A-88298, NOVEMBER 13, 1937, 17 COMP. GEN. 398

A-88298: Nov 13, 1937

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SET-OFF - DEBT OF RESTRICTED INDIAN TO JUDGMENT DEBTOR OF GOVERNMENT AND OTHER INDIANS THE QUESTION WHETHER THERE IS SUCH DEBTOR-CREDITOR RELATIONSHIP BETWEEN THE GOVERNMENT AND AN ATTORNEY BECAUSE OF THE DEBT OF A RESTRICTED INDIAN TO SUCH ATTORNEY ON ACCOUNT OF A FEE FOR LEGAL SERVICES. IS TOO DOUBTFUL TO AUTHORIZE THE SET-OFF WITHOUT THE ATTORNEY'S CONSENT. CAN HAVE THE FEE APPLIED TO THE DEFICIENCY JUDGMENTS. IS AS FOLLOWS: THERE IS ENCLOSED A COPY OF A LETTER DATED JUNE 2 FROM C. SECURED BY A MORTGAGE WHICH WAS SUBSEQUENTLY FORECLOSED AND JUDGMENT RENDERED IN THE SUM OF $5. THE MORTGAGED PROPERTY WAS SOLD BY THE UNITED STATES MARSHAL AND BID IN BY THE GOVERNMENT FOR FANNY LASLEY FOR THE SUM OF $2.

A-88298, NOVEMBER 13, 1937, 17 COMP. GEN. 398

SET-OFF - DEBT OF RESTRICTED INDIAN TO JUDGMENT DEBTOR OF GOVERNMENT AND OTHER INDIANS THE QUESTION WHETHER THERE IS SUCH DEBTOR-CREDITOR RELATIONSHIP BETWEEN THE GOVERNMENT AND AN ATTORNEY BECAUSE OF THE DEBT OF A RESTRICTED INDIAN TO SUCH ATTORNEY ON ACCOUNT OF A FEE FOR LEGAL SERVICES, AS WOULD AUTHORIZE APPLICATION OF THE COMMON-LAW RULE OF SET OFF IN SATISFYING DEFICIENCY JUDGMENTS OBTAINED IN FORECLOSURE PROCEEDINGS IN FAVOR OF THE UNITED STATES AND CERTAIN OTHER INDIANS, IS TOO DOUBTFUL TO AUTHORIZE THE SET-OFF WITHOUT THE ATTORNEY'S CONSENT, AND UNLESS THE UNITED STATES ATTORNEY FOR THE DISTRICT, BY JUDICIAL PROCESS, CAN HAVE THE FEE APPLIED TO THE DEFICIENCY JUDGMENTS, THE PROPER COURSE WOULD APPEAR TO BE TO APPLY THE AMOUNT OF THE FEE, WITH THE CONSENT OF THE ATTORNEY, TO RENTAL DUE FROM HIM UNDER AN INDIAN LEASE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, NOVEMBER 13, 1937:

YOUR LETTER OF AUGUST 7, 1937, IS AS FOLLOWS:

THERE IS ENCLOSED A COPY OF A LETTER DATED JUNE 2 FROM C. L. ELLIS, SUPERINTENDENT OF THE OSAGE INDIAN AGENCY, CONCERNING AN INDEBTEDNESS DUE THE UNITED STATES BY D. E. JOHNSON OF FAIRFAX, OKLAHOMA, UNDER TWO DEFICIENCY JUDGMENTS.

THE FIRST JUDGMENT INVOLVES A LOAN FROM THE FUNDS OF FANNY LASLEY, RESTRICTED FULL BLOOD OSAGE ALLOTTEE NO. 164, SECURED BY A MORTGAGE WHICH WAS SUBSEQUENTLY FORECLOSED AND JUDGMENT RENDERED IN THE SUM OF $5,952.45, WITH INTEREST AT THE RATE OF 7 PERCENT PER ANNUM FROM JANUARY 1, 1932. THE MORTGAGED PROPERTY WAS SOLD BY THE UNITED STATES MARSHAL AND BID IN BY THE GOVERNMENT FOR FANNY LASLEY FOR THE SUM OF $2,000. THERE IS A DEFICIENCY JUDGMENT IN THIS CASE AGAINST MR. JOHNSON IN EXCESS OF $4,000.

THE SECOND JUDGMENT INVOLVES A LOAN FROM THE FUNDS OF PEARL BIGHEART SMITH MCCLURE, UNALLOTTED FULL BLOOD OSAGE INDIAN, ON WHICH A JUDGMENT WAS RENDERED IN THE SUM OF $28,955.99, WITH INTEREST AT 6 PERCENT FROM JANUARY 6, 1932. THIS PROPERTY WAS SOLD BY THE UNITED STATES MARSHAL AND BID IN FOR PEARL BIDHEART MCCLURE FOR THE SUM OF $10,000, LEAVING A DEFICIENCY JUDGMENT IN EXCESS OF $18,955.99.

THERE IS NOW DUE MR. JOHNSON THE SUM OF $160 AS FEE FOR SERVICES RENDERED BY HIM AS ATTORNEY FOR E-NE-KE-OP-PE, RESTRICTED FULL BLOOD OSAGE ALLOTTEE NO. 298, IN PARTITION CASES INSTITUTED UNDER SECTION 6 OF THE ACT OF APRIL 18, 1912 (37 STAT. 86). THE FEE DUE MR. JOHNSON IS BEING HELD BY THE SUPERINTENDENT AS HE BELIEVES IT SHOULD BE APPLIED ON THE DEFICIENCY JUDGMENTS TO WHICH REFERENCE IS MADE. THE SUITS AGAINST MR. JOHNSON WERE BROUGHT BY THE UNITED STATES AS PLAINTIFF AND THE JUDGMENTS OF THE COURT WERE FOR THE PLAINTIFF IN ITS OWN BEHALF AND IN BEHALF OF ITS RESTRICTED WARDS. MR. JOHNSON IS, THEREFORE, INDEBTED TO THE UNITED STATES FOR THE AMOUNTS OF THE DEFICIENCY JUDGMENTS IN QUESTION.

IT IS REQUESTED, THEREFORE, THAT THIS DEPARTMENT BE ADVISED AS TO WHETHER THE FUNDS NOW IN THE HANDS OF THE SUPERINTENDENT CAN BE APPLIED AGAINST THE CLAIM DUE THE GOVERNMENT BY MR. JOHNSON AND, IF SO, HOW THIS SHOULD BE ACCOMPLISHED.

THE LETTER OF JUNE 2, 1937, FROM THE SUPERINTENDENT OF THE OSAGE INDIAN AGENCY IS AS FOLLOWS:

THIS WILL REFER FURTHER TO MY LETTER OF FEBRUARY 9, 1937, CONCERNING ATTORNEY FEES DUE D. E. JOHNSON OF FAIRFAX, OKLAHOMA, FOR REPRESENTING E- NE-KE-OP-PE OSAGE ALLOTTEE NO. 298 IN A PARTITION ACTION HAD IN THE DISTRICT COURT OF OSAGE COUNTY, OKLAHOMA, CASE NO. 14571 ENTITLED "RICHARD FRANKLIN TERRILL V. JAMES E. PARKER, ET AL., " IN WHICH HE ASKED FOR A FEE OF $500 AND ON WHICH THE DEPARTMENT APPROVED A FEE OF $160 REFERENCE ABOVE.

CHECK FOR THIS FEE OF $160 HAS BEEN DRAWN ON THE ACCOUNT OF E-NE-KE OP-PE AND ENDORSED BY HER AND IS HELD BY THIS OFFICE IN AN EFFORT TO HAVE MR. JOHNSON APPLY THE PROCEEDS OF THE CHECK ON CERTAIN JUDGMENTS AS A RESULT OF A FORECLOSURE IN CASE NO. 706 EQUITY, UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA, FORECLOSING A MORTGAGE ON WHICH THERE WAS A BALANCE DUE OF $5,425 MADE TO D. E. JOHNSON FROM THE FUNDS OF FANNY LASLEY, FULL BLOOD RESTRICTED OSAGE ALLOTTEE SEC. 164 AND IN WHICH JUDGMENT WAS RENDERED ON JANUARY 17, 1933, FOR THE SUM OF $5,952.45, WITH INTEREST THEREON AT THE RATE OF 7 PERCENT PER ANNUM FROM JANUARY 1, 1932.

THE MORTGAGED PROPERTY WAS SOLD BY THE UNITED STATES MARSHAL ON NOVEMBER 15, 1933, AND WAS BID IN BY THE AGENCY FOR FANNY LASLEY FOR THE SUM OF $2,000.

SINCE THE SALE OF THIS PROPERTY MR. JOHNSON HAS MADE APPLICATION FOR THE REPURCHASE OF THE PROPERTY AND HE HAS OFFERED TO PAY THE FULL AMOUNT OF THE JUDGMENT PLUS THE INTEREST AND COSTS AND HAS MADE A DEPOSIT OF EARNEST MONEY IN THIS OFFICE OF $993. HE HAS MADE APPLICATION TO THE STATE SCHOOL LAND COMMISSION FOR A LOAN ON THIS PROPERTY FOR A SUFFICIENT AMOUNT TO PAY THE BALANCE OF THE AMOUNT DUE ON THIS TRANSACTION. THE MATTER HAS BEEN PENDING NOW FOR MORE THAN ONE YEAR.

IN CASE NO. 715 EQUITY FORECLOSURE OF A MORTGAGE MADE BY D. E. JOHNSON SECURING A LOAN FROM THE FUNDS OF PEARL BIGHEART SMITH, UNALLOTTED FULL BLOOD OSAGE, IN WHICH CASE THERE WAS A JUDGMENT RENDERED IN THE SUM OF $28,955.99 INTEREST AT 6 PERCENT PER ANNUM FROM JANUARY 6, 1932, WHICH PROPERTY WAS SOLD BY THE UNITED STATES MARSHAL ON MAY 30, 1933, AND WAS BID IN BY THE AGENCY FOR PEARL BIGHEART MCCLURE FOR THE SUM OF $10,000.00, LEAVING A DEFICIENCY JUDGMENT OF APPROXIMATELY $18,955.99.

THE MATTER OF APPLYING THIS SUM ON THE DEFICIENCY JUDGMENT WAS TAKEN UP WITH MR. JOHNSON AND HE REFUSED TO ENDORSE THE CHECK TO BE APPLIED ON SUCH JUDGMENT. HOWEVER, HE ENDEAVORED TO APPLY THIS MONEY ON THE PAYMENT OF RENTALS DUE THIS OFFICE ON LEASE NO. 21035. IN VIEW OF THE FACT THAT MR. JOHNSON HAS REFUSED TO APPLY THIS FEE ON THE DEFICIENCY JUDGMENTS, I WOULD APPRECIATE HAVING INSTRUCTIONS AS TO HOW THE MATTER SHOULD BE HANDLED AND INASMUCH AS IT IS BELIEVED, THAT THE LEASES REFERRED TO BY MR. JOHNSON HAVE SUFFICIENT BOND TO ENABLE THE OFFICE TO COLLECT THE RENT FROM THIS LEASE, IT IS FELT THAT THIS MONEY SHOULD BE APPLIED ON THE DEFICIENCY JUDGMENT IN CASE NO. 715 EQUITY.

IN THE CIRCUMSTANCES STATED, THE MATTER OF WHETHER THERE EXISTS SUCH DEBTOR AND CREDITOR RELATIONSHIP BETWEEN THE GOVERNMENT AND MR. JOHNSON, INSOFAR AS THE SUM OF $160 REPORTED TO BE DUE MR. JOHNSON FOR LEGAL SERVICES RENDERED E-NE-KE-OP-PE IS CONCERNED, APPEARS TO INVOLVE TOO MUCH DOUBT TO AUTHORIZE AN APPLICATION OF THE COMMON-LAW RULE THAT EVERY CREDITOR MAY APPLY MONEYS OF HIS DEBTOR IN HIS HANDS IN THE EXTINGUISHMENT OF CLAIMS DUE HIM FROM SUCH DEBTOR.

THE $160 REPRESENTS A SUM DUE MR. JOHNSON FROM E-NE-KE-OP-PE, RESTRICTED FULL BLOOD OSAGE ALLOTTEE NO. 298, WHEREAS THE DEFICIENCY JUDGMENTS REPRESENT AMOUNTS HE OWES TO THE UNITED STATES, FANNY LASLEY, AND PEARL BIGHEART SMITH MCCLURE.

THE UNITED STATES OWES E-NE-KE-OP-PE THE FIDUCIARY DUTY TO PAY HER DEBT UNDER CONDITIONS WHICH WILL GIVE HER AND HER ESTATE A CLEAR ACQUITTANCE, 17 COMP. GEN. 226, AND UNLESS THE UNITED STATES ATTORNEY FOR THE DISTRICT BY JUDICIAL PROCESS CAN HAVE THE AMOUNT OF JOHNSON'S CLAIM AGAINST E-NE-KE -OP-PE APPLIED TO THE DEFICIENCY JUDGMENTS IN FAVOR OF THE UNITED STATES, THE PROPER COURSE WOULD APPEAR TO BE TO APPLY THE AMOUNT AGAINST THE LEASE RENTALS DUE FROM JOHNSON, WITH HIS CONSENT, RATHER THAN TO THE DEFICIENCY JUDGMENTS, WITHOUT HIS CONSENT, SO THAT E-NE-KE-OP-PE MAY HAVE A GOOD ACQUITTANCE AND HER ESTATE BE NOT INVOLVED IN A COLLATERAL MATTER IN WHICH SHE HAS NO INTEREST.