Central Nat. Bank of Tulsa, Okl. v. United States

• Decision Date: 11 September 1922
• Docket Number: 5626.
• Citation: 283 F. 368
• Parties: CENTRAL NAT. BANK OF TULSA, OKL., v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

283 F. 368

CENTRAL NAT. BANK OF TULSA, OKL., v. UNITED STATES.

No. 5626.

United States Court of Appeals, Eighth Circuit.

September 11, 1922

Preston C. West and A. A. Davidson, both of Tulsa, Okl. (Roger S Sherman and Grey Moore, both of Tulsa, Okl., on the brief) for plaintiff in error.

L. K Pounders, Sp. Asst. U.S. Atty., of Bristow, Okl. (C. W Miller, U.S. Atty., of Muskogee, Okl., on the brief), for the United States.

Before HOOK, Circuit Judge, and COTTERAL and JOHNSON, District Judges.

COTTERAL District Judge.

This action was brought by the United States to recover of the Central National Bank, of Tulsa, Okl., the amount of a check of J. E. Crosbie and C. J. Wrightsman, for $18,150, which was certified by that bank. The petition alleges that on February 27, 1914, R. P. Brewer, guardian of Albert Carney, a full-blood Choctaw Indian minor, executed an oil and gas lease upon a portion of his restricted allotment in Carter county, Okl., in favor of Crosbie and Wrightsman, for an agreed consideration (or bonus) of $18,150; that the lease, which was signed by the parties, was approved by the county court of Carter county, and on April 20, 1914, was approved by the Secretary of the Interior; that the said check for the bonus was delivered to the guardian, and assigned respectively to the cashier and disbursing agent of the government at Muskogee, Okl.; that payment of the check was refused on April 24, 1914, and July 5, 1918, and, it was protested, and remains unpaid. The check contains this indorsement:

'This check not to be negotiated until after the approval of this lease by the Secretary of the Interior, which approval must be within 60 days from the date hereof, and if not so approved this check to be returned to the Central National Bank, Tulsa, Okl.' A copy of the lease was exhibited, from which it appears that the premises were let for a period of 10 years, upon a consideration of $1 and the payment of royalties, and subject to various regulations. The defendant moved to dismiss the petition on the grounds that it fails to state facts sufficient for relief, or to show jurisdiction of the court, or an interest of the plaintiff in the subject matter of the action. The motion was overruled and exception saved.

The bank answered, denying plaintiff's ownership of the check or legal capacity to sue upon it, and alleged that the check was deposited with the First National Bank at McAlester, Okl., as a stakeholder and by way of escrow, for delivery only in compliance with an agreement between the makers and payee, and had been negotiated and delivered in violation thereof, and was without consideration to the makers. It was further alleged in the answer that the agreement was the makers were to pay the bonus after approval of the lease by the Secretary of the Interior within 60 days; that the check was deposited with the McAlester bank for negotiation and delivery or return to the defendant, as specified by the indorsement; that the lease was filed at the Union Agency at Muskogee, and shortly thereafter, and before March 21, 1914, and before such approval, the check was delivered by that bank to the guardian, and transferred by him without the consent of the makers and the defendant; that on March 21, 1914, the United States Indian superintendent demanded of the makers the payment of the check as a condition to favorable action upon the lease, and at the same time notified them that, before it was filed, another lease had been filed from another guardian of the allottee in favor of Jake L. Hamon; that it was not probable action could be had upon their lease within 60 days, owing to necessary investigation to determine the conflict, and demanded to be informed at once whether they intended to compel performance of their agreement with the guardian, or would extend the time for approval of the lease and pay the check at his office. It was also alleged in the answer that, Crosbie and Wrightsman being unwilling to abandon or modify their agreement and believing their rights would not be settled without litigation, that it would extend the time of approval beyond 60 days, and would probably result adversely to them, and that the check had been negotiated in violation of the contract, withdrew their application to have the lease approved and all claims to the land, or to the contest with Hamon, so notified the superintendent, and demanded a return of the check; that the Hamon lease had priority in filing and approval, but that their lease was forwarded to the Secretary of the Interior with recommendation for approval, without notice to them; that they never accepted the lease, took possession of the land, paid any rentals, or claimed any rights under the lease. A former tender of the fund in court was formally withdrawn.

The trial was to a jury. Evidence was introduced on both sides, and at the close the court sustained a motion to direct a verdict in favor of the plaintiff. Thereupon judgment was rendered against the defendant for the amount of the check, with interest. The assignments urged for reversal are, in substance, that the trial court erred in holding that the government was entitled to maintain the action, admitting and excluding evidence, and ruling against the defense that the lessees withdrew their application for the lease before action was had thereon by the Secretary of the Interior, with the acquiescence of the Indian Superintendent. It will suffice, for the purposes of our decision, to condense the evidence, and specially refer only to the rulings upon the correspondence between the superintendent and the lessees.

R. P. Brewer, the guardian, testified that he received by mail the certified check, together with a telegram from the defendant, dated February 25, 1914, addressed to him as cashier of the First National Bank, of McAlester, Okl., and that he indorsed and sent the check to W. M. Baker, the cashier of the Union Indian Agency. The telegram was as follows:

'Crosbie and Wrightsman are forwarding through us certified check in favor of R. P. Brewer, guardian of Albert Carney, for eighteen thousand one hundred fifty dollars to be paid in cash to you on approval by Secretary of Interior of oil and gas lease covering thirty acres. Said lease must be approved within sixty days from date.'

Mr. Baker testified that he handled bonuses for leases of full-blood Indians when paid to his office, and credited and disbursed them in favor of the Indians; that demand was made for the payment of this check within the 60-day period at the instance of the Indian superintendent at Muskogee, and at the time he delivered a copy of the lease to Mr. Wrightsman. He did not know that the lessees had applied to withdraw the lease. He held the check about 10 days-- until March 21, 1914-- and then forwarded it to the superintendent in compliance with the rule of the department.

Mr Wrightsman testified as follows: He drew the check in conjunction with Mr. Crosbie, and it was certified and sent to the bank at McAlester, at their instance. Mr. Baker delivered to him a quadruplicate copy of the lease on April 24, 1914, in a sealed envelope, when he was busily engaged. Finding later it contained the lease, he searched for Mr. Baker in vain...