United States v. Oregon Lumber Co.

260 U.S. 290, 43 S. Ct. 100, 67 L. Ed. 261, 1922 U.S. LEXIS 2367
CourtSupreme Court of the United States
DecidedNovember 27, 1922
Docket40
StatusPublished
Cited by160 cases

This text of 260 U.S. 290 (United States v. Oregon Lumber Co.) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Oregon Lumber Co., 260 U.S. 290, 43 S. Ct. 100, 67 L. Ed. 261, 1922 U.S. LEXIS 2367 (1922).

Opinion

Mr. Justice Sutherland

delivered the opinion of the Court.

*293 This case is here upon a certificate from the Circuit Court of Appeals for the Ninth Circuit, under § 239 of the Judicial Code.

The plaintiff in error brought an action at law against the defendants in error in the United States District Court for the District of Oregon to recover damages for the fraudulent acquisition' of certain lands. The complaint was filed in February, 1918, and alleged that the Oregon Lumber Company, a corporation, and certain of its officers, named as co-defendants, unlawfully conspired to acquire certain tracts of land in Oregon, under the Timber and Stone Act of June 3, 1878, c. 151, 20 Stat. 89. The lands were patented in 1900, subsequently conveyed by the patentees to an officer of the defendant corporation, and thereafter (with the exception of a small tract) transferred by such officer to the corporation. The value of the lands was alleged to be $65,000 and judgment was asked for this amount.

The answer denied thé material allegations of the complaint and pleaded, among other things, as separate defenses: “(1) that pro tanto to the measure of damages the United States received from the several entrymen named in the complaint the aggregate sum of $16,400, which was the price fixed by law and the practices in the land office for the lands described in the complaint; (2) that in October, 1912, the United States brought suit in equity to set aside the patents for the lands and alleged that it owned the property described in the' complaint herein and that the patents for the lands which are1 the same as are involved in this action were secured through fraud of the defendants named in the present action and others, and prayed for the cancellation of the patents; that in the equity suit substantially the same facts were pleaded as are pleaded by the United States in this action; that issue was joined in the equity suit; that in 1916, after trial upon the merits, the District Court dismissed the equity *294 suit for the reason that the United States had had full knowledge of the matters complained of 'in its complaint for more than six years before the equity suit was instituted, and that no appeal was ever taken from the decree dismissing the complaint of the United States.”

The plaintiff' in error demurred to these separate defenses, and, the District Court having overruled the demurrer and the plaintiff in error having declined to plead further, the court dismissed the complaint and judgment • was entered.

■ The District Court, in rendering its judgment, decided that, inasmuch as the suit in equity was brought by. the United States with knowledge of all the facts, it constituted an election final and conclusive.

Upon these facts the following questions are propounded by the Circuit Court of Appeals:

H 1. Is an action by the United States for the value of lands as damages, against the patentees for the lands for fraudulent acquisition of the lands patented under the timber' and stone act, barred where more than six years have elapsed after the United States, with knowledge of the fraud, brought a suit in equity to cancel the patents for the same lands, in which equity suit decree of dismissal was made against the United States on the ground that the suit was barred by the statute of limitations?1
“ 2. If the foregoing question be answered in the negative, should any damages recoverable be reduced by such amounts as the United States may have received from the entrymen, as the price fixed by law for the lands described in the patents? ”

Upon the facts stated the sale was voidable (Moran v. Horsky, 178 U. S. 205, 212), and the plaintiff in error was entitled either to disaffirm the same and recover the lands or affirm it and recover damages for the fraud. It could not do both. Both remedies were appropriate to the facts, but they were inconsistent since the first was founded *295 upon a disaffirmance and the second upon an affirmance of avoidable transaction. Robb v. Vos, 155 U. S. 13, 43; Connihan v. Thompson, 111 Mass. 270, 272. 2 Black on Rescission and Cancellation, § 562, and cases cited. The rule is applicable to the Government in cases where patents have been procured by fraud. United States v. Koleno, 226 Fed. 180, 183. Any. decisive action by a party, with knowledge of his rights and of the facts, determines his election in the case of inconsistent remedies, and one of the most unequivocal of such determinative acts is the bringing of a suit based upon one or the other of. these inconsistent conclusions. Robb v. Vos, supra.

It is suggested in the brief for the plaintiff in error that there is not such inconsistency between a suit to recover lands patented because of fraud and an action to recover damages for the fraud as to bar the latter, citing Friederichsen v. Renard, 247 U. S. 207. That case, however, lends no support to the suggestion. The petitioner, Friederich-sen, brought suit to cancel a contract for the exchange of lands, on the ground of fraud, practiced upon him. Upon the coming in of the report of the master it appeared that petitioner, pending suit, had cut a considerable amount of timber growing upon the lands which he had taken in exchange. Thereupon the court found that he was not entitled to equitable relief because, by cutting the timber, he had ratified the contract and had rendered it impossible to put the defendant in statu quo, but his remedy was at law for damages. The court ordered that the master’s report be vacated and the case transferred to the law side of the court, pursuant to Equity Rule 22, and that the parties file amended pleadings to conform with an action at law.” The question was there presented for decision whether this -was the commencement of a new action, so as to bring it within the bar of the statute of limitations, and it was determined in the negative. Holding further *296 that under the circumstances the doctrine of election of remedies did not apply, this Court said:

" Thus, we are brought to the conclusion that since the two remedies asserted by the petitioner were alternative remedies, and since the order made, requiring the conversion of the suit in equity into one at law, was entered by the -court sitting in chancery, for us to affirm the judgment of the Circuit Court of Appeals that the petitioner, in. obeying the order of the trial court, made a fatal choice of an inconsistent remedy, would be to subordinate substance to form of procedure, with the result of defeating a claim which the respondents stipulated had been sufficiently established to justify a verdict against them. This we cannot consent to do.”

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Cite This Page — Counsel Stack

Bluebook (online)
260 U.S. 290, 43 S. Ct. 100, 67 L. Ed. 261, 1922 U.S. LEXIS 2367, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-oregon-lumber-co-scotus-1922.