United States v. Thurston County, Neb.

• Decision Date: 23 February 1944
• Docket Number: 247,246,Civil Actions No. 235,299.
• Citation: 54 F. Supp. 201
• Parties: UNITED STATES v. THURSTON COUNTY, NEB., et al. (four cases).
• Court: U.S. District Court — District of Nebraska

54 F. Supp. 201

UNITED STATES v. THURSTON COUNTY, NEB., et al. (four cases).

Civil Actions Nos. 235, 246, 247, 299.

District Court, D. Nebraska, Omaha Division.

February 23, 1944.

COPYRIGHT MATERIAL OMITTED

Joseph T. Votava, U. S. Atty., of Omaha, Neb., for plaintiff.

Alfred D. Raun, Co. Atty., of Pender, Neb., and Walter R. Johnson, Atty. Gen., of Nebraska, and H. Emerson Kokjer, Asst. Atty. Gen., of Nebraska, for defendants.

DELEHANT, District Judge.

Of these four cases which have been tried together after consolidation for trial through approved stipulation, number 235 consists of eight counts; number 246 of a single count; number 247 of four counts; and number 299 of eight counts. In each count, the plaintiff in its sovereign capacity as Trustee and Guardian for the Winnebago or Omaha Indian holder or holders of title (subject to restrictions against alienation or encumbrance except with the approval of the Secretary of the Interior) to a parcel of real estate designated and described in the count, and purchased prior to 1936 out of the trust or restricted funds of an individual Indian or of individual Indian demands, against the corporate defendant, the County of Thurston in the state of Nebraska, within whose territorial boundaries all of the real estate is located, and against its taxing and tax collecting authorities who are the other defendants, injunctive relief against the future taxation of the described real estate for the purposes of the state, county and other domestic taxing agencies until the congress of the United States shall permit such taxation; the cancellation of taxes theretofore levied and assessed upon said real estate, in all instances inclusive of taxes for the year 1937 and thereafter, and in some including taxes for the year 1936; a judgment for the recovery of such of said taxes as were paid prior to suit in order to prevent sale for taxes of the real estate; and for general equitable relief.

The alleged ownership of the lands, their purchase out of the trust or restricted funds of individual Indians, the imposition upon the titles of the asserted restrictions against alienation or encumbrance, the selection by the respective owners with the approval of the Secretary of the Interior of the lands to be identified as homesteads and the classification of the selected property either as agricultural and grazing lands not exceeding in any instance a total of one hundred sixty acres, or as village, town or city property not exceeding in cost $5,000 in any instance save one (vide Title 25 U.S.C.A. § 412a, quoted infra) are either admitted or established by stipulation. Each of the several parcels of real estate involved in the cases was formerly owned and held in fee simple by persons quite unconnected with Indian administration; was prior to 1936 on the Thurston county, Nebraska, tax rolls and lawfully taxed during both its non-Indian and its Indian ownership, and, but for the acts of congress hereinafter quoted, would still be taxable.

The statutes upon which the plaintiff relies are:

Section 2 of the Act of Congress of June 20, 1936, 49 Stat. 1542, the material language of which is:

"All lands the title to which is now held by an Indian subject to restrictions against alienation or encumbrance except with the consent or approval of the Secretary of the Interior, heretofore purchased out of trust or restricted funds of said Indian, are hereby declared to be instrumentalities of the Federal Government and shall be nontaxable until otherwise directed by Congress."

And the Act of May 19, 1937 amendatory of the foregoing section, and still effective (50 Stat. 188, Title 25 U.S.C.A. § 412a), of which the pertinent language is:

"All homesteads, heretofore purchased out of the trust or restricted funds of individual Indians, are hereby declared to be instrumentalities of the Federal Government and shall be nontaxable until otherwise directed by Congress; Provided, That the title to such homesteads shall be held subject to restrictions against alienation or encumbrance except with the approval of the Secretary of the Interior: And provided further, That the Indian owner or owners shall select, with the approval of the Secretary of the Interior, either the agricultural and grazing lands, not exceeding a total of one hundred and sixty acres, or the village, town, or city property, not exceeding in cost $5,000, to be designated as a homestead."

The defendants resist the demands of the plaintiff principally on the ground that the attempted congressional absolution of the identified real estate in the state of Nebraska from state taxation is beyond the power of the national government and void.

In approaching its decision the court is urged by the plaintiff to sustain its position because, in the face of claims made by the defendants essentially similar to those now made on hearing upon the merits, the senior judge of this district early in the progress of the cases overruled and denied separate motions of the defendants to dismiss the cases for the asserted failure of the complaints to state claims on which relief could be granted. The rule is invoked that in multiple judge districts one judge will not vacate or reverse the prior rulings in the same case of one of his brethren of the bench. The rule may be acknowledged. But it has no application here. The court is now invited by the defendants not to disregard or vacate the former preliminary rulings in the separate cases, but rather to determine the cases on their merits with the evidence fully before the court. It will approach that task in like manner as if the presently ruling judge had heard and ruled upon the several motions to dismiss. And it may not be amiss to note that the judge now disposing of the cases is persuaded that the ruling on the motions to dismiss was entirely correct.

The insistence that a ruling adverse to the defendant upon a motion to dismiss admonishes the court to a position favorable to the plaintiff at the trial upon the merits if the evidence does not essentially depart from the averments of the complaint reflects an unrealistic appraisal of the office of the motion to dismiss under Rule 12(b) (6), 28 U.S.C.A. following section 723c. Such a motion no longer tests whether the complaint affirmatively states a cause of action. The rule is that it should be denied, though the complaint be infirm, if it is reasonably conceivable that at the trial upon the merits the plaintiff might establish a cause of action. Cohen v. United States, 8 Cir., 129 F.2d 733; Tahir Erk v. Glenn L. Martin Co., 4 Cir., 116 F.2d 865; Boston Casualty Co. v. Bath Iron Works Corporation, 1 Cir., 136 F.2d 31. The cause of action must be proved by evidence on the trial. It need not necessarily be averred with precision in the complaint. So, a complaint may be invulnerable to a motion to dismiss for failure to state a claim upon which relief can be granted, and in the same case, the action may be dismissed on the merits at the trial for failure to establish a cause of action, even though every fact formally pleaded in the complaint be proved. The evidence on final submission is tested more critically than the pleading, when confronted by motion to dismiss. Finally, in the ruling on a motion to dismiss, doubt should ordinarily be resolved against the motion; whereas, upon trial on the merits, doubt usually inclines the scale adversely to him who has the burden of proof, or, upon the plaintiff's case, against him.

During the pendency of these cases the major constitutional issue appears to the court to have been determined with finality in favor of the plaintiff. The issue has been squarely presented; and it has been held that the action of the Congress in according lands of this character the privilege of exemption from state taxation is within its legislative power, and that the two cited sections are constitutional. Board of County Commissioners v. Seber, 318 U. S. 705, 63 S.Ct. 920, 87 L.Ed. 1094, affirming Board of County Commissioners v. Seber, 10 Cir. 130 F.2d 663, which modified and, as modified, affirmed Seber v. Board of County Commissioners, D.C.Okl., 38 F. Supp. 731. See also: Muskogee County, Oklahoma, v. United States, 10 Cir., 133 F. 2d 61; Board of County Commissioners of Pawnee County Okla. v. United States, 10 Cir., 139 F.2d 248; United States v. Nez Perce County, Idaho, D.C.Idaho, 50 F. Supp. 966. The directly pertinent ruling in Board of County Commissioners v. Seber, 318 U.S. 705, 63 S.Ct. 920, 87 L.Ed. 1094, is not neutralized by the note to Oklahoma Tax Commission v. United States, 319 U. S. 598, 602, 63 S.Ct. 1284, 87 L.Ed. 1612. In the case last cited the Supreme Court held that in the absence of congressional exemption from state inheritance taxation, certain of the property of deceased Indians was subject to such tax. The note in question merely observes that the question of the power of Congress to exempt the estates in question from inheritance taxation by the state is not foreclosed by Board of County Commissioners v. Seber, supra. The note and the case in which it appears, serve rather to fortify than to discredit the opinion in Board of County Commissioners v. Seber, supra.

The Supreme Court having thus unequivocally affirmed the validity of the statutes under consideration, it would be altogether presumptuous for this court to examine, or assume to sustain, its conclusion. And that will not be undertaken. The court will merely give brief consideration to certain earnestly supported distinctions by which the defendants seek to obviate the application of the opinion in the Seber case to these proceedings.

A distinction is said to lie in the fact that in the enabling act under which statehood was granted to Oklahoma, there is a clause, which has no counterpart in the Nebraska enabling act, whereby the Congress of the United States was expressly recognized as having and retaining the power and right...