Court Opinion

ID: 6861723
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:49:29.624933+00
Date Added: 2024-06-11T16:05:15.434591
License: Public Domain

LEWIS, Circuit Judge
(dissenting).
I suggest a question of jurisdiction, and am inclined to the belief that power in this court to review the Board’s order does not exist. We have this anomalous procedure: The Superintendent of the Five Civilized Tribes filed a petition for review. He is an officer in the Interior Department. Counsel who represent him were employed by the Interior Department. Respondent, Commissioner of Internal Revenue, is also an officer in an executive department of the government, and he is represented by counsel in that department. Petitioner contends that Sandy Fox, an Indian whom he professes to represent, and his property are not subject to an income tax, and respondent contends to the contrary. Is this a case or controversy over which this court has jurisdiction? In Old Colony Trust Co. v. Com’r of Int. Rev., 279 U. S. 716, 49 S. Ct. 499, 502, 73 L. Ed. 918, the court in construing the act conferring jurisdiction on Circuit Courts of Appeal to review the orders of the Board of Tax Appeals quoted with approval this from the opinion of Mr. Justice Field in Re Pacific Railway Comm. (C. C.) 32 F. 241, 255:
“The judicial article of the Constitution [article 3] mentions cases and controversies.. * * * The term [case] implies *187the existence of present or possible adverse parties whose contentions are submitted to the court for adjudication.”
The Chief Justice then said:
“The Circuit Court of Appeals is a constitutional court under the definition of such courts as given in the Bakelite Case [279 U. S. 438, 49 S. Ct. 411, 73 L. Ed. 789], supra, and a case or controversy may come before it, provided it involves neither advisory nor executive action by it.
“In the case we have here, there are adverse parties. The United States or its authorized official asserts its right to the payment by a taxpayer of a tax due from him to the government, and the taxpayer is resisting that payment or is seeking to recover what he has already paid as taxes when by law they were not properly due. That makes a case or controversy, and the proper disposition of it is the exercise of judicial power.”
So the question arises whether the parties are adversaries in a case or controversy within our jurisdiction, or whether being officers of the United States government they are only seeking advisory instructions.
But on the merits I disagree with the conclusion reached by my associates. The Act of May 27, 1908 (35 Stat. 312) applies to the Five Civilized Tribes. We held in Bagby v. United States, 60 F.(2d) 80, and in Pitman v. Com’r of Int. Rev., 64 F.(2d) 740, that under the facts in each of those cases said act removed the restrictions from the allotments there under consideration, that such removal rendered each of said allotments subject to taxation, and that the rentals or royalties from said allotments were income subject to federal income tax. We further held in Chouteau v. Com’r of Int. Rev., 38 F.(2d) 976, that a certificate of competency issued to and held by Chouteau under section 2 of the Act of June 28, 1906 (34 Stat. 539) removed the restrictions from his allotment and perforce thereof from his income therefrom and rendered said income subject to federal taxation ; that said certificate exempted Chouteau and his property from federal supervision, excepting his homestead; that it gave him full power to use and dispose of his property according to his own judgment and thus there was imposed on him and he assumed the same burden as other individual property owners. The Supreme Court affirmed our judgment in the Chouteau Case. Choteau v. Burnet, 283 U. S. 691, 51 S. Ct. 598, 75 L. Ed. 1353. It may also be conceded that Congress may confer on the Secretary of the Interior, or other officials, power to remove from the lands of an Indian exemption from taxation, and when so removed from such lands or other property it becomes subject to taxation by state and nation. Action removing the exemption by either method expresses a clear intention by Congress to render the Indian’s property subject to taxation. There could be no other intention.
Sandy Fox, the taxpayer, is a full-blood Creek Indian enrolled as a member of that tribe under a given number. It was stipulated that he and his property, both real and personal, are restricted, and that his property is under the direct supervision of the Superintendent of the Five Civilized Tribes subject to the direction of the Secretary of the Interior; that income from his allotment is so received and held; that interest on such income when invested is likewise-received and held in trust as a part of his restricted funds and property. There has been no removal of restrictions as to him or his property. Nevertheless the Board held said income to be taxable. I think the Board erred. We held to the contrary in Mary Blackbird v. Com’r of Int. Rev., 38 F.(2d) 976. I can add nothing to what we said in her case. She was a full blood member of the Osage tribe. Her property from which income was received was restricted, and she did not have a certificate of competency. Like Fox, she was a ward of the government of the United States, and, like him, she had no other guardian. We held she was not subject to the tax. I can see no material difference between her and her property on the one hand and Fox and his property on the other as to the point here involved. Not only does the majority opinion overrule the Mary Blackbird Case, it also disregards the wholesome doctrine of stare decisis.
It is the duty of a trustee to invest funds in his hands. 1 Perry on Trusts (5th Ed.) § 452. Interest received by him should be added to the trust estate. United States v. Brown (C. C. A.) 8 F.(2d) 567.
It is true that the rights and duties of citizenship were conferred on Fox by section 6 of the Act of February 8, 1887 (24 Stat. 388), as amended by the Act of March 3, 1901 (31 Stat. 1447) ; but it was appropriately said by the Eighth Circuit in United States v. Gray (C. C. A.) 201 F. 291, 293:
“The civil and political status of the Indians does not condition the power of the *188government to protect their property or to instruct them. Their admission to citizenship does not deprive the United States of its power, nor relieve it of its duty, to control their property, to protect their rights to it from the rapacity and faithlessness of the members of the superior race, to discharge faithfully its legal and moral obligations to them, and to execute every trust with which it is charged for their benefit.”
See, also, National Bank of Commerce v. Anderson (C. C. A.) 147 F. 87, 90.