Siniscal v. United States

• Decision Date: 29 December 1953
• Docket Number: No. 13681.,13681.
• Citation: 208 F.2d 406
• Parties: SINISCAL et al. v. UNITED STATES et al. UNITED STATES et al. v. SINISCAL et al.
• Court: U.S. Court of Appeals — Ninth Circuit

208 F.2d 406 (1953)

SINISCAL et al. v. UNITED STATES et al.

UNITED STATES et al. v. SINISCAL et al.

No. 13681.

United States Court of Appeals Ninth Circuit.

November 14, 1953.

As Amended on Denial of Rehearing December 29, 1953.

Louis E. Schmitt, Francis F. Yunker, Portland, Ore., for appellant.

Roger P. Marquis, Attorney, Washington, D. C., Perry W. Morton, Asst. Atty. Gen., Washington, D. C., Fred W. Smith, Attorney, Dept. of Just., Washington, D. C., Henry L. Hess, U. S. Atty., Edward B. Twining, Asst. U. S. Atty., Portland, Ore., for appellee U. S.

Wilber Henderson, Portland, Ore., for appellees Henry B. and Elizabeth A. Taylor.

Davidson & Nikoloric, Robert L. Weiss, Irving Rand, Portland, Ore., for appellee Brenner.

Before DENMAN, Chief Judge, and McCORMICK and GOODMAN, District Judges.

DENMAN, Chief Judge.

This is an appeal from a judgment of the district court which ordered all transactions involved in a transfer of allotted Indian lands set aside as void, and a cross-appeal from that portion of the judgment which ordered the return of the consideration to the purchaser.

The lands in question are located near Gold Beach, Oregon. Jasper Grant and Harold F. Thornton were the heirs of five original Indian allottees of the land which is held in trust by the United States Government. Patrick Gray, a forester employed in the Forestry Division of the Indian Office, made an appraisal of the land in question in May, 1951, to determine its value as timber land. The appraisal set was $135,000.00, a figure which the court found to be "grossly inadequate."

In the same month, S. D. Alexander, a white man, contacted Elmer A. Reed, an Indian, about the possibility of purchasing the land in suit. A deal was arranged whereby Reed was to purchase the land and deed it over to Alexander. Alexander was to pay Reed $12,500.00 for his services. Under the applicable law and regulations an Indian could buy this land at its appraised value, but a non-Indian could only buy it after the property had been offered for public bids. 25 U.S.C.A. § 372; 25 C.F.R. 241.11, 241.17-241.33.

In July, Reed and Alexander, accompanied by Grant and Thornton, Indians and beneficial owners of the property which was held by the United States under Trust Patents, appeared in the Indian Office. There they were informed that the projected deal could not go through because the ultimate purchaser was Alexander — a white man — and a public offer for bids would be necessary. However, the officers of the Indian Bureau secured from the beneficial owners a consent to sell the lands at $135,000, in order to complete the Bureau records and "in the event in the future a purchaser could be found * * *."

Also in July, one John C. Blanford approached Reed about making a similar deal and was refused because of Reed's pre-existing contract with Alexander. Fred M. Marsh was also interested in making the deal and was evidently working with Blanford. Reed suggested that since his daughter, Mrs. Ernestine Siniscal, was an Indian, she might be able to make a deal for Blanford.

Reed then talked to Mrs. Siniscal and suggested that she try to put through the deal for $25,000, for herself. When contacted, by Blanford, Mrs. Siniscal made a deal whereby she was to buy the land and then was to sell it to persons whom Blanford was to contact. Mrs. Siniscal was to receive $25,000. for her services.

Blanford then sought out William F. Brenner, seeking financing for the deal. Brenner contacted Mr. and Mrs. Henry B. Taylor, the ultimate purchasers of the property. Arrangements were made to examine the property. A timber cruiser went along on this examination and there was talk that there was 30 or 40 million board feet of timber in the tract worth around $10. per thousand board feet, making the tract worth at least $300,000.

All of the parties to the deal were aware of the fact that the land could not be purchased except at a public sale by any but an Indian. The arrangement ultimately made was that Mrs. Siniscal should purchase the land through the Indian Office, that she should then reconvey it to the Taylors, and that $25,000. should be put in escrow to be delivered to Mrs. Siniscal when the Taylors received a marketable title. In pursuance of this arrangement, Mrs. Siniscal appeared at the land office and prepared an application form for the release of restrictions on the land to be purchased. The purpose of this form is to establish the competency of the applicant so that restrictions upon the property can be removed and the Indian safely entrusted with its future disposition. In filling in financial information, she claimed ownership to property which in fact was owned by her mother and father and income which was in fact her father's. In answer to the question, "Have you made an agreement to sell your land?" (meaning the land to be purchased), she answered no.

The Indian Bureau officers then prepared an instrument entitled an "Order Transferring Inherited Interests in Indian Lands." This order is used where inherited allotted land is sold by one Indian to another. It causes a change to be made in the government records to reflect the new beneficial ownership, the fee remaining in trust in the United States. The standard form used for this purpose expressly provides that the land remains under the restrictions, but in this case this clause of the form was altered to read: "* * * subject to the express condition that these lands shall not be alienated, sold, or encumbered without the consent of the Secretary of the Interior."

Meanwhile, the Taylors, Brenner, Blanford, and Marsh met in Portland where final arrangements were made. The $25,000. was placed in escrow with the United States National Bank of Portland. Taylor purchased a Cashier's check for $135,000 which was used to pay for the land. Mrs. Siniscal then executed a deed to the Taylors, and the Taylors gave Brenner and Marsh an option to purchase the property at $300,000. The Taylors went into possession and had done some preliminary logging operations and felled some trees prior to the commencement of this action.

The United States, in its capacity as trustee for Grant and Thornton, instituted this action to recover the lands and to set aside all of the above transactions. Named as defendants were: Mrs. Siniscal, the Taylors, Brenner, Reed, Marsh and six Does. Alexander entered the case as an intervenor.

The district court found, in addition to the above facts, that no patent...