his employees to sign these in blank, giving them usually a dollar apiece as an inducement. They considered and testified that they had sold their rights to purchase state lands. The affidavits called for by the statute seem not to have been made. The applicants signed the applications including the affidavits and the jurat was placed thereon by a notary without administering the oath. Another of those through whom Schneider operated was a merchant in Portland. He secured applications in the same manner from his employees; he then worked the neighborhood gathering in among others a peanut vender whose stand was near by. Schneider himself was not idle. He secured applications from the waitresses at the restaurant where he usually ate. He visited the plant at Linnton for the canning of horse meat and secured applications from some of the workmen. These applications signed in blank were taken to a notary who was induced to attach his jurat without the presence of the affiant. One third of the state’s price was paid down when the applications were filed. Under the practice in the state land office notes for the unpaid balance of the purchase price were exacted in such cases from the applicants and the record suggests a wholesale forgery of the notes of these dummy applicants. No applicant who testified has any recollection of signing notes. The applications and assignments thereof were signed at the same time in all cases. The consideration paid applicants ran all the way from one dollar to twenty dollars. Schneider made an effort to secure some applications at Oregon City through a business man resident there, but this man refused to be a party to the conspiracy. Some of the signatures to the applications were forged. The state was paid in full shortly after the filing of the applications; in some cases state deeds ran to the original applicants and they executed deeds in favor of Hyde, Schneider or others in whose names titles were taken by the conspirators. In no case in which the facts are disclosed by the testimony did an applicant purchase for his own benefit; in every instance before signing his application he had made a contract, express or implied, for the disposition of the land. By these methods 2,560 acres of state lands were transferred to Hyde, 7,040 acres to Schneider, 7,040 acres to Flora M. Sherman, who was Hyde’s sister-in-law, 4,160 acres to O. W. Clarke, who financed the conspiracy, 17,760 acres to A. S. Baldwin, who was Clarke’s son-in-law, and 2,880 acres to H. S. Morris, who was Hyde’s uncle, beside sundry smaller acreages to others under Hyde’s control. Hyde associated himself with one John A. Benson for the marketing of the selected lands which they expected to secure in lieu of the state lands so acquired. Benson bribed two of the employees of the General Land Office at "Washington to expedite these selections. Deeds were executed and recorded in favor of the United States and the right to make selections in lieu thereof was advertised extensively and sold to a great extent. The price paid the state was $1.25 an acre. The selection right sold for $4 and $5 an acre, sometimes more.

10,11. The defendant Hyde testifies that he had no knowledge of the manner in which these lands were secured from the state until his criminal trial in 1908. It is not possible to give credence to this testimony. Hyde sent Schneider to Oregon, instructed and financed him, equipped him with letters of introduction, all for the purpose of acquiring large bodies of state lands. Hyde was an experienced land dealer and he knew that no purchaser of Oregon state lands could buy more than three hundred and twenty acres and that only for his own use. The fraudulent character of the mission is evidenced by Hyde’s instruction to Schneider to pass himself off as a ranch owner who was looking for additional pasture land. The taking of the great bulk of the acreage in names other than Hyde’s is a suspicious circumstance. It is admitted that these parties, except Clarke, had no interest in the lands conveyed to them. It is not believable that on Schneider’s return to San Francisco he made no report of his doings in Oregon to the man who had sent him to Oregon, or that he failed to account for the large sums of money which he had disbursed. Yet Hyde testifies that he made no report and rendered no accounting. Hyde’s alarm when he learned in 1902 that Schneider had communicated to a special agent of the Interior Department the methods by which he acquired these lands is inconsistent with Hyde’s present claims. Fraud is ordinarily established by circumstantial evidence: Williamson v. North Pacific Lumber Co., 42 Or. 153, 160 (70 Pac. 387); Kabat v. Moore, 48 Or. 191, 196 (85 Pac. 506); Clough v. Dawson, 69 Or. 52, 59 (133 Pac. 345; 138 Pac. 233); Saratoga Investment Co. v. Kern, 76 Or. 243, 249 (148 Pac. 1125). A conspiracy may be inferred from circumstances: Wilson v. McCarthy, 66 Or. 498, 501 (134 Pac. 1189). While the state’s evidence is largely circumstantial, it points unmistakably to the conclusion that Hyde was the author of this conspiracy;. that its chief purpose was his emolument; that all other participants operated under his direction; that he was in touch at all times with its ramifications.

The lands described in Supplements B and C to this opinion were applied for by seventeen applicants. Six of these applicants have testified in the cause. One of them, C. Christensen, testified that he was working at a quarry in Lincoln County; that the proprietor of the quarry sought out Christensen and his wife. He described the circumstances under which he signed the applications as follows:

“He asked us if we had used our right to school land. I told him no, I had not. Then he wants to know if he could use my name and my right for school land for someone else. Well, I told him I didn’t know if that was right, lawful to do that. So he says, ‘Yes, it is.’ He said he had been clerk of the school land here for four years and it didn’t come under the same head as homestead or timber claims, or anything like that, because they bought that land and paid the state cash for it and the state price of the land, or whatever it was; and he says that it was legal to do it. So well, I told bim if it would be to his benefit we could because I had all the rights I had ever had left and I thought I didn’t need it but if I did he said he would make it all right so I could get my school land if I wanted it hereafter.

“Q. How was that to be done?

“A. Well, I didn’t ask him how he could do it because I didn’t think he could after I signed my right away once. And so he come to my house that evening and them papers was made out — wasn’t made out; they were blanks; they were not filled out; and I signed my name to them papers. So he said, — well, he asked if the notary public man, named Marion Mays, was home; he wants to know was the notary public over there; but he didn’t happen to be home, but he says he will take them to Salem with him and make them out himself because he was a notary public himself, and it was filled out here. And he paid, — he says we should take a dollar, because there had to be money in consideration to make it legal.

“Q. Where did you sign these papers?

“A. In my home in Morrison.’ ’

The testimony of the other five applicants is to the same purport. The circumstances under which five additional applicants made their applications are proved by the testimony of members of their families. Two of the agents whom Schneider secured to assist bim testified in another cause as to the manner in which the other six applications were secured and this testimony has been received in this cause by stipulation. In all of these seventeen eases the applications were made for Hyde’s benefit and the parties had made arrangements to dispose of the land before they applied for it. The affidavits, if made at all, were false.

12. The defendants contend that the facts proved do not justify the cancellation of the state deeds. The argument is that the lands secured by Hyde were for sale at $1.25 an acre; that through the activities of Hyde they were marketed at the state’s price and that therefore the state was not damaged. A number of authorities are cited to the point that fraud without damage furnishes no ground for action: Reynolds v. Evans, 123 Md. 365 (91 Atl. 564); Reay v. Butler, 69 Cal. 572 (11 Pac. 463, 467); Woodson v. Winchester, 16 Cal. App. 472 (117 Pac. 565); United States v. Conklin, 169 Fed. 177, 183. The general rule announced by these authorities is well established, but it has no application to this kind of a case. It is the policy of the State of Oregon to sell its school lands only to certain classes of purchasers and in amounts not exceeding three hundred and twenty acres to each applicant. It is actionable fraud to secure these lands by false affidavits in violation of the statutory provisions for their sale. State v. Carlson, 40 Or. 565, 568 (67 Pac. 516), was a suit to cancel a state deed on the ground that the grantee was an alien when he made his application to purchase. Mr. Chief Justice Bean said:

“The right to recover is not based upon the fact that defendant was an alien, but because he did not belong to the class authorized to purchase state lands, and that he obtained the title by a false affidavit. The fact that his alienage differentiated him from the class is a mere incident, — of no more consequence in determining the question than if his disqualification had been caused by some of the other statutory requisites. The sole inquiry is whether at the time of the purchase and- the execution and delivery of the deed he belonged to the class authorized to purchase, and whether the state land board was induced to make the conveyance to him by a misrepresentation of existing facts. If, as is admitted, he was not a qualified purchaser at the time, he clearly obtained the title to state lands upon a false affidavit and in violation of law; and, in our opinion, no subsequent act of his can cure the defect therein. His affidavit accomplished the purpose intended, and was the means by which the state was induced to part with its title, and a fraud was thereby committed.”

The rule announced in the foregoing decision is in harmony with that which obtains in the federal courts in the enforcement of the public land statutes. It has been held many times that patents based on collusive and fraudulent entries will be set aside, notwithstanding the fact that the United States has received the full purchase price of the land: See, for example, Hyde v. Shine, 199 U. S. 62, 81 (50 L. Ed. 90, 25 Sup. Ct. Rep. 760); United States v. Detroit etc. Lumber Co., 200 U. S. 321, 328 (50 L. Ed. 499, 26 Sup. Ct. Rep. 282); Hyde v. United States, 35 App. D. C. 451, 488, 489; Taylor v. United States, 231 Fed. 938, 939. Nor is it necessary as a condition to relief in such a suit that the purchase price of the property be restored or tendered: Causey v. United States, 240 U. S. 399, 402 (60 L. Ed. 711, 36 Sup. Ct. Rep. 365).

The claim that the state has profited by the conspiracy will not bear analysis. The market value of the lands involved in this suit was created not by Hyde, but by the act of Congress approved June 4, 1897. If the lands of the state available for exchange under that statute had been sold only to qualified purchasers in amounts not exceeding three hundred and twenty acres to each purchaser, the probabilities are that only small portions of the acreage available for base would have been sold at $1.25 per acre and the bulk of the lands involved in this suit would have remained available to be sold at higher prices. It appears from Governor Chamberlain’s message to the legislature of 1907, received in evidence,- that the State Land Board had raised the prices of these lands available as base successively to $2.50, $6.00 and $7.50 an acre.

13. These appellants, other than Hyde, claim to be innocent purchasers. We have already sufficiently indicated their relation to the controversy. The evidence shows that Western Lumber Company, Anaconda Copper Mining Company, Henry Hewitt, Jr., Martin Barrett, O. S. Lewis, Mrs. Theodore Hampe, Bock Springs Land and Cattle Company, Biverside Land and Livestock Company, Willamette Pulp and Paper Company, Alger Logging Company and Cedar Sheep Association paid value for the rights which they are asserting and that they parted with their money without notice of the fraud alleged in this suit. But they are asserting no rights in the base lands except that it be adjudged that title to these lands has passed to the United States. They claim selected lands through the relinquishment of these base lands and their title to the selected lands is dependent on the title of the United States to the base lands. We have seen that the United States has acquired no title to the base lands listed in Supplements B and C. It follows that the defendants last above named have no interest in these lands and the question as to whether they are bona fide purchasers of something else is immaterial to the present controversy.

14. The defendant C. W. Clarke Company is less favorably situated. It claims a large body of selected lands in the State of Washington under four deeds. Two of these deeds run from Clarke and his wife, one from Hyde and his wife, and one from F. A. Hyde and Company, a corporation. All of these deeds recite a nominal consideration. The claim of this defendant is that Clarke advanced large sums of money to Hyde and that to secure him the lands covered by three of these deeds were put in the name of Clarke and of F. A. Hyde and Company, nearly all of the stock of the latter corporation being held by Clarke. The corporation C. W. Clarke Company was organized by Clarke; its stock was issued wholly to Clarke and his family. It is claimed that this corporation has succeeded to the debt owing from Hyde to Clarke and that all of the selected lands described in these four deeds are held as security therefor. The corporation can stand in no better position than Clarke. It appears from Hyde’s testimony that Clarke advanced $64,000 which was the entire capital used by Hyde in his operations in Oregon; that Hyde agreed to pay interest on these advances at the rate of one and one-half per cent a month; that Clarke was in Hyde’s office nearly every day; that he signed powers of attorney in blank and left them with Hyde so that Hyde could dispose of lands which stood in Clarke’s name. Hyde’s collections in most cases came to Clarke. We have already stated that a large share of the acreage stood in the name of Clarke and his son-in-law, A. S. Baldwin. Clarke signed countless documents to assist Hyde in his operations. Hyde’s business consisted chiefly in the transactions above recounted and in similar transactions in other territories. Clarke was financing an unlawful business. We think the evidence establishes that Clarke was a party to the conspiracy. He cannot be held to be an innocent purchaser.

15. The answer of Western Lumber Company contains the following allegation:

“That patents for said selected lands have never been issued by the United States, and that charges have been preferred by the Land Department against the validity of the selections aforesaid in lieu of the base lands described in paragraph III of said Second Amended Complaint, charging that the title to said base lands was procured from the State of Oregon fraudulently and by corrupt practices and in violation of the statutes of the State of Oregon; that such charges are still pending undecided.”

The other answers contain similar allegations and these allegations are sustained by the evidence. It is argued from these facts that the General Land Office has exclusive jurisdiction of this controversy and that the courts cannot determine the rights of the parties until the administrative branch of the government has finally acted. It is said by Mr. Justice Peckham in Cosmos Exploration Co. v. Gray Eagle Oil Co., 190 U. S. 301, 315 (47 L. Ed. 1064, 23 Sup. Ct. Rep. 692, 24 Sup. Ct. Rep. 860):

“Concluding, as we do, that the question whether the complainant has ever made a proper selection of land in lieu of the land relinquished, has never been decided by the Land Department, but is still pioperly before that department, the courts cannot take jurisdiction and proceed to decide such question themselves. The Government has provided a special tribunal for the decision of such a question arising out of the administration of its public land laws, and that jurisdiction cannot be taken away from it by the courts.”

The doctrine so announced is well established and has been recognized by this court: Weatherford v. McKay, 59 Or. 558, 564, 565 (117 Pac. 969). See, also, Oregon v. Hitchcock, 202 U. S. 60, 70 (50 L. Ed. 935, 26 Sup. Ct. Rep. 568). But the jurisdiction of the General Land Office is confined to the public domain; Knight v. United Land Assn., 142 U. S. 161 (35 L. Ed. 974, 12 Sup. Ct. Rep. 258). The General Land Office has no control of lands offered to the United States under the act of 1897 until it signifies its acceptance of the offer and thereby vests the title in the United States. When this is done, the jurisdiction of the administrative bureau attaches and the courts will not interfere with its operations until it has disposed of the matter. This rule prevents us from proceeding with so much of the controversy as involves the lands listed in Supplement A, hut it does not relieve us of the duty of determining the rights of plaintiff to the lands listed in Supplements B and C. There is nothing to prevent the withdrawal of the offer of these latter lands to the government at any time: Roughton v. Knight, 219 U. S. 537, 548 (55 L. Ed. 326, 31 Sup. Ct. Rep. 297). The United States having no interest in them, the General Land Office has no control over them.

16. It is next contended that plaintiff has been guilty of laches and that for this reason its suit should be dismissed. We are committed to the principle that the doctrine of laches is applicable to the state: State v. Warner Valley Stock Co., 56 Or. 283, 304 (106 Pac. 780, 108 Pac. 861). In United States v. White, 17 Fed. 561, 565 (9 Sawy. 125), Judge Sawyer says:

“Although statutes of limitation do not run against the government, yet the staleness of the claim may be taken into consideration in determining the question whether a court of equity should interfere and grant relief when the United States, as well as a natural person is a complainant. When the United States comes into a court of equity as a suitor, it is subject to the defenses peculiar to that court.”

In Commonwealth v. Bala & B. M. Turnpike, 153 Pa. St. 47, 53 (25 Atl. 1105, 1106), Mr. Justice Potter says:

“Time, together with other elements, may make up a species of fraud, and estop even sovereignty from exercising its legal rights.”

17. Is it inequitable to grant plaintiff the relief to which it is otherwise entitled because of the delay in bringing this suit? The fraudulent applications were filed from July to November, 1898; most of them in August. This suit was brought August 13, 1913, fifteen years after the cause of action arose. It was a circumstance of suspicion that one hundred and forty-six applications should be made in so short a time to purchase state lands in the forest reserves, especially as these lands were for the most part in remote, inaccessible sections of the state. It was also a suspicious circumstance that deeds should issue in so short a time to a handful of nonresidents transferring many thousands of acres of state lands. These matters seem to have passed unnoticed by the state officials. In Hall v. Catherine Creek Dev. Co., 78 Or. 585, 593 (153 Pac. 97), Mr. Justice Burnett says, in speaking of the notice which will charge a party defrauded with the duty of asserting his rights:

“The notice must be more than would excite the suspicion of a cautious and wary person. ’ ’

This language was adopted from the opinion of Mr. Justice Wolverton in Raymond v. Flavel, 27 Or. 219, 246, 247 (40 Pac. 158). It is also the doctrine of Crossen v. Oliver, 37 Or. 514, 521 (61 Pac. 885); and Coffey v. Scott, 66 Or. 465, 467 (135 Pac. 88). Laches is therefore not imputable to the state in its failure to act at the inception of the fraud.

18. The evidence fails to charge the state with further notice except rumors, till 1905. The message of Governor Chamberlain to the legislature of that year called attention to abuses which had grown up in the administration of state lands and on April 28, 1905, the grand jury for Marion County reported to the Circuit Court for that county that there had been gross violations of law in taking up state lands. These charges were general; they did not refer particularly to the applications with which we are concerned in this case.

During the year 1904 rumors of fraud in some of the applications reached the ears of Hon. Oswald West, State Land Agent, and in 1905 he made a trip to Lincoln County to investigate the applications secured there from the workmen at the quarry. He followed this up with a trip to Portland to investigate the Hyde applications secured there. He was advised by applicants whom he interviewed on these trips of the circumstances under which they had executed their applications.

In the meantime the defendant Schneider became estranged from Hyde and as a result of their changed relations Schneider got in communication with a special agent of the Interior Department and informed bim in November, 1902, of the manner in which these applications were obtained. An investigation by the federal authorities followed and on February 17,1904, Hyde, Schneider and two others were indicted in the District of Columbia on the charge of conspiracy to acquire public lands unlawfully. Some of the counts in the indictment were based on the transactions involved in this case and the effort to secure selected lands in lieu of the base lands acquired by these fraudulent applications. The evidence shows that the state officials furnished the federal authorities with such information as they had with reference to these transactions, but it does not show that the state officials were advised of the facts run down by the federal government until the trial of Hyde and Schneider.

Hyde resisted extradition from California to the District of Columbia, appealing to the Supreme Court of the United States from a judgment denying his application for a writ of habeas corpus. The appellate court decided against him May 29,1905. The criminal charges were set for trial in 1907, but the trial was postponed until 1908, when Hyde and Schneider were tried and convicted. Hyde appealed and the judgment of conviction was affirmed June 10,1912.

While these criminal charges were pending, and especially in the year 1908, the state officials were working with special agents of the Interior Department, each helping the others to ascertain the facts and marshal the evidence. The state’s records were sent to Washington twice for the use of the federal officials and remained there from 1908 until November 21, 1912, when they were returned in response to repeated demands from George G. Brown, clerk of the State Land Board. The facts with reference to these entries were fully disclosed at the trial of Hyde and Schneider in 1908, but the records needed for drafting ■a complaint and trying the case were not available for four years thereafter.

During the lapse of these years a number of witnesses have died; the San Francisco fire destroyed Hyde’s books and papers; the defendants have been in possession of the selected lands and have been at expense for taxes and fire patrol.

It is to be said that notwithstanding the time which has elapsed the evidence is remarkably clear that there was a conspiracy as alleged; that the bulk of the state lands acquired by Hyde were secured fraudulently and that appellants other than Hyde and C. W. Clarke Company are in nowise connected up with the fraudulent operations complained of. The defendant Clarke died some four months after this suit was brought, after a considerable period of disability. We cannot think that he could explain away the circumstances which connect him with the conspiracy and he certainly could not disprove its existence.

It is contended that the innocent defendants have lost their remedy over against Hyde through the state’s delay in bringing suit. It clearly appears that Hyde is now insolvent, but it is not satisfactorily shown that he was able to respond in damages when the state became aware of his frauds. The evidence indicates an effort on his part to cover up or dispose of his assets immediately after his indictment in February, 1904.

We think that the state should ordinarily move in vindication of its rights in less than fifteen years from the accrual of its cause of suit, but this case is differentiated from ordinary litigation. This is but one of seven suits brought in as many different counties. The marshaling of the facts has involved a vast amount of investigation and of painstaking labor. The ascertainment of the facts necessary to the drafting of the complaint required the expenditure of a large sum of money and consumed a great deal of time.

The charges in plaintiff’s pleadings reflect on the integrity of a number of citizens of the state, some living and some dead. The law officers of the commonwealth were not justified in making these charges without careful investigation of the facts and assurance that the proposed action was justified.

The present Attorney General knew, and presumably his predecessor knew, that the state’s remedy was problematical in the absence of the United States as a party. Some delay would be justified in efforts to secure its appearance.

We have seen that the fraud was not discovered until 1905 and the full story was not known until 1908. By that time the position of the innocent defendants had become fixed. The condition and intrinsic value of the base lands have not changed appreciably; in this respect the case is differentiated from United States v. Flint, 4 Sawy. 42 (25 Fed. Cas. (No. 15,121) pp. 1107, 1113, 1114), on which the defendants rely. *

In 10 R. C. L. 405, it is said:

“Laches signifies not only an undue lapse of time, but also negligence in failing to act more promptly.”

On the whole case we think that laches is not imputable to plaintiff.

19. It is finally contended that these titles have been confirmed by an act of the legislature. In Smith on Fraud, Section 136, page 157, the author says:

“When the original transaction is infested with fraud the confirmation of it is so inconsistent with justice and so likely to be accompanied with imposition that courts watch it with the utmost strictness and do not allow it to stand but on the clearest evidence.”

This was said with reference to the ratification of contracts tainted with fraud. If the rule is as stated when applied to business contracts, it should be stated in even stronger terms when applied to the state. It should not be assumed that the legislature has ratified sales of land secured by fraud so gross as that proved in this case, unless the language of the act leads unmistakably to that conclusion.

20. The act relied on by the defendants on this branch of the case is that approved February 27,1901, and found in the Session Laws-for that year on pages 304, 305. It is as follows:

“An Act

“Authorizing the Board of Commissioners for the Sale of School and University Lands to bid in certain lands sold under foreclosure of mortgages and to lease and sell the same, ratifying purchases heretofore made, and confirming and validating all sales made by said board.

“Be it enacted by the Legislative Assembly of the State o? Oregon:

“Section 1. The Board of Commissioners for the Sale of School and University lands are hereby authorized and empowered to, in their discretion, bid in at its true cash value any land sold under foreclosure of mortgage given to secure a loan from the school fund or other trust funds under the management and control of said board, or they may accept a release of the equity of redemption and take such land at its true cash value, when necessary to secure the fund from loss; and all such purchases heretofore made are hereby ratified and confirmed. The board shall keep a correct record of all such purchases, with a description of the lands purchased and a statement of the fund to which they belong, and such lands shall be held for sale, subject to annual lease, and sold as opportunity may offer on the best terms obtainable, and the proceeds placed to the credit of the irreducible fund from which the loan was made, to the amount of the principal of said loan, and the excess, if any, to the interest account of said fund. That all sales of land heretofore made by said board are hereby ratified and confirmed, and whenever the full purchase price thereof shall have been paid title in fee simple shall vest in the purchasers, their successors or assigns.

“Section 2. Inasmuch as there is urgent need for the correction of the present law, this act shall take effect and be in force from and after its approval by the Governor.”

The language italicized is that which is relied on by the defendants. This is a remedial act. It is said in 1 Blackstone, 87, that:

‘ ‘ There are three points to be considered in the construction of all remedial statutes; the old law, the mischief, and the remedy; that is, how the common law stood at the making of the act; what the mischief was, for which the common law did not provide; and what remedy the parliament hath provided to cure this mischief. And it is the business of the judges so to construe the act as to suppress the mischief and advance the remedy.”

What was the law on the subject covered by this statute prior to its enactment, and wherein was the old law mischievous? The functions of the State Land Board, speaking broadly, are twofold. They are charged with the sale of the state lands and also with the care and investment of the school funds arising from such sales. The law authorizes the loaning of these funds on farm mortgages and a heavy responsibility devolves on the Board in the making of these loans and in the collection of the interest and principal as" they mature. In 1899 the legislature enacted a statute which revised the law governing the functions of the State Land Board and repealed earlier statutes on the subject: Session Laws 1899, pp. 156-164. Section 27 of this act is as follows:

“It shall be the duty of the board to foreclose immediately all mortgages which are not adequate security for the debt or upon which there is more than one year’s interest in arrears, and they may, in their discretion, bid in the land in the name of the state at its true cash value, or they may accept a release of the equity of redemption and take the land at its true cash value when necessary to secure the fund from loss, and all such purchases heretofore made — ”

It is apparent that a mistake was made in drafting this section and the result of the mistake was a want of express power in the State Land Board to sell and convey properties bid in at foreclosure sales. This error was called to the attention of the legislature in 1901 by the' message of Governor Geer, found in the Senate Journal for that year at pages 23, 24:

“Section 26 of Senate Bill 126, Laws 1899, provides that the State Land Board shall proceed immediately to ‘foreclose all mortgages which are not adequate security for the debt, or upon which there is more than one year’s interest in arrears.’ In obedience to this requirement, the board has foreclosed one hundred and sixty mortgages, using as much leniency as was compatible with the public interest. By reference to this section you will notice that it terminates abruptly in the middle of the sentence. Investigation has shown that the perfected bill which passed both houses and was regularly signed by their officers, contains the remainder of the section which proceeds to authorize the board to sell all lands secured by foreclosure of mortgages, to give title to the same, and confirms purchases already made. This important part of the bill, as it passed both houses, was omitted by some clerk on the enrolling committee and does not appear in the enrolled bill, a copy of which was sent to the State Printer. Having this knowledge, the State Land Board has proceeded to sell as much of these lands as possible through the State Land Agent.”

The Governor’s message then advised the legislature of the number and the value of the properties which had been purchased for the state at foreclosure sales and called attention to the fact that ninety-two farms so purchased had been sold by the state for the aggregate price of $165,935. In concluding this portion of his message the Governor said:

“It will be your duty to amend the section of the law to which I have just referred, in accordance with its well-defined intention.”

The act in question was passed pursuant to this recommendation. It is the duty of the court to take notice of the conditions obtaining at the time when a law is enacted: Keith v. Quinney, 1 Or. 364, 366; Smith v. Smith, 3 Or. 363, 365; State v. Young, 74 Or. 399, 403 (145 Pac. 647).

It will be noted that with the possible exception of the sentence on which the defendants rely, no part of the act relates to the sale of the state’s granted lands. Every other provision has to do with the functions of the State Land Board in acquiring lands pledged to it as security for its loans and in the sale of such lands. While the language relied on by the defendants is susceptible of the construction for which they contend, they are asking us to take a sentence from the act of 1901 and apply it to a subject foreign to that on which the legislature was acting. Judge Endlich, in his work on the “Interpretation of Statutes,” Section 73, says:

“The words of a statute are to be understood in the sense in which they best harmonize with the subject of the enactment and the object which the Legislature has in view. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained. * * And equally the construction ought to be with reference to the object to be accomplished by the act, and to keep in view the conditions existing. ’ ’

In Lewis’ Sutherland on Statutory Construction (2 ed.), Section 347, it is said:

“It is indispensable to a correct understanding of a statute to inquire first what is the subject of it, what object is intended to be accomplished by it. When the subject matter is once clearly ascertained and its general intent, a key is found to all its intricacies; — general words may be restrained to it, and those of narrower import may be expanded it to effectuate that intent.”

Verba generalia restringuntur ad habilitatem rei vel personae. In his exposition of this maxim, Broom says, Legal Maxims (8 ed.), pp. 503, 504:

“Lastly, it is said to be a good rule of construction, that, ‘where an Act of Parliament begins with words which describe things or persons of an inferior degree and concludes with general words, the general words shall not be extended to any thing or person of a higher degree,’ that is to say, ‘where a particular class (of persons or things), is spoken of, and general words follow, the class first mentioned is to be taken as the most comprehensive, and the general words treated as referring to matters ejusdem generis with such class,’ the effect of general words when they follow particular words being thus restricted.”

These principles have been recognized several times by this court. In 1864 the legislature passed an act regulating the transaction of business in this state by “foreign insurance, banking, express and exchange corporations.” Section 7 of this act, found in the Deady and Lane Code, Volume 2, page 617, is as follows:

“A foreign corporation, before transacting business in this state, must duly execute and acknowledge a power of attorney, and cause the same to be recorded in the county clerk’s office, of each county where it has a resident agent, which power of attorney, so long as such company shall have places of business in the state, shall be irrevocable, except by the substitution of another qualified person for the one mentioned therein, as attorney for such company.”

Section 8 of the act imposed further requirements in similar language. Although these sections of the act were broad enough in their language to include all foreign corporations doing business in Oregon, they were held applicable only to foreign insurance, banking, express and exchange corporations in accordance with the subject matter of the act as defined by its title: Singer Mfg. Co. v. Graham, 8 Or. 17, 22 (34 Am. Rep. 572). In State v. Fisher, 53 Or. 38, 42, 43 (98 Pac. 713), the court construed a game law which inhibited .the hunting of deer between November 1st and July 15th. The act then provided:

“Any person * * having in his possession any deer, or carcass, or part of a deer, during the season when it is unlawful to take or kill such deer, shall be guilty of a misdemeanor.”

The interpretation of this language was controlled by the subject matter of the act and the intent of the legislature to be gathered therefrom. It was held that the act forbade only the possession of the carcass of a deer killed in closed season.

In Wong Sing v. Independence, 47 Or. 231, 235, 236 (83 Pac. 387), the court construed an ordinance of the City of Independence which forbade the sale of liquor in quantities less than a gallon without first securing a license therefor. Section 7 of the ordinance was in part as follows:

“Any person who shall sell * * any * * liquors without first having obtained a license for that purpose as in this ordinance provided, shall upon conviction thereof * * be punished * * .”

This language was restricted by the subject matter of the act as applying only to sales in- quantities less than a gallon.

The case of State v. Carlson, 40 Or. 565, 569, 570 (67 Pac. 516), is still more closely in point. A suit had been brought to set aside a state patent to tidelands on the ground that the purchaser was not qualified to purchase. He defended in part on the ground that in 1899 the legislature had passed an act confirming purchases of tide-lands theretofore made. Mr. Chief Justice Bean reviewed the circumstances leading up to the enactment of this statute and concluded that the defendant’s case was without its purview. The language relied on in that statute, like the language relied on by these defendants, was broad enough, standing alone, to confirm the title attacked, but the statute as a whole, read in the light of the old law, the mischief and the remedy, manifested a narrower legislative intent in accordance with which the act was construed.

21. It is elementary that a statute is to be interpreted in accordance with the legislative intent: Duncan v. Dryer, 71 Or. 548, 557 (143 Pac. 644). We are satisfied that the act of 1901 was passed to correct an error in drafting the act of 1899; that it relates to purchases made by the state on the foreclosure of school fund mortgages; that it authorizes the sale of lands so purchased and confirms such sales theretofore made by the State Land Board; that the act has no reference to the sale of the state’s grant lands and that it was not intended to confirm fraudulent purchases of such grant lands. The statute therefore presents no bar to the prosecution of this suit.

22. Plaintiff prays for an accounting as against the defendant Hyde of all moneys received by said defendant “from the use and benefit of the lands” described in plaintiff’s pleading and particularly of the moneys received from the sale of the patented lands. Plaintiff cannot have both the lands and the money secured by Hyde through their attempted exchange. As it is entitled to the lands listed in Supplements B and C, it can have no accounting as to these lands. We are unwilling to assume that the federal government will long maintain its present inconsistent attitude with reference to the lands listed in Supplement A, and we think that the title to these lands must therefore he considered to be in abeyance. Until it be finally determined that these lands cannot be restored to the state, plaintiff should not recover their price or value. There are also serious objections to an accounting in this suit for the price or value of the state lands surrendered as base for the patented lands. These lands are only in part described in the complaint. The relief demanded is ancillary to the cancellation of the state deeds prayed for. Plaintiff’s right to this character of relief in this suit is based on the principle that equity delights to do complete justice. The record does not contain sufficient data on which to give a complete accounting. Only fragmentary relief could be accorded in this suit. It is much better that the accounting be had in a subsequent suit after the questions of title have been finally adjudicated and when the rights of the parties on this branch of the controversy can be fully determined. The decree will be without prejudice to plaintiff’s right to an accounting against Hyde and such other parties to the conspiracy as plaintiff shall be advised to proceed against.

It follows that the lands listed in Supplements B and C should be restored to plaintiff; the deeds by which they were conveyed to Hyde and his associates should be canceled; as to the lands listed in Supplement A, the complaint should be dismissed without prejudice. Plaintiff will recover costs in the Circuit Court of the defendants Hyde, Schneider, P. A. Hyde and Company and C. W. Clarke Company; in this court plaintiff will recover costs of the defendants Hyde and C. W. Clarke Company. We are not clear that the defendants Flora M. Sherman, Harry S. Morris and A. S. Baldwin are sufficiently connected with the conspiracy to justify a judgment for costs against them. The defendants who- have paid cash for selection rights are co-victims with the state of the fraud of Hyde and his associates. The state should not recover costs as against them, nor should they recover as against the state.

We have been at great pains to list accurately the lands described in the supplements to this opinion; but the record is very voluminous and it is possible that we have overlooked something which would make a difference. Counsel who have been working on this case for four years are more familiar with it than we can hope to be after eight weeks’ consideration of the record. Any errors which may be pointed out in these tabulations will be corrected.

The decree of the lower court is modified.

Modified. Rehearing Denied.

SUPPLEMENT A.

LANDS OFFERED AS BASE FOR LIEU SELECTIONS AND ACCEPTED.

Acres.

NW. % of NE. %, SW. % of NE. % and

SE. % of Sec. 36, t. 21 s. r. 6 e......... 240

Section 36, t. 21 s. r. 7 e................. 640

8.76 acres of Lot 2, Sec. 36, t. 22 s. r. 7 e..... 8.76

Section 16, t. 19 s. r. 7 e................... 640

Section 16, t. 19 s. r. 8 e................... 640

Section 16, t. 19 s. r. 9 e................... 640

N. y2 of Sec. 16,1.18 s. r. 7 e............... 320

S. y% and NE. % of Sec. 16,1.18 s. r. 9 e..... 480

Acres.

S. % and 5.62 acres in N. % of Sec. 36, t. 18

s. r. 9 e............................. 325.62

Section 36, t. 18 s. r. 7 e................... 640

SW. % of SW. % of Sec. 36, t. 20 s. r. 7 e..... 40

S. i/2 of SW. % and NE. % of SW. % “of Sec.

16, t. 21 s. r. 7 e..................... 120

W. % of Sec. 16, t. 20 s. r. 8 e............... 320

N. i/2 of Sec. 36,.t. 20 s. r. 8 e.............. 320

30.05 acres in NE. % of SE. i/4 of Sec. 16, t.

21 s. r. 8 e........................... 30.05

E. % and SW. % of SW. %, NW. % of SW. % and NWy, of Sec. 16, t. 12 s. r. 9 e..... 560

Section 36, t. 12 s. r. 9 e................... 640

W. y2 of Sec. 36,1.13 s. r. 9 e............... 320

SE. % of Sec. 36, t. 13 s. r. 9 e............. 160

SE. y4 and S. % of SW. % of Sec. 36, t. 14 s.

r. 9 e................................. 240

W. % of Sec. 16,1.16 s. r. 9 e.......'........ 320

Section 16, t. 17 s. r. 9 e................... 640

Section 36, t. 15 s. r; 9 e................... 640

Section 36, t. 17 s. r. 9 e................... 640

N. y2 of SE. % and SW. % of SE. % of Sec.

36, t. 19 s. r. 9 e....................... 120

E. % of SW. % and SW. % of SW. % of Sec.

36, t. 20 s. r. 9 e....................... 120

SE. % of NE. % and SE. %, SW. % of NW.

i/4 and SW. !/4 of Sec. 16, t. 20 s. r. 9 e.. 400

10,204.43

SUPPLEMENT B.

LANDS OFFERED AS BASE FOR LIEU SELECTIONS BUT NOT ACCEPTED.

Acres.

NW. % of SW. 14 and SE. 14 of NW. % of

Sec. 16, t. 21 s. r. 6 e................... 80

Section 36, t. 22 s. r. 6 e................... 640

NW. 14 of NW. 14 of Sec. 16, t. 20 s. r. 9 e. .. 40

SE. 14 of SE. 14 of Sec. 16, t. 20 s. r. 8 e..... 40

Lots 1, 2 and 3, Sec. 16, t. 20 s. r. 7 e....... 28.80

NW. % of Sec. 36, t. 22 s. r. 9 e............. 160

S. % of Sec. 16, t. 20 s. r. 7 e.............. 320

NW. 14 of Sec. 36, t. 20 s. r. 7 e.............. 160

Section 16, t. 22 s. r. 9 e................... 640

W. % of NW. 14, SE. 14 of NW. 14 and SW.

Í4 of NE. 14 of Sec. 16, t. 20 s. r. 7 e..... 160

SE. % of NE. 14, E. % of SE. 14 and SW. 14 of SE. 14 of Sec. 36, t. 22 s. r. 9 e....... 160

Section 16, t. 22 s. r. 7 e.................... 640

SE. 14 of SW. 14 and S. % of SE. 14 of Sec.

36, t. 20 s. r. 7 e..................... 120

9.95 acres in NE. 14 of SE. 14 pf Sec. 16, t.

21 s. r. 8 e........................... 9.95

NW. % of NE. 14 and S. % of NE. 14 of Sec.

36, t. 20 s. r. 9 e...................... 120

S. y2 of Sec. 16, t. 21 s. r. 9 e............... 320

3,638.75

SUPPLEMENT C.

LANDS NEVER OFFERED AS BASE FOR LIEU SELECTIONS.

Acres.

SW. i/2 of SW. % of Sec. 36,-1. 21 s. r. 6 e..... 40

Lots 1, 2 and 3 in Sec. 16, t.21 s. r. 7 e........120

SE. % of SE. % of Sec. 16, t. 21 s. r. 7 e....... 40

Lots 1, 3, 4 and 30.04 acres of Lot 2, in Sec. 36,

t.22s. r. 7 e. ............................... 51.56

251.56

Denied March. 19, 1918;

---

Rehearing

Petition for Rehearing.

(171 Pac. 582.)

On petitions for rehearing and motion for modification. Motion sustained in part, and petition for rehearing is denied.

Mr. A. G. Shaw, for the petition and motion.

Mr. George M. Brown, Attorney General, and Mr. John O. Bailey, Assistant Attorney General, contra.

In Banc.

MoCAMANT, J.

The defendants have presented an able argument in support of their petition for a rehearing. It is earnestly contended that we have misapprehended the effect of the evidence on the question of laches. There is room for a difference of opinion as to the date when the state became chargeable with notice of the frauds upon which this suit is based, hut we are satisfied upon the whole case of the correctness of our conclusions in this behalf as stated in the former opinion. A re-examination of the evidence to which our attention is directed confirms onr conclusions that C. W. Clarke was not an innocent purchaser.

23. Defendants complain that we have not noticed the act of Congress approved March 3, 1905, repealing the legislation under which the base lands were relinquished. This act is as follows:

“That the Acts of June fourth, eighteen hundred and ninety-seven, June sixth, nineteen hundred, and March third, nineteen hundred and one, are hereby repealed so far as they provide for the relinquishment, selection and patenting of lands in lieu of tracts covered by an unperfected bona fide claim or patent within a forest reserve, but the validity of contracts entered into by the Secretary of the Interior prior to the passage of this Act shall not be impaired: Provided, That selections heretofore made in lieu of lands relinquished to the United States may be perfected and patents issue therefor the same as though this Act had not been passed, and if for any reason not the fault of the party making the same any pending selection is held invalid another selection for a like quantity of land may be made in lieu thereof.”

The conclusions announced in our former opinion restore to plaintiff the base lands which were acquired fraudulently, which were conveyed by guilty parties to the United States and which have never been accepted by the General Land Office. We find no provision in the above statute which amounts to an acceptance of the deeds of relinquishment by which these properties were conveyed. In the absence of acceptance by the United States no title passed by these deeds. We showed in our former opinion that the United States will not knowingly accept a conveyance of land from a party whose title is acquired by fraud. We should not lightly impute to Congress an intention to depart from this salutary rule. Until the conveyance of the base lands has been accepted by the United States there can be no contract entitled to enforcement under the repealing statute.

It is argued in support of plaintiff’s petition for a rehearing that title to the base lands did not pass until the selections were approved for patent. This contention is out of harmony with the doctrine of Daniels v. Wagner, 237 U. S. 547 (Ann. Cas. 1917A, 40, 59 L. Ed. 1102, 35 Sup. Ct. Rep. 740), and Sawyer v. Gray, 237 U. S. 674 (59 L. Ed. 1170, 35 Sup. Ct. Rep. 842), which seem to us to overrule Clearwater Timber Co. v. Shoshone County, 155 Fed. 612, on which plaintiff largely relies.

24. Our attention is called to the fact that many of the selections cover unsurveyed lands and that under no circumstances can lands be patented prior to survey. It is argued that as the General Land Office could not issue patents to these selected lands at the date when they were selected, it was without jurisdiction to accept deeds to the corresponding base lands. Under the regulations of the Interior Department the selector of unsurveyed lands acquired an inchoate right thereto which ripened into a patent on the survey of the lands and on compliance by the selector with the rules applicable to such selections: 28 L. D. 523; 29 L. D. 393; Daniels v. Northern Pacific, 43 L. D. 381, 384; Clarke v. Halverson, 45 L. D. 54, 55. This was a valuable right; it was not based on settlement or purchase. Its only foundation was the conveyance of the relinquished lands. The existence of this right is inconsistent with the assumption that the selector retained title to the base lands. On the acceptance of the conveyance of these lands by the General Land Office title thereto passed to the United States. It is true that the selector ’s title to the selected lands might fail through noncompliance with the regulations and that it might then become the duty of the United States to reconvey the base lands, but this possibility does not militate against the correctness of the" above conclusions.

Plaintiff calls attention to certain cases in which the data filed in the General Land Office were insufficient to constitute compliance with the regulations and it is contended that in such cases the commissioner was without jurisdiction to accept the deeds of relinquishment and approve the corresponding selections. In this branch of their contention counsel for plaintiff lose sight of the distinction between error and lack of jurisdiction. It may be that the letters of approval criticised by counsel were based on an insufficient showing, but in each case there was a deed of relinquishment and a corresponding selection of government land. In no case was the deed of relinquishment delivered for the creation of a floating right of selection. Plaintiff’s authorities sustain its contention that this latter practice is unauthorized by the act of Congress of January 4, 1897: Roughton v. Knight, 219 U. S. 537, 547 (55 L. Ed. 326, 31 Sup. Ct. Rep. 297); Western Lumber Co. v. Willis, 160 Fed. 27, 31 (87 C. C. A. 183). In Cosmos Exploration Co. v. Gray Eagle Oil Co., 190 U. S. 301, 308, 309 (47 L. Ed. 1064, 23 Sup. Ct. Rep. 692, 24 Sup. Ct. Rep. 860), Mr. Justice Peotcttam says:

“There can be, as we think, no doubt that the general administration of the forest reserve act, and also the determination of the various questions which may arise thereunder before the issuing of any patent for the selected lands, are vested in the Land Department.”

On the delivery of the deeds of relinquishment and the filing of applications to select equivalent acreage, the jurisdiction of the General Land Office attached. The tribunal which formulated the rules of procedure had authority to determine whether relinquishments and selections conformed thereto. "When the General Land Office approved the relinquishments, title to the base lands passed and the title cannot be divested by the decree of a court rendered in a cause to which the United States is not a party.

A few errors have been pointed out in the description and tabulation of properties listed in the supplements to the previous opinion. These errors will be corrected and copies of the supplements in their final form will be furnished the parties.

The petitions for rehearing are denied.

Motion to Modify Sustained in Past and Rehearing Denied.

Case Details

Case Name: State v. Hyde

Court Name: Oregon Supreme Court

Date Published: Jan 8, 1918

Citation: 169 P. 757

Court Abbreviation: Or.