Squire v. Capoeman

LOCATION: Pittsburgh Party Headquarters

DECIDED BY: Warren Court (1955-1956)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 351 US 1 (1956)
ARGUED: Jan 19, 1956
DECIDED: Apr 23, 1956

Facts of the case


Media for Squire v. Capoeman

Audio Transcription for Oral Argument - January 19, 1956 (Part 2) in Squire v. Capoeman

Audio Transcription for Oral Argument - January 19, 1956 (Part 1) in Squire v. Capoeman

Earl Warren:

Number 134, Clark Squire, Collector of Internal Revenue for the District of Washington versus Horton Capoeman and Emma Capoeman, his wife.

Mr. Barber.

Charles F. Barber:

May it please the Court.

This case is here on certiorari from the Court of Appeals for the Ninth Circuit.

It is an income tax case.

The question is whether certain Indians are liable for income taxes on certain income.

Taxpayers here are full-blooded Quinaielt Indians, husband and wife.

They belong to a group of Indians who have become respected members of the West Coast communities in which they live.

The relations between these Indians in the United States stem from a treaty entered into, between the United States and these Indians, in 1955 and 1956.

Pursuant to that treaty, some 200,000 acres of the Olympic Peninsula, along the Pacific Coast in the far northwest, were set aside for their exclusive use.

This area contains a stand of virgin timber, largely citrus spruce but with the important quantities of Douglas Fir, Hemlock, and other commercial timbers.

The income of these Indians, considered as a group, is derived principally from the sale of timber and from salmon fishing.

They derive about an equal amount from each source.

In 1907, a plot of land on this reservation was allotted to the taxpayer husband.

Pursuant to the provisions of the General Allotment Act of 1887, as required by the General Allotment Act, the patent issue to taxpayer husband, provided that the land, the fee to the land, would be held in trust by the United States for his exclusive use and benefit for a period of 25 years at the end of which the fee would be conveyed and this language is important in this suit, discharged of said trust and free from all charge and encumbrance, whatsoever.

The 25-year trust period has, since been extended by a statute and the title to the land continues in the United States.

Taxpayers' allotment contained a typical stand of timber that is typical for this reservation.

A 1910 Amendment to the General Allotment Act provided for the sale of such timber at the request of the Indian allottee, with the consent of the Secretary of Interior.

In 1943, the timber from taxpayers' allotment was sold pursuant to the statutory authorization.

And some $8500 was paid into his account subject to withdrawal by taxpayer with the consent of the Secretary of Interior.

During that year, some $1500 was paid over to the Indian taxpayer for his use.

The question in this case is whether the proceeds of this sale of timber, from taxpayers' allotment are subject to the requirements of the federal income tax laws.

After a test case, brought in the Tax Court, by another Quinaielt Indian, similarly situated, had resulted in a determination that the proceeds from the sale of timber was taxable.

Respondents filed a return and paid the tax about $300, calculating their liability as provided, or as was their option, I should say, under the income tax laws on the basis of long-term capital gain.

After a timely claim for refund was filed and denied, this suit was brought in the -- in the District Court for the return of taxes allegedly, unlawfully collected.

We come then to the question of law involved in this case.

The case arises under the income tax laws which comprehensively tax every individual on gains and profits and income from every source, whatever.

As recently as last term, in the Glenshaw Glass case, this Court had occasion to note that in these provisions, Congress had exerted the full measure of its taxing power.

Indians are within the scope of these provisions as respondent recognizes.

They are not exempted from tax as Indians or as wards of the Government by any provision in the income tax laws.