Daugherty v. McFarland ( 1918 )

GATES, J.

Action to foreclose a mortgage given to secure performance of a contract for an exchange of lands. Findings, conclusions, and judgment were entered in favor of plaintiff mortgagee. Defendants appeal from the judgment and an order denying a new trial. The basis of the judgment is a conclusion of law to the effect that the abstract of title h> 80 acres of the land agreed to be conveyed by defendant Samuel F. McFarland to plaintiff did not show a marketable title. If that conclusion of law is sound, the judgment should! in the main be sustained. If it is. unsound, the judgment should be reversed. This 80-acre tract was allotted to' a ISioux Indian, Paul Goodcloud, iby the United States government by trust patent (so. called) issued November 24, 1894, pursuant to Act Cong. Feb. 8, 1887, c. 119, § 5, 24 Stat. 388, U. S. Comp. St. 1916, § 4201, 3 Fed. Stat. Ann. 494, as amended by Act Cong. Feb. 28, 1891, c. 383, 26 Stat. 794, U. S. Comp. St. 1916, § 4222, 3 Fed. Stat. Ann. 499. Paul Goodcloud died, and the county court of Charles Mix county, S. D., assumed jurisdiction of his estate. In probate proceedings in said county court in his estate the tract was distributed to Iron Soldier, his father. In probate proceedings in said county court in Iron Soldier’s estate the* undivided two-thirds of this tract was distributed to four children, of whom two were minors, and one-thircl to his widow, Ptesanwin. In partition proceedings in saidl estate in said county court said tract was set apart to Ptesanwin on iSeptember 9, 1904, and other allotted lands were set apart to> the children. . On January 6, 1905, said tract was conveyed by deed from Ptesanwin to one August Lahr, ■ which .deed was approved by the Secretary of the Interior March 20, 1905. Subsequently Lahr conveyed to defendant Samuel E. McFarland. Other court proceedings -in the Circuit Court of Charles’ Mix county were had, and also proceedings before the Department of the Interior, culminating in a decision of such- department rendered in May, 1915, which we deem immaterial to the issue if, as we believe, the whole title to the tract passed to August Lahr by reason of the approval of his deed by the Secretary of the Interior. In the Indian Appropriation Act (Act Cong. May 27, 1902, c. 888, 32 Stat. 245), there was added section 7, 32 Stat. 275 U. S. Comp. St. 1916, § 4223 3 Fed. Stat. Ann. 505, which reads as follows:

“That the adult heirs of any deceased) Indian to whom a trust or 'other patent containing restrictions' upon alienation has ■been or shall be issued for lands allotted to him may sell and. convey the lands inherited from such decedent, but in case of minor heirs their interests shall be- sold -only by a guardian duly appointed' by the proper court upon the order of such court, made upon petition filed by the guardian, but all such conveyances shall be subject to the approval of the Secretary of the Interior, and when so approved shall convey a full title to the purchaser, the same as if a final patent without restriction upon the alienation •had been issued to. the allottee. All allotted land so alienated by the heirs of an Indian allottee and all land so patented to a white allottee shall thereupon be subject to -taxation under the laws of the state or territory where the same is situate; provided, that the s'ale herein provided for shall not apply to the homestead during the life of the father, mother or the minority of any child or children.”

[1] Presumably it was by reason of this statute that the count}'’ court of Charles Mix county assumed that' it had jurisdiction over this' allotted land. In McKay v. Kalyton, 204 U. S. 458, 27 Sup. Ct. 346, 51 L ed. 566, the present Chief Justice said:

“As observed in the Smith Case, 194 U. S. 408 [24 Sup. Ct. 676, 48 L. ed. 1039], prior to the passage of the act of 1894, ‘the sole authority for settling disputes concerning allotments resided in the Secretary of the Interior. This- being settled, it follows ihat -prior to the act of Congress of 1894 controversies necessarily involving a determination of the title and incidentally of the right to the possession of Indian allotments, while the same were held in trust by the United States were not primarily cognizable by any court, either state or federal. It results, therefore, that the act of Congress of 1894, which delegated -to the courts of the United States the power to determine such questions, cannot be construed as having conferred upon the state courts the authority to pass upon federal) questions • over which, prior to the act of 1894, nor court had any authority.”

See, also, Smith v. Smith, 140 Wis. 599, 123 N. W. 146; S. D. Const. art 22, par. 2.

We think it must be conceded that such county court did not have such jurisdiction. The “proper court” referred to insaid section was presumably the appropriate federal Circuit Court authorized under Act Aug. 15, 1894, as amended by Act Feb. 6, 1901, c. 217, § 1, 31 Stat. 760, U. S. Comp. St. 1916, § 4214, 3 Fed. Stat. Ann. 503.

In Egan v. McDonald, 36 S. D. 92, 153 N. W. 915, we held that it was unnecessary to -determine whether the county court had such jurisdiction, and whether the Secretary of the Interior acted upon such proceedings in approving a deed or acted upon information from another source. We held that the approval of the deed by the Secretary terminated the jurisdiction of the United States over the land, and that, by reason of a decree of the state cireiut court in an- action begun subsequently to such approval, the title was merchantable. In Tripp v. Sieler, 38 S. D. 321, 161 N. W. 337, we said:

“While such recitals, nor the approval of the deed by -the Interior Department, do not amount t-o an adjudication that the parties who executed the deed are the sole heirs of the allottee, '* * * the deed executed and approved under the above circumstances conveys good' prima facie title, and it was incumbent upon the respondent to show the existence of other heirs before lie can defeat appellant’s title on that account.”

This position was affirmed in Oldham v. Nelson, 38 S. D. 451, 161 N. W. 814. In the foregoing’opinion's this court arrived at what we believe to be correct conclusions in spite of the lurking idea .that, if other heirs than those executing the d’eeds had been apparent, the titles might not have been merchantable. In Carlow v. Jordan, 39 S. D. 28, 162 N. W. 749, in considering said acts of Congress as amended by Act May 8, 1906, c. 2348, 34 Stat. 182, U. S. Comp. St. 1916, § 4203, Fed. Stat. Ann. 1909 Supp. 204, and Act June 21, 1906, c. 3504, 34 Stat. 327, U. S. Comp. St. 1916, §§ 4235, 4236, Fed. Stat. Ann. 1909 Supp. 207, we said:

“Under this federal law the plaintiff, as father of John. Car-low, deceased, had no interest whatever in said land until he received said patent. The interest in said land held by John Carlow during his lifetime was only a trust in his behalf. The legal title was at all times in the federal government.

It will be observed from these statutes and Act June 25, 1910, c. 431, 36 Sta-t. 855, that at the present time upon the death of an allottee the so-called trust patent is canceled, and a patent in fee -is granted to the heirs or to the purchaser as determined by the Secretary of the Interior. ' In the present case, even if the heirs of Paul Goodcloud and of Iron Soldier were as determined by said county court, yet it affirmatively appears that only one of the heirs of the latter executed the deed to August La-hr, and that at that time there were four other heirs. This situation necessitates the determination of two questions : (1) The nature of' the interest aoqjuired by the allottee; and! (2) the effect of the approval of the deed to Lahr by the Secretary of the Interior on March 20, 1905. In effect, the contention of appellant is that the Secretary of the Interior had authority to sell allotted land in case of the death of the allottee, and that by his approval of a deed purporting to convey the whole of the land the whole title, legal and equitable, was thereby conveyed to the purchaser -regardless of the fact that one 01“more heirs of the allottee -did not join in the conveyance.

The -contention of respondent is stated in her brief as follows:

“It is our contention that the Secretary -of the Interior has no arbitrary authority under any law or -principle of equity, -that the heirs- of a deceased! allottee inherit an equitable title to- the land described in the instrument -designated a trust patent, that thejin-herit the same interest which the deceased allottee bad before bis death, and that the Congress itself cannot by legislation subsequent to- -the issuance -of the trust -patent ■ -di-vest the equitable interest of the allottee, or, after his death, of his heirs, and it is our. contention that the Secretary of the Interior possesses' no legal authority greater than that possessed by the United States Congress;”

[2] In support of this contention' respondent relies chiefly upon Chase v. United States, 138 C. C. A. 117, 222 Fed. 593, but that decision was reversed on October 2, 1917, in United States v. Chase, 245 U. S. 89, 38 Sup. Ct. 24, 62 L. ed. -, wherein it was held that assignments of land under the Omaha Treaty of 1865 amounted only to an apportionment of the tribal possessory right. W'e are of the view that the reasoning of the latter opinion is applicable to the allotment in question. This being the latest utterance of the Supreme Court, it must be deemed to be a retraction of the following statement in McKay v. Kalyton, supra, viz :

“The suggestion made in argument that the controversy here presented involved the mere possession, and not the title, to the allotted land, is without merit, since the right of .possession’ asserted of necessity is dependent upon the existence of an equitable title in the claimant under the legislation of Congress to the ownership of the allotted lands.”

The concluding point decided in Harnage v. Martin, 242 U. S. 386, 37 Sup. Ct. 148, 61 L. ed. 382, would seem on 'the surface to sustain the right of an omitted heir to contest the conveyance, but that case turns upon the proposition that there the interest of the allottees was ownership of -the soil in place of the mere possessory right here shown. Such possessory right must be the only right given by the so-called trust patent, else Act Cong. June 25, 1910, c. 431, 36 Stat. 855, U. S. Comp. St. 1916, § 4226, Fed. Stat. Ann. 1912 Supp. 96, would be invalid as to allotments made prior thereto’ or at least as to those made prior to Act May 8, 1906, c. 2348, 34 Stat. 182, U. S. Comp. St. 1916, § 4203, Fed. St. Ann. 1909 Supp. 204. In Williams v. Johnson, 239 U. S. 414, 36 Sup. Ct. 150, 60 L. ed. 358, we find a resume of the oft-repeated status of Indian allottees, viz:

“It has often been decided thalb the Indians are wards of the nation, and that Congress has plenary control over tribal relations and property, and that this power continues after the Indians are made citizens, and may be exercised! as to restrictions upon alienation.”

See, also, United States v. Nice, 241 U. S. 591, 36 Sup. Ct. 696, 60 L. ed. 1192, and United States v. Waller, 243 U. S. 452, 37 Sup. Ct. 430, 61 L. ed. 843.

In United States v. Rickert, 188 U. S. 432, 23 Sup. Ct. 478, 47 L. ed. 532, we find the following:

“It was, in fact, -the property of the United States, and was-put into the hands of -the Indians to be ues-d in execution -of the purpose of the government in reference to them.”

Specifically this language referred to personal property, but from the whole of (that decision we are of the view that the Supreme Court considered' that language applicable as well to allotted lands. See, also, United States v. Pearson (D. C.) 231 Fed. 270. In Bond v. United States (C. C.) 181 Fed. 613, a decision which has been cited with approval by the Supreme Court, and which appears to us Ibo be the best summary of the status of allottee Indians-, the court said of Act Feb. 8, 1887:

“By this act the United States- retained title to and control over the allotted lands during the trust period, without -any right in the allottee (bo do more than occupy and cultivate them under a paper or writing showing that .at a particular time in the future, unless it is extended by the President, he would he entitled to a regular patent conveying the fee. The property did not cease, -by the -allotment, to be the property of the United States nor subject to its control, nor did the allottee cease to be a ward -of the government. The title still remained in' the government, and the allottee remained in a condition of pupilage and •dependency. The determination of all disputes concerning the allotment, its occupancy and .possession, and the general control of the Indian, remained with the Secretary of the Interior.”

[3] Some suggestion is made that Act Aug. 15, 1894, c. 290, § 1, 28 Stat. 305, as amended by Act Feb. 6, 1901, c. 217, § 1, 31 Stat. 760, U. S. Comp. St. 1916, § 4214, 3 Fed. Stat. Ann. 503, deprived the Secretary of the Interior of authority to settle disputes concerning allotments. It may be observed that the later enactment of May 27, 1902, supra, specifically authorized the Secretary of the Interior to approve the deed in question, but we are also- of the view that the adt of 1894, as amended by the act of 1901, did no more than vest authority in the then federal Circuit Court concurrent with the Secretary of the Interior, and that when, in Hallowed v. Commons, 239 U. S. 506, 36 Sup. Ct. 202, 60 L. ed. 409, the Supreme Court said in reference to Act June 25, 1910, c. 431, 36 Stat. 855, U. S. Comp. Stat. 1916, § 4226, Fed. Stat. Ann. 1912 Supp. 96:

“This' act restored! to the Secretary the power that bad been taken from him by acts of 1894 and February 6, 1901.”

—the court meant that the exclusive power had been taken from the Secretary by those acts and restored by the act of 1910. Otherwise it would be difficult to explain the meaning of the clause in the act of 1901:

“And the judgment or decree of any such court in favor of any claimant to an allotmenlfc of land shall have the same effect, when properly certified to the Secretary of the Interior, as 'if such allotment had been allowed and approved by him.”

[4, 5] Another point -worthy of consideration is that under the regulations o-f the Interior Department, when a sale was sought to be made by the heirs of an allottee, the land was examined by -Special agents of the Department, and was app-raised by the -Department, and it -could not be -sold for less than the appraised value. When the sale was made, it was- the whole of the tract that was sold, and not the interest of any particular heir. The approval by the Secretary of the Interior was a-n- approval of the sale o-f the whole tract, not of the sale o-f the interest of such particular heir. Another .rule of the Department provided that no deed or conveyance for an undivided interest in any tract would receive approval. To -our minds there would be no -difference -in legal effect between the conveyance in question-which was approved' by the Secretary under the act of 1902 and a government patent iss-ue-d directly to the -purchaser under the provisions of the act of June 25, 1910.

From the various acts of Congress and from the interpretations thereof -by the many decisions of the Supreme Court of the United' States, we are of the opinion that the la-nds allotted under the act of -February 8, 1887, continued to be government property; that the government by its Congress had complete authority over t-ribal Indians and over the property, real or personal, committed to them, unaccountable to any other body or tribunal; that, while it held the -property- in trust for -the Indians-, such- trust differed from the -ordinary trust, in that Congress had full authority to-make or unmake- the rules governing Ifche execution of the trust; that the federal government could! dispose of such property through the agency of the Secretary of the Interior; that by the approval of the deed in question it did convey .to August Lahr the fee-simple title to the whole of the tract involved, free and clear of the rights- of any heirs of G-oodcloud or of Iron Soldier; and that the rights, if any, of such omitted heirs should not-follow the land, but should follow the fund realized upon the sale. United States v. Thurston Count, 74 C. C. A. 425, 143 Fed. 287; Nat. Bank of Commerce v. Anderson, 77 C. C. A. 259, 147 Fed. 87.

[6] While under the strict letter of the contract respondent might be entitled1 to prevail in the action regardless of whether the interest of the Indians in the land had been extinguished because the contract provided that certain proceeding's should be instituted before the Secretary of the Interior, yet in view of the arguments submitted to this- court it is evident that the real ground of contention between the parties is the issue we have above decided. Therefore, and especially in view of the statement in respondent’s brief’, viz:

“We wil-1 frankly say alt this .place that we make no claim whatever because the appellant Samuel E. McFarland- did not institute proceedings before the Secretary of the Interior to cure the defects in the title to the land.”

—we treat that question as.waived..

Hence it follows that the title tendered was marketable, and the judgment and order appealed from must be reversed.