V. Its refusal to pay cannot be countenanced where it has the effect to violate or curtail the rights of the insured defined in other provisions of the contract. It is not by the mark to say that he could have commenced his action prior to July 21st, and then by supplemental complaints brought up the remainder of his demand for consideration, for it is expressly stipulated that claims are not divisible, and in mandatory language the plaintiff was required to make presentation not before, but after, he had regained his health. ceived a letter from the national secretary | the same, it is plain that the limitation must of the defendant dated January 16, 1915, be held to run from the time when the destating that the directors could not entertain fendant refuses to pay a claim which has the plaintiff's claim and that the complaint been presented after the member has regainherein was not filed until August 28, 1915. ed his health. The plaintiff had a right to It is admitted in evidence also that the let- recover for a period of disability amounting ter alluded to was received by the plaintiff possibly to two years. To approve the connot later than January 21, 1915. Six months tention of the defendant would be to hold from that date would expire July 21st of that immediately on the happening of the that year. The following excerpt from accident it might renounce liability thereSwitchmen's Union of North America after to accrue and thus reduce the two-year Colehouse, 227 Ill. 561, 81 N. E. 696, sets period to six months. forth a well-established canon for the construction of contracts of the sort before us: "The laws and rules of the appellant are to be construed liberally in favor of appellee, so as not to defeat the object and purpose of the insurance or indemnity. Healey v. Mutual Accident Ass'n, 133 Ill. 556, 25 N. E. 52, 9 L. R. A. 371, 23 Am. St. Rep. 637. Where it is sought to narrow the range of liability by insurance companies or societies, equivocal expressions are to be interpreted most strongly against the company, Commercial Ins. Co. v. Robinson, 64 Ill. 265, 16 Am. Rep. 557. "The language of the policy, particularly in determining whether the liability is limited, is always to be strictly construed against the insurer.' Queen Ins. Co. v. Dearborn Sav. Ass'n, 175 Ill. 115, 51 N. E. 717. The language and arrangement of the clauses of section 16 are the language and arrangement of appellant, and in such cases it was held, in Union Mutual Accident Ass'n v. Frohard, 134 Ill. 228, 25 N. E. 642, 10 L. R. A. 383, 23 Am. St. Rep. 664, that the interpre tation must be most strongly against appellant; that the language used should be construed, according to its common and literal meaning, in favor of the assured. In Forest City Ins. Co. v. Hardesty, 182 Ill. 39, 55 N. E. 139, 74 Am. St. Rep. 161, it was held that, where the contract of insurance is so framed as to leave room for construction, that construction should be adopted which will not impair the indemnity, and, if a clause in a policy is susceptible of two interpretations, courts will adopt the one which is most favorable to the assured, in order to indemnify him for the loss sustained. That case was cited and quoted from with approval in Terwilliger v. National Masonic Accident Ass'n, 197 Ill. 9, 63 N. E. 1034." All parts of an instrument must be construed so as to make them harmonious and effectual if possible. It is required by section 7 of article 9 of the defendant's constitution that all claims for benefits or indemnity must be presented to the national secretary of the association, and that "such claims are not divisible and must be presented after the total recovery of the member." The possible time limit of reimbursement for total disability is 104 consecutive weeks or 2 years, according to section 3 of that article. We have in mandatory language the requirement that the claim must be presented after the total recovery of the member, which must mean, subject to the two-year limitation, that it cannot be presented before the member recovers. Reduced to its lowest terms it is, in effect, stated that no claim can exist until the recovery of the member. Giving these provisions effect in connection with section 9, forbidding any action against the defendant unless commenced within six months There is an apparent conflict of authority between the precedents on the matter of conventional limitations in policies of insurance. One class holds that the time restriction prescribed in the policies must be so construed that it may be augmented by an additional provision to the effect that actions shall not be commenced until the expiration of a given period after the proofs of loss are submitted. Instances are cases like Hogl v. Aachen & Munich Ins. Co., 65 W. Va. 437, 64 S. E. 441, 131 Am. St. Rep. 972; Stewart v. National Council Knights and Ladies of Security, 125 Minn. 512, 147 N. W. 651; Pac. Mutual Life Ins. Co. v. Adams, 27 Okl. 496, 112 Pac. 1026. Others construe strictly the clause providing that no action shall be commenced after the period beginning with the happening of the fire or the death of the insured or the event causing the accident. Among cases apparently of the latter sort is Egan v. Oakland Ins. Co., 29 Or. 403, 42 Pac. 990, 54 Am. St. Rep. 798, which holds that the limitation of 6 months from the date of the fire will be enforced, though the policy said that the loss should not be payable until 90 days after furnishing said proof. Other cases cited in the defendant's brief are Harvey v. Fidelity & Casualty Co., 200 Fed. 925, 119 C. C. A. 221; Tebbetts v. Fidelity Co., 155 Cal. 137, 99. Pac. 501; Paul v. Fidelity Co., 186 Mass. 413, 71 N. E. 801, 104 Am. St. Rep. 594; Lowe v. U. S. Mutual, 115 N. C. 18, 20 S. E. 169; Law v. New England Mutual, 94 Mich. 266, 53 N. W. 1109; Moest v. Continental Co., 55 Misc. Rep. 128, 104 N. Y. Supp. 553. In most of these decisions, particularly Egan v. Oakland Ins. Co., the injury for which indemnity was sought had fully passed, as, in the Egan Case, a fire, and the cause of action had entirely accrued, while in the matter before us the claim was yet in process of development. chase shall be for the benefit of the applicant, and after the execution of deeds the grantees or their successors executed deeds to the United States as a basis for lieu land selections, and such deeds were accepted by the proper officers of the United States, the deeds from the state could not be canceled because of the fraud inducing their execution without the presence of the United States as a party, though the United States had co-operated with the state in marshaling the evidence of the fraud and had inresponding selections on the public domain. stituted adverse proceedings against the cor5. PUBLIC LANDS 121-CANCELLATION OF DEEDS NECESSARY PARTIES. the casualty should happen, the damage, tion of the statute contemplating that the purfully accrue, the notice thereof be given, and proof of loss submitted, all well within the conventional period of limitation. But, as we have seen, in the present case the twoyear possibility of the continuance of the sickness cannot be compressed within the six months' limitation. Again, in most of the cases relied upon as precedents, the limitation is inaugurated by a happening either beyond the control of both parties or within that of the claimant, so that good reason exists for restricting the time within which he may sue. In brief, we are impelled to the conclusion that unless it cannot be avoided, that construction will not be placed upon the contract which will enable one party in its discretion to destroy or abridge a plain right of the other under the same contract. We are of the opinion, therefore, that under the admitted facts the action was commenced in time. The conclusion of the whole matter is that the judgment of the circuit court in granting a new trial must be affirmed. MCBRIDE, C. J., and BENSON and HARRIS, JJ., concur. McCAMANT, J., took no part in the consideration of this case. STATE v. HYDE et al. (Supreme Court of Oregon. Jan. 8, 1918.) 1. PUBLIC_LANDS 121-CANCELLATION OF DEEDS-PLEADING. That the United States cannot be sued without its consent would not authorize the court to pass a decree canceling the deeds which it could not enforce. 6. PARTIES 83-DEFECT OF PARTIES-ParTIES ENTITLED TO OBJECT. Where the grantors of the United States had conveyed the selected lands and had executed to the purchasers powers of attorney authorizing the selection in the names of the grantors of lieu lands and the sale of the selected lands, and the powers of attorney had been exercised and land selected and conveyed to parties who were in possession, such parties, in protection of their titles to the selected lands, were entitled to claim that the United States was the owner of the base lands, and as a corollary to that claim to urge that the controversy could not be determined in the absence of the United States as a party. 7. WOODS AND FORESTS 8-FOREST RESERVATIONS INDEMNITY AND LIEU LANDS. Where parties relinquishing lands within a forest reservation as a basis for lieu land selections sold their right to select and executed powers of attorney authorizing the purchasers and convey the selected lands, such powers of to select lieu lands in their names and to sell attorney were powers with an interest and were irrevocable in the lifetime of the grantors. 8. PUBLIC LANDS 121-CANCELLATION OF DEEDS-NECESSARY PARTIES. Where deeds executed by grantees of school lands or their successors to the United States and filed as a basis for lieu land selections had never been accepted by the United States and it had never been determined by the General Land Office that the grantors had title or that the deeds were effectual to pass title, the United States had no interest in the lands and was not a necessary party to a suit by the state to cancel the deeds from the state for fraud. In a suit to cancel deeds to school lands for which the grantees or their successors had executed deeds to the United States as a basis for lieu land selections, an allegation that the United States had and still did refuse to accept the deeds of certain of the defendants imported that there had been no delivery of the deeds, and, though it appeared that the deeds had been recorded, demurrers on the ground that the United States was a necessary party defendant were properly overruled, as a grantee under a deed acquires no rights in the absence of a delivery. 2. WOODS AND FORESTS 8-FOREST RESERVATIONS INDEMNITY AND LIEU LANDS. Under Act Cong. June 4, 1897, c. 2, 309. Stat. 36, providing that in cases in which a tract of land covered by an unperfected bona fide claim or by a patent is included within the limits of a public forest reservation the settler or owner may relinquish the tract to the government and select in lieu thereof a tract of vacant land open to settlement, 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, and, though deeds have been executed and filed, title does not pass until the transfer is accepted by that office. 3. COURTS 97(5)-FEDERAL DECISIONS AS AUTHORITIES IN STATE COURTS. The construction of a federal statute is for the federal courts, and the state court must follow the rule which they announce. 4. PUBLIC LANDS 121-CANCELLATION OF DEEDS NECESSARY PARTIES. Where school lands within a national forest reserve were purchased from the state in the name of dummy applicants, who immediately assigned their contracts to the party for whose benefit the applications were made in viola PUBLIC LANDS~121-CANCELLATION OF In a suit to cancel deeds to school lands, evi- Fraud is ordinarily established by circumstantial evidence. 11. CONSPIRACY 19-CIRCUMSTANTIAL EVI fit and in quantities not exceeding 320 acres to each person, there was such fraud as justified the cancellation of the deeds, though the state received the price at which the lands were held for sale, especially as the market value of the lands subsequently increased and the state land board raised the selling price; it being probable that, if sales had been made only to qualified purchasers in amounts not exceeding 320 acres to each purchaser, the bulk of the lands would have remained available for sale at the higher prices. 13. PUBLIC LANDS 121-CANCELLATION OF DEEDS-BONA FIDE PURCHASERS. In a suit to cancel deeds to school lands within a forest reserve which had been subsequently offered to the United States as a basis for lieu land selections, but which had not been accepted by the United States, it was immaterial whether purchasers of the land selected in lieu thereof were bona fide purchasers, as their title to the selected lands was dependent upon the title of the United States to the base lands and the United States had never acquired title to the base lands. 14. PUBLIC LANDS DEEDS EVIDENCE. 121-CANCELLATION OF In a suit to cancel deeds to school lands purchased from the state on applications of dummy applicants, evidence held to show that a party who financed the purchases and took deeds to secure money advanced by him was a party to the conspiracy and was not an innocent purchaser. 15. PUBLIC LANDS 121-PROCEEDINGS IN LAND OFFICE-JURISDICTION OF COUrts. Where deeds to school lands within a national forest reserve were obtained by fraud and the grantees or their successors executed deeds to the United States and filed them as the basis of Leu land selections, but the deeds had not been accepted by the land office, the pendency in such office of proceedings on charges against the validity of the selections of lieu lands did not prevent an action to cancel the deeds from the state, as, the United States having acquired no interest in the lands, the General Land Office had no control over them; its jurisdiction being confined to the public domain. 16. STATES 201 LACHES. ACTIONS BY STATES The doctrine of laches is applicable to the state. While it was a suspicious circumstance that 146 applications should be made within a few months to purchase state lands in a forest reserve and that deeds should issue shortly afterwards to a handful of nonresidents transferring many thousands of acres of such lands, where these matters apparently passed unnoticed by the state officials, laches was not imputable to the state in its failure to act for the cancellation of the deeds for fraud in the inception of the fraud, as notice must be more than would excite the suspicion of a cautious and wary per son. 18. PUBLIC LANDS 121-CANCELLATION OF DEEDS-LACHES. A delay of 15 years from 1898 to 1913 in bringing suit to set aside deeds to school lands based on fraudulent applications by dummy applicants held not such laches as barred the suit, where the fraud was not discovered until 1905 and the facts were not fully known until 1908, at which time the position of innocent defendants had become fixed, and the condition and value of the lands did not change appreciably and where the marshaling of the facts involved a vast amount of investigation and painstaking labor and the charges reflected on the integrity of a number of citizens of the state necessitating careful investigation before making such charges and taking action, especially where in clear and the fraud could not have been dis proved. 19. PUBLIC LANDS 121-SALE OF SCHOOL LANDS-FRAUD-RATIFICATION. It should not be assumed that the Legisla ture has ratified sales of school lands secured by gross fraud unless the language of the statute leads unmistakably to that conclusion. 20. PUBLIC LANDS_121-SALE OF SCHOOL LANDS-FRAUD-RATIFICATION. Sess. Laws 1899, p. 164, § 27, directed the state land board, which had been authorized to lend the school funds on farm mortgages, to foreclose all mortgages which were not adequate security and bid in the lands at its true cash value, but through mistake did not empower the board to sell land so purchased. Laws 1901, p. 304, authorized the board to bid in lands sold under foreclosure of mortgage given to secure a loan from the school fund, and provided that such lands should be held for sale and sold as opportunity might offer on the best terms obtainable, and that all sales of land theretofore made by the board were thereby ratified and confirmed, and whenever the full purchase price should have been paid title in fee simple should vest in the purchasers and their successors and assigns. Held, that this was passed to correct the error in the act of 1899 and related to purchases made by the state on the foreclosure of school fund mortgages and authorized sales thereof and confirmed sales theretofore made, and had no reference to sales of the state's grant lands and was not intended to confirm fraudulent purchases of such grant lands. 21. STATUTES 194, 205-CONSTRUCTION SUBJECT-MATTER. Language found in a statute is to be interpreted in the light of the subject-matter of the statute. General words will be restricted in their application, when the effect of a different interpretation would be to apply them to a subject foreign to that on which the Legislature 22. STATUTES was acting. 181 (1) CONSTRUCTION INTENTION. with the legislative intent. A statute is to be interpreted in accordance 23. PUBLIC LANDS DEEDS ACCOUNTING. 121-CANCELLATION OF The state, suing to cancel deeds to school lands relinquished to the United States as the basis of lieu land selections for fraud in procuring such deeds, cannot recover the lands and also have an accounting from the grantees for money secured by them through the attempted exchange of the lands. Appeal from Circuit Court, Crook County; T. E. J. Duffy, Judge. Action by the State against F. A. Hyde and others. From a judgment in favor of the State, the defendant named and various other defendants appeal. Modified. This is a suit brought to set aside deeds to upwards of 14,000 acres of land in Crook county which formerly belonged to the state of Oregon. The suit is based on an alleged conspiracy to which the defendants Hyde, Schneider, and others were parties, to secure these lands in fraud of the public policy of the state as defined by its statutes providing for the sale of its lands. Most of the defendants are joined as parties on the allegation that they assert some interest in the property adverse to the claim of the state. The second amended complaint on which the case was tried alleges that an act of 30 Stat. 36), contained the following provi- | though the laws of Oregon contemplate that sion: "That in cases in which a tract covered by an unperfected bona fide claim or by patent, is included within the limits of a public forest reservation the settler or owner thereof may, if he desires to do so, relinquish the tract to the government, and may select in lieu thereof a tract of vacant land open to settlement not exceeding in area the tract covered by his claim or patent; and no charge shall be made in such cases for making the entry of record or issuing the patent; provided further, that in cases of unperfected claims the requirements of the laws respecting settlement, residence, improvements, etc., are complied with on the new claims, credit being allowed for the time spent on the relinquished claims." its lands shall be sold only to residents of the state and in quantities not exceeding 320 acres to each person. Plaintiff charges that this result was brought about by direct purchase from the state, inasmuch as the applications were all made for Hyde's benefit and the lands were all paid for with Hyde's money. It is alleged that the titles were taken in the names of the defendants Hyde, Sherman, Schneider, Morris, Baldwin, and Clarke; that these parties executed and recorded deeds of relinquishment to the United States and thereupon undertook to select lands in lieu of those relinquished. It is It is alleged that shortly after the enact- alleged that the conspiracy resulted in the ment of this legislation the defendant Hyde acquisition by Hyde of about 47,000 acres of conceived the fraudulent purpose of acquir-land and the patenting to him and his asing the properties involved in this case, sociates of about 10,000 acres of selected which were then a part of the school lands lands in lieu of a like acreage relinquished. granted by Congress to the state of Oregon. It is averred that subsequent to November, Hyde's plan was alleged to be to procure 1902, adverse proceedings were instituted in a large number of applications to purchase the General Land Office against the remainthese lands; the purchasers assigning their contracts immediately, and Hyde securing thereby state deeds running to him or parties selected by him and acting with him. The statute for the disposition of state lands in force at that time was as follows: "When any person desires to purchase any of the lands of this state mentioned in section 3617, he shall file an application with the said board of commissioner(s), which application shall contain a precise description of the land applied for, according to the United States survey thereof, and be accompanied by the affidavit of the applicant, taken before some notary public or county clerk, to the effect that he is over eighteen years of age, and is a citizen of the United States, or has declared his intention to become such and a resident of this state, that he has not directly or indirectly made any previous purchase of land from this state, or any for him, which together with the land described in the application exceeds three hundred and twenty acres; that the proposed purchase is for his own benefit, and not for the purpose of speculation; that he has made no contract or agreement, express or implied, for the sale or disposition of the land applied for in case he is permitted to purchase the same, and that there is no valid adverse claim thereto by any actual settler." Hill's Code, § 3618. ing selections, that these proceedings are still pending, and that the General Land Office refuses to patent any of the remainder of the selected lands. The thirtieth paragraph of the second amended complaint is as follows: "That the United States of America has at all times and does now refuse to accept the deeds of defendants C. W. Clarke and F. A. Hyde for the lands hereinbefore first described, and has at all times and does now refuse to accept title to said lands for the reason that the said lands were fraudulently acquired from the state of Oregon, as hereinbefore alleged, and the said United States of America and the officers thereof having charge of the public lands in the United States have never at any time determined or decided that said F. A. Hyde and C. W. Clarke were the owners of the lands attempted to be conveyed by them to the United States and have never decided or determined that the said C. W. Clarke and F. A. Hyde ed in lieu of said lands herein before first deare entitled to the lands attempted to be selectscribed, and the said officers of the United States have for a long time and now do maintain and assert that the United States acquires no interest in the lands designated as base under the Act of June 4, 1897, until the Land Department has determined that the selector is the owner of the base land and is entitled to a patent to the lands selected in lieu thereof; that no such determination has ever been made as to the lands herein before first described or for the lands attempted to be selected in lieu thereof." Facts are alleged in great detail to excuse the delay in bringing suit. The scheme alleged in the second amended complaint contemplated the control by the defendant Hyde of the lands described therein and his conveyance of the same to the United States as a basis for the selection of lands equal in area on the public domain. The steps taken in pursuance of this scheme are alleged with particularity in the second amended complaint. Plaintiff sufficiently avers that the applications so secured were made on behalf of Hyde and for his benefit; that the affidavits made by the applicants were false in so far as they alleged that affiants were purchasing for their own benefit The defendants, other than those charged and that they had made no contract, ex- with the conspiracy, are alleged to claim an press or implied, for the disposition of the interest in the base lands grounded on conproperty; that the result was the acquisition | veyance of the selected lands made to them by a nonresident of the state of many thou- by Hyde and Clarke. It is averred that these It may be said parenthetically that, in the administration of the act of 1897 above quoted, a nomenclature has come into use under which the state lands surrendered are called base lands and the properties claimed in lieu thereof are known as selected lands. rights of the state. It is charged that the lands are unoccupied and that Hyde is insolvent. Plaintiff prays for a decree adjudging that it is owner of the property described, quieting its title as against the several defendants and canceling the state deeds issued for the property in question. In case this relief is denied in whole or in part, plaintiff prays that it may be adjudged to be the owner of the equitable title to the selected lands, that the defendants may be charged as trustees for plaintiff in any interest held by them in said selected lands, and finally that the defendant Hyde be required to account to plaintiff for all moneys received by him from lands sold in lieu of the lands of the state of Oregon surrendered by him. Attached to the second amended complaint is an exhibit showing the particulars as to each piece of land conveyed by the state, its various transfers, and the date of its relinquishment to the United States; also, the date of the selection made in lieu of it. A large majority of these selections were made in the years 1899 and 1900, quite a number in 1901, a very few as late as 1904, and one in 1910. The defendants E. A. Hyde, Western Lumber Company, Willamette Pulp & Paper Company, Martin Barrett, Cedar Sheep Association, Mrs. Theodore Hampe, Riverside Land & Livestock Company, Rock Springs Land & Cattle Company, and Alger Logging Company demurred to the complaint. The demurrers were based in part on an alleged defect of parties in that the United States was not joined as a party defendant. The demurrers were overruled, and thereupon these defendants answered. The defendants C. W. Clarke Company, Anaconda Copper Mining Company, O. S. Lewis, and Henry Hewitt, Jr., also answered. All of these answers deny the allegations above quoted making up the thirtieth paragraph of the second amended complaint and all other allegations to the effect that title to the base lands had not vested in the United States; all answering defendants alleged affirmatively that the United States is the owner of the base lands and is a necessary party defendant. All of the answering defendants except Hyde and C. W. Clarke Company alleged the conveyance to them respectively of specified portions of the selected lands in consideration of moneys paid by them without notice of any fraud or irregularity. The defendant C. W. Clarke Company ålleged indebtedness due it from the defendant Hyde and from one John A. Benson and the transfer to it of sundry selected lands to secure these debts; this defendant alleged that it had made its advances and received its conveyances in ignorance of any of the matters alleged by plaintiff. The answers all allege that plaintiff knew at all times subsequent to the exe erence to the applications to purchase. It is alleged that the defendants have been at expense in the care of the selected lands and the payment of taxes thereon. It is also alleged that much of the evidentiary matter on which the defendants were dependent was destroyed in the San Francisco fire of April, 1906, and that sundry material witnesses have died. The state is charged with laches in bringing this suit. It is also affirmatively alleged in these answers that the applications to surrender and select are still pending before the General Land Office and that its jurisdiction to act in the premises is exclu sive. All of the defendants deny the allegations of fraud in applying to purchase the state lands and the allegations of conspiracy to acquire these lands unlawfully. It is not alleged by any defendant that the lands claimed by him have been patented by the United States either to him or to his predecessors in interest. The defendants Philomen Clarke, Flora M. Sherman, Joost H. Schneider, F. A. Hyde & Co., A. S. Baldwin, and Emma C. Baldwin filed disclaimers. Plaintiff's replies joined issue on the affirmative allegations in the respective answers. Supplemental pleadings admit that since this suit was brought the General Land Office has entered adverse proceedings against certain selections of lieu land based on the relinquishment of Oregon forest reserves. The case was tried out and a decree was passed by the lower court adjudging that plaintiff is the owner of the land in question, setting aside the state deeds executed therefor, directing the several defendants to execute conveyances to plaintiff of the properties claimed by them, and awarding plaintiff a judgment against the defendant Hyde in the sum of $17,689.74. The defendants Hyde, Hewitt, Barrett, Lewis, Hampe, C. W. Clarke Company. Rock Springs Land & Cattle Company, Western Lumber Company, Riverside Land & Livestock Company, Willamette Pulp & Paper Company. Alger Logging Company, Anaconda Copper Mining Company, and Cedar Sheep Association appeal. A. C. Shaw, of Portland, W. M. Bickford and E. E. Hershey, both of Missoula, Mont., Portland (Griffith, Leiter & Allen, of Portland, on the brief), for appellants. Geo. M. and R. A. Leiter and Harrison Allen, both of Brown, Atty. Gen., and J. O. Bailey, Asst. Atty. Gen., for the State. MCCAMANT, J. (after stating the facts as above). [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 re |