United States v. Apple

• Citation: 262 F. 200
• Decision Date: 07 October 1919
• Docket Number: 110-N.
• Parties: UNITED STATES v. APPLE et al.
• Court: United States District Courts. 10th Circuit. United States District Courts. 10th Circuit. District of Kansas

262 F. 200

UNITED STATES v. APPLE et al.

No. 110-N.

United States District Court, D. Kansas, Third Division.

October 7, 1919

Fred Robertson, of Kansas City, Kan., J. A. Tellier, of Little Rock, Ark., and Joseph W. Howell, of Washington, D.C., for plaintiff.

Edward E. Sapp, S. C. Westcott, and E. B. Morgan, all of Galena Kan., A. M. Keene, of Ft. Scott, Kan., E. S. Bessey and G. W Earnshaw, both of Joplin, Mo., Al F. Williams and G. W Staton, both of Columbus, Kan., Garland Biffle, of Baxter Springs, Kan., Fred A. Walker, of Columbus, Kan., and P. E Bradley, of Joplin, Mo., for defendants.

POLLOCK District Judge.

The facts alleged in the petition filed herein, in so far as necessary to decision of separate motions of certain defendants to dismiss, may be briefly stated as follows:

Benjamin and See-sah Quapaw, full-blooded, ignorant Quapaw Indians, through allotment and inheritance, being the owners of three tracts of land in Ottawa county, Okl., described in the petition, in due form of law made certain mining leases covering the same, reserving as rental certain royalties in the minerals to be produced therefrom. The mining operations conducted by the lessors under said mining leases on said properties proved to be very successful, to the extent between the 13th day of March, 1915, and the 31st day of December, 1917, the cash royalties paid to the Indian lessees under and by virtue of said mining leases amounted to as much as $178,000. It is charged in the bill said Indian lessees, being ignorant of business affairs and unlearned, were induced to and did make to a Quapaw Indian relative, defendant herein, Charles Goodeagle, a certain power of attorney, set forth in the pleadings, purporting to empower him as attorney in fact to collect the royalties of lessees arising from said mining operations, to deposit the same from time to time to the credit of lessees in the Baxter National Bank, of Baxter Springs, defendant herein, and, further, to check out from said bank and expend said royalty moneys for the use and benefit of the Indian lessees, however, in a certain and definite manner stated in said power of attorney only, and none other; that said power of attorney, after its making, was lodged with and retained by said bank for the purpose it might at all times be fully informed and know the contents of said instrument, and before payment of any check drawn on said account, if the same was authorized by the power conferred on said attorney in fact, Charles Goodeagle. Thereafter said attorney in fact, and said national bank, and its officers, in violation of the trust reposed in them by the Indian lessees, by virtue of the terms of said power of attorney, and conspiring together and with the other defendants named in the bill, and for the purpose of wronging and defrauding said Indian lessees out of their vast sums of royalties so accruing, and for the purpose of converting said royalty moneys to the use and benefit of defendants, from time to time, in violation of the terms of said power of attorney, and of the trust reposed in them, the bank and the attorney in fact caused said royalty moneys to be checked out of said bank and expended in the purchase and improvement of many tracts of land purchased from the different defendants named in the bill, and, further, said attorney in fact, in violation of his trust, but conspiring with other defendants named herein, seeking to wrong and defraud said Indian lessees of the property and property rights, did make, or cause to be made, in the name of said lessees, promissory notes and other contracts, obligating or attempting to bind said lessees to the payment of large sums of money to certain other defendants named in the bill, all as particularly described and pleaded in the many paragraphs of the voluminous petition, as a result and by reason of all of which conspiracies and fraudulent acts on the part of defendants, said lessees have been despoiled and defrauded out of their vast property rights in more than $200,000. Wherefore the government, acting for said Indian lessees, prays the decree of this court canceling and annulling said fraudulent transactions and contracts, that it may have an accounting with each and all of the defendants named herein so procuring any part of said royalty moneys, and, on said accounting being taken and stated, a decree for the same may enter in favor of plaintiff, to the use and benefit of the lessees in any case wherein said royalty funds can be traced in property now held by defendants, or any of them; that the same may be decreed a trust fund, and a lien on the property thereby purchased, said lien foreclosed, and the property ordered sold in satisfaction of said trust lien; that defendant holders of said promissory notes, and other contract obligations made by or in the name of said lessees now in the possession of defendants, be ordered to turn same into court, and a decree entered canceling and annulling the same, and for other and general relief.

To this petition so charging defendants have appeared. Some have fully answered thereto; some others have filed separate motions to dismiss the case. Said motions, principally, are based on the ground the government has no interest in or right of suit to correct the wrongs of the Indian lessees of which complaint is made in the petition. Said motions stand briefed, argued, and submitted for decision.

In support of the motions to dismiss it is urged by defendants the tracts of land out of which the royalty moneys arose are the absolute property, in fee simple, of their Quapaw Indian owners; hence, it is contended, as a necessary sequence the royalties paid from mining operations conducted thereon are the absolute and unconditioned property of the Indian owners from all of which it is said to result said Quapaw Indian owners in their own persons and right, and not the government, must sue to correct the alleged wrongs complained of in the petition. On the contrary, the government contends and urges the Indian lessees were both in fact and law incompetent to make a valid mining lease of said properties without the approval of the accredited representative of the government, and, further, were not alone incompetent in fact and law to make said power of attorney authorizing Charles Goodeagle to collect and expend said royalties money, when made, but over and above all such contentions, at all times said Quapaw Indian lessees were the wards of the government, and their property and property rights were, by reason of the national policy of the government towards such wards, under the protecting and fostering care which the sovereign, as the guardian of the persons and estates of its wards, owes to right such wrongs as are done them while this relation continues to exist, which exists and will continue to exist until the...