Allbaugh v. United States

• Decision Date: 11 December 1950
• Docket Number: No. 13967.,13967.
• Citation: 184 F.2d 109
• Parties: ALLBAUGH et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

184 F.2d 109 (1950)

ALLBAUGH et al. v. UNITED STATES.

No. 13967.

United States Court of Appeals Eighth Circuit.

August 9, 1950.

Writ of Certiorari Denied December 11, 1950.

Richard C. Peck, Plattsmouth, Neb., and G. M. Tunison, Omaha, Neb., for appellants.

John C. Harrington, Attorney, Department of Justice, Washington, D. C. (A. Devitt Vanech, Assistant Attorney General, Joseph T. Votava, United States Attorney, Omaha, Neb., and Roger P. Marquis, Attorney, Department of Justice, Washington, D.C., on the brief), for appellee.

James E. Curry, Washington, D. C. (Frances L. Horn, I. S. Weissbrodt, and Felix S. Cohen, all of Washington, D. C., on the brief), for amici curiæ Omaha Tribe of Nebraska, National Congress of American Indians, and Amos Lamson, William McKeegan, I. H. Davenport and L. C. Campbell.

Before GARDNER, Chief Judge, and THOMAS and JOHNSEN, Circuit Judges.

Writ of Certiorari Denied December 11, 1950. See 71 S.Ct. 281.

JOHNSEN, Circuit Judge.

The United States sought to recover from the lessee of some Winnebago Indian lands and his bondsmen, as an alleged part of the rental which the lessee had agreed to pay, the taxes which had been assessed against the property by Thurston County, Nebraska, where the lands were situated. The trial court gave the United States a judgment, and the lessee and his bondsmen have appealed.

In instituting the action, the United States was acting as sovereign trustee on behalf of the individual Indian owners of the property, who held the lands under restricted trust patent allotments made to members of the Winnebago tribe pursuant to the General Allotment Act of 1887, 24 Stat. 388, 25 U.S.C.A. § 331 et seq., and who had been authorized to make leasings of such lands by the Act of March 3, 1921, 41 Stat. 1225, 1232, 25 U.S.C.A. § 393.

The leases that are here involved covered the years 1935, to 1942, inclusive, except 1936. All of them were executed, after advertisements by the Superintendent of the Winnebago Agency for rental bids, upon forms provided by the Secretary of the Interior for that purpose.

The form contained clauses as follows:

"The lessee, in consideration of the foregoing leasing of the property to him, covenants and agrees to pay $......... per acre per year to the Superintendent of the Winnebago Agency as rental for said land and premises * * *. All rentals not paid when due will draw 7 per cent interest from that date."

"The lessee agrees to pay all taxes assessed against the land during the term of the lease promptly when due, and to send the receipts therefor to the Superintendent who will credit the amount on the rental, the balance to be paid as specified above."

In each of the leases prior to its execution, the blank space of the first clause quoted, intended for a recital of the rental consideration, was made to contain a statement of the cash amount to be paid and the words "plus taxes" or "and taxes." Thus, as an illustration, and as typical of all the leases, the clause in the first lease that is involved, upon execution, read: "The lessee, in consideration of the foregoing, covenants and agrees to pay $2.50 plus taxes per acre to the Superintendent of the Winnebago Agency as rental for said land and premises * * *."

Taxes that became due during each of the years covered by the leases had been assessed against the lands by Thurston County, Nebraska, in conformity with the state statutes. The assessing of such taxes under the statutes of Nebraska was authorized by the Brown-Stephens Act, Public Law 291 of December 30, 1916, 39 Stat. 865, which in so far as here pertinent, provided:¹ "That all of the lands in the State of Nebraska belonging to the members of the tribe of Winnebago Indians held under trust patents of allotments, and upon which the twenty-five-year trust period shall have expired, or shall expire, and which trust period shall have been or shall be extended as provided by law, shall be, and the same are hereby, * * * made subject to taxation for local, school district, road district, county, and State purposes, as provided by the laws of the State of Nebraska now in force or to be hereafter enacted. * * * Provided, That any of the lands * * *, so long as the same shall be held under trust patents, shall not be subject to levy and tax sale, as provided under the laws of the State of Nebraska, for the collection of such taxes; but if such tax shall not be paid within one year after the same shall become due and payable, as provided by the laws of the State of Nebraska, then the list of such unpaid and delinquent taxes on the lands of the Winnebago Indians * * *, as above provided, shall be certified by the county treasurer of the county in which such lands are situated to the Secretary of the Interior, who shall be authorized to pay the same from any funds belonging to the Indian allottees owning such lands so taxes and arising from the rentals thereof or under his control; and in the event that no funds shall be in the possession or under the control of the Secretary of the Interior, he shall certify that fact to the said county treasurer, which certificate shall operate as a full release and discharge of the tax assessed against the land of the Indian so without funds."

Appellants conceded that the lands involved were within the operation of the Brown-Stephens Act, if that Act was not invalid. Also, the parties stipulated that the taxes sued for had not been paid to Thurston County by anyone, and neither had the County Treasurer certified such taxes to the Secretary of the Interior for payment, nor had the Secretary of the Interior executed any certificate which would release and discharge the assessments under the Brown-Stephens Act.

The only contentions for reversal that call for consideration here are in substance (1) that the taxes did not constitute a part of the rental for the property, but the lessee's obligation was simply a separate covenant to pay taxes on which there could be no recovery for the use and benefit of the lessors in the present situation, since the lessors had in no way been damaged by the breach; (2) that beyond this, since the right to assess such taxes had been created by the Brown-Stephens Act, the remedy of certification, etc., which the Act provided for their collection, necessarily was exclusive, and no court therefore would have jurisdiction of any action to collect; and (3) that the Brown-Stephens Act was in any event unconsitutional, so that any taxes assessed by its authority were invalid, and hence there existed no taxes in fact for the lessee to pay.

Appellants' first contention fails generally, of course, if the trial court was correct in holding that the taxes (assuming their legality) were a part of the rental itself which the lessee had agreed to pay for occupancy of the premises. By long-settled principles of landlord and tenant law, where a lessee has agreed to pay taxes as rental and does not make payment of them to the proper public authority when they are due, the amount thereof becomes a debt owing to the lessor and is collectible as such, like any other delinquent rent. See 32 Am.Jur., Landlord and Tenant, § 293, pp. 272, 273. And the Act of March 3, 1921, 25 U.S.C.A. § 393, permitting Indian allottees to lease their lands, or the rules and regulations prescribed by the Secretary of the Interior under the Act contain nothing that can be said to preclude thus making authorized taxes a part of the rental and allowing them to be collected as such, as a means of facilitating or effectuating the purposes of the Brown-Stephens Act when the lessee does not make payment of them in the normal manner and so causes them to become delinquent.

We agree with the trial court that the language of the leases here clearly made the taxes a part of the rental. Since we are unable to accept appellants' contention that the lessee's obligation was only a covenant to pay taxes, we need not examine the soundness of their corrollary argument that the lessors could not claim in the present situation to have suffered any damage from the breach of such a separate covenant, because they had made no payment themselves of the taxes and were without any obligation to do so and could not have their property charged with a lien therefor.

Under the first of the two lease-clauses which we have quoted above, it was expressly provided that the lessee should pay "$2.50 or other stated cash amount plus taxes per acre to the Superintendent of the Winnebago Agency as rental for said land and premises." The second clause quoted provided that the lessee should make payment of such taxes promptly to the County Treasurer when due, but it specifically preserved the aspect of such payments as rent pursuant to the first clause, by requiring the lessee to send the receipts to the Superintendent, "who will credit the amount on the rental." On its very face, all of this, it seems to us, could reasonably have but one legal meaning: The leases unequivocally made the rental consist of a cash amount plus taxes; the taxes when due were for convenience to be paid by the lessee to the County Treasurer and the receipts sent to the Superintendent to enable the latter to "credit the amount on the rental;" and the lessee's failure so to pay the taxes left this portion of the rent as delinquent, for which under the settled law of landlord and tenant the lessors had the right to sue and recover in debt. Thus the situation was not one where, as in Lamoine Mott Estate v. Neiman, 8 Cir., 77 F.2d 744, 747, 99 A.L. R. 1097, on which appellants rely, the taxes could be said not to have been "included generally within the term rent," but was, on the language used in the rental clause, one to which the views expressed in Britton v. Western Iowa Co., 8 Cir., 9 F.2d 488, 491, 45 A.L.R. 711, and Miles Corporation v. Lindel, 8 Cir., 107 F.2d 729, 730, 731, had application.

Nor do we think any ambiguity could possibly be said to have...