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MEDFOttD MATT, T1UBUNB, TODKOKD, OHMON. WKDNRSIIAY. OCTOHIW. 28. 11)1
PAGE TWO
f-r
MSfflM
, -. 1 j
Djpcislon 'of FehrAl 'Court of Ap
je$ls Sets Aside Patents to Jcrtlan
and La Raut Claims on Grounds of
Illegal Practice History of Case
Rehearsed In Court's Opinion.
Tho tollowlnn Is tlio declMon, In
full, of Jtl.19 United States circuit court
or nppciils, consisting of Justices Gll
bprt. Itosa and Morrow, In tho case
oj tho United Stntcp Oootli-Kolly
Co.! t nl, after hcarluR all of tho
evidence submitted afterwards by K.
A. Booth, cnudldato for tho United
8tntcs senate. In his debato with Gov
ernor West at Portland last week.
The court's decision Is printed In full,
so thnt the ntlbllc may understand
what kind of n junn Is seeking elec
tion to tho United States senate:
United HiMcs v. Jlootli-Kclly l.ttiulwr
Co. ct 1
Evldcnco considered, In n suit by
tho United States, for tho cancella
tion of patents to public lands en
tered under tho stone and timber
net on tho ground of fraud, in that
tho entries wero mado for the bene
fit of defendant lumber company.
which paid the government price and
all fees and expanses and gayp each
onlrjinaji a bonus qn receiving deed
to bis land, and held sufficient to
sustain tho allegations of tho bill
and to entitle- complainant to a can
cellation of all of pie patents.
Appeal and Cross-appeal from the
District Court of the United States
for tho District of Oregon; Robert S.
Dean, Judge.
Suit in equity by tho United States
against tho Booth-Kelly Lumber
Company, Stephen A. La Raut, Alice
La Raut, Ethel M. La Raut. and Lucy
La Raut. From the decree, both the
United States and defendant Lumber
Company appeal. Reversed on ap
peal .of the United States, and af
firmed on defendant's appeal.
On May 24, J 910, tho United
States brought a suit Jn tho court be
low to cancel flyo patents of land
which bad boen issued under the
Timber and Stone Art, on the ground
that tho Initial applications of tho
patentees had been fraudontly xnadP
by them for tho uso and bonflt of
tho Booth-Kelly Lumber Company,
and with tho understanding at the
time when they were made that the
entrymen should wk convey tho
land so entered by him to said com
pany. Tho bill alleged that tho com
pany paid and advance all of tho fee;,
costs and expenses ant) purchase
prlco of said land, and paid to each
entryman MOO, anil received from
each a deed. The entrymen were
Edward Jordan, Stephen A. La Raut,
Allco La Raut, Ethel M. La Raut
(now Ethel M. Lewis) and Lucy La
Raut, and they were made co-defendants'
with tho Booth-Kolly Lum
ber .company. A decrco was taken
pro confesso ngalust Jordan. On
September 21, 1910, all the other
defendants answered tho bill, deny
ing that tho Lumbar company fur
nished any of tho purchase money,
fees, costs or expenses of acquiring
tho land, and denying the allegations
'of fraud on tho Timber and Stone
Act. The answer alleged that on or
about July 22, 1902, the Lumber
Company purchased tho land entered
by Jordan for the sum of $ 550, which
was actually advanced nnl paid to
and for his uso and benefit, and re
ceived a warranty deed from hi in
thorofor, relying upon the final re
ceipt for said land, and believing
that nil tho proceedings anterior
thereto wore buna fide, etc.; that on
May 7, 1907,' Stephen, Alcp, Ethel
and Lucy La taut, by vlrUq of the
patents ssued tq them, we,re seized
nnd nosjegsQd pt fill legal and enplt-ablo-
ownership of tho land granted
by, patpniij, nud that on said day the
Lumber; Company purchased the laud
described in said patonts, and each of
the patcntoes received thorofor the
sum of fCUO, which sum was actual
ly advanced and ,pu.td to and for each
of thorn, rulylpg upon tho patents,
etc. And there lc In the onsyer this
ulk'fc'atlou by the Lumber Cempany:
"Thatjhjs dofendant is informed and
believes, and therefore alleges that
after tho sold eutrfqs mentioned In
fcald bll wore made by several en
try in en, charge wero jiiailp nod filed
wjtli t!v coiuplaliiant'u officials In
tltt Jyturjor jWartinnit, whpim dpi)
It was. p Investigate and determine
fy MWP J'MI'I titrk vvre
,'raudufnt u rjjuructur Md "
wfttltf fr UiH lt'jitft of Hits dufVwJ.
mhI, ami Hint mIi) clurKei rv full
lHtPlltl by lUu Interior Pepuit
HMt fr f iw f wmhw
(Vf Irjlh w WI ( Mi Uwitv,
)Wt Hi AitmM HhllflT I'MlfWU
4M4tN h lM ui'iw ld cnlvrlv,
tf MJwr lb MW liuiiltl bv eku
celled, mid thnt such proceedings
wore hnd in said matters that said
sov.cral .outcries w.cro Xully investi
gated, by complainants .officials
cbargqd with that duty, and tetl
ninny and affidavits wore tnken upon
said Investigation, and the complain'
ont and said entrymen were duly rep
resented at said hearing and InveMl
gallon, nnd that upon n full Invest!
gallon and hearing upon said charges
and with full knowledge of nil the
facts, it was found and determined
by tho said officials thnt said entries
wero not fraudulent, and that tlic
Irregularities in said entries, If any,
wero not of sufficient gravity to require-
or Justify the cancellation of
said entries, and ordored that pat
ents issue upon said entries for said
laud, and, that patents were there
upon Issued therefor, its alleged In
f.ald bill of complaint." After a re
plication had been filed, nnd nt the
beginning of the taklug or testimony
before an examiner, on December 19,
1910. tho Lumber Company, Lucy
1-a Raut, and Ethel M. La Rnut ob
tained permission to n in end their an
swer, "so as to admit that the de
fendant the Booth-Kelly Lumber
Company, Is the holder of the legal
tltlo to the lands entered by nnd pat
ented to Ethel M. La Raut and Lucy
La Raut, but denying that it is the
equitable owner of said land, and al
leging affirmatively that said Ethel
M. La Raut. now Ethel M. Lewis and
Lucy La Raut, ever since suld pat
ents wero issued to them, have been
and now are tho equitable owners of
ald land, and that the deeds made
by them to tho Booth-Kelly Lumber
Company were Intended to be and
were in fact mortgages to secure the
payment of certain advances made
and to bo made to them by said
company, to enable them to enter
nnd pay for said land and for other
purposes.'' On the issues to made,
and tho testimony, the court below
entered a decree cancelling the pat
ent which had been Issued to Jordan
and dismissing the bill as to the
other entries. From that decree
both the complainant and the Lum
ber Company have appealed.
A. C. Woodcock, of Eugene, Ore.,
and Albert H. Tanner, of Portland,
Ore., for appellant Booth-Kelly Lum
ber Co.
John McCourt, U. S. Attorney, of
Portland, Ore. ,
Before Gilbert. Ross, and Morrow,
Circuit Judges,
GILBERT, Circuit Judge (after
stating the facts as above.) Tho
evidence shows that some months
prior to the .date of tho entries, and
some time during the years 1901
and 1902, the Lumber Company had
tho land in controversy cruised; that
the company was acquiring lands in
the vicinity of these lands during
tlioso years; that at that time and
until 1907. R. A. Booth was the
manager of the company; that be
tween January. 1902, and January,
(903, J, JI. Booth was secretary of
the company and was the receiver of
no United Spates land office at. Roso
burg, Pre, that John K. Kelly was
tho ico-presldent of the company,
and that he, under the direction of
R. A. Booth, attended to the pur
chase of lands for the company; that
George Kelly, a director of tho cor
poration had charge of Its sawmills
and wag manager to succeed R. A.
Booth In 1907; that at tho timo of
tho entries In controversy the com
pany had sawmills at Saginaw, Co
burg, Wcndllng and Springfield, Ore.;
and thnt they owned and acquired
largo tracts of land In the vicinity
of those mills; that R. A. Booth Is
tho brother-in-law of Stephen, Ethel,
and Lucy La Raut, and that Alice
Ln Raut Is Stephen La Raut's wife;
that at the time when the entries
were made Stephen and Ethel La
Raut and Edward Jordan were in the
employment of the Lumber Com
pany, and they "were very poor at
that time"; that . H, Brumbaugh was
a cruiser in the employment of the
Lumber Company, and thut at the re
quest of John K. Kelly he showed the
entrymen and cntrywomen their re
spective claims. The records of the
land office show that all entries were
filed in February, 1902, that the final
proofs were mado on May 7, ant May
8, 1902, that the patents issued on
August 3, 1904, and that upon the
request of John F. Kelly the patents
wero delivered by the officers of the
lloseburg land office to Frank E. All.
As to the main issue in the cuse,
which is whether the lands In con
troversy were entered pursuant to an
understanding or agreement between
thu applicants and (he Lumber Pqm
uany whereby the fatter was to ac
quire the same, M'u oral testimony
Is conflicting, jqrdnp testified., nnd
(lie pourt in-low found, that he had
such an uiiderntaudiug mid agree
ment and that io entered the land
Dt tho IiiKtumo of one of the officers
of the Lumber Company, upon the
prouilto of tho payment of 100 lo
bl in for ils service In ko doing. Mrs.
Applimimiu. u daughter of Alice La
Ituiil, tvbllfM tlmi lir iiiollmr toM
bur Ihui ! hud lul.vii up rUlm
for It A liouili. bud w&H o l publ
1 1 00 fur her fluliu, tin Him h hum
publ lliut um, uinl Hint Mr Jlooili
ws in puy lr rpHir nml did w.
Mud unifl")) m tint! Iir tvfullii
Hf'plii'ii I.m Jtuui loyli np Ills (Ulm
for tho same reason that her mother
did, but she was unable to say wheth
er It wns he or her mother .who told
her so, ami thjtt her mother told her
that R. A. Booth had asked her. her
stepfather, and Ethel to take .up
clntms, nnd that her mother mild hor
stepfather had received $1000 (or do
ing so. She testified further, that
her mother got $T0 mure eight, or
nlito months befojy lJo tlnvo when
tho witness jjave her testimony.
There was no contradiction of this
testimony by either St ephen l.a, Rant
or his wife. Thoy wcvro ucd. cnlled as
witnesses, nor w.cro their depositions
taken. Mrs. Applestone was, ap
parently, n disinterested wituess. and
no reason la sugges,lo.d jvhy Jie.r testi
mony should not be given full cred
ence. Ethel nnd Lucy La Raut testl
fled In the matn In harmony with
the testimony of R. A. Booth to thu
effect that the tour entries or the La
Rants wero made under an agree
ment with It. A. Booth, who was their
relative, and thu then manager of
the Lumber Contpnuy, by which tho
Lumber Company was to pay the gov
ernment price for the land and all the
expenses incident to tho entries, and
keep on account thereof, the repay
ment of which to the company Mn
Booth guaranteed, and In pursuance
of which and as security therefor he
took to himself the deeds to the lands
which they entered. t And there was
testimony that In 191Q, when Stephen
La Raut and his wlfo desired t,o re
move to Alberta, Canada, tliey sold
their claims to !the defendant com
pany for $50 each in addition to the
$100 they each had received, a price
which was satisfactory to them, and
that the other two claims istlll be
long to Ethel and Lucy Ln Raut; the
company holding the title as secur
ity. The court below found that tho
Lumber Company acquired by pur
chase the claim of Stephen Ia Raut
and wife, and that it holds the tltlo
to tho other two claims only as sc
curlty for advances mado to Ethel
and Lucy La Raut.
From the conflicting parol testi
mony which the record present, we
turn to the evidence shown by con
temporaneous entries in tho bopk
and records of the Lumber Company,
and to facts and circumstances es
tablished thereby which do pot de
pend upon human memory for sup
port, and which cannot bo contra
dicted. The following facta aro un
disputed: The La Rauts, together
with Jordan, who was in tho employ
ment of the Lumber Company made
trclr applications for timber claims
at the same time, and the company
paid their traveling expenses to and
fro Roseburg and all Incidental ex-;
penses. The company jiald for all
the publication of notices, and
charged tho expense thereof tp .Its
stumpage account, and made no
charge therefor nt any time in its
bqoks against the individual entry
men. Tho company paid tho pur
chase, price of the lands apd all of
the fees, traveling expenses, and
other expenses Incidental to final
proof. Tho final proofs were mado
in May. 1902, and In July following,
each of the entrymen executed and
delivered a deed of the land. Jor
an'8 deed, and probably all of the
deeds, were executed to the company.
The deeds from the La Rauts having
been subsequently destroyed, the
testimony leaves It uncertain wheth
er thoy were executed to the company
or to R. A. Booth. At tho timo when
these deeds wero executed, ach en
tryman received tho sum of $100.
The deed from Jordan was not re
corded until September 0, 1907 Tho
La Routs deeds were never rccordod,
but In tho latter part of 1004 or curly
in 1905, at about the time of the In
vestigation by the government of
land frauds In Oregon, those deeds
were returned to the makers and de
stroyed, Ethel and Lucy La Raut
mado other deeds In 1907, at which
time they were each paid $25, On
February 3. 1910, Stephen Lu Raut
and his wife made a deed of their
lands to tho company, and were each
puld $50. The entrymen of the
claims in controversy never saw the
lands, excepting at the time when
they viewed them prior to making
their entries, and It is admitted that
they never made any effort to dispose
of them, never inquired about them,
or the value of them, or the amount
of timber thereon, and made no in
quiry as to (he .xpenes of thu .en
tries or tho payment qf tuxes Here
on, or assumed any control or own
ership of jbo land, Th Jumber.com
pany on Its books charged Itself with
all expenses In relation to these
landu from and after the time when It
caused the same to ho cruised, short
ly before the entries wero made.
y.'hen the final proofs had been
taken, and the lands hud been paid
for, lndviduul accounts were, opened
under the iibiiiu of eurh of thu entry
men, In which weie (.barged thu pay
ment of IIih piirfhake price of $400
for (he laud, and a payment of $100
to ouch iiilr;mun, upd tsrh ncioimi
pus haluuifd li u credit of $500 to
klllllliHg(, Mild II OIM' Of tllHMI WNN
vii-r ttflurwril n'opi'iiml. Kurd m
count bi'Klns wllh Dm milry of Ilin
PMmnl of (lin imrclfUkii mouyy of
fJOO on ly N, l&UX. The snounU
Hlli lb" I.m llunU nil ml on July
41 ifojf, hi hi ciiuitfo lo Niump
age. $500. ' Tho account under tho
muiio of Ethel Lu Rnut may servo
n sample of nit.
Ethel La Hunt
190'J
May S,.J. 108 Chock $.100
July :U, J. Chock'!.' $100
July iU, J. 191) Check $500
$500 $500
Hut the expenses of the, entryman
lu going to ttiK,churg, lodging there
and returning, the recording tecs,
nnd thu publication notices wero not
entered .in the.u Individual accounts.
but were entered lu the books of tho
company under the heading "Brum
baugh land claims," mid were can led
Into .the tmujinx.o .account under the
Item "Cruising.'' The lauds so deed
ed by the cntryincn In 1902 were
Immediately carried into the genera!
laud account of .the company. iTheoev
after the compauy paid the taxes
thereon, together with Its taxcxuOi
other lauds. Jn, a sum total. No ,ox
plauatlun U .made of tho fact thnt
thu deeds so taken were nut record
ed. No satisfactory reason Ih glvinl
why the deeds wero destroyed No
explanation' Is given of the fact that
for a oar pud n half after thu de
struction of the deeds neither Booth
nor thu Lumber Company had any
cpnve.xance from tjip I.a Rauts.
The theory lljnt.iL A Booth nil
yanccd .the costs., and expenses, and
purchase prlco for the entries in or
der 19 .assist his relatives who worq
In poor circumstances, and that h)
thereafter advanced monoy to them
for thu same reason and took the
deeds as security illy coiuporU with
certain significant facts that appear
In tho record. .Ope of these. Is .thu
contemporaneous payment to Jordan
and the four membcra of tbe l.a Raut
family of the Identical sum of 5 1 Oil
rach at tho time whou their deeds
were taken. Another Is. that neith
er Ethel 1 4i Itnut nor Lucy La Rant
explained why she received tho $00.
Lucy testified that she did not need
It, or uso It. and .that when fho re
ceived It she loaned it 19 her father,
who paid her Interest on It. Another
Is that not another payment anjiears
by the books of the company to have
been made to any of the La Rauts
until the timo when the company re
ceived new deeds from each. When
the second deeds were obtained from
Ethel and Lucy ln 1907, they wore
each paid $25. When tho deeds
were obtained from Stephen La Raut
and his wife In 1910, they were each
paid $50. None of thexo payments
was charged against the La Rants
personally, nor wero the old account
under their namesK which bad been
balanced and closed, reopened; but
theso payments were each charged
In tho et.utnpage account pf thu lum
ber company. In short, there is
nothing in the books of tho company
to show that any of tho La Hauu
owed the Lumber Company or It. A.
Booth at any time after Uielr ac
counts wero cloned, or that the com
pany held any of the conveyances as
security, or that R, A. Booth guar
anteed the rppayment to the Lumber
Company of the monoys which It bad
so advanced. Anothor Important
fact Is that at tho timo when the sec
ond deeds were obtained from
Stephen La Raut and his wlfo, ac
cording to tho decided weight qf t)io
testimony,. thcJr plaints were worth
each, at the Jowcst estimate. $4000,
and probably $5000. A most signi
ficant fact also, Is tho change which
was made In the answer of thu de
fendants when the government began
to take Its testimony before tho ex
aminer. The original answer had
then been on file three months. Tho
original answer denied:
"That the entire or any expense
attending the making of suld entries
or purchaso, Including the payment
of bald purchase money or the said
fees of register or receiver, or all
other expeiihcs or disbursements, or
any expenses or disbursements, were
paid or born by thu sold defendant
corporation."
It Is not clalmd, nor can It bo,
that the answer was prepared by
counbel or sworn to In Iguoranco of
the facts. The complulnt had drawn
tho attention of the defendants
sharply to the charges which were
mado as to the alleged fraud In ac
quiring the landx In controversy. The
answer was complete In every detail,
and one of the allegations was that
tho charges made In the bill had been
the subject of Investigation by offi
cials of the Interior Department, who
bad full InvevtlKStcd them for the
purpose of ascertaining tho truth or
falsity of said charges. Another al
legation was that the Lumber Com
pany had purchased thu lands relying
upon the patents, and had puld Jor
dan $550, and each of the other
patentees $000, therefor. Tim un
swer wan sworn to by A. 0. Dixon,
the inunugtjr of the Lumber Com
pany. Ho toxtlfloil I hut It. A. Booth
hud (old him thv fat Im In ivgard to
thtfkti claims, siiil hid liiformvd lilm
Hist )ih lisil csiufd Him lompuiiy's
money In be udtuuind lo pay the ex
puiiKes uml puwiisiit pin lliKroof,
umj Ihui im had giiurnhlPi") ll'w i
pamwil of Hit moiimy o III 11 ijiid
puny. DU011 IfHiflnd lliut Im whs
fully tiitfki of I tit limit, uml llisl
hu hud kin I ml 1 bt fu (its in llin silor
l)Vt lU pH'I'klPlI H NpSH'Pt tlH
admitted that thu uimvior wim lend
to lilm; but ho testified (hut with
out paying nttontloii tu ho dentin, or
discussing tho -vurtoUH points ombud
led lu It, luvhiul sinned ll, mipiuutlmt
It wuhii more mutter of fmm. lint
he could iuM ,oplln. why tho aiiHwor
was prepared lu tho wny tu which It
was, nor vmih any wltncxx culled to
oxpliiln It,
These facts nnd elreuniKtuiiees,
while perhaps thoy do mil amount tu
a dcmotiHtrutlott of the truth of tho
ullugiitlous of thu bill, result In 11
very decided preponderance of tlio
evidence lu favor of thai ennulnnlon
nnd thoy mo sufficient lu uur Judg
ment to DVori'oim all the prosump
tlous thnt attend tho Ishuiuico of tho
PjHimts. tvud uro nuf.Uxlent to moot
tho requirements of tho rule that lu
a suit to sot aside 11 patent tho testi
mony 011 ulilcli It Is done must bo
clear, uueqiitvm-nl, ami convincing
and must bo more than 11 bare pre
ponderance of the evidence, which
leaves the Issue In doubt. Tho find
ings In the court below 1110 mado
upon evidence which had been taken
before uu examiner, and not lu open
Court, and thoy are not nlteudod
with presumptlous in fuvnr of find
ings' wbleji are made upon conflict
Jng toHtlmony. where tho trial Judge
list) 'the opportunity to observe tho
denuianorrtof' thu wliuesM'; As to
thb laud patented to Jordun, tho de
cree t affirmed. As to tho other
lauds lu controversy, It Is rovoroed,
an'd tlio cause lemaiutcd, with Its
Htructlons to enter n decieo for tho
United Stntes lu accordance with tho
I3vor of tho bill.
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Kohl oyerywhtiv jM eoiiVLiileiil Ko foil piioli
Htfc mIko in IDt: pontine ami 5l)o lunch ww,
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