Linn & Lane Timber Co. v. United States

Background

The United States sued to cancel dozens of land patents that had been issued under the Timber and Stone Act because the entries were obtained by fraud. A man named Smith had the lands and later organized a Minnesota corporation to receive the titles. Many patents were issued in 1902; the Government filed its suits in May 1908. Some patents were more than six years old before defendants were served, and the deeds to the corporation were not recorded until September 1908, after the suits began.

Reasoning

The main question was whether the Government’s claims were barred by the six-year limit and whether creating and using a corporation to hide title could stop the Government. The Court accepted the lower courts’ findings that Smith and the corporation acted to conceal the true ownership. It held that filing the equity bills and showing reasonable diligence to serve defendants interrupted the limitation period, and that the corporation, controlled by Smith and used to hide the title, could not claim a better position than Smith. Because the patents were obtained by fraud, the courts could reconsider the Secretary’s earlier decision to issue them.

Real world impact

The decision means the United States can challenge and annul land patents obtained through fraud even when owners try to hide deeds by shifting title into a company and delaying recording. Filing a suit and pursuing service with reasonable diligence preserves the Government’s right to attack such patents. The Court affirmed the decrees canceling the patents; one Justice did not participate in the decision.