In re Denison, 4236.

• Decision Date: 01 March 1930
• Docket Number: No. 4236.,4236.
• Citation: 38 F.2d 662
• Parties: In re DENISON.
• Court: U.S. District Court — Western District of Oklahoma

38 F.2d 662 (1930)

In re DENISON.

No. 4236.

District Court, W. D. Oklahoma.

March 1, 1930.

Walter L. Gray, of Fairfax, Okl., and Poe, Lundy & Morgan, H. R. Duncan, and L. M. Poe, Jr., all of Tulsa, Okl., for trustee.

Sargent & Ross, of Newkirk, Okl., for bankrupt.

VAUGHT, District Judge.

The bankrupt filed a voluntary petition in bankruptcy, was thereafter duly adjudged a bankrupt, and the case properly referred for administration.

The bankrupt listed his property, and under Section B-4 states: "Petitioner is an original allottee of the Osage Tribe of Indians, and as such, is entitled to and receives what is ordinarily termed one head-right to all the minerals produced according to Act of Congress. For the past two years, or approximately that time, the quarterly income has been from $800 to $1,000. Petitioner does not know how to fix a value upon this property or right held in trust for him by the Federal government."

Under Schedule B-5, the bankrupt states: "Petitioner claims exemption of the so-called head-right due him as a member of the Osage tribe of Indians heretofore listed in previous schedule under authority of Act of Congress creating the trust and all laws pertaining thereto."

Thereafter, on the 30th of October, 1929, the trustee made the following report to the referee: "The under-signed trustee in bankruptcy of Bert Denison, bankrupt, advises the said referee that in the original appraisement heretofore submitted, the head-right of Bert Denison as an Osage Indian should have been included as an asset of the estate and have a market value of $25,000, and that the same is not an exemption and has not been so listed by this trustee, and the said head-right is hereby reported as an asset of Bert Denison, bankrupt."

Thereafter, on November 7, 1929, the bankrupt filed his exceptions to the report of the trustee as follows: "Comes now Bert Denison, bankrupt, and advises said referee that on October 30th, 1929, J. J. Quarles, Jr., as trustee, filed his report in the bankruptcy of said Bert Denison, alleging and stating therein that the head-right of Bert Denison as an Osage Indian should have been included as an asset of the estate of said Bert Denison, and that said head-right has a value of $25,000, and that said head-right is not an exemption, and is reported by said trustee as an asset of the bankrupt, Bert Denison. Said bankrupt * * * hereby excepts to said report on the ground and for the reason that said head-right is exempt property and should not be listed as an asset, and respectfully asks that this matter be set down for hearing at the earliest possible time; that all parties interested be given notice of the date, time and place of said hearing, and that upon final determination thereof a finding be made that said head-right is exempt and listed among the exemptions of said bankrupt."

By order duly made in said cause, a hearing on the report of the trustee and the exceptions filed thereto by the bankrupt was duly had, and upon depositions duly taken and upon oral testimony in which it was admitted that the bankrupt is an original allottee of less than half Indian blood, the referee, after consideration of briefs duly filed, sustained the exceptions of the bankrupt and entered the following order: "It is, therefore, ordered and directed that the said Osage Indian head-right, and the quarterly annuity payments derived therefrom be and the same are hereby surrendered to the bankrupt as exempt, and not subject to administration of this cause."

The trustee thereafter filed his petition in this court for a review of the referee's order.

The question for determination, by this court, is whether or not the Osage "head-right" of the bankrupt, Bert Denison, constitutes an asset of the bankrupt to be administered by the trustee in bankruptcy as the other assets of said bankrupt. The question has been carefully and fully briefed by the attorneys for both the trustee and for the bankrupt. I have examined the record, and the additional briefs filed in this court.

It is necessary to briefly review the history of the legislation affecting the Osage Indians and their property rights. At the time of the passage of the Osage Allotment Act of June 28th, 1906 (34 Stat. 539), the Osage Indians were occupying as a tribe their reservation in Oklahoma territory containing approximately a million and a half acres of land largely underlaid with oil, gas, and other minerals. At the same time the government held in trust for said tribe, which consisted of slightly in excess of 2,000 persons, a fund of over eight million dollars received under various treaties as compensation for the relinquishment of other lands. The said act provided for the allotment of their reservation lands, and in section 3 thereof reserved the oil, gas, coal, or other minerals to the Osage Tribe for a period of 25 years, from and after the 8th day of April, 1906. The said act designates all said mineral interest and funds above referred to as held in trust by the United States, and so forth. It also refers to certain lands held in trust, but these were apparently certain Indian villages and tracts withheld from allotment, and for the purposes of this opinion it is not necessary to discuss either these tracts or the trust fund of eight million dollars.

The mineral interests of the Osage Tribe are by said Act of 1906, held by the government in trust for a period of 25 years from April 8th, 1906, and by the Act of March 3d, 1921 (41 Stat. 1249), the time of such trust holding was extended to April 8th, 1946, and by the Act of March 2d, 1929, said trust was extended to April 8th, 1958. (45 Stat. 1478.)

The above acts removed the restrictions on Indians of less than one half Indian blood except as to the trust estate held by the government belonging to the tribe, and provide for the manner of payment of quarterly annuities to noncompetents, and the payment to those having certificates of competency of their portion of the fund as it accumulates.

Counsel for the trustee insist in their brief that a member of the Osage Tribe of less than half blood, who has received a certificate of competency, has all the rights...