Linn & Lane Timber Co. v. United States,
236 U.S. 574 (1915)

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U.S. Supreme Court

Linn & Lane Timber Co. v. United States, 236 U.S. 574 (1915)

Linn & Lane Timber Company v. United States

Nos. 46, 159

Argued January 27 and 28, 1915

Decided March 8, 1915

236 U.S. 574


This Court follows the findings of fact of two courts below in this case that the corporation was a mere tool of the individual organizing and controlling it and holding most of its capital stock, that his knowledge as to the fraud was its knowledge, and that the corporation was a party to an effort to conceal the title until the period of limitation had expired. McCaskill Co. v. United States, 216 U. S. 504.

Where the corporation was organized simply to take title to lands and its first business was to record the deeds from the owners of practically all of its stock, and there is doubt as to whether they were actually delivered until then, the difference in legal personality between the grantor and the corporation gives the latter no greater rights than the former.

The fact that some third parties held stock of a corporation as collateral for debts of the principal stockholder held in this case, following the findings of the courts below, not to have altered the situation.

Where a secret transfer of wrongfully held land is made through the medium of a corporation for the purpose of busying the United States with the wrong person until the statute has run, service on the man thus put forward is sufficient to avoid the statute.

Where the bills to set aside patents for fraud have been filed and subpoenas issued and delivered for service before the statute has run, and reasonable diligence shown in getting service, the running of the statute is interrupted, and the rights of the United States against the patents are saved.

Where the decision of the Secretary of the Interior that patents should be issued has been obtained by such fraud as existed in this case, it is

Page 236 U. S. 575

not conclusive; the matter is open for consideration by the courts. Washington Securities Co. v. United States, 234 U. S. 76.

196 F. 593, 203 F. 394, affirmed.

The facts, which involve the right of the United States to cancel patents for land on the ground of fraud in the entries and the application of the statute of limitations to the actions to cancel, are stated in the opinion.

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