Curdy v. United States

Decision Date04 March 1918
Docket NumberNo. 685,685
Citation38 S.Ct. 289,62 L.Ed. 706,246 U.S. 263
PartiesMcCURDY, County Treasurer, et al. v. UNITED STATES
CourtU.S. Supreme Court

[Syllabus from 263-264 intentionally omitted] Mr. Preston A. Shinn, of Pawhuska, Okl., for appellants.

Mr. Assistant Attorney General Kearful, for the United States.

Mr. Justice BRANDEIS delivered the opinion of the Court.

The Osage Tribe of Indians consisted in 1906 of 2,000 persons. Their reservation, located in Oklahoma Territory between the Arkansas river and the Kansas state line, contained about a million and a half acres of fertile well-watered prairie land and of heavily timbered hill lands, largely underlaid with petroleum, natural gas, coal and other minerals. At that time the United States held for the tribe a trust fund of $8,373,658.54 received under various treaties as compensation for relinquishing other lands. The annual income of the tribe from interest on this trust fund and from rentals of grazing, oil, and gas lands was nearly $1,000,000; that is, $500 for every man, woman and child, in addition to the earnings of individuals.1 Congress, concluding apparently that the enjoyment of wealth without responsibility was demoralizing to the Osages, decided upon the policy of gradual emancipation. By Act of June 28, 1906 (34 Stat. 539, c. 3572), it provided for an equal division among them of the trust fund and the lands. The trust fund was to be divided by placing to the credit of each member of the tribe his pro rata share which should thereafter be held for the benefit of himself and his heirs for the period of twenty-five years and then paid over to them respectively (sections 4 and 5).2 The lands were to be divided by giving to each member the right to make, from the tribal lands, three selections of 160 acres each and to designate which of these should constitute his homestead. A commission was appointed to divide among the members also, the remaining lands, after setting aside enough for county use, school sites and other small reservations. The oil, gas, coal and other mineral rights were reserved to the tribe for the period of twenty-five years with provision for leasing the same. The homesteads were made inalienable and nontaxable for twenty-five years or until otherwise provided by Congress. All other allotted lands—which were known as 'surplus lands,' were made inalienable for twenty-five years and nontaxable for three years, except that power was vested with the Secretary of the Interior to issue to any adult member, upon his petition, a certificate of competency, authorizing him to sell all of his surplus lands; and upon its issue all his surplus lands became immediately taxable. By Act of April 18, 1912, § 53 (37 Stat 86, 87, c. 83), Congress authorized the Secretary of the Interior to pay to any Osage allottee 'in his discretion' 'under rules and regulations to be prescribed by him and upon application therefor' all or part of the funds held for his benefit, provided the Secretary is satisfied either that the allottee is competent or that such payment would be to 'the manifest best interest and welfare of the allottee.'

In 1913 (apparently in March) the Secretary paid from the principal of the trust funds held for Robert Panther, a noncompetent4 allottee the sum of $1,750, which was applied in payment for a lot of land in the city of Pawhuska. The land when purchased was conveyed to one Brenner as trustee for Robert and Emma Panther, but soon after was conveyed by Brenner to Robert individually. The deed to Robert contained the following clause:

'This conveyance is made and accepted with the understanding, and under the condition that the above described property is to be and remain inalienable and not subject to transfer, sale or incumbrance, for a period of eighteen years from the 1st day of July, 1913, except by and with the express consent and approval of the Secretary of the Interior, or his successor in office.'

The land as originally a part of the Osage Reservation and became part of Pawhuska when that town was established under the Osage Township Act (March 3, 1905, c. 1479, 33 Stat. 1061). When Oklahoma was admitted into the Union in 1907, the town became the city of Pawhuska and a part of Osage county. The land had passed into private ownership before 1908, became taxable then under the laws of Oklahoma and taxes were assessed thereon and were paid until about the time of the conveyance to Brenner in trust for the Panthers. Then default was made and the land was sold by the county treasurer for failure to pay taxes for the second half of 1912.

In January, 1917, the United States tendered to the holder of the tax certificate and to the county treasurer, the amount of the 1912 and 1913 taxes and penalties and demanded a redemption receipt. The tender was refused, because it did not include the taxes and penalties for 1914, 1915 and 1916; and the county treasurer gave notice of intention to issue the tax deed. Thereupon the United States filed, in the federal District Court for the Western District of Oklahoma, this suit against the county treasurer for an injunction to restrain the issue of the tax deed. The government contended, that as the land had been bought for Panther and was by deed made inalienable without the consent of the Secretary of Interior, it was while so held, an instrumentality lawfully employed by the government for the protection of an Indian and as such exempt from taxation by the state or any subdivision thereof. On the other hand the county treasurer and the city (which was permitted to intervene) contended that Congress had not authorized the Secretary of the Interior to invest the trust fund for the Indians' benefit or to impose restriction on alienation of property purchased with money from that source; that the insertion in the deed of the provision against alienation, did not have the effect of exempting the land from taxation by the state; and that it was not the intention of Congress to do so. It was also contended that such exemption was not within the powers of Congress as limited by article 4, § 3, and the Ninth and Tenth Amendments of the Constitution; since before imposing the restriction by deed, the land had become a part of the private property subject to the jurisdiction of the state. A decree was entered granting, in effect, an injunction against taxation during the period of restric- tion of alienation; and the case is brought here on direct appeal under section 238 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1157 [Comp. St. 1916, § 1215]), on the ground that constitutional questions are involved.

The jurisdiction of this court was questioned; but the case is properly here. The constitutional question is substantial, was properly raised below, and was passed upon there. We have, however, no occasion to consider it; since all questions involved in the case are before us (Northwestern Laundry v. Des Moines, 239 U. S. 486, 491, 36 Sup. Ct. 206, 60 L. Ed. 396) and there are other grounds on which the decree must be reversed.

Under the Act of Judge 28, 1906, the Secretary of the Interior had no authority to release or to invest any part of the principal of the trust fund held for Panther. His authority to release rests wholly upon section 5 of the Act of April 18, 1912. That section confers upon him, if application is made therefor, discretion whether to release or to withhold. If the release 'would be to the manifest best interests of the allottee' it may be made although the allottee is not competent, as that term is defined in section 9 of the act. The Secretary is authorized to prescribe the rules and regulations under which such releases shall be made; but he is not given authority to exercise control of any property in which the funds released may thereafter be invested, or otherwise to create with the released funds a governmental instrumentality for the protection of the Osages. Congress apparently b lieved that in order to prepare the Indian for complete independence, he must be educated in self-control, and that this could best be done by committing to him gradually the care of his property. That course necessarily...

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