text:
    TAYLOR v. TAYRIEN et al.
    No. 414.
    Circuit Court of Appeals, Tenth Circuit.
    Aug. 3, 1931.

      See, also, 51 F.(2d) 892.
    L. M. Poe, E. J. Lundy, R. E. Morgan, and H. R. Duncan, all of Tulsa, Okl., for appellant.
    T. J. Leahy, C. S. Macdonald, F. W. Files, H. C. Hargis, F. O. Yarbrough, and Louis N. Stivers, all of Pawhuska, Okl., and L. H. Taylor, of Skiatook, Okl., for appellees.
    Before COTTERAL, PHILLIPS, and McDERMOTT, Circuit Judges.
   McDERMOTT, Circuit Judge.

A single but important question is presented: Does the “headright” of an Osage Indian of less than half-blood, with a certifieate of competency, pass to his trustee in bankruptcy? Judge Kennamer, in this ease, held it did not; Judge Vaught, of the Western District of Oklahoma, held it did not. In re Denison, 38 F.(2d) 662.

By sections 1 and 2 of the underlying Osage Act (Act of June 28, 1906, 34 Stat. 539) the roll of the tribe was established, and each member was declared to be entitled to an equal share of “the tribal lands and tribal funds”; provision was made for the allotment to each member of a “homestead” of 160 acres, and a “surplus” allotment of about 500 acres. Section 2 (7) provides that the Secretary of the Interior, may, upon request, issue to any adult member of the tribe “a certificate of competency, authorizing him to sell and convey any of the lands deeded him by reason of this Act, except his homestead, * * and provided further, that nothing herein shall authorize the sale of the oil, gas, coal, or other minerals covered by said lands, said minerals being reserved to the use of the tribe for a period of twenty-five years, and the royalty to be paid to said tribe as hereinafter provided; and provided further, that the oil, gas, coal, and other minerals upon said allotted lands shall become the property of the individual owner of said land at the expiration of said twenty-five years, unless otherwise provided for by Act of Congress.” (This 26-year period has now been extended until April 8, 1958. Act of March 2, 1929 45 Stat. 1478.

, . Section 3 provides that the minerals are “reserved to the Osage tribe for a period of twenty-five years”; that mineral leases shall be made by the tribe through its tnbal coun-eil and approved by the Secretary of the In-tenor, the royalties to be determined by the President of the United States. Section 4 of the act provides Oat the tnbal funds, then existing or thereafter accruing, shall be held m trust by the United States for twenty-five years; that such funds should be promptly segregated and placed to the credit of the m-dividual rumbera of the tribe, or to their hems, and that the interest on such tribal funds shall be paid quarterly to the members of the tribe. Mineral royalties were to be placed m the Treasury of the United States “to the credit of the members of the Osage tnbe of Indians as other moneys of said tribe are to be deposited under the provisions of this Act,” and after deducting sums fixed by the act for the support of certain schools and for agency purposes, were to be distributed in the same way as interest on other moneys held in trust. The right of Osage Indians m these funds and to participate m these dis-tnbutions is called a “headnght.”

Section 6 provides that “the lands, moneys, and mineral' interests” of any deceased member shall descend to his heirs, with the restriction that if he die without spouse or issue, his mother and father shall inherit equally. •

The Referee in Bankruptey made an order directing the bankrupt to turn over all moneys or checks or orders received from such headright both before and since the filing of the petition in bankruptey; and that he execute such instruments as might be necessary to enable the trastee to collect from the Secretary of the Interior any such sums that might be payable to the bankrupt at any time in the future. It is stipulated however that there were no quarterly annuity payments to the eredit of the bankrupt at the time of his adjudication, but that since the adjudication “there have accumulated and will accrue in the future from said Osage headrights quarterly annuity payments.”

The single question presented here, then, is whether the trustee may appropriate and sell, as an asset of the estate, the right of this bankrupt Osage Indian to receive such payments as may be passed to his credit from now until 1959, or until such date as Congress may by future legislation fix for termination of the trust period,

The position of appellant is that these headrights are transferable by Indians of the clagg o£ bank t and therefore pass to tbe trustee in bankruptey under section 70a (5) of tbe Bankruptcy Act, 11 USCA § 110 (a) (5) tbat i£ tMg be not a is nCTer_ tMesg pr rt wHeb be levied ^ judieiaI as ided b the game seetion. We are cited to autborities bolding tbat equitable or beneficial interests o£ a bankr t to tbe trustee wbicb is a field we flnd unnee to explore. It is eontended tbat as to baif.bloods witb cei.tificateg o£ eompet tbe trust is a «d „ one ^ tbaj. tbe trugtee bag nQ aetive dllties o£ management or. eontrol. , TWs ig not true as to tbe «tribal trust» tbe act piatíes the trusty tbe imp0rtant and aetive duties o£ ^ tbe royaltieB for tbe ieaSes, and approvi o£ their t and o£ eoUect. f tho ro alties and distributing them, partly to tbe maintenaiiee of sebool partly £or agency and purposes, and partly tbe eredit o£ tbe members of tbe tribe. In tbe ^ brief, appellant states tbat «tHs eedi involves onl t]le gtatug o£ tbe £und a£ter it ig and plaeed to tbe oredit o£ tbe bankrupts ready for delivery to them, or after it bag been delivered to tbem „ But it is stipulated that at the time of the adjudication there was no money due the bankrupt; and if the bankrupt’s right attached after the adjudication, then it does not pass to the trustee under the Bankruptey Act. What the appellant is undertaking to reach “ the ^nkrupt’s inchoate right hereafter to sba;re 111 proceeds of oil now m the Sround> and whleh 18 now tbe Property of the tnbe' T° Put ñ concretely: -In 1945 the tnbal council executes a mineral lease, apProved ty the Secretary of the Interior, for a royalty determined by the President; in 4946 fif ^from P^eed m the United States Treasury; out of them are Pald,certam ^ed ebarfef '> the glance is dl‘ vided, and a share credited to the bankrupt or tus heirs. Must the United States in 1946, thls to aPPellant °r bis assignee?

The answer to the question must be found in the acts of Congress. If, in the process of emancipation, Congress has,not made these headlights transferable, they do not pass to the trustee in bankruptcy, for it would thwart the purpose of Congress to permit them to be indirectly transferred by the expedient of a debt followed by judicial sale. Mr. Justice Brewer, in Goudy v. Meath, 203 U. S. 146, 149, 27 S, Ct. 48, 50, 51 L. Ed. 130, held that “the purpose of the restriction upon voluntary alienation is protection of the Indian from the cunning and rapacity of his white neighbors,” and that while Congress had the power to permit voluntary alienation and withhold the land from involuntary alienation, such a purpose must be clearly manifest. If, for the protection of the Indian, Congress has withheld the power of alienating his headright, then there is no power to alienate it by judicial process; for that would be to permit the “white neighbor” to accomplish indirectly what the law forbade him to do directly—to acquire the headright which Congress proposed to preserve for the care and support of its Indian wards. We proceed to the underlying question—Are Osage headrights transferable? -

In dealing with Indian questions, it must be remembered that the powers of Congress are plenary. Stephens v. Cherokee Nation, 174 U. S. 445, 19 S. Ct. 722, 43 L. Ed. 1041; Cherokee Nation v. Hitchcock, 187 U. S. 294, 23 S. Ct. 115, 47 L. Ed. 183; Lone Wolf v. Hitchcock, 187 U. S. 553, 23 S. Ct. 216, 47 L. Ed. 299; Gritts v. Fisher, 224 U. S. 640, 32 S. Ct. 580, 56 L. Ed. 928; Cully v. Mitchell (C. C. A. 10) 37 F.(2d) 493, certiorari denied 281 U. S. 740, 50 S. Ct. 347, 74 L. Ed. 1154. Congress has the power to reimpose restrictions on property once freed. McCurdy v. United States, 246 U. S. 263, 38 S. Ct. 289, 291, 62 L. Ed. 706. The breadth of the powers exercised under this plenary authority is well illustrated by the various amendments to the original Osage' Act. The termination of the trust has been postponed from 1931 to 1959. The original act did not limit the amount of quarterly payments unless they were being dissipated (Work v. Mosier, 261 U. S. 352, 360, 43 S. Ct. 389, 67 L. Ed. 693); later acts imposed a limit. Act of March 3, 1921, 41 Stat. 1249. The statute now provides for revocation of certificates of competency as to certain Indians (section 4, Act of February 27,1925, 43 Stat. 1008 [25 USCA § 331 note]); the power exists to revoke as to all. Congress regulates the transfer of land by inheritance or will. It grants or denies to the states the right of taxation. If Congress has withheld the power to alienate headrights, it is an end of the matter.

Prior to the original act of 1906 the title to the lands and funds of the Osages was in the tribe. The 1906 act was passed because of the belief of Congress “that in order to prepare the Indian for complete independence, he must be educated in self-control, and that this could best be done by committing to him gradually the care of his property.” McCurdy v. United States, supra.

The 1906 act made no allotment of the mineral estate in the land; it remained tribal property. The individual Indian had only an inchoate right to receive his share of the net returns therefrom, subjeet'to the will of Congress. It is entirely clear that under the 1906 act no Indian had any right to dispose of any mineral intei’ests. The only right of alienation was the right to dispose of the “surplus” allotment, granted to an Indian holding a certificate of competency. Such a certificate has nothing to do with mineral rights. The statute defines the certificate as an authority to convey surplus lands; the section authorizing such certificates provides that nothing therein shall authorize the sale of the minerals.. Appellant sets out in his brief the form of these certificates in use, which expressly excepts minerals from the authority thereby granted to sell his surplus lands. If there is authority to transfer these headrights, it must be found in later acts.

The Act of April 18,1912 (37 Stat. 86), amplified the 1906 act in certain particulars. Section 4 thereof provided that “nothing herein shall be construed as in any way changing the rights of thé Osage Tribe” in the minerals, or as amending the provisions of the 1906 act in regard to minerals. Section 6 concerns partition of allotted lands by the heirs of an allottee, and provides that when the heirs of deceased allottees are not members of the tribe, that restrictions on alienation are removed. Section 7 provides in part: “That the lands allotted to members of the Osage tribe shall not in any manner whatsoever be encumbered, taken, or sold to secure or satisfy any debt or obligation contracted or incurred prior to the issuance of a certificate of competency, or removal of restrictions on alienation; nor shall the lands or funds of Osage tribal members be subject to any claim against the same arising prior to grant of a, certificate of competency. That no lands or moneys inherited from Osage al-lottees shall be subject to or be taken or sold to secure the payment of any indebtedness incurred by such heir prior to the time such lands and moneys are turned over to such heirs. * * * ” Section 8 provides that an adult Osage, not mentally ineompeteñt, may dispose of his estate, including trust funds, by will approved by the Secretary of the Interior.

The Act of March 3, 1921 (41 Stat. 1249), amends the 1906 act by extending the reservation of the minerals to the tribe from 1931 to 1946. Section 3 provides in part: “That all members of the Osage Tribe of Indians are hereby declared to be citizens of the United States, but this shall hot affect their interest in tribal property or the control of the United States over such property as is now or may hereafter be provided by law, and all restrictions against alienation of their allotment selections, both surplus and homestead, of all adult Osage Indians of less than one-half Indian blood, are hereby removed. * * *»

This section is strongly relied upon by appellant. But the grant of citizenship has no bearing; not only does the section expressly say that it does not “affect their interest in tribal property or the control of the United States over such property,” but the Supreme Court of the United States has decided that “It has been frequently held by this court that the grant of citizenship is not inconsistent with the right of Congress to continue to exercise this authority by legislation deemed adequate to that end.” Brader v. James, 246 U. S. 88, 96, 38 S. Ct. 285, 287, 62 L. Ed. 591. Neither does that part of the section removing restrictions as to Indians of less than half-blood, have any bearing. That part of the section does just what it says—removes restrictions as to the homestead and surplus allotments.

Section 4 amends the 1906 statute by limiting the amount of the quarterly payments of adults not having certificates of competency, and of minors, and provides for the investment of the excess. The section concludes : “That all just existing individual obligations of adults not having certificates of competency outstanding upon the passage of this Act, when approved by the Superintendent of the Osage Agency, shall be paid out of the money of such individual as the same may be placed to his credit in addition to- the quarterly allowance provided for herein.”

The purpose of this proviso seems to be clear. Prior to the enactment of this section, Indians without certificates were receiving large quarterly payments, which, when received by them, were available to pay their debts. Undoubtedly tradesmen had extended-credit on the assumption that the Indian would continue to receive these large sums. Congress cut these payments to $1,000 a quarter, and to avoid injustice to- those who* had relied on the old law, provided that just and “existing” obligations should be paid out-of the excess, upon the approval of the superintendent. It is only by a stretch of the imagination that this proviso can be contorted into a congressional authority for a member of the tribe to alienate tribal property.

Appellant argues that this entire act, read as a whole, indicates an intention on the part of Congress to “put at an end the Individual-Trusts of Osage Allottees of less than half-blood.” We do not see it. The statute, instead of ending the tribal trust, extended it to-1946; and it further provided that the Secretary “shall cause to be paid at the end of each fiscal quarter to each adult member of the Osage Tribe having a certificate of competency his or her pro rata share, either as a member of the tribe or heir of a deceased member, of the interest on trust funds, the bonus received from the sale of leases, and the royalties received during the previous fiscal quarter.” This provision is utterly at variance with the contention of appellant that the 1921 act entirely emancipated Indians of less than half-blood. Appellant concedes that his position is squarely opposed to the decision of the Eighth Circuit in Osage County Motor Co. v. United States, 33 F.(2d) 21, 22, where it was held that promissory notes given by an -adult Osage of less than half-blood were not valid unless approved by the Secretary of the Interior. That court held that the 1921 act did not fully emancipate such Indians, and that it did not make them “competent for all purposes', or to free them entirely from governmental control as to their persons or property.” Certiorari was applied for and denied. 280 U. S. 577, 50 S. Ct. 31, 74 L. Ed. 628.

On April 12, 1924, Congress passed an act (43 Stat. 94) which is of great significance. It is the first and last -statute that deals with the sale of headlights. We quote the entire statute, italicizing the significant words: “That any right to or interest in the lands, money, or mineral interests, as provided in the Act of Congress approved June 28, 1906 (Thirty-fourth Statutes at Large, page 539), entitled ‘An Act for the division of the lands and funds of the Osage Indians in Oklahoma, and for other purposes/ and in Acts amendatory thereof and supplemental thereto, vested in, determined, or adjudged to be the right or property of any person not an Indian by blood, may with the-approval of the Secretary of the Interior and not otherwise be sold, assigned, and transferred under such rules and regulations as the Secretary of tbe Interior may prescribe.”

The Act of February 27, 1925 (43 Stat. 1008 [25 USCA § 331 note]), amended section 4 of the Act of March 3, 1921 (41 Stat. 1250), in respect to quarterly payments to adults not having certificates of competency, '.and to the guardians of the mentally incompetent. Like the 1921 act it protects those who had extended credit on the faith of the old law by providing, “Any indebtedness heretofore lawfully incurred by guardians shall be paid out of the funds of the members for whom such indebtedness was incurred by the Secretary of the Interior.” Section 1.

Sections 2 and 3 of that act control the disposition of lands and funds passing at death. Section 4 provides for the revocation of certificates of competency for cause, but again protects creditors by providing that just indebtedness existing at the time of the revocation of the certificate shall be paid by the Secretary. This section does not apply to half-bloods or less, although the. power exists in Congress to revoke as to them.

Section 6 provides: “No contract for debt hereafter made with a member of the Osage Tribe of Indians not having a certificate of competency, shall have any validity, unless approved by the Secretary of the Interior. In addition to the payment of funds heretofore authorized, the Secretary of the Interior is hereby authorized in his discretion to pay, out of the funds of a member of the Osage Tribe not having a certificate of competency, any indebtedness heretofore or hereafter incurred by such member by reason of his unlawful acts of carelessness or negligence.”

Section 7 provides: “Hereafter none but heirs of Indian blood shall inherit from those who are of one-half or more Indian blood of the Osage Tribe of Indians any right, title, or interest to any restricted lands, moneys, or mineral interests of the Osage Tribe: Provided, That this section shall not apply to spouses under existing marriages.”

This section does not apply to Indians of the class of the bankrupt, but Congress may, at any time, cut off or abridge the right of descent of Indians of his class.

The last statute is that of March 2, 1929 (45 Stat. 1478). Section 1 extends the reservation of minerals to the tribe until April 8, 1958, and again provides that all royalties and bonuses arising from the minerals “shall belong to the Osage Tribe of Indians, and shall be disbursed to members of the Osage Tribe or their heirs or assigns as now provided by law, after reserving such amounts as •are now or*may hereafter be authorized by Congress for specific purposes.” The trusteeship of the United States is extended to January 1,1959. Section 3 directs the Secretary to pay, within ten years, to all Osages of less than half-blood “all of the balance appearing to his credit of accumulated funds, and shall issue to such Indian a certificate of competency.” Section 4 directs the Secretary, upon the death of an Osage of less than half-blood, to pay the “moneys and funds and other property accrued and accruing to his or her credit,” to his administrator or executor. Section 5 provides that the debts of Osages of less than half-blood need not be approved by the Secretary. The section concludes: “That the Osage lands and funds and any other property which has heretofore or which may hereafter be held in trust or under supervision of the United States for such Osage Indians of less than one-half degree Indian blood not having a certificate of competency shall not be subject to forced sale to satisfy any debt or obligation contracted or incurred prior to the issuance of a certificate of competency. * * * ”

This proviso, taken from its setting, carries an inference that trust funds may be subjected to forced sale to satisfy debts contracted after a certificate was issued. Read with its context, however, .it seems to be but another savings clause; the section removed Osages of less than half-blood from section 6 of the 1925 act, which required the approval of the Secretary to give validity to debts of any Osage without a certificate. The proviso undertook to prevent the section from a retroactive operation, by providing in substance that debts which were invalid when contracted should not be the basis for a judicial sale.

Section 6 of the 1929 act provides: “All just existing obligations of restricted Osage Indians outstanding January 1, 1929, when approved by the Superintendent of the Osage Agency, shall be paid out of the money of such Indian appearing to his credit, in addition to his quarterly allowances. * * * ”

While there may be room for interpretation in some of these statutes, a survey of all of the acts clearly shows: (a) Congress has not relinquished control over any Osage, no matter his degree of blood. The last act passed deals with the rights of those of less than half-blood in at least two particulars, (b) Neither has the tribe, nor Congress, relinquished control over the minerals. The last aet passed reaffirms and extends the title of the tribe thereto and expressly says that the royalties and bonuses “shall' belong” to the tribe, (c) Neither has Congress abdicated its power over the individual property of the allottee. ■ The last aet passed exempts allotted property from taxation, controls the disposition of the property of a deceased Indian, and legislates as to the debts of members of the tribe. The 1925 aet abridged the descent of lands and money of certain members of the tribe.

It is also plain that while Congress has found apt words to free from restrictions the surplus allotments of some Indians and the homesteads of others, it has refrained from the use of any such language as to heddrights, except in the one ease of non-Indian owners, and then only with the approval of the Secretary. When we start with a situation where no one of these classes of property— surplus, homestead, and headlights—is alienable, and where by the gradual process of legislation, first one class (surplus) is freed from restrictions in the hands of certain tribal members; and later another class (homesteads) is freed in the hands of other members’; and still later the third class (head-rights) is’ freed in the hands of non-Indians; in such a situation it seems impossible to say that Congress intended the third class to be alienable by any other person than the non-Indians specifically covered. Moreover, it has long been the policy of this government to construe statutory language in favor of the Indians. In Choate v. Trapp, 224 U. S. 665, 675, 32 S. Ct. 565, 569, 56 L. Ed. 941, the court said: “But in the government’s dealings with the Indians the rule is exactly the contrary. The construction, instead of being strict, is liberal; doubtful expressions, instead of being resolved in favor of the United States, are to be resolved in favor of a weak and defenseless people, who are wards of the nation, and dependent wholly upon its protection and good faith.”

Again reading the statutes as a whole, we are impressed with the idea that Congress intended to preserve these mineral rights as a last bulwark against the improvidence of the Indian. The idea in reserving the minerals to the tribe was doubtless a double one; it tended to. equalize the allotments to the individuals, and it preserved intact a source to which the Indian who had squandered his allotment, might look for sustenance. In 1906 it was thought the Osages would be ready for complete emancipation by 1931; as that year drew near, it was seen that he was not yet ready to hold his own; the period has been twice extended for his protection. The Supreme Court of the United States has used language which, while not directed to the point here involved, is carefully chosen and discloses beyond a doubt its idea that these headlights cannot be taken for debts. The court was dealing with section 5 of the aet of 1912, which-provides that the Secretary may pay to Osage allottees, including the blind, the crippled and the aged, all of the funds to his credit, and after stating that the policy of the government was to educate the Osages by gradually giving them control over property, and that such policy was attendant by some risk, the court said: “But in the ease of the Osages the risk was not attended by serious danger. Even if the whole trust fund should be released and, despite supervision, improvidently spent, the legally competent allottee would still have his homestead and his share in valuable undivided oil, gas and coal rights; and the legally incompetent, his surplus lands in addition.” McCurdy v. United States, 246 U. S. 263, 269-270, 38 S. Ct. 289, 291, 62 L. Ed. 706.

That ease was decided March 4, 1918. There has been no legislation since that indicates an intention on the part of Congress— except as to non-Indians—that the inchoate interest of an Osage in the mineral rights of his tribe, may be sold by him or ta|ren for his debts. Other practical considerations suggest themselves. The bankruptcy law aims at an expeditious distribution of assets and closing of the estate. It would not be in accord with that aim to keep these estates open until 1959 so that the trustee might receive these payments. The alternative is to offer them at a bankrupt sale. But with the power existent in Congress to increase the charges against the fund, to decrease the quarterly payments, to re-impose restrictions, to curtail the right of descent, the present commuted value of a headright would be so speculative that this birthright of the Osage would doubtless pass under the hammer for a mess of pottage. Judge Parker, speaking for the Fourth Circuit, held in Suskin & Berry v. Rumley, 37 F.(2d) 304, 68 A. L. R. 768, that the speculative nature of the right weighed strongly in the balance in determining whether a contingent interést passed to the trustee in bankruptcy. But these considerations are for the legislative branch; whether it would be good public policy to enable the Osage to squander this last vestige of his inheritance, and to throw him back on the government for his food and raiment, is for Congress and not the courts.

Before the trustee can appropriate this headlight, it must be established that the bankrupt, at the time of the adjudication, had a property interest in the minerals and funds reserved to the tribe. An inchoate interest, an expectancy or possibility, does not pass. Remington on Bankruptcy, §§ 1199, 1200. The right of the bankrupt ultimately to share in the distribution of these properties is dependent upon the will of Congress; death may intervene between now and 1959; and the right to control descent, either with or without a will, has been exercised by Congress, and may be further exereised. Without undertaking precise definition, we are of the opinion that an Osage Indian has no present property right in the properties now owned by his tribe.

But if these considerations leave the question still in doubt, the administrative interpretations of the acts determine the matter. It has been ten years since the Osages were made citizens, and since those of less than half-blood were freed of restrictions as to homestead and surplus. There are 2229 Osage allottees. Many of them have become indebted; many of them must have desired to alienate their headright. Chief Justice Taft, in United States v. Jackson, 280 U. S. 183, 193, 50 S. Ct. 143, 146, 74 L. Ed. 361, in speaking of the construction of Indian laws, said: “It is a familiar rule of statutory construction that great weight is properly to be given to the construction consistently given to a statute by the Executive Department charged with its administration. United States v. Cerecedo Hermanos y Compania, 209 U. S. 337, 28 S. Ct. 532, 52 L. Ed. 821; Robertson v. Downing, 127 U. S. 607, 8 S. Ct. 1328, 32 L. Ed. 269; United States v. Healey, 160 U. S. 136, 16 S. Ct. 247, 40 L. Ed. 369. And such construction is not to be overturned unless clearly wrong, or unless a different construction is plainly required. United States v. Johnston, 124 U. S. 236, 253, 8 S. Ct. 446, 31 L. Ed. 389; Hawley v. Diller, 178 U. S. 476, 488, 20 S. Ct. 986, 44 L. Ed. 1157.” And Mr. Justice MeKenna, in dealing with other Indian laws, in Blanset v. Cardin, 256 U. S. 339, 326, 41 S. Ct. 519, 522, 65 L. Ed. 950, said that the construction given the act by the Interior Department “is an assistant, if not demonstrative criterion, of the meaning and purpose of the act.”.

The departmental construction of these acts is not open to argument. On November 4, 1921 (after the Act of March 3,1921, relied upon by appellant), the Attorney General advised the Secretary of the Interior that the mineral rights were the property of the tribe, subject to the control of the government; that Congress had the right to authorize the state of Oklahoma to levy a gross-production tax on minerals; that no individual member of the tribe had any right to object; that the members of the tribe had no vested interest in the royalties and that “Until they were placed to the credit of the individual Indian, they remained tribal funds.” 33 Ops. Atty. Gen., 60, 62.

On August 15, 1922, the Solicitor of the Department rendered an opinion to the Secretary as to the validity of an assignment of an inherited interest in an allotment, attempted to be made by E. A. De Noya, an one-eighth-blood Osage with a certificate of competency. The opinion is directed to “the right of members of the Osage Tribe of Indians, Oklahoma, to assign oil and gas royalties accruing to them as members of that tribe.” After a review of the statutes, the Solicitor concluded:

“True, individual members did obtain a prospective right to share in the periodical distributions of royalties received from leasing the deposits mentioned, after certain authorized deductions therefrom had first been made. In the absence of specific legislation by Congress, which has not been had, prospective rights of this nature, even in the hands of those members of the tribe who have received ‘certificates of competency’ or the restrictions against alienation of whose lands have otherwise been removed, are not assignable. * * * Payments of these funds in any other manner, or to persons other than as authorized by these statutes, is not warranted. * * * Again, and speaking generally, funds in the hands of administrative officers of the Government, whether for the benefit of Indians or otherwise, are not subject to attachment, levy, sale, execution, assignment, etc., in the absence of express legislation by Congress to that effect.
“I find no difficulty, therefore, in' holding that members of the Osage Tribe, including those to whom certificates of competency have been issued or whose restrictions have otherwise been removed, are without power to assign their right to share in the oil and gas royalties and other funds accruing to them as members of that tribe, and, that such funds as and when due, can be paid only to such of these allottees or their heirs as may be competent; the shares due incompetent members to be further administered for their* benefit, as specifically provided for in tbe act of March 3, 1921.”

On June 13, 1931, the Commissioner of Indian Affairs advised the Hon. Thomas D. Thacher, Solicitor General, that “this opinion has been subsequently followed by this Department.” The Commissioner refers to legislation subsequent to this opinion, but states that the Department does not construe such legislation as affecting the assignability of such headrights. The Comptroller General has likewise so ruled. On November 27, 1928, a question was presented to him as to whether accrued quarterly payments could be made to the receiver of a white man who had inherited an interest in a headright. Since the Act of April 12, 1924, permitted persons of non-Indian blood to transfer the interest, the Comptroller authorized the payment. But he was dealing with a white man. The Comptroller’ was careful to say, however, that, even in that case, “the funds, so long as they remain tribal fun'ds and not segregated, may not be paid to the receiver.” On February 7, 1931, the Comptroller held that a bankrupt Osage Indian might revoke a power of attorney, coupled with an interest, to collect quarterly payments. The Comptroller based his opinion upon In re Dennison (D. C.) 38 F.(2d) 662, holding that the subject-matter of the power was not assignable.

Appellant urges that section 6 of the 1929 act makes provision for paying the debts of restricted Indians from their credits, and that, a fortiori, Congress must have intended that unrestricted Indians should pay their debts. Several sections deal with the payment of debts of restricted Indians; but restricted Indians were not paid all of their share of the quarterly’ accruals, and section 6 does not attempt to subject mineral rights to debts, but provides only that the' debts shall be paid, when approved by the Super- ■ intendent, “out of the money of such Indian appearing to his credit.” Furthermore, the unrestricted Indian could sell or mortgage his surplus or homestead; and since unrestricted Indians have valuable property to which creditors may look, Congress may have thought creditors of restricted Indians were therefore entitled to a consideration not due to creditors of the unrestricted. But if there is an anomaly in the situation, it is for Congress to correct.

Other negative inferences are drawn from other sections; for example, it is urged that the proviso in section 5 of the 1929 act that the trust funds shall not be subjected to forced sale for certain debts is an implied authority to subject such property to forced sale for all other debts. Some of the language, taken from the context, does carry the negative inference contended for. But inferences are only aids to construction; and in our opinion these inferences cannot prevail over the other matters heretofore discussed. '

Counsel also rely upon Choteau v. Commissioner, decided by this court (38 F.(2d) 976) and affirmed by the Supreme Court (283 U. S. 691, 51 S. Ct. 598, 75 L. Ed.-), and particularly some of the language in both opinions. But that language must be considered against the background of the facts. That ease dealt only with moneys actually paid to and in possession of the individual Indian, which were his to do with as he pleased. What the case decided was that Congress had exercised its undoubted power to tax this income. We acknowledge the power of Congress to make these headrights alienable; what we hold is, that so far Congress has not done so. If the effort of the trustee in the case at bar were to reach funds which the Indian had received at the time of his adjudication, appellant’s reference to the Choteau Case would be pointed. But that is not the effort here; the effort here is to reach future income that may come to the bankrupt from tribal property in whieh he has no present interest.

We conclude that no Indian of the Osage Tribe has the right to alienate his headright and that it is not subject to judicial process. The orders appealed from are affirmed.


source: Caselaw Access Project

author: McDERMOTT, Circuit Judge.

license: Public Domain

text:
    TAYLOR v. JONES.
    No. 413.
    Circuit Court of Appeals, Tenth Circuit.
    Aug. 3, 1931.

      L. M. Poe, E. J. Lundy, R. E. Morgan, and H. R. Duncan, all of Tulsa, Okl., for appellant.
    E. A. Threadgill, of Pawhuska, Okl., for appellee.
    Before COTTERAL, PHILLIPS, and McDERMOTT, Circuit Judges.
   McDERMOTT, Circuit Judge.

This appeal is closely akin to No. 414, Taylor v. Tayrien et al. (C. C. A.) 51 F.(2d) 884, just decided. The only difference is that the bankrupt is not a member of the Osage Tribe, but is a Kaw allottee, of less than half Indian blood with a certificate of competency. She inherited one-half of an Osage headlight. There were no annuity payments to her credit at the time of her adjudication.

The decision in No. 414 governs this appeal. The Osage acts contemplated that headrights might pass to others than members of the tribe, for it was known that Osages married out of the tribe, arid the law provides that both parents may inherit. Section 6 of the Act of April 18,1912 (37 Stat. 86, 87), provides that “shares due minor heirs, including such minor Indian heirs as may not be tribal members” shall be paid into the treasury, thus distinctly recognizing the situation here presented, of a headlight passing to a member of another tribe. Appellant’s brief states that there are no white members of the Osage Tribe; if this is so, then the act referring to non-Indians is an-' other proof that Congress had in mind the possibility of these rights passing to persons outside the tribe. Yet, with this situation clearly in mind, when Congress passed the Act of April 12, 1924 (43 Stat. 94), providing for the alienation of headrights, it did not extend that authority to all outside the tribe, but limited the authority to those “not an Indian by blood.” The bankrupt is an Indian by blood; Congress has the same power over her and her property as it has over an Osage; doubtless the same considerations of public policy that prompted Congress to withhold from Osages the right to alienate these headrights, prevailed as to Indians of other tribes. The distinction drawn by Congress between Indians and non-Indians is a rational one, for, as Chief Justice Hughes said in Levindale Lead Co. v. Coleman, 241 U. S. 432, 437, 36 S. Ct. 644, 646, 60 L. Ed. 1080, in speaking of the poliey back of the Osage Act of 1906 (34 Stat. 539), “This poliey did not embrace white men,— persons not of Indian blood,—who were not as Indians under national protection, although they might inherit lands from Indians; and, with respect to such persons, it would require clear language to show an intent to impose restrictions.” But whatever the reason, Congress was careful to limit the authority to non-Indians, and we cannot extend it.

The power of Congress is plenary. It has restricted the right of inheritance as to these headrights; it has curtailed the right to bequeath them; it had the power to provide that when membership in' the tribe was terminated, by death or otherwise, the right was at an end, as was the situation before the 1906 act was passed. It had a right to impose upon the right of inheritance the condition that this interest in tribal properties should not be alienated by non-members of Indian blood. By extending the privilege to non-Indians, we think it was denied to Indians.

In section 7 of the Act of April 18, 1912 (37 Stat. 86, 88), it is provided that “no lands or moneys” inherited from Osage allottees shall be taken on judicial process to satisfy indebtedness incurred prior to the inheritance; and from this, the appellant draws the inference that mineral rights may be so taken for debts afterward incurred. But the section speaks of “lands and moneys”; the trustee is not seeking herein to reach any “lands” or “moneys” which the bankrupt owned at the time of the adjudication. Appellant’s brief makes this clear by stating, “In the ease of tbe bankrupt, she did not inherit moneys but she inherited a mineral interest from which she now derives quarterly payments.” A power to dispose of a future interest in tribal property cannot be inferred from a section dealing with a present interest in “lands and moneys.” Levindale Lead Co. v. Coleman, 241 U. S. 432, 36 S. Ct. 644, 60 L. Ed. 1080; La Motte v. United States, 254 U. S. 570, 41 S. Ct. 204, 65 L. Ed. 410; Drummond v. United States (C. C. A. 8) 34 F.(2d) 755, are cited. The substance of these eases is that a non-member who acquires title to Osage lands, takes it free from restrictions. But those cases deal solely with lands, the title to which was in the allottee; they do not deal with the mineral estate, the title to which is in the tribe. In No. 414, we have held that an Osage of less than half-blood, freed from restrictions, cannot alienate this headlight. The circumstance of death does not convert this inchoate right into a vested estate.

The order appealed from is affirmed.


author: HUTCHESON, Circuit Judge.

text:
    UNITED STATES FIDELITY & GUARANTY CO. v. HIGHWAY ENGINEERING & CONSTRUCTION CO., Inc.
    No. 6201-6206.
    Circuit Court of Appeals, Fifth Circuit.
    July 23, 1931.
    Rehearing Denied Sept. 4, 1931.

      Lucien H. Boggs, of Jacksonville, Fla., and Herbert S. Phillips, of Tampa, Fla., for appellant.
    George C. Bedell, of Jacksonville, Fla., and A. G. Turner, of Tampa, Fla., for appel-lee.
    Before BRYAN, SIBLEY, and HUTCH-ESON, Circuit Judges.
   HUTCHESON, Circuit Judge.

By these appeals the United States Fi-. delity & Guaranty Company, defendant in the court below, hereafter referred to as appellant, seeks to have declared here what was denied there, that certain paving certificates issued by the county of Hillsborough, Fla., under chapter 9316, Acts of 1923, as extended and validated by chapter 10139, Acts of 1925, and chapter 12207, Acts of 1927, are not valid and enforceable liens within the meaning of their agreement with appellee, Highway Engineering & Construction Company, to take up and pay them in the event of default.

Each of the paving certificates, the payment of which appellant upon conditions assumed, is fair on its face, and taken in connection with appellant’s agreement to take it up, with the evidence that default in its payment has occurred, and that appellant within the time limit in its agreement has failed to take it up, makes out a prima facie ease.

This appellant admits, contending, however, that this prima facie case has been fully overthrown by the showing that the basic legislation on which the assessments rest and the assessments are void, and that they neither could have been nor were given life by the validating acts relied upon. Further, it declares that at any rate plaintiff has mistaken its recovery, which should have been not for the face value of the certificates, but for nominal damages, or, at most, the actual damages which must have been, but were not, ípleaded and proven.

The contracts in suit were executed under the following circumstances:

Plaintiff, the paving contractor who laid the paving for which the assessments in question were levied, being the owner of the paving certificates based thereon, secured from, appellant for the consideration agreed upon the execution and delivery of the instruments in suit. Each of these agreements was styled “Paving Certificate Bond,” and each, after reciting the fact of the holding by plaintiff of the certain certificates of indebtedness thereinafter specifically described, and that it was the intention of plaintiff to sell them to other persons, declared that, if upon their maturity they should go unpaid, appellant “will pay to the lawful holders of said certificates of indebtedness or any of them, the amount of money then due.” It was, however, in said agreement provided: “This bond is issued subject to the following conditions precedent to liability on the part of the United States Fidelity & Guaranty Company; (1) That the certificates have been issued as recited in the agreement in conformity with the laws of the State of Florida authorizing their issuance. (2) That each certificate, payment of which may be demanded, is a valid and prior lien upon the land described in it. (3) That prior to the payment the holder of the certificate shall have done all things required by the laws of the State of Florida to be done to entitle payment from the owner of the land securing it. (4) That notice of default must be given appellant, and that it shall then have sixty days within which to take up the certificate.”

Appellant makes no question upon the fourth condition, default notice and demand, but contends that conditions 1, 2, and 3 in effect making its liability to pay dependent upon the validity of the assessment liens has not been and cannot be complied with so as to fix its liability to plaintiff. It declares that the legislative journals show that chapter 9316 was invalidly enacted. That chapter 10139; which repealed it, did not purport to validate the assessments made under it, but merely undertook to validate and continue in force the act itself for the purpose of continuing proceedings already begun under it. That, having been invalidly enacted, it could not be validated. Horton v. Kyle, 81 Fla. 274, 88 So. 757.

Further, that the proceedings in this case were not taken under chapter 9316, but under chapter 10139', itself an invalid act, and that chapter 12207 has not effected a validation of the assessments, first because it did not purport to validate assessments made as these were, under the authority of chapter 10139 but only those made under chapter 9316; and, second, because, if it may be construed as attempting to validate the proceedings on which the certificates in question rest, it could not, because of the essential invalidity of the chapters in question, under which they were levied, do so. Horton v. Kyle, 81 Fla. 274, 88 So. 757.

Plaintiff, appellee here, insists that, the defendant having, with full knowledge of the state of the law and facts out of which the assessments grew, and upon which they rest, executed the paving certificate bonds after the Supreme Court of Florida, in Moore v. Hillsborough County, 86 Fla. 514, 98 So. 505, had declared chapter 9316 a constitutionally valid enactment, cannot put upon the conditions any other meaning than that when payment was demanded of appellant, there must be a showing as to each certificate that it had been issued in accordance with the provisions of the governing law, and that it was still'due and unpaid. That to permit defendant to collaterally raise in this suit a constitutional question which is personal to the certificate payors was not intended by the agreement, nor is such right granted by its terms.

Plaintiff stoutly maintains further that the law under which the certificates were issued is valid, and the certificates always have represented valid obligations. Finally, however, it plants itself upon the proposition that, the assessments which the certificates in question represent having been validated by the Legislature of Florida by chapters 10139 and 12207 of the laws of Florida, ap-pellee should have had its judgment below, and that judgment should be here affirmed.

We do not agree with appellee that defendant could be made to pay for invalid certificates. We think it clear that the conditions of the instrument which it signed were carefully drawn to effect, and that they did effect, the result of limiting the risk of appellant to the financial one of the fluctuations in value of the property covered by the lien, and that it assumed no risk either as to title to the certificates or the validity of the assessment liens which underlie them. We think that, if appellant has in fact and in law sustained the burden of overcoming the prima, facies of the recitations in the paving bonds and in the certificates by making a clear showing that the assessments are void and the certificates therefore worthless, it, and not plaintiff, should have had judgment in the court below.

We think it plain, however, that that burden has not been sustained. The ingenuity and earnestness of counsel, aided by the equal division of the Florida Supreme Court, in Smith v. Williams, 126 So. 367; Id., 131 So. 335-337, has indeed gone far to invest this case with an atmosphere of doubt and difficulty; but our understanding of the legal principles involved does not permit us to share it. It seems clear to us that whatever might have been the legal situation, had the Legislature not by enacting chapter 12207 in effect spread the assessments for itself, given legislative authority and sanction to the work done and the amounts due the contractor for having done it, and legislative validity to the liens securing those amounts, the enactment of that státute has effectively and finally put an end to question.

We do not agree with appellant that the assessments in this case were not originally laid under the authority of chapter 9316. We think it entirely plain that they were, for chapter 10139 continued that act in force ■by name for the purpose of making these and other similar assessments, and there can be no question but that the validating act, chapter 12207, related to and effected the validation of the certificates and the assessment liens here in question.

We realize that, because of its equal division on the question, the Supreme Court of Florida has not spoken on this question in an authoritative way. That the same sit-, nation is presented here as was presented in Duval v. Hemphill (C. C. A.) 41 F.(2d) 433, and that here, as there, this court must for itself determine what is the law.

We agree, however, fully with Judge Whitfield’s very excellent discussion in Smith v. Williams, supra, of the question of the validity and scope of chapters 9316, 10145, and 12208, the latter two having the same relation to chapter 9316 as chapters 10139 and 12207 involved here, and we also fully agree with the conclusion which he reached.

We shall content ourselves, therefore, with saying so] and will not burden this opinion by what would be mainly a restatement of what he has already, in his characteristically clear, lucid, and vigorous way, so well said. We think it cannot be gainsaid that it is no longer a matter for question, that when by a validating act the Legislature ratifies and adopts assessments not spread by it, but which it could have originally spread, these assessments become and thereafter are legislative assessments as truly as though the Legislature had in the first place spread them. Columbia Inv. Co. v. Long Branch and Lakeside Road and Bridge Dist. (D. C.) 281 F. 342; Charlotte Harbor & N. R. Co. v. Welles, 260 U. S. 8, 43 S. Ct. 3, 67 L. Ed. 100; Anderson County Road Dist. No. 8 v. Pollard, 116 Tex. 547, 296 S. W. 1062; Dunn v. Ft. Bend County (D. C.) 17 F.(2d) 329, and the long list of eases cited in Judge Whitfield’s opinion in the Smith Bros. Case supra, 126 So. 367, 370.

The ease of Horton v. Kyle, supra, in which Judge Whitfield dissented, and the subsequent reliance upon that ease by some of the members of the Florida court, in our opinion, rests upon the failure to differentiate between the efforts to validate the legislative act itself and the things which had been done under its authority, things which the Legislature could originally have done, and therefore, having been done, it could validate.

Nor do we think there is any more merit in appellant’s position that plaintiff’s recovery should have been for nominal damages only, or at least for actual damages measured by the difference between the value of the certificates and their face. We think that, even if the contract were general with no specific agreement as here for taking up the certificates, and the suit were to be regarded as one for damages, damages would be measured by the face of the certificate and the amount which had been agreed to be paid. Bank of Miami v. Young (Tex. Com. App.) 208 S. W. 656; Seagraves v. Wallace (C. C. A.) 41 F.(2d) 679.

By clear provision in this ease appellant twice agreed, in the condition clause and in clause 4, to take up and pay the value of the certificates, if there were default, while in clause 4 the very difficulty, which appellant now makes so much of, that plaintiff will have its judgment for the value of the certificates and the certificates too, was provided against. That clause provides for sixty days’ notice to the company after default in the certificate before it is compelled to pay it, and then provides that contemporaneously with the payment the certificate shall be delivered over to appellant.

The judgment for plaintiff allowing recovery for the value of the certificates was correct, and must be affirmed. For so much of the judgment, however, as allowed attorneys’ fees there was no warrant.

Attorneys’ fees are recoverable only where they have been provided for in advance, either by agreement or by a valid statute. The agreement in suit made no provision for attorneys’ fees, nor can the statute which authorizes the collection of attorneys’ fees in suits upon insurance policies (Comp. Gen. Laws Fla. 1927, § 6220), Hartford Fire Ins. Co. v. Wilson & Tommer (C. C. A.) 4 F.(2d) 835, be availed of. The contract in question was not an insurance contract, and the invoked statute does not cover this case. Union Indemnity Co. v. Vetter (C. C. A.) 40 F.(2d) 606.

The judgment will therefore be modified by the disallowance of so much of it as awards attorneys’ fees, and, as modified, will be affirmed.


author: SAWTELLE, Circuit Judge.

text:
    ROTHSCHILD & CO. et al. v. MARSHALL, Deputy Com’r, et al.
    No. 6362.
    Circuit Court of Appeals, Ninth Circuit.
    Aug. 4, 1931.

      John W. Roberts, E. L. Steel, Tom W. Holman, and W. E. Evenson, Jr., all of Seattle, Wash. (Roberts, Skeel & Holman, of Seattle, Wash., of counsel), for appellants.
    Sam L. Levinson, of Seattle, Wash., for appellee Hedin.
    Before WILBUR and SAWTELLE, Circuit Judges, and ST. SURE, District Judge.
   SAWTELLE, Circuit Judge.

This is a second appeal in eases involving substantially the same questions of law and of fact.

On March 18, 1929, Gust Hedin, one of the appellees, filed a complaint before the Deputy United States Compensation Commissioner for the Fourteenth Compensation District, who is-the other appellee herein. Hedin claimed- to have suffered an injury while stowing lumber for Rothschild & Company, a stevedoring company, one of the appellants, and brought His suit under the Longshoremen’s and Harbor Workers’ Compensation Act.(33 USCA §§ 901-950).

On September 11, 1929, the deputy commissioner awarded Hedin compensation. On October 10, 1929, the appellants brought injunction proceedings to restrain the enforcement of the award, and on December 23, 1929, Bourquin, D. J., sitting in the District Court for the Western District of Washington, Northern Division, set aside the order of award, concluding his memorandum opinion with the equivocal words, “the deputy commissioner will proceed accordingly.” 36 F.(2d) 814, 816. On February 24, 1930, Judge Bourquin issued a permanent injunction setting aside and enjoining the enforcement of the award.

After the rendition of the memorandum opinion and also after the entry of Judge Bourquin’s final decree, the deputy commissioner took additional testimony in the ease, and on April 29, 1930, made and entered a new order awarding compensation to the-claimant. Thereafter, appellants commenced a new action in the District Court, seeking to enjoin the enforcement of this second award, on the ground that it was made by the deputy commissioner without jurisdiction and authority, and also that it was not supported by substantial evidence.. This matter was heard by Neterer, D. J., who, on July 7, 1930, rejected the* appellants’ contentions- and caused a deeree to be entered upholding the deputy commissioner’s award.

From that deeree, an appeal was taken to this court. The decree was here reversed, on October 27, 1930, and the ease remanded, with directions to the lower court to grant the injunction prayed for by the appellants. 44 F.(2d) 546.

On December 6, 1930, this court denied a petition for a rehearing on the first appeal, and on December 22, 1930, it denied the ap-pellee leave to file a supplemental petition.

On November 24, 1930, while the appeal was pending in this Court, a “petition for review and correction of judgment” was filed, without leave of this court, before Judge Bourquin, who was again sitting in the District Court for the Western District of Washington. See 47 F.(2d) 919. The petition asked that the deeree of injunction of February 24, 1930, be “corrected” so as to “express the true intent of the court,” by “inserting therein a provision that the deputy commissioner shall proceed further for the holding of such additional hearings as may be necessary to do justice between the parties.” On the same day, a petition for a rehearing on the first appeal was filed in this court.

On December 4,1930, Judge Bourquin issued an. “amended permanent injunction” “to take effect as of” February 24, 1930, authorizing the deputy commissioner to take further testimony. From this amended order of injunction, the present appeal was taken.

This case hinges upon the validity, sufficiency, and timeliness of the “petition for review and correction” filed by the appellees in the court below. On page 11 of their brief, appellees assert that “whatever may be the form of the petition it is in effect a bill of review and it is entirely proper under the circumstances.”

Accordingly, we will test the petition in question according to the canons set for bills 'of review ever since the days of Lord Bacon.

At the outset, we might observe that there is some authority for the view that fraud might be the ground for a bill of review, even though this principle has been questioned. Cyc. Fed. Proc. vol. 4, §§ 1140, 1141, and 1147, pp. 287, 291, 301-302. But we dismiss as unworthy of consideration the contention in the appellees’ brief that the deeree of injunction was obtained by fraud, and there is not sufficient allegation, if any, of fraud in the petition. The trial judge, prior to the entry of the deeree—as is disclosed in his opinion—had concluded that the award of the deputy commissioner appeared to be arbitrary, that the evidence was “scanty, ambiguous, indefinite and uncertain,” etc.

We cannot find that fraudulent practice of any nature has been shown in the proceedings.

In a case decided in 1850, the Supreme Court set forth the grounds on which a bill of review may be filed: “Since the ordinances of Lord Bacon, a bill of review can only be brought for ‘error in law appearing in the body of the deeree or record,’ without further examination of matters of fact; or for some new matter of fact discovered, which was not known and could not possibly have been used at the time of the decree.” Kennedy et al. v. Georgia State Bank et al., 49 U. S. (8 How.) 586, 609, 12 L. Ed. 1209. See, also, Hill et al. v. Phelps et al. (C. C. A.) 101 F. 650, 651, and Cyc. Fed. Proc. vol. 4, § 1139, pp. 283, 284.

To relieve against a judgment on the ground of accident or mistake, if it appears at all in a ease like the one before us, it must be shown that the complaining party was without fault or negligence. A court is without power to grant relief if it appears that the party alleged to have been aggrieved could have, with proper diligence, prevented the mistake complained of. “Laches, as well as positive fault, is a bar to such relief.” Brown v. County of Buena Vista, 95 U. S. 157, 159, 24 L. Ed. 422. As we shall see in a moment no error of law sufficient to sustain a bill of review was apparent on the face of the record.

While the ease was on appeal in this court, the District Court was without jurisdiction of the cause and therefore could not enter any order therein. After a decision by this court, the only step that the District Court could take was to obey the mandate of this tribunal, whose decision left the ease in exactly the same situation as Judge Bourquin had left it; that is, the condition that, in legal effect, prohibited the plaintiff from presenting further testimony before the deputy commissioner. Therefore, after a decision by this court, the only Way open to the plaintiff looking to a modification or change of the injunctive order so issued by Judge Bourquin was by application to this court.

In other words, Judge Bourquin, as we held, rendered a final judgment in the ease, subject to review only on appeal. That being so, the District Court was without power to entertain a bill of review for the modification, amendment, or change of the original injunction.

Reverting to the question of the sufficiency of the bill of review in the present instance, from the foregoing it is clear that a bill of review can be based upon only two grounds:

(a) That the judgment contained an error of law apparent on the face of the record.

(b) That new matter or new evidence was being urged in support of the bill of review.

If the bill of review is based upon ground (a), it must be filed within the time allowed for the filing of an appeal—or three months from the date of the final deeree of the lower court. Cyc. Fed. Proc. vol. 4, § 1149, pp. 316, 317; 28 USCA 230; O’Brien, Manual Fed. App. Proc. p. 94. If it be based upon ground (b), we find that it may not be filed in the lower court, even by a nonappealing party, when an appeal has been taken, without leave of the appellate court. Cyc. Fed. Proc. vol. 4, § 1150, p. 318; National Brake & Electric Company v. Christensen et al., 254 U. S. 425, 430-431, 41 S. Ct. 154, 65 L. Ed. 341; Franklin Savings Bank et al. v. Taylor et al. (C. C. A.) 53 F. 854, 865-866; Suhor et al. v. Gooch (C. C. A. 4) 248 F. 870, 871; American Foundry Equipment Company v. Wadsworth (C. C. A.) 290 F. 195, 196.

There is no basis for a contention that new evidence was offered or produced. On the other hand, as we have seen, there was no error of law apparent on the face of Judge Bourquin’s original injunction order of February 24, 1930. This court, in reversing Judge NeterePs award of compensation based upon the additional evidence taken by the deputy commissioner, in effect found no error of law, either on the face of the record or otherwise, in Judge Bourquin’s injunction decree, which held that there was no evidence to sustain the first award. We quote at some length from our opinion in the first appeal, since it clearly shows that we found no errors of law in Judge Bour-quin’s first judgment, which later, while the first appeal was pending, was sought to be corrected by a bill in the nature of a bill of review: ' ■

“ ‘Courts of record speak through the judgments or decrees entered upon, their records, and where a judgment or decree is unambiguous, an opinion delivered by the judge rendering it at the time the same is entered will not be looked to to give such judgment or decree an effect different from that which clearly follows from the language used.’ Kane Hardware Co. v. Cobb, 79 W. Va. 587, 91 S. E. 454.
“The decree makes no provision for a re-reference of the ease to the deputy commissioner, nor does it provide that its entry shall be without prejudice to a new proceeding which the claimant is authorized to institute or prosecute. In terms that leave no room for doubt, the order of the deputy commissioner is set aside and he is permanently enjoined from enforcing it. If the claimant felt that he had not been afforded a full and fair hearing by the deputy commissioner, and that the ends of justice required that he be given additional opportunity to present further evidence in support of his claim, the matter should have been called to the attention of the District Judge, with the request that a decree to that effeet be entered in the case. But no such action was taken by the claimant. He stood by and allowed a final decree enjoining the enforcement of the compensation award to be entered in the ease. Moreover, we are not impressed that the concluding language in the opinion to which we have adverted will bear the construction sought to be placed upon it by counsel for the appellees. The court said, ‘The deputy commissioner will proceed accordingly.’ According to what? Why, obviously to what the court had decided, not to what some one may surmise it ought to have decided, or suspect that it intended to decide but did not. * * * The assumption that by the language employed, Judge Bourquin intended that a rehearing be had, is utterly groundless and gratuitous. To assume that any such thought -was in his mind is to ignore his solemn decree and to read into his opinion something which he was not pleased to incorporate in it.” 44 F.(2d) 548, 549.

Where an appeal is allowed all jurisdiction of the suit appealed from is transferred to this court. Goddard v. Ordway, 101 U. S. 745, 752, 25 L. Ed. 1040.

So long as the order of allowance of appeal ■ continued in operation and the case was continued on appeal in this court, it bound the parties. When the appeal is perfected and the cause has passed to the jurisdiction of the appellate tribunal, the District Court is without jurisdiction in the premises.' Interstate Commerce Commission v. Louisville & Nashville R. R. Co. (C. C. A.) 101 F. 146. So also after the appeal is decided, the District Court is bound by the decision. City of Seattle v. Puget Sound Power & Light Co. (C. C. A. 9) 15 F.(2d) 794, 795; Kingsbury v. Buckner, 134 U. S. 650, 670, 10 S. Ct. 638, 33 L. Ed. 1047; United States v. Port Washington Brewing Co. et al. (D. C.) 277 F. 306, 314; American Foundry Equipment Co. v. Wadsworth, supra; Ed. Rown, etc. v. Brake-Testing Equipment Corporation et al., 50 F.(2d) 380, decided by this court on June 1, 1931.

The amended decree and judgment of December 2, 1930, is hereby set aside and reversed and the original permanent injunction of February 24, 1930, as previously interpreted by this court, is hereby decreed to be of full force and effect.

Judgment reversed.


author: SIBLEY, Circuit Judge.

text:
    HOSKINS v. CITY OF ORLANDO, FLA.
    No. 6111.
    Circuit Court of Appeals, Fifth Circuit.
    Aug. 18, 1931.

      Paul Beckett, of Orlando, Fla., for appellant.
    C. P. Dickinson, of Orlando, Fla., for appellee.
    Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.
   SIBLEY, Circuit Judge.

Hoskins sued the city of Orlando at law to recover two annual installments of $10,000 each, with interest, claimed to be due on a purchase from him of a ninety-nine year lease on certain real estate in the city. His declaration was dismissed on general demurrer, and he appeals. The declaration has attached as Exhibits A, B, D, and C, respectively, a copy of the lease, its assignment by the first lessee to the plaintiff, a contract between plaintiff and the city of Orlando by its mayor for the purchase of the lease, and an assignment of the lease by the plaintiff to the city under certain conditions and covenants. All are instruments under seal.

We are first confronted with the question whether these instruments are a part of the pleading on demurrer under the Florida practice and the Conformity Statute (28 US CA § 724). Common-law pleading obtains in Florida with statutory modifications. Though exhibits were commonly used in chancery practice, they were unknown to the common law. A writing relied on by the common-law pleader was alleged according to its legal effect, or, if that was doubtful, the pertinent provisions might be set forth verbatim. No reference to any document imported it into the pleading. An unsealed writing was merely evidence, and not to be produced until the trial; but if a deed were relied on, because of the estoppel incident to it, it had to' be produced in court by the pleader, and profert made of it. The opposite party might then demand oyer of it, that is, to hear it read, and thereupon he might found a demurrer on it by reciting its contents in his demurrer, and it was then treated as a part o£ the pleading of the party who produced it. Stephen, Pleading, p. 66, and ff. 437 ; 44 C. J., Pleading, §§ 865, 870, 875. By the statutes of Florida profert and oyer of deeds is abolished. Comp. Gen. Laws 1927, § 4292. But by section 4313 (2), “all bonds, notes, bills of exchange, covenants and accounts upon which suit may be brought, or a copy thereof, shall be filed with the declaration.” The statute requires mere filing with, and not attachment as an exhibit to the declaration, and it has been consistently held by the Supreme Court of Florida not to result in making the paper a part of the declaration on demurrer. A contrary view of a similar statute was taken by the Supreme Court of the United States in City of Nauvoo v. Ritter, 97 U. S. 389, 24 L. Ed. 1050. Nevertheless, the practice of attaching exhibits to the declaration has been persisted in, and it is now held by the Florida court that an attached exhibit may by apt words in the declaration be made a part of it; and without such words, if it be so treated in the lower court the reviewing court will likewise so regard it. State v. Seaboard Air Line Ry., 56 Fla. 670, 47 So. 986; National Surety Co. v. Williams, 74 Fla. 446, 77 So. 212; Shelton v. Eisemann, 75 Fla. 644, 79 So. 75; Reinschmidt v. Crosby, 98 Fla. 365, 123 So. 755, 124 So. 4. According to Strout Farm Agency v. Hollingsworth, 92 Fla. 673, 110 So. 267, 268, where the declaration refers to an instrument and adds “copy of which is hereto attached as Plaintiff’s Exhibit A,” and refers to another, adding “a copy of which is attached hereto as a part hereof, and marked Plaintiff’s Exhibit B,” the latter is to be considered a part of the declaration on demurrer but the former is not. By this test Exhibits A, B, and C in the suit at bar are not part of the declaration, but Exhibit D is. We think the distinction too refined and unreasonable to require its application in the federal courts under the Conformity Act. Where the plaintiff alleges that an instrument exists, and asserts that an attached paper is a copy of it, he must intend that his opponent and the court shall read it, and cannot complain that the assertion in his declaration is taken at its face value. In substance he has incorporated the paper into the declaration. If his opponent makes no objection to the impropriety in form according to common-law standards, but as in this ease expressly founds his general demurrer in part upon the contents of the exhibits, and the court sustains the demurrer, neither plaintiff nor defendant is in any position to contend that the reviewing court should not treat the annexed exhibits as a part of the declaration. This we' will accordingly do.

From the declaration and the exhibits it appears that in April, 1925, the owner of a lot of land in the city of Orlando, upon which was a building referred to as the Boardman Apartments, leased the same for ninety-nine years for a monthly rental of $300, with deposit of a reserve fund of $3,-600 to secure rents and performance of other covenants. The lessee is by the terms of the lease to keep the premises in repair and insured against fire and storm, with loss payable to lessor, the insurance to be used in rebuilding. The lease is assignable only on lessor’s written consent. It is forfeitable at lessor’s option on numerous conditions, but nothing is to suspend or abate the rent or end the lease at the instance of the lessee, except that within a limited period he may buy the reversion for $50,000. The lease recites two outstanding mortgages of $113,000. The plaintiff bought this lease on the day it was executed for $500. On February 13, 1926, the mayor and city council took action looking to the purchase of the lease and reversion. On the same day the mayor signed the contract with plaintiff which is Exhibit D, whereby the plaintiff was to assign the lease to the city, and the city was to accept the assignment on March 1, 1926, and to pay for it $5,500 cash, $14,500 on March 1st, and $40,000 to be evidenced by four notes, each for $10,000, due in one, two, three, and four years, with interest at 8 per cent, from March 1,1926, plus $3,600 in six notes due monthly for the reserve fund deposited under the lease. An abstract of title showing fee-simple record title in lessor was to be furnished by plaintiff, and lessor’s written consent was to be obtained, and if the city bought the reversion plaintiff was to have a second mortgage for his balance. On March 5, 1926, lessor having consented in writing and the initial payments having been made, plaintiff signed an assignment of the lease to the city; but the instrument provided that it should be held in escrow until the four $10,-000 notes and the six $600 notes of even date should be paid, with interest, and it added: “It is further expressly agreed between the parties hereto that in the event default is made in the payment of any of the said last named notes for a period of íifteen days'after the same shall become due, that these presents shall then be null and void, and that all moneys theretofore paid hereunder by the said City of Orlando shall be retained by the. said G. H. Hoskins as liquidated damages and as agreed rental for the hereinbefore described premises.” This instrument was signed also for the city by the mayor and clerk. It is not averred whether the six $600 notes were paid, or not, but that two of the $10,000 notes were paid, and the last two were not paid. Acts tending to show ratification by the city are also alleged, among them that the city collected the rents on the property. The questions principally argued are: Was the purchase within the power of the city? Was it lawfully authorized? Was the contract as made in accordance with the authority? .Has ratification cured defects?

Taking the purchase of the lease alone as it is set up in the declaration, we think the first question should be answered in the negative. Comp. Gen. Laws of Ma. 1927, § 2942, declares that municipal corporations have “full power and authority to take and to hold property, real, personal and mixed, and to control and dispose of the same for the benefit and best interest of the corporation.” While power to purchase is not expressly mentioned, we have no doubt that purchases otherwise proper are included. A purchase of land, even for future municipal needs, was held authorized when bonds had been voted therefor in Merrell v. St. Petersburg, 74 Fla. 194, 76 So. 699. But a municipal corporation from its very nature and objects is limited in the property it may purchase, as in the activities in which it may engage. It buys and operates with money raised ih the main by taxation, and municipal taxation in Florida is authorized for municipal purposes and none other. Florida Constitution, art. 9, § 5. Outlays of money, and especially debts to be paid in the future, can be made only for purposes expressly permitted by law to a municipality, or necessarily implied in order to accomplish its express powers. McQuillen, Munic. Corp. § 1216; Phipps v. Morrow, 49 Ga. 37; Avery v. United States (C. C. A.) 104 F. 711; Eufaula v. McNab, 67 Ala. 588, 42 Am. Rep. 118. The doctrine of ultra vires is much more strictly applied to it than to a private corporation, for the limits of its power depend on public law whieh all persons dealing with it axe bound to know. “Municipal corporations are established for purposes of local government, and, in the absence of specific delegation of power, cannot engage in any undertakings not directed immediately to the accomplishment of those purposes.” Hill v. Memphis, 134 U. S. 198, 10 S. Ct. 562, 564, 33 L. Ed. 887; City of Ottawa v. Carey, 108 U. S. 110, 2 S. Ct. 361, 27 L. Ed. 669. “The authority to purchase and hold property of all kinds relates only to such property as is needed for municipal purposes.” Lewis v. Shreveport, 108 U. S. 282, 2 S. Ct. 634, 635, 27 L. Ed. 728. The purchase of land for a golf course was disallowed, though the city had authority to establish parks and playgrounds, in Bradentown v. State, 88 Fla. 381, 102 So. 556, 36 A. L. R. 1297. A city having power to buy and own property for municipal purposes cannot validly agree to buy as a mere investment. Hunnicutt v. Atlanta, 104 Ga. 1, 30 S. E. 500. Nor for the purpose of renting it out or otherwise obtaining income from it. Bates v. Bassett, 60 Vt. 530, 15 A. 200, 1 L. R. A. 166; Bloomsburg Land Imp. Co. v. Bloomsburg, 215 Pa. 452, 64 A. 602. The declaration refers to the property here involved as the “Boaxdman Apartments,” and avers that the city, while in possession, had collected the rents from it. The lease itself requires that the lessee respeet and carry out all contracts with the tenants. Neither the action of the council nor the declaration nor its exhibits suggest any proper municipal use for this apartment house. On its face the purchase seems a mere investment, and not within the corporate power. It is not a taxpayer or third party who is attacking the contract, but the city itself while the contract is yet unperformed has repudiated and is resisting it. This neutralizes the original presumption of right official action in making the purchase. The declaration is not a general assumpsit, as in Brown v. Pomona, 103 Cal. 531, 37 P. 503, and Richmond Land Co. v. West Point, 94 Va. 668, 27 S. E. 460, but is a special count undertaking to set up the full facts. It was held in Richmond Land Co. v. West Point that the burden is on the vendor who seeks to force a purchase of land on the city, to prove á proper municipal purpose in making it. An apartment house in operation is so remote from the ordinary purposes of municipal government that the purchase of an interest in it is not presumptively valid, but apparently invalid, and the declaration should have alleged, if it could be done, some proper municipal use intended for it. Furthermore, we have not here a mere purchase of an estate for years for a fixed present price of $60,000, but there is involved in addition the assumption by the city as assignee of the lease with the lessor’s consent of serious obligations for a period of ninety-eight years. Aside from the burden of insurance, repairs, and rebuilding, there is a fixed rental to be paid of $3,600 each year, $352,800 for the entire term. Escape by reassignment of the lease is impossible without the consent of the lessor. If we suppose that the city is thus contracting on annual payments for house space for some proper municipal need, the contract is for too long a time. In the absence of express statutory permission, municipalities, even in their proprietary functions, may contract only for a reasonable time. 44 C. J., Munic. Corp., § 2127. A contract for a water supply for thirty-one years where a waterworks system was to be installed on the faith of the contract is the longest one to be sustained that we have found. Reed v. Anoka, 85 Minn. 294, 88 N. W. 981; Little Falls Co. v. Little Falls (C. C.) 102 F. 663. To bind the city to the rental of a house for ninety-eight years at a fixed rate we think is on its face unreasonable. It is true that relief from this obligation might, within a limited period, be obtained by buying the reversion at $50,000; but this is not alleged to have been done, nor are the mortgages alleged to have been paid or released. The plaintiff is seeking to enforce the acceptance of the lease as it stands, separate from and independent of the reversion. He shows no- prima facie right to succeed.

We consider, perhaps needlessly, the other questions proposed. Chapter 10973, Special Laws of Florida 1925, requires that “to purchase or sell any real property of said city [Orlando] the said purchase or sale shall be only upon the unanimous affirmative vote of the mayor and all members of the said city council,” or else a majority vote of the electors of the city. The minutes of the council copied in the declaration show that the mayor and all four commissioners were present; that the mayor advised that the city could purchase the lots adjoining the fire station property on the north, “and upon motion of Commissioner Ramsey, seconded by Commissioner Newell, it was unanimously agreed that the purchase of the following real estate be approved, and the Mayor and City Clerk authorized to ¿raw up the proper papers.” There followed a description of other property and the price to be paid for it, and a description of that here in issue as under a ninety-nine year lease, on which “the price is to be $110,-000.00, $60,000.00 for the lease and $50,-000.00 for the option to purchase.” Assuming, without deciding, that the statute by “real property” means technical realty, excluding a bare leasehold which is a chattel, we think it clear that the city council con-templated a purchase óf the fee in this property for $110,000. They refer to it as “real estate.” They did not intend to buy the lease without the reversion, nor the reversion without the lease, and did not authorize it. There being no election held, the affirmative vote of the mayor and all the commissioners was necessary to the validity of the authority. We think, however, the minutes fairly construed mean that the motion was put to a vote, and that the mayor and all four commissioners voted for it. 43 C. J., Munic. Corp. § 791. In Steckert v. City of East Saginaw, 22 Mich. 104, relied on as being to the contrary, the- statute dealt with required the votes of all the members to be entered at large on the minutes. There is no such requirement in Florida.

But we think the contract made differed materially from the power conferred. Assuming that in authorizing the mayor and city clerk “to draw up proper papers” it was meant" that they should also execute them, the power was a joint one, and could not be executed by the mayor alone because it involved the exercise of judgment in drawing up the proper papers and not the mere ministerial act of signing papers already approved. 49 C. J., Powers, § 101; 2 C„ J., Agency, § 319. The clerk did not join in the execution of Exhibit D, but did as to Exhibit C. It does not appear who signed the notes referred to in the latter, or what has become of them. Exhibit C would appear to be the joint execution of the authority rather than Exhibit D, which is specially counted on, but for present purposes there is no great difference. The authority was to buy the lease and the reversion, which would have merged and ended the lease. The contract undertook to buy the lease only. There was no concurrent closing of the option on the reversion. The great difference in the obligations of the city which would result has been pointed out above. A special agent to buy a specified amount of property is not authorized to buy either more or less. 2 C. J., Agency, § 225. But if the purchase of the lease may be divorced from that of the reversion, the authority was to pay only $60,000. The contract committed the city additionally to pay $8,000 in interest on deferred payments, and $3,600 for the reserve fund, which, aside from a purchase of the reversion, would never come back to the city until the end of the lease. The drastic conditions in Exhibit C for forfeiture on failure for fifteen days to pay even a $600 note were beyond any authority given; The city could properly repudiate this partial and perverted execution of its authority to purchase.

But it is alleged that it ratified it by accepting the assignment, paying the initial payments, and two of the $10,000 notes, and by taking possession of the property and collecting the rents, and having it exempted from taxation as city property. There is no allegation that the city council, which is the governing body of the city, did or authorized any of these things, nor, if it ■did, that it knew at the time all the pertinent facts. Scott v. City of Lincoln, 104 Neb. 546, 178 N. W. 203. Without such, knowledge neither ratification nor estoppel by aequiescence or silence would result. McQuillen, Munic. Corp. § 1361; 31 Cyv. 1266, 1275. If the city council had known that the lease alone, carrying the option with the potential credit of $3,600 reserve fund, had been bought, the situation was so different from the acquirement of the fee theretofore authorized as to amount to another transaction. ■ There is nothing to indicate that the council ever saw the lease or considered' its terms. A lease carrying an'option to purchase is more than a chattel. Thalheimer v. Tischler, 55 Fla. 796, 46 So. 514, 17 L. R. A. (N.. S.) 841, 15 Ann. Cas. 863. Another formal, unanimous vote of mayor and all eouneilmen would seem necessary to ratify its separate purchase. McQuillen, Munic. Corp. § 1362; Astoria v. Am. La. France Co. (C. C. A.) 225 F. 21. But no ratification, however express and formal, could meet the objection that the city is not authorized to buy a ninety-nine year lease with burdensome covenants such as this one has on property under heavy mortgages which does not appear to be for municipal purposes. 43 C. J., Municipal Corporations, § 2118. Estoppel by receipt of benefits has been argued, but is not expressly pleaded. The city is not alleged now to be in possession of the .property. The assignment of the lease was never effective because not delivered. All .that the city ever got was some rents for an unstated period. The plaintiff got at least $40,000 from the city. We do not think that it appears that the city has received such benefits as to bind it to carry out this transaction. Nor can estoppel be invoked against a municipality to validate that which is unlawful or wholly ultra vires. McQuillen, Munic. Corp. § 1358; 28 Cyc. 279; State v. Murphy, 134 Mo. 548, 31 S. W. 784, 34 S. W. 51, 35 S. W. 1132, 34 L. R. A. 369, 56 Am. St. Rep. 515; Eufaula v. McNab, 67 Ala. 588, 42 Am. Rep. 118; Horkan v. City of Moultrie, 136 Ga. 561, 71 S. E. 785.

Judgment affirmed.


author: DAVIS, Circuit Judge.

text:
    H. P. CUMMINGS CONST. CO. v. MARBLE-LOID CO.
    No. 4539.
    Circuit Court of Appeals, Third Circuit.
    Aug. 18, 1931.

      Edwards & Smith, of Jersey City, N. J. (Harford T. Marshall, of New York City, of counsel), for appellant.
    Hunt, Hill & Betts, of New York City (H. Victor Crawford, of New York City, of counsel), for appellee.
    Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
   DAVIS, Circuit Judge.

This is an appeal from a judgment, entered by the court sitting without a jury, dismissing the complaint in an action to recover $6,766.23 damages for breach of an alleged contract of indemnity.

The plaintiff-appellant, a Massachusetts corporation, entered into a contract with the state of Maine for the erection of a girls’ dormitory, an addition to the kitchen building, and an addition to the laundry building, for the School for Feeble Minded m the Town of West Pownal, Cumberland County, Me. The defendant, Marbleloid Company, made a subcontract with the plaintiff to lay a marbleloid floor in the new dormitory and dining room addition, “in accordance with the plans and specifications of H. S. Coombs, architect.”

The floors were laid by the defendant and soon cracked. The state of Maine called upon the plaintiff, general contractor, to relay them, and it in turn called upon the defendant to do it; but the defendant refused on the ground that the cracking was due, not to its work, but to craeks in the concrete .foundation which it did not lay and with which it had nothing to do. Thereupon the state relaid them, brought suit against the plaintiff for the cost thereof, and secured judgment against it for $3,042.55. The plaintiff then brought suit against defendant for the amount of the judgment which it was compelled to pay and costs of $3,723.68, which it incurred in defending the suit, making the entire damages $6,766.23.

The defendant contends that the so-called “proceedings at trial” should be stricken out and the appeal dismissed because a bill of exceptions was never presented to or signed by the trial judge and consequently there is nothing for this court to consider. By a uniform course of decisions, no point, as a general rule, will be considered by an appellate court unless objections are made and exceptions taken to the rulings thereon at the trial. It is further necessary that the exceptions thus taken be presented to the judge for allowance at the same term or within a further time allowed by order entered at that term or by a standing rule of court. Texas Company v. Brilliant Manufacturing Company (C. C. A.) 2 F.(2d) 1; Atchison, Topeka & Santa Fe R. R. Co. v. Nichols (C. C. A.) 2 F.(2d) 12; Goetzinger v. Woodley (C. C. A.) 17 F.(2d) 83; Reilly v. Beekmam (C. C. A.) 24 F.(2d) 791; North River Ins. Co. v. Guaranty State Bank of Farwell (C. C. A.) 30 F.(2d.) 881; Michigan Insurance Bank v. Eldred, 143 U. S. 293, 12 S. Ct. 450, 36 L. Ed. 162; Jennings v. Philadelphia, Baltimore & Washington Railway Co., 218 U. S. 255, 31 S. Ct. 1, 54 L. Ed. 1031; O’Connell v. United States, 253 U. S. 142, 40 S. Ct. 444, 64 L. Ed. 827. But appellant says that a bill of exceptions was unnecessary in this ease, for the reason that “in trials by the court in an action at law with a jury waived by stipulation in writing, the sufficiency of facts specially found to support the judgment is open to review without exceptions and a hill of exceptions.” This is true, and the following eases support that proposition: Guaranty Trust Co. v. Koehler (C. C. A.) 195 F. 669; City of Cleveland v. Walsh. Construction Co. (C. C. A.) 279 F. 57; Templar Motors Co. v. Bay State Pump Co. (C. C. A.) 289 F. 24; Tyng v. Grinnell, 92 U. S. 467, 23 L. Ed. 733; Seeberger v. Schlesinger, 152 U. S. 581, 14 S. Ct. 729, 38 L. Ed. 560; 28 USCA § 875. But this rule of law is not applicable in this case, for the court did not make special findings of fact and its general findings have the effect of a general verdict of a jury, which is conclusive upon all matters of fact. There being no exceptions to rulings of law in the progress of the trial and no bill of exceptions, bringing up those portions of the record upon which the assignments of error are predicated, the review is limited to the pleadings and opinion and there is nothing in them justifying a reversal. North River Insurance Co. v. Guaranty State Bank of Farwell (C. C. A.) 30 F.(2d) 881; Lehnen v. Dickson, 148 U. S. 71, 13 S. Ct. 481, 37 L. Ed. 373; St. Louis v. Western Union Telegraph Co., 166 U. S. 388, 17 S. Ct. 608, 41 L. Ed. 1044; Vicksburg, etc., Railway Co. et al. v. Anderson-Tully Co., 256 U. S. 408, 415, 41 S. Ct. 524, 65 L. Ed. 1020.

But passing this technical question, the same conclusion must be reached on the merits of the ease.

The plaintiff sued to recover damages on a contract of indemnity and not to recover on the breach of a contract because of negligent construction of the work which the defendant agreed to perform. The contract between the plaintiff and defendant provided that the defendant was to lay marbleloid floors “in accordance with the plans and specifications of H. S. Coombs, Architect,” which were the plans and specifications in the general contract between the plaintiff and the state of Maine. In section, 44a of these specifications, it appears that the contractor agreed to indemnify the state of Maine for damages due to poor workmanship, and the plaintiff says that these plans and specifications are incorporated in the subcontract by reference and, therefore, an implied contract to indemnify the plaintiff by the defendant arose. But the reference in the subcontract to “the plans and speciflea^ tions of H. S. Coombs, Architect,” was evidently for the mere purpose of identifying the floors to be laid and the manner in which the work was to be done in laying them. The rule of law baséd upon authority and sound reason is that in the case of subcontracts, as in other express agreements in writing, a reference by the contracting parties to an extraneous writing for a particular purpose makes it a part of their agreement only for the purpose specified. Martin v. Oberle, 85 Misc. Rep. 35, 147 N. Y. S. 60; Miller v. Hamilton (C. C. A.) 216 F. 131; Guerini Stone Co. v. J. P. Carlin Construction Co., 240 U. S. 264, 36 S. Ct. 300, 60 L. Ed. 636. It was far from the intention of the defendant, when it entered into the contract to lay floors, to incorporate therein all the provisions of the plans and specifications in the contract between the plaintiff and the state of Maine.

The real purpose of bringing this suit on the theory of a contract to indemnify was to avoid the statute of limitations (Rev. St. Me. 1930, e. 95, § 90). If this action is based upon a contract to indemnify, it is no-t barred by the statute of limitations, but if based on the breach of a contract to lay marbleloid floors, it is barred by the statute. In the case of a contract to indemnify, the cause of action accrues and the statute begins to run when and only when the loss or damage oceurs. But in the ease of the breach of a contract to do certain work, the cause of action accrues and the statute' begins to run from the time of the breach. 3 Willis-ton, Contracts, § 2004, p. 3402; 37 Corpus Juris, p. 838. Judgment against the plaintiff in the Supreme Judicial Court of Maine was rendered on April 4, 1929.

But the last work was done and the floors were completed on September 22,1922. The contract, if breached at all, was breached on or before that date and the right of action accrued then and the statute began to run at that time and not when the floors cracked or the state of Maine secured judgment against the plaintiff. Painter Fertilizer Co. v. Kil-Tone Co., 105 N. J. Law, 109, 143 A. 332; Hoppaugh v. McGrath, 53 N. J. Law, 81, 21 A. 106; Gogolin et al. v. Williams, 91 N. J. Law, 266, 102 A. 667; Wilcox v. Plummer’s Executors, 29 U. S. (4 Pet.) 172, 7 L. Ed. 821. The suit had to be brought within six years, that is, on or before September 22, 1928; but it was not begun until December, 1929, and so was barred by the statute.

The judgment against the plaintiff in Maine was not conclusive upon the defendant. To entitle the plaintiff to indemnification for the damages recovered against it in the Maine suit, it must show a contract with the defendant which in terms and legal effect embraced the entire cause of action for which such damages were recovered. In such ease the defendant may show that the injury complained of was occasioned in whole or in part hy the acts or conduct of the plaintiff, or any other matter which as between it and the plaintiff would exonerate it from liability. Hoppaugh et al. v. McGrath, 53 N. J. Law, 81, 21 A. 106. The defendant contended that the cracking of the floors was due to the cracking of the concrete foundations beneath them and for these foundations the plaintiff was responsible. It was admitted on the trial that three witnesses for the defendant, if called, would so testify. The plaintiff wrote defendant on June 28, 1923, that “these floors had developed cracks due to the concrete slab under them cracking.” This letter was an admission by the plaintiff of defendant’s contention. This proof the plaintiff met only by the offer in evidence of the Maine judgment and this was incompetent.

Whether considered on technical grounds or on the merits, the judgment must be affirmed.