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University of Michigan Case

Children of the Chippewa,
Ottawa and Potawatomy Tribes
v.

The Regents of
The University of Michigan

Docket No. 44533. Submitted June 12, 1980, at Lansing. - Decided January 26, 1981.

Plaintiffs, a class known as the Children of the Chippewa, Ottawa and Potawatomy Tribes, and Paul J. Johnson, a member of the class, brought an action in Washtenaw Circuit Court against The Regents of the University of Michigan seeking to have a trust declared in favor of the plaintiffs based upon the provisions of the 1817 Treaty of Fort Meigs. Plaintiffs claimed that the treaty created a trust whereby certain land belonging to the Indians was conveyed to the defendant for purposes of ensuring that the Indians and their descendants would receive an education, and a variety of equitable remedies were sought. The circuit court, Edward D. Deake, Jr., found that no trust, either express or constructive, was created and entered a judgment of no cause of action in favor of defendant. Plaintiffs appeal. Held:

1. The trial court correctly found that at the time of the treaty the Indians held only a right of possession of lands occupied by them. Title in fee simple was in the United States government.

2. The trial court properly considered the theories set forth in both the initial complaint and the plaintiffs' amended complaint.

3. The treaty provision in question constituted a gift of the subject lands. In addition, the treaty was no the sole product of the efforts of Lewis Cass, the then-president of the newly-created university.

4. The treaty did not create an express trust in favor of the Indians.

5. The trial court properly refused to impose a constructive trust. The imposition of a constructive trust in this case is neither equitably nor legally desirable.

APPEAL - EQUITY - FINDING OF FACT.

The Court of Appeals may not reverse or modify a factual decision reached by a trial court in an equity matter unless the Court of Appeals is convinced that it would have reached a different result had it occupied the position of the trial court.

1. INDIANS - REAL PROPERTY - TITLE IN PROPERTY - RIGHT OF POSSESSION - STATUES.

Federal law creates a right of occupancy in the Indians, rather than a title in fee simple, as to lands held by them; the Federal government possesses power to convey the fee to lands occupied by Indian tribes, and all questions with respect to rights of occupancy and conditions of extinguishment of Indian title are solely for the Federal government (25 USC 177).

2. GIFTS - INTER VIVOS GIFTS.

A valid gift inter vivos requires that there be a delivery, actual or symbolic, of the subject matter, unless it is already in the possession of the donee, with an intent on the part of the donor to divest himself of all title and dominion over the subject matter, and an acceptance by the donee.

3. TRUSTS - CREATION OF TRUST.

A trust is created only if the settler manifests an intent to create a trust and there is an explicit declaration of trusts accompanied by a transfer of property to one for the benefit of another.

4. TRUSTS - EXPRESS TRUST - REAL PROPERTY

An express trust in real property must be in writing, under the hand of the one to be charged.

5. TRUSTS - CONSTRUCTIVE TRUSTS - EQUITY.

Constructive trusts are creatures of equity and their imposition makes the holder of the legal title the trustee for the benefit of another who in good conscience is entitled to the beneficial interest; they are imposed only where it would be inequitable to do otherwise.

Elmer E. White, for plaintiffs,
Roderick K. Daane, for defendant.

Before: T.M. BURNS, P.J. and BEASLEY and G.R. DENEWETH, JJ.

PER CIRIAM. On September 29, 1817, the Treaty of Fort Meigs, 7 Stat 160 was executed. The Chippewa, Ottawa and Potawatomy Indian Tribes were signatories of the first part of the government of the United States of America was the signatory of the second part. The treaty was drafted entirely by the representative of the United States. The defendant at bar was not a party to a treaty.

Not withstanding this latter fact, the plaintiffs, who are descendant s of the members of the signatory Indian tribes, brought action in equity before the Circuit Court of Washtenaw County seeking to have a trust declared in their favor against defendant based on the provisions of this treaty.

The original complaint was filed August 5, 1971. It was claimed that Article 16 of the treaty created a trust whereby certain land, belonging to the Indians, was conveyed to defendant for purposes of ensuring that the Indians and their descendants would receive an education in the European fashion. In support of this contention, the complaint cited certain alleged historical events, including the vesting of the title of the conveyed parcels of land in the defendant; the then-university president Lewis Cass's appointment of two trustees to locate and survey these lands; the patenting of these lands to defendant by the government of the United States in 1824; and the release by one Church of St. Anne of its interest of the lands in favor of the defendant.

St. Anne
St. Anne's Church

The inclusion of St. Anne's Church in the complaint was occasioned by the plaintiff's assertion that the treaty compelled the church to provide for the primary and secondary education of the Indians. The compliant then contends that the treaty imposed a concomitant duty upon defendant to ensure the Indians' college education. It is then claimed that the aforementioned conveyance by the church to the defendant merged the foregoing duties wholly into defendant's realm of responsibility.

The complaint then charged that a breach of these duties had occurred and was continuing to occur. To remedy the alleged breach, plaintiffs proposed a broad spectrum of equitable remedies.

An accounting of the proceeds realized for sale of the subject parcels was sought. Plaintiffs proposed that upon completion of this accounting a trust fund composed of proceeds from these sales should be established. Another trust fund, to be composed of proceeds form these sales should be established. Another trust fund, to be composed of monies accounted for from the sale of lands conveyed to defendant from St. Anne's Church, was also sought.

In addition to the foregoing, plaintiffs asked for an accounting of all investments in both trust, or, in the alternative, payment of a 15% interest fee thereon to be compounded annually from 1826 forward.

The complaint then went on to ask for an accounting of all lands received from the Indians which had not yet been sold together with an accounting of the accrued rent thereon to be computed annually with a compound rate of 15% interest to be added thereto.

It was finally requested that the circuit court should replace defendant as the trustee of these funds with a person of its own choosing and that the proceeds form the first trust fund should be directed toward providing plaintiffs with monies to continue their education at any collegiate institution of their choosing. The funds form the second trust were to be applied toward the primary and secondary education of the plaintiffs.

On March 28, 1977, plaintiffs filed an amended complaint and presented a two-pronged attack, again under a theory of equitable trust. After noting the 1974 decision of the trial court to treat the matter as a class action, plaintiffs proceeded to proffer a claim that the treaty had created an express trust with the plaintiffs being the beneficiaries of that trust. The amended complaint went on to assert that defendant had sold the lands conveyed to it under the treaty with out either dedicating the monies realized from the sales to the plaintiffs' educational needs or in any other way accounting to the plaintiffs for theses proceeds. The amended complaint then sought a trial under the theories of express and/or constructive trust and otherwise repeated the earlier claims.

The treaty provision that is the primary focus of the present dispute, Article 16, reads:

"Some of the Ottawa, Chippewa, and Potawatomy Tribes, being attached to the Catholick religion, and believing they may wish some of their children hereafter educated, do grant to the rector of the Catholick church of St. Anne of Detroit, for the use of the said church, and to the corporation of the college at Detroit, for the use of the said college, to be retained or sold, as the said rector and corporation may judge expedient, each, on half of three section of land, to contain six hundred and forty acres, on the river Raisin, at a place called Macon, and three sections of land not yet located, which tracts were reserved, for the use of the said Indians, by the treaty of Detroit, in one thousand eight hundred and seven; and the superintendent of Indian affairs, in the territory of Michigan, is authorized, on the part of the said Indians, to select the said tracts of land."

Trial commenced August 21, 1978. During the trial, numerous exhibits were received along with much expert testimony from all sides. On February 28, 1979, the trial judge issued a meticulously researched and well-drafted written opinion, thoroughly discussing the historical and procedural facets of this novel action and carefully setting forth the law which he believed controlling of this case. The opinion denied relief on all counts.

We have painstakingly reviewed the findings of fact in that opinion and agree with the trial judge in respect to those findings. The task of leaping back over 160 years in time is most difficult and the trial judge is to be commended for his efforts in that regard. Our decision in this area is further militated by the case of Ford v Howard, 59 Mich App 548; 229 NW2d 841 (1975), as the same is cited in ,i> Telegraph-Lone Pine Venture Co v Bloomfield Twp, 85 Mich App 560, 563; 272 NW2d 136 (1978). Both cases hold that we may not reverse or modify a factual decision reached in an equity matter unless we are convinced that we would have reached a different result had we occupied the position of the trial court. The trial court had the superior opportunity to see and hear the witnesses' testimony and to evaluate their perspective creditability. We are not convinced that a different conclusion in regard to the facts was possible.

To recapitulate each of these finding of fact would be an exercise in expatiation. Rather, in setting forth the findings of fact, we choose to incorporate the entire opinion to accomplish that end. See the Appendix to this opinion.

Following the issuance of the opinion of February 28, 1979, the present appeal was brought as of right. Five issues are raised by plaintiffs.

It is first asserted that the trial judge erred in finding that the Indians could not have owned fee simple title to any lands conveyed from the year 1790 forward. In so ruling the trial court found Oneida Indian Nation v County of Oneida, 414 US 661; 94 S Ct 772; 39 L Ed 2d 73 (1974), to be dispositive. We agree. The thrust of Oneida is that the 1790 Nonintercourse Act created a right of occupancy rather than a title in fee simple in the Indians as to lands held by them. The trial court held that the Federal government possesses power to convey the fee to lands occupied by Indian tribes and all questions with respect to rights of occupancy and conditions of extinguishment of Indian title are solely for the Federal government. The trial court when on to say:

"This Court will concede that in 1817 the Indians could have imposed an express trust on the lands possessed by them and granted to the Church and College by the 1817 Treaty but this was simply not done at that time."

Given this recognition by the trial court, it is difficult to understand the plaintiffs' cavil on the issue. The trial court's ultimate decision obviates further discussion in any event.

Plaintiffs assert that this trial court erred in relying upon the theories set forth in the first complaint as a point of reference for its opinion. While it is true that the opinion of February 28, 1979, assumes the claims of the earlier complaint in reference to grants of land, the error is no fatal. A fair reading of the opinion discloses that both theories of recovery in the second compliant were extensively discussed and refuted. The trail judge clearly comprehended the basis of the relief sought in the second complaint and carefully interwove those theories with the evidence adduced before ruling against them.

Plaintiffs' citation of Snyder v United Benefit Life Ins Co, 371 Mich 36; 123 NW 2d 234 (1963), as authority for a reversal on this issue is misplaced. Snyder is legally and factually inapplicable, involving, as it does, questions concerning jury instructions, a factor not present in the matter at bar.

This claim of error falls squarely under the purview of GCR 1963, 517.1, which requires that finds of fact and conclusions of law be articulated in a manner which will facilitate appellate review. Judge Deake fulfilled that duty admirably.

A third issue raised by plaintiffs is whether the trial court was justified in holding that Article 16 of the Treaty of Fort Meigs constituted a gift of lands to Father Richard and to defendant. We believe that it did.

A valid gift inter vivos requires that:

"There must be a delivery, actual or symbolical of the subject-matter, unless it is already in the possession of the donee, with an intent on the part of the donor to presently divest himself of all title and dominion over the same, and an acceptance by the donee."Chamberlain v Eddy,154 Mich 593, 603; 118 NW 499 (1908), cf. Osius v Dingell, 375 Mich 605, 611; 134 NW2d 657 (1965).

The operative language in Article 16 provides that some of the plaintiffs forefathers:

"do grant to the ***church***for the use of the said church, and to the ***college***for the use of the said college, to be retained or sold, as the said rector and corporation may judge expedient, each, ***." (Emphasis added.)

Clearly, the grant itself is a completed one and not conditional in nature. Nor do its terms encompass more than one transaction. The land is donated jointly to the church and to the corporation. The later division of the parcels was a consequence of Father Richard's discretion, a discretion Article 16 allowed him to exercise.

The evidence points to an almost reverential attitude Father Richard on the Indians' part. This attitude was commingled with an attitude of filial affection. The evidence also points to a clear donative intent on the Indians' part as regards Father Richard and encompasses a similar attitude toward the educational institution which the Indians very properly regarded as an extension of Father Richard's personality and influence.

We disagree with plaintiffs' continued assertions that the treaty, and particularly Article 16, were the sole product of Lewis Cass's efforts. The evidence does not support such a contention in any way. Rather, the treaty was the cumulative result of extended negotiation involving many leaders on both sides.

Both the expert testimony and the language of the treaty itself reflect the likelihood of a present donative intent on the part of the Indians at the time of the treaty's execution. Judge Deake's ruling on the question is carefully reasoned and set forth. We find no basis for any conviction that a mistake was committed. Tuttle v Dep't of State Highways, 397 Mich 44, 46; 243 NW2d 244 (1976).

The next claim of error challenges the trial court's decision that Article 16 created no express trust in the Indians' favor.

"It is a general principle of trust law that a trust is created only if the settler manifests an intention to create a trust, and it is essential that there be an explicit declaration of trust accompanied by a transfer of property to one for the benefit of another." Osius, supra, 613.

Further, an express trust in real property must be in writing, under the hand of the party to be charged. Howe v Webert, 332 Mich 84, 93-94; 50 NW2d 725 (1952).

We find that the plaintiffs' substantive arguments in support of the theory of an express trust are based on speculation and irrelevancy.

The last claim on appeal concerns the issue of a constructive trust. The trial court rejected this theory for several reasons: (1) the university was not a part to the negotiations and committed no misconduct in the treaty negotiations; (2) the Indians were represented by competent interpreters and a trusted Indian agent; (3) the United States evidenced no unjust conduct at the negotiations, its main intent being to secure a cession of a significant area in Ohio; (4) the Article 16 land was of minimal value when conveyed and when the university tried to sell it; and (5) the two cases cited by plaintiffs are distinguishable. We agree.

In the recent case of Arndt v Vos, 83 Mich App 484, 487; 268 NW2d 693 (1978), it is stated that:

Constructive trusts are creatures of equity and their imposition makes the holder of the legal title the trustee for the benefit of another who in good conscience is entitled to the beneficial interest. They are distinguished form express and resulting trusts in that they do not arise by virtue of agreement or intention, but by operation of law. Constructive trusts, while infinite in their variety, are imposed only where it would be inequitable to do otherwise." (Citations omitted.)

Clearly, if fraud or other misconduct is the sole determinant, the trial court did not err in refusing to impose a constructive trust. Defendant was not a part to the treaty or represented at the negotiations. Cass was present as a treaty commissioner, representing the United States. We repeat that there is no evidence at all that he instigated the Article 16 conveyance or that he succeeded in rewriting a provision which other wise would clearly have manifested an express trust, or that he even drafted Article 16 as it is written. Moreover, there is no claim of malfeasance on defendant's part.

The second definition of constructive trusts, requiring that they should be imposed where it would be inequitable to do otherwise, regardless of fraud, does not rebound to plaintiff's benefit.

In a pristinely humane world, it might be honorable and fair to compel defendant to offer comprehensive scholarships in gratitude for the 1817 conveyance. Certainly, the cost of higher education is subject to the rigors of inflation as are all other things and the plaintiffs, like everyone else, could benefit by the financial assistance they seek. However, constructive trusts are not used to requite obligations imposed by conscience alone. Rather, they are imposed solely where a balancing of equities discloses that it would be unfair to act otherwise. Where, as here, the language of the treaty and the historical evidence reflect a gift inter vivos and nothing more, the imposition of a constructive trust is neither equitably nor legally desirable.

Based on the foregoing, it is readily apparent that the judgment of the trial court should be and the same is hereby affirmed. No costs, questions of novel impression and public significance being involved.

Affirmed.