State v. Zay Zah, 46834

• Court: Supreme Court of Minnesota (US)
• Citation: 259 N.W.2d 580
• Docket Number: No. 46834,46834
• Parties: STATE of Minnesota, et al., Appellants, v. ZAY ZAH et al., Respondents, A. J. Powers, et al., Defendants.
• Decision Date: 21 October 1977

Page 580

259 N.W.2d 580

STATE of Minnesota, et al., Appellants, v. ZAY ZAH et al., Respondents, A. J. Powers, et al., Defendants.

No. 46834.

Supreme Court of Minnesota.

Oct. 21, 1977.

Rehearing Denied Nov. 17, 1977.

Syllabus by the Court

Land located on the White Earth Reservation allotted to an adult mixed-blood Chippewa Indian to be held in trust by the United States is exempt from state taxation during the period of that trusteeship and cannot become subject to forfeiture for nonpayment of state taxes. In such a case where it is undisputed that respondents took no action to convert the trust patent into a fee simple, or to alienate or encumber the land in any way, equitable title remained in the Indian patentee and passed to his heir. The tax certificate of forfeiture is therefore void under the specific facts of this case.

Aurel L. Ekvall, County Atty., Bagley, for appellants.

John M. Holmes, Indian Legal Assistance Program, Duluth, for respondents.

James W. Moorman, Acting Asst. Atty. Gen., Raymond N. Zagone, Edward J. Shawaker, Dept. of Justice, Washington, D.C., amicus curiae (seeking affirmance).

Tupper, Smith & Seck, Kent P. Tupper, Gerald L. Seck, Peter W. Cannon and Kimball D. Mattson, Walker (seeking affirmance), for Wh. Earth Res. Bus. Comm., amicus curiae.

George Goodwin, Bureau of Indian Affairs, Minneapolis, amicus curiae (seeking affirmance); Bernard P. Becker, St. Paul (of counsel).

Considered and decided by the court en banc.

SCOTT, Justice.

This is an appeal in an action to quiet title to real estate. Eugene and Laurie Stevens commenced the action in June 1974 in the district court of Clearwater County. In July 1974 the State of Minnesota and the County of Clearwater were joined as party plaintiffs. The matter was heard before the district court on August 28, 1975. On March 1, 1976, the court entered an order for judgment in favor of defendant George Aubid, Sr., the sole heir of defendant Zay Zah. Plaintiffs appeal from this judgment. We affirm.

This case was submitted to the district court upon a stipulation of the following facts:

"1. The following facts are admitted by both parties and shall be taken as true for the purposes of this action. No evidence of said facts other than this Stipulation need be adduced upon the trial.

"2. That the controversy herein relates only to the Northwest Quarter of the Southeast Quarter (NW 1/4 SE 1/4), Section Five (5), Township One Hundred Forty-four (144) North, Range Thirty-eight (38), West, Clearwater County, Minnesota, and that the parties hereto agree that said described real estate is located within the original boundaries of the White Earth Reservation in the State of Minnesota, and that the sovereignty of the United States extends over said described tract.

"3. (This paragraph was in dispute and was stricken by the district court by agreement of the parties.)

"4. That on September 6, 1927, the United States allotted unto Zay Zah, also known as Charles Aubid, one of the defendants herein, the above described real estate, declaring that the United States did hold and would hold said real estate thus allotted, subject to all statutory provisions and restrictions, for a period of twenty-five years in trust for the sole use and benefit of said Indian, and at the expiration of said period the United States would convey the same by patent to said Indian in fee, discharged of said trust and free from all charge and encumbrance whatsoever, which trust patent was filed for record August 18, 1941, in Book 30 of Deeds, page 531 in the Office of the Register of Deeds, Clearwater County, Minnesota.

"5. That said Zay Zah, also known as Charles Aubid, did not at any time during his lifetime apply for a patent in fee simple to the above described real estate or convey the same.

"6. That on September 11, 1940, the Auditor for Clearwater County executed a tax certificate of forfeiture, certifying that the time for redemption of the above described real estate for nonpayment of taxes for the year 1931 had expired and that absolute title to said real estate thereby vested in the State of Minnesota and that said tax certificate of forfeiture was recorded in the office of the Register of Deeds, County of Clearwater, in Book I of Miscellaneous, page 602; and that an Application for Cancellation of said Certificate of Forfeiture for the reason that said real estate was held under a Trust Patent, the terms of which had not expired, and therefore tax exempt, was upon the recommendation of the County Board cancelled on January 30, 1947, as to the above described real estate, which certificate was registered in the office of the Register of Deeds, County of Clearwater, in Book K of Miscellaneous, page 246.

"7. That the County of Clearwater thereafter assessed real estate taxes upon the above described property for the year 1954, at which time the above described property appeared of record in the Office of the Register of Deeds of Clearwater County in the name of Zay Zah, who at that time was an adult mixed blood Chippewa Indian, and also known as Charles Aubid, one of the defendants herein.

"8. That in proceedings to enforce the payment of taxes claimed to be delinquent for the year 1954, the County of Clearwater obtained a real estate tax judgment which was entered in the district court for said county on March 27, 1956; that on October 2, 1961, the auditor for the County of Clearwater executed a tax certificate of forfeiture, certifying that the time for redemption of said real estate had expired, and that absolute title to said real estate thereby vested in the State of Minnesota.

"9. That the Commissioner of Taxation for the State of Minnesota conveyed the above described real estate by Conveyance of Forfeited Lands, dated May 4, 1973, unto Eugene Stevens and Laurie Stevens, as joint tenants and not as tenants in common, their assigns, the survivor of said parties, and the heirs and assigns of the survivor, forever, excepting and reserving to the said state, in trust for the taxing districts concerned, all minerals and mineral rights, as provided by law, Eugene Stevens and Laurie Stevens to have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging or in anywise appertaining, to said parties, their assigns, the survivor of said parties, and the heirs and assigns of the survivor, forever, said parties taking as joint tenants and not as tenants in common.

"10. That the pleadings herein set forth the claims of the parties herein and that to that extent only the same shall constitute a part of this stipulation.

"11. That the parties disagree as to which party, if any, is in possession of the real estate, but said issue shall not be submitted to the Court for determination for the reason that the issue is neither jurisdictional nor does it go to the merits of the controversy once the defendant has interposed his own prayer for affirmative relief.

"12. This Stipulation is for purposes of trial of the above entitled action only, and the matters contained herein are not admitted for the purpose of any other trial or litigation.

"13. That Zay Zah, also known as Charles Aubid, is shown by the roll of the Chippewa Indians allotted within the White Earth Reservation in the State of Minnesota, prepared by the commission duly appointed under the Act of Congress of June 30, 1913, as amended by the Act of Congress on March 2, 1917, and that said roll shows as of the 1st day of October, 1920 that said Zay Zah was an adult mixed blood Indian.

"14. That the White Earth Reservation is a constituent element of the Minnesota Chippewa Tribe."

The district court concluded that the 1927 trust patent issued to Zay Zah continues in effect, thus making George G. Aubid, Sr., sole surviving heir of Zay Zah, the "sole beneficial owner and cestui que trust" of the disputed property.

We find the legal issue presented by these facts to be: Was the property in question subject to tax forfeiture following the expiration of the original trust patent, or did that patent remain in effect beyond the initial 25-year term?

The parties agree that during the original 25-year period of the trust patent given to Zay Zah in 1927, the property was not subject to state taxation. Appellants cite United States v. Rickert, 188 U.S. 432, 23 S.Ct. 478, 47 L.Ed. 532 (1903), to this effect. Appellants and respondents assert different bases for this tax exemption, however. Appellants claim that the Clapp Amendment, discussed infra, eliminated the "trust" aspect of the patent, but could not divest the right not to be taxed during the duration of trust patent. This of course leads to the conclusion that taxation could begin when the 25 years expired. Respondents on the other hand, argue that the "trust status" of the allotment was in itself a constitutionally protected vested property right, thereby preventing taxation not only during the 25-year period, but also thereafter by reason of indefinite extension of the "trust status" by the Wheeler-Howard Act of 1934. The pertinent part of that statute states:

"The existing periods of trust placed upon any Indian lands and any restriction on alienation thereof are hereby extended and continued until otherwise directed by Congress." 48 Stat. 984, 25 U.S.C.A., § 462.

Appellants' argument makes the Wheeler-Howard Act inapplicable because there would be no "trust" to continue following the 25-year period. The crux of the matter is therefore the relationship between the trust patent issued to Zay Zah in 1927 and the Clapp Amendment.

The trust patent contains the following relevant language:

"NOW KNOW YE, that the UNITED STATES OF AMERICA, In consideration of the premises, has allotted, and by these presents does allot, unto the said Indian the land above described, and hereby declares that it does and will hold the land thus allotted (subject to all statutory provisions and restrictions) for the period of twenty-five...