Clark Squire, Collector of Internal Revenue for the District of Washington v. Horton Capoeman and Emma Capoeman, His Wife

This case has to do with the taxability as income of the proceeds of a sale of timber on trust allotted land of a tribal Indian.

Under the provisions of a Treaty with the Quinaielt Indian Tribe, 12 Stat. 971 , tribal lands in what is now the State of Washington were transferred to the United States. By the terms of the treaty an area was reserved therefrom and set apart for the exclusive use of the members of the tribe. Pursuant to the terms of the treaty and of the General Allotment Act of 1887, 24 Stat. 388 , 25 U.S.C.A. § 331 et seq., a trust patent was issued to appellee Horton Capoeman for some ninety-three acres of tribal land within the Quinaielt Reservation. The fee title to this land was and still is in the United States in trust for Capoeman (an unemaneipated member of the tribe) to be conveyed to him or his heirs at the end of the trust period in fee “discharged of said trust and free of all charge or in-cumbrance whatsoever”. 25 U.S.C.A. § 348 .

In 1943, pursuant to a contract of sale entered into by the Bureau of Indian Affairs, with Capoeman’s consent, standing timber on the latter’s allotment was sold, cut and paid for. The timber, it is agreed, constituted the…