Tiger v. Sellers

• Decision Date: 29 December 1944
• Docket Number: No. 2917.,2917.
• Citation: 145 F.2d 920
• Parties: TIGER v. SELLERS.
• Court: U.S. Court of Appeals — Tenth Circuit

145 F.2d 920 (1944)

TIGER v. SELLERS.

No. 2917.

Circuit Court of Appeals, Tenth Circuit.

November 27, 1944.

Rehearing Denied December 29, 1944.

George H. Jennings, of Sapulpa, Okl., for appellant.

S. A. Denyer, of Drumright, Okl., for appellee.

Before PHILLIPS, HUXMAN, and MURRAH, Circuit Judges.

PHILLIPS, Circuit Judge.

Ada Tiger, now Lozier, a full-blood member of the Creek or Muskogee Tribe of Indians, enrolled opposite New Born Roll No. 390, is the owner of a tract of land situate in Creek County, Oklahoma, which she inherited from Minnie Cah-tahwon, a full-blood member of such Tribe, enrolled opposite Roll No. 6708, to whom the land was originally allotted, and who died intestate on or about July 17, 1914, leaving Mrs. Lozier as her sole heir.

L. E. Gibson died testate on May 13, 1939. D. C. Sellers is the executor of the estate of Gibson.

On May 9, 1929, Mrs. Lozier and her then husband, Charles E. Lozier, executed to Gibson a promissory note for $1,500, bearing interest at ten per cent per annum, payable annually, due four years from date, and a mortgage on such land to secure the payment of the note. The mortgage contained a provision that in the event of default, the mortgagee should be entitled to the immediate possession of the mortgaged premises and all the rents and profits thereof. Upon written petition of the Loziers, the county court of Creek County entered an order approving the note and mortgage. The note and mortgage were delivered to Gibson and Mrs. Lozier received the proceeds of the loan.

Mrs. Lozier brought this action seeking a judgment adjudging the mortgage to be void under the provisions of § 9 of the Act of Congress of May 27, 1908, 35 Stat. 312, as amended by § 1 of the Act of Congress of April 12, 1926, 44 Stat. 239, adjudging the provisions of the mortgage with respect to the assignment of rents to be void under the provisions of the Act of Congress of May 27, 1908, 35 Stat. 312, as amended by the provisions of the Act of Congress of April 12, 1926, 44 Stat. 239, and the Act of Congress of February 11, 1936, 49 Stat. 1135, 25 U.S.C.A. § 393a, adjudging the mortgage to be barred by the statute of limitations of Oklahoma, and confirming and quieting her title. She also sought a money judgment against Sellers for $1.625. Sellers filed a cross-petition praying for a judgment on the note and for the foreclosure of the mortgage. The United States intervened in the action. It prayed that the provisions of the mortgage with respect to rents be adjudged to be void and that judgment be awarded for the benefit of Mrs. Lozier for the reasonable rental value of the land from 1930 to 1943.

Mrs. Lozier defaulted in the interest installments which became due on the mortgage in 1930, 1931, and 1932. On September 24, 1932, the Loziers executed and delivered to Gibson a written assignment of the rents for the year 1932, and subsequent thereto, and authorized Gibson to apply such rents on the mortgage indebtedness. The assignment was not approved by the county court of Creek County. Gibson collected the rents for the years 1932 and 1933. From January 1, 1934, Gibson rented the land and, through his tenants, remained in the possession thereof until his death. Thereafter, his executor, through his tenants, remained in possession of the land and collected the rents therefrom until January 6, 1943. The rents so collected were credited on the mortgage indebtedness.

In January, 1943, Mrs. Lozier went into possession of the mortgaged premises, through her tenants, without the knowledge or consent of the executor.

The trial court found that the reasonable rental value of the land for the years 1932 to 1943, inclusive, was $1,020, and that the excess of that amount over the rents actually collected should be applied as an additional credit on the mortgage indebtedness. The trial court found that Gibson had paid taxes on the land for the year 1932 in the sum of $47.85. It awarded judgment in favor of the executor and against Mrs. Lozier for the balance due on the mortgage indebtedness and the amount paid for taxes, with interest, and for the foreclosure of the mortgage. Mrs. Lozier has appealed.

In a long line of decisions, the state and federal courts in Oklahoma have held that the term "conveyance," as used in the provisions restricting alienation in the Act of May 27, 1908, 35 Stat. 312, embraces a mortgage.¹ The material portions of § 9 of the Act of May 27, 1908, 35 Stat. 312, 315, read as follows:

"That the death of any allottee of the Five Civilized Tribes shall operate to remove all restrictions upon the alienation of said allottee's land: Provided, That no conveyance of any interest of any full-blood Indian heir in such land shall be valid unless approved by the court having jurisdiction of the settlement of the estate of said deceased allottee: * * *."

The proviso was amended by the Act of April 12, 1926, 44 Stat. 239, to read as follows:

"Provided, That hereafter no conveyance by any full-blood Indian of the Five Civilized Tribes of any interest in lands restricted by section 1 of this Act acquired by inheritance or devise from an allottee of such lands shall be valid unless approved by the county court having jurisdiction of the settlement of the estate of the deceased allottee or testator: * * *."

It will be noted that, by the amendment, Congress did not change the phrase "no conveyance of any interest." This is persuasive evidence of the adoption by Congress of the construction placed on the term "conveyance" by the state and federal courts in Oklahoma.²

Moreover, the Department of the Interior, charged with the enforcement of restrictions against alienation, has not in the instant case nor in other proceedings challenged the validity of mortgages given by full-blood Indian heirs of lands acquired by inheritance from allottees of such lands, when approved by the proper county court, which indicates that Department approves the construction placed on § 9, supra, by the decisions of the Supreme Court of Oklahoma.

The construction placed on § 9, supra, by the Supreme Court of Oklahoma has become a rule of property in the State of Oklahoma. The construction placed by a state court on a federal statute is not binding on the federal courts, but, when such a construction has become a rule of property and for years has governed transfers of real estate, and at most is only debatable, it should not be overturned.³

Under the Oklahoma statute of limitations, an action to recover upon a promissory note and an action to foreclose a real estate mortgage must be commenced within five years after the cause of action shall have accrued.⁴

The Supreme Court of Oklahoma has held that a provision in a real estate mortgage authorizing the mortgagee, on default, to take possession of the mortgaged premises and receive the rents and profits is contrary to public policy and void.⁵

An assignment of future rents is an incorporeal hereditament and an interest in real estate.⁶ The assignment of rents, not having been approved by the county court, was, therefore, void.⁷ Hence, Gibson and the executor had no lawful right to collect the rents and apply them as credits on the mortgage indebtedness and Mrs. Lozier is entitled to recover such payments.

In order for part payment to toll the running of the statute of limitations, it must be voluntary.⁸ We are of the opinion that the application of the rents by Gibson and the executor cannot be regarded, under the circumstances, as voluntary payments by Mrs. Lozier on the mortgage indebtedness.

Under the Oklahoma decisions, the running of the statute of limitations is tolled during the period the mortgagee is in possession of the mortgaged premises, not holding such premises adversely to the mortgagor. In Neel v. First Federal Sav. & Loan Ass'n of Shawnee, Okl.Sup., 147 P.2d 440, the mortgagee, upon default in the mortgagee indebtedness, took possession, without notice to the owner. In that case the first syllabus, which is the law of the case in Oklahoma, reads:

"Mortgagee who took possession of realty, though without notice to owner, upon default in payment of mortgage, became `mortgagee in possession' as respects running of statute of limitations against right to foreclose mortgage."

In the opinion, the court said:

"There can be no question that the plaintiff from December, 1932 to 1939, was a mortgagee in possession; that it took possession peaceably and retained such possession until the termination thereof in 1939.

"`It is not necessary to the status of a mortgagee in possession that possession of the land shall have been taken under the mortgage, nor with the consent of the mortgagor.' Jaggar v. Plunkett, 81 Kan. 565, 106 P. 280, 25 L.R.A.,N.S., 935. See, also, Faxon v. All Persons, 166 Cal. 707, 137 P. 919, L.R.A.1916B, 1209; Cameron v. Ah Quong et al., 175 Cal. 377, 165 P. 961.

"The statute of limitations under the facts in this case did not run in favor of the defendant and against the plaintiff during the time that the mortgagee was in possession by reason of the fact that the mortgagee was not claiming adversely to the defendant. * * * The statute of limitations begins to run from the date adverse possession is taken by the mortgagee, and is barred within five years thereafter."

In Jaggar v. Plunkett, 81 Kan. 565, 106 P. 280, 281, 25 L.R.A.,N.S., 935, cited with approval in the Neel case, Jaggar took possession of the mortgaged land under a void tax deed. Thereafter, he acquired the outstanding mortgage against the land and continued in possession claiming under the mortgage. The trial court held that, notwithstanding the tax deed was void on its face, from the date Jagger acquired the mortgage his status was that of a mortgagee in possession. The court said:

"It is not essential to the status of a mortgagee in possession that possession should have been taken under the mortgage, nor with the consent of the mortgagor. It is enough if...