United States v. Hallam, 6886.

• Decision Date: 25 May 1962
• Docket Number: No. 6886.,6886.
• Citation: 304 F.2d 620
• Parties: UNITED STATES of America, Appellant, v. Anna B. HALLAM, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

304 F.2d 620 (1962)

UNITED STATES of America, Appellant, v. Anna B. HALLAM, Appellee.

No. 6886.

United States Court of Appeals Tenth Circuit.

May 25, 1962.

Carolyn R. Just, Atty., Dept. of Justice, Washington, D. C. (Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Robert N. Anderson, Attys., Dept. of Justice, Washington, D. C., and John M. Imel, U. S. Atty., Tulsa, Okl., with her on the brief), for appellant.

James O. Ellison, of Boone & Ellison, Tulsa, Okl. (J. Eben Hart, Oklahoma City, Okl., with him on the brief), for appellee.

Before MURRAH, Chief Judge, and PICKETT and HILL, Circuit Judges.

PICKETT, Circuit Judge.

This action was brought to recover income taxes for the years 1953, 1954 and 1955 which were alleged to have been erroneously refunded to the defendant, Anna B. Hallam, a full-blood Quapaw Indian. The income in question was derived from restricted, allotted Indian lands in the form of rentals, royalties and the proceeds from the sale of chats. We agree with the trial court that the income was not taxable.

The refund was made following the decision of the Supreme Court in Squire v. Capoeman, 351 U.S. 1, 76 S.Ct. 611, 100 L.Ed. 883, in which it was held that income accruing to a noncompetent Indian from lands allotted under the General Allotment Act (24 Stat. 388, 25 U.S. C.A. § 331 et seq.) was not subject to federal income tax. There the court said:

"We agree with the Government that Indians are citizens and that in ordinary affairs of life, not governed by treaties or remedial legislation, they are subject to the payment of income taxes as are other citizens. We also agree that, to be valid, exemptions to tax laws should be clearly expressed. But we cannot agree that taxability of respondents in these circumstances is unaffected by the treaty, the trust patent or the Allotment Act.

"The courts below held that imposition of the tax here in question is inconsistent with the Government\'s promise to transfer the fee `free of all charge or incumbrance whatsoever.\' Although this statutory provision is not expressly couched in terms of nontaxability, this Court has said that

`Doubtful expressions are to be resolved in favor of the weak and defenseless people who are the wards of the nation, dependent upon its protection and good faith. Hence, in the words of Chief Justice Marshall,

`The language used in treaties with the Indians should never be construed to their prejudice. If words be made use of, which are susceptible of a more extended meaning than their plain import, as connected with the tenor of the treaty, they should be considered as used only in the latter sense.\' Worcester v. The State of Georgia, 6 Pet. 515, 582 8 L.Ed. 843. Carpenter v. Shaw, 280 U.S. 363, 367 50 S.Ct. 121, 74 L.Ed. 478.

"Thus, the general words `charge or incumbrance\' might well be sufficient to include taxation. But Congress, in an amendment to the General Allotment Act, gave additional force to respondents\' position. Section 6 of that Act was amended to include a proviso —

`That the Secretary of the Interior may, in his discretion, and he is authorized, whenever he shall be satisfied that any Indian allottee is competent and capable of managing his or her affairs at any time to cause to be issued to such allottee a patent in fee simple, and thereafter all restrictions as to sale, incumbrance, or taxation of said land shall be removed and said land shall not be liable to the satisfaction of any debt contracted prior to the issuing of such patent * * *.\'" (Footnote omitted.) Squire v. Capoeman, 351 U.S. 1, 6-7, 76 S.Ct. 611, 614-615.

Having made these refunds on the authority of Squire v. Capoeman, supra, the government, relying upon a strictly technical interpretation of pertinent statutes, now seeks to distinguish that case. The gist of its argument is that allotments to the Quapaws were treated by Congress in separate legislation, and therefore, the provision of Section 5 of the General Allotment Act upon which the Supreme Court partially relied in Squire v. Capoeman, supra, to hold that Congress did not intend to tax the income derived directly from allotted lands, is not applicable to Quapaw allotments. The General Allotment Act was passed in 1887. In 1893 the...