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UNITED STATES v. FORNESS

February 14, 1941

UNITED STATES
v.
FORNESS et al. (SALAMANCA TRUST CO. et al., Interveners)



The opinion of the court was delivered by: KNIGHT

KNIGHT, District Judge.

When railroad building was commenced in the western part of the State of New York nearly a century ago, desirable routes were found through the Allegany and Cattaraugus Indian Reservations therein. The Legislature of the State of New York undertook to authorize railroad companies chartered by that state to contract with the Chiefs of the Indians for the right to construct and maintain railroads upon the Indian lands, title, however, not to be vested in the companies. The railroads as constructed combined covered some 30 miles in lenght of the Reservation. Several villages, among them, Salamanca, quickly sprang up along the lines of the railroads. By reason both of its location and the junction of the railroads there, this village grew rapidly until it now has become a city with population of nearly 10,000. When the railroads were first being constructed, aside from the railroad leases, leases, some from individual Indians and some from the Seneca Nation of Indians, were procured by numerous persons. These leases then were relatively few in number, but together covered considerable tracts of land. Numerous lessees procured private acts purported to ratify and confirm their leases, and in 1866 an Act was passed by the Legislature of the State of New York purporting to ratify the leases on all lands theretofore leased in the town of Salamanca. Chapter 472, 89th Session. This Act and the various private acts confirming such leases were held by the Supreme Court of the State of New York to be unconstitutional. In 1875 the Legislature of the State of New York passed a concurrent resolution, Laws 1875, p. 819, asking Congress to enact legislation for the relief of the lessees of these lands, and in that same year Congress ratified the existing railroad leases and provided for the laying out of certain villages within the Allegany Reservation, legalized existing leases for terms up to five years and permitted the further leasing and renewal of leases in the villages laid out, for a term of twelve years. Act of February 19, 1875, 18 Stat. 330. In 1890, 26 Stat. 558, the Act of 1875 was amended to provide for renewal of leases, except railroad leases, for term of ninety-nine years instead of twelve. The Acts of 1875 and 1890 as to leases thereafter executed required that such leasing should be granted by the Seneca Nation through its authorized representatives. All of the present city of Salamanca is within the Allegany Reservation.

The lease involved in this case is one granted by the Seneca Nation of Indians to one Hector G. Forbes and dated February 19, 1892. The defendants Forness are assignees of such lease and the written assignment was executed in 1919. The lease itself specifically states that it was executed by virtue of the terms of the Act of 1875. It covers lands in the City of Salamanca. Since 1919 there has been constructed by the defendants on the premises in question a structure at a cost of $63,000. On October 3, 1934, a mortgage in the amount of $15,000 was executed to the Salamanca Trust Company and that amount remains unpaid.

 On March 4, 1939, the Council of the Seneca Indians adopted a resolution that: "All leases made with the Seneca Nation as lessor, which are delinquent in rental payments this 4th day of March, 1939, be and the same are hereby cancelled as of this date." The resolution also provided that notice be given by mail to all lessees claimed to be in arrears and the necessary steps be taken to remove delinquent lessees and collect the arrears of rent. By the terms of the lease with the assignor of the defendants, the lessee agreed to pay the rent of $4 "to be paid in cash annually in advance to the Treasurer of the Seneca Nation of Indians on or before the 19th day of February each and every year during the continuation of this lease. * * *" At the time and upon the date when the aforesaid resolution of the Seneca Nation was adopted, the defendants were in default for the annual rental due on February 19, 1939, for the year 1939 and for several years prior thereto. On or about February 19, 1939, the Superintendent of the New York Indian Agency caused to be sent to these defendants a notice stating the amount of the rent unpaid and the interest thereon, which total showed $44.64. The notice bore this endorsement: "Be sure to bring this statement with you. Rents are payable to the United States Indian Office * * * Rents are due each year in advance on February 19, and must be paid on or before April 20 thereafter, or interest will be charged from the time the rent became due." On March 6, 1939, or two days after the adoption of the aforesaid resolution by the Seneca Nation of Indians, the defendants Forness tendered to an official in the office of the New York Indian Agency a check in the amount of $44.64. That check in the usual course was paid and a receipt of payment for all rent due to that date given by an official in the office of the agency to the defendants Forness. The proceeds of the check were deposited to the credit of the Treasurer of the United States and have been so retained. It is admitted that the rent unpaid with interest was $44.64. The evidence discloses that the Indian Agent for twenty-five years had annually sent out notices in the same form as that which was sent to these defendants Forness on or about February 19, 1939. The forms of these notices had been approved by the Department of the Interior of the United States.

 The government brings this suit to cancel the lease held by these defendants, and for a judgment declaring that the Seneca Nation of Indians is entitled to immediate possession of the premises described in the lease in question.While this suit was originally brought against Frantk A. Forness and Jessie Forness only, certain other defendants, namely, the City of Salamanca, the First National Bank of Salamanca, the Salamanca Federal Savings & Loan Association, the Salamanca Trust Company and the Home Owners's Loan Corporation have been permitted to intervene and answer the complaint.

 The defendant Salamanca Trust Company alleges that it is the owner of approximately 125 mortgages on various parcels of real estate in the City of Salamanca leased from the Seneca Nation of Indians pursuant to the aforesaid Acts of Congress, upon which there is unpaid the sum of $335,000, and that a tender of the payment of rent on approximately 25 parcels of the lands so mortgaged has been made and refused.

 The defendant First National Bank of Salamanca alleges that it is the owner of 16 mortgages on which there is unpaid $20,872.34 on properties leased as aforesaid, and that in the case of three of the individual mortgagors thereof a tender was made prior to April 20, 1939, for payment of the rental due, and that this tender was refused.

 The defendant Salamanca Federal Savings & Loan Association alleges that it is the owner of 169 mortgages on which there is unpaid $217,770.10 on lands leased as aforesaid, and that on April 20, 1939, a tender of the payment of rent on 51 of such properties on which the mortgages aggregated $47,857.43 was made, and the tender refused.

 The defendant City of Salamanca alleges that it is the owner of 279 pieces of real estate in that city acquired through tax sales and these are of the assessed value of $79,000; that prior to April 20, 1939, the city tendered the rent reserved on 5 of such properties, and that this tender was refused.

 The importance of the question involved is apparent.

 It is the contention of the government that, by virtue of the terms of the lease under which the defendants Forness hold, the Council of the Seneca Nation of Indians on default in the payment of any rent had authority immediately thereafter to cancel it and a right to judgment declaring said lease cancelled and awarding the Seneca Nation possession. It contends that there can be no reviver of the interest of the defendants save by action of the Council of the Seneca Nation of Indians.

 The complaint alleges the execution of the lease, default in the payment of the rent, the adoption of the resolution of the Council of the Seneca Indians, and the right to the immediate possession by said Seneca Nation of Indians. Defendants interpose three defenses: (1) that the statute of the State of New York furnishes a complete defense to this action; (2) that the right to claim a forfeiture has been waived; (3) that the plaintiff is estopped from maintaining the action.

 Subsequent to the joinder of issue herein, pursuant to Rule 16 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, a pre-trial conference was held. After lengthy discussion nothing evolved. Upon the trial the court submitted to the jury the single question: "Did the course of conduct pursued by the United States Agent as Agent for Seneca Nation over period of years from 1916 to 1939 with notice given to defendant in February, 1939, justify belief on the part of defendants Forness that they had the right to pay the rent specified in the notice up to and until April 20, 1939, and did the defendants rely on such relief?" The jury found in the affirmative. Both parties moved for judgment. There was no substantial disputed on the facts. It appears to me now that there was no need to have submitted this question to a jury. The entire question presents a question of law.

 The defendants first claim that the State of New York was authorized by the Act of Congress of February 19, 1875, 18 Stat. 330, to extend all its general Laws over the City of Salamanca and that Chapter 679 of the Laws of 1892 did extend the general laws of New York to the village of Salamanca. If this is so, the ...


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