Source: https://supreme.justia.com/cases/federal/us/318/705/
Timestamp: 2019-04-19 18:43:47+00:00

Document:
1. Lands theretofore purchased with restricted funds derived from an oil and gas lease of restricted allotted lands of a Creek Indian held, under the Act of June 20, 1936, immune from tax by Oklahoma for the year 1937 where, on the assessment date, the Indian owned a life estate in such lands subject to restrictions against alienation except with the approval of the Secretary of the Interior. P. 318 U. S. 709.
(a) The tax immunity granted by the Act of June 20, 1936, was not limited to lands purchased for landless Indians. P. 318 U. S. 710.
(b) An Indian has "title" within the meaning of the Act if his interest in the property is such that, but for the Act, he would be subjected to the tax. P. 318 U. S. 711.
to valid restrictions against alienation except with the approval of the Secretary of the Interior, held, under the Act of My 19, 1937, immune from tax by Oklahoma where, prior to the assessment date, the lands have been properly designated by such grantees as homestead lands. P. 318 U. S. 712.
(a) The tax immunity granted by the Act of May 19, 1937, does not extend only to land purchased for landless Indians. P. 318 U. S. 712.
(b) The tax exemption granted by the 1937 Act is not personal to the Indian whose restricted funds were used to purchase the land; nor does it extend to the land in the hands of the Creek Indian grantees only until 1956. P. 318 U. S. 712.
(c) It is immaterial that the Creek Indian grantees in this case are citizen of the United States. P. 318 U. S. 718.
3. The Act of June 20, 1936, and the Act of May 19, 1937, as here applied, are constitutional. P. 318 U. S. 715.
4. The grant of citizenship is not inconsistent with the status of Indians as wards whose property is subject to the plenary control of the federal government. P. 318 U. S. 718.
5. Creek Indians of the half blood or more, though they be unenrolled, are tribal Indians subject to federal control. P. 318 U. S. 718.
Certiorari 317 U.S. 622, to review the affirmance in part of a judgment, 38 F.Supp. 731, allowing recovery of taxes paid upon lands claimed to be tax exempt under federal statutes.
This petition for certiorari presents the questions whether certain lands held by respondent Indians, subject to restrictions against alienation and encumbrance without the approval of the Secretary of the Interior, were exempt from Oklahoma real estate taxes for the year 1937 by virtue of the Act of June 20, 1936, 49 Stat. 1542; [Footnote 1] whether a portion of those lands were exempt for subsequent years by virtue of the Act of 1936 as amended by the Act of May 19, 1937, 50 Stat. 188; [Footnote 2] and whether the Acts of 1936 and 1937, so applied, are constitutional.
land. She was given title subject to a condition against alienation or encumbrance without approval of the Secretary prior to April 26, 1931. [Footnote 3] Before that date, with the approval of the Secretary, she reserved a life estate and conveyed the fee to her children, full-blood but unenrolled Creeks and respondents here, subject to a like condition against alienation or encumbrance without the approval of the Secretary with the exception that the restriction had no definite time limitation. On December 10, 1937, Wosey John Deere conveyed her life estate to respondents so that they became full owners subject to a restriction against alienation or encumbrance without the approval of the Secretary. Both conveyances were in consideration of love and affection. Thereafter, on December 16, 1937, respondents designated the two rural tracts, totaling eighty-seven and one-half acres, as a tax exempt homestead under the provisions of the Act of May 19, 1937, and the Secretary approved this designation on March 24, 1938.
taxes for the years 1936, 1937, 1938, and part of 1939. On July 26, 1940, they filed this action in federal district court for the recovery of the 1936 and 1937 taxes paid on all three tracts, for the recovery of the 1938 and 1939 taxes paid on the two rural tracts designated as homestead lands, and for a declaration that the homestead lands were tax exempt. The district court gave judgment as prayed. 38 F.Supp. 731. The Circuit Court of Appeals affirmed for the most part but reversed with respect to the 1936 taxes on the ground that liability for them became fixed on the assessment date, January 1, 1936, before the enactment of the Act of June 20, 1936. Interest on the taxes paid was also disallowed. 130 F.2d 663. The importance of the case in the administration of Indian affairs and its impact upon state finances caused us to grant the County's petition for certiorari. Respondents have not cross-petitioned for review of the adverse decision on the 1936 taxes and the allowance of interest so it is unnecessary to consider those questions.
tenant, she was obligated to pay the taxes under Oklahoma law. 60 Okl.Stat.Ann. § 69; Helm v. Belvin, 107 Okl. 214, 232 P. 382; Riley v. Collier, 111 Okl. 130, 238 P. 491; Waldon v. Baker, 184 Okl. 492, 495, 88 P.2d 352. Since the 1936 Act was concerned with a tax exemption, the proper test of whether an Indian purchaser had "title" within the meaning of the Act must be whether he had retained such a property interest that, but for the Act, he would be subjected to the tax. Here, Wosey John Deere retained such a title, and the three tracts were clearly within the 1936 Act even accepting petitioners' construction.
"All homesteads, heretofore purchased out of the trust or restricted funds of individual Indians . . . shall be nontaxable until otherwise directed by Congress: Provided, That the title to such homesteads shall be held subject to restrictions. . . ."
governing the tax status of restricted allotted lands of the Creeks. [Footnote 13] The Act does not say, however, and there is not a word to suggest that, upon transfer of the lands to Indian heirs or grantees, subject to restrictions, the exemption is either to terminate or else extend only until 1956. If Congress had intended either result, it could easily have expressed those purposes. It did neither, but provided instead that the lands, while restricted, were to remain nontaxable until it directed otherwise. In the absence of explicit Congressional direction, we do not think we should hold the exemption personal or attempt to derive an applicable principle from the complicated and admittedly ambiguous statutes governing the tax status of restricted allotted Creek lands. Respondents received the land, which they have designated as a homestead, subject to restrictions of indefinite duration which the Secretary of the Interior had authority to impose. [Footnote 14] It seems only fair, as the clear words of the 1937 Act provide, that the tax exemption should follow the restrictions and continue so long as they do, unless Congress meanwhile provides to the contrary. Even if the 1937 Act were ambiguous, we think this interpretation should be taken. Cf. United States v. Reily, 290 U. S. 33, 290 U. S. 39.
but a personal exemption or else allows the exemption only until 1956. While the question need not be decided, it is appropriate to notice that the purpose of the 1936 Act makes it at least doubtful whether that Act afforded only a personal exemption. Assuming, however, that it did, there is nothing to indicate that the 1937 Act, contrary to its terms, incorporated the same limitation. The applicable committee report sheds no light one way or another. [Footnote 16] There is no inconsistency between the object of the 1937 Act to limit the sweeping exemption of all lands, granted by the 1936 Act, to homestead lands, and a purpose to enlarge the exemption accorded to the relatively small amount of homestead lands so that it would apply to restricted homesteads passing to Indian heirs or grantees. The fact that extensive changes in language were made in the 1937 Act is persuasive, moreover, that a change in sense from the presumed personal exemption of the 1936 Act was intended. If the only object of the 1937 Act was to limit the application of the 1936 Act (with its assumed personal exemption) to homesteads, that purpose could have been accomplished simply by substituting the word "homesteads" for the word "lands." We cannot accept the view that the substantial changes in language were only matters of style. Furthermore, it has not been suggested that respondents, as takers from the original purchaser, were incompetent to designate the lands as a homestead under the 1937 Act. If they could do that, as we and apparently the Secretary of the Interior think they could, [Footnote 17] it would seem to follow that, having properly designated their homestead under the Act, they are entitled to the tax exemption afforded restricted homesteads by the Act until Congress otherwise directs.
"From their [the Indians'] very weakness and helplessness, so largely due to the course of dealing of the federal government with them, and the treaties in which it has been promised, there arises the duty of protection, and with it, the power. This has always been recognized by the executive, and by Congress, and by this Court, whenever the question has arisen."
"The power of the general government over these remnants of a race once powerful, now weak and diminished in numbers, is necessary to their protection. . . . It must exist in that government, because it never has existed anywhere else; because the theater of its exercise is within the geographical limits of the United States; because it has never been denied, and because it alone can enforce its laws on all the tribes. "
"In a broad sense, all lands which the Indians are permitted to purchase out of the taxable lands of the state in this process of their emancipation and assumption of the responsibility of citizenship, whether restricted or not, may be said to be instrumentalities in that process."
"instrumentalities which, though Congress may protect them from state taxation, will nevertheless be subject to that taxation unless Congress speaks."
Shaw v. Gibson-Zahniser Oil Corp., 276 U. S. 575, 276 U. S. 580-581.
Indians subject to federal control. [Footnote 25] Respondents fall in this class.
"All lands the title to which is now held by an Indian subject to restrictions against alienation or encumbrance except with the consent or approval of the Secretary of the Interior, heretofore purchased out of trust or restricted funds of said Indian, are hereby declared to be instrumentalities of the Federal Government, and shall be nontaxable until otherwise directed by Congress."
"All homesteads, heretofore purchased out of the trust or restricted funds of individual Indians, are hereby declared to be instrumentalities of the Federal Government, and shall be nontaxable until otherwise directed by Congress: Provided, That the title to such homesteads shall be held subject to restrictions against alienation or encumbrance except with the approval of the Secretary of the Interior: And provided further, That the Indian owner or owners shall select, with the approval of the Secretary of the Interior, either the agricultural and grazing lands, not exceeding a total of one hundred and sixty acres, or the village, town, or city property, not exceeding in cost $5,000, to be designated as a homestead."
In Sunderland v. United States, 266 U. S. 226, it was held that the Secretary of the Interior had power to impose such a restriction against alienation or encumbrance with respect to lands purchased for Indians of the Five Civilized Tribes (of which the Creeks are one) with the proceeds from sales of their restricted allotted lands. We think it clear that he also has authority to impose such restrictions upon lands purchased with restricted funds from leases of restricted allotted lands (see Shaw v. Gibson-Zahniser Oil Corp., 276 U. S. 575, and United States v. Brown, 8 F.2d 564, at 568), and to make those restrictions run with the lands in the hands of Indian grantees. Cf. Drummond v. United States, 34 F.2d 755, 758, 759; United States v. Goldfeder, 112 F.2d 615.
See Shaw v. Oil Corp., 276 U. S. 575.
Under Oklahoma law, the taxable status of property in Oklahoma is fixed as of the assessment date, January 1, in each year although taxes are levied as of July 1. See Board of Commissioners of Comanche County v. Central Baptist Church, 136 Okl. 99, 276 P. 726; In re Sinclair Prairie Oil Co., 175 Okl. 289, 53 P.2d 221; In re Assessment Champlin Refining Co., 186 Okl. 625, 99 P.2d 880. For the purposes of this case, we assume without deciding that the status of the property on the assessment date is determinative.
"Formerly the Congress authorized the Secretary of the Interior to buy land for landless Indians. The Secretary proceeded to buy the lands and assigned the Indians to reside upon such lands. The recommendation or assertion was made to the Indians that the land would be theirs and they would have no taxes to pay. . . . In some cases, tax warrants have been issued and the Indians have been threatened with dispossession. The Department believes that, in order to keep faith with the Indians, the tax warrants and tax assessments should be paid, and the title to the lands cleared. The bill authorizes the appropriation of money for that purpose."
"Section 2 provides that the lands so secured shall hereafter be nontaxable."
The Meriam Report to the Secretary of the Interior on the Problem of Indian Administration (Brookings Institute, 1928), pp. 795-798, pointed out that allotments were often unsuitable for homes, that other lands had to be purchased, and that, while restricted allotted lands and the trust proceeds thereof had been held immune from state taxation, the tax status of property purchased with trust funds from sale or lease of allotted lands was in doubt. Legislation conferring tax exemption was recommended to protect the Indians against inability to pay or their insufficient sense of public responsibility, and to keep faith, since officials of the federal government had expressly or impliedly represented that lands so purchased were tax exempt. The House and Senate reports show that this was the problem at which the 1936 Act was aimed. H.Rep. 2398, S.Rep. 2168, 74th Cong., 2d Sess. See also Cohen, Handbook of Federal Indian Law (1942) pp. 260-61.
The Acting Attorney General and the Solicitor of the Department of the Interior both ruled that the 1936 Act applied to lands purchased from the restricted funds of individual Osage Indians who were not landless. 38 Op.A.G. 577; 56 I.D. 48.
"It will be observed from the language of section 2 . . . that it applies to all lands purchased by restricted Indian funds, and the Attorney General so held."
H.Rep. 562, 75th Cong., 1st Sess. (emphasis supplied). The Senate substituted for the repealer an amendment limiting § 2 to homestead lands, which became the 1937 Act, but the Senate committee report also makes it clear that the 1936 Act covered all restricted Indian lands purchased out of restricted funds. S.Rep. 332, 75th Cong., 1st Sess.
The Secretary did not approve the designation until March 24, 1938, but we think this approval related back to the date of designation.
See Act of June 30, 1902, 32 Stat. 500, 503; Act of April 26, 1906, § 19, 34 Stat. 137, 144; Act of May 27, 1908, §§ 4, 9, 35 Stat. 312, 313, 315; Act of April 12, 1926, 44 Stat. 239; Act of May 10, 1928, 45 Stat. 495; Act of May 24, 1928, 45 Stat. 733; Act of March 2, 1931, 46 Stat. 1471, as amended by Act of June 30, 1932, 47 Stat. 474; Act of January 27, 1933, 47 Stat. 777.
See H.Rep. 562, S.Rep. 332, 75th Cong., 1st Sess.
S.Rep. 332, 75th Cong., 1st Sess.
The Secretary approved respondents' designation. See Note 12 ante.
See United States v. Kagama, supra; Choctaw Nation v. United States, 119 U. S. 1, 119 U. S. 27; Stephens v. Cherokee Nation, 174 U. S. 445, 174 U. S. 486; Lone Wolf v. Hitchcock, 187 U. S. 553, 187 U. S. 566-568; Tiger v. Western Investment Co., 221 U. S. 286, 221 U. S. 310-317; United States v. Sandoval, 231 U. S. 28, 231 U. S. 45-47; Brader v. James, 246 U. S. 88, 246 U. S. 96; Sunderland v. United States, 266 U. S. 226, 266 U. S. 233-234; United States v. Ramsey, 271 U. S. 467, 271 U. S. 469-471; United States v. McGowan, 302 U. S. 535, 302 U. S. 538-539; Board of Comm'rs v. United States, 308 U. S. 343, 308 U. S. 349.
Wosey John Deere received her allotment under an agreement negotiated with the Creeks by the Dawes Commission and incorporated into the Act of March 1, 1901, 31 Stat. 861, as amended by the supplemental agreement of June 30, 1902, 32 Stat. 500. See also § 19 of the Act of April 26, 1906, 34 Stat. 137, 144; Act of May 27, 1908, 35 Stat. 312, and Act of May 10, 1928, 45 Stat. 495.
Allotments in severalty were halted by the Wheeler-Howard Act of June 18, 1934, 48 Stat. 984, and by the Oklahoma Welfare Act of June 26, 1936, 49 Stat. 1967. These and other recent statutes reflect a change in policy, the theory of which is that Indians can better meet the problems of modern life through corporate, group, or tribal action, rather than as assimilated individuals.
The land involved in the Rickert case was a trust allotment, rather than a restricted fee. The power of Congress over both types of allotments, however, is the same. See United States v. Ramsey, 271 U. S. 467, 271 U. S. 471.
See H.Rep. 2398, S.Rep. 2168, 74th Cong., 2d Sess. See also the Meriam Report to the Secretary of the Interior on the Problem of Indian Administration (Brookings Institute, 1928), pp. 795-98.
The Act of March 1, 1901, 31 Stat. 861, and the supplemental agreement of June 30, 1902, 32 Stat. 500, provided for the dissolution of the Creek Tribe on March 4, 1906, but this provision was revoked by the joint resolution of March 2, 1906, 34 Stat. 822, and § 28 of the Act of April 26, 1906, 34 Stat. 137, 148.
Section 2 of the Act of April 26, 1906, 34 Stat. 137.
See Act of January 27, 1933, 47 Stat. 777; Act of Feb. 11, 1936, 49 Stat. 1135; Act of June 26, 1936, 49 Stat. 1967; Act of December 24, 1942, c. 813, 56 Stat. 1080.
I concur in the result and also in the opinion, except as it relates to the taxes for 1938 and thereafter, levied and collected under the 1937 Act. I agree that the exemption extended for these years to Wosey John Deere's grantees, but for different reasons and with the limitation, which I think should be stated, that, under presently effective legislation, the exemption extends only to 1956.
therefore, no evidence of purpose to enlarge the protected class at the same time the amount of land exempted was being reduced. Nor is mere absence of language expressly limiting the exemption to a class defined in the Act a sufficient basis for implying an intent to enlarge the protected class. Nullifying the power of a state to tax land within its borders held by or for private individuals is too important and delicate a matter to hang on such an implication. In my opinion, therefore, the sole purpose and effect of the 1937 Act was to reduce the quantity of land for which exemption could be claimed. Consequently, if grantees were within the benefit, it was because they were so by virtue of the 1936 Act.
intended to create new classes of beneficiaries or new kinds of exemptions, whether in duration or otherwise. There was a preexisting and defined general policy in both respects, no problem of either sort was presented by the situation the Act was intended to cure, and the sole purpose, in my opinion, was to make sure the preexisting exemptions would extend to the lands specified in the Act. Accordingly, whether grantees were exempted, and, if so, for how long, is to be determined not by implication or construction from the terms of the 1936 Act alone, but by reference to the law as it existed in respect of grantees of original allottees prior to 1936.
There is no need to go back of 1928 except to say that, for our purposes, the effect of prior legislation was that grantees of original allottees were not within the existing tax exemptions, [Footnote 2/3] which were, for the most part, to expire at the latest in 1931. [Footnote 2/4] In some instances, restrictions extended to lands held by heirs of allottees, but for the limited period. [Footnote 2/5] In 1928, Congress extended existing restrictions on some lands -- both allotted and inherited -- to 1956, but at the same time removed existing restrictions on others. 45 Stat. 495. The existing tax exemption was cut down in scope to one hundred sixty acres of each Indian's holding, but was also extended more clearly to cover the land in the hands of "any full blood Indian heir or devisee," though not beyond 1956. 45 Stat. 495, as amended by 45 Stat. 733, 734.
Provided, That where the entire interest in any tract of restricted and tax exempt land belonging to members of the Five Civilized Tribes is acquired by inheritance, devise, gift, or purchase, with restricted funds, by or for restricted Indians, such lands shall remain restricted and tax exempt during the life of and as long as held by such restricted Indians, but not longer than April 26, 1956 . . . : Provided further, That such restricted and tax exempt land held by anyone, acquired as herein provided, shall not exceed one hundred and sixty acres.
of Wosey John Deere's grantees may be doubted. [Footnote 2/7] But, whether or not the statute applies specifically to this case, it shows the latest phase of Congressional policy, prior to 1936, as to the kind of exemption given to members of the Creek Nation and the persons entitled to its benefit.
In this background the 1936 Act was adopted. In my opinion, it incorporated the previously existing exemption, as it related to duration and grantees, but extended it to "all lands", rather than merely the homestead. The 1937 Act returned to the homestead limit, but without change in other respects. In my view, therefore and for these reasons, the grantees of Wosey John Deere were entitled to the benefit of the exemption, but unless it is extended further by Congress, only to 1956.
See H.R. Rep. No. 562, 75th Cong., 1st Sess.; S.Rep. No. 332, 75th Cong., 1st Sess.
See H.R. Rep. No. 2398, 74th Cong., 2d Sess.; S.Rep. No. 2168, 74th Cong., 2d Sess. See also 80 Cong.Rec. 9159 and Meriam Report to the Secretary of the Interior on the Problem of Indian Administration (Brookings Institute, 1928), 795-798.
Cf. Act of June 30, 1902, c. 1323, § 16, 32 Stat. 500, 503; Act of April 26, 1906, c. 1876, § 19, 34 Stat. 137, 144; Act of May 27, 1908, c.199, §§ 4, 9, 35 Stat. 312, 313, 315; Act of April 12, 1926, c. 115, 44 Stat. 239.
34 Stat. 144; 35 Stat. 315; 44 Stat. 239.
See 35 Stat. 315; 44 Stat. 239.
See H.R. Rep. No. 1015, 72d Cong., 1st Sess.; S.Rep. No. 873, 77d Cong., 1st Sess.; see also 75 Cong.Rec. 8163, 8170.
They are homestead lands. They were bought with her restricted funds. She, if anyone, was a "restricted Indian," though that term is new in this Act and unclear. She acquired the lands by purchase. Her children took them by deed, whether by gift or by "purchase" is not material. They, too, were "restricted Indians," if she was. At any rate, they were full blood. All these things would fit the statute to the present case. On the other hand, the tax exemption in the proviso apparently extends only to newly acquired lands which prior to their acquisition were tax exempt and restricted. See 75 Cong.Rec. 8170. Nothing in the record indicates that the lands here involved were either tax exempt or restricted when Wosey John Deere purchased them. However, the precise significance of the apparent requirement that the lands shall have been tax exempt before they were acquired is obscured by the context of the proviso in a statute addressed primarily to the problem of restricting funds (in the hands of the Secretary) obtained largely from the sale of interests in restricted lands.

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