Board of Com Rs of Jackson County, Kan v. United States

• Citation: 308 U.S. 343,84 L.Ed. 313,60 S.Ct. 285
• Decision Date: 18 December 1939
• Docket Number: No. 14,14
• Parties: BOARD OF COM'RS OF JACKSON COUNTY, KAN., v. UNITED STATES
• Court: United States Supreme Court

308 U.S. 343

60 S.Ct. 285

84 L.Ed. 313

BOARD OF COM'RS OF JACKSON COUNTY, KAN.,

v UNITED STATES.

No. 14.

Argued Oct. 16, 1939.

Decided Dec. 18, 1939.

Messrs. O. B. Eidson and Thomas M. Lillard, both of Topeka, Kan., for petitioner.

[Argument of Counsel from pages 344-345 intentionally omitted] Mr. Raymond T. Nagle, of Washington, D.C., for respondent.

[Argument of Counsel from Page 346 intentionally omitted] Mr. Justice FRANKFURTER delivered the opinion of the Court.

This case is here to review an affirmance by the Circuit Court of Appeals for the Tenth Circuit of a ruling by the District Court for the District of Kansas allowing interest in a suit for the recovery of taxes by the United States on behalf of an Indian under circumstances presently to be stated. 100 F.2d 929. We granted certiorari because of conflicting views between the Ninth and the Tenth Circuits, 306 U.S. 629, 59 S.Ct. 787, 83 L.Ed. 1032. See United States v. Nez Perce County, Idaho, 9 Cir., 95 F.2d 232.¹

M-Ko-Quah-Wah is a full-blooded Pottawatomie Indian. In her behalf the United States asserts whatever rights she may have flowing from the Treaty of November 15, 1861, between the United States and the Pottawatomie nation of Indians, 12 Stat. 1191, and the legislation in aid of it. This Treaty made lands held by the United States in trust for the Pottawatomie Indians 'exempt from levy, taxation, or sale * * *' 'until otherwise provided by law * * *.' Article 2. The land which gave rise to this controversy, situated in Jackson County, Kansas, was patented under the General Allotment Act of February 8, 1887, § 5, 24 Stat. 388, 25 U.S.C. § 348, 25 U.S.C.A. § 348. In pursuance of this Act, the United States agreed to hold the land for twenty-five years under the restrictions of the 1861 Treaty, subject to extension at the President's discretion. Two ten-year extensions were made by Executive Order, one, in 1918 and the other, in 1928; and by the Act of June 18, 1934, the existing trust periods were indefinitely extended by Congress. 48 Stat. 984, 25 U.S.C.A. § 461 et seq.

In this legislative setting, the Secretary of the Interior in 1918, over the objection of M-Ko-Quah-Wah, cancelled her outstanding trust patent and in its place issued a fee simple patent. This was duly recorded in the Registry of Deeds for Jackson County. In consequence Jackson County in 1919 began to subject the land to its regular property taxes. It continued to do so as long as this fee simple patent was left undisturbed by the United States. In 1927 Congress authorized the Secretary of the Interior to cancel fee simple patents theretofore issued over the objection of allottees. In 1935 the patent for the land in controversy was cancelled, and in the next year proceedings were begun by the United States as guardian of M-Ko-Quah-Wah to recover the taxes which Jackson County had collected, amounting to $1,966.13, with interest from the respective dates of payment. The District Court allowed interest at 6%, and a verdict for principal and interest, amounting to $3,277.49, was returned by the jury. A judgment upon this verdict was affirmed by the Circuit Court of Appeals. Jackson County does not here contest its liability for the principal, but challenges the Government's right to interest prior to judgment.

The issue is uncontrolled by any formal expression of the will of Congress. The United States urges that we must be indifferent to the law of the state pertaining to the recovery of taxes improperly levied on land within it. Jackson County, on the other hand, urges that the law of Kansas controls. It is settled doctrine there that a tax-payer may not recover from a county interest upon taxes wrongfully collected. Jackson County Com'rs v. Kaul, 77 Kan. 715, 96 P. 45, 17 L.R.A.,N.S., 552.

We deem neither the juristic theory urged by the Government nor that of Jackson County entirely appropriate for the solution of our problem. The starting point for relief in this case is the Treaty of 1861, exempting M-Ko-Quah-Wah's property from taxation. Effectuation of the exemption is, of course, entirely within Congressional control. But Congress has not specifically provided for the present contingency, that is, the nature and extent of relief in case loss is suffered through denial of exemption. It has left such remedial details to judicial implications. Since the origin of the right to be enforced is the Treaty, plainly whatever rule we fashion is ultimately attributable to the Constitution, treaties or statutes of the United States, and does not owe its authority to the law-making agencies of Kansas. Cf. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487. And so the concrete problem is to determine the materials out of which the judicial rule regarding interest as an incident to the main remedy should be formulated. In ordinary suits where the Government seeks, as between itself and a private litigant, to enforce a money claim ultimately derived from a federal law, thus implying a wish of Congress to collect what it deemed fairly owing according to the traditional notions of Anglo-American law, this Court has chosen that rule as to interest which comports best with general notions of equity. United States v. Sanborn, 135 U.S. 271, 281, 10 S.Ct. 812, 815, 34 L.Ed. 112; Billings v. United States, 232 U.S. 261, 34 S.Ct. 421, 58 L.Ed. 596. Instead of choosing a rigid rule, the Court has drawn upon those flexible considerations of equity which are established sources for judicial law-making.

But the present case introduces an important factor not present in former decisions. The litigation is not between the United States and a private litigant, but between the United States and the political subdivision of a state. In effect, therefore, we have another aspect of our task in adjusting the interests of two governments within the same territory.

Nothing that the state can do will be allowed to destroy the federal right which is to be vindicated; but in defining the extent of that right its relation to the operation of state laws is relevant. The state will not be allowed to invade the immunities of Indians, no matter how skilful its legal manipulations. United States v. Rickert, 188 U.S. 432, 23 S.Ct. 478, 47 L.Ed. 532. Cf. Bunch v. Cole, 263 U.S. 250, 44 S.Ct. 101, 68 L.Ed. 290. Nor are the federal courts restricted to the remedies available in state courts in enforcing such federal rights. United States v. Board of Com'rs of Osage County, 251 U.S. 128, 40 S.Ct. 100, 64 L.Ed. 184; Ward v. Board of Com'rs of Love County, 253 U.S. 17, 40 S.Ct. 419, 64 L.Ed. 751. Nor may the right to recover taxes illegally collected from Indians be unduly circumscribed by state law. Carpenter v. Shaw, 280 U.S. 363, 50 S.Ct. 121, 74 L.Ed. 478. Again, state notions of laches and state statutes of limitations have no applicability to suits by the Government, whether on behalf of Indians or otherwise. United States v. Minnesota, 270 U.S. 181, 46 S.Ct. 298, 70 L.Ed. 539. Cf. Chesapeake & Delaware Canal Co. v. United States, 250 U.S. 123, 39 S.Ct. 407, 63 L.Ed. 889. This is so because the immunity of the sovereign from these defenses is historic. Unless expressly waived, it is implied in all federal enactments.

But the recovery of interest in inter-governmental litigation has no such roots in history. Indeed, liability for interest is of relatively recent origin and the rationale of its recognition or denial is not always clear. That it is not a congenital rule in our law is indicated by its denial in United States v. North Carolina, 136 U.S. 211, 10 S.Ct. 920, 34 L.Ed. 336, on grounds of 'public convenience'. Since Congress has, in the legislation implementing the Indians' tax immunity, remained silent as to recovery of interest, we need not presume that it has impliedly fixed liability for interest in a suit like the present.

Having left the matter at large for judicial determination within the framework of familiar remedies equitable in their nature, see Stone v. White, 301 U.S. 532, 534, 57 S.Ct. 851, 852, 81 L.Ed. 1265, Congress has left us free to take into account appropriate considerations of 'public convenience'.² Nothing seems to us more appropriate than due regard for local institutions and local interests. We are concerned with the interplay between the rights of Indians under federal guardianship and the local repercussion of those rights. Congress has not been heedless of the interests of the states in which Indian lands were situated, as reflected by their local laws.³ With reference to other federal rights, the state law has been absorbed, as it were as the governing federal rule not because state law was the source of the right but because recognition of state interests was not deemed inconsistent with federal policy. See Brown v. United States, 263 U.S. 78, 44 S.Ct. 92, 68 L.Ed. 171; Seaboard Air Line R. Co. v. United States, 261 U.S. 299, 43 S.Ct. 354, 67 L.Ed. 664. In the absence of explicit legislative policy cutting across state interests, we draw upon a general principle that the beneficiaries of federal rights are not to have a privileged position over other aggrieved tax-payers in their relation with the states or their political subdivisions. To respect the law of interest prevailing in Kansas in no wise impinges upon the exemption which the Treaty of 1861 has commanded Kansas to respect and the federal courts to vindicate.

Assuming, however, that the law as to interest in governmental actions based upon quasi-contractual obligations be applicable, the United States must fail here. The cases teach that interest is not recovered according to a rigid theory of compensation for money withheld, but is given in response to considerations of fairness. It is denied when its exaction would be inequitable. United States v. Sanborn, 135 U.S. 271, 281, 10 S.Ct. 812, 815, 34 L.Ed. 112; Billings v. United States, 232 U.S. 261, 34 S.Ct. 421, 58...